APTV Q2 2025: Record EPS $2.12, Secures $5.4B in New Business Awards
- Record Financial Performance: Aptiv delivered record Q2 results with $5.2B in revenue, $628M in operating income, and $2.12 EPS, driven by strong execution, cost optimization initiatives, and the benefits of a reduced share count from its accelerated share repurchase program.
- Robust New Business Pipeline: The company secured $5.4B in new business awards across key segments such as Advanced Safety, Engineered Components, and Electrical Distribution Systems, highlighting strong customer demand and a resilient pipeline for future growth.
- Strategic and Operational Excellence: Aptiv’s focus on launching advanced platforms (e.g., Gen six ADAS solutions), optimizing global supply chain operations, and leveraging its strong presence in multiple regions positions it to capitalize on trends in electrification, automation, and digitalization, which supports sustained long-term growth.
- Trade Policy and Tariff Risks: Management expressed caution regarding evolving trade policies and potential tariff impacts (such as copper tariffs) that could lead to lower vehicle production and margin headwinds in the back half of the year.
- Volatile Chinese Market Dynamics: Concerns were raised over unfavorable customer mix and rapid changes in production schedules in China (e.g., reductions on key programs like Zika and Neo), which may negatively affect revenue and profitability.
- Uncertainty in New Bookings and Production Schedules: Executives noted delays in finalizing new business awards and a cautious outlook on vehicle production for later quarters—underscoring the risk of lower-than-expected bookings and operational execution in a dynamic market.
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Revenue Growth | Q3 2025 | no prior guidance | 3% | no prior guidance |
Vehicle Production | Q3 2025 | no prior guidance | down 2% | no prior guidance |
Adjusted EPS | Q3 2025 | $1.80 | $1.6 to $1.8 | no change |
Operating Income Margin | Q3 2025 | no prior guidance | 11.6% | no prior guidance |
Revenue Growth | FY 2025 | no prior guidance | up 4% in North America, down 1% in Europe, down 2% in China | no prior guidance |
Vehicle Production | FY 2025 | no prior guidance | down 3%, approximately 92,500,000 units | no prior guidance |
Revenue Outlook | FY 2025 | no prior guidance | $20,150,000,000 at a 2% adjusted growth rate | no prior guidance |
Adjusted EBITDA | FY 2025 | no prior guidance | $3,190,000,000, up 32% | no prior guidance |
Operating Income | FY 2025 | no prior guidance | $2,420,000,000, up 32% | no prior guidance |
Adjusted EPS | FY 2025 | no prior guidance | $7.3 to $7.6, up 19% | no prior guidance |
Operating Cash Flow | FY 2025 | no prior guidance | $2,000,000,000, which is $100,000,000 lower than prior guidance | no prior guidance |
Capital Expenditures | FY 2025 | no prior guidance | Approximately 4% of revenue | no prior guidance |
Tax Rate | FY 2025 | no prior guidance | 17.5% | no prior guidance |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
Trade Policy and Tariff Management | Discussed extensively in Q1 2025 with emphasis on minimal cross-regional exposure, USMCA compliance, and mitigation strategies , and in Q4 2024 with a conservative outlook due to trade and tariff uncertainties. | In Q2 2025, the focus remains on strong USMCA compliance, management of copper tariffs, and cautious guidance assumptions for H2 amid evolving trade policies. | Consistent emphasis on compliance and tariff management with a new explicit focus on copper tariffs and cautious forward guidance. |
Robust New Business Pipeline and Business Awards | Q1 2025 highlighted nearly $5 billion in new awards with strong performance across ASUX, ECG, and EDS , while Q4 2024 reported record bookings of $10.1 billion and a full-year target nearing $31 billion. | Q2 2025 reported $5.4 billion in new business awards, with specific major ADAS program wins and strong confidence in achieving the full-year funnel. | The pipeline remains robust with consistent record awards; new program wins continue to underline a bullish outlook despite macro uncertainties. |
Cost Control and Margin Performance | In Q1 2025, strong cost control initiatives led to significant margin expansion and SG&A reductions , and Q4 2024 showcased workforce reductions, footprint rotation, and material cost savings that delivered margin expansion. | Q2 2025 noted ongoing operational efficiency measures leading to modest margin expansion, though FX and commodity headwinds (e.g., a 120 basis point impact) were evident. | Continued cost control efforts with consistent efficiency programs, though current FX/commodity pressures introduce slight caution; overall stabilization of margins is observed. |
