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AP

Aptiv PLC (APTV)·Q3 2025 Earnings Summary

Executive Summary

  • Aptiv delivered record Q3 2025 revenue ($5.212B), adjusted operating income ($654M), and adjusted EPS ($2.17), while GAAP EPS was a loss due to a $648M non-cash goodwill impairment tied to Wind River; full-year 2025 guidance was raised across revenue, AOI, EBITDA, and adjusted EPS .
  • The company outperformed consensus: revenue beat by ~$0.10B (~2%) and adjusted EPS beat by ~$0.34, driven by stronger North America vehicle production, Wind River >20% growth, cost initiatives, and timing of customer settlements . S&P Global consensus: revenue $5.108B*, EPS $1.83*.
  • Segment mix: EDS up 12% with >200bps margin expansion and timing benefits; ECG up 8% on China/local OEM strength and non-auto demand; AS&UX flat with Wind River growth offset by China customer mix and legacy infotainment roll-off .
  • Q4 guidance embeds conservatism for OEM disruptions (~$80M headwind), copper, and potential semiconductor/trade tensions (e.g., Nexperia), but management emphasized resilient supply chain and validated second-source alternatives; EDS separation remains on track for Q1 2026 .
  • Potential stock catalysts: raised FY guidance, strong bookings ($8.4B in Q3, ~$31B full-year target), Gen 8 radar and PULSE product advances, and expanding non-auto growth via Wind River and edge AI partnerships (Vodafone Open RAN, Robust.AI) .

What Went Well and What Went Wrong

  • What Went Well:

    • “Another quarter of record financial results” with revenue $5.212B, AOI $654M, adjusted EPS $2.17; adjusted AOI margin expanded to 12.5% on volume and cost actions .
    • Wind River growth >20% and strategic wins (Vodafone Open RAN, edge AI partnerships) underpin software and non-auto expansion .
    • EDS margin expansion (>200bps) and double-digit revenue growth; bookings momentum ($8.4B in Q3; ~$31B FY target) .

  • What Went Wrong:

    • GAAP loss per share (-$1.63) from $648M non-cash goodwill impairment at Wind River amid delays in 5G adoption and software-defined vehicles; higher tax expense (valuation allowances ~$300M YTD) .
    • AS&UX margin down YoY on China customer mix and legacy infotainment program roll-off; management expects stabilization into 2026 .
    • Europe revenue down 3% and Q4 headwinds from customer-specific disruptions and elevated copper prices; guidance embeds conservatism tied to trade-tension semiconductor risks (e.g., Nexperia) .

Financial Results

Consolidated Trends (Quarterly)

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Billions)$4.825 $5.208 $5.212
GAAP Diluted EPS ($)-$0.05 $1.80 -$1.63
Adjusted EPS ($)$1.69 $2.12 $2.17
Adjusted Operating Income ($USD Millions)$572 $628 $654
Adjusted Operating Income Margin (%)11.9% 12.1% 12.5%
Adjusted EBITDA ($USD Millions)$758 $821 $851
Cash from Operations ($USD Millions)$273 $510 $584

Estimates vs Actuals (Consensus vs Reported)

MetricQ1 2025 Estimate*Q1 2025 ActualQ2 2025 Estimate*Q2 2025 ActualQ3 2025 Estimate*Q3 2025 Actual
Revenue ($USD Billions)$4.805$4.825 $5.083$5.208 $5.108$5.212
Primary EPS ($)$1.535$1.69 $1.831$2.12 $1.827$2.17

Values marked with * retrieved from S&P Global.

Segment Breakdown (Q3 2025 vs Q3 2024)

SegmentNet Sales Q3 2024 ($MM)Net Sales Q3 2025 ($MM)Adjusted OI Q3 2024 ($MM)Adjusted OI Q3 2025 ($MM)
Electrical Distribution Systems$2,035 $2,286 $125 $192
Engineered Components Group$1,582 $1,714 $272 $298
Advanced Safety & User Experience$1,427 $1,442 $196 $164
Eliminations & Other($190) ($230) ——
Total$4,854 $5,212 $593 $654

Regional Revenue Commentary (Q3 2025)

  • North America +14%; Asia +4% (China flat); South America +16%; Europe -3% .

Guidance Changes

MetricPeriodPrevious Guidance (7/31/25)Current Guidance (10/30/25)Change
Net Sales ($B)FY 2025$20.0 – $20.3 $20.15 – $20.45 Raised
Adjusted Operating Income ($B)FY 2025$2.37 – $2.47 $2.40 – $2.50 Raised
Adjusted EBITDA ($B)FY 2025$3.135 – $3.235 $3.170 – $3.270 Raised
Adjusted EPS ($)FY 2025$7.30 – $7.60 $7.55 – $7.85 Raised
Cash Flow from Operations ($B)FY 2025$2.00 $2.00 Maintained
Capital Expenditures ($MM)FY 2025$780 $780 Maintained
Adjusted Effective Tax Rate (%)FY 2025~17.5% ~17.5% Maintained
GAAP Effective Tax Rate (%)FY 2025~35.0% ~65.0% Raised
Net Sales ($B)Q4 2025—$4.905 – $5.205 New detail
Adjusted EPS ($)Q4 2025—$1.60 – $1.90 New detail

