third quarter 2026
Filed Oct 23, 2026Gentex reported third-quarter 2026 net sales of $647.7 million, gross margin of 33.4%, and GAAP diluted earnings per share of $0.43 while lowering elements of its 2026 outlook and maintaining 2027 revenue guidance of $2.80 billion to $2.90 billion.
Sales, gross margin, GAAP operating income, GAAP net income, and GAAP diluted EPS were below the respective third-quarter 2025 figures, while Premium Audio and non-automotive revenue grew and the Company maintained its 2027 revenue outlook.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Q3 2026 net salesGAAP | $647.7M | – | – |
| Nine months ended September 30, 2026 net salesGAAP | $ 1,974,452,482 | – | – |
| Q3 2026 cost of goods soldGAAP | $431.4B | – | – |
| Nine months ended September 30, 2026 cost of goods soldGAAP | $ 1,288,497,162 | – | – |
| Q3 2026 gross profitGAAP | $216.3B | – | – |
| Nine months ended September 30, 2026 gross profitGAAP | $ 685,955,320 | – | – |
| Q3 2026 gross marginGAAP | 33.4% | – | – |
| Q3 2026 engineering, research & development expenseGAAP | $ 51,568,685 | – | – |
| Nine months ended September 30, 2026 engineering, research & development expenseGAAP | $ 152,480,305 | – | – |
| Q3 2026 selling, general & administrative expenseGAAP | $ 45,925,812 | – | – |
| Nine months ended September 30, 2026 selling, general & administrative expenseGAAP | $ 145,755,108 | – | – |
| Q3 2026 impairment chargesGAAP | $3B | – | – |
| Nine months ended September 30, 2026 impairment chargesGAAP | $ 5,800,000 | – | – |
| Q3 2026 severance expenseGAAP | $777.0M | – | – |
| Nine months ended September 30, 2026 severance expenseGAAP | $ 1,862,392 | – | – |
| Q3 2026 operating expensesGAAP | $101.3M | – | – |
| Nine months ended September 30, 2026 operating expensesGAAP | $ 305,897,805 | – | – |
| Q3 2026 adjusted operating expensesnon-GAAP | $97.5M | – | – |
| Q3 2026 income from operationsGAAP | $115.1M | – | – |
| Nine months ended September 30, 2026 income from operationsGAAP | $ 380,057,515 | – | – |
| Q3 2026 adjusted income from operationsnon-GAAP | $118.8M | – | – |
| Q3 2026 other lossGAAP | $7.8M | – | – |
| Nine months ended September 30, 2026 other lossGAAP | $ 17,964,539 | – | – |
| Q3 2026 adjusted other lossnon-GAAP | $3.1M | – | – |
| Q3 2026 income before income taxesGAAP | $ 107,216,724 | – | – |
| Nine months ended September 30, 2026 income before income taxesGAAP | $ 362,092,976 | – | – |
| Q3 2026 income tax provisionGAAP | $16.65B | – | – |
| Nine months ended September 30, 2026 income tax provisionGAAP | $ 58,923,261 | – | – |
| Q3 2026 effective tax rateGAAP | 15.5% | – | – |
| Q3 2026 net income attributable to GentexGAAP | $90.6M | – | – |
| Nine months ended September 30, 2026 net income attributable to GentexGAAP | $ 303,709,445 | – | – |
| Q3 2026 adjusted net income attributable to Gentexnon-GAAP | $97.8M | – | – |
| Q3 2026 basic earnings per share attributable to GentexGAAP | $0.43 | – | – |
| Q3 2026 diluted earnings per share attributable to GentexGAAP | $0.43 | – | – |
| Nine months ended September 30, 2026 basic earnings per share attributable to GentexGAAP | $ 1.44 | – | – |
| Nine months ended September 30, 2026 diluted earnings per share attributable to GentexGAAP | $ 1.44 | – | – |
| Q3 2026 adjusted basic earnings per sharenon-GAAP | $0.47 | – | – |
| Q3 2026 adjusted diluted earnings per sharenon-GAAP | $0.47 | – | – |
| Q3 2026 cash dividends declared per shareGAAP | $0.12 | – | – |
| Nine months ended September 30, 2026 cash dividends declared per shareGAAP | $0.36 | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| AutomotiveExpected unit trends and strong content growth across primary markets were offset by discrete headwinds in China and from the VW program loss. | $552.5M | increased approximately 2% quarter over quarter, excluding the China and VW headwinds | – |
| Premium AudioPremium Audio revenue increased year over year. | $54.7M | – | increase of approximately 27% |
| Other ProductsGrowth was driven primarily by Aerospace and Fire Protection revenues, which increased 135% and 36%, respectively, partially offset by lower aftermarket and accessory sales. | $40.5M | – | 5% increase |
