Garrett Motion's Outstanding Q2 2025 Financial Performance
Garrett Motion's Financial Highlights for Q2 2025
Second Quarter 2025 Financial Highlights
- Net sales reached $913 million, reflecting a 3% increase on a reported basis and remaining flat on a constant currency basis.
- Net income amounted to $87 million with a net income margin of 9.5%.
- Adjusted EBIT totaled $124 million, achieving an adjusted EBIT margin of 13.6%.
- Net cash provided by operating activities was $158 million.
- Adjusted free cash flow reached $121 million.
- The company raised its full-year 2025 outlook, taking into account favorable foreign currency impacts.
Business Performance Overview
Second Quarter 2025 Business Highlights
- Secured over $1 billion in light vehicle turbo program extensions.
- Received multiple awards from local and global OEMs for innovations in commercial vehicles and industrial power generation.
- Reached significant milestones in E-Powertrain, E-Cooling, and Fuel Cell programs aimed at enhancing electrification.
- Launched a new innovation center in Wuhan, enhancing R&D capabilities for electric solutions.
Business Update from Garrett Motion Inc. (Nasdaq: GTX)
Garrett Motion Inc., an established leader in differentiated automotive technology, recently released its impressive financial results for the three months ending June 30, 2025. CEO Olivier Rabiller expressed: "Garrett delivered another exceptional quarter, eclipsing the industry standards with robust financial outcomes and an Adjusted EBIT margin of 13.6%. Our operational execution has led to $121 million in adjusted free cash flow, facilitating $22 million in share buybacks and a dividend payment of $13 million. We solidified our leadership in turbocharging, winning $1 billion in light vehicle program extensions, all while advancing our zero-emission initiatives in electric propulsion and cooling."
Detailed Financial Analysis
Net Sales Comparison
Net sales for Q2 2025 amounted to $913 million, representing a 3% increase, bolstered by favorable currency translation effects. The growth was primarily driven by heightened demand in the gasoline and commercial vehicle segments, despite challenges in the aftermarket parts sector.
Cost of Goods Sold Overview
The cost of goods sold rose to $732 million compared to $705 million in the same period a year prior. This increase was mainly attributed to foreign currency impact and tariffs. However, efficiency improvements and cost reductions helped to mitigate the overall increase.
Profit and Expenses
Gross profit for the quarter stood at $181 million, reflecting a gross profit percentage of 19.8% compared to 20.8% a year earlier. The decrease was primarily due to unfavorable product mix and pricing adjustments.
SG&A expenses saw a slight decline to $59 million, partially due to lower personnel costs despite adverse currency impacts.
Net Income Summary
Garrett reported net income of $87 million for the quarter, an increase from the previous year’s $64 million, driven by reduced interest expenses and tax liabilities. Net cash provided by operations increased to $158 million, showcasing improved operational efficiency.
Outlook for the Full Year 2025
Garrett’s outlook for the full year 2025 remains positive, with an anticipated range for net sales set between $3.4 billion and $3.6 billion, up from the previous estimate of $3.3 billion to $3.5 billion. The company expects sales growth at constant currency to be between -3% and +2%. Projected net income is now forecasted between $233 million and $278 million, reflecting the company's robust growth trajectory in turbocharging technology and electric vehicle solutions.
Investor confidence remains bolstered by Garrett's strategic initiatives and commitment to innovation, positioning the company for substantial growth moving forward.
Frequently Asked Questions
What were Garrett Motion's net sales in Q2 2025?
Garrett Motion reported net sales of $913 million for the second quarter of 2025.
How much net income did the company achieve during this period?
The company's net income for Q2 2025 reached $87 million, up from $64 million in Q2 2024.
What drove the increase in Adjusted EBIT margin?
The Adjusted EBIT margin improved due to effective operational execution and a favorable sales mix, resulting in an adjusted EBIT of $124 million.
What is Garrett's outlook for the full year 2025?
The company anticipates net sales between $3.4 billion and $3.6 billion and an expected net income range of $233 million to $278 million.
What innovations has Garrett Motion recently introduced?
Garrett Motion has launched E-Powertrain, E-Cooling, and Fuel Cell programs, advancing towards sustainable, zero-emission technologies.
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