Sensata Technologies (ST) Q4 2025 earnings summary

Executive summary

• Achieved or exceeded guidance midpoints for all quarters in 2025, with sequential margin expansion and a return to organic revenue growth in Q4, demonstrating operational excellence and resilience amid market challenges.

• Completed a major transformation, reorganizing into three segments: Automotive, Industrials, and Aerospace, Defense & Commercial Equipment, each with distinct growth mandates.

• Installed a new leadership team and embedded a disciplined, KPI-driven approach to value creation.

• Improved free cash flow and strengthened the balance sheet, supporting a more resilient organization.

Financial highlights

• Q4 2025 revenue was $918 million, up 1.1% year-over-year; organic revenue grew up to 4%.

• Q4 adjusted operating income was $180 million, with a 19.6% margin, up 30 basis points year-over-year.

• Full year 2025 revenue was $3.70 billion, down 5.8% due to divestitures; organic revenue was flat.

• Record free cash flow of $490 million in 2025, a 25% increase year-over-year, with 97% conversion of adjusted net income.

• Returned $191 million to shareholders via buybacks and dividends; retired or reduced over $354 million in long-term debt.

Outlook and guidance

• Q1 2026 revenue guidance: $917–$937 million; adjusted operating income: $168–$175 million; EPS: $0.81–$0.85.

• Adjusted operating margin for Q1 2026 expected at 18.6%–18.8% excluding tariff impact.

• Expect low single-digit revenue growth for full year 2026, with margin expansion of at least 20 basis points.

• Annual margin floor reiterated at 19%; free cash flow conversion targeted in the high 80s percent.

• Precious metals inflation and tariff changes identified as headwinds, but expected to be offset by supply chain optimization and cost pass-through.