Itay Michaeli

Itay Michaeli asked for more details on the underlying assumptions for LVP and EV mix for 2026, as well as any insights into the OI margin for next year, given the commentary on accelerating revenue growth. He also inquired about the opportunity within the Gen8 radar products, specifically regarding market share gains, CPV increase, or displacement of ultrasonics for surround sensing.

Answer

Kevin Clark (Chair and CEO, Aptiv) indicated the 2026 market is likely flat to slightly down, with Aptiv planning conservatively. He highlighted strong bookings, annualized electrification headwinds, and double-digit growth in non-automotive markets as tailwinds for accelerating revenue growth, deferring specific OI margin guidance to Investor Day. Varun Laroyia (EVP and CFO, Aptiv) added that non-auto businesses are rapidly approaching $4 billion and growing high single to double digits with a higher margin profile. Mr. Clark expressed confidence in Gen8 radar's industry-leading position for share gain and CPV increase, mentioning 'Pulse' for eliminating ultrasonics.

Itay Michaeli of TD Cowen inquired about Aptiv's visibility into Q4 vehicle production and whether a potential shift in OEM mix towards larger vehicles presents new content opportunities.

Answer

CEO Kevin P. Clark stated that while Aptiv has visibility into production schedules, the company has adopted a conservative outlook for the second half of the year, anticipating a potential pull-forward of demand into Q2. He also confirmed that Aptiv has already benefited from increased content on larger North American trucks, which has helped offset the slowdown in EV adoption.

Itay Michaeli asked about the extent to which powertrain, segment, and trim mix optimization next year, driven by lower compliance costs, would push up Average Transaction Prices (ATPs) and Ford's confidence in passing this through to consumers given affordability constraints. He also sought drivers behind Ford Blue's improved pricing and color on fleet pricing.

Answer

Andrew Frick, President of Ford Blue and Model e, stated that strong ATPs and the flexibility to manage mix, especially for off-road derivatives like Tremor and Raptor, provide headroom. Jim Farley, President and CEO, added that hybrid mix, particularly for the F-150, presents a big opportunity to maximize company results. Frick also noted that industry retail pricing is up 1.7%, driven by tariff pricing, with fleet pricing down slightly, primarily in vans, but Super Duty and full-size pickup pricing remained strong. Jim Farley and Andrew Frick highlighted Ford Pro's diversification into small-medium businesses (SMBs) to de-risk fleet pricing.

Itay Michaeli asked about the extent to which next year's powertrain and segment mix optimization, driven by lower compliance costs, would push up Average Transaction Prices (ATPs) and Ford's confidence in passing these increases to consumers amidst affordability constraints. He also requested additional color on the drivers behind Ford Blue's improved pricing and fleet pricing in the quarter.

Answer

President of Ford Blue and Model e Andrew Frick stated that Ford's ATPs are strong and above segment average, and the mix optimization allows flexibility to manage mix, especially for off-road derivatives like Tremor and Raptor, providing headroom. President and CEO Jim Farley added that hybrid mix presents a significant opportunity to adjust hybrid pricing and maximize company results, particularly for the F-150 hybrid. Andrew Frick noted that industry retail pricing is up 1.7%, driven by tariff pricing, while fleet pricing was down slightly, primarily in the van business, but Super Duty and full-size pickup pricing remained strong. Jim Farley highlighted Ford Pro's accomplishment in diversifying its business away from traditional fleet, focusing on small-medium businesses (SMBs). Andrew Frick detailed that services as a percentage of EBIT are increasing, and channel mix is balanced across large corporations, SMBs, and government/rental fleets.

Itay Michaeli asked whether Ford would prioritize market share or pricing if the industry raises prices more than expected, and also inquired about the company's plans and timing for Level 3 autonomy.

Answer

President of Ford Blue and Model e, Andrew Frick, responded that they will be opportunistic, taking share if profitable or taking price if not, on a vehicle-by-vehicle basis. CEO James Farley stated that Ford is on track with its Level 3 ADAS development, which will be an internally sourced product aiming to be the 'best,' not the first, and is distinct from the current BlueCruise system.

Itay Michaeli inquired about the impact of shifting emissions regulations on GM's ability to sell more ICE full-size pickups and SUVs, and whether Orion capacity represents incremental volume growth or tariff mitigation. He also asked for an update on Super Cruise next generations and the roadmap for personal AVs with the Cruise team.

