BorgWarner Reports 2025 Results and Provides 2026 Guidance; Returned Approximately $630 Million to Shareholders in 2025; Strategically Enters Data Center Market with Turbine Generator System Award

Rhea-AI Summary

BorgWarner (NYSE: BWA) reported 2025 results and 2026 guidance. Light vehicle eProducts grew ~23% in 2025. U.S. GAAP operating margin was 3.7% after $624 million of impairment charges; adjusted operating margin was 10.7%, up 60 basis points. Operating cash flow was $1,648M (up ~19%) and free cash flow was $1,208M (up ~66%). U.S. GAAP EPS was $1.28; adjusted EPS was $4.91 (up ~14%). The company returned approximately $630M to shareholders in 2025 and secured a turbine generator system award with expected >$300M first-year sales starting early 2027.

Positive

• Light vehicle eProducts growth of ~23% in 2025
• Adjusted operating margin of 10.7%, +60 bps vs. 2024
• Operating cash flow of $1,648M, up ~19%
• Free cash flow of $1,208M, up ~66%
• Returned approximately $630M to shareholders in 2025
• Turbine generator award with >$300M estimated first-year sales (2027)

Negative

• U.S. GAAP operating margin reduced to 3.7% after $624M impairment
• U.S. GAAP net earnings per share of $1.28 vs adjusted $4.91
• Fourth-quarter U.S. GAAP net loss of $(1.23) per diluted share
• Battery & Charging Systems sales expected to decline ~$210M in 2026

Market Reaction

+20.55% $65.08 4.7x vol

15m delay 135 alerts

+20.55% Since News

+21.0% Peak in 42 min

$65.08 Last Price

$54.35 $68.82 Day Range

+$2.37B Valuation Impact

$13.92B Market Cap

4.7x Rel. Volume

Following this news, BWA has gained 20.55%, reflecting a significant positive market reaction. Argus tracked a peak move of +21.0% during the session. Our momentum scanner has triggered 135 alerts so far, indicating very high trading interest and price volatility. The stock is currently trading at $65.08. This price movement has added approximately $2.37B to the company's valuation. Trading volume is very high at 4.7x the average, suggesting strong buying interest.

Data tracked by StockTitan Argus (15 min delayed). Upgrade to Silver for real-time data.

Key Figures

Light vehicle eProducts growth: approximately 23% GAAP operating margin: 3.7% Adjusted operating margin: 10.7% +5 more

8 metrics

Light vehicle eProducts growth approximately 23% Full year 2025 vs 2024

GAAP operating margin 3.7% Full year 2025, includes $624M impairments

Adjusted operating margin 10.7% Full year 2025, up 60 bps vs 2024

Operating cash flow $1,648 million Full year 2025, up approximately 19% vs 2024

Free cash flow $1,208 million Full year 2025, up approximately 66% vs 2024

Adjusted EPS $4.91 per diluted share Full year 2025, up approximately 14% vs 2024

Capital returned to shareholders approximately $630 million Full year 2025

2026 net sales guidance $14.0–$14.3 billion Full year 2026 net sales outlook

Market Reality Check

Price: $53.98 Vol: Volume 4,756,480 is 2.2x ...

high vol

$53.98 Last Close

Volume Volume 4,756,480 is 2.2x the 20-day average of 2,164,634, indicating elevated interest ahead of and around this report. high

Technical Price at $53.98 is near the 52-week high of $54.45 and trading above the 200-day MA at $40.60.

Peers on Argus

BWA is up 2.35% with high volume, while key peers like ALV (+0.58%), MOD (+0.62%...

BWA is up 2.35% with high volume, while key peers like ALV (+0.58%), MOD (+0.62%), ALSN (+0.20%), LKQ (+2.34%) and LEA (-0.84%) show smaller, mixed moves, suggesting a company-specific reaction to this earnings and guidance update.

Historical Context

5 past events · Latest: Feb 05 (Positive)

Pattern 5 events

Date	Event	Sentiment	Move	Catalyst
Feb 05	Dividend declaration	Positive	-0.3%	Quarterly cash dividend of $0.17 per share declared for March 2026.
Jan 23	Reputation ranking	Positive	-0.4%	Named to Fortune's 2026 World's Most Admired Companies list in its category.
Nov 20	Motorsport branding	Positive	-5.0%	Alex Palou added as 112th face on Borg-Warner Trophy® after 2025 Indy 500 win.
Nov 13	Dividend declaration	Positive	-1.3%	Quarterly $0.17 per share dividend announced for December 2025 payment.
Nov 04	Employer award	Positive	+0.6%	Included in Forbes America's Best Employers for Engineers 2026 ranking.

Pattern Detected

Recent positive or reputation-focused headlines often saw flat-to-negative next-day moves, indicating a tendency for muted or contrarian reactions to good news.

