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Aptiv (APTV) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Consumer Discretionary· May 5, 2026

Source: earnings call transcript

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

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

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

APTV operating KPIs by quarter

APTV operating KPIs stated on its earnings calls, by fiscal quarter
KPIThis call Mar 2026 Q1 FY26 Jun 2026 Q2 FY26Change vs prior quarter
New business awards
$7B We secured $7 billion of new business awards while also delivering solid financial results, including revenue of over $5 billion, an increase of 1% versus the prior year despite a deterioration in underlying vehicle production. Source: earnings call transcript
$5B This list represents a small portion of the $5 billion of new business awards during the second quarter, bringing our year-to-date total to $10 billion, putting us on track for our $20 billion full year target. Source: earnings call transcript
-28.6%

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Product announcements

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

Versigent Separation 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] robotics Partnership 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.

Comau Partnership 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 OEM Active 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 OEM Sensors and advanced compute awards for next-generation EV platform.

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

Leading defense prime VxWorks RTOS and Helix virtualization software award.

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

Large North American OEM Software 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 OEM High-voltage [indiscernible] award.

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

Multiple aerospace and defense primes High-speed interconnects and components awards.

Awards for lower orbit satellite and subsea applications.

North American-based global EV OEM Low-voltage connection system award.

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

Risks & headwinds

Middle East Conflict & Input Costs Q1 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 Disruptions Q1 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-off Ongoing 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

New Aptiv Revenue Growth in China

Q2 FY26
Current Down 14% in Q1 FY26
Target Positive 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.

Find out whether APTV delivers this. Inve re-checks your case every morning.

Q&A highlights

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 read 6 chapters

Detailed narrative

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.

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.

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.

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.

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.

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.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.