Aptiv PLC (APTV)·Q4 2024 Earnings Summary

Executive Summary

• Q4 2024 revenue was $4.91B (flat YoY), GAAP EPS $1.14 and adjusted EPS $1.75; margins expanded with adjusted operating margin 12.7% and adjusted EBITDA margin 16.5% .
• Regionally, Europe declined 8%, offset by growth in North America (+3%) and Asia (+3%; China +4%); record Q4 new business awards drove full-year bookings over $30B for the third straight year .
• Management issued conservative Q1 and FY2025 guidance (net sales $4.64–$4.84B for Q1; $19.6–$20.4B for FY2025) given tariff and production uncertainties; tax rate ~17.5%, capex ~$880M, FCF from operations ~$2.1B .
• Strategic catalyst: planned tax-free spin-off of the Electrical Distribution Systems (EDS) business by March 31, 2026 and segment realignment to EDS, Engineered Components Group (ECG), and Advanced Safety & UX (ASUX) .

What Went Well and What Went Wrong

What Went Well

• Strong operating performance and cost actions expanded margins: Q4 adjusted operating income rose to $623M (12.7%) and adjusted EBITDA to $811M (16.5%) .
• Record operating cash flow: $1.06B in Q4 and $2.45B for FY2024; management accelerated deleveraging via debt paydown and returned $4.1B to shareholders in 2024 .
• Strategic bookings momentum: “New business bookings reached a fourth quarter record of $10.1 billion…resulting in our third consecutive year of $30+ billion bookings” — Kevin Clark, CEO .

What Went Wrong

• Europe weakness and EV headwinds: Q4 adjusted revenue declined 1% with Europe down 8%; high-voltage EV revenue within EDS was down ~20% in 2024, pressuring volumes and mix .
• Elevated interest expense: Q4 interest expense rose to $107M (vs. $71M YoY) due to financing actions including ASR-related debt in Q3 .
• Prior-year tax benefits distort YoY comparisons: Q4 2023 included a ~$723M deferred tax benefit from entity restructuring, inflating the prior period GAAP EPS and net income .

Financial Results

Consolidated P&L and Margins (USD Millions, except per-share and %)

Notes:

• Q2 GAAP EPS includes Motional transaction gain; Adjusted EPS strips non-GAAP items per company reconciliation .
• Q4 prior-year GAAP EPS was elevated by a deferred tax benefit; current period includes normal tax expense .

Segment Breakdown (USD Millions)

KPIs and Cash Metrics

Guidance Changes

Notes:

• Guidance explicitly excludes potential tariff impacts; management added conservatism to North America production assumptions .
• Motional equity loss expected to impact Q1/FY 2025 adjusted EPS by ~$0.05/$0.30 per share .

Earnings Call Themes & Trends

Management Commentary

• “New business bookings reached a fourth quarter record of $10.1 billion…operating cash flow totaled a record $1.1 billion, allowing us to accelerate our deleveraging” — Kevin Clark .
• “We will remain focused on enabling our customers as they transition to a more feature-rich, software-defined future…execute on the separation of our Electrical Distribution Systems business” — Kevin Clark .
• “We delivered quarterly adjusted EPS of $1.75, an increase of 25% from the prior year…paid down $1.1 billion of outstanding debt” — Varun Laroyia .
• “We believe it’s prudent to include additional conservatism for North American vehicle production in our current outlook for 2025” — Kevin Clark .

Q&A Highlights

• Guidance conservatism: Management haircut customer schedules more than usual; expects typical 18–22% volume flow-through if production surprises to the upside, but did not include it in guidance .
• China strategy: Rapid shift to locals; targeting parity in mix; selective program pursuit with focus on export-capable OEMs; margins balanced via cost reductions and footprint optimization .
• Cost actions: Increased salaried reductions, plant consolidation, engineering productivity, and material cost savings (including China SoCs) to offset volatility and inflation .
• FX/Commodities: Peso hedged; copper largely indexed; FX headwinds mainly euro/R&D-related .
• Semiconductors: Strategic inventory build in 2025 anticipated due to potential industry-wide shortages driven by AI-driven compute demand .

Estimates Context

• S&P Global consensus estimates for Q4 2024 (Revenue, EPS, EBITDA) were unavailable at the time of this analysis due to API request limits; therefore, estimate comparisons and beat/miss judgments are not included [GetEstimates error].
• Where directional color on estimates is critical, revisit when S&P Global data access is restored to assess revisions and potential estimate dispersion.

Key Takeaways for Investors

• Margin resilience despite EV and Europe headwinds: AOI and EBITDA margins expanded sequentially; cost discipline is offsetting volume/mix pressure .
• Conservative 2025 setup: Guidance embeds NA production caution and excludes tariff impacts, potentially setting a bar for upside if policy risks fade or launches normalize .
• Spin-off catalyst: EDS separation should unlock segment-specific valuations and operational focus; watch fall 2025 investor days for both entities .
• China local OEM momentum: Mix shift and bookings with domestic OEMs support medium-term growth in ASUX and selective EDS programs; monitor profitability dynamics .
• Balance sheet actions: Debt paydown and strong OCF provide flexibility for bolt-on M&A and opportunistic buybacks within investment-grade parameters .
• Near-term trading lens: Narrative pivots around conservative guide, bookings strength, and spin-off—headline risks from tariffs and EV production trajectory remain the key stock drivers .
• Medium-term thesis: Software-defined vehicle and ADAS adoption, diversified end-markets (A&D/industrial), and cost/automation initiatives underpin margin durability; segment realignment clarifies performance .

Citations: Financials, guidance, and commentary sourced from Aptiv’s Q4 2024 8-K and press release and the earnings call transcript .