Vehicle Production and Demand Uncertainty | Q1 2025 acknowledged lower vehicle production in N.A. and Europe, along with customer mix issues ; Q4 2024 forecast declines in North American production and noted uncertainties from high inventories and trade factors. | Q2 2025 reported stronger-than-expected early production—possibly due to demand pull-forward—but maintained a cautious outlook for the second half amid evolving trade policies and potential weaker consumer demand. | Mixed signals persist: short-term production strength is offset by heightened uncertainty in H2 due to trade policy changes and demand risks. |
Chinese Market Dynamics and Customer Mix | Q1 2025 noted 2% revenue growth in China with challenges from a major global EV customer affecting mix , and Q4 2024 highlighted a strategic shift toward local OEMs and improving market share. | Q2 2025 revealed a 1% revenue decline in China attributed to an unfavorable customer mix in ASUX, even as efforts to bolster local OEM relationships continue. | The strategic focus on local OEMs is consistent, yet short-term revenue pressures due to customer mix challenges signal ongoing adjustment in the Chinese market. |
Advanced ADAS Solutions and Platform Innovation | Q1 2025 emphasized innovation with awards, strong growth in active safety and software, and Wind River leadership , while Q4 2024 focused on open-architected, cost-effective ADAS solutions in discussions with multiple OEMs. | Q2 2025 highlighted significant ADAS awards with next-gen systems (including programs for a leading North American OEM and Leap Motor) and reinforced its open and flexible platform strategy. | Consistent and bullish innovation trajectory with continued strong ADAS wins underscoring platform flexibility and enhanced customer value propositions. |
Electrification, Automation, and Digitalization | Q1 2025 outlined its commitment to electrification with strong EDS bookings, automation improvements via iharness, and digital partnerships , while Q4 2024 noted growing opportunities in EV platforms, AI-enabled automation, and software-defined vehicles. | Q2 2025 reaffirmed alignment with these megatrends by highlighting cross-industry digitalization and automation strategies that bolster new business pipelines. | A steady, positive focus that underlines strategic alignment with key industry trends; the company remains well positioned to benefit from ongoing industry digital transformations. |
Diversification into Adjacent High-Growth Markets | Q1 2025 reported mid-single-digit growth in adjacent markets with notable traction in Wind River solutions for Aerospace & Defense and industrial sectors , while Q4 2024 detailed strategic diversification into Aerospace & Defense, energy, robotics, and other areas with significant revenue opportunities. | Q2 2025 emphasized strong growth in non-automotive areas (industrial, aerospace, defense) and expects fast double-digit growth in these sectors for the back half of the year. | The diversification strategy is intensifying, with continued expansion into high-growth, nonautomotive markets reinforcing future growth potential. |
Semiconductor Supply Constraints | In Q4 2024, concerns were raised regarding industry-wide semiconductor supply constraints with potential lead time issues and the possibility of increased inventory investment. | Not mentioned in Q1 or Q2 2025 earnings calls. | The topic is no longer mentioned in the current period, suggesting that it may have been resolved or has receded as a priority. |
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Production Outlook
Q: What is Q4 production visibility?
A: Management noted they currently see firm schedules about 2–4 weeks out into Q4 with no significant changes, reflecting a cautious but steady view on production. -
Bookings Target
Q: Can you explain the $31B bookings target?
A: They expressed high confidence in a strong funnel and expect to meet the $31B full-year target despite longer RFQ-to-award cycles amid a challenging macro backdrop. -
Growth Acceleration
Q: What drives higher H2 growth expectations?
A: Management cited accelerated growth in key segments—particularly in ASUX and EDS—supported by historical Q4 production trends and new program launches, indicating a noticeable H2 pickup. -
Margin & Revenue Trajectory
Q: How will AS/UX and ECG revenue margins evolve?
A: They expect ASUX to rebound after legacy program wind‐downs and see ECG margins recovering from FX headwinds, with margin expansion driven by cost initiatives and a return to normal channel mixes. -
Demand Pull Forward
Q: Was demand pulled forward in Q2?
A: Management acknowledged that a mix of production scheduling and pull forward of consumer demand contributed to current results, though precise amounts were not specified. -
Tariff Impact
Q: How are tariffs affecting the business?
A: They stressed that almost all their US production is USMCA compliant and copper tariff impacts are minimal and manageable, with incremental costs largely passed through to customers. -
China Order Book
Q: How is the China mix evolving?
A: The team is focused on normalizing their China mix by building on strong domestic OEM wins and strategic exports, ensuring the market’s inherent volatility is mitigated through targeted programs.
Research analysts covering Aptiv.