[10-Q] Gentherm Inc Quarterly Earnings Report

Rhea-AI Filing Summary

Gentherm (THRM) reported Q3 results for the period ended September 30, 2025. Product revenue was $386,870, with gross margin of $95,148 and operating income of $23,858. Net income was $14,949, or diluted EPS of $0.49. Interest expense, net, was $3,313, and the effective tax rate was 28.4%.

For the nine months, operating cash flow reached $87,820, ending cash and cash equivalents were $154,250. Total debt was $189,109, primarily the U.S. dollar revolving credit facility at $189,000; $307,938 remained available for additional borrowings. Letters of credit outstanding were $3,062.

The company advanced multi‑region restructuring to optimize its manufacturing footprint. The 2025 Manufacturing Footprint Plan anticipates cash restructuring costs of $3,000–$4,000 for severance and $1,000 of other transition costs, plus $1,000–$2,000 of capital expenditures. The 2025 EMEA Plan expects $4,000–$6,000 for severance and $2,000–$3,000 of other costs, plus $1,000–$2,000 of capital expenditures. The 2025 Asia Plan expects $2,000–$3,000 for severance and $1,000 of other costs, plus $2,000–$3,000 of capital expenditures. As of October 17, 2025, shares outstanding were 30,525,148; year‑to‑date repurchases totaled $10,015, with $110,103 remaining under the authorization.

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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 September 30, 2025

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: 0-21810

GENTHERM INCORPORATED

(Exact name of registrant as specified in its charter)

Michigan		95-4318554
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
28875 Cabot Drive, Novi, MI		48377
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (248) 504-0500

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, no par value	THRM	Nasdaq

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.

Large accelerated filer	☒		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 ☒

At October 17, 2025, there were 30,525,148 issued and outstanding shares of Common Stock of the registrant.

GENTHERM INCORPORATED

TABLE OF CONTENTS

Part I. Financial Information					3
	Item 1.		Financial Statements (Unaudited)		3
			Consolidated Condensed Balance Sheets		3
			Consolidated Condensed Statements of Income		4
			Consolidated Condensed Statements of Comprehensive Income		5
			Consolidated Condensed Statements of Cash Flows		6
			Consolidated Condensed Statements of Changes in Shareholders’ Equity		7
			Notes to Unaudited Consolidated Condensed Financial Statements		8
			Note 1 - Overview		8
			Note 2 - Recently Issued Accounting Pronouncements		9
			Note 3 - Restructuring		9
			Note 4 - Details of Certain Balance Sheet Components		12
			Note 5 - Goodwill and Other Intangibles		12
			Note 6 - Debt		13
			Note 7 - Commitments and Contingencies		14
			Note 8 - Supplier Finance Program		15
			Note 9 - Earnings Per Share		16
			Note 10 - Financial Instruments		16
			Note 11 - Fair Value Measurements		18
			Note 12 - Equity		18
			Note 13 - Reclassifications Out of Accumulated Other Comprehensive Income (Loss)		19
			Note 14 - Income Taxes		20
			Note 15 - Segment Reporting		21
	Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		24
	Item 3.		Quantitative and Qualitative Disclosures About Market Risk		36
	Item 4.		Controls and Procedures		37
Part II. Other Information					38
	Item 1.		Legal Proceedings		38
	Item 1A.		Risk Factors		38
	Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds		38
	Item 5.		Other Information		38
	Item 6.		Exhibits		39
Signatures					40

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

GENTHERM INCORPORATED

CONSOLIDATED CONDENSED BALANCE SHEETS

(In thousands, except share data)

(Unaudited)

		September 30, 2025				December 31, 2024
ASSETS
Current Assets:
Cash and cash equivalents		$	154,250			$	134,134
Accounts receivable, net			291,293				258,112
Inventory:
Raw materials			136,014				137,511
Work in process			35,040				19,059
Finished goods			82,199				70,786
Inventory, net			253,253				227,356
Other current assets			87,096				64,413
Total current assets			785,892				684,015
Property and equipment, net			256,948				252,970
Goodwill			108,730				99,603
Other intangible assets, net			54,291				57,251
Operating lease right-of-use assets			58,662				43,954
Deferred income tax assets			78,302				75,041
Other non-current assets			38,510				34,722
Total assets		$	1,381,335			$	1,247,556
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable		$	263,600			$	226,815
Current lease liabilities			10,181				7,517
Current maturities of long-term debt			109				137
Other current liabilities			126,435				105,824
Total current liabilities			400,325				340,293
Long-term debt, less current maturities			189,000				220,064
Non-current lease liabilities			49,678				37,052
Pension benefit obligation			3,880				4,017
Other non-current liabilities			20,504				29,183
Total liabilities		$	663,387			$	630,609
Shareholders’ equity:
Common Stock:
No par value; 55,000,000 shares authorized 30,525,148 and 30,788,639 issued and outstanding at September 30, 2025 and December 31, 2024, respectively			3,901				2,049
Paid-in capital			1,590				4,290
Accumulated other comprehensive income (loss)			1,358				(85,193	)
Accumulated earnings			711,099				695,801
Total shareholders’ equity			717,948				616,947
Total liabilities and shareholders’ equity		$	1,381,335			$	1,247,556

See accompanying notes to the consolidated condensed financial statements.

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GENTHERM INCORPORATED

CONSOLIDATED CONDENSED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)

		Three Months Ended September 30,								Nine Months Ended September 30,
		2025				2024				2025				2024
Product revenues		$	386,870			$	371,512			$	1,115,814			$	1,103,210
Cost of sales			291,722				276,639				844,439				822,883
Gross margin			95,148				94,873				271,375				280,327
Operating expenses:
Net research and development expenses			24,429				23,013				71,203				67,619
Selling, general and administrative expenses			42,875				36,861				122,440				116,992
Restructuring expenses, net			3,986				2,662				10,608				12,342
Loss on sale of land and building, net			—				—				2,196				—
Total operating expenses			71,290				62,536				206,447				196,953
Operating income			23,858				32,337				64,928				83,374
Interest expense, net			(3,313	)			(4,710	)			(10,911	)			(11,956	)
Foreign currency gain (loss)			339				(8,480	)			(27,391	)			(6,213	)
Other income (loss)			—				263				(1,124	)			952
Earnings before income tax			20,884				19,410				25,502				66,157
Income tax expense			5,935				3,445				10,204				16,531
Net income		$	14,949			$	15,965			$	15,298			$	49,626
Basic earnings per share		$	0.49			$	0.51			$	0.50			$	1.58
Diluted earnings per share		$	0.49			$	0.51			$	0.50			$	1.57
Weighted average number of shares – basic			30,480				31,187				30,619				31,421
Weighted average number of shares – diluted			30,748				31,365				30,802				31,605

See accompanying notes to the consolidated condensed financial statements.

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GENTHERM INCORPORATED

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)

		Three Months Ended September 30,								Nine Months Ended September 30,
		2025				2024				2025				2024
Net income		$	14,949			$	15,965			$	15,298			$	49,626
Other comprehensive (loss) income:
Pension benefit obligations, net of tax			15				17				43				50
Foreign currency translation adjustments			(687	)			22,438				79,364				3,446
Unrealized gain (loss) on cash flow derivative securities, net of tax			25				(1,777	)			7,144				(8,357	)
Other comprehensive (loss) income, net of tax			(647	)			20,678				86,551				(4,861	)
Comprehensive income		$	14,302			$	36,643			$	101,849			$	44,765

See accompanying notes to the consolidated condensed financial statements.

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GENTHERM INCORPORATED

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

		Nine Months Ended September 30,
		2025				2024
Operating Activities:
Net income		$	15,298			$	49,626
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			39,478				40,085
Deferred income taxes			(12,836	)			1,568
Stock based compensation			10,573				10,291
Loss (gain) on disposition of property and equipment			2,671				(1,702	)
Provisions for inventory			5,234				502
Other non-cash items, including unrealized foreign currency loss (gain)			30,957				(1,057	)
Changes in assets and liabilities:
Accounts receivable, net			(20,543	)			(16,179	)
Inventory			(20,136	)			(27,826	)
Other assets			(22,325	)			(35,959	)
Accounts payable			33,514				38,501
Other liabilities			25,935				15,239
Net cash provided by operating activities			87,820				73,089
Investing Activities:
Purchases of property and equipment			(33,378	)			(50,354	)
Proceeds from the sale of property and equipment			3,770				7,537
Proceeds from deferred purchase price of factored receivables			744				10,266
Cost of technology investments			(915	)			(590	)
Net cash used in investing activities			(29,779	)			(33,141	)
Financing Activities:
Borrowings on debt			72,000				53,000
Repayments of debt			(103,112	)			(53,520	)
Proceeds from the exercise of Common Stock options			—				4,650
Taxes withheld and paid on employees' stock based compensation			(1,306	)			(3,157	)
Cash paid for the repurchase of Common Stock			(10,015	)			(41,578	)
Net cash used in financing activities			(42,433	)			(40,605	)
Foreign currency effect			4,508				1,565
Net increase in cash and cash equivalents			20,116				908
Cash and cash equivalents at beginning of period			134,134				149,673
Cash and cash equivalents at end of period		$	154,250			$	150,581
Supplemental disclosure of cash flow information:
Cash paid for taxes		$	22,171			$	19,470
Cash paid for interest			9,835				10,022
Non-Cash Investing Activities:
Period-end balance of accounts payable for property and equipment		$	2,959			$	7,646
Deferred purchase price of receivables factored in the period			—				9,276

See accompanying notes to the consolidated condensed financial statements.

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GENTHERM INCORPORATED

CONSOLIDATED CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(In thousands)

(Unaudited)

														Accumulated
														Other
		Common Stock								Paid-in				Comprehensive				Accumulated
		Shares				Amount				Capital				Income (Loss)				Earnings				Total
Balance at December 31, 2024			30,789			$	2,049			$	4,290			$	(85,193	)		$	695,801			$	616,947
Net loss			—				—				—				—				(128	)			(128	)
Other comprehensive income			—				—				—				28,312				—				28,312
Stock based compensation, net			70				1,397				—				—				—				1,397
Balance at March 31, 2025			30,859			$	3,446			$	4,290			$	(56,881	)		$	695,673			$	646,528
Net income			—				—				—				—				477				477
Other comprehensive income			—				—				—				58,886				—				58,886
Stock based compensation, net			43				3,869				—				—				—				3,869
Stock repurchase			(382	)			(7,315	)			(2,700	)			—				—				(10,015	)
Balance at June 30, 2025			30,520			$	—			$	1,590			$	2,005			$	696,150			$	699,745
Net income			—				—				—				—				14,949				14,949
Other comprehensive loss			—				—				—				(647	)			—				(647	)
Stock based compensation, net			5				3,901				—				—				—				3,901
Balance at September 30, 2025			30,525			$	3,901			$	1,590			$	1,358			$	711,099			$	717,948
														Accumulated
														Other
		Common Stock								Paid-in				Comprehensive				Accumulated
		Shares				Amount				Capital				Income (Loss)				Earnings				Total
Balance at December 31, 2023			31,542			$	50,503			$	—			$	(30,160	)		$	624,379			$	644,722
Net income			—				—				—				—				14,785				14,785
Other comprehensive loss			—				—				—				(15,035	)			—				(15,035	)
Stock based compensation, net			87				2,766				—				—				(179	)			2,587
Balance at March 31, 2024			31,629			$	53,269			$	—			$	(45,195	)		$	638,985			$	647,059
Net income			—				—				—				—				18,876				18,876
Other comprehensive loss			—				—				—				(10,504	)			—				(10,504	)
Stock based compensation, net			69				5,555				(396	)			—				—				5,159
Stock repurchase			(380	)			(32,285	)			5,345				—				6,654				(20,286	)
Balance at June 30, 2024			31,318			$	26,539			$	4,949			$	(55,699	)		$	664,515			$	640,304
Net income			—				—				—				—				15,965				15,965
Other comprehensive income			—				—				—				20,678				—				20,678
Stock based compensation, net			64				4,442				(397	)			—				—				4,045
Stock repurchase			(406	)			(20,283	)			—				—				—				(20,283	)
Balance at September 30, 2024			30,976			$	10,698			$	4,552			$	(35,021	)		$	680,480			$	660,709

See accompanying notes to the consolidated condensed financial statements.

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Note 1 – Overview

Gentherm Incorporated, a Michigan corporation, and its consolidated subsidiaries (“Gentherm”, “we”, “us”, “our” or the “Company”) is a global market leader of innovative thermal management and pneumatic comfort technologies. Our automotive products include variable temperature Climate Control Seats (CCS®), Climate Control Interiors (CCI™), Lumbar and Massage Comfort Solutions, Valve Systems, and electronic solutions for climate and comfort technologies. Our automotive products can be found on light vehicles manufactured by nearly all the major original equipment manufacturers (“OEMs”) operating in North America and Europe, and several major OEMs in Asia. We operate in locations aligned with our major customers’ product strategies to provide locally enhanced design, integration and production capabilities. Our medical products include patient temperature management systems that can be found in hospitals throughout the world, primarily in the U.S., China, Germany and Brazil. The Company is also developing a number of new technologies and products that will help enable improvements to existing products, improve health, wellness and patient outcomes and will lead to new product applications for existing and new and adjacent markets.

