Garrett Motion (Nasdaq: GTX) boosts 2026 guidance after Q2 profit rise
Rhea-AI Filing Summary
Garrett Motion Inc. reported strong results for the three months ended June 30, 2026. Net sales were $976 million versus $913 million a year earlier, with gross margin improving to 21.7% from 19.8%. Net income was $101 million, up from $87 million, and diluted EPS rose to $0.53 from $0.42. Adjusted EBIT increased to $152 million, with margin expanding to 15.6%, and Adjusted EBITDA reached $183 million, a margin of 18.8%.
Net cash provided by operating activities was $145 million, and Adjusted free cash flow was $122 million. As of June 30, 2026, available liquidity totaled $788 million, including $158 million of cash and $630 million of undrawn revolver capacity, against $1,386 million of total debt. The company repurchased $28 million of common stock in the quarter, leaving $135 million of remaining authorization, and declared a $0.08 per-share cash dividend payable September 15, 2026.
Garrett raised its full-year 2026 outlook, now expecting net sales of $3.7–$3.9 billion, net income of $330–$360 million, Adjusted EBIT of $560–$600 million, operating cash flow of $435–$525 million, and Adjusted free cash flow of $385–$475 million, assuming modest declines in light-vehicle production and slight growth in commercial vehicles.
Positive
- Q2 2026 net sales rose to $976 million from $913 million while gross margin improved to 21.7% and Adjusted EBIT margin to 15.6%, reflecting higher profitability.
- 2026 outlook was increased across key metrics, including net sales of $3.7–$3.9 billion and Adjusted EBIT of $560–$600 million, alongside ongoing dividends and share repurchases.
Negative
- None.
Filing Explained
As of June 30, common shares outstanding were 186,800,685 versus 190,556,297 at year-end.
At
Under the supplied dilution definition, issuing additional shares can reduce an existing holder’s percentage ownership, but the filing reports issued and outstanding shares separately; those counts alone do not establish a holder’s percentage-ownership change.
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Q2 2026 Net sales: $976 million
Q2 2026 Net income: $101 million
Q2 2026 Adjusted EBIT: $152 million
+5 more
8 metrics
Q2 2026 Net sales
$976 million
Three months ended June 30, 2026; up from $913 million in Q2 2025
Q2 2026 Net income
$101 million
Three months ended June 30, 2026; up from $87 million in Q2 2025
Q2 2026 Adjusted EBIT
$152 million
Three months ended June 30, 2026; Adjusted EBIT margin 15.6%
Q2 2026 Net cash provided by operating activities
$145 million
Three months ended June 30, 2026; compared with $158 million in Q2 2025
Q2 2026 Adjusted free cash flow
$122 million
Three months ended June 30, 2026; slightly above $121 million in Q2 2025
Available liquidity
$788 million
As of June 30, 2026; includes $158 million cash and $630 million undrawn revolver
Total principal amount of debt
$1,386 million
Debt outstanding as of June 30, 2026
Quarterly cash dividend per share
$0.08
Declared payable on September 15, 2026 to shareholders of record on September 1, 2026
Key Terms
Adjusted EBIT, Adjusted free cash flow, constant currency sales growth, net investment hedges, +2 more
6 terms
Adjusted EBIT financial
"Adjusted EBIT* totaled $152 million; adjusted EBIT margin* of 15.6%"
Adjusted EBIT is a company’s operating profit before interest and taxes, but cleaned up by removing one-time or unusual items that can obscure ongoing performance. Investors use it like a tidied-up report card — it aims to show the underlying profitability of the business by excluding irregular gains, losses, or costs so comparisons across periods or companies are clearer and more meaningful for valuing operational strength.
Adjusted free cash flow financial
"Adjusted free cash flow* totaled $122 million"
Adjusted free cash flow is the amount of money a company generates from its operations after accounting for essential expenses and investments, like maintaining or upgrading equipment. It shows how much cash is truly available to grow the business, pay debts, or return to shareholders, helping investors see the company's financial health more clearly.
constant currency sales growth financial
"We define constant currency sales growth as the year-over-year change in reported sales"
net investment hedges financial
"Changes in fair value of net investment hedges, net of tax"
A net investment hedge is a financial step a company takes to protect the reported value of its ownership in foreign subsidiaries from swings in exchange rates. By using derivatives or foreign‑currency borrowings to offset translation gains or losses, the company reduces how much its balance sheet and reported equity jump around when currencies move — like locking a price tag on a foreign store so its value in the home currency stays steadier for investors.
repositioning costs financial
"We define Adjusted EBIT as EBIT, plus the sum of (i) repositioning costs"
cross currency swap contracts financial
"Proceeds from cross-currency swap contracts"
Earnings Snapshot
Net sales: $976 million · Guidance included
Three months ended June 30, 2026
Net sales
$976 million
Up from $913 million in Q2 2025
Net income
$101 million
Up from $87 million in Q2 2025
Diluted EPS
$0.53
Up from $0.42 in Q2 2025
Adjusted EBIT
$152 million
Up from $124 million in Q2 2025
Guidance
For full-year 2026, Garrett forecasts net sales of $3.7–$3.9 billion, net income of $330–$360 million, Adjusted EBIT of $560–$600 million, operating cash flow of $435–$525 million, and Adjusted free cash flow of $385–$475 million.
