Garrett Motion — Financial Results

Revenue Grew 3% to $3.6 Billion, Driven by Gasoline and Commercial Vehicles

Net sales rose $109 million year-over-year, with gasoline turbochargers leading the way thanks to new product launches in Europe, North America, and India. The aftermarket segment (replacement parts sold outside of vehicle manufacturers) was the one weak spot, down 5% due to softer demand in North America. It's worth noting that $40 million of the revenue figure came from recoveries on import tariffs, so some of the growth was a pass-through rather than underlying demand.

Net Income Rose to $310 Million, Helped Significantly by Lower Interest Costs

Net income improved by $28 million, but the biggest driver was a $48 million drop in interest expense — largely because Garrett refinanced its debt in early 2025 on better terms, and the prior year included one-time costs from that process. Gross profit margin (the percentage of revenue left after production costs) held essentially flat at 20.4%, meaning the core manufacturing business kept its footing despite tariff headwinds and an unfavorable shift in the mix of products sold.

Tariffs Are a Real Headwind, but Being Actively Managed

Import tariffs added $41 million to the company's cost of goods sold in 2025. Garrett offset this partly through $40 million in tariff recovery charges passed on to customers, and partly through $24 million in commodity and logistics deflation savings. The company flagged the trade environment as "very dynamic," and while it navigated 2025 successfully, tariffs remain a live risk heading into 2026.

The Company Returned $260 Million to Shareholders in 2025

Garrett paid $52 million in dividends and repurchased $208 million of its own shares — including a $103 million block purchased directly from funds affiliated with Oaktree Capital Management. The board has already authorized a fresh $250 million buyback program for 2026, suggesting continued confidence in generating enough cash to fund both operations and shareholder returns.

Long-Term Outlook: Hybrids Buying Time, but Electric Vehicles Loom

Global turbocharger production nudged up from 49 million to 50 million units in 2025, but management expects volumes to decline from 2026 onward as electric vehicle adoption grows. The near-term cushion is hybrid vehicles — cars that pair a combustion engine with an electric motor still need turbochargers. Garrett is also investing in zero-emission technologies (its first E-Powertrain contract was awarded in early 2025), and capital spending is expected to increase in 2026 specifically to fund that transition. How successfully the company converts its turbocharger expertise into EV-relevant products is the central long-term question for investors.