Basis of Presentation and Significant Accounting Policies

The unaudited consolidated condensed financial statements included herein have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to those rules and regulations. The information furnished in the consolidated condensed financial statements include all adjustments (consisting of only normal, recurring adjustments) considered necessary to present fairly the results of operations, financial position and cash flows of the Company. These financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. The operating results for interim periods are not necessarily indicative of results that may be expected for other interim periods or for the full year.

In preparing these financial statements, management was required to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. These estimates and assumptions are based on our historical experience, the terms of existing contracts, our evaluation of trends in the industry, information provided by our customers and suppliers and information available from other third-party sources, as appropriate. These estimates and assumptions are subject to an inherent degree of uncertainty and may change as new events occur and additional information is obtained. As a result, actual results may differ significantly from our estimates, and any such differences may be material to our financial statements.

All amounts in these notes to the consolidated condensed financial statements are presented in thousands, except share and per share data.

Principles of Consolidation

The consolidated condensed financial statements include the accounts of the Company, its wholly owned subsidiaries and those entities in which it has a controlling financial interest. The Company evaluates its relationship with other entities for consolidation and to identify whether such entities are variable interest entities and to assess whether the Company is the primary beneficiary of such entities. Investments in affiliates in which Gentherm does not have control but does have the ability to exercise significant influence over operating and financial policies are accounted for under the equity method. When Gentherm does not have the ability to exercise significant influence (generally when ownership interest is less than 20%), investments in affiliates are measured at cost, less impairments, adjusted for observable price changes in orderly transactions for identical or similar investments of the same issuer.

Revenue Recognition - payments to customers

From time to time, the Company provides cash incentives to customers in exchange for new business awards. The Company evaluates the underlying economics of each amount of consideration payable to a customer to determine the proper accounting by understanding the reasons for the payment, the rights and obligations resulting from the payment, the nature of the promises in the contract, and other relevant facts and circumstances. When the Company concludes that the payment is incurred only if the new business is obtained and the Company expects to recover the amounts from the customer over the term of the new business arrangement, the Company recognizes these payments as an asset. The Company amortizes the asset as a reduction of revenue as products related to the payment are transferred to the customer, based on the total amount of products expected to be sold over the

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term of the arrangement (generally 5 to 10 years following start of production). The Company evaluates the amounts capitalized each reporting period for recoverability and recognizes a reduction of revenue for any amounts that are no longer expected to be recovered over the term of the business arrangement. Payments to customers that are not capitalized are recognized as a reduction to revenue at the time of the commitment to make such payments.

As of September 30, 2025 and December 31, 2024, total capitalized payments to customers were $16,572 and $14,276, respectively. During the three and nine months ended September 30, 2025, the Company recognized $202 and $1,246 as reductions of revenue due to amortization and write-off of previously capitalized payments. During the three and nine months ended September 30, 2024, the Company recognized $121 and $307 as reductions of revenue due to amortization and write-off of previously capitalized payments.

The Company had no other material contract assets or contract liabilities as of September 30, 2025.

Loss on Sale of Land and Building, net

In connection with our move to a new global headquarters location, we completed the sale of our former headquarters building in Northville, Michigan in January 2025. The sale resulted in cash proceeds of $3,740 and a loss on sale of $2,311. In addition, we recognized a gain of $115 for the sale of land in Asia.

Note 2 – Recently Issued Accounting Pronouncements

Income Taxes

In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures". ASU 2023-09 enhances income tax disclosures to further disaggregate the effective tax rate reconciliation and income taxes paid. Prospective adoption is required, however, retrospective application is permitted. This update is effective for fiscal years beginning after December 15, 2024. ASU 2023-09 is expected to impact our income tax disclosures beginning with the consolidated financial statements included in the annual report on Form 10-K for the fiscal year ending December 31, 2025, but will have no impact on our results of operations, cash flow or financial condition.

Disaggregation of Income Statement Expenses

In November 2024, the FASB issued ASU 2024-03, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40)". ASU 2024-03 enhances disclosures around certain costs and expenses. Retrospective adoption is required for all periods presented in the financial statements and early adoption is permitted. This update is effective for annual reporting periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. We are currently in the process of determining the impact the implementation of ASU 2024-03 will have on the Company’s financial statement disclosures.

Internal-Use Software

In September 2025, the FASB issued ASU 2025-06, "Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40)". ASU 2025-06 modernizes the accounting for internal-use software costs. Retrospective, prospective, or a modified transition approach for adoption are all permitted, as well as early adoption at the beginning of an annual reporting period. This update is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. We are currently in the process of determining the impact the implementation of ASU 2025-06 will have on the Company’s financial statement disclosures.

Note 3 – Restructuring

The Company continuously monitors market developments, industry trends and changing customer needs and in response, has taken and may continue to undertake restructuring actions, as necessary, to execute management’s strategy, streamline operations and optimize the Company’s cost structure. Restructuring actions may include the realignment of existing manufacturing footprint, facility closures or similar actions, either in the normal course of business or pursuant to significant restructuring programs.

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These actions may result in employees receiving voluntary or involuntary employee termination benefits, which are mainly statutory requirements or other contractual agreements. Voluntary termination benefits are accrued when an employee accepts the related offer. Involuntary termination benefits are accrued upon the commitment to a termination plan and when the benefit arrangement is communicated to affected employees, or when liabilities are determined to be probable and estimable, depending on the existence of a substantive plan for severance or termination.

2025 Manufacturing Footprint Plan

In July 2025, the Company committed to an additional restructuring plan to further optimize the Company’s manufacturing footprint by realigning its global manufacturing capacity (“2025 Manufacturing Footprint Plan”). As a result, the Company will relocate certain manufacturing activities between existing locations.

The Company expects to incur cash restructuring costs of between $3,000 and $4,000 for employee severance and retention costs and $1,000 of other transition costs primarily for machinery and equipment move and set up costs. Additionally, we expect to incur capital expenditures of between $1,000 and $2,000. The actions under the 2025 Manufacturing Footprint Plan are expected to be substantially completed by the end of 2026.

During the three and nine months ended September 30, 2025, the Company recognized restructuring expense of $2,190, for employee separation costs.

2025 EMEA Plan

In February 2025, the Company committed to a restructuring plan to further optimize the Company’s manufacturing footprint by realigning its manufacturing capacity in Europe (“2025 EMEA Plan”). As a result, the Company will close its facility in Plzeň, Czech Republic and relocate the manufacturing activities into other existing facilities within the region.

The Company expects to incur cash restructuring costs of between $4,000 and $6,000 for employee severance and retention costs and between $2,000 and $3,000 of other transition costs primarily for machinery and equipment move and set up costs. Additionally, we expect to incur capital expenditures of between $1,000 and $2,000. The actions under the 2025 EMEA Plan are expected to be substantially completed by the end of 2026.

During the three and nine months ended September 30, 2025, the Company recognized restructuring expense of $413 and $3,186, respectively, for employee separation costs and $480 and $813, respectively, for other costs.

2025 Asia Plan

In February 2025, the Company committed to an additional restructuring plan to further optimize the Company’s manufacturing footprint by realigning its manufacturing capacity in Asia (“2025 Asia Plan”). As a result, the Company will relocate certain manufacturing activities from its facility in Shanghai, China to its new facility in Tianjin, China.

The Company expects to incur cash restructuring costs of between $2,000 and $3,000 for employee severance and retention costs and $1,000 of other transition costs primarily for machinery and equipment move and set up costs. Additionally, we expect to incur capital expenditures of between $2,000 and $3,000. The actions under the 2025 Asia Plan are expected to be substantially completed in the first half of 2026.

During the three and nine months ended September 30, 2025, the Company recognized restructuring expense of $125 and $2,077, respectively, for employee separation costs and $273 and $390, respectively, for other costs.

Other Restructuring Actions

The Company has undertaken several discrete restructuring actions in an effort to optimize its cost structure.

During the three and nine months ended September 30, 2025, the Company recognized $(2) and $1,214, for employee separation costs related to structural cost reductions impacting the Company’s global salaried workforce.

During the three and nine months ended September 30, 2024, the Company recognized $787 and $6,150, respectively, for employee separation costs related to structural cost reductions impacting the Company’s global salaried workforce.

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During the three and nine months ended September 30, 2025, the Company recognized $0 and $(262), respectively, for employee separation costs and $507 and $1,000, respectively, for other costs, primarily related to the relocation of certain manufacturing to best cost locations.

During the three and nine months ended September 30, 2024, the Company recognized $1,008 and $4,518, respectively, for employee separation costs and $867 and $1,674, respectively, for other costs, primarily related to the relocation of certain manufacturing to best cost locations.

Restructuring Expenses, Net By Reporting Segment

The following table summarizes restructuring expenses, net for the three and nine months ended September 30, 2025 and 2024 by reporting segment:

		Three Months Ended September 30,								Nine Months Ended September 30,
		2025				2024				2025				2024
Automotive		$	3,972			$	2,662			$	10,410			$	11,470
Medical			14				—				170				20
Corporate			—				—				28				852
Total		$	3,986			$	2,662			$	10,608			$	12,342

Restructuring Liability

Restructuring liabilities are classified as other current liabilities in the consolidated condensed balance sheets. The following table summarizes restructuring activity for all restructuring initiatives for the nine months ended September 30, 2025:

		Employee Separation Costs				Other Related Costs, Net				Total
Balance at December 31, 2024		$	3,288			$	—			$	3,288
Additions, charged to restructuring expenses, net			4,412				284				4,696
Cash payments			(2,123	)			(284	)			(2,407	)
Change in estimate			(182	)			—				(182	)
Currency translation			100				—				100
Balance at March 31, 2025		$	5,495			$	—			$	5,495
Additions, charged to restructuring expenses, net			1,533				659				2,192
Cash payments			(1,274	)			(659	)			(1,933	)
Change in estimate			(84	)			—				(84	)
Currency translation			363				—				363
Balance at June 30, 2025		$	6,033			$	—			$	6,033
Additions, charged to restructuring expenses, net			2,738				1,260				3,998
Cash payments			(1,048	)			(1,260	)			(2,308	)
Change in estimate			(12	)			—				(12	)
Currency translation			45				—				45
Balance at September 30, 2025		$	7,756			$	—			$	7,756

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Note 4 – Details of Certain Balance Sheet Components

		September 30, 2025				December 31, 2024
Other current assets:
Billable tooling		$	26,385			$	19,740
Income tax and other tax receivable			23,562				20,611
Prepaid expenses			11,739				6,305
Notes receivable			9,869				11,190
Short-term derivative financial instruments			5,870				719
Other			9,671				5,848
Total other current assets		$	87,096			$	64,413
Other current liabilities:
Accrued employee liabilities		$	49,678			$	42,277
Income tax and other taxes payable			25,491				26,385
Liabilities from discounts and rebates			24,389				20,501
Accrued warranty			7,907				3,507
Restructuring			7,756				3,288
Short-term derivative financial instruments			757				2,037
Other			10,457				7,829
Total other current liabilities		$	126,435			$	105,824

Note 5 – Goodwill and Other Intangibles

Goodwill

Changes in the carrying amount of goodwill, by reportable segment, for the nine months ended September 30, 2025 were as follows:

		Automotive				Medical				Total
Balance as of December 31, 2024		$	72,754			$	26,849			$	99,603
Currency translation			8,239				888				9,127
Balance as of September 30, 2025		$	80,993			$	27,737			$	108,730

The accumulated impairment losses of goodwill for Automotive and Medical were $0 and $19,509, respectively, as of September 30, 2025.

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Other Intangible Assets

Other intangible assets and accumulated amortization balances as of September 30, 2025 and December 31, 2024 were as follows:

		Gross Carrying Value				Accumulated Amortization				Accumulated Impairment				Net Carrying Value
Definite-lived:
Customer relationships		$	120,936			$	(81,230	)		$	(5,477	)		$	34,229
Technology			48,399				(35,571	)			(24	)			12,804
Product development costs			19,919				(19,751	)			(71	)			97
Software development			1,007				(352	)			—				655
Indefinite-lived:
Tradenames			7,036				—				(530	)			6,506
Balance as of September 30, 2025		$	197,297			$	(136,904	)		$	(6,102	)		$	54,291
		Gross Carrying Value				Accumulated Amortization				Accumulated Impairment				Net Carrying Value
Definite-lived:
Customer relationships		$	109,608			$	(67,787	)		$	(5,477	)		$	36,344
Technology			43,458				(29,976	)			(24	)			13,458
Product development costs			18,019				(17,849	)			—				170
Software development			1,007				(201	)			—				806
Indefinite-lived:
Tradenames			7,003				—				(530	)			6,473
Balance as of December 31, 2024		$	179,095			$	(115,813	)		$	(6,031	)		$	57,251

Note 6 – Debt

The following table summarizes the Company’s debt as of September 30, 2025 and December 31, 2024:

		September 30, 2025								December 31, 2024
		Interest Rate				Principal Balance				Interest Rate				Principal Balance
Revolving Credit Facility (U.S. Dollar denominations)			5.63	%		$	189,000				5.86	%		$	220,000
Finance leases			3.35	%			109				3.46	%			201
Total debt							189,109								220,201
Less: current maturities							(109	)							(137	)
Long-term debt, less current maturities						$	189,000							$	220,064

Credit Agreement

On June 10, 2022, the Company entered into a Second Amended and Restated Credit Agreement (the “Second Amended and Restated Credit Agreement”) with a consortium of lenders and Bank of America, N.A., as administrative agent (the “Agent”). The amendment, among other things, extended the maturity date to June 10, 2027.