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
How did Garrett Motion (GTX) perform financially in Q2 2026?
Garrett Motion reported Q2 2026 net sales of $976 million and net income of $101 million, up from $913 million and $87 million a year earlier. Diluted EPS rose to $0.53, and Adjusted EBIT increased to $152 million with a 15.6% margin.
What guidance did Garrett Motion (GTX) give for full-year 2026?
For 2026, Garrett targets net sales of $3.7–$3.9 billion and net income of $330–$360 million. It expects Adjusted EBIT of $560–$600 million, operating cash flow of $435–$525 million, and Adjusted free cash flow of $385–$475 million.
What is Garrett Motion (GTX)'s cash and debt position as of June 30, 2026?
As of June 30, 2026, Garrett held $158 million in cash and cash equivalents and had total available liquidity of $788 million, including a $630 million undrawn revolver. The total principal amount of debt outstanding was $1,386 million.
What drove Garrett Motion (GTX)'s Q2 2026 sales growth?
Q2 2026 net sales grew to $976 million, a 7% increase including 2% from foreign currency. Growth was supported by higher demand across gasoline, diesel, commercial vehicle and industrial segments, stronger aftermarket volumes, and favorable pricing and productivity improvements.
What industry assumptions underpin Garrett Motion (GTX)'s 2026 outlook?
Garrett’s 2026 outlook assumes light-vehicle production down 2–4% and commercial vehicle production up 1–2% versus 2025, average light-vehicle BEV penetration around 19%, RD&E at about 4.1% of sales, and capital expenditures near 2.4% of sales.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 29, 2026
(Exact name of Registrant as specified in its Charter)
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) | ||||||||||||
and | ||||||||||||||
(Address of principal executive offices) (Zip Code) | ||||||||||||||
Registrant’s telephone number, including area code:
+1 734 392 5500
and
+41 21 695 30 00
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||||||||
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | ||||||||
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | ||||||||
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | ||||||||
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Common Stock, $0.001 par value per share | GTX | The Nasdaq Stock Market LLC | ||||||
Indicate by check mark whether the Registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. | Results of Operations and Financial Condition. | ||||
On July 29, 2026, Garrett Motion Inc. (the “Company”), issued a press release to report the Company’s financial results for the three months ended June 30, 2026. The full text of the press release is attached to this Current Report on Form 8-K as Exhibit 99.1.
The information in Item 2.02 and Exhibit 99.1 of this Current Report on Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Item 9.01. | Financial Statements and Exhibits. | ||||
(d) Exhibits.
99.1* | Press Release of Garrett Motion Inc., dated July 29, 2026. | |||||||
104 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. | |||||||
* | Furnished herewith. | ||||
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: July 29, 2026 | Garrett Motion Inc. | |||||||||||||||||||
By: | /s/ Sean Deason | |||||||||||||||||||
Sean Deason | ||||||||||||||||||||
Senior Vice President and Chief Financial Officer | ||||||||||||||||||||
 | Exhibit 99.1 | ||||
Garrett Motion Reports Strong Second Quarter 2026 Results, Increases 2026 Outlook
Second Quarter 2026 Financial Highlights
•Net sales totaled $976 million, up 5% on a constant currency* basis vs prior year, driven by share of demand gains in passenger vehicles and strong performance in commercial vehicle and industrial
•Net income totaled $101 million; net income margin of 10.3%
•Adjusted EBIT* totaled $152 million; adjusted EBIT margin* of 15.6%
•Net cash provided by operating activities totaled $145 million
•Adjusted free cash flow* totaled $122 million
•Increased 2026 full-year outlook
Second Quarter 2026 Business Highlights
•Secured multiple turbo wins, including a large light vehicle program in North America and several on- and off-highway commercial vehicle applications in China and India
•Won a major award for Garrett MEG used in gensets for data centers, along with several additional genset awards in different regions
•Kicked off pre-development of a commercial vehicle e- powertrain with a Japanese truck maker
•Secured a production award for industrial air compression, using Garrett’s centrifugal compressor technology
PLYMOUTH, Mich. and ROLLE, Switzerland, July 29, 2026 – Garrett Motion Inc. (Nasdaq: GTX) ("Garrett" or the "Company"), a leading automotive and industrial technology provider, today announced its financial results for the three months ended June 30, 2026. Additionally, the Company's Board of Directors declared a cash dividend of $0.08 per share of common stock, payable on September 15, 2026, to shareholders of record as of September 1, 2026.
“Garrett delivered a strong second quarter, highlighting the power of our differentiated technology portfolio and continued share-of-demand gains,” said Olivier Rabiller, President and CEO of Garrett. “Net sales were $976 million, up 5% at constant currency, and adjusted EBIT margin expanded 200 basis points to 15.6%, driven by disciplined execution across the business.
