Sensata Technologies (NYSE: ST) lifts Q2 profit and trims debt load
Sensata Technologies Holding plc reported higher results for the quarter ended June 30, 2026. Net revenue was $990.6 million, up 5.0%, with organic revenue up 4.4% after adjusting for currency and portfolio changes. For the first half, net revenue reached $1,925.4 million, up 3.8% and 4.3% organically.
Operating income rose to $165.4 million in the quarter, a 19.8% increase, lifting the operating margin to 16.7% from 14.6%. Net income was $102.1 million versus $60.7 million, and diluted EPS was $0.70 versus $0.41. On an adjusted basis, operating income was $193.3 million (19.5% margin) and adjusted diluted EPS was $0.98. Growth was broad-based, with Automotive, Industrials, and especially Aerospace, Defense, and Commercial Equipment all contributing, the latter showing double‑digit organic growth.
Cash generation remained solid: in the first six months of 2026, net cash from operating activities was $332.5 million and free cash flow $291.0 million. Sensata used $401.1 million to repay debt, including a $400.0 million cash tender that retired $406.1 million of 4.0% Senior Notes, reducing long‑term debt to $2,424.8 million and bringing the net leverage ratio down to 2.4x. The company also invested $41.5 million in capital expenditures, paid $34.9 million in dividends, and repurchased $25.1 million of shares, ending the period with $403.3 million in cash. Management continues to execute its multi‑year Transformation Plan, with restructuring charges moderating, and expects a $24.0 million settlement payment in the third quarter related to an electric vehicle program cancellation.
Positive
- Net income surged to $102.1 million in Q2 2026 from $60.7 million a year earlier, with net margin improving from 6.4% to 10.3% and adjusted diluted EPS rising from $0.87 to $0.98 for the quarter.
- Sensata reduced leverage via a $400.0 million cash tender retiring $406.1 million of 4.0% Senior Notes, cutting long‑term debt to $2,424.8 million and lowering the net leverage ratio to 2.4x from 2.7x.
Negative
- None.
Filing Explained
The equity plan’s capacity rose to 8.59 million awards, with vesting and performance conditions leaving dilution potential rather than current issuance.
This Form 10-Q is an unaudited quarterly update for the period ended
The company completed the debt tender described in the filing: it paid
During the first six months, the company granted director RSUs, employee and executive RSUs, and performance-based RSUs; the latter awards can vest from 0% to 200% depending on stated performance conditions.
The awards have specified future vesting windows: some RSUs begin vesting in
As of
The key holder-related follow-up is the vesting and performance determination for the disclosed awards during the
Key Figures
Q2 2026 Net revenue: $990.6 million
Q2 2026 Net income: $102.1 million
Q2 2026 Diluted EPS: $0.70
+5 more
8 metrics
Q2 2026 Net revenue
$990.6 million
For the three months ended June 30, 2026
Q2 2026 Net income
$102.1 million
For the three months ended June 30, 2026
Q2 2026 Diluted EPS
$0.70
For the three months ended June 30, 2026
H1 2026 Operating cash flow
$332.5 million
Net cash provided by operating activities for six months ended June 30, 2026
H1 2026 Free cash flow
$291.0 million
Net cash from operating activities minus capital expenditures
Long-term debt, net
$2,424.8 million
Balance as of June 30, 2026
Net leverage ratio
2.4x
Net debt divided by last twelve months adjusted EBITDA as of June 30, 2026
Cash and cash equivalents
$403.3 million
Balance as of June 30, 2026
Key Terms
Organic revenue growth, Free cash flow, Adjusted EBITDA, Cash flow hedges, +1 more
5 terms
Organic revenue growth financial
"Net revenue increased 4.4% on an organic basis"
Organic revenue growth is the increase in a company's sales that comes from its existing products and services, without including any gains from acquisitions or selling off parts of the business. It reflects the company’s ability to attract more customers or encourage existing customers to buy more over time. For investors, it indicates the company's underlying strength and efficiency in expanding its core operations.
Free cash flow financial
"Free cash flow is defined as net cash provided by operating activities less additions"
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.
Adjusted EBITDA financial
"Adjusted EBITDA is defined as net income excluding interest, taxes, depreciation, amortization"
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
Cash flow hedges financial
"Other comprehensive income, net of tax Cash flow hedges"
A cash flow hedge is an accounting label companies use when they enter financial contracts—like currency or interest-rate agreements—to protect expected future cash payments or receipts from unpredictable moves. For investors, it signals that the company is trying to smooth out future cash variability (think of locking in a price to avoid surprises), which can reduce reported profit swings but also means the company has exposure to derivative instruments and their associated risks.
Net leverage ratio financial
"Net leverage ratio represents net debt divided by LTM adjusted EBITDA"
The net leverage ratio measures how much debt a company has compared to its available assets or earnings, after accounting for its cash and liquid assets. It helps investors understand how heavily a company relies on borrowed money to finance its operations and growth. A higher ratio indicates greater financial risk, while a lower ratio suggests a more cautious approach to borrowing.
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FAQ
How did Sensata Technologies (ST) perform financially in Q2 2026?
Sensata’s Q2 2026 net revenue was $990.6 million, up 5.0% year over year, and net income was $102.1 million, up from $60.7 million. Operating margin improved to 16.7%, and diluted EPS rose to $0.70 from $0.41.
What was Sensata Technologies (ST) cash flow and free cash flow for the first half of 2026?
For the six months ended June 30, 2026, Sensata generated $332.5 million in net cash from operating activities and $291.0 million in free cash flow. This reflected strong earnings plus working capital improvements, after funding $41.5 million of capital expenditures and capitalized software.
How did Sensata Technologies (ST) change its debt and leverage in 2026?
Sensata used $400.0 million of cash to repurchase $406.1 million of 4.0% Senior Notes, reducing long‑term debt to $2,424.8 million. Total gross indebtedness fell to $2,460.1 million, and the net leverage ratio declined to 2.4x adjusted EBITDA.
Which segments drove Sensata Technologies (ST) revenue growth in Q2 2026?
All three segments contributed: Automotive revenue was $544.8 million, Industrials $212.1 million, and Aerospace, Defense, and Commercial Equipment $233.7 million. The Aerospace, Defense, and Commercial Equipment segment delivered double‑digit organic growth driven by commercial equipment and aerospace demand.
What shareholder returns did Sensata Technologies (ST) provide in the first half of 2026?
In the first six months of 2026, Sensata paid $34.9 million in cash dividends and repurchased $25.1 million of ordinary shares under its $500.0 million September 2023 program. A quarterly dividend of $0.12 per share was approved for payment in August 2026.
What is Sensata Technologies (ST) Transformation Plan and expected restructuring cost?
Sensata’s multi‑year Transformation Plan includes leadership changes, workforce reductions, site closures, and cost‑savings initiatives. Over the life of the plan, the company expects restructuring charges of $16.0–$24.0 million, with most actions targeted for completion by June 30, 2028.
What notable subsequent event did Sensata Technologies (ST) disclose related to an EV customer?
In July 2026, Sensata entered a settlement with a customer over an electric vehicle program cancellation. Under the agreement, Sensata expects to receive a $24.0 million payment during the third quarter of 2026, providing additional cash inflow.
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________________________________________________________________
FORM 10-Q
_________________________________________________________________________________
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended June 30, 2026
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from to
Commission File Number 001-34652
_________________________________________________________________________________
(Exact name of registrant as specified in its charter)
_________________________________________________________________________________
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||||||||
(Address of principal executive offices, including zip code)
+1 (508 ) 236 3800
(Registrant's telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year, if changed since last report)
_____________________________________
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of exchange on which registered | ||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| ☒ | Accelerated filer | ☐ | ||||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
| 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. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of July 16, 2026, 145,535,862 ordinary shares were outstanding.
Table of Contents
TABLE OF CONTENTS
| PART I | |||||||||||
| Item 1. | Financial Statements (unaudited): | ||||||||||
Condensed Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025 | 3 | ||||||||||
Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2026 and 2025 | 4 | ||||||||||
Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2026 and 2025 | 5 | ||||||||||
Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2026 and 2025 | 6 | ||||||||||
Condensed Consolidated Statements of Changes in Shareholders' Equity for the Three and Six Months Ended June 30, 2026 and 2025 | 7 | ||||||||||
Notes to Condensed Consolidated Financial Statements | 9 | ||||||||||
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 23 | |||||||||
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 35 | |||||||||
| Item 4. | Controls and Procedures | 35 | |||||||||
| PART II | |||||||||||
| Item 1. | Legal Proceedings | 36 | |||||||||
| Item 1A. | Risk Factors | 36 | |||||||||
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 36 | |||||||||
| Item 3. | Defaults Upon Senior Securities | 36 | |||||||||
| Item 5. | Other Information | 36 | |||||||||
| Item 6. | Exhibits | 37 | |||||||||
Signatures | 38 | ||||||||||
2
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PART I—FINANCIAL INFORMATION
Item 1.Financial Statements.
SENSATA TECHNOLOGIES HOLDING PLC
Condensed Consolidated Balance Sheets
(In millions, except per share amounts)
(unaudited)
| June 30, 2026 | December 31, 2025 | ||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable, net of allowances of $ | |||||||||||
| Inventories | |||||||||||
| Prepaid expenses and other current assets | |||||||||||
| Total current assets | |||||||||||
| Property, plant and equipment, net | |||||||||||
| Goodwill | |||||||||||
Other intangible assets, net of accumulated amortization of $ | |||||||||||
| Deferred income tax assets | |||||||||||
| Other assets | |||||||||||
| Total assets | $ | $ | |||||||||
| Liabilities and shareholders' equity | |||||||||||
| Current liabilities: | |||||||||||
| Current portion of long-term debt and finance lease obligations | $ | $ | |||||||||
| Accounts payable | |||||||||||
| Income taxes payable | |||||||||||
| Accrued expenses and other current liabilities | |||||||||||
| Total current liabilities | |||||||||||
| Deferred income tax liabilities | |||||||||||
| Pension and other post-retirement benefit obligations | |||||||||||
| Finance lease obligations, less current portion | |||||||||||
| Long-term debt, net | |||||||||||
| Other long-term liabilities | |||||||||||
| Total liabilities | |||||||||||
| Commitments and contingencies (Note 11) | |||||||||||
| Shareholders’ equity: | |||||||||||
Ordinary shares, € | |||||||||||
Treasury shares, at cost, | ( | ( | |||||||||
| Additional paid-in capital | |||||||||||
| Retained earnings | |||||||||||
| Accumulated other comprehensive income/loss | ( | ||||||||||
| Total shareholders' equity | |||||||||||
| Total liabilities and shareholders' equity | $ | $ | |||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
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SENSATA TECHNOLOGIES HOLDING PLC
Condensed Consolidated Statements of Operations
(In millions, except per share amounts)
(unaudited)
| For the three months ended | For the six months ended | ||||||||||||||||||||||
| June 30, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | ||||||||||||||||||||
| Net revenue | $ | $ | $ | $ | |||||||||||||||||||
| Operating costs and expenses: | |||||||||||||||||||||||
| Cost of revenue | |||||||||||||||||||||||
| Research and development | |||||||||||||||||||||||
| Selling, general and administrative | |||||||||||||||||||||||
| Amortization of intangible assets | |||||||||||||||||||||||
| Restructuring and other charges, net | ( | ||||||||||||||||||||||
| Total operating costs and expenses | |||||||||||||||||||||||
| Operating income | |||||||||||||||||||||||
| Interest expense | ( | ( | ( | ( | |||||||||||||||||||
| Interest income | |||||||||||||||||||||||
| Other, net | ( | ||||||||||||||||||||||
| Income before taxes | |||||||||||||||||||||||
| Provision for income taxes | |||||||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
| Basic net income per share | $ | $ | $ | $ | |||||||||||||||||||
| Diluted net income per share | $ | $ | $ | $ | |||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
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SENSATA TECHNOLOGIES HOLDING PLC
Condensed Consolidated Statements of Comprehensive Income
(In millions)
(unaudited)
| For the three months ended | For the six months ended | ||||||||||||||||||||||
| June 30, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | ||||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
| Other comprehensive income, net of tax: | |||||||||||||||||||||||
| Cash flow hedges | ( | ( | |||||||||||||||||||||
| Defined benefit and retiree healthcare plans | |||||||||||||||||||||||
Currency translation adjustment | |||||||||||||||||||||||
| Other comprehensive income | |||||||||||||||||||||||
| Comprehensive income | $ | $ | $ | $ | |||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
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SENSATA TECHNOLOGIES HOLDING PLC
Condensed Consolidated Statements of Cash Flows
(In millions)
(unaudited)
| For the six months ended | |||||||||||
| June 30, 2026 | June 30, 2025 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $ | $ | |||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation | |||||||||||
| Amortization of debt issuance costs | |||||||||||
Loss on sale of business | |||||||||||
| Share-based compensation | |||||||||||
| Gain on extinguishment of debt | ( | ||||||||||
| Amortization of intangible assets | |||||||||||
| Deferred income taxes | |||||||||||
| Gain on equity investments, net | ( | ||||||||||
| Other non-cash loss, net | |||||||||||
| Changes in operating assets and liabilities, net of effects of divestitures: | |||||||||||
| Accounts receivable, net | ( | ( | |||||||||
| Inventories | ( | ||||||||||
Prepaid expenses and other | ( | ( | |||||||||
| Accounts payable and accrued expenses | |||||||||||
| Income taxes payable | |||||||||||
| Net cash provided by operating activities | |||||||||||
| Cash flows from investing activities: | |||||||||||
| Additions to property, plant and equipment and capitalized software | ( | ( | |||||||||
| Proceeds from the sale of business, net of cash sold | |||||||||||
| Other | ( | ||||||||||
| Net cash used in investing activities | ( | ( | |||||||||
| Cash flows from financing activities: | |||||||||||
| Payment of employee restricted stock tax withholdings | ( | ( | |||||||||
| Payments on debt | ( | ( | |||||||||
| Dividends paid | ( | ( | |||||||||
| Payments to repurchase ordinary shares | ( | ( | |||||||||
| Payments of debt financing costs | ( | ||||||||||
| Proceeds from exercise of stock options | |||||||||||
