Garrett Motion (GTX) Q2 2025 Earnings
How Did GTX Stock React to Q2 2025 Earnings?
S&P 500 over the same 30 days: +1.27%.
Did GTX Beat Earnings? Q2 2025 Results
Garrett Motion posted a mixed but broadly solid second quarter, delivering earnings per share of $0.42 against a flat consensus estimate while revenue of $913.00 million came in just 0.54% below the $918.00 million Wall Street had anticipated, still representing 2.6% growth year over year. The most material driver of the quarter was a sharp improvement in net income, which climbed 36% to $87.00 million from $64.00 million a year ago, largely on the back of $37.00 million in lower interest expense, even as gross margin compressed to 19.8% from 20.8% due to $25.00 million in unfavorable product mix headwinds. Adjusted free cash flow nearly doubled to $121.00 million from $62.00 million, reflecting favorable working capital dynamics. Looking ahead, Garrett raised its full-year 2025 net sales outlook to $3.40 billion to $3.60 billion and lifted its net income guidance to $233.00 million to $278.00 million, citing favorable currency tailwinds, a constructive signal for a stock that has already gained roughly 39% year-to-date amid growing confidence in the durability of its turbocharger business.
- Strong demand for gasoline and commercial vehicle turbocharger applications
- Favorable foreign currency translation of $23 million (3% impact)
- Recoveries on newly enacted import tariffs
- Productivity gains of $11 million offset by $25 million unfavorable product mix
- Significant reduction in interest expense ($37 million lower YoY) due to reduced debt issuance cost amortization
- Favorable working capital changes driving operating cash flow improvement
“Garrett delivered another strong quarter, outperforming the industry with solid financial results and an Adjusted EBIT margin of 13.6%. Our operational execution generated $121 million of Adjusted free cash flow, enabling $22 million in share repurchases and the payment of our second quarterly dividend of $13 million. We also reinforced our leadership in turbocharging, by securing awards for more than $1 billion in light vehicle program extensions whilst continuing to advance our zero-emission technologies, achieving new milestones in our E-Powertrain, E-Cooling, and Fuel Cell programs. With the launch of our second innovation center in Wuhan, we are scaling our R&D capabilities to meet the growing global demand for high-efficiency electrification solutions. Lastly, our inclusion in the Russell 2000® index this quarter reflects the positive momentum generated by our strategy and capital discipline.”
Garrett Motion CEO, on the earnings call
What Was Garrett Motion's Outlook in Q2 2025?
Garrett raised its full-year 2025 outlook to reflect favorable foreign currency impacts. Updated guidance: net sales of $3.4 billion to $3.6 billion (prior: $3.3B-$3.5B); net income of $233M-$278M (prior: $209M-$254M); Adjusted EBIT of $470M-$530M (prior: $427M-$487M); Adjusted EBITDA of $590M-$650M (prior: $545M-$605M); operating cash flow of $370M-$450M; adjusted free cash flow of $330M-$410M. Constant currency sales growth unchanged at -3% to +2%. Assumptions include light vehicle industry production down 3% to flat, commercial vehicle production flat to +2%, 16% average BEV penetration, EUR/USD at 1.13, R&D investment at 4.2% of sales, capex at 2.5% of sales, and full direct tariff recovery (excludes potential indirect impact of global trade policies).
GTX YoY Financials
| Metric | Q2 2025 | Q2 2024 | Year over year |
|---|---|---|---|
| Revenue | $913.0M | $890.0M | +2.6% |
| Gross Profit | $181.0M | $224.0M | −19.2% |
| Operating Income | $122.0M | $123.0M | −0.8% |
| Net Income | $87.0M | $64.0M | +35.9% |
Figures from SEC filings and company reports. Not investment advice.