Gentherm (NASDAQ:THRM) reported stronger-than-expected second-quarter results on Thursday after delivering record quarterly revenue and increasing its full-year financial guidance.
The thermal management technology company also announced a new share repurchase programme, reinforcing confidence in its long-term growth strategy.
Record revenue drives earnings beat
Gentherm posted adjusted earnings of $0.75 per share for the second quarter, comfortably ahead of analysts’ consensus estimate of $0.56.
Revenue reached a record $416.2 million, exceeding market expectations of $382.01 million and increasing 11% from $375.1 million in the same quarter last year.
Following the announcement, the company’s shares traded modestly higher.
Company increases full-year guidance
Gentherm raised its revenue forecast for fiscal 2026 to between $1.55 billion and $1.65 billion, compared with its previous outlook of $1.5 billion to $1.6 billion.
The midpoint of the updated guidance is broadly in line with analysts’ expectations.
The company also lifted its adjusted EBITDA forecast to a range of $185 million to $200 million, up from its previous guidance of $175 million to $195 million.
President and Chief Executive Officer Bill Presley said, “The Gentherm team demonstrated strong commercial performance with record quarterly revenue, while also scaling our core technologies into new markets.”
Automotive business outperforms market
Excluding foreign exchange movements, revenue increased 9.5% year over year.
The Automotive Climate and Comfort Solutions division delivered revenue growth of 14.1%, or 12.7% excluding currency effects, outperforming light vehicle production in its key markets by 14 percentage points.
The Medical segment also recorded modest growth, with revenue increasing 1% to $11.4 million.
Cash flow declines as company launches new buyback
Gross margin eased to 23.2% from 23.9% a year earlier, primarily reflecting higher material costs and increased warranty provisions.
Adjusted EBITDA rose to $48.8 million, equivalent to 11.7% of revenue, compared with $45.9 million, or 12.2% of revenue, in the second quarter of 2025.
Operating cash flow totalled $2.3 million, down from $31.7 million a year earlier, mainly because of restructuring and merger-related expenses.
Gentherm ended the quarter with net leverage of approximately 0.3 times and liquidity of $502.3 million.
The company’s board also approved a new share repurchase programme of up to $400 million, replacing the previous authorisation.