Garrett Motion Inc. (GTX): Results of Operations and Financial Condition
Garrett Motion Inc. (GTX) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 Garrett Motion Reports Strong Second Quarter 2026 Results, Increases 2026 Outlook Second Quarter 2026 Financial Highlights • Net sales totaled $976 million, up 5% on a constant currency* basis vs prior year, driven by share of demand gains in passenger vehicles and s
How this was made
The 30-second read
Why it matters
Traders can update GTX’s forward earnings and margin expectations based on the reported quarter and the stated increase to 2026 outlook, while monitoring cash conversion given the working-capital drag.
Market read
Quantified profitability and cash generation improvements, alongside increased 2026 outlook, are the core drivers for near-term positioning in GTX.
What to watch
Operating cash flow fell year over year due to unfavorable working-capital impacts, which could temper enthusiasm despite higher adjusted free cash flow.
Garrett Motion Reports Strong Second Quarter 2026 Results, Increases 2026 Outlook
Net sales increased 7%, gross profit percentage improved to 21.7% from 19.8%, adjusted EBIT increased to $152 million from $124 million, and the company increased the lower ends of its full-year 2026 outlook ranges.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net salesGAAP | $976 million | – | 7% |
| Net sales growth at constant currencynon-GAAP | 5% | – | 5% |
| Cost of goods soldGAAP | $764 million | – | – |
| Gross profitGAAP | $212 million | – | – |
| Gross profit %GAAP | 21.7% | – | – |
| Selling, general and administrative expensesGAAP | $63 million | – | – |
| Income before taxesGAAP | $126 million | – | – |
| Interest expenseGAAP | $24 million | – | – |
| Non-operating incomeGAAP | $2 million | – | – |
| Tax expenseGAAP | $25 million | – | – |
| Net incomeGAAP | $101 million | – | – |
| Net income marginGAAP | 10.3% | – | – |
| Adjusted EBITnon-GAAP | $152 million | – | $28 million |
| Adjusted EBIT marginnon-GAAP | 15.6% | – | 200 basis points |
| Adjusted EBITDAnon-GAAP | $183 million | – | – |
| Adjusted EBITDA marginnon-GAAP | 18.8% | – | – |
| Net cash provided by operating activitiesGAAP | $145 million | – | decrease of $13 million |
| Adjusted free cash flownon-GAAP | $122 million | – | – |
| YTD net salesGAAP | $1,961 million | – | – |
| YTD cost of goods soldGAAP | $1,553 million | – | – |
| YTD gross profitGAAP | $408 million | – | – |
| YTD gross profit %GAAP | 20.8% | – | – |
| YTD selling, general and administrative expensesGAAP | $121 million | – | – |
| YTD income before taxesGAAP | $244 million | – | – |
| YTD net incomeGAAP | $196 million | – | – |
| YTD net income marginGAAP | 10.0% | – | – |
| YTD adjusted EBITnon-GAAP | $303 million | – | – |
| YTD adjusted EBIT marginnon-GAAP | 15.5% | – | – |
| YTD adjusted EBITDAnon-GAAP | $366 million | – | – |
| YTD adjusted EBITDA marginnon-GAAP | 18.7% | – | – |
| YTD net cash provided by operating activitiesGAAP | $243 million | – | – |
| YTD adjusted free cash flownon-GAAP | $171 million | – | – |
Full Year 2026 outlook
- Revenue$3.7 billion to $3.9 billion
- NoteNet sales growth at constant currency (Non-GAAP): +1% to +7%
- NoteNet income (GAAP): $330 million to $360 million
- NoteAdjusted EBIT (Non-GAAP): $560 million to $600 million
- NoteNet cash provided by operating activities (GAAP): $435 million to $525 million
- NoteAdjusted free cash flow (Non-GAAP): $385 million to $475 million
- Note2026 light vehicle industry production: down 2% to 4% from 2025
- Note2026 commercial vehicle industry, including both on- and off-highway: up 1% to 2% from 2025
- Note2026 average light vehicle battery electric vehicle penetration: ~19%
- Note2026 Euro/dollar exchange rate: 1.16 USD
- NoteRD&E investment: ~4.1% of sales
- NoteCapital expenditures: ~2.4% of sales
Capital returns
- The Board of Directors declared a cash dividend of $0.08 per share of common stock, payable on September 15, 2026, to shareholders of record as of September 1, 2026.
- During the second quarter of 2026, the company repurchased $28 million of common stock under its authorized share repurchase program.
- Remaining repurchase capacity was $135 million as of June 30, 2026.
What drove it
- Net-sales growth was driven by higher growth across all verticals.
- Gasoline growth reflected new application launches and program ramp-ups in Europe, India and South America.
- Diesel growth reflected strong demand for light commercial vehicles and pickup trucks in Europe, Asia and South America and program ramp-ups in India.
- Commercial vehicle and industrial growth reflected strong on-highway demand in China following program launches and North America Genset for data centers.
- Aftermarket volumes increased in Europe, China and Australia, resulting in a favorable product mix.
- Adjusted EBIT growth was driven by higher sales volumes, productivity, pricing net of inflation pass-through, lower RD&E costs and favorable product mix.
Concerns
- Net cash provided by operating activities decreased by $13 million, primarily driven by $84 million of unfavorable impacts from working capital changes.
- Cost of goods sold included $18 million of unfavorable product mix, $15 million from foreign currency impacts and $8 million of commodity, transportation and energy inflation.
- Tax expense increased to $25 million from $15 million.
- Non-operating income decreased to $2 million from $6 million, driven by a decrease in foreign exchange transactional gains.
- The outlook assumes 2026 light vehicle industry production will be down 2% to 4% from 2025.
