Aptiv (APTV)·Q4 2025 Earnings Summary

Aptiv Delivers Record Year, VersaGen Spin-Off on Track for April

February 2, 2026 · by Fintool AI Agent

Aptiv (NYSE: APTV) reported Q4 2025 results that beat consensus expectations, capping a record year for revenue, operating income, and EPS. The auto technology supplier delivered adjusted EPS of $1.86 (beating the $1.83 estimate) on revenue of $5.15 billion (+5% YoY reported, +3% adjusted for FX/commodities). The stock fell ~2% in after-hours trading despite the beats, as investors digested margin compression and the impending VersaGen spin-off.

Did Aptiv Beat Earnings?

Yes. Aptiv delivered beats across revenue and EPS, though EBITDA came in slightly light:

The revenue beat was driven by North America (+8% adjusted growth) and strength in the Electrical Distribution Systems segment (+5% adjusted). EPS benefited from a 9% lower share count following aggressive buybacks throughout 2025.

Beat/Miss History: Aptiv has now beaten EPS estimates for 8 consecutive quarters, demonstrating consistent execution despite volatile auto production and FX headwinds.*

What Did Management Say?

CEO Kevin Clark emphasized the record-breaking year and strategic clarity heading into 2026:

"We delivered another year of record revenue, operating income, and earnings per share, demonstrating our agility within a dynamic landscape, our consistency of operational excellence, and the strength of our product portfolio of industry-leading technologies."

Key themes from the release:

• Operational resilience amid evolving trade policy and OEM production disruptions
• Non-automotive expansion with 8% revenue growth in non-auto markets
• Spin-off progress with VersaGen on track for April 1 trading debut

How Did Segments Perform?

The three segments showed divergent margin trends:

Intelligent Systems saw the largest margin compression (-270 bps YoY). CEO Kevin Clark explained the Q4 drivers on the call:

"On a full-year basis, margins in intelligence systems were up 30 basis points if you exclude foreign exchange... In the quarter, I think we had three impacts... foreign exchange... roughly 170 basis points... engineering credits actually were not as heavily weighted in the fourth quarter... and we've accelerated the investment in some engineering areas in and around technologies and solutions or bringing technologies and solutions into the robotics market."

Despite the margin pressure, bookings momentum was strong at $7B+ for FY 2025 (+65% YoY), with 95%+ of China bookings coming from Local OEMs.

Engineered Components was the margin standout, expanding 60 bps despite FX/commodity headwinds, benefiting from continued performance improvements and Non-Auto growth (+5% YoY).

Electrical Distribution Systems (soon to be VersaGen) grew 5% adjusted but saw margin pressure from labor economics and FX. The segment booked ~$11B in new business awards for FY 2025.

What Changed From Last Quarter?

The sequential margin decline was primarily driven by $66M of FX/commodity headwinds (160 bps impact), which offset strong volume flow-through and manufacturing performance improvements. Cash flow improved significantly as the company typically sees stronger collections in Q4.

How Did the Stock React?

Despite beating estimates, APTV shares fell approximately 2% in after-hours trading to $74.24 from the regular session close of $75.75. The muted reaction likely reflects:

1. Margin compression – Operating margins declined 90 bps YoY to 11.8%
2. Spin-off complexity – Investors digesting the two-company thesis with different profiles
3. FY 2026 guidance – EPS midpoint of $8.45 implies modest growth post-spin

The stock is down ~15% from its 52-week high of $88.93, trading at roughly 9x forward earnings.*

What Did Management Guide?

Aptiv provided detailed guidance for both the combined company (Q1 and partial year) and the two post-spin entities:

Q1 2026 (Combined Aptiv)

FY 2026 Pro Forma

The guidance implies 3% revenue growth for the combined entity and highlights the dramatically different margin profiles: New Aptiv at 18.6% EBITDA margin vs. VersaGen at 10.7%.

What About the VersaGen Spin-Off?

The EDS business will begin trading as VersaGen (NYSE: VGNT) on April 1, 2026. Key details:

• Revenue: $9.1B - $9.4B (2026 estimate)
• EBITDA margin: 10.7% (vs. 18.6% for New Aptiv)
• Free cash flow: $200M - $300M (includes ~$70M separation costs)
• Focus: Vehicle wiring harnesses and electrical architecture

VersaGen CEO Joe Liotine joined the earnings call and emphasized the momentum heading into independence:

"EDS had a very good year in 2025. We posted solid revenue growth and expanded our EBITDA margins through continued progress on our operational initiatives, and drove another year of strong bookings, laying the foundation for future growth. We have momentum heading into 2026, and as an independent company with a strong financial profile, we're confident in our ability to deliver value for shareholders."

