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    APTV
    Earnings call· Mar 2026(Q1 FY26)

    Aptiv Q1 FY26 earnings call APTV

    May 5, 2026 Source

    Executive summary

    Aptiv Q1 FY26 — Strong New Business Awards and Portfolio Evolution Post-Spin-off

    Aptiv successfully completed the spin-off of its EDS business into Versigent, sharpening its focus on advanced software and hardware solutions for automation, electrification, and digitalization. Despite navigating a dynamic macro environment with rising input costs and production disruptions, the company secured significant new business awards and delivered solid financial results, including record EPS. Management is confident in its ability to mitigate headwinds and drive future growth through strategic diversification and operational rigor.

    Highlights

    5

    • Secured $7 billion of new business awards for Total Aptiv, with $4.6 billion for New Aptiv, including $900 million from non-automotive customers.

    • Total Aptiv achieved record earnings per share of $1.71, an increase of $0.02 from the prior year.

    • New Aptiv delivered high single-digit revenue growth in non-automotive markets and double-digit revenue growth in software and services.

    • New Aptiv achieved margin expansion of 30 basis points, excluding FX and commodities.

    • Paid down $2.1 billion of debt year-to-date, including $300 million in Q1 and $1.8 billion in early April.

    Concerns

    5

    • Total Aptiv revenue increased only 1% versus the prior year despite underlying vehicle production deterioration.

    • Total Aptiv Adjusted EBITDA margin declined 90 basis points year-over-year, driven by FX and commodity headwinds of 180 basis points.

    • New Aptiv Intelligent Systems revenue decreased 1% YoY, impacted by approximately 250 basis points from China program cancellations and a North American OEM supply chain issue.

    • Incremental inflationary pressures on materials, primarily commodities, due to the Middle East conflict, resulting in an additional 60 basis points impact on full-year guidance.

    • New Aptiv is burdened by $70 million in annualized stranded costs post-spin-off.

    Guidance & targets

    12
    CategoryTargetConfidence
    Adjusted Revenue Growth
    4%
    high materiality
    High
    Adjusted EBITDA
    $2.4 billion
    high materiality
    High
    Adjusted EBITDA Margin
    18.6%
    high materiality
    High
    Adjusted EPS
    $5.70 to $6.10
    high materiality
    High
    Effective Tax Rate
    18.5%
    medium materiality
    High
    Free Cash Flow
    $750 million
    high materiality
    High
    Adjusted Revenue Growth
    2%
    medium materiality
    High
    Adjusted EBITDA
    $580 million
    medium materiality
    High
    Adjusted EBITDA Margin
    17.6%
    medium materiality
    High
    EPS
    $1.40
    medium materiality
    High
    Bookings
    More than $20 billion
    high materiality
    High
    Stranded Costs Elimination
    Completely eliminate
    medium materiality
    High

    Segment performance

    5
    SegmentRevenueYoYQoQMargin
    Total Aptiv
    Revenue growth was adjusted. EBITDA margin decline driven by 180 bps FX and commodity headwinds.
    Adjusted EBITDA margin: declined 90 bps YoY
    		$5.1 billion1%—$752 million Adjusted EBITDA
    New Aptiv
    New Aptiv faced some customer mix headwinds but progressed in diversifying revenues.
    Non-automotive revenue growth: high single-digitSoftware and services revenue growth: double-digitMargin expansion (ex-FX/commodities): 30 bps
    		————
    Intelligent Systems
    Revenue impacted by 2025 China program cancellations and lower production at a large North American customer (supplier fire), cumulatively ~250 bps headwind. Margin decline primarily due to 60 bps FX and commodity headwind and incremental investments.
    Software and services growth: double-digit
    		$1.4 billion-1%—Adjusted EBITDA margin declined 90 bps
    Engineered Components
    Revenue reflects 6% growth in non-automotive offset by 2% decline in automotive due to customer mix headwinds in China. Margin decline entirely due to 140 bps commodity and FX headwind.
    Non-automotive growth: 6%Diversified industrials growth: double-digitAutomotive decline: 2%
    		$1.7 billionflat—Adjusted EBITDA margin declined 90 bps
    EDS
    Revenue growth was adjusted. Driven by strength in Asia Pacific (China export, APAC ex-China) and favorable customer mix in North America. Margin decline reflects 260 bps FX and commodity headwind, largely offset by recoveries and volume growth flow-through. Will move to discontinued operations in Q2.
    		$2.2 billion3%—Adjusted EBITDA margin declined 70 bps

    Operational metrics

    19
    New Business Awards
    $7 billion
    Q1 FY26

    Secured for Total Aptiv.

    New Business Awards
    $4.6 billionup approximately 15% from 2025 quarterly average
    Q1 FY26

    Secured for New Aptiv.

