Is it fair to assume that with MirrorEye largely penetrated in Class 8, take rates will be the primary driver of growth going forward?

Natalia Noblet confirmed this assumption, noting that European take rates are higher (35-50%) due to maturity, while North American take rates are currently 5-15% but are expected to grow as the technology matures. “Absolutely right, absolutely right. In Europe, the maturity is higher. We've been also publicly talking about the take rates around 35 to 50 percent, depending on, obviously, the model of the vehicle. And in North America, we assume that around 5 to 15 percent, depending on the customer. obviously this will this will grow for sure this will go for sure it will it as always that the technology takes time to mature but this is going to grow okay.”

Beyond agriculture, what other off-highway markets is Stoneridge targeting for MirrorEye, specifically heavy construction?

Natalia Noblet confirmed that heavy construction is indeed a target market, highlighting the technology's broad applicability. She stated that dedicated teams are actively marketing MirrorEye and other vision products to these new verticals in both North America and Europe. “Absolutely right. Absolutely right. So this is also the beauty of this technology that is applicable to different segments. We do focus on our off-highway agriculture heavy equipment segments with MirrorEye, but also with Agri. of our vision products getting also you know good traction here so absolutely this is this is one of the of the key focus of our teams.”

SRI

Stoneridge (SRI) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Consumer Discretionary· Aug 6, 2026

Source: earnings call transcript

Executive summary

Stoneridge Q2 FY26 — Strong Organic Growth and Operational Efficiency Gains

Stoneridge delivered strong Q2 FY26 results, driven by nearly 8% organic revenue growth and significant operational efficiency gains, including improved SG&A leverage and record MirrorEye sales. Despite gross margin pressures from material costs and inventory, adjusted EBITDA expanded significantly. The company reaffirmed its full-year guidance, balancing market tailwinds with macroeconomic uncertainties, and is focused on strategic execution and capital structure optimization.

Highlights

Organic revenue, excluding FX and Mexico manufacturing agreement, grew nearly 8%, marking the fastest rate in over two years.
MirrorEye sales reached a record $37 million, representing 39% year-over-year growth and 10% quarter-over-quarter growth.
SG&A as a percentage of sales improved by 182 basis points versus last year, contributing to cost structure enhancement.
Adjusted Consolidated EBITDA increased more than six-fold to $5.5 million, the highest level in eight quarters.
Cash from operations totaled $12 million, a 38% improvement versus last year, reflecting strong working capital discipline.
Net debt was reduced by $39 million over the past 12 months, significantly improving the capital structure.

Concerns

Adjusted gross profit margin declined 277 basis points versus the year-ago period to 20.3%, primarily due to higher material expense from currency translation losses and discrete inventory-related costs.
Additional investment in working capital over the balance of 2026 is expected to create near-term variability in cash generation relative to historical norms, driven by significant OEM programs ramping up in early 2027.

Guidance & targets

Category	Target	Timeline	Confidence
Full-year 2026 Revenue	$645 million to $670 million high materiality	FY26	High
Full-year 2026 Adjusted EBITDA	$20 million to $25 million high materiality	FY26	High
Second Half 2026 Revenue	Year-over-year improvement medium materiality	H2 FY26	Medium
Second Half 2026 EBITDA	Year-over-year improvement medium materiality	H2 FY26	Medium
Q3 and Q4 2026 Revenue	Modestly lower than Q2 levels low materiality	Q3 FY26 and Q4 FY26	Medium
Sequential EBITDA Improvement	Improve sequentially over the balance of the year medium materiality	H2 FY26	Medium

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Electronics Growth driven by MirrorEye. Segment-level adjusted operating margin improved 12 basis points versus the year-ago period. The increase in sales combined with cost mitigation efforts and operational efficiencies neutralized the impacts of unfavorable mix, currency-influenced material expense, and inventory-related costs. Core segment growth (ex-FX/Mexico Mfg Agreement): 6% YoYMirrorEye revenue: $37 millionMirrorEye growth YoY: 39%MirrorEye growth QoQ: 10%	$160.9 million	nearly 13%	—	improved 12 bps
Brazil Delivered an outstanding quarter with record sales. Benefited from a temporary competitive supply dislocation in that market and strategic actions to realign product lineup and expand OEM opportunities. The 464 basis point year-over-year improvement in adjusted operating income margin was driven by record gross profit and improved fixed cost leverage across a higher sales base. Revenue growth (ex-FX): nearly 26%Adjusted operating income margin improvement: 464 bps YoY	$20.5 million	38%	—	$2.3 million (11.2% of sales)

Product announcements

Product	Type	Timeline	Details
MirrorEye MP2 system	launch	—
MirrorEye OEM business award (bus and coach)	milestone	Full commercialization expected in 2027

Deals & partnerships

N/A (internal business unit) Sale of the Control Devices business segment.

