Sign in

You're signed outSign in or to get full access.

SM

STANDARD MOTOR PRODUCTS, INC. (SMP)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 headline: revenue $498.8M and non-GAAP diluted EPS $1.36; EPS beat consensus by ~$0.23 while revenue missed by ~$4.5M. Adjusted EBITDA was $61.7M (12.4% margin). Management raised FY25 sales growth to low-to-mid 20% and tightened adjusted EBITDA margin to 10.5–11.0% . EPS beat and revenue miss vs S&P Global consensus: EPS $1.36 vs $1.135*, revenue $498.8M vs $503.3M*.
  • Segment mix: Temperature Control strength (+14.8% YoY) and Nissens contribution ($84.5M at 16.8% EBITDA margin) offset Vehicle Control weakness (-1.6% YoY; wire category in secular decline) .
  • Balance sheet and leverage improved: net debt cut to $502.3M with leverage down to 2.6x; target remains 2.0x by end of 2026 .
  • Tariffs: pricing offsets largely neutralized tariff costs in Q3; management expects continued offset and views footprint (USMCA-compliant production) as competitive advantage .

What Went Well and What Went Wrong

What Went Well

  • Temperature Control momentum: “robust sales continued, up nearly 15%… early pre-season orders… customers gaining share” . Q3 Temperature Control revenue $144.7M (+14.8% YoY) and gross margin rate 35.9% .
  • Nissens integration performing ahead of plan: $84.5M revenue at 16.8% adjusted EBITDA margin; synergies moving from cost to growth initiatives (cross-selling, new categories) . “We are ahead of plan… capitalizing on each other's strengths to launch new product categories” .
  • Profitability and guidance: adjusted EBITDA $61.7M vs $48.7M YoY; FY25 guidance raised and margin range tightened despite tariff compression . “We remain very bullish about the future” .

What Went Wrong

  • Vehicle Control softness: segment down 1.6% YoY driven by wire sets secular decline; adjusted EBITDA rate pressured by tariff pass-through at cost and DC transition expenses .
  • Engineered Solutions flat with margin pressure: Q3 revenue essentially flat (-0.3%); unfavorable mix and tariff costs lowered gross margin; operating margin 5.7% vs 7.3% last year .
  • GAAP net loss from discontinued operations: Q3 loss from discontinued ops ($34.2M) drove GAAP net loss per share of $(0.19) despite continuing ops diluted EPS of $1.32 .

Financial Results

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$413.379 $493.853 $498.836
GAAP Diluted EPS – Continuing Ops ($)$0.61 $1.17 $1.32
Non-GAAP Diluted EPS – Continuing Ops ($)$0.81 $1.29 $1.36
Gross Margin % (Consolidated)30.2% 30.6% 32.4%
Operating Income ($USD Millions)$24.462 $42.836 $47.636
Adjusted EBITDA ($USD Millions)$42.797 $59.118 $61.652
Adjusted EBITDA Margin %10.4% 12.0% 12.4%
Dividend Declared per Share ($)$0.31 $0.31 $0.31

Segment Revenue Breakdown (YoY)

SegmentQ3 2024 ($MM)Q3 2025 ($MM)
Vehicle Control – Engine Mgmt$121.432 $121.420
Vehicle Control – Electrical & Safety$63.237 $63.192
Vehicle Control – Wire Sets & Other$16.208 $13.070
Vehicle Control – Total$200.877 $197.682
Temperature Control – AC Components$95.698 $114.033
Temperature Control – Other Thermal$30.287 $30.624
Temperature Control – Total$125.985 $144.657
Nissens – Air Conditioning—$36.409
Nissens – Engine Cooling—$32.168
Nissens – Engine Efficiency—$15.960
Nissens – Total—$84.537
Engineered Solutions – Light Vehicle$24.287 $21.977
Engineered Solutions – Commercial Vehicle$22.625 $21.111
Engineered Solutions – Construction/Agriculture$8.082 $8.863
Engineered Solutions – All Other$17.409 $20.247
Engineered Solutions – Total$72.403 $72.198
Other—$(0.238)
Total$399.265 $498.836

KPIs

| KPI | Q1 2025 | Q2 2025 | Q3 2025 | |---|---|---| | Adjusted EBITDA ($MM) | $42.797 | $59.118 | $61.652 | | Adjusted EBITDA Margin % | 10.4% | 12.0% | 12.4% | | Net Debt ($MM) | $600.3 | $577.8 | $502.3 | | Leverage Ratio (Adj EBITDA) | 3.75x | 3.2x | 2.6x | | CapEx (YTD, $MM) | $9.132 | $19.295 | $29.334 | | Cash from Operations (YTD, $MM) | $(60.220) | $(5.903) | $85.681 |

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Sales Growth %FY 2025Low-20s% Low-to-mid 20s% Raised
Adjusted EBITDA Margin %FY 202510–11% 10.5–11% Tightened upward
Leverage TargetYE 20262.0x adjusted EBITDA 2.0x adjusted EBITDA Maintained
DividendNext pay date$0.31 per share (Sep 2, 2025) $0.31 per share (Dec 1, 2025) Maintained

