Executive Summary

Q2 2025 delivered product revenues of $375.1M (+3.2% q/q, -0.2% y/y) with adjusted EBITDA margin at 12.2% (vs 11.1% in Q1), and GAAP diluted EPS of $0.02 impacted by $18.9M net unrealized FX losses; adjusted diluted EPS was $0.54 .
Against S&P Global consensus, revenue was a clear beat ($375.1M vs $363.4M*), while EPS modestly missed ($0.54 vs $0.582*); EBITDA was slightly above consensus on an adjusted basis though consensus tracks EBITDA differently* .
Full-year guidance narrowed: product revenue range lifted at the midpoint ($1.43B–$1.5B), adjusted EBITDA margin range tightened to 11.7%–12.5%, and capex reduced to $55M–$65M .
Commercial momentum remains robust: $620M of new automotive awards in Q2 (>$1B YTD), including full comfort solutions across Ford’s next-gen F-Series; liquidity rose to $416M; net leverage ~0.5x; $10M buyback executed .
Near-term stock catalysts: revenue beat and raised midpoint, Ford F-Series content win, and Q4 margin expansion focus; watch FX volatility and tariff recovery timing (≈15 bps margin headwind) .

What Went Well and What Went Wrong

What Went Well

Secured $620M of new awards in Q2 (>$1B YTD), highlighted by Ford’s next-gen F-Series platform; “full comfort solution provider” content spanning heat, ventilation, lumbar, and massage across F-150/F-250/F-350 .
Automotive Climate and Comfort Solutions (A&CS) revenue +3.8% y/y (or +2.5% ex-FX), outperforming S&P Global’s LV production by 10 bps in relevant markets; strength in North America/Europe .
Strategic adjacency wins (commercial vehicles thermal solutions; valves in power sports) and China mix shifting toward domestic OEMs; “launch of steering wheel heat with hands-on detection” at Xiaomi and Ram 1500 thermal control unit .

Management quote: “We secured all of the heat, ventilation, lumbar, and massage systems on Ford's next generation F-150, F-250, and F-350 platforms, making us the full comfort solution provider on one of the most significant platforms in the market.”

What Went Wrong

Gross margin fell 180 bps y/y to 23.9% due to higher material costs (unfavorable mix), higher labor, and footprint realignment expenses; adjusted EBITDA margin declined y/y to 12.2% .
GAAP net income dropped to $0.5M (from $18.9M y/y) driven by net unrealized FX losses of $18.9M; GAAP diluted EPS $0.02 vs $0.60 y/y .
Asia weighed on performance; underexposure to China domestic OEMs (being addressed), while tariff pass-through timing and dilution added ~15 bps headwind to margins .

Financial Results

Quarterly Performance vs Prior Periods and Estimates

Metric	Q4 2024	Q1 2025	Q2 2025
Product Revenues ($USD Millions)	$352.914	$353.854	$375.090
GAAP Diluted EPS ($)	$0.49	$(0.00)	$0.02
Adjusted Diluted EPS ($)	$0.29	$0.51	$0.54
Gross Margin (%)	24.4%	24.4%	23.9%
Adjusted EBITDA ($USD Millions)	$41.374	$39.341	$45.897
Adjusted EBITDA Margin (%)	11.7%	11.1%	12.2%
Net Income Margin (%)	4.3%	(0.0)%	0.1%

Results vs S&P Global Consensus (Selected)

Metric	Consensus (Q2 2025)	Actual (Q2 2025)	Result
Product Revenues ($USD)	$363,425,200*	$375,090,000	Beat
Primary EPS ($)	$0.58236*	$0.54	Miss
EBITDA ($USD)	$43,192,000*	$45,897,000 (Adjusted)	Above adjusted

Counts: EPS estimates = 5*, Revenue estimates = 5*.

Segment and Product Category Breakdown (Q2 2025 vs Q2 2024)

Category ($USD Thousands)	Q2 2025	Q2 2024	YoY %
Climate Control Seats	$200,020	$199,766	0.1%
Lumbar & Massage Comfort Solutions	$52,530	$45,869	14.5%
Climate Control Interiors	$49,585	$47,031	5.4%
Climate & Comfort Electronics	$5,906	$4,157	42.1%
Automotive Climate & Comfort Solutions	$308,041	$296,823	3.8%
Valve Systems	$25,143	$29,267	(14.1)%
Other Automotive	$30,668	$37,912	(19.1)%
Subtotal Automotive	$363,852	$364,002	(0.0)%
Medical	$11,238	$11,681	(3.8)%
Total Company	$375,090	$375,683	(0.2)%

KPIs

KPI	Q2 2025
Automotive New Business Awards	$620M
Liquidity	$416.3M
Net Leverage	~0.5x
Adjusted Operating Expenses	$58.502M
Share Repurchases	$10.0M