The Control Devices business segment was sold on January 30, 2026. As a result, the company has applied discontinued operations accounting guidance, retrospectively presenting its financial results as discontinued operations for all periods presented.

Risks & headwinds

Macroeconomic and geopolitical uncertainty Remainder of 2026

Unquantified, but noted as balancing positive tailwinds.

Mitigation:Continue to control what we can control and execute the long-term strategic plan.

Higher material expense due to currency translation losses and discrete inventory-related costs Q2 FY26

Contributed to 277 bps decline in adjusted gross profit margin.

Mitigation:Anticipate lesser impact over the balance of the year, assuming constant currency.

Lower sales of Smart2 tachograph product Q2 FY26

Weighed on gross margin percentage.

Mitigation:Follows completion of last year's European regulatory retrofit campaign, implying a known, non-recurring impact.

Near-term variability in cash generation due to working capital investment Over the balance of 2026

Will necessitate additional investment in working capital.

Mitigation:Investment is for significant OEM programs ramping up in early 2027.

What to watch in Q3 FY26

MirrorEye Take Rate (North America)

Next quarter and beyond

Current 5-15%

Target Growth beyond 15%

Why it matters

Take rates are a key driver for MirrorEye growth in the North American Class 8 truck market.

In North America, we assume that around 5 to 15 percent, depending on the customer. obviously this will this will grow for sure this will go for sure it will it as always that the technology takes time to mature but this is going to grow okay.

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

Q&A highlights

How many more Class 8 truck OEMs are there to target for MirrorEye, and what will drive future growth for the product?

Natalia Noblet stated there are four key Class 8 OEMs in North America and four to five in Europe. She emphasized that while they continuously aim for market share, the focus for growth will increasingly be on take rates within existing OEM programs and expansion into new segments like bus and coach (20+ programs) and off-highway applications (agriculture, heavy construction).

“In North America, obviously, there are four key OEM for a truck class 8 production... and then in Europe would be four to five... our activities are continuously going to have as much share of market as possible. But again, I would like to here focus on the fact that, as you see here, we have 20 plus bus and coach programs and this is continued and we are expanding to off-highway application as well with some good first results.”

asked by Gary Prestopino · answered by Natalia Noblet

2 min read 6 chapters

Detailed narrative

Operational Efficiency & Profitability Initiatives

Stoneridge's initiatives to generate operational efficiencies and enhance profitability are showing results. SG&A as a percentage of sales improved by 182 basis points year-over-year, and adjusted EBITDA increased more than six-fold to $5.5 million, marking the highest level in eight quarters.

The company remains on track to achieve its target of reducing operating costs by $5 million this year, reinforcing a stronger and more profitable foundation for future growth.

MirrorEye Technology Momentum and Market Penetration

Demand for MirrorEye technology continues to accelerate, with sales reaching a record $37 million in Q2 FY26, representing 39% year-over-year growth and 10% quarter-over-quarter growth. This growth is largely driven by European OEM programs and the ramp-up of recently launched North American programs.

A significant new OEM business award for the bus and coach segment, valued at $42 million in estimated lifetime revenue with full commercialization by 2027, further highlights its expanding market applicability beyond trucks into off-highway and agriculture segments.

Commercial Vehicle Market Trends and Outlook

Global commercial vehicle end markets are showing signs of stabilization and modest improvement. Europe is transitioning to modest growth in 2026, while North America, after a deeper cyclical downturn, is now recovering due to a strengthening trucking market. IHS forecasts have been revised upwards, projecting 5.5% year-over-year growth in weighted average OEM end markets for 2026 and an additional 5.4% for 2027, indicating incremental positivity despite ongoing macroeconomic uncertainties.

Stoneridge Brazil's Outstanding Performance

Stoneridge Brazil delivered an outstanding quarter, achieving record sales of $20.5 million, a 38% increase year-over-year (26% excluding currency translation). Adjusted operating income reached $2.3 million, or 11.2% of sales, marking a 464 basis point improvement year-over-year. This performance is attributed to strategic actions to realign the product lineup, expand opportunities with OEM customers, and a temporary competitive supply dislocation in the market.

Balance Sheet Strength and Liquidity Management

The company demonstrated strong balance sheet management, reducing net debt by $39 million over the past 12 months to $151 million, with cash on hand at $72 million. Inventory was reduced by $5 million, and electronics segment days in inventory decreased by 15 days year-over-year.

Stoneridge is on schedule to complete the refinancing process for its existing credit facility, which matures in July 2027, by the end of November, ensuring sufficient liquidity for ongoing operations and growth.

Strategic Priorities and Long-Term Growth

Stoneridge remains focused on advanced technology solutions and strong customer service to drive market outperformance, aiming to outpace market growth by 2-3 times over the long term. Key priorities include enhancing end-to-end quality management, optimizing material and structural costs, and recovering inflationary cost increases.

These efforts, combined with a culture of accountability and continuous improvement, are positioning the company for sustainable performance and achieving near and medium-term financial objectives.

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