| Net cash used in financing activities | ( | ( | |||||||||
| Effect of exchange rate changes on cash and cash equivalents | |||||||||||
| Net change in cash and cash equivalents | ( | ||||||||||
| Cash and cash equivalents, beginning of year | |||||||||||
| Cash and cash equivalents, end of period | $ | $ | |||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
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SENSATA TECHNOLOGIES HOLDING PLC
Condensed Consolidated Statements of Changes in Shareholders' Equity
Three Months Ended June 30, 2026 and 2025
(In millions)
(unaudited)
| Ordinary Shares | Treasury Shares | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive (Loss)/ Income | Total Shareholders' Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Number | Amount | Number | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of March 31, 2026 | $ | ( | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Surrender of shares for tax withholding | — | — | ( | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock options exercised | 0.0 | 0.0 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Vesting of restricted securities | 0.0 | — | — | — | (0.0) | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cash dividends paid | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Retirement of ordinary shares | ( | (0.0) | — | ( | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of June 30, 2026 | $ | ( | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of March 31, 2025 | $ | ( | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Surrender of shares for tax withholding | — | — | ( | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Vesting of restricted securities | 0.0 | — | — | — | (0.0) | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cash dividends paid | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Repurchase of ordinary shares | — | — | ( | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Retirement of ordinary shares | ( | 0.0 | — | ( | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of June 30, 2025 | $ | ( | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
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SENSATA TECHNOLOGIES HOLDING PLC
Condensed Consolidated Statements of Changes in Shareholders' Equity
Six Months Ended June 30, 2026 and 2025
(In millions)
(unaudited)
| Ordinary Shares | Treasury Shares | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive (Loss)/ Income | Total Shareholders' Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Number | Amount | Number | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2025 | $ | ( | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Surrender of shares for tax withholding | — | — | ( | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock options exercised | 0.0 | 0.0 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Vesting of restricted securities | 0.0 | — | — | — | (0.0) | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cash dividends paid | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Repurchase of ordinary shares | — | — | ( | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Retirement of ordinary shares | ( | ( | — | ( | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of June 30, 2026 | $ | ( | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2024 | $ | ( | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Surrender of shares for tax withholding | — | — | ( | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Vesting of restricted securities | 0.0 | — | — | — | (0.0) | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cash dividends paid | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Repurchase of ordinary shares | — | — | ( | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Retirement of ordinary shares | ( | (0.0) | — | ( | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of June 30, 2025 | $ | ( | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
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SENSATA TECHNOLOGIES HOLDING PLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. Basis of Presentation
The accompanying unaudited condensed consolidated financial statements reflect the financial position, results of operations, comprehensive income, cash flows, and changes in shareholders' equity of Sensata Technologies Holding plc, a public limited company incorporated under the laws of England and Wales, and its consolidated subsidiaries, collectively referred to as the "Company," "Sensata," "we," "our," or "us."
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States ("U.S.") generally accepted accounting principles ("GAAP") for interim financial information and the instructions to Form 10-Q. Accordingly, these interim financial statements do not include all of the information and note disclosures required by U.S. GAAP for complete financial statements. The accompanying interim financial information reflects all normal recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the interim period results. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the U.S. Securities and Exchange Commission (the "SEC") on February 27, 2026 (the "2025 Annual Report").
All U.S. dollar ("USD") and share amounts presented, except per share amounts, are stated in millions, unless otherwise indicated. We round amounts in the consolidated financial statements within tables and text (unless otherwise specified) and calculate all percentages and per-share data from underlying whole-dollar amounts. Thus, certain amounts may not foot, crossfoot, or recalculate based on reported numbers due to rounding. Certain reclassifications have been made to prior periods to conform to current period presentation.
2. New Accounting Standards
In November 2024, the FASB issued ASU No. 2024-03 Income Statement (Topic 220): Reporting Comprehensive Income, which requires additional disclosure of the nature of expenses included in the income statement as well as disclosures about specific types of expenses included in the expense captions presented in the income statement. ASU No. 2024-03 does not change or remove current expense presentation requirements within the Consolidated Statements of Operations. However, the update requires disclosure, on an annual and interim basis, of disaggregated information about certain income statement expense line items within the notes to the consolidated financial statements. This ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact that the adoption of ASU No. 2024-03 will have on its consolidated financial statements and disclosures.
In September 2025, the FASB issued ASU No. 2025-06, Intangibles-Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. This update improves the operability of the guidance by removing all references to software development project stages so that the guidance is neutral to different software development methods. ASU No. 2025-06 is effective for annual reporting periods beginning after December 15, 2027, including interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. This ASU can be applied prospectively, retrospectively, or with a modified transition approach. The Company is currently evaluating the impact that the adoption of ASU No. 2025-06 will have on its consolidated financial statements and disclosures.
In November 2025, the FASB issued ASU 2025-09, Derivatives and Hedging (Topic 815): Hedge Accounting Improvements. This guidance amends existing guidance to simplify the application of hedge accounting, enhance alignment between risk management activities and financial reporting, and provide additional flexibility in the designation and measurement of certain
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hedging relationships. The amendments included in the five matters addressed in this ASU are intended to better reflect those strategies in financial reporting by enabling entities to achieve and maintain hedge accounting for highly effective economic hedges of forecasted transactions. The amendments are effective for annual reporting periods beginning after December 15, 2026, and interim periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the impact that the adoption of ASU No. 2025-09 will have on its consolidated financial statements and disclosures.
In May 2026, the FASB issued ASU No. 2026-02 Environmental Credits and Environmental Credit Obligations (Topic 818). This update provides recognition, measurement, presentation and disclosure requirements for environmental credits and related environmental credit obligations for entities that generate, purchase or receive environmental credits or have a regulatory compliance obligation that may be settled with environmental credits. This update is effective for annual periods beginning after December 15, 2027, including interim periods within those fiscal years. The Company is currently evaluating the impact that the adoption of ASU No. 2026-02 will have on its consolidated financial statements and disclosures.
3. Revenue Recognition
We recognize revenue to depict the transfer of promised goods to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods. The majority of our revenue is derived from the sale of tangible products whereby (1) control of the product transfers to the customer at a point in time, (2) we recognize revenue at a point in time, and (3) the underlying contract is a purchase order that establishes a firm purchase commitment for a short period of time. Our standard terms of sale provide our customers with a limited warranty against faulty workmanship and the use of defective materials.
We have elected to apply certain practical expedients that allow for more limited disclosures than those that would otherwise be required by FASB ASC Topic 606, including (1) the disclosure of transaction price allocated to the remaining unsatisfied performance obligations at the end of the period and (2) an explanation of when we expect to recognize the related revenue.
We believe that our geographic regions are the categories that best depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. Refer to Note 15: Segment Reporting for additional information.
4. Share-Based Payment Plans
The following table presents the components of non-cash compensation expense related to our equity awards for the three and six months ended June 30, 2026 and 2025:
| For the three months ended | For the six months ended | ||||||||||||||||||||||
| June 30, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | ||||||||||||||||||||
Restricted securities | $ | $ | $ | $ | |||||||||||||||||||
| Share-based compensation expense | $ | $ | $ | $ | |||||||||||||||||||
Equity Awards
During the second quarter of 2026, the Company's board of directors adopted an amendment to the 2021 Equity Incentive Plan to increase the number of shares that may be awarded by 2,890,000 shares, bringing the total to 8,590,000 shares.
We granted the following restricted stock units ("RSUs" and each, an "RSU") and performance-based restricted stock units ("PRSUs" and each, a "PRSU") under the Sensata Technologies Holding plc 2021 Equity Incentive Plan during the six months ended June 30, 2026:
| Awards Granted To: | Type of Award | Number of Units Granted (in thousands) | Weighted Average Grant Date Fair Value | |||||||||||||||||||||||
| Directors | RSU (1) | $ | ||||||||||||||||||||||||
| Various executives and employees | RSU (2) | $ | ||||||||||||||||||||||||
| Various executives and employees | PRSU (3) | $ | ||||||||||||||||||||||||
| Various executives and employees | PRSU (4) | $ | ||||||||||||||||||||||||
____________________________________
(1) These RSUs cliff vest one year from the grant date (in June 2027).
(2) These RSUs vest ratably over three years , one-third per year beginning on the first anniversary of the grant date. These RSUs will fully vest on various dates between January 2029 and June 2029.
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(3) These PRSUs vest on various dates between April 2029 and June 2029. The number of units that ultimately vest will be between 0 % and 200 % and is dependent on the achievement of certain performance criteria.
5. Restructuring and Other Charges, Net
Transformation Plan
In the year ended December 31, 2025, we committed to a plan to reorganize our business (the “Transformation Plan”). The Transformation Plan, consisting of leadership transitions, involuntary reductions-in-force, site closures, and other cost-savings initiatives, was commenced to competitively reposition ourselves to capture growth from evolving market conditions.
Over the life of the Transformation Plan, we expect to incur restructuring charges of between $16.0 million and $24.0 million, primarily related to reductions-in-force and related site closure costs. All restructuring costs are excluded from segment results. The majority of the actions under the Transformation Plan are expected to be completed on or before June 30, 2028. We expect to settle these charges with cash on hand.
Summary
The following table presents the components of restructuring and other charges, net for the three and six months ended June 30, 2026, and 2025:
| For the three months ended | For the six months ended | ||||||||||||||||||||||
| June 30, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | ||||||||||||||||||||
Transformation Plan | $ | $ | $ | $ | |||||||||||||||||||
| Other plans, net | |||||||||||||||||||||||
| Other restructuring and other charges, net | |||||||||||||||||||||||
Severance charges, net | ( | ||||||||||||||||||||||
| Transaction related charges | ( | ( | |||||||||||||||||||||
| Facility and other charge | |||||||||||||||||||||||
| Restructuring and other charges, net | $ | ( | $ | $ | $ | ||||||||||||||||||
The following table presents a rollforward of our severance liability, which is primarily related to the Transformation Plan, for the six months ended June 30, 2026:
| Total | ||||||||||||||
Balance as of December 31, 2025 | $ | |||||||||||||
| Charges, net of reversals | ||||||||||||||
| Payments | ( | |||||||||||||
| Foreign currency remeasurement | ||||||||||||||
Balance as of June 30, 2026 | $ | |||||||||||||
The severance liability as of June 30, 2026 and December 31, 2025 was entirely recorded in accrued expenses and other current liabilities on our condensed consolidated balance sheets.
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6. Other, Net
The following table presents the components of other, net for the three and six months ended June 30, 2026 and 2025:
| For the three months ended | For the six months ended | ||||||||||||||||||||||
| June 30, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | ||||||||||||||||||||
| Currency remeasurement (loss)/gain on net monetary assets | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
| Gain/(loss) on foreign currency forward contracts | ( | ( | |||||||||||||||||||||
| (Loss)/gain on commodity forward contracts | ( | ||||||||||||||||||||||
| Gain on debt financing transactions | |||||||||||||||||||||||
Gain on equity investments, net | |||||||||||||||||||||||
| Net periodic benefit cost, excluding service cost | ( | ( | ( | ( | |||||||||||||||||||
| Other | |||||||||||||||||||||||
| Other, net | $ | ( | $ | $ | $ | ||||||||||||||||||
7. Income Taxes
The following table presents the provision for income taxes for the three and six months ended June 30, 2026 and 2025:
| For the three months ended | For the six months ended | ||||||||||||||||||||||
| June 30, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | ||||||||||||||||||||
| Provision for income taxes | $ | $ | $ | $ | |||||||||||||||||||
The provision for income taxes consists of (1) current tax expense, which relates primarily to our profitable operations in tax jurisdictions with limited or no net operating loss carryforwards and withholding taxes related to management fees, royalties, and the repatriation of foreign earnings; and (2) deferred tax expense (or benefit), which represents adjustments in book-to-tax basis differences primarily related to (a) book versus tax basis in intangible assets, (b) changes in net operating loss carryforwards and tax credits, and (c) changes in withholding taxes on unremitted earnings.