Recent Company History

Over the past several months, BorgWarner issued recurring $0.17 quarterly dividends and received multiple employer and corporate reputation accolades from Forbes and Fortune. A motorsport-related branding event around the Borg-Warner Trophy® also featured prominently. Despite these generally positive or neutral developments, shares often slipped modestly in the following session. Against that backdrop, today’s earnings, cash flow strength, guidance, and new data center turbine-generator award mark a more fundamentally driven update than prior brand- and dividend-focused items.

Market Pulse Summary

The stock is surging +20.6% following this news. A strong positive reaction aligns with the company’...

Analysis

The stock is surging +20.6% following this news. A strong positive reaction aligns with the company’s solid 2025 execution and detailed 2026 guidance. Investors received higher adjusted margins, cash flow gains, and adjusted EPS of $4.91, alongside entry into the AI-driven data center market and a turbine generator award with estimated first-year sales above $300 million. Past news often saw divergence, so sustained strength depended on how durable these margin and growth drivers proved.

Key Terms

free cash flow, variable turbine geometry turbocharger, integrated drive module, battery management system, +3 more

7 terms

free cash flow financial

"Free cash flow increased to $1,208 million, up approximately 66% compared..."

Free cash flow is the amount of money a company has left over after paying all its expenses and investing in its business, like buying equipment or updating facilities. It shows how much cash is available to reward shareholders, pay down debt, or save for future growth. This helps investors understand if a company is financially healthy and able to grow.

variable turbine geometry turbocharger technical

"Variable turbine geometry turbocharger (VTG) conquest award with a major..."

A variable turbine geometry turbocharger is an engine component that changes the shape or angle of small vanes inside the turbo so it can boost engine power and efficiency across different speeds, rather than only at one fixed setting. For investors it matters because this technology can help vehicles meet fuel-efficiency and emissions rules, improve performance without larger engines, and influence cost, reliability and competitive advantage for automakers and parts suppliers—like a camera lens that zooms to keep the picture sharp at any distance.

integrated drive module technical

"Integrated drive module (iDM) award with a major North American OEM..."

An integrated drive module is a compact hardware unit that combines the motor, its power electronics and control circuitry into a single packaged component, much like a single appliance that houses a motor and its control panel instead of separate parts. Investors care because it can lower manufacturing costs, simplify product design, improve reliability and speed up time to market for devices such as electric vehicles, industrial robots and appliances—factors that can boost margins and competitive advantage.

battery management system technical

"Battery management system (BMS) award with a global OEM supporting..."

A battery management system (BMS) is the electronic control unit that monitors and regulates a rechargeable battery pack’s health, charge level, temperature and balance between cells to keep it safe and working efficiently. Think of it as a traffic manager and thermostat for a battery: it prevents overcharging, overheating and uneven wear, estimates remaining range or runtime, and communicates status to the device. Investors care because a strong BMS improves product safety, lifespan, performance, regulatory compliance and can reduce warranty costs and reputational risk, all of which affect a company’s costs and competitive position.

organic sales financial

"Excluding the impact of foreign currencies, organic sales were up 0.5%..."

Organic sales are the change in a company’s revenue that comes from its existing business operations, excluding effects of acquisitions, divestitures, and currency swings. Think of it like measuring how much a garden grows from the plants you already tended, rather than adding new pots; investors use organic sales to judge whether demand and core business performance are genuinely improving or if growth is driven by one‑time deals or accounting shifts.

impairment charges financial

"includes $624 million of goodwill, intangible asset and property... impairment charges"

Impairment charges are one-time accounting write-downs taken when a company decides an asset — like a factory, brand, patent, or investment — is worth less than it was recorded for. Like marking down the price of a damaged item on a store shelf, they reduce reported profits and the asset’s book value; investors watch them because they can signal lasting business problems or change future earnings and balance-sheet strength.

non-comparable items financial

"Excluding the $2.58 of net losses per diluted share related to non-comparable items..."

Non-comparable items are one-time, unusual, or timing-driven gains, losses, or adjustments that distort a company’s current financial results so they can’t be fairly compared with prior periods. For investors these items matter because they can hide the company’s true ongoing performance; thinking of them like a sudden, rare expense or windfall helps — you wouldn’t judge a restaurant’s usual sales by including a single large catering event. Adjusting for these items lets investors compare the business’ recurring results more accurately.

AI-generated analysis. Not financial advice.

AUBURN HILLS, Mich., Feb. 11, 2026 /PRNewswire/ -- BorgWarner Inc. (NYSE: BWA) today reported fourth quarter and full-year 2025 results and provided 2026 guidance.

