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VC

VISTEON CORP (VC)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 revenue was $0.917B (-6% y/y) as cockpit electronics strength in Europe/Americas was offset by China softness, BMS declines in the U.S., and a full-month JLR shutdown; adjusted EPS was $2.15 and diluted EPS $2.04 .
  • Versus S&P Global consensus, VC modestly beat EPS (+$0.01), missed revenue (~$45M), and on an SPGI EBITDA basis missed by ~$11M; on company-adjusted basis, EBITDA was $119M and margin 13% (solid execution) *.
  • Full-year guidance was maintained (Sales $3.70–$3.85B; Adj. EBITDA $475–$505M; Adj. FCF $195–$225M), with sales trending below midpoint and profitability/FCF tracking to the high end; capex trending to ~$140M .
  • Capital returns are a near-term catalyst: first quarterly dividend paid and $0.275/share declared for December; Q4 buybacks planned at $20–$30M (with potential to do more opportunistically) .
  • Key watch items: China demand mix (stabilizing sequentially), JLR disruptions (temporary), Ford aluminum plant downtime, and potential industry-wide Nexperia export restrictions risk not baked into guidance .

What Went Well and What Went Wrong

What Went Well

  • Adjusted EBITDA of $119M and 13% margin despite revenue headwinds, reflecting cost discipline, productivity, and commercial execution .
  • Strong commercial momentum: $1.8B in new business wins (YTD $5.7B) led by advanced displays and SmartCore; 28 new product launches across 10 OEMs including Zeekr, Ford, Renault, Corvette, TVS, and Volvo Construction Equipment .
  • Balance sheet strength and cash generation: net cash $459M; adjusted FCF $110M in Q3 and $215M YTD; capital allocation resumed via dividend and planned buybacks .

Selected management quotes:

  • “Adjusted EBITDA margin was 13%, benefiting from our ongoing efforts in product costing and productivity.”
  • “We launched 28 new products, improved our profit margin through productivity measures, and secured $1.8 billion in new business during the quarter.”
  • “We will return additional capital through share repurchases… anticipate retiring between $20 million and $30 million of shares during the quarter.”

What Went Wrong

  • Revenue down 6% y/y to $917M driven by lower BMS volumes, China sales decline, and one customer’s (JLR) cybersecurity-induced shutdown impacting ~$12M .
  • Growth-over-market came in at -5% for the period due to unfavorable production mix and temporary disruptions (JLR, Ford supplier fire) .
  • China market remains a drag (~5 percentage-point impact to growth this year), though sequential sales were stable; BMS expected to be a headwind into 2026 .

Financial Results

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$980 $934 $969 $917
Diluted EPS ($USD)$1.40 $2.36 $2.36 $2.04
Adjusted EPS ($USD)$2.26 $2.40 $2.39 $2.15
Gross Margin ($USD Millions)$131 $138 $141 $131
Adjusted EBITDA ($USD Millions)$119 $129 $134 $119
Adjusted EBITDA Margin %12.1% (calc from $119/$980) 13.8% (calc from $129/$934) 13.8% (calc from $134/$969) 13.0%

Notes: Adjusted EBITDA margin percentages for Q3 2024–Q2 2025 are computed from disclosed figures.

Estimates vs Actuals (S&P Global)

MetricQ1 2025 Estimate*Q1 Actual*Q2 2025 Estimate*Q2 Actual*Q3 2025 Estimate*Q3 Actual*
Revenue ($USD)$910.98M$934.00M$974.15M$969.00M$962.10M$917.00M
Primary EPS ($USD)$1.859$2.40$2.146$2.39$2.135$2.15
EBITDA ($USD)$106.14M$118.00M$119.94M$122.00M$119.11M$108.00M

Values retrieved from S&P Global.*

KPIs

KPIQ1 2025Q2 2025Q3 2025
New Business Wins ($USD Billions)$1.9 $2.0 $1.8
Product Launches (#)16 21 28
Adjusted Free Cash Flow ($USD Millions)$38 $67 $110
Net Cash ($USD Millions)$343 $361 $459

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
SalesFY 2025$3.70–$3.85B $3.70–$3.85B Maintained (sales trending below midpoint)
Adjusted EBITDAFY 2025$475–$505M $475–$505M Maintained (tracking to high end)
Adjusted Free Cash FlowFY 2025$195–$225M $195–$225M Maintained (tracking to high end)
CapExFY 2025N/A~$140M (trend) Update (lower than original expectation)
Share RepurchasesQ4 2025N/A$20–$30M planned; may exceed opportunistically Initiated Q4 activity
DividendOngoingInitiated $0.275/share (July) $0.275/share payable Dec 5, 2025 Maintained

