Garrett Motion Inc. (NASDAQ:GTX) announced Thursday its third quarter 2025 financial results, with the stock soaring after the automotive technology provider beat analyst expectations on both the top and bottom lines and raised its full-year guidance.
The company reported net sales of $902 million, a 9% increase year-over-year, beating the $865.333 million consensus estimate. Adjusted earnings per share of 38 cents beat the 26-cent estimate. Net income totaled $77 million.
Adjusted results included adjusted EBIT of $133 million, yielding an adjusted EBIT margin of 14.7%. Cost of goods sold included $12 million from enacted import tariffs.
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Cash Flow and Capital Allocation Highlights
The company's operations generated robust cash, with net cash provided by operating activities totaling $100 million and adjusted free cash flow reaching $107 million. Garrett maintained strong liquidity, reporting $860 million in available liquidity, including $230 million in unrestricted cash and cash equivalents.
The company executed a $50 million voluntary early debt repayment on its term loan and repurchased $84 million of common stock, while the total principal amount of debt outstanding stood at $1.490 billion.
The Board declared an 8-cent per share cash dividend, a 33% increase, payable on December 15, 2025, to shareholders of record as of December 1, 2025.
“This performance enabled $84 million in share repurchases in Q3 and a 33% increase in our quarterly dividend beginning in Q4, reinforcing our disciplined approach to capital allocation and commitment to driving shareholder value. Based on our year-to-date performance and favorable industry conditions, we are once again raising the midpoint for our full-year 2025 outlook,” said CEO Olivier Rabiller.
Operational Achievements and Technology Focus
Key operational achievements included securing several new light vehicle turbo programs, including for range-extended electric vehicles, and multiple commercial vehicle & industrial awards representing more than $40 million in lifetime revenue for gensets.
The company also reported growing interest and initiatives for its E-Powertrain and successful E-Cooling testing, validating its two-leg strategy focusing on turbocharging and zero-emission technologies.
Outlook
Garrett raised its 2025 midpoint outlook, citing strong performance and an improved second-half automotive industry outlook.
The revised full-year 2025 guidance projects net sales between $3.5 billion and $3.6 billion, an increase from the prior $3.4 billion to $3.6 billion range, and against the consensus estimate of $3.529 billion.
Full-year guidance for net income is now projected between $265 million to $295 million, and adjusted free cash flow is expected to be between $350 million to $420 million.
The outlook assumes that 2025 light vehicle industry production will be flat to up 2% compared to 2024, and assumes full direct tariff recovery, but excludes the potential indirect impact of global trade policies and inflation.
Price Action: GTX shares were trading higher by 16.31% to $14.55 premarket at last check Thursday.
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