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GM

General Motors Co (GM)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered revenue of $48.6B (+sequential, -0.3% YoY) and EPS diluted-adjusted of $2.80, with EBIT-adjusted of $3.4B; GAAP EPS was $1.35 as special items weighed on GAAP results .
  • GM raised full-year 2025 guidance for EBIT-adjusted ($12.0–$13.0B), EPS diluted-adjusted ($9.75–$10.50), and adjusted automotive FCF ($10.0–$11.0B), reflecting operational strength and tariff offsets; EPS diluted GAAP range narrowed to $8.30–$9.05 .
  • Operational commentary emphasized tariff mitigation (expanded MSRP offset), disciplined pricing/inventory, record U.S. crossover performance, and strong GM Financial; warranty costs and EV capacity realignment were headwinds .
  • Wall Street estimates: GM beat S&P Global consensus on Q3 adjusted EPS and revenue, but missed on EBITDA; the beat was driven by robust NA mix and GM Financial, offset by tariffs and warranty pressure (estimates via S&P Global; see tables) *.
  • Potential stock catalysts: guidance raise, visible tariff mitigation, improving China equity income, and software/services revenue growth with ~70% gross margins in Super Cruise/OnStar .

What Went Well and What Went Wrong

  • What Went Well

    • Raised FY25 guidance across EBIT-adjusted, EPS diluted-adjusted, automotive OCF and adjusted auto FCF, signaling stronger execution and tariff offsets .

    • Record U.S. crossover deliveries; NA EBIT-adjusted margin was 6.2%, and ex-tariffs would have been ~9%—within the aspirational 8–10% target; GM Financial EBT-adjusted rose to $804M .

    • Management highlighted expanding MSRP offset and broader eligible parts, plus plans to offset ~35% of gross tariff impact with go-to-market, footprint, and cost initiatives; strong software/services momentum with nearly $2B YTD revenue and ~70% gross margins in Super Cruise/OnStar .

    • Selected management quotes:

      • “We are raising our calendar year 2025 guidance… EBIT adjusted of $12.0–$13.0B [and] EPS diluted adjusted of $9.75–$10.5” .
      • “EVs remain our North Star… we will continue to invest… to drive improved profitability” .
      • “We see a clear path back to our historical 8% to 10% EBIT margins in North America over time” .

  • What Went Wrong

    • Warranty expense was a $900M headwind YoY in Q3; management is attacking root causes via supplier validation, AI/OTA updates, and targeted component fixes .
    • EV strategic realignment drove $1.592B in special charges; BrightDrop production at CAMI to be stopped with additional Q4 charges expected, reflecting slower near-term EV adoption and capacity reset .
    • NA margin compressed (6.2% vs 9.7% YoY) and EBIT-adjusted declined YoY (6.9% margin vs 8.4% YoY), primarily reflecting tariffs, warranty costs, and special items .

Financial Results

Quarterly performance (actuals)

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Billions)$44.020 $47.122 $48.591
EPS Diluted (GAAP, $)$3.35 $1.91 $1.35
EPS Diluted-Adjusted ($)$2.78 $2.53 $2.80
EBIT-Adjusted ($USD Billions)$3.490 $3.037 $3.376
Net Income Margin (%)6.3% 4.0% 2.7%
EBIT-Adjusted Margin (%)7.9% 6.4% 6.9%
Adjusted Automotive Free Cash Flow ($USD Billions)$0.811 $2.827 $4.201

YoY Q3 comparison

MetricQ3 2024Q3 2025
Revenue ($USD Billions)$48.757 $48.591
EPS Diluted (GAAP, $)$2.68 $1.35
EPS Diluted-Adjusted ($)$2.96 $2.80
EBIT-Adjusted ($USD Billions)$4.115 $3.376
Net Income Margin (%)6.3% 2.7%
EBIT-Adjusted Margin (%)8.4% 6.9%

Versus Wall Street consensus (S&P Global) *

MetricQ1 2025Q2 2025Q3 2025
Revenue Consensus Mean ($USD Billions)43.411*46.284*45.328*
Primary EPS Consensus Mean ($)2.666*2.477*2.323*
EBITDA Consensus Mean ($USD Billions)6.071*5.240*5.341*
  • Actuals vs estimates highlights (S&P Global): Q3 revenue $48.591B vs $45.328B estimate (beat) *. Q3 adjusted EPS $2.80 vs $2.323 estimate (beat) *. Q3 EBITDA $4.587B actual vs $5.341B estimate (miss) *.
  • Values retrieved from S&P Global.

Segment breakdown

Segment metricQ3 2024Q3 2025
GMNA Net Sales & Revenue ($USD Billions)$41.157 $40.551
GMI Net Sales & Revenue ($USD Billions)$3.517 $3.645
GM Financial Revenue ($USD Billions)$4.031 $4.337
GMNA EBIT-Adjusted ($USD Billions)$3.982 $2.506
GMNA EBIT-Adjusted Margin (%)9.7% 6.2%
GMI EBIT-Adjusted ($USD Millions)$42 $226
China Equity Income ($USD Millions)$(137) $80
GM Financial EBT-Adjusted ($USD Millions)$687 $804

KPIs

KPIQ1 2025Q2 2025Q3 2025
U.S. Market Share (%)17.2% 17.4% 17.0%
Wholesale Vehicle Sales (000s, Total)912 974 977
NA Two-Shift Capacity Utilization (%)109.5% 117.6% 118.3%
EV Deliveries (Units)——67,000
GM Financial Net Income ($USD Millions)685 EBT-adj 704 EBT-adj 589 net income (GMF)

Non-GAAP/special items impact (Q3 2025):

