BorgWarner (BWA) Q4 2025 earnings summary

Executive summary

• Net sales reached $14,316 million in 2025, up 1.6% year-over-year, driven by 23% growth in light vehicle e-product sales and strong demand for hybrid and BEV products.

• Adjusted operating margin expanded by 60 basis points to 10.7%, and adjusted EPS grew 14% year-over-year to $4.91.

• Free cash flow surged 66% to $1,208 million, with over 50% returned to shareholders via dividends and share repurchases totaling $630 million.

• Secured a record number of new product awards across foundational and e-product portfolios, supporting long-term growth.

• Entered the data center and microgrid market with a modular turbine generator system, expected to generate over $300 million in sales in its first production year (2027).

Financial highlights

• Q4 2025 net sales were $3,572 million, up from $3,439 million in Q4 2024, aided by stronger foreign currencies and organic growth.

• Q4 adjusted operating margin was 12.0%, up from 10.2% a year ago.

• Adjusted EPS from continuing operations increased by $0.34 year-over-year, supported by higher operating income and share repurchases.

• Operating cash flow increased 19% to $1,648 million in 2025.

• GAAP operating margin for 2025 was 3.7% due to $624 million in impairment charges.

Outlook and guidance

• 2026 net sales expected between $14.0 billion and $14.3 billion, with organic sales projected to decline 1.5%–3.5% year-over-year.

• Adjusted operating margin guidance for 2026 is 10.7%–10.9%, with EPS expected at $5.00–$5.20 per share.

• Free cash flow for 2026 forecasted at $900 million–$1,100 million, with higher capital spending to support new launches.

• Light vehicle e-product sales expected to grow low double digits in 2026; battery business to remain a headwind.

• CapEx planned at $600 million to $700 million; adjusted tax rate for ongoing operations ~23%.