8. Net Income per Share
Basic and diluted net income per share are calculated by dividing net income by the number of basic and diluted weighted-average ordinary shares outstanding during the period. For the three and six months ended June 30, 2026 and 2025 the weighted-average ordinary shares outstanding used to calculate basic and diluted net income per share were as follows:
| For the three months ended | For the six months ended | ||||||||||||||||||||||
| June 30, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | ||||||||||||||||||||
| Basic weighted-average ordinary shares outstanding | |||||||||||||||||||||||
| Dilutive effect of stock options | |||||||||||||||||||||||
| Dilutive effect of unvested restricted securities | |||||||||||||||||||||||
| Diluted weighted-average ordinary shares outstanding | |||||||||||||||||||||||
Net income and net income per share are presented in the condensed consolidated statements of operations.
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Certain potential ordinary shares were excluded from our calculation of diluted weighted-average ordinary shares outstanding because either they would have had an anti-dilutive effect on net income per share or they related to equity awards that were contingently issuable for which the contingency had not been satisfied. These potential ordinary shares were as follows:
| For the three months ended | For the six months ended | ||||||||||||||||||||||
| June 30, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | ||||||||||||||||||||
| Anti-dilutive shares excluded | |||||||||||||||||||||||
| Contingently issuable shares excluded | |||||||||||||||||||||||
9. Inventories
The following table presents the components of inventories as of June 30, 2026 and December 31, 2025:
| June 30, 2026 | December 31, 2025 | ||||||||||
| Finished goods | $ | $ | |||||||||
| Work-in-process | |||||||||||
| Raw materials | |||||||||||
| Inventories | $ | $ | |||||||||
10. Debt
Tender Offer
In May 2026, Sensata Technologies B.V. and Sensata Technologies, Inc., our indirect, wholly owned subsidiaries, announced the commencement of a cash tender offer for up to $400.0 million of aggregate cash consideration payable for the 4.0 % Senior Notes, the 4.375 % Senior Notes due 2030 (the "4.375 % Senior Notes"), and the 5.875 % Senior Notes due 2030 (the "5.875 % Senior Notes"). In June 2026, we purchased $406.1 million in aggregate principal amount of the 4.0 % Senior Notes that were validly tendered in connection with that tender offer. We paid $400.0 million in cash in the aggregate for such purchase. We did not purchase any 4.375 % Senior Notes or 5.875 % Senior Notes in these tender offers.
Summary
The following table presents the components of long-term debt, net and finance lease obligations as of June 30, 2026 and December 31, 2025:
| Maturity Date | June 30, 2026 | December 31, 2025 | ||||||||||||||||||
| April 15, 2029 | $ | $ | ||||||||||||||||||
| February 15, 2030 | ||||||||||||||||||||
| September 1, 2030 | ||||||||||||||||||||
| February 15, 2031 | ||||||||||||||||||||
| July 15, 2032 | ||||||||||||||||||||
Plus: debt premium, net of discount | ||||||||||||||||||||
| Less: deferred financing costs | ( | ( | ||||||||||||||||||
| Long-term debt, net | $ | $ | ||||||||||||||||||
| Finance lease obligations | $ | $ | ||||||||||||||||||
| Less: current portion | ( | ( | ||||||||||||||||||
| Finance lease obligations, less current portion | $ | $ | ||||||||||||||||||
Our indebtedness as of June 30, 2026 and December 31, 2025 consists of various tranches of senior unsecured notes as shown in the table above. We also have secured credit facilities (the "Senior Secured Credit Facilities") which provide for our $650.0 million revolving credit facility (the "Revolving Credit Facility") and incremental availability under which additional debt can be issued. Refer to Note 14: Debt of our 2025 Annual Report for additional information related to our indebtedness.
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Revolving Credit Facility
As of June 30, 2026, we had $645.8 million available under the Revolving Credit Facility, net of $4.2 million of obligations in respect of outstanding letters of credit issued thereunder. Outstanding letters of credit are issued primarily for the benefit of certain operating activities. As of June 30, 2026, no amounts had been drawn against these outstanding letters of credit.
During April 2026, the Company entered into a technical amendment to the Revolving Credit Facility correcting and clarifying certain details to conform the language with the intention of the Fourteenth Amendment that was signed in September 2025.
Accrued Interest
Accrued interest associated with our outstanding debt is included as a component of accrued expenses and other current liabilities in the condensed consolidated balance sheets. As of June 30, 2026 and December 31, 2025, accrued interest totaled $45.2 million and $48.6 million, respectively.
11. Commitments and Contingencies
We are regularly involved in a number of claims and litigation matters that arise in the ordinary course of business. Although it is not feasible to predict the outcome of these matters, based upon our experience and current information known to us, we do not expect the outcome of these matters, either individually or in the aggregate, to have a material adverse effect on our results of operations, financial condition, and/or cash flows.
Other Matters
Following the February 2026 ruling by the United States Supreme Court striking down certain tariffs imposed under the International Emergency Economic Powers Act, U.S. Customs and Border Protection has since announced steps toward an administrative process to address potential tariff refunds. However, the availability, timing, and amount of any potential refunds remain uncertain and are subject to ongoing legal, regulatory, and administrative developments.
12. Shareholders' Equity
Cash Dividends
In the three and six months ended June 30, 2026, we paid aggregate cash dividends of $17.5 million and $34.9 million, respectively, compared to $17.6 million and $35.5 million in the three and six months ended June 30, 2025, respectively. In July 2026, we announced that our Board of Directors approved a quarterly dividend of $0.12 per share, payable in August 2026 to shareholders of record as of August 12, 2026.
Treasury Shares
From time to time, our Board of Directors has authorized various share repurchase programs, which may be modified or terminated by the Board at any time. Under these programs, we may repurchase ordinary shares at such times and in amounts to be determined by our management, based on market conditions, legal requirements, and other corporate considerations, on the open market or in privately negotiated transactions, provided that such transactions were completed pursuant to an agreement and with a third party approved by our shareholders at the annual general meeting. Ordinary shares repurchased by us are recognized, measured at cost, and presented as treasury shares on our consolidated balance sheets, resulting in a reduction of shareholders' equity. In September 2023, our Board of Directors authorized a $500.0 million ordinary share repurchase program (the “September 2023 Program”), which became effective on October 1, 2023.
In the three months ended June 30, 2026 we did not purchase any shares under our share repurchase program. In the three months ended June 30, 2025, we repurchased 0.7 million ordinary shares for $20.1 million. In the six months ended June 30, 2026 and 2025, we repurchased 0.7 million and 4.2 million ordinary shares for $25.1 million and $120.6 million, respectively. All share repurchases in the three and six months ended June 30, 2026 and 2025 were made under the September 2023 Program. As of June 30, 2026, $257.3 million remained available for repurchase under the September 2023 Program.
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Accumulated Other Comprehensive Income/Loss
The following table presents the components of accumulated other comprehensive income/loss for the six months ended June 30, 2026:
| Cash Flow Hedges | Defined Benefit and Retiree Healthcare Plans | Cumulative Translation Adjustment | Accumulated Other Comprehensive Income/Loss | |||||||||||||||||||||||
| Balance as of December 31, 2025 | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||
| Other comprehensive income before reclassifications, net of tax | ||||||||||||||||||||||||||
| Reclassifications from accumulated other comprehensive income/loss, net of tax | ||||||||||||||||||||||||||
| Other comprehensive income | ||||||||||||||||||||||||||
| Balance as of June 30, 2026 | $ | $ | ( | $ | $ | |||||||||||||||||||||
The following table presents the amounts reclassified from accumulated other comprehensive income/loss for the three and six months ended June 30, 2026 and 2025:
| For the three months ended June 30, | For the six months ended June 30, | Affected Line in Condensed Consolidated Statements of Operations | ||||||||||||||||||||||||||||||
| Component | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||
| Derivative instruments designated and qualifying as cash flow hedges: | ||||||||||||||||||||||||||||||||
| Foreign currency forward contracts | $ | $ | $ | $ | ( | Net revenue (1) | ||||||||||||||||||||||||||
| Foreign currency forward contracts | ( | ( | Cost of revenue (1) | |||||||||||||||||||||||||||||
| Total, before taxes | ( | Income before taxes | ||||||||||||||||||||||||||||||
| Income tax effect | ( | ( | ( | Provision for income taxes | ||||||||||||||||||||||||||||
| Total, net of taxes | $ | ( | $ | $ | $ | Net income | ||||||||||||||||||||||||||
| Defined benefit and retiree healthcare plans | ||||||||||||||||||||||||||||||||
| Defined benefit and retiree healthcare plans | $ | $ | $ | $ | Other, net | |||||||||||||||||||||||||||
| Defined benefit and retiree healthcare plans | Restructuring and other charges, net | |||||||||||||||||||||||||||||||
| Total, before taxes | Income before taxes | |||||||||||||||||||||||||||||||
| Income tax effect | ( | ( | ( | ( | Provision for income taxes | |||||||||||||||||||||||||||
| Total, net of taxes | $ | $ | $ | $ | Net income | |||||||||||||||||||||||||||
___________________________________
(1) Refer to Note 14: Derivative Instruments and Hedging Activities for additional information regarding amounts to be reclassified from accumulated other comprehensive income/loss in future periods.
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13. Fair Value Measures
Measured on a Recurring Basis
The fair values of our assets and liabilities measured at fair value on a recurring basis as of June 30, 2026 and December 31, 2025 are shown in the below table.
| June 30, 2026 | December 31, 2025 | ||||||||||
| Assets | |||||||||||
| Cash equivalents (Level 1) | $ | $ | |||||||||
| Foreign currency forward contracts (Level 2) | |||||||||||
| Commodity forward contracts (Level 2) | |||||||||||
| Total | $ | $ | |||||||||
| Liabilities | |||||||||||
| Foreign currency forward contracts (Level 2) | $ | $ | |||||||||
| Commodity forward contracts (Level 2) | |||||||||||
| Total | $ | $ | |||||||||
Refer to Note 14: Derivative Instruments and Hedging Activities for additional information regarding our forward contracts. Cash equivalents consist of U.S. Government Treasury money market funds and are classified as Level 1 as they are exchange traded in an active market.
Financial Instruments Not Recorded at Fair Value
The following table presents the carrying values and fair values of financial instruments not recorded at fair value in the condensed consolidated balance sheets as of June 30, 2026 and December 31, 2025. All fair value measures presented are categorized in Level 2 of the fair value hierarchy.
| June 30, 2026 | December 31, 2025 | ||||||||||||||||||||||
Carrying Value(1) | Fair Value | Carrying Value(1) | Fair Value | ||||||||||||||||||||
| Liabilities | |||||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||
___________________________________
(1) Excluding any related debt discounts, premiums, and deferred financing costs.
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14. Derivative Instruments and Hedging Activities
Foreign Currency Derivatives
As of June 30, 2026, we had the following outstanding foreign currency forward contracts, which had the below hedge accounting designation in accordance with FASB ASC Topic 815, Derivatives and Hedging:
| Notional (in millions) | Effective Date(s) | Maturity Date(s) | Index (Exchange Rates) | Weighted-Average Strike Rate | Hedge Designation (1) | |||||||||||||||||||||||||||
| Various from July 2024 to June 2026 | Various from July 2026 to June 2028 | Euro ("EUR") to USD | Cash flow hedge | |||||||||||||||||||||||||||||
| Various from July 2024 to June 2026 | Various from July 2026 to June 2028 | USD to Mexican Peso ("MXN") | Cash flow hedge | |||||||||||||||||||||||||||||
| Various from July 2024 to June 2026 | Various from July 2026 to June 2028 | British Pound Sterling ("GBP") to USD | Cash flow hedge | |||||||||||||||||||||||||||||
| Notional (in millions) | Effective Date(s) | Maturity Date(s) | Index (Exchange Rates) | Weighted-Average Strike Rate | Hedge Designation (1) | |||||||||||||||||||||||||||
| Various from August 2024 to September 2024 | Various from July 2026 to July 2026 | USD to Korean Won ("KRW") | Not designated | |||||||||||||||||||||||||||||
___________________________________
As of June 30, 2026, we estimate that $21.9 million of net gain will be reclassified from accumulated other comprehensive income/loss to earnings during the twelve-month period ending June 30, 2027.