Answer

Mary Barra, GM's Chair and CEO, explained that changing regulations allow for longer ICE sales, with Orion Assembly providing capacity for unmet Chevrolet Equinox demand and maximizing full-size utilities, serving both tariff mitigation and volume growth. She highlighted Super Cruise's continuous improvements, Google Maps integration, and the focus on personal autonomy (Level 4) under Sterling Anderson, while not prioritizing Rideshare 1.0.

Itay Michaeli inquired about the impact of shifting emissions regulations on the ability to sell more ICE full-size pickups and SUVs over the next few years. He also asked about the roadmap for next-generation Super Cruise and the journey to personal autonomous vehicles (AVs) with the Cruise team.

Answer

Mary Barra, GM's Chair and CEO, indicated that less stringent regulations would allow for longer ICE vehicle sales, citing unmet Equinox demand and full-size SUV constraint relief from Orion Assembly. She noted that Orion's truck production would offer both tariff mitigation and global demand upside. For Super Cruise, Ms. Barra highlighted continuous improvements, Google Maps integration, collaboration with the Cruise team, and the expertise of Sterling Anderson, emphasizing the commitment to personal autonomy and a future software-defined vehicle platform.

Itay Michaeli from TD Cowen asked about the key variables that could push results to the high or low end of the full-year guidance range and inquired about the target for U.S. dealer inventory by year-end.

Answer

EVP & CFO Paul Jacobson stated that GM is aiming for the midpoint of its guidance, with potential upside from outperforming on tariff offsets and downside risk from higher tariff rates for longer. He reaffirmed the company's commitment to a 50-60 day supply target for year-end inventory, noting that a calculated shift of components to aftersales to address warranty issues impacted recent wholesale figures but that inventory levels remain well-managed.

Itay Michaeli of Citigroup asked about the potential for tariff relief on imported vehicles and the timeline for full mitigation. He also inquired about the pace of investment in AV and AI, and the timing for the next-generation software-defined vehicle (SDV) platform and L3 autonomous features.

Answer

EVP and CFO Paul Jacobson stated that the trade environment remains fluid and mitigation will take time, outlining a three-pronged approach: go-to-market strategy, cost reductions, and footprint/supply chain adjustments. Chair and CEO Mary Barra added that the Cruise team integration is progressing well, with more details on the SDV and L3 timeline to be shared later in the year. She emphasized ongoing feature additions to Super Cruise and a company-wide focus on leveraging AI for efficiency.

Itay Michaeli of TD Cowen questioned the expected revenue cadence between Q3 and Q4 and sought to understand the bridge to positive EBITDA, asking about the implied incremental margin from the H1 loss to the guided H2 profitability.

Answer

CEO Eyal Peso projected that Q4 would be stronger than Q3, estimating a rough 40/60 revenue split for the second half, consistent with historical patterns. He reiterated that the EBITDA breakeven point is around $31 million in quarterly revenue. He explained that higher H2 revenue will significantly expand gross margins due to operating leverage on fixed costs. Additionally, he noted a substantial drop in vacation liability is expected in H2, which will further contribute positively to the adjusted EBITDA.

Itay Michaeli of TD Cowen inquired about the expected revenue cadence between Q3 and Q4 and sought more detail on the bridge from the Q2 EBITDA loss to the positive full-year target, specifically concerning incremental margins and cost leverage.

Answer

CEO Eyal Peso estimated a rough 40/60 revenue split between Q3 and Q4, noting that Q4 is historically the company's strongest quarter. To bridge the EBITDA gap, he reiterated that revenue above the ~$31 million breakeven point dramatically improves gross margins due to fixed cost absorption. Peso also highlighted a significant non-operational factor: a large vacation liability of $4.8 million at the end of Q2 is expected to decrease substantially in H2, positively impacting the results.

Itay Michaeli asked about the expected trajectory for operating expenses for the remainder of 2025 and how working capital is expected to behave as revenues ramp up in the coming quarters.

Answer

Executives Eyal Peso and Meir Peleg stated that Q1 operating expenses should be considered the base for the full year, with only a slight potential increase in sales and marketing to support growth. Regarding working capital, they explained that while it will naturally grow with revenue, they are actively managing it through improved supplier payment terms and invoice financing to mitigate the cash need. Meir Peleg also clarified that the company still expects negative free cash flow for 2025, with a target for positive free cash flow in 2026.