The Second Amended and Restated Credit Agreement provides for a $500,000 secured revolving credit facility (the “Revolving Credit Facility”), with a $50,000 sublimit for swing line loans and a $15,000 sublimit for the issuance of standby letters of credit. Any amount of the facility utilized for swing line loans or letters of credit outstanding will reduce the amount available under the Second Amended and Restated Credit Agreement. Subject to specified conditions, Gentherm can increase the Revolving Credit Facility or incur secured term loans in an aggregate amount of up to $200,000.

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Under the Second Amended and Restated Credit Agreement, all obligations are unconditionally guaranteed by certain of the Company’s subsidiaries and a security interest is granted in substantially all of the personal property of the Company and its U.S. subsidiaries designated as borrowers, including the stock and membership interests of specified subsidiaries. The Second Amended and Restated Credit Agreement contains covenants, that, among other things, (i) prohibit or limit the ability to incur additional indebtedness, create liens, pay dividends, make certain types of investments (including acquisitions), enter into certain types of transactions with affiliates, prepay other indebtedness, sell assets or enter into certain other transactions outside the ordinary course of business, and (ii) require that Gentherm maintain a minimum Consolidated Interest Coverage Ratio and a maximum Consolidated Net Leverage Ratio (based on consolidated EBITDA for the applicable trailing four fiscal quarters) as of the end of any fiscal quarter. The Second Amended and Restated Credit Agreement also contains customary events of default. As of September 30, 2025, the Company was in compliance, in all material respects, with the terms of the Second Amended and Restated Credit Agreement.

Under the Second Amended and Restated Credit Agreement, U.S. Dollar denominated loans bear interest at either a base rate (“Base Rate Loans”) or Term Secured Overnight Financing Rate (“SOFR”) rate (“Term SOFR Rate Loans”), plus a margin (“Applicable Rate”). The rate for Base Rate Loans is equal to the highest of the Federal Funds Rate plus 0.50%, Bank of America’s prime rate, or the Term SOFR rate plus 1.00%. The rate for Term SOFR Rate Loans denominated in U.S. Dollars is equal to the forward-looking Term SOFR rate administered by the Chicago Mercantile Exchange with a term of one month. All loans denominated in a currency other than the U.S. Dollar must be Term SOFR Rate Loans. Interest is payable at least quarterly. Additionally, a commitment fee of between 0.175% to 0.300% is payable on the average daily unused amounts under the Revolving Credit Facility.

The Applicable Rate varies based on the Consolidated Net Leverage Ratio reported by the Company. As long as the Company is not in default of the terms and conditions of the Second Amended and Restated Credit Agreement, the lowest and highest possible Applicable Rate is 1.125% and 2.125%, respectively, for Term SOFR Rate Loans and 0.125% and 1.125%, respectively, for Base Rate Loans.

Based upon consolidated EBITDA for the trailing four fiscal quarters calculated for purposes of the Consolidated Net Leverage Ratio, $307,938 remained available for additional borrowings as of September 30, 2025.

The Company had $3,062 and $2,838 of outstanding letters of credit issued as of September 30, 2025 and December 31, 2024 respectively.

The scheduled principal maturities of our debt as of September 30, 2025 were as follows:

		U.S. Revolving Note				Other Debt				Total
2025		$	—			$	37			$	37
2026			—				72				72
2027			189,000				—				189,000
Total		$	189,000			$	109			$	189,109

Note 7 – Commitments and Contingencies

Legal and Other Contingencies

The Company is subject to various legal actions and claims in the ordinary course of its business, which may include those arising out of breach of contracts, intellectual property rights, environmental matters, regulatory matters and employment-related matters. The Company establishes accruals for matters which it believes that losses are probable and can be reasonably estimated. Although it is not possible to predict with certainty the outcome of these matters, the Company is of the opinion that the ultimate resolution of these matters outstanding as of September 30, 2025 will not have a material adverse effect on its results of operations or financial position. Product liability and warranty reserves are recorded separately from legal reserves.

Product Liability and Warranty Matters

Our products subject us to warranty claims and, from time to time product liability claims, based on the Company’s products alleged failure to perform as expected or resulting in alleged bodily injury or property damage. If any of our products are or are alleged to be defective, we may be required to participate in a recall or other corrective action involving such products. The Company

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maintains warranty and product liability insurance coverage at levels based on commercial norms and historical claims experience. The Company can provide no assurances that it will not experience material warranty or product liability claims or liabilities in the future or that it will not incur significant costs to defend such claims.

The Company accrues warranty obligations for products sold based on management estimates of future failure rates and current claim cost experience, with support from the sales, engineering, quality and legal functions. Using historical information available to the Company, including any claims filed by customers, the warranty accrual is adjusted quarterly to reflect management’s estimate of future claims.

In February 2024, the National Highway Traffic Safety Administration (“NHTSA”) announced that Volkswagen Group of America, Inc. (“VW”) is recalling 261,257 vehicles from model years 2015-2020 to remedy an alleged problem with a suction jet pump seal inside the fuel tank system. The suction jet pump is a product originally designed and manufactured by Alfmeier, the business Gentherm acquired in August 2022. No litigation has been threatened or filed as of the date of this report and the Company has not accepted any financial responsibility for the recall. The Company has provided replacement parts for the recall at commercial pricing paid by VW. If the Company is obligated to indemnify VW for the direct and indirect costs associated with the recall, such costs could be material. The Company has insurance policies that generally include coverage of the costs of a recall, subject to insured limits, although the Company’s costs related to manufacturing of replacement parts are generally not covered. In addition, the Company’s purchase agreement of Alfmeier included indemnification provisions under which the Company believes it would have a claim against the sellers. Given the uncertainty that exists concerning the resolution of this matter, as of the date of this report, the Company cannot reasonably estimate the amount and timing of possible costs that may be incurred by the Company.

In April 2025, NHTSA announced that VW and Porsche Cars North America, Inc. (“Porsche”) are each recalling vehicles from model years 2022-2023 to remedy a problem with their passenger occupant detection system that is alleged to be affected by the crimp connection of the seat cushion heating mat, which is produced by Gentherm. Total vehicles included in these recall campaigns are 13,508. No litigation has been threatened or filed as of the date of this report and the Company has not accepted any financial responsibility for the recalls. If the Company is obligated to indemnify VW and Porsche for the direct and indirect costs associated with the recall, such costs could be material. Insurance policies, noted above, are expected to apply. Given the uncertainty that exists concerning the resolution of this matter, as of the date of this report, the Company cannot reasonably estimate the amount and timing of possible costs that may be incurred by the Company.

The following is a reconciliation of the changes in accrued warranty costs:

		Nine Months Ended September 30,
		2025				2024
Balance at the beginning of the period		$	3,507			$	3,945
Warranty claims paid			(6,227	)			(4,882	)
Warranty expense for products shipped during the current period			8,345				4,017
Adjustments to warranty estimates from prior periods			2,121				725
Adjustments due to currency translation			161				(4	)
Balance at the end of the period		$	7,907			$	3,801

Note 8 – Supplier Finance Program

The Company is party to a supplier finance program with a third-party service provider (“Service Provider”), pursuant to which the Company has offered the opportunity to participate to certain of the Company's suppliers. The Company has no economic interest in a supplier’s participation and the Company has not pledged any assets to the Service Provider under this program.

Under this program, the Company and supplier initially agree on the contractual payment terms for the goods to be procured for the Company in the ordinary course. A supplier’s participation in this program is voluntary and does not impact its contractual payment terms with the Company, including the payment amount and timing of when payments are due. A participating supplier has the sole discretion to determine whether to discount one or more invoices, if any, to the Service Provider in exchange for payment by the Service Provider on an earlier date than provided for in the contract with the Company. Amounts due to participating suppliers are included in accounts payable in the consolidated condensed balance sheets until the Company makes payment to the Service Provider, even though the payment of such amount will be made to the supplier at an earlier date by the Service Provider. As of September 30,

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2025, the Company had supplier obligations that had been confirmed under these arrangements of $25,474. Payments of the Company’s obligations to the Service Provider are reported as operating cash flows in the consolidated condensed statements of cash flows.

Note 9 – Earnings Per Share

Basic earnings per share are computed by dividing net income by the weighted average number of shares of the Company’s Common Stock, no par value (“Common Stock”), outstanding during the period. The Company’s diluted earnings per share give effect to all potential shares of Common Stock outstanding during a period that do not have an anti-dilutive impact to the calculation. There were no potential shares with an anti-dilutive impact during the three and nine months ended September 30, 2025. In computing the diluted earnings per share, the treasury stock method is used in determining the number of shares assumed to be issued from the exercise of Common Stock equivalents.

The following table illustrates earnings per share and the weighted average shares outstanding used in calculating basic and diluted earnings per share:

		Three Months Ended September 30,								Nine Months Ended September 30,
		2025				2024				2025				2024
Net income		$	14,949			$	15,965			$	15,298			$	49,626
Basic weighted average shares of Common Stock outstanding			30,479,846				31,186,867				30,618,564				31,420,826
Dilutive effect of restricted stock, restricted stock units and performance stock units			268,043				178,182				183,129				184,376
Diluted weighted average shares of Common Stock outstanding			30,747,889				31,365,049				30,801,693				31,605,202
Basic earnings per share		$	0.49			$	0.51			$	0.50			$	1.58
Diluted earnings per share		$	0.49			$	0.51			$	0.50			$	1.57

Note 10 – Financial Instruments

Derivative Financial Instruments

The Company is exposed to various market risks including, but not limited to, changes in foreign currency exchange rates, changes in interest rates and price fluctuations of certain material commodities, such as copper.

The Company regularly enters into derivative contracts with the objective of managing its financial and operational exposure arising from these risks by offsetting gains and losses on the underlying exposures with gains and losses on the financial instruments used to hedge them. The decision of whether and when to execute derivative financial instruments, along with the duration of the instrument, may vary from period to period depending on market conditions, the relative costs of the instruments and capacity to hedge. The Company does not enter into derivative financial instruments for speculative or trading purposes. Some derivative contracts do not qualify for hedge accounting; for other derivative contracts, we elect to not apply hedge accounting.

Information related to the recurring fair value measurement of derivative instruments in the consolidated condensed balance sheet as of September 30, 2025 is as follows:

								Asset Derivatives						Liability Derivatives
		Fair Value Hierarchy		Notional Amount				Balance Sheet Location		Fair Value				Balance Sheet Location		Fair Value				Net Assets/ (Liabilities)
Derivatives Designated as Cash Flow Hedges
Foreign currency derivatives		Level 2		$	80,649			Other current assets		$	5,870			Other current liabilities		$	—			$	5,870
Interest rate contracts		Level 2		$	100,000			Other current assets		$	—			Other current liabilities		$	757			$	(757	)

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Information related to the recurring fair value measurement of derivative instruments in the consolidated condensed balance sheet as of December 31, 2024 is as follows:

								Asset Derivatives						Liability Derivatives
		Fair Value Hierarchy		Notional Amount				Balance Sheet Location		Fair Value				Balance Sheet Location		Fair Value				Net Assets/ (Liabilities)
Derivatives Designated as Cash Flow Hedges
Foreign currency derivatives		Level 2		$	126,496			Other current assets		$	—			Other current liabilities		$	2,037			$	(2,037	)
Derivatives Not Designated as Hedging Instruments
Interest rate contracts		Level 2		$	100,000			Other current assets		$	719			Other current liabilities		$	—			$	719

Information relating to the effect of derivative instruments on the consolidated condensed statements of income and the consolidated condensed statements of comprehensive income is as follows:

				Three Months Ended September 30,								Nine Months Ended September 30,
		Location (Income/(Loss))		2025				2024				2025				2024
Derivatives Designated as Cash Flow Hedges
Foreign currency derivatives		Cost of sales – income (loss)		$	2,086			$	(455	)		$	273			$	5,817
		Other comprehensive income (loss)			91				(2,272	)			9,844				(10,685	)
Total foreign currency derivatives				$	2,177			$	(2,727	)		$	10,117			$	(4,868	)
Interest rate contracts		Interest expense, net		$	156			$	—			$	156			$	—
		Other comprehensive income (loss)			(58	)			—				(757	)			—
Total interest rate derivatives				$	98			$	—			$	(601	)		$	—
Derivatives Not Designated as Hedging Instruments
Interest rate contracts		Interest expense, net		$	(104	)		$	(1,157	)		$	(719	)		$	(1,161	)
Total interest rate derivatives				$	(104	)		$	(1,157	)		$	(719	)		$	(1,161	)

The Company did not incur any hedge ineffectiveness during the three and nine months ended September 30, 2025 and 2024.