Financial Instrument Presentation
The following table presents the fair values of our derivative financial instruments and their classification in the condensed consolidated balance sheets as of June 30, 2026 and December 31, 2025:
| Asset Derivatives | Liability Derivatives | ||||||||||||||||||||||||||||||||||
| Balance Sheet Location | June 30, 2026 | December 31, 2025 | Balance Sheet Location | June 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||
| Derivatives designated as hedging instruments | |||||||||||||||||||||||||||||||||||
| Foreign currency forward contracts | Prepaid expenses and other current assets | $ | $ | Accrued expenses and other current liabilities | $ | $ | |||||||||||||||||||||||||||||
| Foreign currency forward contracts | Other assets | Other long-term liabilities | |||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
| Derivatives not designated as hedging instruments | |||||||||||||||||||||||||||||||||||
| Commodity forward contracts | Prepaid expenses and other current assets | $ | $ | Accrued expenses and other current liabilities | $ | $ | |||||||||||||||||||||||||||||
| Commodity forward contracts | Other assets | Other long-term liabilities | |||||||||||||||||||||||||||||||||
| Foreign currency forward contracts | Prepaid expenses and other current assets | Accrued expenses and other current liabilities | |||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
These fair value measurements were all categorized within Level 2 of the fair value hierarchy.
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The following tables present the effect of our derivative financial instruments on the condensed consolidated statements of operations and the condensed consolidated statements of comprehensive income for the three months ended June 30, 2026 and 2025:
| Derivatives designated as hedging instruments | Amount of Deferred Gain/(Loss) Recognized in Other Comprehensive Income | Location of Net Gain/(Loss) Reclassified from Accumulated Other Comprehensive Income/Loss into Net Income | Amount of Net Gain/(Loss) Reclassified from Accumulated Other Comprehensive Income/Loss into Net Income | |||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||
| Foreign currency forward contracts | $ | $ | ( | Net revenue | $ | ( | $ | ( | ||||||||||||||||||||||||
| Foreign currency forward contracts | $ | $ | Cost of revenue | $ | $ | ( | ||||||||||||||||||||||||||
| Derivatives not designated as hedging instruments | Amount of (Loss)/Gain Recognized in Net Income | Location of (Loss)/Gain Recognized in Net Income | ||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||
| Commodity forward contracts | $ | ( | $ | Other, net | ||||||||||||||||
| Foreign currency forward contracts | $ | $ | ( | Other, net | ||||||||||||||||
The following tables present the effect of our derivative financial instruments on the condensed consolidated statements of operations and the condensed consolidated statements of comprehensive income for the six months ended June 30, 2026 and 2025:
| Derivatives designated as hedging instruments | Amount of Deferred Gain/(Loss) Recognized in Other Comprehensive Income | Location of Net (Loss)/Gain Reclassified from Accumulated Other Comprehensive Income/Loss into Net Income | Amount of Net (Loss)/Gain Reclassified from Accumulated Other Comprehensive Income/Loss into Net Income | |||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||
| Foreign currency forward contracts | $ | $ | ( | Net revenue | $ | ( | $ | |||||||||||||||||||||||||
| Foreign currency forward contracts | $ | $ | Cost of revenue | $ | $ | ( | ||||||||||||||||||||||||||
| Derivatives not designated as hedging instruments | Amount of (Loss)/Gain Recognized in Net Income | Location of (Loss)/Gain Recognized in Net Income | ||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||
| Commodity forward contracts | $ | $ | Other, net | |||||||||||||||||
| Foreign currency forward contracts | $ | $ | ( | Other, net | ||||||||||||||||
Credit Risk Related Contingent Features
We have agreements with our derivative counterparties that contain a provision whereby if we default on our indebtedness and repayment of the indebtedness has been accelerated by the lender, then we could also be declared in default on our derivative obligations.
15. Segment Reporting
We present financial information for three reportable segments, Automotive, Industrials, and Aerospace, Defense, and Commercial Equipment. In the last quarter of 2025, we realigned our segments as a result of organizational changes that better allocate our resources to support changes to our business strategy. Refer to Note 1: Basis of Presentation for additional information. Our operating segments are business segments that we manage as components of an enterprise, for which separate financial information is evaluated regularly by our chief operating decision maker ("CODM"), who is our chief executive officer, in deciding how to allocate resources and assess performance.
An operating segment’s performance is primarily evaluated based on segment operating income, which excludes amortization of intangible assets, impairment of goodwill and other intangible assets, restructuring charges, and certain corporate costs or credits not associated with the operations of the segment. Corporate and other costs excluded from a segment’s performance are separately stated below and include costs that are related to functional areas such as finance, information technology, legal, and human resources. The CODM uses operating income primarily in the annual budget and forecasting process. The CODM
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considers budget-to-actual variances on a quarterly basis for operating income when making decisions about the allocation of resources to each segment. We believe that segment operating income, as defined above, is an appropriate measure for evaluating the operating performance of our segments. However, the measure should be considered in addition to, and not as a substitute for, or superior to, operating income or other measures of financial performance prepared with U.S. GAAP. The accounting policies of each of our operating and reportable segments are materially consistent with those described in Note 2: Significant Accounting Policies of the audited consolidated financial statements and notes thereto included in our 2025 Annual Report.
The Automotive segment primarily serves the Automotive OEM and aftermarket industries through the development and manufacturing of sensors, high-voltage solutions (i.e., electrical protection components), and other solutions that are used in mission-critical systems and applications.
Industrials primarily serves industrial customers through the development and manufacturing of a broad portfolio of application-specific sensor, power management, and electrical protection products used in a diverse range of industrial markets, including the appliance, HVAC, material handling, charging infrastructure, renewable energy generation, and microgrid applications and markets.
The Aerospace, Defense, and Commercial Equipment segment primarily serves the aerospace, including commercial aircraft, defense, and commercial equipment, which includes on-road truck, construction, and agriculture markets, through the development and manufacture of a variety of sensors, electrical protection products, operator controls, and other solutions that are used in mission-critical systems and applications.
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The following table presents net revenue, segment and non-segment operating expenses, and segment and non-segment operating income for the reportable segments and other operating results not allocated to our reportable segments for the three and six months ended June 30, 2026 and 2025:
| For the three months ended | For the six months ended | ||||||||||||||||||||||
| June 30, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | ||||||||||||||||||||
| Net revenue: | |||||||||||||||||||||||
Automotive (1) | $ | $ | $ | $ | |||||||||||||||||||
Industrials (1) | |||||||||||||||||||||||
Aerospace, Defense, and Commercial Equipment (1) | |||||||||||||||||||||||
| Total net revenue | $ | $ | $ | $ | |||||||||||||||||||
Segment cost of revenue: | |||||||||||||||||||||||
Automotive | $ | $ | $ | $ | |||||||||||||||||||
Industrials | |||||||||||||||||||||||
Aerospace, Defense, and Commercial Equipment | |||||||||||||||||||||||
Total segment cost of revenue | $ | $ | $ | $ | |||||||||||||||||||
Segment operating expenses(2): | |||||||||||||||||||||||
Automotive (1) | $ | $ | $ | $ | |||||||||||||||||||
Industrials (1) | |||||||||||||||||||||||
Aerospace, Defense, and Commercial Equipment (1) | |||||||||||||||||||||||
Total segment operating expenses | $ | $ | $ | $ | |||||||||||||||||||
Segment operating income (as defined above): | |||||||||||||||||||||||
Automotive (1) | $ | $ | $ | $ | |||||||||||||||||||
Industrials (1) | |||||||||||||||||||||||
Aerospace, Defense, and Commercial Equipment (1) | |||||||||||||||||||||||
Total segment operating income | |||||||||||||||||||||||
Corporate and other(1) | ( | ( | ( | ( | |||||||||||||||||||
| Amortization of intangible assets | ( | ( | ( | ( | |||||||||||||||||||
| Restructuring and other charges, net | ( | ( | ( | ||||||||||||||||||||
| Operating income | |||||||||||||||||||||||
| Interest expense | ( | ( | ( | ( | |||||||||||||||||||
| Interest income | |||||||||||||||||||||||
| Other, net | ( | ||||||||||||||||||||||
| Income before taxes | $ | $ | $ | $ | |||||||||||||||||||
___________________________________
(1) The amounts previously reported for the three and six months ended June 30, 2025 have been retrospectively recast to reflect the segment realignment as discussed in Note 1: Basis of Presentation.
(2) Segment operating expenses include research, development, and engineering, and selling, general and administrative expenses associated with each segment.
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The following table presents depreciation and amortization expense for our reportable segments and corporate and other for the three and six months ended June 30, 2026 and 2025:
| For the three months ended | For the six months ended | ||||||||||||||||||||||
| June 30, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | ||||||||||||||||||||
| Depreciation and amortization: | |||||||||||||||||||||||
| Automotive | $ | $ | $ | $ | |||||||||||||||||||
| Industrials | |||||||||||||||||||||||
| Aerospace, Defense, and Commercial Equipment | |||||||||||||||||||||||
Corporate and other (1) | |||||||||||||||||||||||
| Total depreciation and amortization | $ | $ | $ | $ | |||||||||||||||||||
__________________________
(1)Included within corporate and other is depreciation expense, amortization of intangible assets, and accelerated depreciation recognized in connection with restructuring actions. We do not allocate these amounts to our segments. This treatment is consistent with the financial information reviewed by our chief operating decision maker.
The following table presents additions to property, plant and equipment ("PP&E") and capitalized software for our reportable segments and corporate and other for the three and six months ended June 30, 2026 and 2025:
| For the three months ended | For the six months ended | ||||||||||||||||||||||
| June 30, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | ||||||||||||||||||||
| Additions to property, plant and equipment and capitalized software: | |||||||||||||||||||||||
| Automotive | $ | $ | $ | $ | |||||||||||||||||||
| Industrials | |||||||||||||||||||||||
| Aerospace, Defense, and Commercial Equipment | |||||||||||||||||||||||
| Corporate and other | |||||||||||||||||||||||
| Total additions to property, plant and equipment and capitalized software | $ | $ | $ | $ | |||||||||||||||||||
Geographic Area Information
The following tables present net revenue by geographic area and by significant country for the three and six months ended June 30, 2026 and 2025. In these tables, net revenue is aggregated according to the location of our subsidiaries.
| For the three months ended | For the six months ended | ||||||||||||||||||||||
| June 30, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | ||||||||||||||||||||
| Net revenue: | |||||||||||||||||||||||
| Americas | $ | $ | $ | $ | |||||||||||||||||||
| Europe | |||||||||||||||||||||||
| Asia and rest of world | |||||||||||||||||||||||
| Net revenue | $ | $ | $ | $ | |||||||||||||||||||
| For the three months ended | For the six months ended | ||||||||||||||||||||||
| June 30, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | ||||||||||||||||||||
| Net revenue: | |||||||||||||||||||||||
| United States | $ | $ | $ | $ | |||||||||||||||||||
| China | |||||||||||||||||||||||
| The Netherlands | |||||||||||||||||||||||
| United Kingdom | |||||||||||||||||||||||
| All other | |||||||||||||||||||||||
| Net revenue | $ | $ | $ | $ | |||||||||||||||||||
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The following tables present PP&E, net, by geographic area and by significant country as of June 30, 2026 and December 31, 2025. In these tables, PP&E, net is aggregated based on the location of our subsidiaries.
| June 30, 2026 | December 31, 2025 | ||||||||||
| Property, plant and equipment, net: | |||||||||||
| Americas | $ | $ | |||||||||
| Europe | |||||||||||
| Asia and rest of world | |||||||||||
| Property, plant and equipment, net | $ | $ | |||||||||
| June 30, 2026 | December 31, 2025 | ||||||||||
| Property, plant and equipment, net: | |||||||||||
| United States | $ | $ | |||||||||
| China | |||||||||||
| Mexico | |||||||||||
| Bulgaria | |||||||||||
| United Kingdom | |||||||||||
| Malaysia | |||||||||||
| All other | |||||||||||
| Property, plant and equipment, net | $ | $ | |||||||||
16. Disposals
Magnetic Speed and Position Business ("MSP Business")
17. Subsequent Events
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Cautionary Statements Concerning Forward-Looking Statements
This Quarterly Report on Form 10-Q includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by terminology such as "may," "will," "could," "should," "expect," "anticipate," "believe," "estimate," "predict," "project," "forecast," "continue," "intend," "plan," "potential," "opportunity," "guidance," and similar terms or phrases. Forward-looking statements involve, among other things, expectations, projections, and assumptions about future financial and operating results, objectives, business and market outlook, trends, priorities, growth, shareholder value, capital expenditures, cash flows, demand for products and services, share repurchases, and Sensata’s strategic initiatives, including those relating to acquisitions and dispositions and the impact of such transactions on our strategic plans, operational plans, and financial results. These statements are subject to risks, uncertainties, and other important factors relating to our operations and business environment, and we can give no assurances that these forward-looking statements will prove to be correct.