Management noted pricing offsets and mitigation actions are incorporated into guidance; pass-through pricing at cost compresses margin rate, but sales growth and initiatives allow raising EBITDA outlook .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
Tariffs & PricingQ1: Limited Q1 P&L impact; plan is dollar-for-dollar pass-through; footprint lowers exposure . Q2: Costs hit P&L; pricing/mitigation to offset in H2 .Tariff costs largely offset by pricing; exposure “low single digits” inflation; stabilized environment .Improving offset; stabilization
POS/Sell-throughQ1: Vehicle Control POS up low single-digits; Temp Control POS high single-digits . Q2: Strong sell-through; Temp Control hot start .Vehicle Control POS mid-single-digits; Temp Control mid-to-upper single digits across quarter .Stable to strong
Nissens IntegrationQ1: Exceeding expectations; 17.3% EBITDA; synergy plan . Q2: 18% EBITDA; 800 new SKUs in NA; cost synergy ahead .16.8% EBITDA; ahead of plan; next wave: growth synergies, new categories in Europe/US .Consistent outperformance; expanding growth
Distribution Center (Shawnee, KS)Q1: Startup costs $6–8M baseline, automation underway . Q2: DC opened; ramp through year; exit Edwardsville by YE25 .OpEx elevated due to transition; more normal on 9M basis; efficiency benefits expected (automation, freight) .Near-term cost headwind; medium-term efficiency tailwind
Engineered SolutionsQ1: Sales down 11.2%; profitability improved on mix/currency . Q2: -8.3%; softness across markets .Flat; demand stabilized; margins pressured by mix/tariffs .Stabilizing volumes; margin pressure persists
Pricing Elasticity/DemandQ2: Pass-through pricing nominal across broad portfolio; nondiscretionary categories inelastic .No elasticity issues in DIFM categories; demand resilient vs DIY softness in broader market .Resilient demand in DIFM, non-discretionary

Management Commentary

  • “We are very pleased with our solid third quarter results… Sales for the quarter increased nearly 25%, or 3.8% excluding the impact of Nissens.” — Eric Sills, CEO .
  • “Beginning in the third quarter of 2025, our ongoing tariff costs were generally offset with pricing, and we expect this offset to continue going forward.” .
  • “We are ahead of plan… and have begun planning our next wave of initiatives, including capitalizing on each other's strengths to launch new product categories.” .
  • “We remain very bullish about the future.” — Eric Sills (closing remarks) .

Q&A Highlights

  • Demand/elasticity: SMP is not seeing consumer price elasticity issues in DIFM, non-discretionary categories; Vehicle Control POS mid-single-digits, Temp Control stronger .
  • Nissens/Europe: Growth strong and share gains across Europe; favorable demand in east/southeast regions; continued expansion into engine efficiency .
  • OpEx cadence: Q3 OpEx elevated from DC transition and inclusion of Nissens; modeling should include ~$24M OpEx for Nissens; 9M OpEx more in line .
  • POS cadence: Temp Control strongest in August but steady overall; Vehicle Control POS stable across months .
  • Synergies: Active cross-selling and product line expansion on both sides of the Atlantic; preparing new categories in Europe; early days but “nice potential” .

Estimates Context

MetricQ1 2025Q2 2025Q3 2025
Revenue Actual ($MM)$413.379 $493.853 $498.836
Revenue Consensus ($MM)$394.381*$450.205*$503.330*
Revenue Surprise ($MM / %)+$18.998* / +4.8%*+$43.648* / +9.7%*-$4.495* / -0.9%*
EPS Actual (Diluted, Non-GAAP, $)$0.81 $1.29 $1.36
EPS Consensus ($)$0.44*$0.95*$1.135*
EPS Surprise ($ / %)+$0.37* / +84.1%*+$0.34* / +35.8%*+$0.225* / +19.8%*

Note: Consensus and surprise values marked with * are from S&P Global. Values retrieved from S&P Global.

Key Takeaways for Investors

  • Mixed headline print with an EPS beat and slight revenue miss; margin expansion and raised FY25 guidance point to sustained earnings power despite tariff headwinds . EPS/revenue vs consensus detailed above (S&P Global).
  • Temperature Control strength and Nissens’ mid-teens EBITDA continue to drive mix and margin; Vehicle Control headwinds are concentrated in secularly declining wire sets .
  • Leverage de-risking is on track (2.6x); net debt reduced by ~$75M since Q2, targeting 2.0x by YE26—improves optionality for capital allocation and synergy funding .
  • Tariff pass-through and mitigation are working; expect continued margin rate compression offset by sales growth and synergies—watch for narrative stability on tariffs into 2026 .
  • Near-term modeling: include Nissens OpEx and Shawnee DC transition costs; margin tailwinds from automation and freight should emerge post-ramp .
  • Segment rotation: overweight exposure to Temperature Control and Nissens supports resilience; monitor Engineered Solutions margins with mix/tariff dynamics .
  • Tactical: EPS beats and tightened margin guidance are positive catalysts; watch next quarter’s seasonality normalization and tariff developments for incremental revisions.