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Product Revenues	FY 2025	$1.4B – $1.5B	$1.43B – $1.5B	Raised midpoint
Adjusted EBITDA Margin	FY 2025	11.5% – 13%	11.7% – 12.5%	Narrowed
Adjusted Effective Tax Rate	FY 2025	26% – 29%	No change	Maintained
Capital Expenditures	FY 2025	$70M – $80M	$55M – $65M	Lowered

Management expects Q3 to be “roughly in line” with Q2 despite industry forecasts of a sequential LV production decline; margin improvement targeted for Q4 via operational initiatives .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024, Q1 2025)	Current Period (Q2 2025)	Trend
Tariffs/macro	Maintained FY25 guide with LV production decline; tariff mechanisms in place; limited net demand changes	~15 bps margin headwind from tariff pass-through timing/dilution; better clarity; Q3 to mirror Q2	Stabilizing assumptions; operational mitigation continues
China exposure	Strategy to shift mix toward domestic OEMs; wins with Great Wall, Leapmotor	70% of China awards YTD with domestic OEMs; aiming ~60/40 global/domestic next year	Improving alignment with market
Product performance (A&CS)	A&CS revenue +1.7% y/y in Q4; +3.8% y/y in Q1; Lumbar/Massage growth strong	A&CS +3.8% y/y; Lumbar/Massage +14.5% y/y; Pulsa.A traction with JLR/BMW	Consistent outperformance vs LV production
Adjacent markets	Early proof-of-concepts in medical; focus on scaling existing platforms	Commercial vehicle thermal solutions; power sports valves; motion furniture pilots; Xiaomi steering wheel HOD launch	Broadening end markets
Medical distribution	N/A	Expanded DUOMED partnership into France for temperature management portfolio	Expansion in Europe
Footprint/operations	Realignment driving long-term margin expansion; Morocco facility shipment approvals	Operational workshops; standardized processes; Q4 margin expansion expected operationally	Execution focus intensifying

Management Commentary

“Our Automotive New Business Awards reached over $1 billion year-to-date... continued innovation, technology leadership, and strong customer relationships.”
“We secured all of the heat, ventilation, lumbar, and massage systems on Ford's next generation F-150, F-250, and F-350...”
“Automotive climate and comfort solutions outperformed actual light vehicle production... weighed down by Asia.”
“Pulsa.A... gaining traction... unmatched in the market; expect profitable incremental growth...”
“We have narrowed the adjusted EBITDA margin range to 11.7% - 12.5%... reduced capex to $55M - $65M...”

Q&A Highlights

Guidance cadence: Q3 expected similar to Q2; margin expansion targeted in Q4 via operational improvements rather than mix/vendor changes .
Ford F-Series award: Full comfort solutions portfolio; continuation of content from prior platform; sourced pre seat-supplier selection due to OEM-direct approach .
Adjacent markets: Power sports valves (single OEM across three platforms); commercial vehicle thermal solutions (heavy truck and last-mile van); motion furniture and two-wheelers in proof-of-concept .
China trajectory: Faster development cycles enable revenue within 6–18 months; target 60/40 global/domestic customer split next year .
Tariffs: ~15 bps headwind in Q2; recovery mechanisms functioning, timing disconnects remain the key margin driver .

Estimates Context

Revenue beat: Actual $375.1M vs $363.4M* consensus; reflects A&CS outperformance and FX tailwinds noted earlier in the year .
EPS miss: Adjusted diluted EPS $0.54 vs $0.582* consensus; GAAP EPS pressured by $18.9M net unrealized FX losses; margin headwinds from tariff timing/pass-through dilution (~15 bps) .
EBITDA: Adjusted EBITDA $45.9M vs $43.2M* consensus; note consensus tracks EBITDA and may not be strictly comparable to the company’s adjusted EBITDA definition .

Values retrieved from S&P Global*.

Where estimates may adjust: Raised revenue midpoint and steady Q3 outlook could lift revenue forecasts; continued FX volatility and tariff timing may temper margin/EPS estimates; management’s Q4 operational improvement focus may support H2 margin revisions .

Key Takeaways for Investors

Revenue execution stronger than feared: clear beat vs consensus on Q2 revenues and raised FY midpoint; monitor sustainability amid industry LV production declines .
EPS pressured by FX volatility and tariff timing; adjusted margin recovery underway with Q4 targeted improvements—position sizing should consider near-term EPS variability .
Commercial momentum intact: $620M Q2 awards and Ford F-Series content reaffirms platform leadership; Pulsa.A traction indicates mix shift toward higher-value comfort solutions .
China strategy gaining traction: accelerated wins with domestic OEMs should reduce regional underperformance and improve growth visibility over 12–24 months .
Capex discipline and operational focus: capex cut to $55M–$65M and process standardization support FCF and margin expansion; attractive for medium-term thesis .
Liquidity and leverage provide flexibility: $416M liquidity and ~0.5x net leverage enable opportunistic capital allocation, including repurchases and M&A .
Trading setup: Near-term catalysts include investor confidence from revenue beat/guidance midpoint raise and Ford platform win; watch FX and tariff headlines for EPS swings .

Values retrieved from S&P Global* (consensus metrics and counts).

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