Full Year 2025 Highlights

• Light vehicle eProducts grew approximately 23% in 2025 compared with 2024 due to demand for the Company's leading-edge hybrid and electric technologies in Europe and Asia.
• The Company's U.S. GAAP operating margin was 3.7%, which includes $624 million of goodwill, intangible asset and property, plant and equipment impairment charges within our PowerDrive Systems and Battery & Charging Systems segments. BorgWarner achieved an adjusted operating margin of 10.7% during 2025, up 60 basis points compared with 2024. This increase was driven by strong eProducts growth and cost controls across the business.
• Operating cash flow increased to $1,648 million, up approximately 19% compared to 2024. Free cash flow increased to $1,208 million, up approximately 66% compared with 2024 due to strong operating income and capital expenditure management.
• The Company's U.S. GAAP net earnings per diluted share were $1.28. Adjusted net earnings per diluted share were $4.91, up approximately 14% compared with 2024 due to higher adjusted operating income and over $500 million in share repurchases.
• Secured a supply agreement for a turbine generator system for the artificial intelligence (AI) driven data center market and other microgrid applications.
• Secured a record number of light vehicle awards across the Company's Foundational and eProduct portfolios that we expect will accelerate profitable growth in 2027 and beyond.

New Business Awards Across Portfolio
The Company secured multiple new business awards that are expected to support its long-term profitable growth, including the following:

Turbine Generator System Award for AI Driven Data Center Market and Other Microgrid Applications

• Master Supply Agreement with TurboCell, a subsidiary of full stack data center infrastructure developer Endeavour, to supply a highly modular turbine generator system. This product has been in development for over three years and utilizes the Company's turbocharging, thermal management, power electronics, advanced software controls and high-speed rotating electric core competencies to bring an innovative solution for the next wave of artificial intelligence driven data center demand and other microgrid applications. BorgWarner's turbine generator system is expected to be transformative by addressing the growing demand for high-power alternatives to traditional power generation. Additionally, the turbine generator system provides significant power, modular and fuel flexibility, while also providing a lower emissions footprint versus traditional products. Production is expected to begin in early 2027 with estimated sales of more than $300 million during the first year of production.

Other New Business Awards

• Variable turbine geometry turbocharger (VTG) conquest award with a major European OEM for the North American market used on hybrid vehicles. Production is expected to begin in 2028.
• Integrated drive module (iDM) award with a major North American OEM used on range extended electric vehicle trucks and large-frame SUVs. Production is expected to begin in 2029.
• Integrated drive module (iDM) award with a premium European OEM to support a hybrid range extended powertrain architecture. Production is expected to begin in 2029.
• Battery management system (BMS) award with a global OEM supporting additional B-segment and C-segment passenger cars as well as light commercial vehicles for both battery electric and plug-in hybrid electric vehicles. Production is expected to begin in 2029.
• Electric cross differential (eXD) award with a leading Chinese OEM used on 48V electrical and electronic architectures.

Fourth Quarter Highlights (continuing operations basis):

• U.S. GAAP net sales of $3,572 million, an increase of 3.9% compared with fourth quarter 2024.
  • Excluding the impact of foreign currencies, organic sales were up 0.8% compared with fourth quarter 2024.
• U.S. GAAP net loss of $(1.23) per diluted share.
  • Excluding the $2.58 of net losses per diluted share related to non-comparable items (detailed in the table below), adjusted net earnings were $1.35 per diluted share.
• U.S. GAAP operating loss of $(238) million, or (6.7)% of net sales.
  • Excluding $665 million of net pretax expense related to non-comparable items, adjusted operating income was $427 million, or 12.0% of net sales.
• Net cash provided by operating activities of $619 million.
  • Free cash flow of $470 million.

Full Year Highlights (continuing operations basis):

• U.S. GAAP net sales of $14,316 million, an increase of 1.6% when compared with 2024.
  • Excluding the impact of foreign currencies, organic sales were up 0.5% compared with 2024.
• U.S. GAAP net earnings of $1.28 per diluted share.
  • Excluding $3.63 of net losses per diluted share related to non-comparable items (detailed in the table below), adjusted net earnings were $4.91 per diluted share, an increase of approximately 14% compared with 2024.
• U.S. GAAP operating income of $536 million, or 3.7% of net sales.
  • Excluding $1,001 million of net pretax expense related to non-comparable items, adjusted operating income was $1,537 million, or 10.7% of net sales, up 60 basis points compared with 2024.
• Net cash provided by operating activities of $1,648 million.
  • Free cash flow of $1,208 million, an increase of approximately 66% compared with 2024.

Financial Results (continuing operations basis):
The Company believes the following table is useful in highlighting non-comparable items that impacted its GAAP net earnings per diluted share. The non-comparable items presented below are calculated after tax using the corresponding effective tax rate discrete to each item and the weighted average number of diluted shares for the periods presented. The Company defines adjusted earnings per diluted share as earnings per diluted share adjusted to eliminate the impact of restructuring expense, merger, acquisition and divestiture expense, other net expenses, discontinued operations, other gains and losses not reflective of the Company's ongoing operations and related tax effects.