What to watch
- Delivery against the increased full-year 2026 outlook, including net sales of $3.7 billion to $3.9 billion and adjusted EBIT of $560 million to $600 million.
- Working-capital effects on operating cash flow and adjusted free cash flow.
- Commercial vehicle and industrial demand, including on-highway demand in China and Genset applications for data centers in North America.
- Execution on recently secured turbo, genset, e-powertrain and industrial air-compression awards.
- Commodity, transportation and energy inflation, foreign currency impacts, product mix and the assumed 1.16 USD Euro/dollar exchange rate.
Balance sheet and cash flow
- Available liquidity was $788 million as of June 30, 2026, including $158 million in unrestricted cash and cash equivalents and $630 million of undrawn commitments under its revolving credit facility.
- Available liquidity was $807 million as of December 31, 2025, including $177 million in unrestricted cash and cash equivalents and $630 million of undrawn commitments under its revolving credit facility.
- Total principal amount of debt outstanding was $1,386 million as of June 30, 2026, compared to $1,439 million as of December 31, 2025.
- Net cash provided by operating activities totaled $145 million in the second quarter of 2026, compared with $158 million in the second quarter of 2025.
- Adjusted free cash flow was $122 million in the second quarter of 2026, compared with $121 million in the second quarter of 2025.
Analysis
Garrett reported a strong second quarter, with GAAP net sales of $976 million versus $913 million in the prior-year quarter. The company said sales rose 5% on a constant-currency basis and identified growth across all verticals. Gasoline launches and ramp-ups, diesel demand for light commercial vehicles and pickup trucks, China on-highway commercial-vehicle demand, North America data-center gensets, and higher aftermarket volumes supported the quarter.
Profitability improved materially. Gross profit rose to $212 million from $181 million, while gross profit percentage increased to 21.7% from 19.8%. The company cited higher sales volumes, productivity net of labor inflation and repositioning costs, price net of inflation pass-through, lower RD&E costs and favorable product mix as gross-profit contributors. These benefits overcame commodity, transportation and energy inflation. Adjusted EBIT rose to $152 million from $124 million, and adjusted EBIT margin expanded 200 basis points to 15.6%.
GAAP net income increased to $101 million from $87 million, despite tax expense increasing to $25 million from $15 million and non-operating income declining to $2 million from $6 million. SG&A expenses rose to $63 million from $59 million. The company attributed the net-income increase principally to increased gross profit and lower interest expense, partly offset by higher tax expense, lower non-operating income and higher SG&A expense.
Cash conversion was mixed. Net cash provided by operating activities totaled $145 million, below $158 million in the prior-year quarter, as unfavorable working-capital changes outweighed favorable changes in other assets and liabilities and higher net income net of non-cash charges. Adjusted free cash flow was $122 million versus $121 million. Garrett ended the quarter with $788 million in available liquidity, including $158 million in unrestricted cash and cash equivalents, while total principal debt outstanding was $1,386 million.
Capital allocation included $28 million of common-stock repurchases and a declared cash dividend of $0.08 per share of common stock. Management increased the lower ends of its full-year 2026 sales, net-income, adjusted-EBIT, operating-cash-flow and adjusted-free-cash-flow outlook ranges. The guide remains conditioned on light vehicle industry production being down 2% to 4% from 2025, while commercial vehicle industry production is expected to be up 1% to 2% from 2025.
Management, verbatim
Garrett delivered a strong second quarter, highlighting the power of our differentiated technology portfolio and continued share-of-demand gains.
Olivier Rabiller, President and CEO of Garrett
Net sales were $976 million, up 5% at constant currency, and adjusted EBIT margin expanded 200 basis points to 15.6%, driven by disciplined execution across the business.
Olivier Rabiller, President and CEO of Garrett
We also secured multiple turbo wins in industrial for power generation, as well as in passenger and commercial vehicle, while advancing our e-compressor and e-powertrain offerings. Combined with strong profitability and cash generation, these results reinforce our confidence in Garrett’s long-term growth trajectory.
Olivier Rabiller, President and CEO of Garrett
Not in the filing
stated, not guessed- GAAP diluted EPS
- Non-GAAP diluted EPS
- GAAP operating income
- Segment revenue by reportable segment
- Segment year-over-year and quarter-over-quarter comparisons
- Prior-quarter metrics
- Full-year 2026 gross-margin guidance
- Full-year 2026 operating-expense guidance
- Full-year 2026 tax-rate guidance
- Absolute capital-expenditure guidance
- Prior-release outlook for comparison against reported results
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
This SEC Form 8-K includes Q2 2026 results (Item 2.02) and an EX-99.1 earnings release, plus a declared cash dividend.
Ticker impact
Garrett Motion reported Q2 2026 net sales of $976M and expanded adjusted EBIT margin to 15.6%, plus increased full-year outlook.
Likely positive bias for GTX as traders price higher 2026 earnings and margin durability, with follow-through dependent on guidance details not shown here.
This is a primary SEC filing with quantified results (sales, net income, adjusted EBIT, free cash flow) and a stated increase in 2026 outlook, which are direct inputs to valuation and positioning.
Market effects
Supports read-across for automotive/industrial turbocharger and e-powertrain supply chains via evidence of share-of-demand gains and margin expansion.
Highlights strength in China and India commercial vehicle/industrial demand, which may influence regional supplier sentiment.
Reinforces global industrial capex and data-center power generation demand themes through genset-related awards.
Counterpoint
Margin expansion could be partly mix and execution-driven; without detailed guidance ranges, upside may fade if working capital or commodity/FX headwinds reappear.
Key entities
- issuerGarrett Motion Inc.
Nasdaq-listed automotive and industrial technology provider reporting Q2 2026 results and increasing 2026 outlook.
- governanceBoard of Directors
Declared a cash dividend of $0.08 per share payable September 15, 2026.