"We also secured multiple turbo wins in industrial for power generation, as well as in passenger and commercial vehicle, while advancing our e-compressor and e-powertrain offerings. Combined with strong profitability and cash generation, these results reinforce our confidence in Garrett’s long-term growth trajectory.”
1
| $ millions (unless otherwise noted) | Q2 2026 | Q2 2025 | YTD 2026 | YTD 2025 | ||||||||||||||||||||||
| Net sales | 976 | 913 | 1,961 | 1,791 | ||||||||||||||||||||||
| Cost of goods sold | 764 | 732 | 1,553 | 1,431 | ||||||||||||||||||||||
| Gross profit | 212 | 181 | 408 | 360 | ||||||||||||||||||||||
| Gross profit % | 21.7% | 19.8% | 20.8% | 20.1% | ||||||||||||||||||||||
| Selling, general and administrative expenses | 63 | 59 | 121 | 118 | ||||||||||||||||||||||
| Income before taxes | 126 | 102 | 244 | 187 | ||||||||||||||||||||||
| Net income | 101 | 87 | 196 | 149 | ||||||||||||||||||||||
| Net income margin | 10.3% | 9.5% | 10.0% | 8.3% | ||||||||||||||||||||||
| Adjusted EBIT* | 152 | 124 | 303 | 255 | ||||||||||||||||||||||
| Adjusted EBIT margin* | 15.6% | 13.6% | 15.5% | 14.2% | ||||||||||||||||||||||
| Adjusted EBITDA* | 183 | 154 | 366 | 313 | ||||||||||||||||||||||
| Adjusted EBITDA margin* | 18.8% | 16.9% | 18.7% | 17.5% | ||||||||||||||||||||||
| Net cash provided by operating activities | 145 | 158 | 243 | 214 | ||||||||||||||||||||||
| Adjusted free cash flow* | 122 | 121 | 171 | 157 | ||||||||||||||||||||||
* See reconciliations to the nearest GAAP measures below.
Results of Operations
Net sales for the second quarter of 2026 were $976 million, representing an increase of 7% (including a favorable impact of $15 million or 2% due to foreign currency translation) compared with $913 million in the second quarter of 2025. This increase was driven by higher growth across all verticals. Gasoline growth was driven by new application launches and program ramp-ups in Europe, India and South America. Diesel growth was due to strong demand for light commercial vehicles and pickup trucks in Europe, Asia and South America and program ramp-ups in India. Commercial vehicle and industrial growth was driven by strong on-highway demand in China following program launches and North America Genset for data centers. Aftermarket volumes increased in Europe, China and Australia resulting in a favorable product mix.
Cost of goods sold for the second quarter of 2026 increased to $764 million from $732 million in the second quarter of 2025, primarily driven by $35 million from higher sales volumes, $18 million of unfavorable product mix, $15 million from foreign currency impacts and $8 million from commodity, transportation and energy inflation. These increases were partially offset by $24 million productivity net of labor inflation and repositioning costs, $16 million of lower import tariffs and $4 million of lower RD&E costs.
Gross profit totaled $212 million for the second quarter of 2026 as compared to $181 million in the second quarter of 2025, with a gross profit percentage for the second quarter of 2026 of 21.7% as compared to 19.8% in the second quarter of 2025. This increase in gross profit was driven by $16 million from higher sales volumes, $8 million productivity net of labor inflation and repositioning costs, $8 million of price net of inflation pass-through, $4 million of lower RD&E costs and $3 million of favorable product mix. These increases were partially offset by $8 million of commodity, transportation and energy inflation.
Selling, general and administrative (“SG&A”) expenses for the second quarter of 2026 increased to $63 million from $59 million in the second quarter of 2025. This increase was driven by $3 million of higher personnel costs and $2 million of unfavorable foreign currency impact, partially offset by $1 million of lower bad debt expense.
Other expense in the second quarter of 2026 was consistent with the the second quarter of 2025.
Interest expense in the second quarter of 2026 was $24 million as compared to $25 million in the second quarter of 2025. This decrease was primarily due to $3 million in lower interest expense due to a different notional amount of debt
2
outstanding during the period. In addition, we recorded offsetting net gains of $2 million on our interest derivatives in the current year, in comparison to net gains of $4 million in the prior year.
Non-operating income for the second quarter of 2026 was $2 million as compared to $6 million in the second quarter of 2025, with the decrease driven by a decrease in foreign exchange transactional gains.
Tax expense for the second quarter of 2026 was $25 million as compared to $15 million in the second quarter of 2025, primarily because of a decrease in U.S. taxes on international operations during 2026, the global mix of earnings from year-to-year, a one-time benefit related to the revaluation of deferred tax assets in China during 2025, and deductions related to employee share-based compensation during 2026.
Net income for the second quarter of 2026 was $101 million as compared to $87 million in the second quarter of 2025 primarily driven by $31 million of increased gross profit and $1 million of lower interest expense, partially offset by $10 million of higher tax expense, $4 million of lower non-operating income and $4 million of higher SG&A expense.
Net cash provided by operating activities totaled $145 million in the second quarter of 2026 as compared to $158 million in the second quarter of 2025, representing a decrease of $13 million. The decrease was primarily driven by $84 million of unfavorable impacts from working capital changes, partially offset by $60 million of favorable impacts from changes in other assets and liabilities and $11 million of higher net income net of non-cash charges.