	Three Months Ended December 31,				Year Ended December 31,
	2025		2024		2025		2024
(Loss) earnings per diluted share	$        (1.23)		$        (1.84)		$         1.28		$         1.63
Non-comparable items:
Impairment charges	2.51		2.80		2.63		2.73
Restructuring expense	0.09		0.03		0.36		0.24
Accelerated depreciation	0.04		0.05		0.31		0.18
Legal settlement	0.01		—		0.18		—
Costs to exit charging business	—		—		0.14		—
Impairment of investment	0.07		—		0.07		—
Chief Executive Officer ("CEO") transition compensation	—		—		0.05		—
Loss on sale of assets	0.01		—		0.03		—
Adjustments associated with Spin-Off related balances	—		0.01		0.03		0.14
Write-off of customer incentive asset	—		—		0.03		—
Merger and acquisition expense, net	—		0.01		0.02		—
Loss on sale of businesses	—		0.01		0.01		0.04
Change in accounting method	—		(0.10)		—		(0.10)
Commercial contract settlement	—		—		—		0.07
Gain on debt extinguishment	—		—		—		(0.01)
Unrealized gain on equity securities	(0.01)		—		(0.01)		—
Insurance recovery	—		—		(0.07)		—
Tax adjustments	(0.16)		0.02		(0.23)		(0.64)
Other non-comparable items	0.02		0.02		0.08		0.04
Adjusted earnings per diluted share	$         1.35		$         1.01		$         4.91		$         4.32

Net sales were $3,572 million for the fourth quarter 2025, an increase of approximately 3.9% compared with the fourth quarter 2024. This increase was primarily due to light vehicle eProduct sales growth, partially offset by lower industry volume and lower Battery & Charging Systems segment sales. Net loss for the fourth quarter 2025 was $262 million, or $(1.23) per diluted share, compared with net loss of $403 million, or $(1.84) per diluted share, for the fourth quarter 2024. Adjusted net earnings per diluted share for the fourth quarter 2025 were $1.35, up approximately 34% from adjusted net earnings per diluted share of $1.01 for the fourth quarter 2024. Adjusted net earnings for the fourth quarter 2025 excluded net non-comparable items of $(2.58) per diluted share, while adjusted net earnings for the fourth quarter 2024 excluded net non-comparable items of $(2.85) per diluted share. Non-comparable items include $582 million of goodwill, intangible asset and property, plant and equipment impairment charges recorded during the fourth quarter in our PowerDrive Systems and Battery & Charging Systems segments. These and other non-comparable items are listed in the table above, which is provided by the Company for comparison with other results and the most directly comparable U.S. GAAP measures. The increase in adjusted net earnings per diluted share was primarily due to the impact of higher adjusted operating income, the impact of our share repurchases and a lower effective tax rate.

Full Year 2026 Guidance: At the mid-point of its 2026 guidance, BorgWarner expects to deliver another year of adjusted operating margin improvement and adjusted earnings per share growth despite the Company's expectation that its weighted light vehicle markets will be down 3% to approximately flat and a decline in the Company's Battery & Charging Systems segment sales. Net sales are expected to be in the range of $14.0 billion to $14.3 billion in 2026, compared with 2025 sales of $14.3 billion. The Company's net sales guidance implies a year-over-year change in organic sales of down 3.5% to down 1.5%. The Company's net sales guidance includes an expected year-over-year sales decline of approximately $210 million in the Company's Battery & Charging Systems segment, which represents approximately a 1.5% headwind to organic growth in 2026. Foreign currencies are expected to result in a year-over-year increase in sales of approximately $200 million primarily due to the strengthening of the Euro and Chinese Renminbi against the U.S. dollar.

U.S. GAAP operating margin is expected to be in the range of 9.8% to 10.0% in 2026. Excluding the impact of non-comparable items and the add back of intangible asset amortization expense, adjusted operating margin is expected to be in the range of 10.7% to 10.9%. U.S. GAAP net earnings are expected to be within a range of $4.74 to $4.91 per diluted share. Excluding the impact of non-comparable items, adjusted net earnings are expected to be within a range of $5.00 to $5.20 per diluted share. Full-year operating cash flow is expected to be in the range of $1,600 million to $1,700 million, while free cash flow is expected to be in the range of $900 million to $1,100 million.

At 9:30 a.m. ET today, a brief conference call concerning fourth quarter and full year 2025 results and full year 2026 guidance will be webcast at: https://www.borgwarner.com/investors. Additionally, an earnings call presentation will be available at https://www.borgwarner.com/investors.

For more than 130 years, BorgWarner Inc. (NYSE: BWA) has been a transformative global product leader bringing successful mobility innovation to market. Today, we're accelerating the world's transition to eMobility -- to help build a cleaner, healthier, safer future for all.

Forward Looking Statements: This release may contain forward-looking statements as contemplated by the 1995 Private Securities Litigation Reform Act that are based on management's current outlook, expectations, estimates and projections. Words such as "anticipates," "believes," "continues," "could," "designed," "effect," "estimates," "evaluates," "expects," "forecasts," "goal," "guidance," "initiative," "intends," "may," "outlook," "plans," "potential," "predicts," "project," "pursue," "seek," "should ," "target," "when," "will," "would," and variations of such words and similar expressions are intended to identify such forward-looking statements. Further, all statements, other than statements of historical fact, contained or incorporated by reference in this release that we expect or anticipate will or may occur in the future regarding our financial position, including our guidance for full year 2026, our business strategy and measures to implement that strategy, including changes to operations, competitive strengths, goals, expansion and profitable growth of our business and operations, plans, references to future success, including the launch of the turbine generator system and our other new business awards, and other such matters, are forward-looking statements. Accounting estimates, such as those described under the heading "Critical Accounting Policies and Estimates" in Item 7 of our most recently filed Annual Report on Form 10-K ("Form 10-K"), are inherently forward-looking. All forward-looking statements are based on assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. Forward-looking statements are not guarantees of performance, and the Company's actual results may differ materially from those expressed, projected or implied in or by the forward-looking statements.

