third quarter 2026
Filed Oct 22, 2026Gentherm Reports 2026 Third Quarter Results Delivered Revenue of $405 Million, up 4.4% (ex-FX) Year-over-Year 2026 Full Year Guidance Updated to Include Modine Performance Technologies Repurchased $60 Million of Common Stock in October
Product revenues increased 4.7% and Automotive Climate and Comfort Solutions increased 8.8%, but gross margin, operating income, net income, adjusted EBITDA, adjusted EPS, operating cash flow and adjusted free cash flow declined from the prior year.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Q3 2026 product revenuesGAAP | $405.1M | – | 4.7 % |
| Q3 2026 product revenues excluding foreign currency translation impactnon-GAAP | $404.1M | – | 4.4 % |
| Q3 2026 gross marginGAAP | $94.30M | – | – |
| Q3 2026 gross margin percentageGAAP | 23.3% | – | – |
| Q3 2026 total operating expensesGAAP | $79.94M | – | – |
| Q3 2026 adjusted operating expensesnon-GAAP | $65.36M | – | – |
| Q3 2026 operating incomeGAAP | $14.36M | – | – |
| Q3 2026 net (loss) incomeGAAP | −$2.59M | – | – |
| Q3 2026 net (loss) income marginGAAP | (0.6 )% | – | – |
| Q3 2026 diluted (loss) earnings per shareGAAP | $ (0.08 ) | – | – |
| Q3 2026 adjusted net incomenon-GAAP | $10.01M | – | – |
| Q3 2026 adjusted diluted earnings per sharenon-GAAP | $ 0.33 | – | – |
| Q3 2026 Adjusted EBITDAnon-GAAP | $45.00M | – | – |
| Q3 2026 Adjusted EBITDA marginnon-GAAP | 11.1 % | – | – |
| Q3 2026 net cash provided by operating activitiesGAAP | $33.73M | – | – |
| Q3 2026 Free Cash Flownon-GAAP | $25.39M | – | – |
| Q3 2026 Adjusted Free Cash Flownon-GAAP | $43.65M | – | – |
| Nine months 2026 product revenuesGAAP | $1.21B | – | 8.9 % |
| Nine months 2026 product revenues excluding foreign currency translation impactnon-GAAP | $1.19B | – | 7.0 % |
| Nine months 2026 gross marginGAAP | $288.0M | – | – |
| Nine months 2026 operating incomeGAAP | $36.34M | – | – |
| Nine months 2026 net incomeGAAP | $6.05M | – | – |
| Nine months 2026 diluted earnings per shareGAAP | $ 0.19 | – | – |
| Nine months 2026 Adjusted EBITDAnon-GAAP | $143.1M | – | – |
| Nine months 2026 Adjusted EBITDA marginnon-GAAP | 11.8 % | – | – |
| Nine months 2026 adjusted diluted earnings per sharenon-GAAP | $ 1.90 | – | – |
| Nine months 2026 net cash provided by operating activitiesGAAP | $36.01M | – | – |
| Nine months 2026 Free Cash Flownon-GAAP | $13.53M | – | – |
| Nine months 2026 Adjusted Free Cash Flownon-GAAP | $59.48M | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Climate Control SeatsAutomotive Climate and Comfort Solutions product category. | $215.6M | – | 7.1 % |
| Lumbar and Massage Comfort SolutionsAutomotive Climate and Comfort Solutions product category. | $70.92M | – | 27.1 % |
| Climate Control InteriorsAutomotive Climate and Comfort Solutions product category. | $51.94M | – | (1.3 )% |
| Climate and Comfort ElectronicsAutomotive Climate and Comfort Solutions product category. | $7.92M | – | (7.8 )% |
| Automotive Climate and Comfort SolutionsRevenue increased 8.5% excluding the impact of foreign currency translation and outperformed S&P Global’s mid-October light vehicle production report in relevant markets by 12 percentage points. | $346.4M | – | 8.8 % |
| Valve SystemsAutomotive product category. | $21.60M | – | (11.8 )% |
| Other AutomotiveAutomotive product category. | $22.61M | – | (28.0 )% |
| Automotive segmentIncludes Automotive Climate and Comfort Solutions, Valve Systems and Other Automotive. | $390.6M | – | 4.4 % |
| Medical segmentThe Company acquired Innovative Medical Equipment, LLC on July 1, expanding its thermal management product portfolio. | $14.51M | – | 14.6 % |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
full year 2026, as of October 2026 outlook
- Revenue$1.825B – $1.925B
- NoteAdjusted EBITDA: $210M – $230M
- NoteAdjusted Free Cash Flow: $100M – $120M
- NoteGuidance is based on tariffs currently in effect as of today, current forecast of customer demand and expectations of near-term conditions, light vehicle production in relevant markets decreasing at a low single digit rate for full year 2026 versus 2025, and a EUR to USD exchange rate of $1.15/Euro.