Accounts Receivable Factoring

The Company previously sold certain customer trade receivables on a non-recourse basis under factoring arrangements with designated financial institutions. The sale of receivables under these agreements was considered an off-balance sheet arrangement to the Company and was accounted for as a true sale and excluded from accounts receivable in the consolidated condensed balance sheets. These factoring arrangements included a deferred purchase price component in which a portion of the purchase price for the receivable was paid by the financial institution in cash upon sale and the remaining portion was recorded as a deferred purchase price receivable and paid at a later date. Deferred purchase price receivables are recorded in other current assets within the consolidated condensed balance sheets. Cash proceeds received upon the sale of the receivables are included in net cash from operating activities and the cash proceeds received on the deferred purchase price receivables are included in net cash from investing activities. During the year ended December 31, 2024, the factoring agreements the Company was party to either expired or were terminated.

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Receivables factored under receivables factoring agreements balance as of December 31, 2024 were as follows:

		December 31, 2024
Receivables factored and outstanding		$	755

Trade receivables sold and factoring fees incurred during the three and nine months ended September 30, 2024 were as follows:

		Three Months Ended September 30,				Nine Months Ended September 30,
		2024				2024
Trade receivables sold		$	27,885			$	98,761
Factoring fees incurred			186				564

Note 11 – Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and also considers counterparty credit risk in its assessment of fair value. Fair value measurements are classified under the following fair value hierarchy:

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

Level 2: Inputs, other than quoted market prices included in Level 1, that are observable either directly or indirectly for the asset or liability.

Level 3: Unobservable inputs that are used when little or no market data is available. Unobservable inputs are used if there is little or no market data for the asset or liability at the measurement date.

Items Measured at Fair Value on a Recurring Basis

The Company uses an income approach to value derivatives instruments, analyzing quoted market prices to calculate the forward values and then discounting such forward values to the present value using benchmark rates at commonly quoted intervals for the instrument’s full term. The Company had no other material financial assets and liabilities that were carried at fair value at September 30, 2025 and December 31, 2024.

Items Measured at Fair Value on a Nonrecurring Basis

The Company measures certain assets and liabilities at fair value on a non-recurring basis. During the nine months ended September 30, 2025, there was a decrease in the fair value of an equity investment of $1,294 due to observable transactions (Level 2), which was recorded in other income (loss). As of September 30, 2025, and December 31, 2024, there were no other significant assets or liabilities measured at fair value on a non-recurring basis.

Items Not Carried at Fair Value

The Company uses an income valuation technique to measure the fair values of its debt instruments by converting amounts of future cash flows to a single present value amount using rates based on current market expectations (Level 2 inputs). As of September 30, 2025, and December 31, 2024, the carrying values of the indebtedness under the Company’s Second Amended and Restated Credit Agreement were not materially different than the estimated fair values because the interest rates on variable rate debt approximated rates currently available to the Company (see Note 6).

Note 12 – Equity

In June 2024, the Board of Directors authorized a stock repurchase program (the “2024 Stock Repurchase Program”) to commence upon expiration of the Company’s prior stock repurchase program on June 30, 2024. Under the 2024 Stock Repurchase Program, the Company is authorized to repurchase up to $150,000 of its issued and outstanding Common Stock over a three-year period, expiring June 30, 2027. Repurchases may be made, from time to time, in amounts and at prices the Company deems appropriate, subject to market conditions, applicable legal requirements, debt covenants and other considerations.

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Share repurchases and related activity during the three and nine months ended September 30, 2025 and 2024 were as follows:

		Three Months Ended September 30,								Nine Months Ended September 30,
		2025				2024				2025				2024
Total number of shares repurchased			—				406,021				381,600				785,865
Average price paid per share		$	—			$	48.97			$	26.24			$	50.75
Total		$	—			$	19,883			$	10,015			$	39,883
Excise tax charged		$	—			$	200			$	100			$	400

As of September 30, 2025, the 2024 Stock Repurchase Program had $110,103 of share repurchase authorization remaining.

Note 13 – Reclassifications Out of Accumulated Other Comprehensive Income (Loss)

Reclassification adjustments and other activities impacting accumulated other comprehensive income (loss) during the three and nine months ended September 30, 2025 and 2024 were as follows:

		Defined Benefit Pension Plans				Foreign Currency Translation Adjustments				Cash Flow Hedge Derivatives				Total
Balance at June 30, 2025		$	(1,823	)		$	(45	)		$	3,873			$	2,005
Other comprehensive (loss) income before reclassifications			—				(687	)			2,276				1,589
Income tax effect of other comprehensive (loss) income before reclassifications			—				—				(474	)			(474	)
Amounts reclassified from accumulated other comprehensive income (loss) into net income			21				—				(2,243	)	a		(2,222	)
Income taxes reclassified into net income			(6	)			—				466				460
Net current period other comprehensive income (loss)			15				(687	)			25				(647	)
Balance at September 30, 2025		$	(1,808	)		$	(732	)		$	3,898			$	1,358

(a)In the three months ended September 30, 2025 $2,086 and $156 were reclassified from accumulated other comprehensive income (loss) into cost of sales and interest expense, net, respectively, in the consolidated condensed statements of income.

		Defined Benefit Pension Plans				Foreign Currency Translation Adjustments				Cash Flow Hedge Derivatives				Total
Balance at June 30, 2024		$	(978	)		$	(53,822	)		$	(899	)		$	(55,699	)
Other comprehensive income (loss) before reclassifications			—				22,691				(1,754	)			20,937
Income tax effect of other comprehensive income (loss) before reclassifications			—				(253	)			382				129
Amounts reclassified from accumulated other comprehensive loss into net income			24				—				(518	)	a		(494	)
Income taxes reclassified into net income			(7	)			—				113				106
Net current period other comprehensive income (loss)			17				22,438				(1,777	)			20,678
Balance at September 30, 2024		$	(961	)		$	(31,384	)		$	(2,676	)		$	(35,021	)

(a)The amounts reclassified from accumulated other comprehensive (loss) income were included in cost of sales in the consolidated condensed statements of income.

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		Defined Benefit Pension Plans				Foreign Currency Translation Adjustments				Cash Flow Hedge Derivatives				Total
Balance at December 31, 2024		$	(1,851	)		$	(80,096	)		$	(3,246	)		$	(85,193	)
Other comprehensive income before reclassifications			—				79,364				11,463				90,827
Income tax effect of other comprehensive income before reclassifications			—				—				(2,423	)			(2,423	)
Amounts reclassified from accumulated other comprehensive income (loss) into net income			59				—				(2,376	)	a		(2,317	)
Income taxes reclassified into net income			(16	)			—				480				464
Net current period other comprehensive income			43				79,364				7,144				86,551
Balance at September 30, 2025		$	(1,808	)		$	(732	)		$	3,898			$	1,358

(a)In the nine months ended September 30, 2025 $2,220 and $156 were reclassified from accumulated other comprehensive income (loss) into cost of sales and interest expense, net, respectively, in the consolidated condensed statements of income.

		Defined Benefit Pension Plans				Foreign Currency Translation Adjustments				Cash Flow Hedge Derivatives				Total
Balance at December 31, 2023		$	(1,011	)		$	(34,830	)		$	5,681			$	(30,160	)
Other comprehensive income (loss) before reclassifications			—				3,446				(1,948	)			1,498
Income tax effect of other comprehensive income (loss) before reclassifications			—				—				424				424
Amounts reclassified from accumulated other comprehensive loss into net income			69				—				(8,737	)	a		(8,668	)
Income taxes reclassified into net income			(19	)			—				1,904				1,885
Net current period other comprehensive income (loss)			50				3,446				(8,357	)			(4,861	)
Balance at September 30, 2024		$	(961	)		$	(31,384	)		$	(2,676	)		$	(35,021	)

(a)The amounts reclassified from accumulated other comprehensive (loss) income were included in cost of sales in the consolidated condensed statements of income.

The Company expects that substantially all of the existing gains and losses related to cash flow derivatives reported in accumulated other comprehensive income (loss) as of September 30, 2025 to be reclassified into earnings during the next twelve months. See Note 10 for additional information about derivative financial instruments and the effects from reclassification to net income.

Note 14 – Income Taxes

At the end of each interim period, the Company makes an estimate of the annual expected effective income tax rate and applies that rate to its ordinary year-to-date earnings or loss. The income tax provision or benefit related to unusual or infrequent items, if applicable, that will be separately reported or reported net of their related tax effects are individually computed and recognized in the interim period in which those items occur. In addition, the effect of changes in enacted tax laws or rates, tax status, judgment on the realizability of a beginning-of-the-year deferred tax asset in future years or income tax contingencies is recognized in the interim period in which the change occurs.

The computation of the annual expected effective income tax rate at each interim period requires certain estimates and assumptions including, but not limited to, the expected pre-tax income (or loss) for the year, projections of the proportion of income (and/or loss) earned and taxed in respective jurisdictions, permanent and temporary differences, and the likelihood of the realizability of deferred tax assets generated in the current year. Jurisdictions with a projected loss for the year for which no tax benefit can be recognized due to a valuation allowance are excluded from the estimated annual effective tax rate. The impact of such an exclusion could result in a higher or lower effective tax rate during a particular quarter, based upon the composition and timing of actual earnings compared to annual projections. The estimates used to compute the provision or benefit for income taxes may change as new events occur, additional information is obtained or as our tax environment changes. To the extent that the expected annual effective income tax rate changes, the effect of the change on prior interim periods is included in the income tax provision in the period in which the change in estimate occurs.

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A summary of the provision for income taxes and the corresponding effective tax rate for the three and nine months ended September 30, 2025 and 2024, is shown below:

		Three Months Ended September 30,								Nine Months Ended September 30,
		2025				2024				2025				2024
Income tax expense		$	5,935			$	3,445			$	10,204			$	16,531
Earnings before income tax		$	20,884			$	19,410			$	25,502			$	66,157
Effective tax rate			28.4	%			17.7	%			40.0	%			25.0	%

Income tax expense was $5,935 for the three months ended September 30, 2025 on earnings before income tax of $20,884, representing an effective tax rate of 28.4%. The effective tax rate differed from the U.S. Federal statutory rate of 21.0% primarily due to the impact of income taxes on foreign earnings taxed at rates varying from the U.S. Federal statutory rate and the unfavorable impact of global intangible low-tax income (“GILTI”) and Subpart F income.

Income tax expense was $3,445 for the three months ended September 30, 2024 on earnings before income tax of $19,410, representing an effective tax rate of 17.7%. The effective tax rate differed from the U.S. Federal statutory rate of 21.0% primarily due to the impact of income taxes on foreign earnings taxed at rates varying from the U.S. Federal statutory rate, the release of the uncertain tax position reserve accrual due to tax audit settlement, a partial valuation allowance release in the U.S. related to its capital loss carryforward, and favorable tax effects of equity vesting, partially offset by the unfavorable impact of GILTI.

Income tax expense was $10,204 for the nine months ended September 30, 2025 on earnings before income tax of $25,502, representing an effective tax rate of 40.0%. The effective tax rate differed from the U.S. Federal statutory rate of 21.0% primarily due to the unfavorable impact of GILTI and Subpart F income, unfavorable tax effects of equity vesting and a valuation allowance established in the U.S. related to a capital loss carryforward.

Income tax expense was $16,531 for the nine months ended September 30, 2024 on earnings before income tax of $66,157, representing an effective tax rate of 25.0%. The effective tax rate differed from the U.S. Federal statutory rate of 21.0% primarily due to the impact of income taxes on foreign earnings taxed at rates varying from the U.S. Federal statutory rate and the unfavorable impact of GILTI, partially offset by favorable tax effects of equity vesting, a partial valuation allowance release in the U.S. related to its capital loss carryforward and a one-time benefit related to the Alfmeier acquisition.

Tax Provisions

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The Company is evaluating the potential impacts of the OBBBA on its consolidated financial statements and has determined the OBBBA will not have a material impact on 2025 and does not anticipate a material impact in 2026, based on the guidance issued to date.

In addition, on July 19, 2025, the Act for an Immediate Tax Investment Programme to Strengthen Germany's Business Location (“German Tax Package”) was enacted in Germany. The German Tax Package includes significant provisions, including a gradual reduction in the corporate tax rate from 15% in 2027 to 10% by 2032, in 1% increments beginning in 2028, enhanced depreciation provisions and expanded relief for research and development expenses. The impact of the legislation was a non-cash income tax expense of $531, which was recorded as an adjustment to deferred tax expense in the third quarter of 2025.

