Gentherm (THRM) Q2 2026 earnings summary

Executive summary

• Achieved record Q2 2026 revenue of $416.2 million, up 11.0% year-over-year, driven by strong automotive segment growth and new business awards totaling $690 million.

• Raised full-year 2026 guidance for product revenues, adjusted EBITDA, and free cash flow, reflecting robust commercial execution and operational discipline.

• Completed acquisition of Innovative Medical Equipment (IME) for $34 million, expanding the medical product portfolio and cross-selling opportunities.

• Advanced the Modine Performance Technologies merger, expected to close by early Q4 2026, diversifying revenue and creating a global leader in thermal and precision flow management.

• Announced a new $400 million stock repurchase program, replacing the prior authorization.

Financial highlights

• Q2 2026 product revenues reached $416.2 million, up 11.0% year-over-year; Automotive Climate and Comfort Solutions revenue grew 14.1%.

• Adjusted EBITDA was $48.8 million (11.7% margin), with adjusted diluted EPS of $0.75, up from $0.54 year-over-year.

• Gross margin was 23.2%, down from 23.9% year-over-year, impacted by higher material and warranty costs.

• Adjusted free cash flow was $16 million year-to-date; CapEx was $14 million, down $9.5 million from prior year.

• Ended Q2 with net leverage of 0.3x and liquidity of $502 million.

Outlook and guidance

• Raised 2026 full-year guidance: product revenue expected at $1.55B–$1.65B (~5% growth), adjusted EBITDA $185M–$200M (~12% margin), and adjusted free cash flow $85M–$100M.

• Margins expected to dip in Q3 before rebounding in Q4.

• Confident in reaching $1.7 billion+ revenue in 2027 and exceeding $3.5 billion by 2030 post-Modine merger.

• Guidance assumes current tariffs, customer order forecasts, and a EUR/USD rate of $1.16.