Itay Michaeli of TD Cowen requested more detail on the gross margin outlook for the Automotive and Aeronautics segments in 2025. He also asked for a specific figure for the company's planned capital expenditures for the year.

Answer

Executive Eyal Peso explained that both parts of the Automotive business—Light Control and Safety-Tech—are expected to see dramatic gross margin improvement in 2025, with Light Control becoming very healthy and Safety-Tech benefiting from the new, higher-margin Smart-Vision 3 platform. Executive Meir Peleg followed up by stating that Gauzy expects to invest approximately $10 million in CapEx during 2025.

Itay Michaeli of TD Cowen asked about the potential impact of changing federal emissions regulations on AAM's business mix and key program volumes over the next few years. He also requested a quantification of the incremental launch costs expected in the second half of the year.

Answer

Chairman & CEO David Dauch explained that a longer tail for ICE and hybrid vehicles, driven by consumer preference and policy shifts, benefits AAM by allowing it to leverage its installed asset base, though the company remains prepared for electrification. EVP & CFO Christopher May quantified the incremental launch costs for the second half of 2025 at approximately $5 million to $10 million compared to the first half.

Itay Michaeli of TD Cowen questioned the potential impact of changing emissions regulations on AAM's business mix and program volumes, and also requested a quantification of the launch costs expected in the second half of 2025.

Answer

CEO David Dauch stated that a slower EV transition benefits AAM by allowing it to leverage its installed ICE asset base, while noting the company remains propulsion-agnostic. CFO Christopher May quantified the incremental launch costs for the second half of the year at approximately $5 million to $10 million.

Itay Michaeli of TD Cowen asked for a high-level view of the puts and takes for the 2026 SOI bridge, given the industry's progression in 2025. He also questioned whether Goodyear is contemplating additional cost-cutting or restructuring actions beyond the current Goodyear Forward plan in response to the near-term challenges, especially with incremental cash from asset sales.

Answer

EVP & CFO Christina Zamarro provided a preliminary 2026 outlook, highlighting a potential couple hundred million dollar tailwind from raw materials and at least a $250 million benefit from Goodyear Forward. She also quantified the high sensitivity of earnings to price and volume improvements. CEO Mark Stewart stated that while the company is aggressively managing its cost structure and flexing plants, it is not contemplating major new restructuring actions beyond those already announced in Europe and South Africa, as the current environment is not seen as reflective of the long-term business.

Itay Michaeli of TD Cowen questioned the potential for mitigating the $300 million tariff impact over time and asked for more detail on the assumptions underlying the flat year-over-year volume outlook for the second half.

Answer

CEO Mark Stewart explained that Goodyear is well-positioned with its large U.S. footprint and ongoing factory modernizations, which will add 10 million units of high-value tire capacity. CFO Christina Zamarro added that H2 volume assumptions include a recovery in Asia Pacific, strengthening volume in EMEA, but continued toughness in the U.S. and Latin America due to channel inventory and OE volatility, though OE market share is expected to grow.

Itay Michaeli of TD Cowen sought to revisit the potential 2027 revenue buildup for the Thermal Barrier business and asked for insights from the current quoting pipeline, including timing, content, and regional mix.

Answer

CFO Ricardo Rodriguez reaffirmed that the path to the 2027 revenue target remains unchanged, supported by ACC, Daimler, and GM. He noted that current quoting activity is tilting towards prismatic cells and that OEMs are taking more time with decisions due to policy uncertainty, with more clarity expected in the first half of 2026.

Itay Michaeli of TD Cowen sought more detail on recent XUI design wins, including model penetration and segment mix. He also asked if the non-automotive expansion would require incremental operating expenses.

Answer

CEO Brian Krzanich noted that while specific model details for the VW Group win are confidential, XUI deals typically feature a higher PPU and broad deployment across a brand's lineup. He asserted that non-auto growth will be funded through productivity gains from internal AI tools, aiming for 15-20% engineering efficiency improvements, rather than increased OpEx.

Representing Itay Michaeli from TD Cowen, an analyst asked if automotive tariffs might inadvertently boost customer interest in Cerence's new offerings as OEMs seek more service revenue, and requested more detail on non-automotive opportunities, including their potential size and revenue timeline.

