Gentherm Incorporated Q4 FY2025 earnings call

• Strategic initiatives: Broke out technologies into four platforms (thermal management, air moving devices, pneumatic solutions, and valve systems) to pursue business in other markets. - Footprint realignment: Continues through 2027, with benefits expected to flow through and contribute to margin expansion. - Organic growth: Generated over $300,000,000 of lifetime revenue in non-light vehicle markets in 2025, expanded into commercial vehicles, powersports, home and office. - Combination with Modine Performance Technologies: Expected to close by end of 2026, creating a $2,600,000,000 market leader with potential to grow to over $3,500,000,000, with near-term cost synergies and product/integration opportunities.

Automotive: Generated $1,500,000,000 in revenue in 2025, increased 2.9% compared to prior year (1.8% ex-FX). Automotive Climate and Comfort Solutions revenue increased 5.8% ex-FX, offset by declines in other automotive products due to planned exits. Adjusted EBITDA in 2025 was $175,000,000 (11.7% of sales). Adjacent markets: Home and office expected to contribute $50,000,000 - $100,000,000 in revenue by 2028; Medical's ThermoFix system expected to start contributing revenue this year and be a key contributor to doubling the Medical business before 2030.

• 2026: Revenue expected between $1,500,000,000 - $1,600,000,000 (up ~3% midpoint ex-FX). Adjusted EBITDA expected $175,000,000 - $195,000,000 (midpoint ~12% margin, 30 basis points expansion). Adjusted free cash flow expected $80,000,000 - $100,000,000. Second half revenue expected slightly stronger than first half. - 2027: Preliminary revenue outlook $1,700,000,000, up ~10% vs 2026 midpoint, supported by strong launch activities and adjacent market pursuits.

Q: On adjacent end markets and 2026-2027 revenue from adjacent markets, A: Continue to lean into adjacent markets like home and office and Medical, with home and office expected to contribute $50M - $100M by 2028 and Medical's ThermoFix to contribute to doubling the Medical business.

Q: On footprint realignment timing and 2027 margin, A: Timing of footprint transitions remains, with benefits expected to flow through in 2027 and margin expansion expected to accelerate with revenue growth.

Q: On China positioning and ThermoFix, A: Saw strong growth in China in Q4, with global OEMs increasing take rates; ThermoFix expected to start contributing revenue this year with more new product introductions to come.

Q: On valves in data centers, A: Application in data centers is liquid cooling, with Modine Performance Technologies providing an avenue to enter the power gen market which includes liquid cooling applications requiring valve technology