Additional outlook detail: Management tracking FY sales “closer to ~$3.75B” and expects Q4 sequential sales up modestly; JLR shutdown and Ford aluminum downtime are temporary .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q3 2025)Trend
AI/technology initiatives (SmartCore HPC, Cognito AI)Portfolio focus on digital cockpit; wins with Asia ex-China and two-wheeler OEMs Second HPC win (Chery); Cognito AI enabling in-car GenAI; dual-architecture solutions (Qualcomm/NVIDIA) Increasing momentum
Supply chainQ2: vertical integration to de-risk; paused buybacks earlier due to tariffs but resumed Flagged Nexperia export restriction risk (industry-wide); ~30 days inventory; mitigation underway Emerging risk to watch
Tariffs/macroQ1: withheld guidance due to tariff uncertainty NA demand impact minimal; guidance maintained; sales below midpoint Stabilizing
Product performanceRamps and new launches supporting cockpit Cockpit strong; BMS down significantly y/y; sequentially modestly higher Mixed: Cockpit strength; BMS headwind
Regional trendsQ1/Q2: China softness; Europe/Americas solid China stable sequentially; y/y down; management expects growth over market in 2026 with back-half launches Gradual improvement into 2026
R&D executionResource optimization; acquisitions to enhance UX/HMI Net engineering 6.3% of sales (ex-acquisitions ~5%); AI-driven productivity; platform approach Efficiency focus sustained
Regulatory/legal—JLR shutdown from cyberattack; Nexperia restrictions (not in guidance) Near-term operational headwinds

Management Commentary

  • CEO: “Sales for the third quarter were $917 million… primarily due to the impact of the unplanned production shutdown at JLR… We launched 28 new products… and secured $1.8 billion in new business.”
  • CEO on China: “Sales remained stable sequentially… represent a baseline level… from which we expect to return to growth in the coming years.”
  • CFO: “Adjusted EBITDA margin was 13%… net positive non-recurring items contributed ~half a point.”
  • CFO on capital returns: “In addition to our recurring quarterly dividend of $0.275 per share, we will return additional capital through share repurchases… anticipate retiring between $20 million and $30 million of shares during the quarter.”
  • CFO on outlook: “Adjusted EBITDA is trending towards the high end… CapEx trending closer to $140 million… we may go beyond buyback range on an opportunistic basis.”

Q&A Highlights

  • China trajectory: ~20 new model launches in 2026, back-half weighted; expectation to outperform customer vehicle production next year (growth over market returns) .
  • Nexperia risk: Supply stopped Oct 4; ~2–3 weeks typical inventory buffers; VC holds higher inventory since prior crisis; seeking alternate parts, but risk not in guidance; monitoring diplomatic resolution .
  • BMS outlook: BMS ~5% of sales; modeling a conservative ~20% decline in 2026 vs 2025; recovery payments (piece price or lump sum) anticipated as volumes reset .
  • Margins/one-timers: ~$30M one-timers in 2025 (H1 ~$25M, Q3 ~$5M); normalize when building bridges to 2026 .
  • Toyota exposure: Launch cadence 2 programs in 2025, 5 in 2026, 7 in 2027; ~10% of revenue by 2028 from cluster/displays with opportunity to expand across platforms and electronics .

Estimates Context

  • EPS: Adjusted EPS of $2.15 modestly beat consensus ($2.135); sequential EPS declined vs Q2 ($2.39) as headwinds (China, BMS, JLR) weighed on sales *.
  • Revenue: $917M missed consensus ($962M) by ~$45M, reflecting production mix and temporary disruptions (JLR, Ford aluminum supply fire) *.
  • EBITDA: On SPGI basis, EBITDA of $108M missed consensus ($119M); on company-adjusted basis, EBITDA was $119M with a 13% margin (solid execution) * .

Values retrieved from S&P Global.*

Where estimates may need to adjust: FY sales bias down towards ~$3.75B given mix/disruptions; profitability/FCF bias up to high end of ranges given margin execution and working capital/cash conversion .

Key Takeaways for Investors

  • Revenue miss was driven by identifiable, largely temporary factors (JLR cyber shutdown, Ford supplier fire); margin execution remained strong (13% adj. EBITDA) .
  • Capital return story accelerating: dividend in place and Q4 buybacks of $20–$30M planned, with capacity to do more (net cash $459M) .
  • China appears to have stabilized sequentially; 2026 back-half launches (SmartCore HPC) could reaccelerate growth over market, supporting medium-term top-line trajectory .
  • BMS is a small (~5%) contributor and a manageable headwind into 2026; cockpit electronics and displays remain the growth engine across regions .
  • Watch the Nexperia situation for potential industry-wide supply impacts; not embedded in guidance and could represent an external risk .
  • FY 2025 guide maintained; sales likely below midpoint while EBITDA/FCF trend to high end—a setup where delivery on Q4 sequential sales and continued margin discipline can support estimate stability or modest upward revisions for profitability .
  • Medium-term thesis: secular cockpit content growth (large displays, AI-enabled SmartCore), Toyota/Honda/commercial vehicle ramps, and vertical integration underpin margin resilience and FCF conversion .