  • Key adjustments included EV strategic realignment ($1,592M), OnStar Smart Driver ($300M), Cruise restructuring ($25M), HQ relocation ($16M), among others; total adjustments were $1,933M in Q3 .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net income attributable to stockholders ($B)FY 2025$7.7–$9.5 $7.7–$8.3 Lowered upper bound
EBIT-Adjusted ($B)FY 2025$10.0–$12.5 $12.0–$13.0 Raised
Automotive Operating Cash Flow ($B)FY 2025$17.0–$20.5 $19.2–$21.2 Raised
Adjusted Automotive Free Cash Flow ($B)FY 2025$7.5–$10.0 $10.0–$11.0 Raised
EPS Diluted (GAAP, $)FY 2025$8.22–$9.97 $8.30–$9.05 Narrowed (lower upper bound)
EPS Diluted-Adjusted ($)FY 2025$8.25–$10.00 $9.75–$10.50 Raised

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
Tariffs/MacroAssumed $4–$5B gross impact, targeting ≥30% offsets; pricing up 0.5–1% YoY . Q2 net tariff impact ~$1.1B; mitigation to offset ~30% FY; MSRP offset in place .Expanded MSRP offset broadening eligible parts; gross exposure improved to $3.5–$4.5B; aim to offset ~35% .Mitigation improving
Supply ChainSwift recovery from supplier fire; increased US sourcing and “buy where we build” .Monitoring China chip supply risk; proactive mitigation teams engaged .Watchlist, proactive
EV Strategy/ProfitabilityModerated production; portfolio success; variable profit near breakeven; focus on cost (LMR/LFP) .EV inventory right-sized; cost-down via chemistries/modules; flexibility between ICE/EV .Recalibrating; cost focus
Warranty/QualityL87 engine remedy; goal to stabilize costs .+$300M QoQ headwind in Q2; tools/OTA reduced incidence .$900M YoY headwind; multipronged reduction underway .
Software/ServicesSuper Cruise expansion; doubling fleet in 2025 .Deferred revenue ~$4B; robust double-digit growth outlook .Nearly $2B YTD revenue; ~70% gross margins; 11M OnStar subs .
Regional Trends (China)$45M equity income in Q1; restructuring progressing .Q2 China equity income $71M; market share gains .Q3 China equity income $80M; China share 6.8% .
Capital Allocation$2B ASR; paused repurchases pending clarity .Resumed open market buybacks in July .$1.5B repurchased in Q3; diluted shares 954M; $0.15 dividend declared .

Management Commentary

  • Strategic priorities: “Expanding our U.S. capacity and working… to increase U.S. content… a clear path back to 8%–10% EBIT margins in North America” .
  • EV realignment: “EVs remain our North Star… we will continue to invest in new battery chemistries like LMR… to drive improved profitability” .
  • Tariff mitigation: “Expansion of the MSRP tariff offset… broadens the scope of parts eligibility… supports tariff mitigation in 2026 and beyond” .
  • Software/services: “We have recognized nearly $2B in revenue from OnStar, Super Cruise and other software services… with gross margins of about 70%” .

Q&A Highlights

  • Tariff mechanics and offsets: Management expects lower net tariffs in 2026 versus 2025, aided by MSRP offsets, footprint moves, and cost actions; Korea/Mexico/Canada outcomes pending finalization .
  • Warranty costs: A $900M YoY headwind; actions include dealer partnerships, supplier quality validation, AI tools/OTA updates, and targeted component repairs to reduce outlays .
  • EV portfolio and demand: Build-to-demand discipline, cost reductions via larger module sizes and chemistries; expected EV demand softness post credit removal, with stabilization into early 2026 .
  • Supply chain risk: Minimal impact from Novelis; teams are addressing China chip exposure and alternate sourcing to avoid production disruption .
  • Capital allocation: Balanced approach with $2.1B capex, $1.3B debt reduction, and $1.5B buybacks in Q3; diluted share count down 15% YoY to 954M .

Estimates Context

  • S&P Global consensus (quarterly): Q3 revenue $45.33B vs actual $48.59B (beat) *. Q3 Primary EPS $2.32 vs actual adjusted EPS $2.80 (beat) *. Q3 EBITDA $5.34B vs actual $4.59B (miss) *.
  • Prior quarters: Q2 revenue $46.28B vs $47.12B actual (beat) *; Q2 EPS $2.48 vs $2.53 actual (beat) *; Q1 revenue $43.41B vs $44.02B actual (beat) *; Q1 EPS $2.67 vs $2.78 actual (beat) *.
  • Note: S&P’s “Primary EPS” tracks adjusted EPS; GM’s non-GAAP EPS (“EPS diluted-adjusted”) reconciles GAAP EPS to exclude special items .
  • Values retrieved from S&P Global.

Key Takeaways for Investors

  • Guidance raised: FY25 EBIT-adjusted, EPS diluted-adjusted, and adjusted auto FCF are all higher; execution and tariff offsets are material drivers .
  • Beat vs Street: Q3 adjusted EPS and revenue beat S&P Global consensus, supported by strong NA mix and GM Financial; EBITDA missed amid tariffs/warranty drag *.
  • Tariff path improving: Expanded MSRP offsets, footprint changes, and cost levers target ~35% mitigation in 2025 and potentially lower net tariffs in 2026 .
  • EV recalibration: Near-term EV demand softness and capacity realignment (Q3 special charges) should reduce EV losses into 2026; maintain build-to-demand discipline .
  • Warranty remediation: Significant initiatives underway to curb warranty costs; management indicates stabilization trends and longer-term tailwinds as measures take hold .
  • Software/services optionality: ~70% gross margins and growing deferred revenue base provide a resilient, high-margin growth vector alongside ICE profitability .
  • Capital returns: Continued buybacks ($1.5B in Q3) and dividend ($0.15); diluted share count trending lower, enhancing per-share metrics .