You should not place undue reliance on these forward-looking statements, which speak only as of the date of this release. Forward-looking statements are subject to risks and uncertainties, many of which are difficult to predict and generally beyond our control, that could cause actual results to differ materially from those expressed, projected or implied in or by the forward-looking statements. These risks and uncertainties, among others, include: supply disruptions impacting us or our customers, commodity availability and pricing, and an inability to achieve expected levels of recoverability in commercial negotiations with customers concerning these costs; competitive challenges from existing and new competitors, including original equipment manufacturer ("OEM") customers; the challenges associated with rapidly changing technologies, including artificial intelligence, and our ability to innovate in response; potential delays and other challenges associated with launching a new product, such as the turbine generator system, as it involves a new industry for the company; the difficulty in forecasting demand for electric vehicles and our electric vehicles revenue growth; potential future changes in laws and regulations, including, by way of example, taxes and tariffs, in the countries in which we operate; potential disruptions in the global economy caused by wars or other geopolitical conflicts; the ability to identify targets and consummate acquisitions on acceptable terms; failure to realize the expected benefits of acquisitions on a timely basis; the possibility that our 2023 tax-free spin-off of our former Fuel Systems and Aftermarket segments into a separate publicly traded company will not achieve its intended benefits; the failure to promptly and effectively integrate acquired businesses; the potential for unknown or inestimable liabilities relating to the acquired businesses; impacts of our exit of the charging business; our dependence on automotive and truck production, which is highly cyclical and subject to disruptions; our reliance on major OEM customers; impacts of any future strikes involving any of our OEM customers and any actions such OEM customers take in response; fluctuations in interest rates and foreign currency exchange rates; our dependence on information systems; the uncertainty of the global economic environment; the uncertainty surrounding global trade policies, including tariffs and export restrictions and their impact on the Company, its customers and its suppliers; the outcome of existing or any future legal proceedings, including litigation with respect to various claims, or governmental investigations, including related litigation; impacts from any potential future acquisition or disposition transactions; and the other risks discussed in reports that we file with the Securities and Exchange Commission, including in Item 1A. "Risk Factors" in our most recently filed Annual Report on Form 10-K and/or Quarterly Report on Form 10-Q. We do not undertake any obligation to update or announce publicly any updates to or revisions to any of the forward-looking statements in this release to reflect any change in our expectations or any change in events, conditions, circumstances, or assumptions underlying the statements.

 

BorgWarner Inc.
Condensed Consolidated Statements of Operations (Unaudited)
(in millions, except per share amounts)
	Three Months Ended				Year Ended
	December 31,				December 31,
	2025		2024		2025		2024
Net sales	$    3,572		$    3,439		$   14,316		$   14,086
Cost of sales	2,841		2,756		11,642		11,438
Gross profit	731		683		2,674		2,648
Gross margin	20.5 %		19.9 %		18.7 %		18.8 %
Selling, general and administrative expenses	331		340		1,304		1,350
Restructuring expense	30		9		101		74
Other operating expense (income), net	26		4		109		32
Impairment charges	582		646		624		646
Operating (loss) income	(238)		(316)		536		546
Equity in affiliates' earnings, net of tax	(6)		(4)		(35)		(27)
Unrealized and realized (gain) loss on debt and equity securities	(1)		1		(3)		1
Interest expense, net	6		3		39		20
Other postretirement expense	3		3		11		13
(Loss) earnings from continuing operations before income taxes and noncontrolling interest	(240)		(319)		524		539
Provision for income taxes	1		67		189		111
Net (loss) earnings from continuing operations	(241)		(386)		335		428
Net loss from discontinued operations	—		(2)		—		(29)
Net (loss) earnings	(241)		(388)		335		399
Net earnings from continuing operations attributable to the noncontrolling interest, net of tax	21		17		58		61
Net (loss) earnings attributable to BorgWarner Inc.	$      (262)		$      (405)		$        277		$        338
Amounts attributable to BorgWarner Inc.:
Net (loss) earnings from continuing operations	$      (262)		$      (403)		$        277		$        367
Net loss from discontinued operations	—		(2)		—		(29)
Net (loss) earnings attributable to BorgWarner Inc.	$      (262)		$      (405)		$        277		$        338
(Loss) earnings per share from continuing operations — diluted	$     (1.23)		$     (1.84)		$       1.28		$       1.63
Loss per share from discontinued operations — diluted	—		(0.01)		—		(0.13)
(Loss) earnings per share attributable to BorgWarner Inc. — diluted	$     (1.23)		$     (1.85)		$       1.28		$       1.50
Weighted average shares outstanding — diluted	212.9		219.1		216.4		224.8

