third quarter 2026
Filed Nov 4, 2026Reported sales increased despite a $24.2 million arbitration-related reduction, while adjusted revenue grew 29.9% and full-year adjusted revenue guidance was raised.
Adjusted sales, adjusted EBITDA and adjusted net income improved materially year over year, but the PM sensor arbitration charge drove a $22.9 million GAAP loss from continuing operations, gross margin declined, and adjusted gross-margin and operating-margin guidance was reduced.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Q3 adjusted net sales from continuing operationsnon-GAAP | $180M | – | 29.9% |
| Q3 core revenuenon-GAAP | 25.5% YoY | – | 25.5% YoY |
| Q3 gross profitGAAP | $11.5M | – | (57.5) % |
| Q3 adjusted gross profitnon-GAAP | $35.7M | – | 8.9 % |
| Q3 gross marginGAAP | 7.4 % | – | (1,575) bps |
| Q3 adjusted gross marginnon-GAAP | 19.9 % | – | (382) bps |
| Q3 selling, general and administrative expenseGAAP | $23.9M | – | – |
| Q3 design and development expenseGAAP | $11.4M | – | – |
| Q3 SG&A as a percentage of adjusted salesnon-GAAP | 13.1% | – | declined 317 basis points versus the year ago period |
| Q3 operating income (loss)GAAP | −$23.8M | – | (2916.8) % |
| Q3 adjusted operating incomenon-GAAP | $800K | – | 140.4 % |
| Q3 loss before income taxes from continuing operationsGAAP | −$25.6M | – | (1779.8) % |
| Q3 adjusted loss before taxes from continuing operationsnon-GAAP | −$1M | – | 79.7 % |
| Q3 benefit (provision) for income taxes from continuing operationsGAAP | −$2.7M | – | (173.3) % |
| Q3 adjusted benefit (provision) for income taxes from continuing operationsnon-GAAP | −$2.7M | – | (209.6) % |
| Q3 net income (loss) from continuing operationsGAAP | −$22.9M | – | (855.3) % |
| Q3 adjusted net income (loss) from continuing operationsnon-GAAP | $1.6M | – | 121.5 % |
| Q3 diluted loss per common share from continuing operationsGAAP | $(0.81) per diluted share | – | (845.1) % |
| Q3 adjusted diluted earnings per common share from continuing operationsnon-GAAP | $0.06 per diluted share | – | 121.1 % |
| Q3 weighted-average common shares outstandingGAAP | 28.4M | – | 1.9 % |
| Q3 adjusted consolidated EBITDAnon-GAAP | $7.3M | – | 41.7 % |
| Q3 adjusted consolidated EBITDA marginnon-GAAP | 4.1 % | – | 34 bps |
| Nine months net salesGAAP | $498.0B | – | – |
| Nine months operating lossGAAP | −$33.95B | – | – |
| Nine months loss from continuing operationsGAAP | −$42.97B | – | – |
| Nine months net lossGAAP | −$56.11B | – | – |
| Nine months diluted loss per share from continuing operationsGAAP | $(1.52) | – | – |
| Nine months diluted loss per share from Stoneridge Inc.GAAP | $(1.99) | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| ElectronicsRevenue growth versus the third quarter of 2025 was primarily driven by increased volume in the North American and European commercial vehicle markets. | $158.6M | – | 30.5 % |
| Stoneridge BrazilHigher OEM sales were the primary driver of growth during the quarter. | $21.5M | – | 25.3 % |
| Arbitration Award Reduction to Net SalesPre-tax charge recorded as a reduction to net sales related to an adverse ruling in the previously disclosed arbitration proceeding regarding legacy PM sensor product warranty claims. | −$24.2M | – | – |
Amounts quoted below without a unit are in millions, as in the filing’s tables. Per-share figures are as printed.
2026 full year outlook
- Revenue$690 — $700
- Gross margin20.5% — 21.0%
- NoteAdjusted Operating Margin: (0.5)% — 0.0%
- NoteAdjusted EBITDA: $20 — $25
- NoteAdjusted EBITDA margin: 2.9% — 3.6%
What drove it
- North American and European commercial vehicle markets and Stoneridge Brazil were the primary contributors to third-quarter growth.
- Record quarterly revenue was reported for MirrorEye (>$37 million) and Stoneridge Brazil ($21.5 million).
- Stoneridge Electronics secured additional orders for existing vision systems expected to generate approximately $180 million in cumulative incremental sales through 2028.
- Cost savings efforts are on track to deliver over $5 million in cost savings in 2026.
- Electronics sales growth excluded an unfavorable foreign currency translation impact of $1.4 million and Mexico Manufacturing Agreement revenue related to the sale of the Control Devices business.
- Stoneridge Brazil sales growth excluded a favorable foreign currency translation impact of $1.0 million.
Concerns
- An adverse arbitration ruling resulted in a pre-tax charge of $24.2 million recorded as a reduction to net sales.
- The arbitration panel awarded the former customer €22.5 million (approximately $25.5 million), including interest and costs.