Note 15 – Segment Reporting

The Company is organized under two reportable segments: Automotive and Medical.

The Automotive reporting segment is comprised of the results from our global automotive businesses, including the design, development, manufacturing and sales of our automotive climate and comfort solutions (including Climate Control Seats, Climate Control Interiors, lumbar and massage comfort solutions and electronic solutions for climate and comfort technologies), valve system solutions and other automotive products.

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The Medical reporting segment is comprised of the results from our patient temperature management business in the medical industry. Patient temperature management includes temperature management systems across multiple product categories addressing the needs of hyper-hypothermia therapy in intensive care, normothermia in surgical procedures and additional warming/cooling therapies utilized in acute and chronic care departments and non-hospital facilities.

The Corporate and other unallocated expenses category includes certain enterprise and governance activities resulting in unallocated corporate costs and other activity and net costs that the Company may choose not to allocate directly to its business segments.

A measure of assets has not been disclosed for each segment as it is not regularly reviewed by our chief operating decision maker.

The table below presents segment information about the reported product revenues, significant segment expenses, operating income and depreciation and amortization of the Company for the three and nine months ended September 30, 2025 and 2024.

		Three Months Ended September 30,								Nine Months Ended September 30,
		2025				2024				2025				2024
Product Revenues
Automotive		$	374,211			$	358,804			$	1,079,937			$	1,067,444
Medical			12,659				12,708				35,877				35,766
Total			386,870				371,512				1,115,814				1,103,210
Significant Segment Expenses and Operating Performance
Automotive
Cost of sales			283,663				267,671				822,314				800,053
Net research and development expenses			18,629				17,788				55,831				52,224
Selling, general and administrative expenses			17,013				16,127				49,546				49,765
Restructuring expenses, net			3,972				2,662				10,410				11,470
Loss on sale of land and building, net			—				—				2,196				—
Automotive operating income			50,934				54,556				139,640				153,932
Medical
Cost of sales			6,691				6,814				18,696				18,828
Other operating expenses			5,982				5,415				17,137				16,134
Impairment of intangible assets			—				—				—				530
Medical operating (loss) income			(14	)			479				44				274
Corporate and Other Unallocated Expenses
Corporate and other unallocated expenses			27,062				22,698				74,756				70,832
Total consolidated operating income		$	23,858			$	32,337			$	64,928			$	83,374
Other Segment Disclosures
Depreciation and Amortization
Automotive		$	11,990			$	12,118			$	35,388			$	36,343
Medical			849				870				2,555				2,622
Corporate and other unallocated expenses			550				364				1,535				1,120
Total		$	13,389			$	13,352			$	39,478			$	40,085

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Automotive and Medical segment product revenues by product category for the three and nine months ended September 30, 2025 and 2024 were as follows:

		Three Months Ended September 30,								Nine Months Ended September 30,
		2025				2024				2025				2024
Climate Control Seats (a)		$	201,275			$	189,898			$	592,448			$	581,713
Lumbar and Massage Comfort Solutions			55,799				48,970				153,642				133,090
Climate Control Interiors (a)			52,638				49,283				147,564				140,712
Climate and Comfort Electronics (a)			8,599				4,883				22,220				13,266
Automotive Climate and Comfort Solutions			318,311				293,034				915,874				868,781
Valve Systems			24,487				26,082				72,803				81,974
Other Automotive (a)			31,413				39,688				91,260				116,689
Subtotal Automotive segment			374,211				358,804				1,079,937				1,067,444
Medical segment			12,659				12,708				35,877				35,766
Total Company		$	386,870			$	371,512			$	1,115,814			$	1,103,210

(a)Product categories have been modified, and prior-period amounts have been recast to conform with the current period presentation. Climate Control Seats (CCS) includes CCS Heat (previously Seat Heaters), CCS Vent/CCS Active Cool (previously CCS) and CCS Neck Conditioners (previously included in Other Automotive). Climate Control Interiors (CCI) includes CCI Steering Wheel Heat and CCI Interior Heat (previously included in Other Automotive). Other Automotive includes Automotive Cables, Battery Performance Solutions, non-automotive electronics and contract manufacturing electronics (previously classified as Electronics).

Revenue (based on shipment destination) by geographic area for the three and nine months ended September 30, 2025 and 2024 is as follows:

		Three Months Ended September 30,								Nine Months Ended September 30,
		2025				2024				2025				2024
United States		$	139,991			$	127,869			$	391,662			$	380,681
China			63,679				54,791				167,214				162,476
Germany			30,300				26,394				86,038				81,635
South Korea			20,422				22,487				68,288				78,341
Czech Republic			21,437				20,830				66,113				60,520
Mexico			18,272				10,783				51,704				32,621
Slovakia			12,828				13,970				41,121				41,870
Romania			13,533				13,069				41,056				40,299
Japan			12,027				13,370				35,805				40,562
United Kingdom			6,387				9,674				25,538				31,480
Other			47,994				58,275				141,275				152,725
Total Non-U.S.			246,879				243,643				724,152				722,529
Total Company		$	386,870			$	371,512			$	1,115,814			$	1,103,210

Property and equipment, net, for each of the geographic areas in which the Company operates as of September 30, 2025 and December 31, 2024 is as follows:

		September 30, 2025				December 31, 2024
Property and equipment, net
Germany		$	49,591			$	42,457
Mexico			49,222				47,814
China			45,195				44,767
United States			38,158				42,928
North Macedonia			26,736				25,374
Vietnam			19,348				20,920
Czech Republic			10,232				9,440
Hungary			8,583				7,994
Ukraine			4,792				5,174
Other			5,091				6,102
Total		$	256,948			$	252,970

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

This Quarterly Report on Form 10-Q (this “Report”) contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent our goals, beliefs, plans and expectations about our prospects for the future and other future events, such as: the expected light vehicle production in the Company’s key markets; the impact of macroeconomic and geopolitical conditions, including adverse global trade conditions and actual and threatened global tariffs; the components and our execution of our strategic plan and restructuring plans; long-term consumer and technological trends in the automotive industry and our related market opportunity for our existing and new products and technologies; the competitive landscape; the impact of global tax reform legislation; the sufficiency of our cash balances and cash generated from operating, investing and financing activities for our future liquidity and capital resource needs; and our ability to finance sufficient working capital. Reference is made in particular to forward-looking statements included in this “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations”. Such statements may be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “believe”, “estimate”, “anticipate”, “intend”, “continue”, or similar terms, variations of such terms or the negative of such terms. The forward-looking statements included in this Report are made as of the date hereof or as of the date specified herein and are based on management’s reasonable expectations and beliefs. In making these statements we rely on assumptions and analyses based on our experience and perception of historical trends, current conditions and expected future developments, third-party information and projections from sources that management believes to be reputable, as well as other factors we consider appropriate under the circumstances. Such statements are subject to a number of assumptions, risks, uncertainties and other factors, which are set forth in “Item 1A. Risk Factors” and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2024 and subsequent reports filed with the Securities and Exchange Commission, and which could cause actual results to differ materially from that described in the forward-looking statements. In addition, with reasonable frequency, we have entered into business combinations, acquisitions, divestitures, strategic investments and other significant transactions. Such forward-looking statements do not include the potential impact of any such transactions that may be completed after the date hereof, each of which may present material risks to the Company’s future business and financial results. Except as required by law, we expressly disclaim any obligation or undertaking to update any forward-looking statements to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

The following discussion and analysis should be read in conjunction with, and is qualified in its entirety by, the consolidated condensed financial statements and related notes thereto included elsewhere in this Report and our consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2024.

Overview

Gentherm Incorporated is a global market leader of innovative thermal management and pneumatic comfort technologies. Our automotive products include variable temperature Climate Control Seats (CCS®), Climate Control Interiors (CCI™), Lumbar and Massage Comfort Solutions, Valve Systems, and electronic solutions for climate and comfort technologies. Our automotive products can be found on light vehicles manufactured by nearly all the major original equipment manufacturers (“OEMs”) operating in North America and Europe, and several major OEMs in Asia. We operate in locations aligned with our major customers’ product strategies to provide locally enhanced design, integration and production capabilities. Our medical products include patient temperature management systems that can be found in hospitals throughout the world, primarily in the U.S., China, Germany and Brazil. The Company is also developing a number of new technologies and products that will help enable improvements to existing products, improve health, wellness and patient outcomes and will lead to new product applications for existing and new and adjacent markets.

Our Automotive sales are driven by the number of light vehicles produced by the OEMs primarily in our key markets of North America, Europe, China, Japan and South Korea, which is ultimately dependent on consumer demand for automotive light vehicles, our product content per vehicle, and other factors that may limit or otherwise impact production by us, our supply chain and our customers. Historically, new vehicle demand and product content (i.e. vehicle features) have been driven by macroeconomic and other factors, such as interest rates, automotive manufacturer and dealer sales incentives, fuel prices, consumer confidence, employment levels, income growth trends and government incentives. Vehicle content has also been driven by trends in consumer preferences, such as preferences for smart devices and features, personalized user experience, and comfort, health and wellness. We believe our diversified OEM customer base and geographic revenue base, along with our flexible cost structure, have well positioned us to withstand the impact of industry downturns and benefit from industry upturns in the ordinary course. However, shifts in the mix of global automotive production to higher cost regions or to vehicles that contain less of our product content and inflationary pressures could have adverse impacts on our profitability. In addition, we have been and may in the future be adversely impacted by volatility or

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weakness in markets for hybrid or electric vehicles specifically. We believe our products offer certain advantages for hybrid and electric vehicles, including improved energy efficiency, and position us well to withstand changes in the volume mix between vehicles driven by internal combustion engines and hybrid and other electric vehicles. We believe our industry is increasingly progressing towards a focus on human comfort, health and wellness, which is evidenced by increasing adoption rates for comfort products. Gentherm is an independent partner that can cooperate with any combination of the vehicle OEMs and seat manufacturers globally, including those that are vertically integrated, to create innovative and unique configurations that adapt to industry trends.

Recent Trends

Tariffs and Global Trade Environment

Since March 2025, the U.S. government has periodically announced additional significant tariffs on various goods imported to the U.S. and other countries have periodically announced reciprocal tariffs on goods imported to such countries, including goods used by or manufactured by us. There has been significant uncertainty resulting from the implementation, termination and/or conditional pause of these additional tariffs. Further, it is reasonably possible that new or additional tariffs will be periodically announced in the future given the current global trade environment. We continue to monitor and evaluate the direct and indirect impacts of these tariffs and heightened global trade disputes. Our business model of manufacturing by regions for the regions limit the global impact of certain trade restrictions and tariffs. Further, the majority of our supply components are not currently subject to the additional tariffs or are compliant with exceptions, and we believe that we can generally mitigate the direct impact of any such tariffs currently in effect by directly or indirectly passing the additional costs through to customers. We are taking and will continue to take additional actions to mitigate any direct and indirect impacts.

For the nine months ended September 30, 2025, the additional tariffs did not have a material impact on our results of operations, financial position, and cash flows. However, these matters are changing rapidly and there is significant uncertainty as to how long and to what degree that Gentherm and the automotive industry will be impacted by these additional tariffs, the adverse global trade environment and the resulting economic uncertainty.

Global Conditions

The global automotive light vehicle industry is impacted by a number of factors, including global and regional economic conditions. At times in recent years, the global economy has experienced significant volatility, inflationary pressures and supply chain disruptions, which have a widespread adverse effect on the global automotive industry. These macroeconomic conditions have resulted in fluctuating demand and production disruptions, facility closures, labor shortages, work stoppages, and increased prices of inputs to our products. Although some supply chain conditions have steadily improved and certain inflationary pressures have moderated, rising costs of materials, labor, equipment and other inputs used to manufacture and sell our products, including freight and logistics costs, have adversely impacted, and may in the future adversely impact, operating costs and operating results. We continue to employ measures to mitigate the impact of cost increases through identification of sourcing and manufacturing efficiencies where possible. However, we have been unable to fully mitigate or pass through the increases in our operating costs, which may continue in the future.

We are exposed to foreign currency risk due to the translation and remeasurement of the results of certain international operations into U.S. Dollars as part of the consolidation process. Therefore, fluctuations in foreign currency exchange rates can create volatility in the results of operations and may adversely affect our financial condition.

We have a global manufacturing footprint that enables us to serve our customers in the regions they operate and shift production between regions to remain competitive. There have been various ongoing geopolitical conflicts, such as the current conflicts between Russia and Ukraine and in the Middle East and heightened tensions in the Red Sea and in the South China Sea. These conflicts have interrupted ocean freight shipping and if prolonged or intensified, could have a substantial adverse effect on our financial results. Further, it is reasonably possible that certain political pressures, such as changes to international trade agreements, increases in tariffs, import quotas or other trade restrictions or actions, including export controls and other retaliatory responses to such actions, could continue to affect the operations of our OEM customers, resulting in reduced automotive production in certain regions or shifts in the mix of production to higher cost regions. See “—Tariffs and Global Trade Environment” above for further information on the impact of tariffs and the global trade environment in 2025. We, like other manufacturers, have a high proportion of fixed structural costs, and therefore relatively small changes in industry vehicle production can have a substantial effect on our financial results.