A wide variety of potential risks, uncertainties, and other factors could materially affect our ability to achieve the results either expressed or implied by these forward-looking statements, including, but not limited to, risks related to instability and changes in the global markets, supplier interruption or non-performance, changes in trade-related tariffs and risks with uncertain trade environments, the acquisition or disposition of businesses, variability in metals pricing, cybersecurity, adverse conditions or competition in the industries upon which we are dependent, intellectual property, product liability, warranty, and recall claims, public health crises, market acceptance of new product introductions and product innovations, labor disruptions or increased labor costs, and changes in existing environmental or safety laws, regulations, and programs.
Investors and others should carefully consider the foregoing factors and other uncertainties, risks, and potential events including, but not limited to, those described in Item 1A: Risk Factors included in our 2025 Annual Report and as may be updated from time to time in Item 1A: Risk Factors included in our quarterly reports on Form 10-Q or other subsequent filings with the United States Securities and Exchange Commission. All such forward-looking statements speak only as of the date they are made, and we do not undertake any obligation to update these statements other than as required by law.
Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of our financial condition and results of operations supplements should be read in conjunction with the discussion in Item 7: Management's Discussion and Analysis of Financial Condition and Results of Operations included in our 2025 Annual Report. The following discussion should also be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto (the "Financial Statements") included elsewhere in this Report. Amounts and percentages in the following discussions and tables have been calculated based on unrounded numbers. Accordingly, certain amounts may not appear to recalculate due to the effect of rounding.
Overview
Net revenue for the three months ended June 30, 2026 was $990.6 million, an increase of 5.0% on a reported basis compared to $943.4 million in the prior period. Excluding an increase of 1.1% attributed to changes in foreign currency exchange rates and a decrease of 0.5% related to the effect of disposals, net revenue increased 4.4% on an organic basis. Organic revenue growth (or decline), discussed throughout this Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations (this "MD&A"), is a financial measure not presented in accordance with U.S. GAAP. Refer to Non-GAAP Financial Measures included elsewhere in this MD&A for additional information regarding our use of organic revenue growth (or decline). Net revenue for the six months ended June 30, 2026 was $1,925.4 million, an increase of 3.8% on a reported basis compared to $1,854.6 million in the prior period. Excluding an increase of 1.6% attributed to changes in foreign currency exchange rates and a decrease of 2.1% related to the effect of disposals, net revenue increased 4.3% on an organic basis.
Operating income for the three months ended June 30, 2026 was $165.4 million (16.7% of net revenue), an increase of $27.3 million, or 19.8%, compared to operating income of $138.1 million (14.6% of net revenue) in the three months ended June 30, 2025. Operating income for the six months ended June 30, 2026 was $307.0 million (15.9% of net revenue), an increase of $46.7 million, or 18.0%, compared to operating income of $260.3 million (14.0% of net revenue) in the six months ended June 30, 2025. Refer to Results of Operations included elsewhere in this MD&A for additional discussion of our earnings results for the three and six months ended June 30, 2026 compared to the prior periods.
We generated $332.5 million of operating cash flows in the six months ended June 30, 2026, ending the quarter with $403.3 million in cash and cash equivalents. In addition to $401.1 million used to pay debt, in the six months ended June 30, 2026, we used cash of approximately $41.5 million for capital expenditures, $34.9 million for payment of dividends, and $25.1 million for share repurchases as part of our share repurchase plan.
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Results of Operations
The table below presents our historical results of operations, in millions of dollars and as a percentage of net revenue, for the three and six months ended June 30, 2026 compared to the three and six months ended June 30, 2025. We have derived the results of operations from the Financial Statements included elsewhere in this Report. Amounts and percentages in the table below have been calculated based on unrounded numbers. Accordingly, certain amounts may not appear to recalculate due to the effect of rounding.
| For the three months ended | For the six months ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| June 30, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Amount | Percent | Amount | Percent | Amount | Percent | Amount | Percent | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net revenue: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Automotive | $ | 544.8 | 55.0 | % | $ | 527.5 | 55.9 | % | $ | 1,074.1 | 55.8 | % | $ | 1,059.7 | 57.1 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Industrials | 212.1 | 21.4 | 206.3 | 21.9 | 387.4 | 20.1 | 384.6 | 20.7 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Aerospace, Defense, and Commercial Equipment | 233.7 | 23.6 | 209.7 | 22.2 | 464.0 | 24.1 | 410.3 | 22.2 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net revenue | 990.6 | 100.0 | 943.4 | 100.0 | 1,925.4 | 100.0 | 1,854.6 | 100.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating costs and expenses | 825.3 | 83.3 | 805.3 | 85.4 | 1,618.4 | 84.1 | 1,594.4 | 86.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating income | 165.4 | 16.7 | 138.1 | 14.6 | 307.0 | 15.9 | 260.3 | 14.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense | (32.8) | (3.3) | (37.7) | (4.0) | (66.9) | (3.5) | (75.7) | (4.1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest income | 3.6 | 0.4 | 4.5 | 0.5 | 7.5 | 0.4 | 8.8 | 0.5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other, net | (3.6) | (0.4) | 0.9 | 0.1 | 0.4 | 0.0 | 3.1 | 0.2 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income before taxes | 132.5 | 13.4 | 105.8 | 11.2 | 248.0 | 12.9 | 196.4 | 10.6 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Provision for income taxes | 30.3 | 3.1 | 45.1 | 4.8 | 58.8 | 3.1 | 65.8 | 3.5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | $ | 102.1 | 10.3 | % | $ | 60.7 | 6.4 | % | $ | 189.2 | 9.8 | % | $ | 130.6 | 7.0 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Revenue
Net revenue for the three months ended June 30, 2026 increased 5.0% compared to the prior period. Net revenue increased 4.4% on an organic basis, which excludes an increase of 1.1% attributed to changes in foreign currency exchange rates and a decrease of 0.5% due primarily to the effects of discontinued product lines in 2025.
Net revenue for the six months ended June 30, 2026 increased 3.8% compared to the prior period. Net revenue increased 4.3% on an organic basis, which excludes an increase of 1.6% attributed to changes in foreign currency exchange rates and a decrease of 2.1% due primarily to the effects of the divestiture of the Magnetic Speed and Position Business ("MSP Business") in the first quarter of 2025. Refer to Note 16: Disposals of the Financial Statements, included elsewhere in this Report, for additional information on the sale of the MSP Business.
Automotive
Automotive net revenue for the three months ended June 30, 2026 increased 3.3% compared to the prior period. Excluding an increase of 1.5% attributed to changes in foreign currency exchange rates, Automotive net revenue increased 1.8% on an organic basis compared to the prior period, which was primarily due to content growth in our Automotive business segment.
Automotive net revenue for the six months ended June 30, 2026 increased 1.4% compared to the prior period. Excluding an increase of 2.0% attributed to changes in foreign currency exchange and a decrease of 2.0% due to the effects of a divestiture, Automotive net revenue increased 1.4% on an organic basis compared to the prior period, which was primarily due to content growth in our Automotive business segment.
Industrials
Industrials net revenue for the three months ended June 30, 2026 increased 2.9% compared to the prior period. Excluding an increase of 0.9% attributed to changes in foreign currency exchange and a decrease of 2.2% due to the effect of discontinued product lines, Industrials net revenue grew 4.2% on an organic basis compared to the prior period, which primarily reflects content growth in our Industrials business segment.
Industrials net revenue for the six months ended June 30, 2026 increased 0.7% compared to the prior period. Excluding an increase of 1.1% attributed to changes in foreign currency exchange and a decline of 2.6% due to the effect of divestitures,
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Industrials net revenue grew 2.2% on an organic basis compared to the prior period, which primarily reflects content growth in our Industrials business segment.
Aerospace, Defense, and Commercial Equipment
Aerospace, Defense, and Commercial Equipment net revenue for the three months ended June 30, 2026 increased 11.5% compared to the prior period. Excluding an increase of 0.6% attributed to changes in foreign currency exchange rates, Aerospace, Defense, and Commercial Equipment net revenue grew 10.9% on an organic basis due to growth in our commercial equipment and aerospace business and product mix in the markets we serve.
Aerospace, Defense, and Commercial Equipment net revenue for the six months ended June 30, 2026 increased 13.1% compared to the prior period. Excluding an increase of 1.2% attributed to changes in foreign currency exchange rates and a decline of 1.8% due to the effects of a divestiture, Aerospace, Defense, and Commercial Equipment net revenue grew 13.7% on an organic basis due to growth in our commercial equipment and aerospace business and product mix in the markets we serve.
Operating Costs and Expenses
Operating costs and expenses for the three and six months ended June 30, 2026 and 2025 are presented, in millions of dollars and as a percentage of net revenue, in the following table. Amounts and percentages in the table below have been calculated based on unrounded numbers. Accordingly, certain amounts may not appear to recalculate due to the effect of rounding.
| For the three months ended | For the six months ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| June 30, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Amount | Percent | Amount | Percent | Amount | Percent | Amount | Percent | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating costs and expenses: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cost of revenue | $ | 688.8 | 69.5 | % | $ | 657.1 | 69.7 | % | $ | 1,337.3 | 69.5 | % | $ | 1,295.8 | 69.9 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Research and development | 31.9 | 3.2 | 32.6 | 3.5 | 63.8 | 3.3 | 69.4 | 3.7 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Selling, general and administrative | 90.5 | 9.1 | 87.8 | 9.3 | 183.9 | 9.6 | 173.9 | 9.4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Amortization of intangible assets | 15.7 | 1.6 | 21.2 | 2.2 | 31.5 | 1.6 | 41.8 | 2.3 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Restructuring and other charges, net | (1.7) | (0.2) | 6.6 | 0.7 | 2.0 | 0.1 | 13.6 | 0.7 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total operating costs and expenses | $ | 825.3 | 83.3 | % | $ | 805.3 | 85.4 | % | $ | 1,618.4 | 84.1 | % | $ | 1,594.4 | 86.0 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cost of revenue
For the three months ended June 30, 2026, cost of revenue as a percentage of net revenue decreased from the prior period, primarily due to organic revenue growth, partially offset by the net impacts of inflation on material and logistics costs and tariffs.
For the six months ended June 30, 2026, cost of revenue as a percentage of net revenue decreased from the prior period, primarily due to the favorable effects of the MSP divestiture in the first quarter of 2025 and organic revenue growth, partially offset by the net impacts of inflation on material and logistics costs and tariffs.
Research and development expense
For the three and six months ended June 30, 2026, research and development expense did not fluctuate materially from the prior period.
Selling, general and administrative expense
For the three and six months ended June 30, 2026, selling, general and administrative expense did not fluctuate materially from the prior period.
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Amortization of intangible assets
For the three and six months ended June 30, 2026, amortization of intangible assets decreased from the prior period, primarily due to the effect of amortization of intangible assets in accordance with their expected economic benefit, which generally results in acceleration of amortization expense in the early years of the life of an intangible asset.
Restructuring and other charges, net
In the three and six months ended June 30, 2026, restructuring and other charges, net decreased from the prior period, primarily due to higher transaction-related charges in 2025 corresponding to the business divestitures that took place in that year, partially offset by higher charges related to the Transformation Plan in the current period.
Refer to Note 5: Restructuring and Other Charges, Net, included elsewhere in this Report, for additional information regarding the components of restructuring and other charges, net.
Operating Income
For the three months ended June 30, 2026, operating income was $165.4 million, compared to operating income of $138.1 million in the prior period. This favorable impact was driven primarily by (1) higher revenue in the current period, (2) a decrease in restructuring charges and amortization of intangibles, and (3) cost savings as a result of actions taken as part of our restructuring plans, partially offset by the net impacts of inflation on material and logistics costs.
For the six months ended June 30, 2026, operating income was $307.0 million, compared to operating income of $260.3 million in the prior period. This favorable impact was driven primarily by (1) higher revenue in the current period, (2) a decrease in restructuring charges and amortization of intangibles, and (3) cost savings as a result of actions taken as part of our restructuring plans, partially offset by the net impacts of inflation on material and logistics costs.
Interest Expense
For the three and six months ended June 30, 2026, interest expense did not fluctuate materially from the prior period.
Interest Income
For the three and six months ended June 30, 2026, interest income did not fluctuate materially from the prior period.