| Automotive North AmericaNorth American automotive revenue growth outpaced regional light vehicle production, which declined 5%. | $ 263,279 | – | 3 % |
| Automotive EuropeEurope produced a 13% year-over-year growth rate apart from the Volkswagen program loss. | $ 126,624 | – | — % |
| Automotive Japan/KoreaAutomotive sales by region as reported. | $ 129,005 | – | (8) % |
| Automotive ChinaPreviously discussed industry conditions continued to pressure unit shipments and revenue. | $ 22,072 | – | (44) % |
| Automotive Rest of WorldAutomotive sales by region as reported. | $ 11,541 | – | (1) % |
2026 Annual Guidance (as of October 23, 2026) outlook
- RevenueApproximately $2.65 billion
- Gross margin34.0% – 34.5%
- Operating expenses$395 – $410 million (excluding severance and impairments)
- Tax rate16% – 16.5%
- NoteCapital Expenditures: $100 – $115 million
- NoteDepreciation & Amortization: $100 – $105 million
- Note2027 Revenue Guidance: $2.80 billion to $2.90 billion
- NoteThe updated gross-margin guidance includes an estimated $10 million to $15 million of incremental cost increases expected in the fourth quarter of 2026, with related recoveries not anticipated to be reimbursed until the first half of 2027.
Capital returns
- The Company repurchased 5.7 million shares of its common stock at an average price of $23.44 per share, for a total of $132.6 million during the third quarter of 2026.
- Year-to-date, the Company repurchased 11.6 million shares for a total of $270.2 million, at an average price of $23.28 per share.
- As of September 30, 2026, the Company had approximately 24.3 million shares remaining available for repurchase under its previously announced share repurchase plan.
- Cash dividends declared per share were $0.12 for the third quarter of 2026 and $0.36 for the nine months ended September 30, 2026.
What drove it
- North American automotive revenue increased approximately 3% compared with the third quarter of 2025 despite a 5% decline in regional light vehicle production.
- Revenue was approximately $35 million below the Company's forecast at the beginning of the quarter due to certain customer issues and delayed launches.
- Automotive content growth across primary markets supported performance.
- Non-automotive revenue increased approximately 17% year over year and represented 15% of total Company revenue, compared with approximately 12% in the third quarter of 2025.
- The Company secured its first PCBA business award, with production currently expected to begin in 2029.
Concerns
- Higher precious metal costs increased bill of material costs.
- Lower-than-anticipated sales created unfavorable product mix and reduced operating leverage.
- China industry conditions pressured both unit shipments and revenue.
- The VW program loss represented an approximately $16.6 million quarter over quarter revenue headwind during the third quarter.
- Significant demand for memory and other electronic components is creating supply constraints and cost pressure.
- The Company expects cost headwinds to continue into the fourth quarter, while related recoveries are not anticipated to be reimbursed until the first half of 2027.
What to watch
- Execution against approximately $2.65 billion of 2026 consolidated revenue guidance.
- Fourth-quarter gross-margin effects from estimated $10 million to $15 million of incremental cost increases.
- Customer reimbursement progress for tariff and commodity-related cost increases.
- The maintained 2027 revenue outlook of $2.80 billion to $2.90 billion against primary-market light vehicle production expected to decline approximately 1%.
- Launch timing for the dimmable visor product, scheduled to launch late next year, and progress toward large area device qualification.
- Production timing for the first PCBA contract, currently expected to begin in 2029.
Balance sheet and cash flow
- Cash and cash equivalents were $ 136,444,273 as of September 30, 2026, compared with $ 145,645,715 as of December 31, 2025.