 

BorgWarner Inc.
Net Sales by Reporting Segment (Unaudited)
(in millions)	Three Months Ended				Year Ended
	December 31,				December 31,
	2025		2024		2025		2024
Turbos & Thermal Technologies	$     1,400		$     1,412		$     5,772		$     5,887
Drivetrain & Morse Systems	1,412		1,351		5,654		5,577
PowerDrive Systems	623		525		2,347		1,937
Battery & Charging Systems	149		162		590		729
Inter-segment eliminations	(12)		(11)		(47)		(44)
Net sales	$     3,572		$     3,439		$   14,316		$   14,086
Segment Adjusted Operating Income (Loss) (Unaudited)
(in millions)
	Three Months Ended				Year Ended
	December 31,				December 31,
	2025		2024		2025		2024
Turbos & Thermal Technologies	$        198		$        223		$        879		$        877
Drivetrain & Morse Systems	271		240		1,041		1,010
PowerDrive Systems	28		(14)		(83)		(144)
Battery & Charging Systems	2		(14)		(39)		(47)
Segment Adjusted Operating Income	499		435		1,798		1,696
Corporate, including stock-based compensation	72		83		261		279
Impairment charges	582		646		624		646
Restructuring expense	30		9		101		74
Accelerated depreciation	9		15		90		50
Intangible asset amortization expense	17		18		66		69
Legal settlement	2		—		40		—
Costs to exit charging business	—		—		32		—
Impairment of investment	16		—		16		—
Chief Executive Officer ("CEO") transition compensation	—		—		11		—
Loss on sale of assets	3		2		9		2
Adjustments associated with Spin-Off related balances	—		3		7		17
Write-off customer incentive asset	—		—		7		—
Merger and acquisition expense, net	1		2		5		2
Loss on sale of business	—		3		2		6
Change in accounting method	—		(29)		—		(29)
Commercial contract settlement	—		—		—		15
Insurance Recovery	—		—		(21)		—
Other non-comparable items	5		(1)		12		19
Equity in affiliates' earnings, net of tax	(6)		(4)		(35)		(27)
Unrealized and realized (gain) loss on equity and debt securities	(1)		1		(3)		1
Interest expense, net	6		3		39		20
Other postretirement expense	3		3		11		13
(Loss) earnings from continuing operations before income taxes and noncontrolling interest	(240)		(319)		524		539
Provision for income taxes	1		67		189		111
Net (loss) earnings from continuing operations	(241)		(386)		335		428
Net earnings from continuing operations attributable to the noncontrolling interest, net of tax	21		17		58		61
Net (loss) earnings from continuing operations attributable to BorgWarner Inc.	$      (262)		$      (403)		$        277		$        367

 

BorgWarner Inc.
Condensed Consolidated Balance Sheets (Unaudited)
(in millions)
	December 31, 2025		December 31, 2024
ASSETS
Cash and cash equivalents	$                2,313		$                2,094
Receivables, net	2,962		2,843
Inventories	1,207		1,251
Prepayments and other current assets	313		333
Total current assets	6,795		6,521
Property, plant and equipment, net	3,330		3,575
Other non-current assets	3,644		3,897
Total assets	$              13,769		$              13,993
LIABILITIES AND EQUITY
Notes payable and other short-term debt	$                       5		$                   398
Accounts payable	1,996		2,032
Other current liabilities	1,281		1,216
Total current liabilities	3,282		3,646
Long-term debt	3,894		3,763
Other non-current liabilities	979		878
Total liabilities	8,155		8,287
Total BorgWarner Inc. stockholders' equity	5,442		5,532
Noncontrolling interest	172		174
Total equity	5,614		5,706
Total liabilities and equity	$              13,769		$              13,993

 

BorgWarner Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in millions)	Year Ended
	December 31,
	2025		2024
OPERATING ACTIVITIES OF CONTINUING OPERATIONS
Net cash provided by operating activities from continuing operations	$                1,648		$                1,382
INVESTING ACTIVITIES OF CONTINUING OPERATIONS
Capital expenditures, including tooling outlays	(469)		(671)
Customer advances related to capital expenditures	29		18
Insurance proceeds received for damage to property, plant and equipment	4		—
Proceeds from sale of businesses, net	7		8
Proceeds from settlement of net investment hedges, net	18		46
Payments for investments in debt and equity securities, net	—		(8)
Proceeds from asset disposals and other, net	43		4
Net cash used in investing activities from continuing operations	(368)		(603)
FINANCING ACTIVITIES OF CONTINUING OPERATIONS
Payments on notes payable	(5)		—
Additions to debt	—		1,008
Repayments of debt, including current portion	(409)		(525)
Payments for debt issuance costs	—		(9)
Payments for purchase of treasury stock	(508)		(402)
Payments for stock-based compensation items	(22)		(23)
Payments for business acquired, net of cash acquired	—		(4)
Payments for contingent consideration	(4)		(1)
Dividends paid to BorgWarner stockholders	(119)		(98)
Dividends paid to noncontrolling stockholders	(49)		(113)
Net cash used in financing activities from continuing operations	(1,116)		(167)
CASH FLOWS FROM DISCONTINUED OPERATIONS
Operating activities of discontinued operations	—		(30)
Net used in discontinued operations	—		(30)
Effect of exchange rate changes on cash	55		(22)
Net increase in cash and cash equivalents	219		560
Cash and cash equivalents at beginning of year	2,094		1,534
Cash and cash equivalents at end of year	$                2,313		$                2,094
Supplemental Financial Information (Unaudited)
(in millions)	Year Ended
	December 31,
	2025		2024
Depreciation and tooling amortization	$                   653		$                   604
Intangible asset amortization	66		69