Other, Net
Other, net primarily includes gains and losses related to currency remeasurement adjustments, foreign currency and commodity forward contracts not designated as hedging instruments, mark-to-market investments, debt refinancing, and the portion of our net periodic benefit cost excluding service cost.
For the three months ended June 30, 2026, other, net represented a net loss of $3.6 million, an unfavorable impact on
earnings of $4.6 million compared to a net gain of $0.9 million in the prior period. This unfavorable impact was primarily due to losses on commodity forward contracts and on the remeasurement of net monetary assets in the current year, partially offset by the gain on debt financing transactions in the current period.
For the six months ended June 30, 2026, other, net represented a net gain of $0.4 million, an unfavorable impact on
earnings of $2.6 million compared to a net gain of $3.1 million in the prior period. This unfavorable impact was primarily due to losses on the remeasurement of net monetary assets and a lower gain on commodity forward contracts in the current year, partially offset by the gain on debt financing transactions in the current period.
Refer to Note 13: Fair Value Measures and Note 6: Other, Net of the Financial Statements, included elsewhere in this Report, for additional details of our hedge accounting contracts and the components of other, net, respectively.
Provision for Income Taxes
The provision for income taxes consists of (1) current tax expense, which relates primarily to our profitable operations in tax jurisdictions with limited or no net operating loss carryforwards and withholding taxes related to management fees, royalties, and the repatriation of foreign earnings; and (2) deferred tax expense (or benefit), which represents adjustments in book-to-tax basis differences primarily related to (a) book versus tax basis in intangible assets, (b) changes in net operating loss carryforwards and tax credits, and (c) changes in withholding taxes on unremitted earnings.
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Non-GAAP Financial Measures
This section provides additional information regarding certain non-GAAP financial measures, including organic revenue growth (or decline), adjusted operating income, adjusted operating margin, adjusted net income, adjusted earnings per share ("EPS"), free cash flow, adjusted corporate and other expenses, net debt, gross and net leverage ratio, and adjusted earnings before interest, taxes, depreciation, and amortization ("EBITDA"), which are used by our management, Board of Directors, and investors. We use these non-GAAP financial measures internally to make operating and strategic decisions, including the preparation of our annual operating plan, evaluation of our overall business performance, and as a factor in determining compensation for certain employees.
The use of our non-GAAP financial measures has limitations. They should be considered as supplemental in nature and are not intended to be considered in isolation from, or as an alternative to, reported net revenue growth (or decline), operating income, operating margin, net income, diluted EPS, net cash provided by operating activities, corporate and other expenses, or total debt and finance lease obligations, respectively, calculated in accordance with U.S. GAAP. In addition, our measures of organic revenue growth (or decline), adjusted operating income, adjusted operating margin, adjusted net income, adjusted EPS, free cash flow, adjusted corporate and other expenses, gross and net leverage ratio, and adjusted EBITDA may not be the same as, or comparable to, similar non-GAAP financial measures presented by other companies.
Organic revenue growth (or decline) and market outgrowth
Organic revenue growth (or decline) is defined as the reported percentage change in net revenue calculated in accordance with U.S. GAAP, excluding the period-over-period impact of foreign exchange rate differences as well as the net impact of material acquisitions, divestitures, and product life-cycle management actions for the 12-month period following the respective transaction date(s).
We believe that organic revenue growth (or decline) provides investors with helpful information with respect to our operating performance, and we use organic revenue growth (or decline) to evaluate our ongoing operations as well as for internal planning and forecasting purposes. We believe that organic revenue growth (or decline) provides useful information in evaluating the results of our business because it excludes items that we believe are not indicative of ongoing performance or that we believe impact comparability with the prior period.
Market outgrowth is calculated as organic revenue growth less our weighted market growth. Our weighted market growth is calculated using our regional and platform sales mix, as applicable, in the corresponding prior period. Market outgrowth is used to describe the impact of an increasing quantity and value of our products used in customer systems and applications above market growth. We believe this provides a more meaningful comparison of our revenue growth relative to the markets we serve.
Adjusted operating income, adjusted operating margin, adjusted net income, and adjusted EPS
We define adjusted operating income as operating income (or loss), determined in accordance with U.S. GAAP, adjusted to exclude certain non-GAAP adjustments which are described under the heading Non-GAAP Adjustments below. Adjusted operating margin is calculated by dividing adjusted operating income (or loss) by net revenue determined in accordance with U.S. GAAP. We define adjusted net income as follows: net income (or loss) determined in accordance with U.S. GAAP, excluding certain non-GAAP adjustments which are described under the heading Non-GAAP Adjustments below. Adjusted EPS is calculated by dividing adjusted net income by the number of diluted weighted-average ordinary shares outstanding in the period as determined in accordance with U.S. GAAP.
Management uses adjusted operating income, adjusted operating margin, adjusted net income, and adjusted EPS (and the constant currency equivalent of each) as measures of operating performance, for planning purposes (including the preparation of our annual operating budget), to allocate resources to enhance the financial performance of our business, to evaluate the effectiveness of our business strategies, in communications with our Board of Directors and investors concerning our financial performance, and as factors in determining compensation for certain employees. We believe investors and securities analysts also use these non-GAAP financial measures in their evaluation of our performance and the performance of other similar companies. These non-GAAP financial measures are not measures of liquidity.
Free cash flow
Free cash flow is defined as net cash provided by operating activities less additions to property, plant and equipment and capitalized software. Free cash flow conversion is defined as Free cash flow divided by Adjusted net income. We believe free cash flow is useful to management and investors as a measure of cash generated by business operations that will be used to
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repay scheduled debt maturities and can be used to, among other things, fund acquisitions, repurchase ordinary shares, or accelerate the repayment of debt obligations.
Adjusted corporate and other expenses
Adjusted corporate and other expenses is defined as corporate and other expenses calculated in accordance with U.S. GAAP, excluding the portion of non-GAAP adjustments described below that relate to corporate and other expenses. We believe adjusted corporate and other expenses is useful to management and investors in understanding the impact of non-GAAP adjustments on operating expenses not allocated to our segments.
Adjusted EBITDA
Adjusted EBITDA is defined as net income (or loss), determined in accordance with U.S. GAAP, excluding interest expense, interest income, and provision for (or benefit from) income taxes, depreciation expense, amortization of intangible assets, and the following non-GAAP adjustments, if applicable: (1) restructuring related and other, (2) financing and other transaction costs, and (3) other, net. Refer to Non-GAAP Adjustments below for additional discussion of these adjustments.
Gross leverage ratio
Gross leverage ratio represents gross debt (total debt and finance lease obligations less unamortized issue costs) divided by last twelve months ("LTM") adjusted EBITDA. We believe that gross leverage ratio is a useful measure to management and investors in understanding trends in our overall financial condition.
Net leverage ratio
Net leverage ratio represents net debt (gross debt less cash and cash equivalents) divided by LTM adjusted EBITDA. We believe that the net leverage ratio is a useful measure to management and investors in understanding trends in our overall financial condition.
Non-GAAP adjustments
Many of our non-GAAP adjustments relate to a series of strategic initiatives developed by our management aimed at better positioning us for future revenue growth and an improved cost structure. These initiatives have been modified from time to time to reflect changes in overall market conditions and the competitive environment facing our business. These initiatives include, among other items, acquisitions, divestitures, restructurings of certain business, supply chain or corporate activities, and various financing transactions. We describe these adjustments in more detail below, each of which is net of current tax impacts, as applicable.
•Restructuring related and other: includes net charges related to certain restructuring and other exit activities, other costs (or income) that we believe are either unique or unusual to the identified reporting period, and the impact of commodity forward contracts that we believe impact comparisons to prior period operating results. Such costs include charges related to optimization of our manufacturing processes to increase productivity. This type of activity occurs periodically; however, each action is unique, discrete, and driven by various facts and circumstances. Such amounts are excluded from internal financial statements and analyses that management uses in connection with financial planning and in its review and assessment of our operating and financial performance, including the performance of our segments.
•Financing and other transaction costs: includes costs incurred, such as legal, accounting, and other professional services, that are directly related to an acquisition, divestiture, or equity financing transaction, expenses related to compensation arrangements entered into concurrent with the closing of an acquisition, adjustments related to changes in the fair value of acquisition-related contingent consideration amounts.
•Amortization of intangible assets: represents amortization of intangible assets.
•Other, net: includes non-operating expenses (or non-operating income) recorded within Other, net on our condensed consolidated statements of operations. Refer to Note 6: Other, Net of the Financial Statements, included elsewhere in this Quarterly Report, for additional details of the components of Other, net.
•Deferred taxes and other tax related: includes adjustments for deferred taxes and other timing differences including, but not limited to, book-to-tax basis differences on the fair value of intangible assets and goodwill, the utilization of net operating losses, and adjustments to our valuation allowance in connection with certain transactions and tax law
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changes. Other tax related items include certain adjustments to unrecognized tax benefits and withholding tax on repatriation of foreign earnings.
•Amortization of debt issuance costs: represents interest expense related to the amortization of deferred financing costs as well as debt discounts, net of premiums.
•Where applicable, the current income tax effect of non-GAAP adjustments.
Our definition of adjusted net income excludes the deferred provision for (or benefit from) income taxes and other tax related items described above. As we treat deferred income taxes as an adjustment to compute adjusted net income, the deferred income tax effect associated with the reconciling items presented below would not change adjusted net income for any period presented.
Non-GAAP reconciliations
The following tables present reconciliations of certain financial measures calculated in accordance with U.S. GAAP to the related non-GAAP financial measures for the three months ended June 30, 2026 and 2025. Refer to the Non-GAAP Adjustments section above for additional information regarding these adjustments. Amounts and percentages in the tables below have been calculated based on unrounded numbers, accordingly, certain amounts may not appear to recalculate due to the effect of rounding.
| For the three months ended June 30, 2026 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions, except per share amounts) | Operating Income | Operating Margin | Income Taxes | Net Income | Diluted EPS | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Reported (GAAP) | $ | 165.4 | 16.7 | % | $ | 30.3 | $ | 102.1 | $ | 0.70 | ||||||||||||||||||||||||||||||||||||||||||||||
| Non-GAAP adjustments: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring related and other (a) | 17.5 | 1.8 | (1.6) | 15.9 | 0.11 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Financing and other transaction costs (b) | (5.3) | (0.5) | 0.1 | (5.2) | (0.04) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Amortization of intangible assets | 15.7 | 1.6 | — | 15.7 | 0.11 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Amortization of debt issuance costs | — | — | — | 1.1 | 0.01 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Other, net | — | — | (1.2) | 2.5 | 0.02 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred taxes and other tax related | — | — | 11.5 | 11.5 | 0.08 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Total adjustments | 28.0 | 2.8 | 8.8 | 41.5 | 0.28 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjusted (non-GAAP) | $ | 193.3 | 19.5 | % | $ | 21.5 | $ | 143.7 | $ | 0.98 | ||||||||||||||||||||||||||||||||||||||||||||||
| For the three months ended June 30, 2025 | ||||||||||||||||||||||||||||||||
| (Dollars in millions, except per share amounts) | Operating Income | Operating Margin | Income Taxes | Net Income | Diluted EPS | |||||||||||||||||||||||||||
| Reported (GAAP) | $ | 138.1 | 14.6 | % | $ | 45.1 | $ | 60.7 | $ | 0.41 | ||||||||||||||||||||||
| Non-GAAP adjustments: | ||||||||||||||||||||||||||||||||
Restructuring related and other (a) | 16.3 | 1.7 | (0.6) | 15.6 | 0.11 | |||||||||||||||||||||||||||
Financing and other transaction costs (b) | 3.6 | 0.4 | 0.1 | 3.6 | 0.02 | |||||||||||||||||||||||||||
Amortization of intangible assets | 21.2 | 2.2 | — | 21.2 | 0.14 | |||||||||||||||||||||||||||
| Amortization of debt issuance costs | — | — | — | 1.2 | 0.01 | |||||||||||||||||||||||||||
Other, net | — | — | (0.1) | (1.0) | (0.01) | |||||||||||||||||||||||||||
| Deferred taxes and other tax related | — | — | 26.0 | 26.0 | 0.18 | |||||||||||||||||||||||||||
| Total adjustments | 41.0 | 4.3 | 25.4 | 66.7 | 0.45 | |||||||||||||||||||||||||||
| Adjusted (non-GAAP) | $ | 179.1 | 19.0 | % | $ | 19.7 | $ | 127.3 | $ | 0.87 | ||||||||||||||||||||||
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The following tables present reconciliations of certain financial measures calculated in accordance with U.S. GAAP to the related non-GAAP financial measures for the six months ended June 30, 2026 and 2025.