    New Business Awards
    $900 million
    Q1 FY26

    Portion of New Aptiv awards from non-automotive customers.

    Gross Leverage
    2.3x
    Q1 FY26

    Consistent with leverage levels prior to ASR program launch in Q3 2024.

    Net Leverage
    1.9x
    Q1 FY26

    Consistent with leverage levels prior to ASR program launch in Q3 2024.

    Share Repurchases
    $75 million
    Q1 FY26

    Deployed towards share repurchases in the quarter.

    Debt Paid Down
    $2.1 billion
    YTD

    Funded by $1.65 billion dividend from Versigent and $400 million from cash on hand.

    Transaction Payments
    -$260 million
    Q1 FY26

    Across New Aptiv and Versigent, consistent with guidance.

    Separation Costs
    $100 million
    Q2 FY26

    Anticipated in Q2 for New Aptiv.

    Tax-related Transaction Payments Recoupment
    $80 million
    later in the year

    Expected recoupment of transaction payments.

    Commodity and FX Headwind
    180 bpsYoY
    Q1 FY26

    Well above the 120 bps forecasted for the quarter.

    Commodity and FX Headwind
    60 bps
    Q1 FY26

    Related to FX and commodities.

    Commodity and FX Headwind
    140 bps
    Q1 FY26

    Entirely a function of commodities and FX.

    Commodity and FX Headwind
    260 bps
    Q1 FY26

    Largely offset by timing of recoveries and flow-through on volume growth.

    Vehicle Production
    down 2%
    H1 FY26

    Expected for the first half of the year.

    Vehicle Production
    down 1%
    H2 FY26

    Expected for the second half of the year, showing improvement.

    Revenue Acceleration from Headwind Abatement
    150 bps
    H1 to H2 FY26

    Contribution to revenue acceleration from first half to second half.

    Revenue Acceleration from Program Launches/Ramps
    300 bps
    H1 to H2 FY26

    Contribution to revenue acceleration from first half to second half.

    Incremental Commodity Impact on Guidance
    60 bps
    since prior guidance

    Incremental inflationary pressures on input costs over the last 90 days, primarily commodities.

    Industry KPIs

    6
    MetricValueDetails
    EPS$1.71USD
    Revenue$5.1 billionUSD
    Operating margin14.7%%
    Adjusted EBITDA ebita$752 millionUSD
    Cash investments balance$3.2 billionUSD
    Share buyback capital return$75 millionUSD

    Product announcements

    6
    ProductTypeDetails
    Intelligent interior cameralaunch
    Integrated high-performance cockpit controllerlaunch
    AI-powered collaborative robot and autonomous mobile robotupdate
    High-speed interconnect launcheslaunch
    High-voltage electrical centerslaunch
    Terminalslaunch

    Deals & partnerships

    10
    VersigentSeparation of Electrical Distribution Systems business into a new independent public company.

    Completed the successful separation of the Electrical Distribution Systems business, better positioning Aptiv to enhance its advanced software and hardware tech stack.

    Robust AI and [indiscernible] roboticsPartnership to enhance functionality and performance of AI-powered collaborative robot and autonomous mobile robot.

    Partnership to enhance AI-powered collaborative robot and autonomous mobile robot for material handling, integrating Aptiv's Pulse sensor and advanced compute solutions.

    ComauPartnership agreement with a top 10 industrial robotics company.

    Secured a partnership agreement with Comau, a top 10 industrial robotics company, accelerating commercial momentum in the robotics market.

    Large North American OEMActive safety award integrating full tech stack (sensors, compute, software).

    Award for incremental large truck and SUV platforms, underscoring the flexibility of Aptiv's solutions and deep technology partnerships.

    Leading China local OEMSensors and advanced compute awards for next-generation EV platform.

    Awards support production for both the China market and export volumes.

    Leading defense primeVxWorks RTOS and Helix virtualization software award.

    Building upon an established long-term partnership with this customer.

    Large North American OEMSoftware tool chain award.

    Will be used to build optimized deterministic software for mission-critical and safety-critical embedded systems, supporting the OEM's software factory initiative.

    Major Korean OEMHigh-voltage [indiscernible] award.

    Combines high performance at a competitive cost, supporting its next-generation multi-powertrain software-defined vehicle platform.

    Multiple aerospace and defense primesHigh-speed interconnects and components awards.

    Awards for lower orbit satellite and subsea applications.

    North American-based global EV OEMLow-voltage connection system award.

    For an integrated high-power energy storage solution that scales to support grid level performance and resilience.

    Risks & headwinds

    3
    Middle East Conflict & Input CostsQ1 FY26 and foreseeable future

    Total Aptiv EBITDA margin declined 90 bps YoY, driven by 180 bps FX and commodity headwinds. Incremental inflationary pressures on materials (resins, metals) impacting full-year guidance by 60 bps.