Non-GAAP Financial Measures
Adjusted EBIT increased to $152 million in the second quarter of 2026 as compared to $124 million in the second quarter of 2025. The increase of $28 million was driven by $16 million from higher sales volumes, $10 million of higher productivity, $8 million of pricing net of inflation pass-through, $4 million of lower RD&E costs and $3 million of favorable product mix impact. This increase was partially offset by $8 million of commodity, transportation and energy inflation and $5 million unfavorable foreign currency impact.
Adjusted free cash flow was $122 million in the second quarter of 2026 as compared to $121 million in the second quarter of 2025. The increase was driven by $30 million from other assets and liabilities, $28 million from higher Adjusted EBIT, $4 million from lower cash taxes and $1 million from higher depreciation, and were partially offset by $60 million of unfavorable impact from working capital (net of factoring) and $2 million of higher capital expenditures.
Liquidity and Capital Resources
As of June 30, 2026, Garrett had $788 million in available liquidity, including $158 million in unrestricted cash and cash equivalents and $630 million of undrawn commitments under its revolving credit facility. As of December 31, 2025, Garrett had $807 million in available liquidity, including $177 million in unrestricted cash and cash equivalents and $630 million of undrawn commitments under its revolving credit facility.
As of June 30, 2026, total principal amount of debt outstanding was $1,386 million, compared to $1,439 million as of December 31, 2025.
During the second quarter of 2026, we repurchased $28 million of our common stock under our authorized share repurchase program and we had remaining repurchase capacity of $135 million as of June 30, 2026.
3
Full Year 2026 Outlook
Garrett is providing the following outlook for the full year 2026 for certain GAAP and Non-GAAP financial measures.
| Full Year 2026 Outlook | Prior Outlook | |||||||
| Net sales (GAAP) | $3.7 billion to $3.9 billion | $3.6 billion to $3.9 billion | ||||||
| Net sales growth at constant currency (Non-GAAP)* | +1% to +7% | -2% to +6% | ||||||
| Net income (GAAP) | $330 million to $360 million | $300 million to $360 million | ||||||
| Adjusted EBIT (Non-GAAP)* | $560 million to $600 million | $520 million to $600 million | ||||||
| Net cash provided by operating activities (GAAP) | $435 million to $525 million | $407 million to $522 million | ||||||
| Adjusted free cash flow (Non-GAAP)* | $385 million to $475 million | $355 million to $475 million | ||||||
* See reconciliations to the nearest GAAP measures below.
Garrett’s full year 2026 outlook, as of July 29, 2026, includes the following expectations:
•2026 light vehicle industry production down 2% to 4% from 2025;
•2026 commercial vehicle industry, including both on- and off-highway, up 1% to 2% from 2025;
•2026 average light vehicle battery electric vehicle penetration of ~19%;
•2026 Euro/dollar exchange rate of 1.16 USD (down from 1.17 in prior outlook)
•RD&E investment at ~4.1% of sales;
•Capital expenditures at ~2.4% of sales
Conference Call
Garrett will hold a conference call at 8:30 am EDT / 2:30 pm CET on Thursday, July 29, 2026, to discuss its results. To participate on the conference call, please dial +1-877-883-0383 (US) or +1-412-902-6506 (international) and use the passcode 7065303.
The conference call will also be broadcast over the internet and include a slide presentation. To access the webcast and supporting material, please visit the investor relations section of the Garrett Motion website at http://investors.garrettmotion.com. A replay of the conference call will be available by dialing +1-855-669-9658 (US) or +1-412-317-0088 (international) using the access code 2467399. The webcast will also be archived on Garrett’s website.
Forward-Looking Statements
This communication and related comments by management may include “forward-looking statements” within the meaning of the U.S. federal securities laws. Forward-looking statements are any statements other than statements of historical fact and can be identified by words such as “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “should,” “will,” and similar expressions. Forward-looking statements represent our current judgment about possible future activities, events, or developments that we intend, expect, project, believe, or anticipate will or may occur in the future. In making these statement, we rely upon assumptions and analysis based on our experience and perception of historical trends, current conditions, and expected future developments, as well as other factors we consider appropriate under the circumstances. We believe these judgments are reasonable, but these statements are not guarantees of any future performance, events, or results, and actual performance, events, or results may differ materially from those envisaged by our forward-looking statements due to a variety of important factors, many of which are described in our most recent Annual Report on Form 10-K and our other filings with the U.S. Securities and Exchange Commission, including risks related to the automotive industry, the competitive landscape and our ability to compete, and macroeconomic and geopolitical conditions, among others. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date they are made, and we undertake no obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information, future events, or other factors that affect the subject of these statement, except where we are expressly required to do so by law.