- Short-term investments were 9,225,472 as of September 30, 2026, compared with 5,386,566 as of December 31, 2025.
- Accounts receivable, net were 404,572,897 as of September 30, 2026, compared with 368,517,569 as of December 31, 2025.
- Inventories, net were 550,087,498 as of September 30, 2026, compared with 516,253,617 as of December 31, 2025.
- Total assets were $ 2,940,485,369 as of September 30, 2026, compared with $ 2,928,592,834 as of December 31, 2025.
- Current liabilities were $ 404,425,501 as of September 30, 2026, compared with $ 387,542,969 as of December 31, 2025.
- No operating cash flow or free cash flow was reported in the filing text.
Analysis
Gentex reported third-quarter net sales of $647.7 million versus $655.2 million in the third quarter of 2025. Management said automotive unit performance was consistent with expectations, but revenue was approximately $35 million below its beginning-of-quarter forecast because of customer issues and delayed launches. Automotive sales of $552.5 million were affected by China and the VW program loss, while Premium Audio revenue rose approximately 27% to $54.7 million and Other Products revenue rose 5% to $40.5 million.
Regional and product mix trends were divergent. North American automotive revenue increased approximately 3% despite a 5% decline in regional light vehicle production, supported by advanced-feature content. China automotive revenue was $22,072, down 44%, and Japan/Korea automotive revenue was $129,005, down 8%. The Company said non-automotive revenue increased approximately 17% year over year and represented 15% of total Company revenue, compared with approximately 12% in the third quarter of 2025.
Profitability declined year over year. Gross margin was 33.4% versus 34.4%, which the Company attributed primarily to higher precious metal costs and lower-than-anticipated sales that hurt product mix and operating leverage. GAAP operating expenses fell to $101.3 million from $102.8 million, and adjusted operating expenses fell to $97.5 million from $101.8 million. However, GAAP income from operations declined to $115.1 million from $122.3 million, while GAAP net income attributable to Gentex declined to $90.6 million from $101.0 million. Adjusted diluted EPS was unchanged at $0.47, while GAAP diluted EPS declined to $0.43 from $0.46.
Capital allocation remained focused on repurchases. Gentex repurchased 5.7 million shares for $132.6 million during the quarter and had approximately 24.3 million shares remaining under its repurchase plan at September 30, 2026. Cash and cash equivalents were $136,444,273, while inventories were 550,087,498, compared with 516,253,617 at December 31, 2025.
The Company updated 2026 guidance to approximately $2.65 billion of revenue, gross margin of 34.0% to 34.5%, operating expenses of $395 million to $410 million excluding severance and impairments, and a tax rate of 16% to 16.5%. It maintained 2027 revenue guidance of $2.80 billion to $2.90 billion despite forecasting approximately 1% light vehicle production decline in its primary markets. The guide reflects ongoing tariff, memory, electronic-component and precious-metal cost pressures, including an estimated $10 million to $15 million of incremental fourth-quarter cost increases for which reimbursement is not anticipated until the first half of 2027.
Management, verbatim
Our third quarter results demonstrate the resilience of our business and the continued benefits of our strategy to grow through technology, product mix, and diversification.
Steve Downing, President and CEO
While gross margin was below our expectations for the quarter, the underlying drivers were relatively concentrated.
Steve Downing, President and CEO
The decrease in operating expenses on a GAAP and an adjusted basis reflects the Company’s continued focus on managing operating expenses as sales growth has moderated during 2026.
Neil Boehm, COO and CTO
Not in the filing
stated, not guessed- Prior-quarter comparisons for reported income-statement metrics were not provided, except for the stated Automotive revenue performance excluding China and VW headwinds.
- Operating cash flow was not reported.
- Free cash flow was not reported.
- Debt balances were not reported.
- A separate prior-release outlook section was not provided; therefore, no actual-versus-prior-guidance comparisons were made.
- Prior-year dollar revenue for Other Products was not separately reported.
- Prior-year gross margin for the nine months ended September 30, 2026 was not reported.
- Non-GAAP measures for the nine months ended September 30, 2026 were not reported.
AlphAI 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.