| For the six months ended June 30, 2026 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions, except per share amounts) | Operating Income | Operating Margin | Income Taxes | Net Income | Diluted EPS | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Reported (GAAP) | $ | 307.0 | 15.9 | % | $ | 58.8 | $ | 189.2 | $ | 1.29 | ||||||||||||||||||||||||||||||||||||||||||||||
| Non-GAAP adjustments: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring related and other (a) | 34.1 | 1.8 | (3.3) | 30.8 | 0.21 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Financing and other transaction costs (b) | (5.2) | (0.3) | 0.1 | (5.1) | (0.03) | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Amortization of intangible assets | 31.5 | 1.6 | — | 31.5 | 0.21 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Amortization of debt issuance costs | — | — | — | 2.2 | 0.01 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Other, net | — | — | (0.4) | (0.8) | (0.01) | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Deferred taxes and other tax related | — | — | 21.5 | 21.5 | 0.15 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Total adjustments | 60.4 | 3.1 | 17.8 | 80.0 | 0.55 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjusted (non-GAAP) | $ | 367.4 | 19.1 | % | $ | 40.9 | $ | 269.2 | $ | 1.84 | ||||||||||||||||||||||||||||||||||||||||||||||
| For the six months ended June 30, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions, except per share amounts) | Operating Income | Operating Margin | Income Taxes | Net Income | Diluted EPS | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Reported (GAAP) | $ | 260.3 | 14.0 | % | $ | 65.8 | $ | 130.6 | $ | 0.88 | ||||||||||||||||||||||||||||||||||||||||||||||
| Non-GAAP adjustments: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring related and other (a) | 34.6 | 1.9 | 0.9 | 35.5 | 0.24 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Financing and other transaction costs (b) | 9.0 | 0.5 | 0.1 | 9.1 | 0.06 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Amortization of intangible assets | 41.8 | 2.3 | — | 41.8 | 0.28 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Amortization of debt issuance costs | — | — | — | 2.4 | 0.02 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Other, net | — | — | (0.6) | (3.6) | (0.02) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred taxes and other tax related | — | — | 28.3 | 28.3 | 0.19 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Total adjustments | 85.3 | 4.6 | 28.7 | 113.4 | 0.77 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjusted (non-GAAP) | $ | 345.6 | 18.6 | % | $ | 37.1 | $ | 243.9 | $ | 1.65 | ||||||||||||||||||||||||||||||||||||||||||||||
(a) The following table presents the components of our restructuring related and other non-GAAP adjustment to net income for the three and six months ended June 30, 2026 and 2025 (amounts have been calculated based on unrounded numbers, accordingly, certain amounts may not appear to recalculate due to the effect of rounding):
| For the three months ended June 30, | For the six months ended June 30, | ||||||||||||||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||||
Business and corporate repositioning (i) | $ | 11.9 | $ | 16.2 | $ | 25.7 | $ | 34.3 | |||||||||||||||||||||||||||
Other | 5.6 | 0.1 | 8.4 | 0.3 | |||||||||||||||||||||||||||||||
Income tax effect | (1.6) | (0.6) | (3.3) | 0.9 | |||||||||||||||||||||||||||||||
Total non-GAAP restructuring related and other | $ | 15.9 | $ | 15.6 | $ | 30.8 | $ | 35.5 | |||||||||||||||||||||||||||
__________________________
i.Primarily includes charges related to repositioning our business and corporate functions to more effectively respond to the challenges that face the business, including severance, contract termination costs, charges related to asset write-downs, and other various restructuring-related charges.
(b) The following table presents the components of our financing and other transaction costs non-GAAP adjustment to net income for the three and six months ended June 30, 2026 and 2025 (amounts have been calculated based on unrounded numbers, accordingly, certain amounts may not appear to recalculate due to the effect of rounding):
| For the three months ended June 30, | For the six months ended June 30, | ||||||||||||||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||||
Transaction loss (i) | $ | — | $ | 3.9 | $ | — | $ | 8.6 | |||||||||||||||||||||||||||
Merger and acquisition compensation arrangements (ii) | (5.9) | (0.3) | (6.3) | 0.4 | |||||||||||||||||||||||||||||||
Other | 0.7 | — | 1.1 | — | |||||||||||||||||||||||||||||||
Income tax effect | 0.1 | 0.1 | 0.1 | 0.1 | |||||||||||||||||||||||||||||||
Total financing and other transaction costs | $ | (5.2) | $ | 3.6 | $ | (5.1) | $ | 9.1 | |||||||||||||||||||||||||||
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i.Primarily includes losses or gains related to the divestiture of a business, costs incurred, including for legal, accounting, and other professional services, that are directly related to an acquisition, divestiture, or other transaction. In the six months ended June 30, 2025, this line includes costs and losses associated with the disposition of the MSP Business. Refer to Note 16: Disposals for further information on this transaction.
ii.Primarily relates to compensation arrangements entered into concurrent with the closing of an acquisition and compensation in connection with the closing of a transaction.
The following table provides a reconciliation of net cash provided by operating activities in accordance with U.S. GAAP to free cash flow.
| For the six months ended June 30, | ||||||||||||||||||||
| (In millions) | 2026 | 2025 | ||||||||||||||||||
| Net cash provided by operating activities (GAAP) | $ | 332.5 | $ | 260.1 | ||||||||||||||||
| Additions to property, plant and equipment and capitalized software | (41.5) | (58.0) | ||||||||||||||||||
| Free cash flow (non-GAAP) | $ | 291.0 | $ | 202.1 | ||||||||||||||||
The following table provides a reconciliation of corporate and other expenses in accordance with U.S. GAAP to adjusted corporate and other expenses.
| For the three months ended June 30, | For the six months ended June 30, | |||||||||||||||||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||||
| Corporate and other expenses (GAAP) | $ | (74.8) | $ | (64.3) | $ | (147.6) | $ | (129.6) | ||||||||||||||||||||||||||||||
| Restructuring related and other | 13.3 | 12.9 | 26.2 | 28.6 | ||||||||||||||||||||||||||||||||||
| Financing and other transaction costs | 0.7 | 0.3 | 0.7 | 1.4 | ||||||||||||||||||||||||||||||||||
| Total adjustments | 13.9 | 13.2 | 26.9 | 30.0 | ||||||||||||||||||||||||||||||||||
| Adjusted corporate and other expenses (non-GAAP) | $ | (60.9) | $ | (51.1) | $ | (120.7) | $ | (99.6) | ||||||||||||||||||||||||||||||
The following table provides a reconciliation of net income in accordance with U.S. GAAP to adjusted EBITDA.
| For the three months ended June 30, | For the six months ended June 30, | |||||||||||||||||||||||||||||||||||||||||||
| (In millions) | LTM | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||||||||||||
Net income | $ | 89.9 | $ | 102.1 | $ | 60.7 | $ | 189.2 | $ | 130.6 | ||||||||||||||||||||||||||||||||||
| Interest expense, net | 122.5 | 29.2 | 33.2 | 59.4 | 66.9 | |||||||||||||||||||||||||||||||||||||||
| Provision for income taxes | 85.0 | 30.3 | 45.1 | 58.8 | 65.8 | |||||||||||||||||||||||||||||||||||||||
| Depreciation expense | 169.5 | 33.5 | 33.3 | 67.6 | 74.3 | |||||||||||||||||||||||||||||||||||||||
| Amortization of intangible assets | 70.0 | 15.7 | 21.2 | 31.5 | 41.8 | |||||||||||||||||||||||||||||||||||||||
| EBITDA | 536.9 | 211.0 | 193.5 | 406.5 | 379.4 | |||||||||||||||||||||||||||||||||||||||
| Non-GAAP adjustments | ||||||||||||||||||||||||||||||||||||||||||||
| Restructuring related and other | 311.5 | 16.5 | 16.0 | 31.5 | 27.0 | |||||||||||||||||||||||||||||||||||||||
| Financing and other transaction costs | 20.7 | (5.3) | 3.6 | (5.2) | 9.0 | |||||||||||||||||||||||||||||||||||||||
| Other, net | (13.2) | 3.6 | (0.9) | (0.4) | (3.1) | |||||||||||||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 855.9 | $ | 225.9 | $ | 212.1 | $ | 432.3 | $ | 412.3 | ||||||||||||||||||||||||||||||||||
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The following table provides a reconciliation of total debt and finance lease obligations in accordance with U.S. GAAP to gross and net debt balances and leverage ratios.
| (Dollars in millions) | June 30, 2026 | December 31, 2025 | ||||||||||||||||||
| Current portion of long-term debt and finance lease obligations | $ | 2.4 | $ | 2.3 | ||||||||||||||||
| Finance lease obligations, less current portion | 17.7 | 18.9 | ||||||||||||||||||
| Long-term debt, net | 2,424.8 | 2,828.6 | ||||||||||||||||||
| Total debt and finance lease obligations | 2,444.9 | 2,849.7 | ||||||||||||||||||
Less: debt premium, net | 0.2 | 0.5 | ||||||||||||||||||
| Less: deferred financing costs | (15.3) | (17.9) | ||||||||||||||||||
| Total gross indebtedness | $ | 2,460.1 | $ | 2,867.2 | ||||||||||||||||
| Adjusted EBITDA (LTM) | $ | 855.9 | $ | 835.9 | ||||||||||||||||
| Gross leverage ratio | 2.9 | 3.4 | ||||||||||||||||||
| Total gross indebtedness | $ | 2,460.1 | $ | 2,867.2 | ||||||||||||||||
| Less: cash and cash equivalents | 403.3 | 573.0 | ||||||||||||||||||
| Net debt | $ | 2,056.8 | $ | 2,294.2 | ||||||||||||||||
| Adjusted EBITDA (LTM) | $ | 855.9 | $ | 835.9 | ||||||||||||||||
| Net leverage ratio | 2.4 | 2.7 | ||||||||||||||||||
Liquidity and Capital Resources
As of June 30, 2026 and December 31, 2025, we held cash and cash equivalents in the following regions (amounts have been calculated based on unrounded numbers, accordingly, certain amounts may not appear to recalculate due to the effect of rounding):
| (In millions) | June 30, 2026 | December 31, 2025 | |||||||||
| United Kingdom | $ | 3.4 | $ | 3.6 | |||||||
| United States | 5.7 | 8.0 | |||||||||
| The Netherlands | 165.6 | 421.8 | |||||||||
| China | 153.0 | 80.7 | |||||||||
| Other | 75.6 | 58.9 | |||||||||
| Total | $ | 403.3 | $ | 573.0 | |||||||
The amount of cash and cash equivalents held in these geographic regions fluctuates throughout the year due to a variety of factors, such as our use of intercompany loans and dividends and the timing of cash receipts and disbursements in the normal course of business. Our earnings are not considered to be permanently reinvested in certain jurisdictions in which they were earned. We recognize a deferred tax liability on these unremitted earnings to the extent the remittance of such earnings cannot be recovered in a tax-free manner.
In certain jurisdictions, our cash balances are subject to withholding taxes immediately upon withdrawal of funds to a different jurisdiction. In addition, in order to take advantage of incentive programs offered by various jurisdictions, including tax incentives, we are required to maintain minimum cash balances in these jurisdictions. The transfer of cash from these jurisdictions could result in loss of incentives or higher cash tax expense, but those impacts are not expected to be material.