Capital returns
- On October 7, returned $63.5 million to shareholders through a special cash dividend of $2.07 per share as part of the Modine transaction.
- In July, the Board of Directors authorized a new stock repurchase program of up to $400 million of the Company’s issued and outstanding common stock.
- Following the closing of the transaction with Modine in October, the Company repurchased $60 million of common stock.
- As of today, the program has approximately $340 million of stock repurchase authorization remaining.
What drove it
- Secured Automotive New Business Awards totaling $555 million in the quarter.
- Launched ThermAffyx™ Patient Safety System and Puls.A™.
- Automotive Climate and Comfort Solutions revenue increased 8.8% year over year, or 8.5% excluding the impact of foreign currency translation.
- Completed the combination with Modine’s Performance Technologies business on October 1.
- Updated full-year 2026 guidance to reflect the expected contribution from Modine Performance Technologies in the fourth quarter.
Concerns
- Gross margin was 23.3%, compared to 24.6% in the prior year; the decrease was primarily driven by foreign exchange, higher net material costs and inflation, partially offset by strong operating leverage.
- Q3 net (loss) income was $ (2,590 ), compared with net income of $ 14,949 in the prior year.
- Q3 Adjusted EBITDA was $ 45,004, compared with $ 49,007 in the prior year, and Adjusted EBITDA margin was 11.1 %, compared with 12.7 %.
- Nine months 2026 net cash provided by operating activities was $ 36,007, compared with $ 87,820 in the prior year.
- Merger and acquisition expenses were $ 6,528 in Q3 2026 and $ 34,187 for the nine months ended September 30, 2026.
What to watch
- Fourth-quarter contribution from Modine Performance Technologies following the October 1 combination.
- Execution against full-year 2026 product revenue guidance of $1.825B – $1.925B.
- Execution against full-year 2026 Adjusted EBITDA guidance of $210M – $230M and Adjusted Free Cash Flow guidance of $100M – $120M.
- Gross-margin effects from foreign exchange, net material costs and inflation.
- Conversion of $555 million of Automotive New Business Awards into product revenues.
- Further activity under the approximately $340 million remaining stock repurchase authorization.
Balance sheet and cash flow
- Cash and cash equivalents were $ 252,098 at September 30, 2026, compared with $ 160,833 at December 31, 2025.
- Total Debt was $ 320,443 at September 30, 2026, compared with $ 189,109 at September 30, 2025.
- Net Debt was $ 68,345 at September 30, 2026, compared with $ 34,859 at September 30, 2025.
- Total liquidity was $ 494,239 at September 30, 2026, compared with $ 462,188 at September 30, 2025.
- Net Leverage was 0.4 at September 30, 2026, compared with 0.2 at September 30, 2025.
- Nine months 2026 purchases of property and equipment were $ (22,558 ), compared with $ (33,378 ) in the prior year.
- Nine months 2026 acquisition of business, net of cash acquired was $ (34,152 ).