4
Non-GAAP Financial Measures
This communication includes the following non-GAAP financial measures, which are not calculated in accordance with generally accepted accounting principles in the United States (“GAAP”): Constant currency sales growth, Adjusted EBIT, Adjusted EBITDA, Adjusted EBIT margin, Adjusted EBITDA margin and Adjusted free cash flow. We believe these measures are useful to investors and management in understanding our ongoing operations and analysis of ongoing operating trends and are important indicators of operating performance because they exclude the effects of certain non-operating items, therefore making them more closely reflect our operational performance. Our calculation of these non-GAAP measures, including a reconciliation of such measures to the most closely related GAAP measure, are set forth in the Appendix to this presentation. These non-GAAP measures may not be comparable to similarly titled measures of other companies due to potential differences between companies in the method of calculation. As a result, the use of these non-GAAP measures has limitations and should not be considered superior to, in isolation from, or as a substitute for, related GAAP measures. For additional information regarding our non-GAAP financial measures, see our most recent Annual Report on Form 10-K and our other filings with the U.S. Securities and Exchange Commission.
About Garrett Motion Inc.
A differentiated technology leader, Garrett Motion has a 70-year history of innovation in the automotive sector (cars, trucks) and beyond (off-highway equipment, marine, power generators). Its well-recognized expertise in turbocharging has enabled significant reductions in engine size, fuel consumption, and CO2 emissions. Garrett is committed to advancing turbo applications while leveraging its unique technology solutions, such as fuel cell compressors for hydrogen fuel cell vehicles, as well as electric propulsion and thermal management systems for automotive and industrial applications. Garrett has six R&D centers, 13 manufacturing facilities and a team of more than 8,700 employees in more than 20 countries. For more information, please visit www.garrettmotion.com.
| Contacts: | ||||||||
INVESTOR RELATIONS | ||||||||
| Cyril Grandjean | ||||||||
| +1.734.392.5504 | ||||||||
investorrelations@garrettmotion.com | ||||||||
5
CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (Dollars in millions, except per share amounts) | |||||||||||||||||||||||
| Net sales | $ | 976 | $ | 913 | $ | 1,961 | $ | 1,791 | |||||||||||||||
| Cost of goods sold | 764 | 732 | 1,553 | 1,431 | |||||||||||||||||||
| Gross profit | 212 | 181 | 408 | 360 | |||||||||||||||||||
| Selling, general and administrative expenses | 63 | 59 | 121 | 118 | |||||||||||||||||||
| Other expense, net | 1 | 1 | 2 | 8 | |||||||||||||||||||
| Interest expense | 24 | 25 | 51 | 54 | |||||||||||||||||||
| Non-operating income, net | (2) | (6) | (10) | (7) | |||||||||||||||||||
| Income before taxes | 126 | 102 | 244 | 187 | |||||||||||||||||||
| Tax expense | 25 | 15 | 48 | 38 | |||||||||||||||||||
| Net income | $ | 101 | $ | 87 | $ | 196 | $ | 149 | |||||||||||||||
| Earnings per common share | |||||||||||||||||||||||
| Basic | $ | 0.54 | $ | 0.43 | $ | 1.04 | $ | 0.73 | |||||||||||||||
| Diluted | 0.53 | 0.42 | 1.02 | 0.72 | |||||||||||||||||||
| Weighted average common shares outstanding | |||||||||||||||||||||||
| Basic | 187,252,451 | 202,672,945 | 188,244,787 | 203,886,530 | |||||||||||||||||||
| Diluted | 190,594,777 | 205,255,033 | 191,970,322 | 206,433,975 | |||||||||||||||||||
6
CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE INCOME
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||
| Net income | $ | 101 | $ | 87 | $ | 196 | $ | 149 | |||||||||||||||
| Foreign exchange translation adjustment | 43 | (59) | 38 | (88) | |||||||||||||||||||
| Changes in fair value of effective cash flow hedges, net of tax | (1) | 17 | 13 | 19 | |||||||||||||||||||
| Changes in fair value of net investment hedges, net of tax | 2 | (128) | 33 | (163) | |||||||||||||||||||
| Total other comprehensive income (loss), net of tax | 44 | (170) | 84 | (232) | |||||||||||||||||||
| Comprehensive income (loss) | $ | 145 | $ | (83) | $ | 280 | $ | (83) | |||||||||||||||
7
CONSOLIDATED INTERIM BALANCE SHEETS
| June 30, 2026 | December 31, 2025 | ||||||||||
| (Dollars in millions) | |||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 158 | $ | 177 | |||||||
| Restricted cash | 2 | 2 | |||||||||
| Accounts, notes and other receivables – net | 836 | 703 | |||||||||
| Inventories – net | 350 | 339 | |||||||||
| Other current assets | 124 | 98 | |||||||||
| Total current assets | 1,470 | 1,319 | |||||||||
| Investments and long-term receivables | 10 | 11 | |||||||||
| Property, plant and equipment – net | 426 | 462 | |||||||||
| Goodwill | 193 | 193 | |||||||||
| Deferred income taxes | 207 | 210 | |||||||||
| Other assets | 167 | 172 | |||||||||
| Total assets | $ | 2,473 | $ | 2,367 | |||||||
| LIABILITIES | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 1,135 | $ | 1,061 | |||||||