    Mitigation: Resilient business model, performance initiatives, commercial recoveries, customer pass-throughs. Confident in managing internally and pursuing recoveries from customers.

    Customer Mix Headwinds and Production DisruptionsQ1 FY26, expected to abate in H2 FY26

    New Aptiv Intelligent Systems revenue decreased 1% YoY, impacted by ~250 bps from 2025 China program cancellations and lower production at a large North American customer due to a supplier fire. Engineered Components revenue was flat due to customer mix headwinds in China.

    Mitigation: Diversifying revenue streams into non-automotive markets and software/services, gaining share with local China OEMs, and anticipating recovery in H2 from specific customer issues.

    Stranded Costs Post-Spin-offOngoing until end of 2027

    $70 million in annualized stranded costs for New Aptiv.

    Mitigation: Working to completely eliminate these costs from the cost structure by the end of 2027.

    What to watch in Q2 FY26

    5

    New Aptiv Revenue Growth in China

    Q2 FY26
    CurrentDown 14% in Q1 FY26
    TargetPositive growth

    Why it matters

    Indicates successful new program launches and normalization of prior headwinds, crucial for overall growth acceleration.

    So actually positive growth you'll see in Q2, and that's a result of a couple of things, the launch of new programs, and we see the benefit from that.

    Q&A highlights

    6

    How have the underlying assumptions for FX, commodities, and vehicle production changed since the prior guidance, and how do they impact the maintained full-year outlook?

    Commodities (copper, gold, silver, oil-based resins) are seeing increased inflationary pressures compared to 3 months ago, impacting guidance. FX remains a positive year-over-year. Underlying vehicle production is expected to improve from H1 (down 2%) to H2 (down 1%), aligning with S&P forecasts.

    “from a commodities perspective, copper, gold, silver, oil-based products such as resin, as Kevin mentioned, yes, we are seeing inflationary pressures. Those are up versus our guidance from 3 months ago.”

    asked by Colin Langan · answered by Varun Laroyia

    2 min read6 chapters

    Detailed Narrative

    01

    Versigent Spin-off and New Aptiv Focus

    The successful separation of the Electrical Distribution Systems (EDS) business into Versigent positions New Aptiv to enhance its advanced software and hardware tech stack, further diversify end markets, and accelerate revenue and earnings growth. New Aptiv's investment thesis centers on powering intelligence at the Edge, delivering through a robust operating model that leverages global capabilities, and creating an attractive financial profile with more diversified, higher-margin revenues and significant free cash flow generation.

    02

    Strategic Diversification and Market Penetration

    New Aptiv is expanding its reach beyond automotive into commercial aerospace, telecom, drones, and robotics, with non-automotive markets now representing roughly 25% of the business. The company is gaining share with leading local China OEMs and penetrating markets in Japan, Korea, and India, leveraging its automotive tech stack for new applications. This diversification includes product innovation for new and emerging use cases, such as AI-powered ADAS platforms and robotics.

    03

    Operational Resilience Amidst Headwinds

    Despite ongoing geopolitical dynamics, an evolving macro environment, and rising input costs (resins, metals), Aptiv demonstrated strong operating performance. The company successfully navigated changing vehicle production schedules and offset headwinds through performance initiatives, passing on the majority of input cost inflation to customers. This resilient operating model enabled the company to deliver solid financial results while continuing to invest in key strategic initiatives.

    04

    Strong New Business Awards and Pipeline

    New Aptiv secured $4.6 billion in customer awards in Q1, a 15% increase from the 2025 quarterly average, including $900 million from non-automotive customers. The company expects over $20 billion in bookings for 2026, driven by a large and growing pipeline of commercial opportunities across both Intelligent Systems and Engineered Components segments. These awards reflect the breadth of solutions meeting demanding performance and reliability requirements across various end markets.

    05

    ADAS and User Experience Trends

    ADAS growth was flat in Q1 due to specific OEM supply disruptions, but it is expected to ramp up significantly in H2 2026. User experience solutions are also anticipated to see more significant growth in H2, particularly with new program launches in China and with European OEMs. The company notes increasing domain consolidation and the use of fusion chips, blurring the lines between ADAS and user experience, and driving demand for sensors, compute, and software solutions.

    06

    Commodity Inflation and Mitigation

    The conflict in the Middle East has led to incremental inflationary pressures on materials like copper, gold, silver, and oil-based resins, impacting Q1 results and the full-year outlook. Aptiv expects to offset these higher input costs through internal performance initiatives and commercial negotiations with customers, leveraging its strong track record of recovering costs and providing additional cost reduction opportunities to OEMs.

    AI-generated summary of the company’s earnings call. Not investment advice.