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Light Vehicle Production Volumes

Our sales are driven by the number of vehicles produced by the automotive manufacturers, which is ultimately dependent on consumer demand for automotive vehicles, our content per vehicle, and other factors that may limit or otherwise impact production by us, our supply chain and our customers. According to the forecasting firm S&P Global Mobility (October 2025 release), global light vehicle production in the three and nine months ended September 30, 2025 in the Company’s key markets of North America, Europe, China, Japan and South Korea, as compared to the three and nine months ended September 30, 2024, are shown below (in millions of units):

		Three Months Ended September 30,												Nine Months Ended September 30,
		2025				2024				% Change				2025				2024				% Change
North America			3.9				3.8				4.7	%			11.7				11.8				(1.4	)%
Europe			3.8				3.7				1.2	%			12.6				12.8				(1.7	)%
Greater China			8.0				7.3				9.7	%			23.0				20.6				11.7	%
Japan / South Korea			2.9				2.9				0.7	%			9.0				8.8				2.6	%
Total light vehicle production volume in key markets			18.7				17.7				5.4	%			56.2				54.0				4.2	%

The S&P Global Mobility (October 2025 release) forecasted light vehicle production volume in the Company’s key markets for full year 2025 to increase to 76.1 million units, a 1.9% increase from full year 2024 light vehicle production volumes. Forecasted light vehicle production volumes are a component of the data we use in forecasting future business. However, these forecasts generally are updated monthly, and future forecasts have been and may continue to be significantly different from period to period due to changes in macroeconomic and geopolitical conditions or matters specific to the automotive industry. Further, due to differences in regional product mix at our manufacturing facilities, as well as material production schedules from our customers for our products on specific vehicle programs, our future forecasted results do not directly correlate with the global and/or regional light vehicle production forecasts of S&P Global Mobility or other third-party sources.

Automotive New Business Awards

We believe that innovation is an important element to gaining market acceptance of our products and strengthening our market position. During the third quarter of 2025, we secured automotive new business awards totaling $745 million. Automotive new business awards represent the aggregate projected lifetime revenue of new awards provided by our customers to Gentherm in the applicable period, with the value based on the price and volume projections received from each customer as of the award date. Although automotive new business awards are not firm customer orders, we believe that automotive new business awards are an indicator of future revenue. Automotive new business awards are not projections of revenue or future business as of September 30, 2025, the date of this Report or any other date. Customer projections regularly change over time, and we do not update our calculation of any automotive new business award after the date initially communicated. Automotive new business awards in the third quarter of 2025 also do not reflect, in particular, the impact of macroeconomic and geopolitical challenges on future business. Revenues resulting from automotive new business awards also are subject to additional risks and uncertainties that are included in this Report or incorporated by reference in “Forward-Looking Statements” above.

Stock Repurchase Program

In June 2024, the Board of Directors authorized a stock repurchase program (the “2024 Stock Repurchase Program”) to commence upon expiration of the Company’s prior stock repurchase program on June 30, 2024. Under the 2024 Stock Repurchase Program, the Company is authorized to repurchase up to $150.0 million of its issued and outstanding Common Stock over a three-year period, expiring June 30, 2027. Repurchases under the 2024 Stock Repurchase Program may be made, from time to time, in amounts and at prices the Company deems appropriate, subject to market conditions, applicable legal requirements, debt covenants and other considerations. Any such repurchases may be executed using open market purchases, accelerated share repurchase programs, privately negotiated agreements or other transactions. Repurchases may be funded from cash on hand, available borrowings or proceeds from potential debt or other capital markets sources.

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During the nine months ended September 30, 2025, the Company repurchased $10.0 million with an average price paid per share of $26.24. There were no share repurchases during the three months ended September 30, 2025. The 2024 Stock Repurchase Program had $110.1 million of repurchase authorization remaining as of September 30, 2025.

Reportable Segments

The Company has two reportable segments for financial reporting purposes: Automotive and Medical.

See Note 15, “Segment Reporting,” to the consolidated condensed financial statements included in this Report for a description of our reportable segments as well as their proportional contribution to the Company’s reported product revenues, significant segment expenses, operating income, and depreciation and amortization.

Consolidated Results of Operations

The results of operations for the three and nine months ended September 30, 2025 and 2024, in thousands, were as follows:

		Three Months Ended September 30,												Nine Months Ended September 30,
		2025				2024				Favorable / (Unfavorable)				2025				2024				Favorable / (Unfavorable)
Product revenues		$	386,870			$	371,512			$	15,358			$	1,115,814			$	1,103,210			$	12,604
Cost of sales			291,722				276,639				(15,083	)			844,439				822,883				(21,556	)
Gross margin			95,148				94,873				275				271,375				280,327				(8,952	)
Operating expenses:
Net research and development expenses			24,429				23,013				(1,416	)			71,203				67,619				(3,584	)
Selling, general and administrative expenses			42,875				36,861				(6,014	)			122,440				116,992				(5,448	)
Restructuring expenses, net			3,986				2,662				(1,324	)			10,608				12,342				1,734
Loss on sale of land and building, net			—				—				—				2,196				—				(2,196	)
Total operating expenses			71,290				62,536				(8,754	)			206,447				196,953				(9,494	)
Operating income			23,858				32,337				(8,479	)			64,928				83,374				(18,446	)
Interest expense, net			(3,313	)			(4,710	)			1,397				(10,911	)			(11,956	)			1,045
Foreign currency gain (loss)			339				(8,480	)			8,819				(27,391	)			(6,213	)			(21,178	)
Other income (loss)			—				263				(263	)			(1,124	)			952				(2,076	)
Earnings before income tax			20,884				19,410				1,474				25,502				66,157				(40,655	)
Income tax expense			5,935				3,445				(2,490	)			10,204				16,531				6,327
Net income		$	14,949			$	15,965			$	(1,016	)		$	15,298			$	49,626			$	(34,328	)

Product revenues by product category, in thousands, for the three and nine months ended September 30, 2025 and 2024, were as follows:

			Three Months Ended September 30,											Nine Months Ended September 30,
			2025			2024			$ Change		% Change			2025			2024			$ Change		% Change
Climate Control Seats (a)		$	201,275		$	189,898		$	11,377		6.0 %		$	592,448		$	581,713		$	10,735		1.8 %
Lumbar and Massage Comfort Solutions			55,799			48,970			6,829		13.9 %			153,642			133,090			20,552		15.4 %
Climate Control Interiors (a)			52,638			49,283			3,355		6.8 %			147,564			140,712			6,852		4.9 %
Climate and Comfort Electronics (a)			8,599			4,883			3,716		76.1 %			22,220			13,266			8,954		67.5 %
Automotive Climate and Comfort Solutions			318,311			293,034			25,277		8.6 %			915,874			868,781			47,093		5.4 %
Valve Systems			24,487			26,082			(1,595)		(6.1)%			72,803			81,974			(9,171)		(11.2)%
Other Automotive (a)			31,413			39,688			(8,275)		(20.9)%			91,260			116,689			(25,429)		(21.8)%
Subtotal Automotive segment			374,211			358,804			15,407		4.3 %			1,079,937			1,067,444			12,493		1.2 %
Medical segment			12,659			12,708			(49)		(0.4)%			35,877			35,766			111		0.3 %
Total Company		$	386,870		$	371,512		$	15,358		4.1 %		$	1,115,814		$	1,103,210		$	12,604		1.1 %

(a)Product categories have been modified, and prior-period amounts have been recast to conform with the current period presentation. Climate Control Seats (CCS) includes CCS Heat (previously Seat Heaters), CCS Vent/CCS Active Cool (previously CCS) and CCS Neck

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Conditioners (previously included in Other Automotive). Climate Control Interiors (CCI) includes CCI Steering Wheel Heat and CCI Interior Heat (previously included in Other Automotive). Other Automotive includes Automotive Cables, Battery Performance Solutions, non-automotive electronics and contract manufacturing electronics (previously classified as Electronics).

Product Revenues

Below is a summary of our product revenues, in thousands, for the three months ended September 30, 2025 and 2024:

		Three Months Ended September 30,													Variance Due To:
		2025				2024				Favorable / (Unfavorable)					Automotive  Volume				FX				Pricing / Other				Total
Product revenues		$	386,870			$	371,512			$	15,358				$	13,600			$	6,615			$	(4,857	)		$	15,358

Product revenues for the three months ended September 30, 2025 increased 4.1% as compared to the three months ended September 30, 2024. The increase in product revenues is due to favorable automotive volumes and favorable foreign currency impacts primarily attributable to the Euro, partially offset by unfavorable pricing and unfavorable currency impacts primarily attributable to the Chinese Renminbi and Korean Won.

Below is a summary of our product revenues, in thousands, for the nine months ended September 30, 2025 and 2024:

		Nine Months Ended September 30,													Variance Due To:
		2025				2024				Favorable / (Unfavorable)					Automotive  Volume				FX				Pricing / Other				Total
Product revenues		$	1,115,814			$	1,103,210			$	12,604				$	17,203			$	6,708			$	(11,307	)		$	12,604

Product revenues for the nine months ended September 30, 2025 increased 1.1% as compared to the nine months ended September 30, 2024. The increase in product revenues is due to favorable automotive volumes and favorable foreign currency impacts primarily attributable to the Euro, partially offset by unfavorable pricing and unfavorable currency impacts primarily attributable to the Korean Won and Chinese Renminbi.

Cost of Sales

Below is a summary of our cost of sales and gross margin, in thousands, for the three months ended September 30, 2025 and 2024:

		Three Months Ended September 30,													Variance Due To:
		2025				2024				Favorable / (Unfavorable)					Automotive  Volume				Operational Performance				FX				Other				Total
Cost of sales		$	291,722			$	276,639			$	(15,083	)			$	(10,129	)		$	2,795			$	(2,484	)		$	(5,265	)		$	(15,083	)
Gross margin			95,148				94,873				275					3,471				2,795				4,131				(10,122	)			275
Gross margin - Percentage of product revenues			24.6	%			25.5	%

Cost of sales for the three months ended September 30, 2025 increased 5.5% as compared to the three months ended September 30, 2024. The increase in cost of sales is primarily due to higher automotive volumes, unfavorable foreign currency impacts primarily attributable to the Euro, higher quality costs and higher labor costs, partially offset by material purchasing savings.

Below is a summary of our cost of sales and gross margin, in thousands, for the nine months ended September 30, 2025 and 2024:

		Nine Months Ended September 30,													Variance Due To:
		2025				2024				Favorable / (Unfavorable)					Automotive  Volume				Operational Performance				FX				Other				Total
Cost of sales		$	844,439			$	822,883			$	(21,556	)			$	(12,030	)		$	4,406			$	(1,918	)		$	(12,014	)		$	(21,556	)
Gross margin			271,375				280,327				(8,952	)				5,173				4,406				4,790				(23,321	)			(8,952	)
Gross margin - Percentage of product revenues			24.3	%			25.4	%

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Cost of sales for the nine months ended September 30, 2025 increased 2.6% as compared to the nine months ended September 30, 2024. The increase in cost of sales is primarily due to higher automotive volumes, unfavorable foreign currency impacts primarily attributable to the Euro, higher quality costs and higher labor costs, partially offset by material purchasing savings and favorable foreign currency impacts (net of foreign currency hedges) primarily attributable to the Mexican Peso.

Net Research and Development Expenses

Below is a summary of our net research and development expenses, in thousands, for the three months ended September 30, 2025 and 2024:

		Three Months Ended September 30,
		2025				2024				Favorable / (Unfavorable)
Research and development expenses		$	31,008			$	32,248			$	1,240
Reimbursed research and development expenses			(6,579	)			(9,235	)			(2,656	)
Net research and development expenses		$	24,429			$	23,013			$	(1,416	)
Percentage of product revenues			6.3	%			6.2	%

Net research and development expenses for the three months ended September 30, 2025 increased 6.2% as compared to the three months ended September 30, 2024. The increase in net research and development expenses is primarily related to lower customer reimbursements in the current year.

Below is a summary of our net research and development expenses, in thousands, for the nine months ended September 30, 2025 and 2024:

		Nine Months Ended September 30,
		2025				2024				Favorable / (Unfavorable)
Research and development expenses		$	90,116			$	89,093			$	(1,023	)
Reimbursed research and development expenses			(18,913	)			(21,474	)			(2,561	)
Net research and development expenses		$	71,203			$	67,619			$	(3,584	)
Percentage of product revenues			6.4	%			6.1	%

Net research and development expenses for the nine months ended September 30, 2025 increased 5.3% as compared to the nine months ended September 30, 2024. The increase in net research and development expenses is primarily related to higher employee compensation expenses and lower customer reimbursements in the current year.