Non-GAAP Financial Measures
This press release contains certain information about BorgWarner's financial results that is not presented in accordance with U.S. GAAP. Such non-GAAP financial measures are reconciled to their closest U.S. GAAP financial measures below and in the Financial Results table above. The provision of these comparable U.S. GAAP financial measures is not intended to indicate that BorgWarner is explicitly or implicitly providing projections on those U.S. GAAP financial measures, and actual results for such measures are likely to vary from those presented. The reconciliations include all information reasonably available to the Company at the date of this press release and the adjustments that management can reasonably predict.

Management believes that these non-GAAP financial measures are useful to management, investors, and banking institutions in their analyses of the Company's business and operating performance to facilitate comparisons and better identify trends in our business. Management also uses this information for operational planning and decision-making purposes.

Non-GAAP financial measures are not and should not be considered a substitute for any U.S. GAAP measure. Additionally, because not all companies use identical calculations, the non-GAAP financial measures as presented by BorgWarner may not be comparable to similarly titled measures reported by other companies.

Adjusted Operating Income and Adjusted Operating Margin
The Company defines adjusted operating income as operating income adjusted to exclude the impact of restructuring expense, impairment charges, merger, acquisition and divestiture expense, intangible asset amortization expense, other net expenses, discontinued operations, and other gains and losses not reflective of the Company's ongoing operations. Adjusted operating margin is defined as adjusted operating income divided by net sales.

Adjusted Net Earnings
The Company defines adjusted net earnings as net earnings attributable to BorgWarner Inc. adjusted to eliminate the impact of restructuring expense, merger, acquisition and divestiture expense, other net expenses, discontinued operations, and other gains and losses not reflective of the Company's ongoing operations, and related tax effects. The impact of intangible asset amortization expense continues to be included in adjusted net earnings.

Adjusted Earnings per Diluted Share
The Company defines adjusted earnings per diluted share as earnings per diluted share adjusted to eliminate the impact of restructuring expense, merger, acquisition and divestiture expense, other net expenses, discontinued operations, and other gains and losses not reflective of the Company's ongoing operations, and related tax effects. The impact of intangible asset amortization expense continues to be included in adjusted earnings per share.

Free Cash Flow
The Company defines free cash flow as net cash provided by operating activities minus capital expenditures, net of customer advances related to capital expenditures. The Company believes this measure is useful to both management and investors in evaluating the Company's ability to service and repay its debt.

Organic Net Sales Change
The Company defines organic net sales changes as net sales change year-over-year excluding the estimated impact of foreign exchange (FX) and net mergers, acquisitions and divestitures.

Adjusted Operating Income and Adjusted Operating Margin (Unaudited)
	Three Months Ended				Year Ended
	December 31,				December 31,
(in millions)	2025		2024		2025		2024
Net sales	$    3,572		$    3,439		$  14,316		$  14,086
Operating (loss) income	(238)		(316)		536		546
Operating margin	(6.7) %		(9.2) %		3.7 %		3.9 %
Non-comparable items:
Impairment charges	$       582		$       646		$       624		$       646
Restructuring expense	30		9		101		74
Accelerated depreciation	9		15		90		50
Intangible asset amortization	17		18		66		69
Legal settlement	2		—		40		—
Costs to exit charging business	—		—		32		—
Impairment of investment	16		—		16		—
Chief Executive Officer ("CEO") transition compensation	—		—		11		—
Loss on sale of assets	3		2		9		2
Adjustments associated with Spin-Off related balances	—		3		7		17
Write-off customer incentive asset	—		—		7		—
Merger and acquisition expense, net	1		2		5		2
Loss on sale of businesses	—		3		2		6
Change in accounting method	—		(29)		—		(29)
Commercial contract settlement	—		—		—		15
Insurance recovery	—		—		(21)		—
Other non-comparable items	5		(1)		12		19
Net non-comparable items	$       665		$       668		$    1,001		$       871
Adjusted operating income	$       427		$       352		$    1,537		$    1,417
Adjusted operating margin	12.0 %		10.2 %		10.7 %		10.1 %

 