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Our cash and cash equivalents balances are held in the following significant currencies (amounts in the tables below have been calculated based on unrounded numbers, accordingly, certain amounts may not appear to recalculate due to the effect of rounding):
As of June 30, 2026 | |||||||||||||||||||||||||||||
| (In millions) | United States Dollar ("USD") | Euro ("EUR") | British Pound Sterling ("GBP") | Chinese Renminbi ("CNY") | Other | ||||||||||||||||||||||||
| United Kingdom | $ | 0.7 | € | 0.0 | £ | 1.8 | ¥ | — | |||||||||||||||||||||
| United States | 5.7 | 0.0 | — | 0.0 | |||||||||||||||||||||||||
| The Netherlands | 162.1 | 2.2 | 0.7 | — | |||||||||||||||||||||||||
| China | 52.0 | — | — | 685.8 | |||||||||||||||||||||||||
| Other | 55.9 | 5.4 | 0.0 | 0.0 | |||||||||||||||||||||||||
| Total | $ | 276.4 | € | 7.6 | £ | 2.5 | ¥ | 685.8 | |||||||||||||||||||||
| USD Equivalent | $ | 8.7 | $ | 3.3 | $ | 100.9 | $ | 14.0 | |||||||||||||||||||||
As of December 31, 2025 | |||||||||||||||||||||||||||||
| (In millions) | USD | EUR | GBP | CNY | Other | ||||||||||||||||||||||||
| United Kingdom | $ | — | € | 0.0 | £ | 2.6 | ¥ | — | |||||||||||||||||||||
| United States | 8.0 | 0.0 | 0.0 | — | |||||||||||||||||||||||||
| The Netherlands | 411.4 | 8.2 | 0.6 | — | |||||||||||||||||||||||||
| China | 20.1 | — | — | 423.3 | |||||||||||||||||||||||||
| Other | 43.8 | 1.9 | — | — | |||||||||||||||||||||||||
| Total | $ | 483.3 | € | 10.1 | £ | 3.2 | ¥ | 423.3 | |||||||||||||||||||||
| USD Equivalent | $ | 11.9 | $ | 4.3 | $ | 60.5 | $ | 13.0 | |||||||||||||||||||||
Cash Flows:
The table below summarizes our primary sources and uses of cash for the six months ended June 30, 2026 and 2025. We have derived these summarized statements of cash flows from the Financial Statements included elsewhere in this Report. Amounts in the table below have been calculated based on unrounded numbers. Accordingly, certain amounts may not appear to recalculate due to the effect of rounding.
| For the six months ended | |||||||||||
| (In millions) | June 30, 2026 | June 30, 2025 | |||||||||
| Net cash provided by/(used in): | |||||||||||
| Operating activities: | |||||||||||
Net income adjusted for non-cash items | $ | 322.2 | $ | 297.4 | |||||||
| Changes in operating assets and liabilities, net | 10.3 | (37.3) | |||||||||
| Operating activities | 332.5 | 260.1 | |||||||||
| Investing activities | (35.9) | (33.6) | |||||||||
| Financing activities | (468.5) | (160.8) | |||||||||
| Effects of exchange rate differences | 2.2 | 2.4 | |||||||||
| Net change | $ | (169.7) | $ | 68.1 | |||||||
Operating activities. Net cash provided by operating activities for the six months ended June 30, 2026 increased compared to the corresponding period of the prior year, primarily due to higher cash provided by earnings and favorable changes in working capital.
Investing activities. Net cash used in investing activities for the six months ended June 30, 2026 was $35.9 million compared to cash used of $33.6 million for the corresponding period of the prior year. This change was primarily due to proceeds received for the sale of the MSP Business in the first quarter of 2025, partially offset by higher capital expenditures in the prior period. For fiscal year 2026, we anticipate additions to PP&E and capitalized software of up to approximately $125.0 million, which we expect to fund with cash flows from operations.
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Financing activities. Net cash used in financing activities for the six months ended June 30, 2026 was $468.5 million compared to cash used in financing activities of $160.8 million in the corresponding period of the prior year. This change was primarily due the settlement of our cash tender offer in the second quarter of 2026, partially offset by a higher amount of cash paid to repurchase ordinary shares in the prior year.
Indebtedness and Liquidity
As of June 30, 2026, we had $2.5 billion in gross indebtedness, which includes finance lease obligations and excludes debt discounts, premiums, and deferred financing costs.
Capital Resources
Sources of liquidity
Our sources of liquidity include cash on hand, cash flows from operations, and available capacity under the Revolving Credit Facility. As of June 30, 2026, we had $645.8 million available under the Revolving Credit Facility, net of $4.2 million of obligations in respect of outstanding letters of credit issued thereunder. Outstanding letters of credit are issued primarily for the benefit of certain operating activities. As of June 30, 2026, no amounts had been drawn against these outstanding letters of credit. This Revolving Credit Facility includes an accordion feature under which maximum borrowings may be increased under certain circumstances.
We believe, based on our current level of operations and taking into consideration the restrictions and covenants included in the Credit Agreement, Revolving Credit Facility, and Senior Notes Indentures, that the sources of liquidity described above will be sufficient to fund our operations, capital expenditures, dividend payments, ordinary share repurchases, and debt service for at least the next twelve months. However, we cannot make assurances that our business will generate sufficient cash flows from operations or that future borrowings will be available to us in an amount sufficient to enable us to pay our indebtedness or to fund our other liquidity needs. Further, the amount of our debt may limit our ability to procure additional financing in the future.
Our ability to raise additional financing, and our borrowing costs, may be impacted by short- and long-term debt ratings assigned by independent rating agencies, which are based, in significant part, on our performance as measured by certain credit metrics such as interest coverage and leverage ratios. As of July 16, 2026, Standard & Poor's corporate credit rating for STBV was BB+ with a stable outlook and Moody’s Investors Service’s corporate credit rating for STBV was Ba2 with a stable outlook. Any future downgrades to STBV's credit ratings may increase our future borrowing costs but will not reduce availability under the Credit Agreement.
Restrictions and Covenants
The Credit Agreement provides that if our senior secured net leverage ratio exceeds a specified level, we are required to use a portion of our excess cash flow, as defined in the Credit Agreement, generated by operating, investing, or financing activities to prepay some or all of the outstanding borrowings under the Senior Secured Credit Facilities. The Credit Agreement also requires mandatory prepayments of the outstanding borrowings under the Senior Secured Credit Facilities upon certain asset dispositions and casualty events, in each case subject to certain reinvestment rights, and upon the incurrence of certain indebtedness (excluding any permitted indebtedness). These provisions were not triggered during the six months ended June 30, 2026.
The Credit Agreement and the Senior Notes Indentures contain restrictions and covenants that limit the ability of our wholly-owned subsidiary, STBV, and certain of its subsidiaries to, among other things, incur subsequent indebtedness, sell assets, pay dividends, and make other restricted payments. For a full discussion of these restrictions and covenants, refer to Part II, Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations—Capital Resources included in our 2025 Annual Report. These restrictions and covenants, which are subject to important exceptions and qualifications set forth in the Credit Agreement and Senior Notes Indentures, were taken into consideration when we established our share repurchase programs and will be evaluated periodically with respect to future potential funding of those programs. As of June 30, 2026, we believe we were in compliance with all covenants and default provisions under our credit arrangements.
Share repurchase programs
From time to time, our Board of Directors has authorized various share repurchase programs, which may be modified or terminated by our Board at any time. We currently have authorization for the September 2023 Program, under which approximately $257.3 million remained available as of June 30, 2026. In the six months ended June 30, 2026, and 2025, we repurchased 0.7 million and 4.2 million ordinary shares under the September 2023 Program.
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Dividends
In the six months ended June 30, 2026 and 2025, we paid aggregate cash dividends of $34.9 million and $35.5 million, respectively. In July 2026, we announced that our Board of Directors approved a quarterly dividend of $0.12 per share, payable in August 2026 to shareholders of record as of August 12, 2026.
Critical Accounting Policies and Estimates
For a discussion of the critical accounting policies that require the use of significant judgments and estimates by management, refer to Part II, Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates included in our 2025 Annual Report. The preparation of consolidated financial statements in accordance with U.S. GAAP requires us to exercise judgment in the process of applying our accounting policies. It also requires that we make estimates and assumptions about future events that affect the amounts reported in the consolidated financial statements and accompanying notes. No material changes to our critical accounting policies and estimates, as previously disclosed, have occurred during the first six months of 2026.
Item 3.Quantitative and Qualitative Disclosures About Market Risk.
No significant changes to our market risk have occurred since December 31, 2025. For a discussion of market risks affecting us, refer to Part II, Item 7A: Quantitative and Qualitative Disclosures About Market Risk included in our 2025 Annual Report.
Item 4.Controls and Procedures.
As of the end of the period covered by this Quarterly Report on Form 10-Q, our management carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer, our Chief Financial Officer, and our Chief Accounting Officer, of the effectiveness of our disclosure controls and procedures pursuant to Rules 13a-15 and 15d-15 under the Securities Exchange Act of 1934, as amended. Based upon that evaluation, our Chief Executive Officer, our Chief Financial Officer, and our Chief Accounting Officer concluded that our disclosure controls and procedures are effective.
There have been no changes in our internal control over financial reporting during the quarter ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II—OTHER INFORMATION
Item 1.Legal Proceedings.
We are regularly involved in a number of claims and litigation matters that arise in the ordinary course of business. Although it is not feasible to predict the outcome of these matters, based upon our experience and current information known to us, we do not expect the outcome of these matters, either individually or in the aggregate, to have a material adverse effect on our results of operations, financial condition, and/or cash flows.
Item 1A.Risk Factors.
Information regarding risk factors appears in Part I, Item 1A: Risk Factors, included in our 2025 Annual Report. There have been no material changes to the risk factors disclosed therein.
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds.
Issuer Purchases of Equity Securities
| Period | Total Number of Shares Purchased (in shares) (1) | Weighted-Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plan or Programs | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plan or Programs (in millions) | ||||||||||||||||||||||
| April 1 through April 30, 2026 | 158,223 | $ | 35.18 | — | $ | 257.3 | ||||||||||||||||||||
| May 1 through May 31, 2026 | 1,279 | $ | 42.19 | — | $ | 257.3 | ||||||||||||||||||||
| June 1 through June 30, 2026 | 7,408 | $ | 49.52 | — | $ | 257.3 | ||||||||||||||||||||
| Quarter total | 166,910 | $ | 35.87 | — | $ | 257.3 | ||||||||||||||||||||
___________________________________
(1) The total number of ordinary shares purchased includes ordinary shares that were withheld upon the vesting of restricted securities to cover payment of employee withholding tax. These withholdings took place outside of a publicly announced repurchase plan. There were 158,223, 1,279, and 7,408 ordinary shares withheld in April 2026, May 2026, and June 2026, respectively, representing a total aggregate fair value of $6.0 million based on the closing price of our ordinary shares on the date of withholdings.
Item 3.Defaults Upon Senior Securities.
None.
Item 5. Other Information
On June 15, 2026 , Lynne Caljouw , Executive Vice President and Chief Administrative Officer , an officer for purposes of Section 16 of the Exchange Act, entered into a "Rule 10b5-1 trading arrangement" as such term is defined in Item 408(a) of Regulation S-K. This arrangement was entered into during an open trading window and provides for the potential sale of up to 37,395 ordinary shares contingent on attainment of certain price per share of our common stock. The earliest sell date is September 14, 2026 and the plan will terminate upon the earlier of August 31, 2027 or the date all ordinary shares under the plan are sold. In addition, Ms. Caljouw may terminate the plan at any time.
On June 2, 2026 , Jackie Chen , Executive Vice President and President of Sensata China , an officer for purposes of Section 16 of the Exchange Act, entered into a "Rule 10b5-1 trading arrangement" as such term is defined in Item 408(a) of Regulation S-K. This arrangement was entered into during an open trading window and provides for the potential sale of up to 3,800 ordinary shares contingent on attainment of certain price per share of our common stock. The earliest sell date is September 1, 2026 and the plan will terminate upon the earlier of June 2, 2027 or the date all ordinary shares under the plan are sold. In addition, Mr. Chen may terminate the plan at any time.
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Item 6.Exhibits.
| Exhibit No. | Description | |||||||
| 3.1 | Articles of Association of Sensata Technologies Holding plc (incorporated by reference to Exhibit 3.1 of the Registrant's Current Report on Form 8-K filed on March 28, 2018). | |||||||
| 10.1 | Technical Amendment to Credit Agreement, dated as of April 13, 2026, by and among Sensata Technologies, Inc., Sensata Technologies Intermediate Holding B.V., Sensata Technologies B.V., the other Guarantors party thereto, Morgan Stanley Senior Funding, Inc., as the Administrative Agent, an L/C Issuer and the Swing Line Lender, and the Revolving Credit Lenders and other L/C Issuers party thereto .* | |||||||
| 10.2 | Amendment to the Sensata Technologies Holding plc 2021 Equity Incentive Plan *† | |||||||
| 19.1 | Sensata Technologies Holding plc Insider Trading Policy. * | |||||||
| 31.1 | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* | |||||||
| 31.2 | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* | |||||||
| 31.3 | Certification of Chief Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* | |||||||
| 32.1 | Certification of Chief Executive Officer, Chief Financial Officer, and Chief Accounting Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.* | |||||||
| 101.INS | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document. * | |||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. * | |||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. * | |||||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. * | |||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. * | |||||||
| 104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). | |||||||
___________________________________
* Filed herewith
† Indicates management contract or compensatory plan, contract or arrangement.
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SIGNATURES
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 thereunto duly authorized.
Date: July 29, 2026
SENSATA TECHNOLOGIES HOLDING PLC | ||
| /s/ Stephan von Schuckmann | ||
(Stephan von Schuckmann) Chief Executive Officer (Principal Executive Officer) | ||
/s/ Andrew Lynch | ||
(Andrew Lynch) Executive Vice President and Chief Financial Officer (Principal Financial Officer) | ||
| /s/ Richard Siedel | ||
(Richard Siedel) Senior Vice President and Chief Accounting Officer (Principal Accounting Officer) | ||
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