Strattec Security (STRT) Q2 2025 earnings summary

Executive summary

• Q2 FY25 revenue increased 9.6% year-over-year to $129.9 million, driven by new product launches and higher demand, offsetting declines in mature products.

• Net income attributable to STRATTEC rose 29% to $1.3 million ($0.32 per diluted share), with adjusted EPS up 81% to $0.65.

• Adjusted EBITDA for the quarter was $8.0 million (6.1% of sales), up 60% year-over-year; margin expanded 180 basis points.

• Operational cash flow reached $9.4 million in Q2, with year-to-date cash from operations at $20.8 million, a significant improvement over the prior year.

• Strategic initiatives included leadership changes, cost structure optimization, and working capital improvements.

Financial highlights

• Net sales increased 9.6% year-over-year to $129.9 million, with $6 million from new programs and $1.3 million from favorable mix.

• Gross profit rose to $17.2 million (13.2% margin), up from $13.5 million (11.4% margin) in Q2 FY24, aided by $3.5 million in FX benefit.

• Adjusted EBITDA margin improved to 6.1% in Q2 FY25; adjusted net income was $2.6 million ($0.65 per diluted share), up 81% year-over-year.

• Free cash flow for the quarter was $8.5 million, with a $12.5 million improvement versus the prior year.

• Ended the quarter with $42.6 million in cash and cash equivalents.

Outlook and guidance

• $8 million in new annualized pricing expected to begin realization in the third quarter, subject to customer demand.

• Management anticipates continued margin improvement, operational efficiencies, and further cost reductions.

• Tariff impacts and supply chain disruptions remain near-term risks, but proactive measures and a strong balance sheet provide flexibility.