STONERIDGE INC Q4 FY2025 earnings call

• In 2025, focused growth strategy, cost control, and structural cost control helped navigate challenging macroeconomic conditions. Mirai sales over $110 million (+70% y-o-y) and new business awards totaling ~$830 million in estimated lifetime revenue. • Reduced material costs by 80 basis points, quality-related costs by $6.6 million, and drove inventory reductions. Completed sale of control devices segment, focusing resources on high-growth businesses. • Natalia Noble promoted to President and CEO effective April 1st. Jim Ziselman to retire May 20th, remaining as strategic advisor. • StoneRidge's strength in global footprint, advanced technologies, and product portfolio aligned with industry trends of automation and connected vehicles.

For electronics, full-year sales of $551 million outperformed weighted average OEM end markets by ~430 basis points. Mirrorized sales totaled $111 million in 2025, up 69% y-o-y. Electronics adjusted operating income declined 140 basis points due to lower sales, but offset by material cost improvement and lower quality-related costs. For StoneRidge Brazil, full-year sales grew $15 million (+30%), with OEM sales in Brazil reaching $26.7 million (doubled y-o-y). Full-year adjusted operating income improved $4.6 million (+660 basis points) due to increased contribution from incremental sales.

• 2026 revenue expected to grow ~4.2% primarily driven by Mirai growth; Mirai sales expected to grow to at least $160 million (+45% y-o-y). • Smart2 tachograph aftermarket sales expected to decline ~$12 million in 2026. • 2026 EBITDA midpoint guidance $22.5 million, with revenue growth contributing ~$6.5 million, structural cost reductions expected to benefit at least $5 million, and incentive compensation programs expected to drive $6.7 million headwind. • Medium to long-term targets include revenue of $750 million in 2027 (+12% y-o-y) and $850 million to $1 billion by 2030 with 6.8%-10.3% CAGR, and EBITDA of $44 million in 2027 and $80 million to $120 million by 2030.

• Geopolitical volatility could impact performance. • Recovery in end markets and off-highway vehicle production could affect guidance upside. • Legacy warranty issues could impact costs if not managed properly. • Customer price reductions and market pressures could offset positive factors like foreign currency tailwinds and tariff-related reimbursements.

Q: Inquired about legacy warranty costs related to control devices and if they were part of the sale.

A: Legacy warranty questions were for electronics products; warranties related to control devices were passed to the new buyer.

Q: Asked about percentage of revenues from different markets.

A: Brazil currently ~15% of business, electronics business globally ~85%.

Q: Inquired about mirror eye sales growth and impact on other areas.

A: Mirai platform saw significant growth, but other products linked to vehicle production faced downside due to weak commercial vehicle volumes.

Q: Asked about telematics and network agnosticism.

A: Have digital services for telematics, including track and trace in Brazil, with recurring revenue and growing portfolio.