Answer

Executive Brian Krzanich suggested that customer interest is primarily driven by technological innovation, such as new multimodal features, rather than tariffs. However, he conceded that OEMs facing price hikes may need to offer more value, creating an opportunity for Cerence. On non-automotive ventures, Krzanich highlighted a partnership-led, cost-effective strategy, citing the Code Factory collaboration for voice-enabled kiosks. He emphasized that the focus is on applying existing tech to new verticals with clear demand, but did not provide a specific timeline for meaningful revenue, noting the strategy prioritizes smart growth over rapid expansion.

Itay Michaeli from TD Cowen requested a quantification of the impact from lower fleet sales in North America during H1 and asked for details on the company's action plan to improve performance in this channel.

Answer

CEO Antonio Filosa quantified the impact at approximately half a percentage point of market share in North America. He outlined a new strategy led by a recently hired executive, which involves diversifying the fleet sales mix away from 'Rent-A-Car' and toward the higher-margin 'Commercial' and 'Governmental' sub-channels. He expects a partial recovery to begin soon and accelerate into the next year.

Itay Michaeli from TD Cowen inquired about the primary drivers behind Visteon's recent market share gains and strong bookings, and how this performance might affect long-term growth expectations. He also asked about the company's targeted net cash and future leverage strategy following the new capital allocation announcements.

Answer

President and CEO Sachin Lawande attributed the strong bookings, particularly in displays and clusters, to OEMs refreshing existing platforms as EV timelines shift. He noted that while this is positive, the long-term outlook for Battery Management Systems (BMS) needs to be monitored. SVP and CFO Jerome Rouquet stated that Visteon targets a minimum net cash position of $100 million and feels confident initiating a dividend due to strong, consistent cash flow generation. He confirmed the company would also resume its active share repurchase program.

Itay Michaeli asked if the strong $1.9 billion in Q1 new business wins was above expectations and could lead to exceeding the yearly target, potentially accelerating long-term growth. He also requested more detail on the new win with Chery.

Answer

CEO Sachin Lawande described the new business pipeline as the strongest in five years, positioning the company well to achieve its annual target. He highlighted the win with Chery, a fast-growing Chinese OEM with global export plans, as a key strategic success that Visteon expects to leverage into a larger relationship by supporting their expansion into Europe and South America.

Itay Michaeli inquired about the process for expanding to new lanes, how that will accelerate, and for more detail on the performance gains of the second-generation hardware kit.

Answer

CEO Chris Urmson stated that each new lane will be easier to launch, as the core driving task is largely solved and the U.S. freeway system is self-similar. He noted that the second-generation hardware kit will provide incrementally longer sensor range but is primarily focused on reducing costs and enabling scaled manufacturing. CFO David Maday added that the ability to produce a larger quantity of Gen 2 kits is a key enabler for expansion.

Itay Michaeli of TD Cowen sought two clarifications on the autonomy platform: whether Rivian is still on track to launch "eyes-off" functionality in controlled conditions next year, and if the R2 will feature a standard autonomy hardware system or offer different tiers.

Answer

CEO Robert Scaringe confirmed the company is very focused on moving from the current "hands-off, eyes-on" system to a "hands-off, eyes-off" (Level 3) capability on highways next year. He stated that Rivian does not envision an R2 without a very robust, standard autonomy platform, noting it will feature an enhanced perception stack with 65 megapixels of cameras, as this capability is a critical part of the customer experience.

Itay Michaeli from TD Cowen inquired if Lear is observing any pressure on vehicle trim mix, particularly on high-content trims, as a result of tariffs. He also asked about the expected timing for the new business awards won in the quarter to begin contributing to revenue.

Answer

CFO Jason Cardew stated that while they anticipate potential pressure on trim mix, they haven't seen significant changes yet, though some specific options like rear-seat entertainment could be affected. CEO Raymond Scott added that Lear is proactively offering customers alternative solutions to mitigate these costs. Cardew noted that most of the new business awarded in the quarter is expected to launch in 2028.

Itay Michaeli of Citi requested a breakdown of the $600 million active safety sales shortfall in the 2026 outlook between legacy Magna and former Veoneer assets, and asked about quoting activity and trends for active safety outside of China.

Answer

CEO Seetarama Kotagiri responded that it is too difficult to separate the active safety shortfall between legacy Magna and Veoneer. He clarified that his comments on win rates were specific to China, which represents 10-12% of the ADAS business. He stated that quoting activity and win rates outside of China remain in line with past trends, although some OEM sourcing decisions are in flux due to shifting vehicle architectures.