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2025)Previous Mentions (Q1 2025)Current Period (Q3 2025)Trend
AI/Tech initiatives (Gen 8 radar, PULSE, Wind River)Focus on resilient model; non-auto growth; adjusted margin expansion Segment realignment; software portfolio momentum Gen 8 radar launch; Wind River >20% growth; Vodafone Open RAN; edge AI partnerships Strengthening
Supply chain & trade tensionsTariffs included in outlook; FX/commodities headwinds Tariffs visibility limited; plan to update guidance Q4 conservatism for semiconductor trade tensions (Nexperia); Oswego fire; alt sourcing validated Heightened caution
Regional trendsAsia +4% (China -1% in Q2); Europe -1% Europe -4%, NA -2%, Asia +5% NA +14%; Europe -3%; China flat; SA +16% Mixed; NA strong
Product performance (EDS, ECG, AS&UX)EDS +7%, ECG +6%, AS&UX -3% EDS -3%, ECG -1%, AS&UX flat EDS +12% AOI +54%; ECG +8%; AS&UX flat; AOI down on mix/legacy roll-off EDS outperform; AS&UX transition
Regulatory/taxEffective tax rate commentary; FX/commodities OECD Pillar Two valuation allowance $294M FY GAAP tax rate ~65%; adjusted ~17.5% Higher GAAP tax burden
R&D execution / bookingsRecord bookings YTD ~$19B; targeting ~$31B Realignment supports execution Q3 bookings $8.4B; ~$31B FY target; potential timing shift to 2026 Strong pipeline

Management Commentary

  • “We exceeded expectations in the third quarter, delivering record revenue, operating income, and earnings per share… well positioned to continue our strong operating performance heading into next year.” — Kevin Clark (CEO) .
  • “Adjusted EBITDA and operating income grew 9% and 10% respectively… margin expanded 30bps, driven by strong volume flow-through, manufacturing performance, and cost initiatives.” — Varun Laroyia (CFO) .
  • On Wind River impairment: “$648 million… reflects slower than originally expected growth over 2023 and 2024 owing to delays in 5G adoption and the launch of software-defined vehicles… does not change our expectation for long term structural growth.” — CFO .
  • On Q4 outlook risks: “Recent known disruptions and production adjustments… ~$80 million headwind… conservatism related to amplified trade tensions impacting semiconductor supply chains.” — CFO .
  • On technology roadmap: “Gen 8 radar we're confident is industry leading… Pulse can eliminate ultrasonics and reduce OEM costs.” — CEO .

Q&A Highlights

  • Q4 margin guidance below Q3 despite typical seasonal improvement: management cited flow-through from lower volumes, timing shift of a $15M customer recovery, and elevated copper; FX (peso) and copper impact >100bps YoY .
  • Semiconductor/trade tensions (Nexperia): framed as political; China not impacted near-term; Europe noise higher; validated second sources and ~3 months inventory; conservatism overlaid in Q4 .
  • Bookings cadence: $8.4B in Q3; ~$31B FY target with potential timing of awards shifting into 2026; strength in ADAS/UX across regions .
  • China mix and AS&UX: headwinds from cancellations (NIO/Zeekr) and legacy infotainment roll-off; progress with local OEMs; return to growth expected into 2026 .
  • Non-auto growth: approaching >$3B revenue, growing high single/double digits with higher margin businesses like Wind River; energy storage/robotics/drones opportunities highlighted .

Estimates Context

  • Q3 2025: Revenue beat (~$5.212B vs $5.108B*), Adjusted EPS beat ($2.17 vs $1.83*). Primary drivers: stronger NA production, Wind River >20% growth, manufacturing performance, cost reductions, and timing of certain customer settlements .
  • Q2 2025: Revenue beat ($5.208B vs $5.083B*), Adjusted EPS beat ($2.12 vs $1.83*) .
  • Q1 2025: Revenue in-line/slight beat ($4.825B vs $4.805B*), Adjusted EPS beat ($1.69 vs $1.53*) .

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Raised FY 2025 guidance across revenue, AOI, EBITDA, and adjusted EPS signals durable execution despite macro uncertainty; Q4 embeds prudent conservatism for OEM disruptions and trade-tension semiconductor risks .
  • Mix shift towards higher-margin non-auto/software (Wind River, edge AI) provides medium-term earnings resilience; continued bookings and partnerships (Vodafone, Robust.AI) support growth .
  • EDS strength and margin expansion underpin near-term profitability; EDS separation by Q1 2026 is a structural catalyst to unlock value and sharpen capital allocation .
  • AS&UX transitional headwinds (China mix, legacy roll-off) should abate into 2026; Gen 8 radar and PULSE enhance competitive position and CPV, with potential share gains across regions .
  • Watch FX (peso) and copper volatility; management has demonstrated pass-through and mitigation, but these remain margin variables, especially in Europe .
  • Cash generation consistent (target ~$2B CFO) and leverage improved (gross 2.4x, net 1.8x), enabling ongoing buybacks and debt paydown; ~$2.4B repurchase authorization remains .
  • Near-term trading: results/guidance beat and bookings momentum are positives; headlines around Nexperia/trade tensions and Europe production could inject volatility; positioning into Investor Day may highlight non-auto/software strategy and EDS separation roadmap .