| Current maturities of long-term debt | 7 | 7 | |||||||||
| Accrued liabilities | 325 | 295 | |||||||||
| Total current liabilities | 1,467 | 1,363 | |||||||||
| Long-term debt | 1,360 | 1,411 | |||||||||
| Deferred income taxes | 35 | 32 | |||||||||
| Other liabilities | 286 | 363 | |||||||||
| Total liabilities | $ | 3,148 | $ | 3,169 | |||||||
COMMITMENTS AND CONTINGENCIES | |||||||||||
| EQUITY (DEFICIT) | |||||||||||
| Common Stock, par value $0.001; 1,000,000,000 and 1,000,000,000 shares authorized, 245,457,621 and 242,549,685 issued and 186,800,685 and 190,556,297 outstanding as of June 30, 2026 and December 31, 2025, respectively | — | — | |||||||||
| Additional paid – in capital | 1,254 | 1,240 | |||||||||
| Retained deficit | (1,220) | (1,384) | |||||||||
| Accumulated other comprehensive (loss) income | (54) | (138) | |||||||||
Treasury Stock, at cost; 58,666,936 and 51,993,388 shares as of June 30, 2026 and December 31, 2025, respectively | (655) | (520) | |||||||||
| Total deficit | (675) | (802) | |||||||||
| Total liabilities and deficit | $ | 2,473 | $ | 2,367 | |||||||
8
CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS | Six Months Ended June 30, | ||||||||||
| 2026 | 2025 | ||||||||||
| (Dollars in millions) | |||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $ | 196 | $ | 149 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities | |||||||||||
| Deferred income taxes | 10 | (3) | |||||||||
| Depreciation | 49 | 45 | |||||||||
| Amortization of deferred issuance costs | 3 | 3 | |||||||||
| Foreign exchange loss (gain) | 17 | (65) | |||||||||
| Stock compensation expense | 14 | 13 | |||||||||
| Pension expense | — | 1 | |||||||||
| Unrealized (gain) loss on derivatives | (37) | 81 | |||||||||
| Other | 8 | 4 | |||||||||
| Changes in assets and liabilities: | |||||||||||
| Accounts, notes and other receivables | (137) | 8 | |||||||||
| Inventories | (23) | 20 | |||||||||
| Other assets | 5 | (7) | |||||||||
| Accounts payable | 109 | (13) | |||||||||
| Accrued liabilities | 12 | (44) | |||||||||
| Other liabilities | 17 | 22 | |||||||||
| Net cash provided by operating activities | $ | 243 | $ | 214 | |||||||
| Cash flows from investing activities: | |||||||||||
| Expenditures for property, plant and equipment | (46) | (41) | |||||||||
Proceeds from cross-currency swap contracts | 8 | 15 | |||||||||
| Net cash used for investing activities | $ | (38) | $ | (26) | |||||||
| Cash flows from financing activities: | |||||||||||
| Proceeds from issuance of long-term debt, net of deferred financing costs | 56 | 68 | |||||||||
| Payments of long-term debt | (110) | (73) | |||||||||
| Repurchases of Common Stock | (115) | (52) | |||||||||
| Excise tax on Common Stock repurchase | (1) | (3) | |||||||||
| Dividend payments | (31) | (25) | |||||||||
| Withholdings on shares issued under stock plan | (20) | — | |||||||||
| Payments for debt and revolving facility financing costs | — | (2) | |||||||||
| Other | (1) | (2) | |||||||||
| Net cash used for financing activities | $ | (222) | $ | (89) | |||||||
| Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash | (2) | 8 | |||||||||
| Net (decrease) increase in cash, cash equivalents and restricted cash | (19) | 107 | |||||||||
| Cash, cash equivalents and restricted cash at beginning of the period | 179 | 126 | |||||||||
| Cash, cash equivalents and restricted cash at end of the period | $ | 160 | $ | 233 | |||||||
| Supplemental cash flow disclosure: | |||||||||||
| Income taxes paid (net of refunds) | 34 | 37 | |||||||||
| Interest paid | 50 | 46 | |||||||||
| Supplemental disclosure of non-cash investing activities: | |||||||||||
| Expenditures for property, plant and equipment in accounts payable | 38 | 24 | |||||||||
9
Reconciliation of Net Income to Adjusted EBIT(1) and Adjusted EBITDA(1)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| (Dollars in millions) | ||||||||||||||||||||||||||
| Net income | $ | 101 | $ | 87 | $ | 196 | $ | 149 | ||||||||||||||||||
Interest expense, net of interest income (2) | 25 | 23 | 51 | 52 | ||||||||||||||||||||||
| Tax expense | 25 | 15 | 48 | 38 | ||||||||||||||||||||||
| EBIT | 151 | 125 | 295 | 239 | ||||||||||||||||||||||
| Repositioning costs | 1 | (2) | 13 | 5 | ||||||||||||||||||||||
| Foreign exchange gain on debt, net of related hedging loss | — | (1) | — | — | ||||||||||||||||||||||
| Factoring and notes receivables discount fees | 1 | 1 | 2 | 2 | ||||||||||||||||||||||
Other non-operating income (3) | (2) | (2) | (8) | (3) | ||||||||||||||||||||||
Debt refinancing and redemption costs (4) | 1 | — | 1 | 6 | ||||||||||||||||||||||
| Acquisition and divestiture expenses | — | 3 | — | 6 | ||||||||||||||||||||||
| Adjusted EBIT | 152 | 124 | 303 | 255 | ||||||||||||||||||||||
| Depreciation | 24 | 23 | 49 | 45 | ||||||||||||||||||||||
Stock compensation expense (5) | 7 | 7 | 14 | 13 | ||||||||||||||||||||||
| Adjusted EBITDA | $ | 183 | $ | 154 | $ | 366 | $ | 313 | ||||||||||||||||||
| Net sales | $ | 976 | $ | 913 | $ | 1,961 | $ | 1,791 | ||||||||||||||||||