Selling, General and Administrative Expenses

Below is a summary of our selling, general and administrative expenses, in thousands, for the three months ended September 30, 2025 and 2024:

		Three Months Ended September 30,
		2025				2024				Favorable / (Unfavorable)
Selling, general and administrative expenses		$	42,875			$	36,861			$	(6,014	)
Percentage of product revenues			11.1	%			9.9	%

Selling, general and administrative expenses for the three months ended September 30, 2025 increased 16.3% as compared to the three months ended September 30, 2024. The increase in selling, general and administrative expenses is primarily related to higher expenses for leadership transition, leases, information technology and employee compensation and unfavorable foreign currency impacts primarily attributable to the Euro.

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Below is a summary of our selling, general and administrative expenses, in thousands, for the nine months ended September 30, 2025 and 2024:

		Nine Months Ended September 30,
		2025				2024				Favorable / (Unfavorable)
Selling, general and administrative expenses		$	122,440			$	116,992			$	(5,448	)
Percentage of product revenues			11.0	%			10.6	%

Selling, general and administrative expenses for the nine months ended September 30, 2025 increased 4.7% as compared to the nine months ended September 30, 2024. The increase in selling, general and administrative expenses is primarily related to higher expenses for leadership transition, leases, information technology and employee compensation and unfavorable foreign currency impacts primarily attributable to the Euro, partially offset by favorable foreign currency impacts primarily attributable to the Mexican Peso.

Restructuring Expenses, net

Below is a summary of our restructuring expenses, net, in thousands, for the three months ended September 30, 2025 and 2024:

		Three Months Ended September 30,
		2025				2024				Favorable / (Unfavorable)
Restructuring expenses, net		$	3,986			$	2,662			$	(1,324	)

During the three months ended September 30, 2025, the Company recognized expenses of $2.7 million for employee separation costs and $1.3 million for other costs.

During the three months ended September 30, 2024, the Company recognized expenses of $1.8 million for employee separation costs and $2.6 million for other costs, partially offset by $1.7 million of gain on sale of our Greenville, South Carolina facility.

Below is a summary of our restructuring expenses, net, in thousands, for the nine months ended September 30, 2025 and 2024:

		Nine Months Ended September 30,
		2025				2024				Favorable / (Unfavorable)
Restructuring expenses, net		$	10,608			$	12,342			$	1,734

During the nine months ended September 30, 2025, the Company recognized expenses of $8.4 million for employee separation costs and $2.2 million for other costs.

During the nine months ended September 30, 2024, the Company recognized expenses of $10.7 million for employee separation costs and $3.4 million for other costs, partially offset by $1.7 million of gain on sale of our Greenville, South Carolina facility.

See Note 3, “Restructuring,” to the consolidated condensed financial statements included in this Report for additional information.

Loss on Sale of Land and Building, net

Below is a summary of our loss on sale of land and building, net, in thousands, for the nine months ended September 30, 2025 and 2024:

		Nine Months Ended September 30,
		2025				2024				Favorable / (Unfavorable)
Loss on sale of land and building, net		$	2,196			$	—			$	(2,196	)

Loss on sale of land and building, net for the nine months ended September 30, 2025 is primarily related to the sale of our former headquarters building in Northville, Michigan in January 2025.

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Interest Expense, net

Below is a summary of our interest expense, net, in thousands, for the three months ended September 30, 2025 and 2024:

		Three Months Ended September 30,
		2025				2024				Favorable / (Unfavorable)
Interest expense, net		$	(3,313	)		$	(4,710	)		$	1,397

Interest expense, net for the three months ended September 30, 2025 decreased 29.7% as compared to the three months ended September 30, 2024. The decrease in interest expense, net is primarily related to the change in fair value of an interest rate swap derivative in the prior year period.

Below is a summary of our interest expense, net, in thousands, for the nine months ended September 30, 2025 and 2024:

		Nine Months Ended September 30,
		2025				2024				Favorable / (Unfavorable)
Interest expense, net		$	(10,911	)		$	(11,956	)		$	1,045

Interest expense, net for the nine months ended September 30, 2025 decreased 8.7% as compared to the nine months ended September 30, 2024. The decrease in interest expense, net is primarily related to the change in fair value of an interest rate swap derivative in the prior year period.

Foreign Currency Gain (Loss)

Below is a summary of our foreign currency gain (loss), in thousands, for the three months ended September 30, 2025 and 2024:

		Three Months Ended September 30,
		2025				2024				Favorable / (Unfavorable)
Foreign currency gain (loss)		$	339			$	(8,480	)		$	8,819

Foreign currency gain for the three months ended September 30, 2025 included net realized foreign currency gain of $2.2 million and net unrealized foreign currency loss of $1.9 million.

Foreign currency loss for the three months ended September 30, 2024 included net realized foreign currency loss of $0.1 million and net unrealized foreign currency gain of $8.6 million.

Below is a summary of our foreign currency loss, in thousands, for the nine months ended September 30, 2025 and 2024:

		Nine Months Ended September 30,
		2025				2024				Favorable / (Unfavorable)
Foreign currency loss		$	(27,391	)		$	(6,213	)		$	(21,178	)

Foreign currency loss for the nine months ended September 30, 2025 included net realized foreign currency gain of $3.0 million and net unrealized foreign currency loss of $30.4 million. The unrealized foreign currency loss is primarily related to a non-current intercompany U.S. Dollar receivable at one of our foreign subsidiaries.

Foreign currency loss for the nine months ended September 30, 2024 included net unrealized foreign currency loss of $6.2 million.

Other Income (Loss)

Below is a summary of our other income, in thousands, for the three months ended September 30, 2025 and 2024:

		Three Months Ended September 30,
		2025				2024				Favorable / (Unfavorable)
Other income		$	—			$	263			$	(263	)

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Other income for the three months ended September 30, 2025 decreased as compared to other income for the three months ended September 30, 2024, primarily due to a decrease in miscellaneous income.

Below is a summary of our other (loss) income, in thousands, for the nine months ended September 30, 2025 and 2024:

		Nine Months Ended September 30,
		2025				2024				Favorable / (Unfavorable)
Other (loss) income		$	(1,124	)		$	952			$	(2,076	)

Other (loss) income for the nine months ended September 30, 2025 was unfavorable as compared to the nine months ended September 30, 2024. The change in other (loss) income is primarily due to a $1.3 million decrease in the fair value of an equity investment in the current year period and a $1.1 million increase in the fair value of an equity investment in the prior year period.

Income Tax Expense

Below is a summary of our income tax expense, in thousands, for the three months ended September 30, 2025 and 2024:

		Three Months Ended September 30,
		2025				2024				Favorable / (Unfavorable)
Income tax expense		$	5,935			$	3,445			$	(2,490	)

Income tax expense was $5.9 million for the three months ended September 30, 2025 on earnings before income tax of $20.9 million, representing an effective tax rate of 28.4%. The effective tax rate differed from the U.S. Federal statutory rate of 21.0% primarily due to the impact of income taxes on foreign earnings taxed at rates varying from the U.S. Federal statutory rate and the unfavorable impact of global intangible low-tax income (“GILTI”) and Subpart F income.

Income tax expense was $3.4 million for the three months ended September 30, 2024 on earnings before income tax of $19.4 million, representing an effective tax rate of 17.7%. The effective tax rate differed from the U.S. Federal statutory rate of 21.0% primarily due to the impact of income taxes on foreign earnings taxed at rates varying from the U.S. Federal statutory rate, the release of the uncertain tax position reserve accrual due to tax audit settlement, a partial valuation allowance release in the U.S. related to its capital loss carryforward, and favorable tax effects of equity vesting, partially offset by the unfavorable impact of the GILTI.

Below is a summary of our income tax expense, in thousands, for the nine months ended September 30, 2025 and 2024:

		Nine Months Ended September 30,
		2025				2024				Favorable / (Unfavorable)
Income tax expense		$	10,204			$	16,531			$	6,327

Income tax expense was $10.2 million for the nine months ended September 30, 2025 on earnings before income tax of $25.5 million, representing an effective tax rate of 40.0%. The effective tax rate differed from the U.S. Federal statutory rate of 21.0% primarily due to the unfavorable impact of GILTI and Subpart F income, unfavorable tax effects of equity vesting and a valuation allowance established in the U.S. related to a capital loss carryforward.

Income tax expense was $16.5 million for the nine months ended September 30, 2024 on earnings before income tax of $66.2 million, representing an effective tax rate of 25.0%. The effective tax rate differed from the U.S. Federal statutory rate of 21.0% primarily due to the impact of income taxes on foreign earnings taxed at rates varying from the U.S. Federal statutory rate and the unfavorable impact of the GILTI, partially offset by favorable tax effects of equity vesting, a partial valuation allowance release in the U.S. related to its capital loss carryforward and a one-time benefit related to the Alfmeier acquisition.

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Liquidity and Capital Resources

Overview

Our primary sources of liquidity and capital resources are cash flows from operations and borrowings available under our Second Amended and Restated Credit Agreement. Our cash requirements consist principally of working capital, capital expenditures, research and development, operating lease payments, income tax payments and general corporate purposes. We generally reinvest available cash flows from operations into our business, while opportunistically utilizing our authorized stock repurchase program. Further, we continuously evaluate acquisition and investment opportunities that will enhance our business strategies.

As of September 30, 2025, the Company had $154.3 million of cash and cash equivalents and $307.9 million of availability under our Second Amended and Restated Credit Agreement. We may issue debt or equity securities, which may provide an additional source of liquidity. However, there can be no assurance equity or debt financing will be available to us when we need it or, if available, the terms will be satisfactory to us and not dilutive to our then-current shareholders.

We continue to expect to be able to move funds between different countries to manage our global liquidity needs without material adverse tax implications, subject to current monetary policies and the terms of the Second Amended and Restated Credit Agreement. We utilize a combination of strategies, including dividends, cash pooling arrangements, intercompany loan repayments and other distributions and advances to provide the funds necessary to meet our global liquidity needs. There are no significant restrictions on the ability of our subsidiaries to pay dividends or make other distributions to Gentherm Incorporated. As of September 30, 2025, the Company’s cash and cash equivalents held by our non-U.S. subsidiaries totaled $98.0 million. If additional non-U.S. cash was needed for our U.S. operations, we may be required to accrue and pay withholding if we were to distribute such funds from non-U.S. subsidiaries to the U.S.; however, based on our current liquidity needs and strategies, we do not anticipate a need to accrue and pay such additional amounts.

We currently believe that our cash and cash equivalents, borrowings available under our Second Amended and Restated Credit Agreement, and cash flows from operations will be adequate to meet anticipated cash requirements for at least the next twelve months and the foreseeable future.

Cash and Cash Flows

The following table represents our cash and cash equivalents, in thousands:

		Nine Months Ended September 30,
		2025				2024
Cash and cash equivalents at beginning of period		$	134,134			$	149,673
Net cash provided by operating activities			87,820				73,089
Net cash used in investing activities			(29,779	)			(33,141	)
Net cash used in financing activities			(42,433	)			(40,605	)
Foreign currency effect on cash and cash equivalents			4,508				1,565
Cash and cash equivalents at end of period		$	154,250			$	150,581

Cash Flows From Operating Activities

Net cash provided by operating activities totaled $87.8 million during the nine months ended September 30, 2025 primarily reflecting net income of $15.3 million, $88.9 million for non-cash charges for depreciation, amortization, stock based compensation, loss on disposition of property, provisions for inventory and other, including unrealized foreign currency loss, $33.5 million related to changes in accounts payable and $3.5 million related to changes in net other assets and liabilities, partially offset by $20.5 million related to changes in accounts receivable, net, $20.1 million related to changes in inventory and $12.8 million for non-cash deferred income taxes.

Cash Flows From Investing Activities

Net cash used in investing activities was $29.8 million during the nine months ended September 30, 2025, reflecting purchases of property and equipment of $33.4 million and investments in technology companies of $0.9 million, partially offset by proceeds from the sale of property and equipment of $3.8 million and proceeds from deferred purchase price of factored receivables of $0.7 million.

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Cash Flows From Financing Activities

Net cash used in financing activities was $42.4 million during the nine months ended September 30, 2025, reflecting $103.1 million of debt repayments, $10.0 million paid to repurchase Common Stock and $1.3 million paid for employee taxes related to the net settlement of restricted stock units that vested during the year, partially offset by the borrowing of debt of $72.0 million.

