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GENTEX CORP (GNTX)·Q2 2025 Earnings Summary

Executive Summary

  • Consolidated net sales were $657.9M (+15% YoY), GAAP diluted EPS $0.43 (+16% YoY), and consolidated gross margin 34.2% (+130 bps YoY); adjusted EPS was $0.47 (+27% YoY) .
  • Material beats vs consensus: revenue +$36.7M (+5.9%), EPS +$0.04 (+10.4%), EBITDA +$27.2M (+21.6%); Street had 7 EPS and 8 revenue estimates (values from S&P Global)*.
  • Core Gentex gross margin raised to 34.0–34.5% for FY25 (from 33–34%), and consolidated FY25 guidance updated to include VOXX: revenue $2.44–$2.61B, GM 33–34%, OpEx $370–$390M, tax 16–17% .
  • Shareholder return catalyst: 5.7M shares repurchased in Q2 for $126.2M; new authorization for 40M additional shares (~18% of shares outstanding) announced July 16 .
  • Operating narrative: margin expansion driven by purchasing savings and overhead efficiencies, offset by unreimbursed tariffs ($2.7M in Q2) with reimbursement expected in 2H; China demand impacted by decontenting and tariffs .

What Went Well and What Went Wrong

  • What Went Well

    • Margin execution: core gross margin reached 35.3% (+240 bps YoY, +210 bps QoQ) on purchasing reductions, mix, and efficiencies; consolidated gross margin 34.2% (+130 bps YoY) .
    • Advanced features growth: Full Display Mirror (FDM) nameplates reached 139; FY25 FDM shipments now expected to rise by ~150k–300k units vs 2024 as take rates and launch cadence improve .
    • Capital allocation: repurchased 5.7M shares in Q2; Board added authorization for 40M shares (more than 18% of shares outstanding as of 6/30) .
    • Quote: “This quarter’s gross margin performance is a testament to the hard work and discipline the entire team has put into our margin improvement effort” — CEO Steve Downing .

  • What Went Wrong

    • China revenue fell to ~$33M vs $50–$60M forecast due to counter-tariffs and OEM decontenting; management expects ~$25M per quarter in 2H25 .
    • Unreimbursed tariffs of ~$2.7M pressured margins, though reimbursement is expected later in the year .
    • Auto-dimming mirror unit shipments declined 5% YoY (exterior -13% YoY), reflecting weaker mix and regional pressures .
    • Analyst concern: potential Q4 softening in primary markets (North America, Japan/Korea); management sees Q3 similar to Q2, softness in Q4 .

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD)$541.6M $576.8M $657.9M
Diluted EPS (GAAP) ($)$0.39 $0.42 $0.43
Adjusted EPS ($)——$0.47
Gross Margin (%)32.5% 33.2% 34.2%
Segment Net Sales (Q2 2025)Amount
Automotive$566.5M
Other (Aero, Fire, Medical, Biometrics)$12.5M (vs $13.6M in Q2’24)
VOXX$78.8M
KPI (Units, Q2)20242025YoY
Total Auto-Dimming Mirror Units12,184 11,575 -5%
Total Interior Mirrors7,535 7,534 ~0%
Total Exterior Mirrors4,649 4,041 -13%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Consolidated RevenueFY 2025N/A (VOXX not included in Apr)$2.44–$2.61B Introduced (includes VOXX)
Core Revenue (Primary Markets)FY 2025$2.10–$2.20B (Apr 25) $2.10–$2.20B Maintained
China RevenueFY 2025$50–$120M (Apr 25) $100–$125M Raised
VOXX RevenueFY 2025$240–$280M (Apr 25 disclosure) $240–$280M Maintained
Consolidated Gross MarginFY 2025N/A33–34% Introduced
Core Gross Margin (ex-VOXX)FY 202533–34% (Apr 25) 34–34.5% Raised
VOXX Gross MarginFY 2025N/A27–29% Introduced
Consolidated OpEx (ex severance)FY 2025N/A$370–$390M Introduced
Core OpExFY 2025$300–$310M (Apr 25) $300–$310M Maintained
VOXX OpEx (ex severance)FY 2025N/A$70–$80M Introduced
Tax RateFY 202515–17% (Apr 25) 16–17% Tightened higher
CapExFY 2025$100–$125M (Apr 25) $100–$125M Maintained
D&A (Consolidated)FY 2025$85–$90M (Apr 25) $91–$98M Raised

