Gentherm Inc. reported record product revenue of $1,498.6 million for 2025, a 2.9% increase from $1,456.1 million in 2024, while operating cash flow rose 7% to $116.8 million. The company’s net leverage ratio fell to 0.2x, down from roughly 0.5x in 2024, underscoring a stronger balance‑sheet position as it continues to realign its manufacturing footprint.
The company’s adjusted diluted earnings per share for the year were $0.49, missing consensus estimates of $0.56 to $0.63. Gross margin compressed to 24.2% from 25.2% in 2024, and adjusted EBITDA declined to $174.8 million (11.7% margin) from $182.9 million (12.6% margin) the prior year, reflecting higher material costs, an unfavorable product mix, and ongoing footprint‑realignment expenses.
Gentherm guided 2026 product revenue to $1.5 billion–$1.6 billion, a 3% increase at the midpoint, and projected 2027 revenue of about $1.7 billion. Management expects adjusted EBITDA for 2026 to be $175 million–$195 million, implying a 12% margin. The company also reiterated that its combination with Modine Performance Technologies, valued at roughly $1 billion, is expected to close by year‑end, creating a pro‑forma revenue of $2.6 billion and an adjusted EBITDA margin of 13%. The merger will diversify Gentherm’s end‑market mix, reducing its light‑vehicle concentration from 97% to 63% of pro‑forma revenue and unlocking significant cost and commercial synergies.
Segment‑level data show that automotive new‑business awards totaled $2.2 billion in 2025, while the Home & Office segment is projected to contribute $50–$100 million in revenue by 2028. These developments support Gentherm’s strategy to expand beyond automotive, targeting adjacent markets such as medical and home‑office thermal management.
Management highlighted that margin compression in 2025 is expected to persist into 2026 due to footprint‑realignment costs, with a projected 60‑basis‑point drag, but anticipates a significant improvement in 2027 once the transition completes. The company’s focus on adjacent markets and the Modine merger is positioned to broaden its product portfolio and market reach, signaling confidence in long‑term growth despite short‑term headwinds.
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