- Nine months 2026 borrowings on debt were $ 204,000 and repayments of debt were $ (85,887 ).
Analysis
Gentherm reported Q3 product revenues of $ 405,102, up 4.7 % from $ 386,870. Product revenues excluding foreign currency translation impact were $ 404,077, up 4.4 %. Automotive Climate and Comfort Solutions was the principal growth area, with revenue of $ 346,390, up 8.8 %, while Medical segment revenue rose 14.6 % to $ 14,505. Within automotive, Lumbar and Massage Comfort Solutions increased 27.1 %, whereas Valve Systems declined 11.8 % and Other Automotive declined 28.0 %.
Profitability weakened despite the revenue growth. Gross margin was $ 94,304 and the gross-margin percentage was 23.3%, compared with $ 95,148 and 24.6% in the prior year. The Company attributed the gross-margin decline primarily to foreign exchange, higher net material costs and inflation, partially offset by strong operating leverage. Operating income declined to $ 14,363 from $ 23,858, and net (loss) income was $ (2,590 ) compared with net income of $ 14,949. Q3 Adjusted EBITDA was $ 45,004, compared with $ 49,007, and its margin was 11.1 % versus 12.7 %.
Cash generation also declined on the reported quarterly and nine-month measures. Q3 net cash provided by operating activities was $ 33,735, Free Cash Flow was $ 25,393, and Adjusted Free Cash Flow was $ 43,649, each below the respective prior-year measure. For the nine months, net cash provided by operating activities was $ 36,007 versus $ 87,820, while Adjusted Free Cash Flow was $ 59,484 versus $ 72,290. The balance sheet showed $ 252,098 of cash and cash equivalents, $ 320,443 of Total Debt, $ 68,345 of Net Debt and $ 494,239 of total liquidity at September 30, 2026.
The company completed the Modine Performance Technologies combination on October 1, after quarter-end, and updated full-year 2026 guidance to incorporate the expected fourth-quarter contribution. The October outlook calls for product revenues of $1.825B – $1.925B, Adjusted EBITDA of $210M – $230M and Adjusted Free Cash Flow of $100M – $120M. Capital allocation included a $63.5 million special cash dividend on October 7, a new authorization of up to $400 million for common-stock repurchases, and $60 million repurchased following the Modine closing.
The key operating issue is whether Automotive Climate and Comfort Solutions momentum, including $555 million of Automotive New Business Awards, can support the expanded revenue base while gross margin recovers from foreign exchange, material-cost and inflation pressure. Integration and contribution from Modine will be central to the fourth-quarter result and the updated full-year guide. The Company also cited expected light vehicle production in relevant markets decreasing at a low single digit rate for full year 2026 versus 2025 as a guidance assumption.
Management, verbatim
Our third quarter results were in line with expectations as we made continued progress on growth and operational excellence initiatives, while completing the Modine Performance Technologies combination on October 1.
Bill Presley, President and CEO
With the completion of the transaction, we are fundamentally a different company. We are entering an exciting new phase for Gentherm with industry leading platforms and I am increasingly confident in the significant value creation opportunities ahead.
Bill Presley, President and CEO
As expected, following the combination with Modine Performance Technologies, we remain in a strong financial position and continue to have confidence in the ability to generate significant cash moving forward.
Jon Douyard, Chief Financial Officer
Not in the filing
stated, not guessed- Previous-release outlook was not provided separately; therefore, no actual-versus-prior-guidance comparison is presented.
- Q3 2026 prior-quarter comparisons were not reported for the financial metrics.
- GAAP full-year 2026 revenue reconciliation and GAAP profitability, cash-flow, gross-margin, operating-expense and tax-rate guidance were not provided.
- Q3 2026 tax rate was not reported.
- Q3 2026 dividend declared as a regular recurring dividend was not reported.
- Post-Modine-transaction closing balance-sheet amounts 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.