Garrett Motion Reveals Financial Performance During Q2 of 2025 in Their Earnings Report
Garrett Motion Makes Strong Progress in Q2 2025
Garrett Motion, a leading automotive technology company, has reported a successful Q2 2025, with significant achievements in various areas.
The company repurchased $22 million of common stock and paid out $12 million in quarterly dividends, demonstrating its commitment to returning capital to shareholders. Moreover, it has recovered $14 million in tariffs during the quarter, although there was a 30 basis points margin rate dilution from newly implemented tariffs. Garrett Motion plans to achieve full direct tariff recovery in 2025, aiming to fully offset the impact of tariffs on their costs.
In terms of business wins, Garrett Motion secured awards worth over $1 billion in light vehicle turbo program extensions during Q2 2025. This has increased revenue visibility into 2034. The company's gasoline turbo sales also increased by 4% in Q2 2025, outperforming the industry.
Garrett Motion's Q2 2025 net sales were $913 million, up 3% on a reported basis and flat at constant currency. The company's adjusted EBIT for Q2 2025 was $124 million, with an adjusted EBIT margin of 13.6%.
The company's updated 2025 outlook midpoints include net sales of $3.5 billion, net sales growth at constant currency of minus 1%, net income of $256 million, adjusted EBIT of $500 million, net cash provided by operating activities of $410 million, and adjusted free cash flow of $370 million. Foreign exchange is expected to drive 70 basis points of rate improvement, and the impact of full tariff recovery is expected to drive 20 basis points of margin dilution for the year.
Garrett Motion's financial outlook for 2025 assumes full direct tariff recovery, indicating ongoing efforts to mitigate tariff effects. The company anticipates continued gasoline strength and incremental operating performance to offset unfavorable product mix, slightly improving the margin rate before foreign exchange and tariffs.
The company ended Q2 2025 with $862 million in liquidity, including $630 million in undrawn revolving credit facilities and $232 million in cash. Aftermarket activity is a future growth driver for Garrett Motion.
Garrett Motion has also made steady progress on zero-emission technologies. The company has a new proof of concept partnership on an e-powertrain, strong test results for oil-free cooling solutions, and a significant fuel cell program award. The company has secured major awards in eTurbo, e-powertrain, fuel cell compressor, and non-automotive eCooling products, including a new R&D center established in Wuhan, China.
The company reaffirmed its commitment to distribute at least 75% of free cash flow to shareholders over time through dividends and share repurchases. Olivier Rabiller, President and Chief Executive Officer, also mentioned a third quarter cash dividend payable in September 2025.
The conference call was held on Thursday, July 24, 2025, at 8:30 a.m. EDT, with participants including Olivier Rabiller and Sean Deason, Senior Vice President and Chief Financial Officer.
Garrett Motion continues to reduce its total outstanding shares. Since Q1 of 2023, the company has reduced its total outstanding shares by 39% through share repurchase programs. New large-turbo revenue for backup power and marine is expected to build into the "hundreds of millions of dollars" annually within three to five years.
[1] Source: Garrett Motion Q2 2025 Earnings Release and Conference Call [2] Source: Garrett Motion 2025 Outlook Presentation [3] Source: Garrett Motion Q2 2025 Earnings Release and Conference Call Transcript
- The company's Q2 2025 earnings illustrate considerable financial investments, with $22 million spent on common stock repurchases and $12 million distributed as quarterly dividends.
- Garrett Motion's business strategy includes efforts to recover tariff costs, aiming to achieve full recovery in 2025 and mitigate their impact on costs.
- The company's focus on investing in zero-emission technologies has yielded significant progress, with awards in eTurbo, e-powertrain, fuel cell compressor, and non-automotive eCooling products.
