Garrett Motion Inc. Q1 FY2026 earnings call

Bullet points:

• Olivier highlighted strong Q1 financials driven by growth in muted industry and disciplined execution, with net sales up, adjusted EBIT and free cash flow positive, and increased 2026 full-year outlook upper range.
• Secured wins across turbo portfolio, including gasoline awards and industrial applications. Progress in zero-emission technologies with commercial vehicle e-powertrain and industrial cooling compressor production awards.
• Sean reviewed net sales, adjusted EBIT, adjusted free cash flow, liquidity position, share repurchases, and dividend, noting sequential growth across verticals and margin improvement due to volume and mix.

Net sales for the first quarter were $985 million, up 6% at constant currency. Adjusted EBIT was $151 million with an adjusted EBIT margin of 15.3%. Double-digit growth was seen in commercial vehicle, industrial, and aftermarket. Revenue contribution came from growth in passenger vehicles, commercial, off-highway, and industrial segments with share of demand gains.

Bullet points:

• Anticipate strong demand across all verticals in first half of 2026.
• Increased upper range of 2026 full-year outlook midpoints: net sales 3.75 billion (2% growth at constant currency), adjusted EBIT $560 million (14.9% margin), adjusted free cash flow $415 million.
• Maintained low end of outlook range due to macroeconomic uncertainties and geopolitical events.

Bullet points:

• Discussion of factors causing results to differ materially from forward-looking statements, including macroeconomic and geopolitical events that could impact performance.

Q: Nathan Jones of Stifel asked about oil-free compressor progress, interest from customers, and e-powertrain award details.

A: Shipping first units soon, strong industry interest, significant e-powertrain win in China with Hyundai partnership.

Q: James Mulholland of Deutsche Bank inquired about industrial sales progress and commercial vehicle in North America and Europe.

A: Industrial sales to grow low double digits, commercial vehicle recovery seen with off-highway and China growth.

Q: Jake Scholl of BNP asked about profitability puts and takes and China success in zero emissions.

A: No material impact from Middle East war on company, China driving zero-emission success due to high electric truck commitment and big battery makers there.

Q: Ahmed Korshand of BWS Financial asked about design wins and zero emissions composition.

A: Design wins translate to volume, zero emissions composition to be disclosed more in three weeks