Earnings Call Themes & Trends

TopicQ4 2024 (Jan 31)Q1 2025 (Apr 25)Q2 2025 (Jul 25)Trend
Gross margin trajectoryTarget ~35% by end-2025; Q4 GM 32.5% GM guide 33–34%; tariff headwind 50–100 bps modeled Core GM 35.3%; FY25 core GM guide raised to 34–34.5% Improving with execution; tariff reimbursement pending
Tariffs and tradeNoted early-2025 tariffs beginning Halted China-bound production; modeled ~$50M tariff COGS passthrough $2.7M unreimbursed tariffs in Q2; expect reimbursement 2H Acute impact; management expects recovery of costs
China demandWeaker mix & segments Risk to China revenue ($50–$120M) China decontenting is primary issue; 2H run-rate ~$25M/quarter Structural pressure; decontenting over replacement
FDM/product launches2.96M FDM units in 2024; new OEMs (Renault, VW) FDM growth guide +100k units in 2025 FDM +150–300k units; 18 net new launches in Q2 Strengthening take rates & cadence
DMS/advanced techPipeline visibility; CES demos First DMS shipments (Rivian); 4 launches through 2026 2 new DMS customers late Q3/Q4; ramp through 2027–2028 Building revenue slope from 2026–2028
Non-auto (PLACE)CES unveiling of smart home solutions —Retail launch of PLACE line; big-box partner shipments began Diversification; new consumer channel
VOXX integrationDeal pending; synergies targeted Close on Apr 1; post-close pricing/sourcing moves ERP/back-office synergies; OpEx to move closer to Gentex % of sales over 12–18 months Gradual cost synergy realization

Management Commentary

  • “Consolidated net sales were $657.9 million… Despite revenue headwinds related to tariffs and reduced sales into the China market, the company more than offset these challenges through strong growth in Full Display Mirror and other advanced features, along with incremental revenue from the VOXX acquisition” — CEO Steve Downing .
  • “There were negatives… pricing and tariffs of 50–100 bps… positives were PPV 100–150 bps and labor/overhead 150–200 bps… we don’t see those reversing in the second half” — CEO Steve Downing on gross margin drivers .
  • “China… the single biggest [issue] is decontenting… profitability of OEMs is squeezed; features are getting removed” — CEO Steve Downing .
  • “We repurchased 5.7 million shares… and announced a new authorization of an additional 40 million shares” — CFO Kevin Nash .
  • “We began shipments of our new PLACE product line through a major big box retail partner during the quarter” — COO/CTO Neil Boehm .

Q&A Highlights

  • Gross margin inflection: Margin tailwinds from supplier savings and overhead drove core GM to 35.3%; Q2 unreimbursed tariff cost ~$2.7M, expected to be reimbursed later in 2025 .
  • China outlook: Q1 ~$43M, Q2 ~$33M; 2H quarterly run-rate ~$25M; structural decontenting rather than full replacement by local suppliers .
  • VOXX integration: ERP/back-office and engineering overlaps targeted; OpEx as % of sales expected to move towards Gentex levels over 12–18 months; VOXX gross margin improvement of 200–300 bps over ~2 years feasible .
  • FDM trajectory: Take rates and launches driving FY25 shipments higher by 150k–300k units; continued new OEM additions .
  • Near-term production cadence: Q3 similar to Q2; softness likely in Q4 in primary markets .

Estimates Context

Metric (Q2 2025)ConsensusActualSurprise
Revenue ($)$621,180,590*$657,858,210 +$36,677,620 (+5.9%)*
Primary EPS ($)$0.3896*$0.43 +$0.040 (+10.4%)*
EBITDA ($)$125,500,550*$152,675,645*+$27,175,095 (+21.6%)*
# of Estimates (EPS/Revenue)7 / 8*——

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Core margin story improving: core GM at 35.3% in Q2 with FY25 guide raised to 34–34.5%; focus remains on supplier PPV and overhead efficiencies — supportive of multiple expansion if sustained .
  • Topline resilience despite macro/trade: consolidated revenue +15% YoY with advanced features offsetting China declines; Q3 likely steady, watch for Q4 softness per management .
  • China risk remains a headwind: decontenting is the primary driver of demand pressure; any tariff relief and reimbursement timing are key swing factors .
  • FDM and DMS are growth pillars: increased FY25 FDM shipment outlook and DMS ramps into 2026–2028 underpin medium-term revenue trajectory .
  • Buyback authorization is a strong capital return signal: added capacity (40M shares) augments Q2 repurchases; opportunistic deployment could support shares .
  • VOXX integration offers cost synergy optionality: ERP and back-office efficiencies plus sourcing moves could lift VOXX margins 200–300 bps over ~2 years .
  • Near-term trading: lean towards Q3 continuity; monitor tariff reimbursement, China run-rate, and any Q4 production downgrades in primary markets .

Additional Notes and Sources

  • Q2 earnings materials: 8-K and press release (financials, guidance) .
  • Q2 call transcript (financial detail, margin drivers, China, VOXX, product launches) – –.
  • Prior quarters for trend analysis: Q1 2025 8-K/PR/call (tariff modeling, guidance, DMS launch) – –; Q4 2024 8-K/PR/call (margin target, FDM new OEMs) – – –.
  • Other relevant Q2 press releases: PLACE retail launch (smart home safety); Boyd Supplier of the Year; RAILINK ecosystem expansion .