Management expects $250M of separation costs at New Aptiv and $70M at VersaGen. The spin creates two "optimally positioned, independent companies" per CEO Clark.

Capital Allocation Highlights

Aptiv continued aggressive shareholder returns in Q4:

The company still has $2.1B remaining under its $5.0B share repurchase authorization. Share count declined 9% YoY, providing meaningful EPS accretion.*

Full Year 2025 Performance

FY 2025 was a record year across key metrics:

The 25% EPS growth was driven by revenue growth, margin expansion, and significant share count reduction. GAAP net income was only $165M due to a $648M non-cash goodwill impairment in the Intelligent Systems segment.

Key Bookings Trends

New business awards totaled $27B for FY 2025, with management guiding to $30B+ in 2026:

Notable booking trends:

• China Local OEMs represented >75% of $5B total China bookings
• Non-China Asian OEMs bookings exceeded $1B
• Non-Auto expansion across A&D, commercial space, industrial, marine, and energy storage

Q&A Highlights: What Analysts Asked

The earnings call Q&A revealed several key investor concerns and management clarifications:

DRAM/Memory Exposure

This was the top question from analysts. CFO Varun Laroyia and CEO Kevin Clark provided detailed color:

"The purchase value is roughly $175 million as we sit here, 2026. And the majority of that is DRAM 3 and DRAM 4... Pricing or price increases for us in calendar 2026 are low double digits, and that's the result of the supply chain management strategy that we've been implementing over the last couple of years."

Key points on memory exposure:

• 2026 pricing impact: Low double-digit increases (well below industry's 100-120% headline)
• Inventory coverage: Built semiconductor inventory to ~12 weeks
• 2027 negotiations: Already underway, confident increases will be below industry averages
• Pass-through: "We're highly confident we'll be able to push those cost increases through to our OEM customers"

Regional Outlook

Management provided geographic color for 2026:

VersaGen Copper Exposure

For VersaGen, copper is the primary commodity exposure:

"We expect copper as of now; we've budgeted that at $5.50 a pound versus a $4.51 number in actuals 2025. That leads to close to $200 million from a top-line revenue perspective."

Approximately 70% of copper exposure is indexed with 3-month pass-through to customers.

Peso Hedging

Given the significant Mexican manufacturing footprint (primarily VersaGen), analysts asked about peso exposure:

"For 2026 in particular, we are essentially hedged about 95% below 18... that certainly lessens the impact up to a certain point."

The peso moved from 21:1 to sub-18:1 throughout 2025, creating a significant headwind that management is now hedged against for 2026.

Wind River Robotics Opportunity

Kevin Clark provided TAM color on the robotics opportunity:

"From a software standpoint, [Wind River is] the tip of the spear... it's a TAM that we estimate to be about $6 billion. When you look at a comparable to our contemporary vehicle... it's roughly $4,000-$5,000 of content on a robot."

Management expects to announce additional commercial robotics partnerships in Q1 2026.

2026 Margin Bridge Walkthrough

Management provided detailed margin bridges during the Q&A:

New Aptiv (post-spin):

Excluding stranded costs, New Aptiv margins expected to expand ~30 bps YoY.

VersaGen:

VersaGen margins expected to expand ~40 bps YoY on a pro forma basis.

Risks and Concerns

1. DRAM pricing in 2027 – 2026 is hedged, but 2027 negotiations ongoing; pass-through to OEMs critical
2. FX/Commodity headwinds – $207M impact in FY 2025; peso hedged 95% below 18 for 2026
3. Spin-off execution – Separation costs of ~$320M combined; operational complexity
4. Vehicle production assumptions – Q1 expected down 4% globally; full year down 1% (was up 1% in Oct/Nov IHS forecasts)
5. China exposure – Trade policy uncertainty and OEM-specific production disruptions
6. Margin pressure – Intelligent Systems margins down 270 bps YoY in Q4 due to engineering investments and timing

Forward Catalysts

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*Values retrieved from S&P Global estimates data and market-data skill.