- Gross margin declined 1,575 basis points to 7.4%, while adjusted gross margin declined 382 basis points to 19.9%.
- Management cited higher material costs, legacy warranty obligations, strategic inventory-related actions and adverse sales mix in Stoneridge Brazil as pressures on adjusted gross margin.
- Full-year adjusted gross-margin guidance was reduced to 20.5% — 21.0% from 21.5% — 22.0%, and adjusted operating-margin guidance was reduced to (0.5)% — 0.0% from 0.0% — 0.5%.
- Management cited transitory costs, inflationary pressures, unfavorable currency impacts and semiconductor cost pressure.
- The Company may ultimately be obligated to satisfy the arbitration award without modification if an appeal is not successful.
What to watch
- The outcome, payment timing and cash impact of the PM sensor arbitration award.
- Completion of the global refinancing process before the Credit Facility matures on July 1, 2027.
- Whether North American and European commercial vehicle demand continues into 2027 as anticipated by management.
- Delivery of approximately $180 million in cumulative incremental vision-systems sales through 2028.
- Progress toward over $5 million in 2026 cost savings and the durability of the 13.1% SG&A-to-adjusted-sales ratio.
- Material-cost, semiconductor-cost, currency and Stoneridge Brazil sales-mix effects on the reduced full-year margin outlook.
Balance sheet and cash flow
- As of September 30, 2026, cash and cash equivalents totaled $63.4 million.
- As of September 30, 2026, total debt was $143.7 million.
- As of September 30, 2026, net debt was $80.2 million.
- The Company stated that net debt decreased by $47.6 million compared to December 31, 2025.
- The outstanding borrowings under the Credit Facility are classified as a current liability and the Credit Facility matures on July 1, 2027.
- Cash and cash equivalents were $ 63,446 at September 30, 2026, compared with $ 53,057 at December 31, 2025.
- The Company is currently engaged in a global refinancing process.
Analysis
Stoneridge reported Q3 GAAP net sales of $155.8 million, up 9.5%, while adjusted net sales were $180.0 million, up 29.9%. The difference reflects a $24.2 million pre-tax charge recorded as a reduction to net sales after an adverse arbitration ruling concerning legacy PM sensor warranty claims. Management said the North American and European commercial vehicle markets and Stoneridge Brazil were the primary contributors to growth. Electronics revenue rose 30.5% to $158.6 million, while Stoneridge Brazil revenue increased 25.3% to $21.5 million.
Profitability improved on an adjusted earnings basis but deteriorated sharply under GAAP. Adjusted EBITDA increased 41.7% to $7.3 million and adjusted net income from continuing operations was $1.6 million, compared with an adjusted loss of $7.6 million a year earlier. However, GAAP loss from continuing operations widened to $22.9 million from $8.9 million, reflecting the arbitration charge. Adjusted EBITDA margin expanded 34 basis points to 4.1%, but adjusted gross margin declined 382 basis points to 19.9% and GAAP gross margin declined 1,575 basis points to 7.4%.
Margin pressure came from higher material costs, legacy warranty obligations, strategic inventory-related actions and adverse sales mix in Stoneridge Brazil. The company did reduce SG&A as a percentage of adjusted sales by 317 basis points to 13.1%, and management said it remains on track to deliver over $5 million in 2026 cost savings. At the segment level, adjusted operating margin in Electronics was 3.4%, down 217 basis points, while Stoneridge Brazil adjusted operating margin was 11.5%, down 411 basis points.
Management raised full-year adjusted revenue guidance to $690 — $700 from $645 — $670, citing improved market demand, product momentum and Brazilian outperformance. It retained the $20 — $25 adjusted EBITDA range but now expects results at the bottom end, and reduced adjusted gross-margin and operating-margin outlooks. Balance-sheet attention remains centered on $143.7 million of total debt, $63.4 million of cash and the Credit Facility maturity on July 1, 2027, as the company pursues a global refinancing process. The arbitration outcome and potential payment from cash on hand remain material variables for liquidity and reported results.
Management, verbatim
We delivered another quarter of strong execution, with adjusted sales growth of nearly 30% and adjusted EBITDA growth of more than 40% year over year, despite increasing inflationary pressures and supply chain disruption.
Natalia Noblet, president and chief executive officer
During the third quarter we made tangible progress realigning our cost structure, which should provide a durable foundation for profitable growth over the long term.
Natalia Noblet, president and chief executive officer
Not in the filing
stated, not guessed- Q3 operating cash flow was not reported.
- Q3 free cash flow was not reported.
- Q3 capital expenditures were not reported.
- Share repurchases were not reported.
- Dividends were not reported.
- A full-year GAAP reconciliation for adjusted revenue, adjusted gross margin, adjusted operating margin, adjusted EBITDA and adjusted EBITDA margin guidance was not provided.
- Prior-quarter comparisons for reported Q3 metrics were not provided.
Written by an AI language model 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 checked against the filing text, and a metric whose value, prior period and change do not add up is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.