Thermal management company also authorized a new $400 million stock repurchase program and said its planned combination with Modine Performance Technologies remains on track for early fourth quarter 2026.
Gentherm reported record second-quarter product revenue of $416.2 million for the period ended June 30, 2026, up 11.0% from $375.1 million a year earlier, or 9.5% excluding foreign currency effects. The company raised its full-year 2026 guidance, lifted its adjusted EBITDA outlook, and approved a new stock repurchase program of up to $400 million. Automotive Climate and Comfort Solutions revenue rose 14.1% year over year, or 12.7% excluding foreign currency translation, which the company said outperformed S&P Global’s mid-July light vehicle production report in its relevant markets by 14 percentage points. Automotive new business awards totaled $690 million in the quarter, while Gentherm said it was selected by two leading North American based furniture brands to supply climate and comfort solutions, marking a fourth straight quarter of new home and office customer wins. Gross margin slipped to 23.2% from 23.9%, mainly because of higher material costs and higher warranty accruals in Automotive and Medical, partly offset by operating leverage. Net income improved to $4.4 million from $0.5 million, while adjusted EBITDA rose to $48.8 million from $45.9 million. GAAP diluted earnings per share increased to $0.14 from $0.02, and adjusted diluted earnings per share climbed to $0.75 from $0.54. Cash flow from operations fell to $2.3 million from $31.7 million, primarily due to restructuring and merger and acquisition expenses. Gentherm ended the quarter with net leverage of about 0.3x and liquidity of $502.3 million. For 2026, the company now expects product revenue of $1.55 billion to $1.65 billion, up from prior guidance of $1.5 billion to $1.6 billion. It raised adjusted EBITDA guidance to $185 million to $200 million from $175 million to $195 million, and adjusted free cash flow guidance to $85 million to $100 million from $80 million to $100 million. The outlook is based on tariffs currently in effect, current customer order forecasts, light vehicle production in Gentherm’s relevant markets declining at a low single-digit rate for full-year 2026 versus 2025, a EUR to USD exchange rate of $1.16/Euro, and an effective tax rate of about 30%. It does not include any impact from the planned combination with Modine Performance Technologies. Gentherm also said it completed key sign-to-close deliverables tied to the planned combination with Modine Performance Technologies and still expects the deal to close by early fourth quarter 2026. Separately, it acquired Innovative Medical Equipment, LLC, maker of the ThermaZone thermal therapy device, to expand its thermal management product portfolio and cross-selling opportunities across healthcare channels.