Debt

The following table summarizes the Company’s debt, in thousands, as of September 30, 2025 and December 31, 2024:

		September 30, 2025								December 31, 2024
		Interest Rate				Principal Balance				Interest Rate				Principal Balance
Revolving Credit Facility (U.S. Dollar denominations)			5.63	%		$	189,000				5.86	%		$	220,000
Finance leases			3.35	%			109				3.46	%			201
Total debt							189,109								220,201
Less: current maturities							(109	)							(137	)
Long-term debt, less current maturities						$	189,000							$	220,064

Credit Agreement

Gentherm, together with certain of its subsidiaries, maintain a revolving credit note (the “Revolving Credit Facility”) under its Second Amended and Restated Credit Agreement (the “Second Amended and Restated Credit Agreement”) with a consortium of lenders and Bank of America, N.A. as administrative agent. The Second Amended and Restated Credit Agreement was entered into on June 10, 2022 and amended and restated in its entirety the Amended and Restated Credit Agreement dated June 27, 2019, by and among Gentherm, certain of its direct and indirect subsidiaries, the lenders party thereto and the Agent. The Second Amended and Restated Credit Agreement has a maximum borrowing capacity of $500 million and matures on June 10, 2027. The Second Amended and Restated Credit Agreement contains covenants, that, among other things, (i) prohibit or limit the ability of the borrowers and any material subsidiary to incur additional indebtedness, create liens, pay dividends, make certain types of investments (including acquisitions), enter into certain types of transactions with affiliates, prepay other indebtedness, sell assets or enter into certain other transactions outside the ordinary course of business, and (ii) require that Gentherm maintain a minimum Consolidated Interest Coverage Ratio and a maximum Consolidated Net Leverage Ratio (based on consolidated EBITDA for the applicable trailing four fiscal quarters) as of the end of any fiscal quarter. As of September 30, 2025, the Company was in compliance, in all material respects, with the terms of the Second Amended and Restated Credit Agreement.

Finance Leases

As of September 30, 2025 and December 31, 2024, there was $0.1 million and $0.2 million, respectively, of outstanding finance leases.

Material Cash Requirements

In July 2025, we committed to a restructuring plan to further optimize our manufacturing footprint by realigning our global manufacturing capacity. We expect to incur cash restructuring costs of between $3 million and $4 million for employee severance and retention costs and $1 million of other transition costs primarily for machinery and equipment move and set up costs. Additionally, we expect to incur capital expenditures of between $1 million and $2 million.

In February 2025, we committed to a restructuring plan to further optimize our manufacturing footprint by realigning our manufacturing capacity in Europe. We expect to incur cash restructuring costs of between $4 million and $6 million for employee severance and retention costs and between $2 million and $3 million of other transition costs primarily for machinery and equipment move and set up costs. Additionally, we expect to incur capital expenditures of between $1 million and $2 million.

In February 2025, we committed to an additional restructuring plan to further optimize our manufacturing footprint by realigning our manufacturing capacity in Asia. We expect to incur cash restructuring costs of between $2 million and $3 million for employee severance and retention costs and $1 million of other transition costs primarily for machinery and equipment move and set up costs. Additionally, we expect to incur capital expenditures of between $2 million and $3 million.

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See Note 3, “Restructuring,” to the consolidated condensed financial statements included in this Report for additional information regarding these plans.

Except as described above, there have been no material changes in our cash requirements since December 31, 2024, the end of fiscal year 2024. See Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024 for additional information regarding our material cash requirements.

Effects of Inflation

The automotive component supply industry has historically been subject to inflationary pressures with respect to materials and labor. At times in recent years, the automotive industry has experienced significant volatility in the costs of certain materials and components, labor and transportation. Although supply chain conditions have steadily improved and certain inflationary pressures have moderated, rising costs of materials, labor, equipment and other inputs used to manufacture and sell our products, including freight and logistics costs, have adversely impacted, and may in the future adversely impact, operating costs and operating results. The impact of additional significant tariffs could add to these inflationary pressures. Although the Company has developed and implemented strategies to mitigate the impact of higher material component costs and transportation costs through sourcing and manufacturing efficiencies where possible, these strategies together with commercial negotiations with Gentherm's customers and suppliers have not fully offset to date and may not fully offset our future cost increases. Such inflationary cost increase may increase the cash required to fund our operations by a material amount.

Critical Accounting Estimates

The discussion and analysis of our financial condition and results of operations are based upon our consolidated condensed financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. For discussion of our significant accounting policies, see Note 2, “Summary of Significant Accounting Policies,” to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024. There have been no significant changes in our critical accounting policies or critical accounting estimates during the three months ended September 30, 2025. We are not presently aware of any events or circumstances that would require us to update our estimates, assumptions or revise the carrying value of our assets or liabilities. Our estimates may change, however, as new events occur and additional information is obtained. As a result, actual results may differ significantly from our estimates, and any such differences may be material to our financial statements.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to various market risks including, but not limited to, changes in foreign currency exchange rates, changes in interest rates and price fluctuations of certain material commodities, such as copper. Market risks for changes in interest rates relate primarily to the Company's debt obligations under the Second Amended and Restated Credit Agreement. Foreign currency exchange risks are attributable to sales to foreign customers and purchases from foreign suppliers not denominated in a location’s functional currency, foreign plant operations, intercompany indebtedness, acquisitions denominated in foreign currencies, intercompany investments and include exposures to the Euro, Mexican Peso, Canadian Dollar, Hungarian Forint, North Macedonian Denar, Ukrainian Hryvnia, Japanese Yen, Chinese Renminbi, Korean Won, Czech Koruna, Vietnamese Dong, British Pound, and Moroccan Dirham.

The Company regularly enters into derivative contracts with the objective of managing its financial and operational exposure arising from these risks by offsetting gains and losses on the underlying exposures with gains and losses on the financial instruments used to hedge them. The decision of whether and when to execute derivative financial instruments, along with the duration of the instrument, may vary from period to period depending on market conditions, the relative costs of the instruments and capacity to hedge. The duration is linked to the timing of the underlying exposure, with the connection between the two being regularly monitored. The Company does not enter into derivative financial instruments for speculative or trading purposes. Some derivative contracts do not qualify for hedge accounting; for other derivative contracts, we elect to not apply hedge accounting.

The Company’s designated hedging relationships are formally documented at the inception of the hedge, and hedges must be highly effective in offsetting changes to future cash flows on hedged transactions both at the inception of a hedge and on an ongoing basis to be designated for hedge accounting treatment. For derivative contracts that can be classified as a cash flow hedge, the effective portion of the change in the fair value of the derivative is recorded to accumulated other comprehensive income (loss) in the consolidated condensed balance sheets. When the underlying hedge transaction is realized, the gain or loss included in accumulated other comprehensive income (loss) is recorded in earnings in the consolidated condensed statements of income on the same line as the gain or loss on the hedged item attributable to the hedged risk. The Company records the ineffective portion of foreign currency hedging instruments, if any, to cost of sales, and the ineffective portion of interest rate swaps, if any, to interest expense, net in the consolidated condensed statements of income. Cash flows associated with derivatives are reported in net cash from operating activities in the consolidated condensed statements of cash flows.

Information related to the fair values of all derivative instruments in the consolidated condensed balance sheet as of September 30, 2025 is set forth in Note 10, “Financial Instruments” in the consolidated condensed financial statements included in this Report.

Interest Rate Sensitivity

The table below presents principal cash flows and related weighted average interest rates by expected maturity dates for each of the Company’s debt obligations, excluding finance leases. The information is presented in U.S. Dollar equivalents, which is the Company’s reporting currency.

		Expected Maturity Date
		2025				2026				2027				2028				2029				2030				Total				Fair Value
Liabilities
Long-Term Debt:
Variable rate		$	—			$	—			$	189,000			$	—			$	—			$	—			$	189,000			$	189,000
Variable interest rate as of September 30, 2025											5.63	%															5.63	%

Based on the amounts outstanding as of September 30, 2025, a hypothetical 100 basis point change (increase or decrease) in interest rates would impact annual interest expense by $1.9 million. To hedge the Company's exposure to interest payment fluctuations on a portion of these borrowings, we entered into floating-to-fixed interest rate swap agreements with notional amounts totaling $100.0 million.

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Exchange Rate Sensitivity

The table below provides information about the Company’s foreign currency exchange rate agreements that are sensitive to changes in foreign currency exchange rates. The table presents the notional amounts and weighted average exchange rates by expected maturity dates for each type of foreign currency exchange agreement. These notional amounts generally are used to calculate the payments to be exchanged under the contract.

		Expected Maturity or Transaction Date
Anticipated Transactions and Related Derivatives		2025				2026				Total				Fair Value
USD Functional Currency
Exchange Agreements:
(Receive MXN / Pay USD)
Total contract amount (a)		$	42,177			$	35,122			$	77,299			$	5,608
Average contract rate			20.27				20.50				20.38
(Receive HUF / Pay EUR)
Total contract amount (a)		$	3,350			$	—			$	3,350			$	262
Average contract rate			420.62				—				420.62

(a)Reflects the approximate U.S. Dollar equivalent of the notional value of the hedge contracts.

The table below presents the potential gain and loss in fair value for the foreign currency derivative contracts from a hypothetical 10% change in quoted currency exchange rates.

		September 30, 2025								December 31, 2024
Exchange Rate Sensitivity		Potential loss in fair value				Potential gain in fair value				Potential loss in fair value				Potential gain in fair value
Exchange Agreement:(Receive MXN / Pay USD)		$	4,439			$	6,217			$	6,243			$	7,359
Exchange Agreements:(Receive HUF / Pay EUR)			238				290				917				1,120

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

Management of the Company, under the supervision and with the participation of the Chief Executive Officer and the Chief Financial Officer, carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of September 30, 2025. As defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (as amended, the “Exchange Act”), disclosure controls and procedures are controls and procedures designed to provide reasonable assurance that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported on a timely basis, and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Based upon this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective as of September 30, 2025.

(b) Changes in Internal Control over Financial Reporting

There were no changes in the Company’s internal control over financial reporting during the three months ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are subject to litigation from time to time in the ordinary course of business, however there was no material pending litigation to which we are a party and no material legal proceeding was terminated, settled or otherwise resolved during the three months ended September 30, 2025.

ITEM 1A. RISK FACTORS

In addition to the information set forth in this report, you should carefully consider the risk factors previously disclosed in Part 1, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024 and in Part II, Item 1A “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025. The Company is not aware of any additional material risks or uncertainties.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities During Third Quarter 2025

Period		Total Number of Shares Purchased				Average Price Paid Per Share				Total Number of Shares Repurchased as Part of Publicly Announced Plans or Programs				Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs
July 1, 2025 to July 31, 2025			—			$	—				—			$	110,102,528
August 1, 2025 to August 31, 2025			—				—				—				110,102,528
September 1, 2025 to September 30, 2025			—				—				—				110,102,528

ITEM 5. OTHER INFORMATION

Trading Plans – Directors and Section 16 Officers

During the three months ended September 30, 2025, none of the Company's directors or Section 16 officers adopted or terminated (i) any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act or (ii) any non-Rule 10b5-1 trading arrangement.

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ITEM 6. EXHIBITS

Exhibits to this Report are as follows:

Incorporated by Reference

Exhibit Number

Exhibit Description

Filed /Furnished Herewith

Form

Period Ending

Exhibit / Appendix Number

Filing Date

3.1

Second Amended and Restated Articles of Incorporation of Gentherm Incorporated

8-K

3.2

3/5/18

3.2

Amended and Restated Bylaws of Gentherm Incorporated

8-K

3.1

5/26/16

31.1

Section 302 Certification – CEO

X

31.2

Section 302 Certification – CFO

X

32.1*

Section 906 Certification – CEO

X

32.2*

Section 906 Certification – CFO

X

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

X

101.SCH

Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents

X

104

Cover Page Interactive Data File – the cover page XBRL tags are embedded within the Inline XBRL document

X

* Documents are furnished not filed.

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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.

Gentherm Incorporated

    /s/ William Presley

William Presley

President and Chief Executive Officer

(Principal Executive Officer)

Date: October 23, 2025

    /s/ Jonathan Douyard

Jonathan Douyard

Executive Vice President, Chief Financial Officer and Treasurer

(Principal Financial Officer)

Date: October 23, 2025

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FAQ

What were Gentherm (THRM) Q3 2025 revenue and EPS?

Product revenue was $386,870, and diluted EPS was $0.49.

How did Gentherm's cash and debt look at quarter end?

Cash and cash equivalents were $154,250; total debt was $189,109, mainly the revolving credit facility at $189,000.

How much borrowing capacity did THRM have available?

Based on the leverage covenant calculation, $307,938 remained available for additional borrowings.

What restructuring actions did Gentherm outline in 2025?

Plans include the 2025 Manufacturing Footprint Plan, 2025 EMEA Plan (including a facility closure in Plzeň, Czech Republic), and a 2025 Asia Plan relocating work in China.

What are the expected costs for the 2025 EMEA and Asia plans?

EMEA: severance $4,000–$6,000, other costs $2,000–$3,000, capex $1,000–$2,000. Asia: severance $2,000–$3,000, other costs $1,000, capex $2,000–$3,000.

How much stock did THRM repurchase and what remains authorized?

Year‑to‑date repurchases were $10,015; authorization remaining under the 2024 program was $110,103.

How many shares were outstanding for THRM?

As of October 17, 2025, there were 30,525,148 shares of Common Stock outstanding.