Free Cash Flow Reconciliation (Unaudited)
	Three Months Ended December 31,				Year Ended December 31,
(in millions)	2025		2024		2025		2024
Net cash provided by operating activities from continuing operations	$        619		$        682		$     1,648		$     1,382
Capital expenditures, including tooling outlays	(162)		(161)		(469)		(671)
Customer advances related to capital expenditures	13		18		29		18
Free cash flow	$        470		$        539		$     1,208		$        729

 

Fourth Quarter 2025 Organic Net Sales Change (Unaudited)
(in millions)	Q4 2024 Net Sales		FX		Organic Net Sales Change		Q4 2025 Net Sales		Organic Net Sales Change %
Turbos & Thermal Technologies	$        1,412		$             53		$           (65)		$        1,400		(4.6) %
Drivetrain & Morse Systems	1,351		27		34		1,412		2.5 %
PowerDrive Systems	525		17		81		623		15.4 %
Battery & Charging Systems	162		7		(20)		149		(12.3) %
Inter-segment eliminations	(11)		—		(1)		(12)		9.1 %
Net sales	$        3,439		$           104		$             29		$        3,572		0.8 %

 

Full Year 2025 Organic Net Sales Change (Unaudited)
(in millions)	2024 Net Sales		FX		Organic Net Sales Change		2025 Net Sales		Organic Net Sales Change %
Turbos & Thermal Technologies	$        5,887		$             77		$          (192)		$        5,772		(3.3) %
Drivetrain & Morse Systems	5,577		42		35		5,654		0.6 %
PowerDrive Systems	1,937		22		388		2,347		20.0 %
Battery & Charging Systems	729		13		(152)		590		(20.9) %
Inter-segment eliminations	(44)		—		(3)		(47)		6.8 %
Net sales	$      14,086		$           154		$             76		$      14,316		0.5 %

 

Adjusted Operating Income and Adjusted Operating Margin Guidance Reconciliation (Unaudited)
	Full-Year 2026 Guidance
(in millions)	Low		High
Net sales	$        14,000		$        14,300
Operating income	$          1,373		$          1,428
Operating margin	9.8 %		10.0 %
Non-comparable items:
Restructuring expense	$               70		$               80
Intangible asset amortization	57		57
Adjusted operating income	$          1,500		$          1,565
Adjusted operating margin	10.7 %		10.9 %

 

Adjusted Earnings Per Diluted Share Guidance Reconciliation (Unaudited)
	Full-Year 2026 Guidance
	Low		High
Earnings per Diluted Share	$                4.74		$                4.91
Non-comparable items:
Restructuring expense	0.26		0.29
Adjusted Earnings per Diluted Share	$                5.00		$                5.20

 

Free Cash Flow Guidance Reconciliation From Continuing Operations (Unaudited)
	Full-Year 2026 Guidance
(in millions)	Low		High
Net cash provided by operating activities	$              1,600		$              1,700
Capital expenditures, including tooling outlays	(700)		(600)
Free cash flow	$                 900		$              1,100

 

Full Year 2026 Organic Net Sales Change Guidance Reconciliation (Unaudited)
(in millions)	FY 2025 Net Sales		FX		Organic Net Sales Change		FY 2026 Net Sales		Organic Net Sales Change %		LV Weighted Market		Outgrowth
Low	$     14,316		$          200		$          (516)		$      14,000		(3.6) %		(3.0) %		(0.6) %
High	$     14,316		$          200		$          (216)		$      14,300		(1.5) %		— %		(1.5) %

 

Full Year 2026 Estimated Year-Over-Year Change in Production (Unaudited)
		North America		Europe		China		Total		BorgWarner Weighted Total
Light vehicle		(5)% to (1)%		(2)% to 0.5%		(4)% to (1)%		(2)% to 0%		(3)% to 0%

 

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SOURCE BorgWarner

FAQ

What were BorgWarner's full-year 2025 adjusted earnings per share (BWA)?

Adjusted net earnings per diluted share were $4.91 for 2025. According to the company, this reflects higher adjusted operating income and over $500 million in share repurchases.

How much cash did BorgWarner generate from operations in 2025 (BWA)?

Net cash from operating activities was $1,648 million in 2025. According to the company, stronger operating income and capital expenditure control drove the ~19% increase versus 2024.

What is BorgWarner's 2026 sales guidance range (BWA)?

Net sales are expected between $14.0B and $14.3B for 2026. According to the company, this implies organic sales down roughly 3.5% to 1.5%, with currency tailwinds near $200 million.

What did BorgWarner announce about the turbine generator system award (BWA)?

BorgWarner secured a master supply agreement for a turbine generator aimed at AI data centers and microgrids. According to the company, production is expected early 2027 with estimated first-year sales >$300 million.

How did impairments affect BorgWarner's 2025 GAAP results (BWA)?

The company recorded approximately $624 million of impairment charges impacting U.S. GAAP operating margin. According to the company, impairments primarily affected PowerDrive Systems and Battery & Charging Systems segments.