Sensata Technologies — Third Quarter 2026 Earnings Summary

Financial Performance:

• Third quarter 2026 revenue was $1,003.6 million, an increase of 7.7% year-over-year compared to $932.0 million in Q3 2025; this includes a $24.0 million termination payment from a customer regarding an electric vehicle program cancellation.
• Organic revenue growth for Q3 2026 was $63.5 million, or 6.8%, with the termination payment contributing 2.6% to this growth.
• Nine-month revenue through September 30, 2026, was $2,929.1 million, up 5.1% year-over-year from $2,786.6 million; excluding the $24.0 million termination payment, revenue would have been $2,905.1 million.
• Nine-month organic revenue growth was $142.6 million, or 5.1%.
• Q3 2026 operating income was $175.3 million (17.5% of revenue), a significant improvement from an operating loss of $122.9 million (13.2% of revenue) in Q3 2025.
• Q3 2026 adjusted operating income was $215.3 million (21.5% of revenue), up 19.9% from $179.6 million (19.3% of revenue) in Q3 2025; excluding the termination payment, adjusted operating income would have been $191.3 million (19.5% of revenue).
• Nine-month operating income was $482.3 million (16.5% of revenue), up 251.1% from $137.4 million (4.9% of revenue) in the same period last year.
• Nine-month adjusted operating income was $582.7 million (19.9% of revenue), up 10.9% from $525.2 million (18.8% of revenue) in the prior year period; excluding the termination payment, adjusted operating income would have been $558.7 million (19.2% of revenue).
• Q3 2026 earnings per share (EPS) was $0.78, compared to a loss per share of $1.12 in Q3 2025.
• Q3 2026 adjusted EPS was $1.13, up 27.0% from $0.89 in Q3 2025; excluding the termination payment, adjusted EPS would have been $0.97.
• Nine-month EPS was $2.07, compared to a loss per share of $0.22 in the prior year period.
• Nine-month adjusted EPS was $2.97, up 16.9% from $2.54 in the prior year period; excluding the termination payment, adjusted EPS would have been $2.80.
• Q3 2026 net cash provided by operating activities was $225.3 million, and cash on hand was $553.4 million as of September 30, 2026.
• Q3 2026 free cash flow was $198.3 million, representing a conversion rate of 119%.
• Nine-month net cash provided by operating activities was $557.8 million.
• Nine-month free cash flow was $489.3 million, representing a conversion rate of 112%.
• As of September 30, 2026, total gross debt was $2,427.1 million, down from $2,867.2 million as of December 31, 2025.
• Net debt as of September 30, 2026, was $1,873.7 million, down from $2,294.2 million as of December 31, 2025.
• Gross leverage ratio was 2.7x as of September 30, 2026, down from 3.4x as of December 31, 2025.
• Net leverage ratio was 2.1x as of September 30, 2026, down from 2.7x as of December 31, 2025.

Guidance and Future Outlook:

• Sensata expects Q4 2026 revenue to be between $942 million and $972 million, inclusive of tariff cost recovery.
• Sensata expects Q4 2026 adjusted EPS to be between $0.95 and $0.99.
• Guidance reflects trade policies in effect as of October 26, 2026, and excludes the impact of prospective tariff refunds.

Business Segments and Product Lines:

• Automotive: Q3 2026 revenue was $555.8 million with operating income of $157.9 million (28.4% margin); nine-month revenue was $1,629.9 million with operating income of $412.1 million (25.3% margin).
• Industrials: Q3 2026 revenue was $209.8 million with operating income of $60.5 million (28.8% margin); nine-month revenue was $597.2 million with operating income of $164.4 million (27.5% margin).
• Aerospace, Defense, and Commercial Equipment: Q3 2026 revenue was $238.0 million with operating income of $63.5 million (26.7% margin); nine-month revenue was $702.0 million with operating income of $193.6 million (27.6% margin).
• Revenue mix in Q3 2026 was 55.4% Automotive, 20.9% Industrials, and 23.7% Aerospace, Defense, and Commercial Equipment.
• Geographic revenue mix in Q3 2026 was 44.4% Americas, 26.2% Europe, and 29.4% Asia/Rest of World.

Market and Competitive Landscape:

• The company serves customers in the automotive, heavy vehicle & off-road, industrial, and aerospace markets.
• Management stated the core business is stronger with growing conviction in the ability to accelerate long-term organic growth.

Risks and Challenges:

• Forward-looking statements are subject to risks including instability in global markets, supplier interruptions, changes in trade-related tariffs, acquisition or disposition variability, metals pricing fluctuations, cybersecurity threats, product liability, and labor disruptions.
• The company notes that tariff expectations in guidance do not include prospective tariff refunds.

Management Commentary and Tone:

• Stephan von Schuckmann, CEO, stated: "Our core business is stronger, and we have growing conviction in our ability to accelerate long-term organic growth."
• The CEO expressed encouragement regarding value unlocked so far and excitement about future opportunities.

Other Key Points:

• The company reorganized into three operating segments effective in the fourth quarter of 2025, with prior year results recast for comparability.
• In Q3 2026, Sensata returned $17.5 million to shareholders via quarterly dividends and retired $32.6 million of long-term debt through open market repurchases.
• In the first nine months of 2026, Sensata returned $77.5 million to shareholders ($52.4 million in dividends and $25.1 million in share repurchases).
• During the first nine months of 2026, Sensata completed a $400 million cash tender offer to retire approximately $406 million of long-term debt.
• The company has more than 16,000 employees and operates in 13 countries.