| Net income margin | 10.3 | % | 9.5 | % | 10.0 | % | 8.3 | % | ||||||||||||||||||
Adjusted EBIT margin (6) | 15.6 | % | 13.6 | % | 15.5 | % | 14.2 | % | ||||||||||||||||||
Adjusted EBITDA margin (7) | 18.8 | % | 16.9 | % | 18.7 | % | 17.5 | % | ||||||||||||||||||
(1)We evaluate performance on the basis of Adjusted EBIT and Adjusted EBITDA. We define “EBIT” as our net income calculated in accordance with U.S. GAAP, plus the sum of (i) interest expense net of interest income and (ii) tax expense. We define Adjusted EBIT as EBIT, plus the sum of (i) repositioning costs, (ii) foreign exchange (gain) loss on debt net of related hedging gain/loss, (iii) discounting costs on factoring, (iv) gain on sale of equity investment, (v) acquisition and divestiture expenses, (vi) other non-operating income, and (vii) debt refinancing and redemption costs, if any. We define Adjusted EBITDA as EBIT, plus the sum of (i) repositioning costs, (ii) foreign exchange (gain) loss on debt net of related hedging gain/loss, (iii) discounting costs on factoring, (iv) gain on sale of equity investment, (v) acquisition and divestiture expenses, (vi) other non-operating income, and (vii) debt refinancing and redemption costs, if any, plus (viii) depreciation and (ix) stock compensation expense. We believe that Adjusted EBIT and Adjusted EBITDA are important indicators of operating performance and provide useful information for investors because:
•Adjusted EBIT and Adjusted EBITDA exclude the effects of income taxes, as well as the effects of financing activities by eliminating the effects of interest;
•certain adjustment items, while periodically affecting our results, may vary significantly from period to period and have disproportionate effect in a given period, which affects the comparability of our results; and
•Adjusted EBITDA also excludes the effects of investing activities by eliminating the effects of depreciation.
In addition, our management may use Adjusted EBIT and Adjusted EBITDA in setting performance incentive targets to align performance measurement with operational performance.
(2) Reflects interest income of $0 million and $2 million for the three months ended June 30, 2026 and 2025, respectively, and $0 million and $2 million for the six months ended June 30, 2026 and 2025, respectively.
(3) Reflects the non-service component of net periodic pension income and, for the six months ended June 30, 2026, also includes $5 million related to the resolution of certain environmental liabilities not directly related to the Company's operations.
(4) Reflects third-party costs directly attributable to the refinancing of our credit facilities and any amendments thereto.
(5) Stock compensation expense includes only non-cash expenses.
(6) Adjusted EBIT margin represents Adjusted EBIT as a percentage of net sales.
(7) Adjusted EBITDA margin represents Adjusted EBITDA as a percentage of net sales.
10
Reconciliation of Constant Currency Sales % Change(1)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Garrett | |||||||||||||||||||||||
| Reported sales % change | 7 | % | 3 | % | 9 | % | (1) | % | |||||||||||||||
| Less: Foreign currency translation | 2 | % | 3 | % | 4 | % | 0 | % | |||||||||||||||
| Constant currency sales % change | 5 | % | 0 | % | 5 | % | (1) | % | |||||||||||||||
| Gasoline | |||||||||||||||||||||||
| Reported sales % change | 5 | % | 6 | % | 7 | % | 5 | % | |||||||||||||||
| Less: Foreign currency translation | 2 | % | 2 | % | 4 | % | 0 | % | |||||||||||||||
| Constant currency sales % change | 3 | % | 4 | % | 3 | % | 5 | % | |||||||||||||||
| Diesel | |||||||||||||||||||||||
| Reported sales % change | 8 | % | (1) | % | 10 | % | (8) | % | |||||||||||||||
| Less: Foreign currency translation | 2 | % | 4 | % | 6 | % | 0 | % | |||||||||||||||
| Constant currency sales % change | 6 | % | (5) | % | 4 | % | (8) | % | |||||||||||||||
| Commercial vehicle / Industrial | |||||||||||||||||||||||
| Reported sales % change | 10 | % | 6 | % | 14 | % | 1 | % | |||||||||||||||
| Less: Foreign currency translation | 0 | % | 2 | % | 2 | % | 0 | % | |||||||||||||||
| Constant currency sales % change | 10 | % | 4 | % | 12 | % | 1 | % | |||||||||||||||
| Aftermarket | |||||||||||||||||||||||
| Reported sales % change | 8 | % | (8) | % | 11 | % | (10) | % | |||||||||||||||
| Less: Foreign currency translation | 1 | % | 2 | % | 3 | % | 0 | % | |||||||||||||||
| Constant currency sales % change | 7 | % | (10) | % | 8 | % | (10) | % | |||||||||||||||
| Other Sales | |||||||||||||||||||||||
| Reported sales % change | 6 | % | 31 | % | 6 | % | 19 | % | |||||||||||||||
| Less: Foreign currency translation | 0 | % | 5 | % | 3 | % | 1 | % | |||||||||||||||
| Constant currency sales % change | 6 | % | 26 | % | 3 | % | 18 | % | |||||||||||||||
(1) We define constant currency sales growth as the year-over-year change in reported sales relative to the comparable period, excluding the impact on sales from foreign currency translation. We believe this measure is useful to investors and management in understanding our ongoing operations and in analysis of ongoing operating trends.
11
Reconciliation of Cash Flow from Operations to Adjusted Free Cash Flow(1)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||
| Net cash provided by operating activities | $ | 145 | $ | 158 | $ | 243 | $ | 214 | |||||||||||||||
| Expenditures for property, plant and equipment | (17) | (15) | (46) | (41) | |||||||||||||||||||
| Net cash provided by operating activities less expenditures for property, plant and equipment | 128 | 143 | 197 | 173 | |||||||||||||||||||
| Acquisition and divestiture expenses | — | 4 | — | 5 | |||||||||||||||||||
| Cash payments for repositioning | 4 | 3 | 12 | 6 | |||||||||||||||||||
| Proceeds from cross currency swap contracts | 5 | 11 | 8 | 15 | |||||||||||||||||||
| Cash payments for debt refinancing costs | 1 | — | 1 | 6 | |||||||||||||||||||
| Factoring and P-notes | (16) | (40) | (47) | (48) | |||||||||||||||||||
Adjusted free cash flow (1) | $ | 122 | $ | 121 | $ | 171 | $ | 157 | |||||||||||||||
(1) Adjusted free cash flow reflects an additional way of viewing liquidity that management believes is useful to investors in analyzing the Company’s ability to service and repay its debt. The Company defines adjusted free cash flow as cash flow provided from operating activities less capital expenditures and additionally adjusted for other discretionary items including cash flow impacts for capital structure transformation expenses, acquisition and divestiture expenses, debt refinancing costs, and factoring and guaranteed bank notes activity.
12
Full Year 2026 Outlook Reconciliation of Reported Net Sales to Net Sales Growth at Constant Currency
| 2026 Full Year | ||||||||||||||
| Low End | High End | |||||||||||||
| Reported net sales (% change) | 3 | % | 9 | % | ||||||||||
| Foreign currency translation | 2 | % | 2 | % | ||||||||||
| Full year 2026 Outlook Net sales growth at constant currency | 1 | % | 7 | % | ||||||||||
Full Year 2026 Outlook Reconciliation of Net Income to Adjusted EBIT and Adjusted EBITDA
| 2026 Full Year | ||||||||||||||
| Low End | High End | |||||||||||||
| (Dollars in millions) | ||||||||||||||
| Net income | $ | 330 | $ | 360 | ||||||||||
| Interest expense, net of interest income * | 99 | 99 | ||||||||||||
| Tax expense | 111 | 121 | ||||||||||||
| Other non-operating income | (8) | (8) | ||||||||||||
| Factoring and notes receivables discount fees | 2 | 2 | ||||||||||||
| Debt refinancing and redemption costs | 1 | 1 | ||||||||||||
| Repositioning costs | 25 | 25 | ||||||||||||
| Full Year 2026 Outlook Adjusted EBIT | $ | 560 | $ | 600 | ||||||||||
| Depreciation | 100 | 100 | ||||||||||||
| Stock compensation expense | 28 | 28 | ||||||||||||
| Full Year 2026 Outlook Adjusted EBITDA | $ | 688 | $ | 728 | ||||||||||
* Excludes the effects of marked-to-market fluctuations from our interest rate swap contracts
Full Year 2026 Outlook Reconciliation of Net Cash Provided by Operating Activities to Adjusted Free Cash Flow
| 2026 Full Year | ||||||||||||||
| Low End | High End | |||||||||||||
| (Dollars in millions) | ||||||||||||||
| Net cash provided by operating activities | $ | 435 | $ | 525 | ||||||||||
| Expenditures for property, plant and equipment | (90) | (90) | ||||||||||||
| Net cash provided by operating activities less expenditures for property, plant and equipment | 345 | 435 | ||||||||||||
| Cash payments for repositioning | 25 | 25 | ||||||||||||
| Proceeds from cross currency swap contracts | 14 | 14 | ||||||||||||
| Cash payments for debt refinancing costs | 1 | 1 | ||||||||||||
| Full Year 2026 Outlook Adjusted free cash flow | $ | 385 | $ | 475 | ||||||||||
13