BorgWarner Reports 2025 Results and Provides 2026 Guidance; Returned Approximately $630 Million to Shareholders in 2025; Strategically Enters Data Center Market with Turbine Generator System Award

AUBURN HILLS, Mich., Feb. 11, 2026 /PRNewswire/ -- BorgWarner Inc. (NYSE: BWA) today reported fourth quarter and full-year 2025 results and provided 2026 guidance.

Full Year 2025 Highlights

New Business Awards Across Portfolio

The Company secured multiple new business awards that are expected to support its long-term profitable growth, including the following:

Turbine Generator System Award for AI Driven Data Center Market and Other Microgrid Applications

Other New Business Awards

Fourth Quarter Highlights (continuing operations basis):

Full Year Highlights (continuing operations basis):

Financial Results (continuing operations basis):

The Company believes the following table is useful in highlighting non-comparable items that impacted its GAAP net earnings per diluted share. The non-comparable items presented below are calculated after tax using the corresponding effective tax rate discrete to each item and the weighted average number of diluted shares for the periods presented. The Company defines adjusted earnings per diluted share as earnings per diluted share adjusted to eliminate the impact of restructuring expense, merger, acquisition and divestiture expense, other net expenses, discontinued operations, other gains and losses not reflective of the Company's ongoing operations and related tax effects.

Three Months Ended

December 31,

Year Ended

December 31,

2025

2024

2025

2024

(Loss) earnings per diluted share

$ (1.23)

$ (1.84)

$ 1.28

$ 1.63

Non-comparable items:

Impairment charges

2.51

2.80

2.63

2.73

Restructuring expense

0.09

0.03

0.36

0.24

Accelerated depreciation

0.04

0.05

0.31

0.18

Legal settlement

0.01

—

0.18

—

Costs to exit charging business

—

0.14

—

Impairment of investment

0.07

—

0.07

—

Chief Executive Officer ("CEO") transition compensation

—

0.05

—

Loss on sale of assets

0.01

—

0.03

—

Adjustments associated with Spin-Off related balances

—

0.01

0.03

0.14

Write-off of customer incentive asset

—

0.03

—

Merger and acquisition expense, net

—

0.01

0.02

—

Loss on sale of businesses

—

0.01

0.04

Change in accounting method

—

(0.10)

—

(0.10)

Commercial contract settlement

—

0.07

Gain on debt extinguishment

—

(0.01)

Unrealized gain on equity securities

(0.01)

—

(0.01)

—

Insurance recovery

—

(0.07)

—

Tax adjustments

(0.16)

0.02

(0.23)

(0.64)

Other non-comparable items

0.02

0.08

0.04

Adjusted earnings per diluted share

$ 1.35

$ 1.01

$ 4.91

$ 4.32

Net sales were $3,572 million for the fourth quarter 2025, an increase of approximately 3.9% compared with the fourth quarter 2024. This increase was primarily due to light vehicle eProduct sales growth, partially offset by lower industry volume and lower Battery & Charging Systems segment sales. Net loss for the fourth quarter 2025 was $262 million, or $(1.23) per diluted share, compared with net loss of $403 million, or $(1.84) per diluted share, for the fourth quarter 2024. Adjusted net earnings per diluted share for the fourth quarter 2025 were $1.35, up approximately 34% from adjusted net earnings per diluted share of $1.01 for the fourth quarter 2024. Adjusted net earnings for the fourth quarter 2025 excluded net non-comparable items of $(2.58) per diluted share, while adjusted net earnings for the fourth quarter 2024 excluded net non-comparable items of $(2.85) per diluted share. Non-comparable items include $582 million of goodwill, intangible asset and property, plant and equipment impairment charges recorded during the fourth quarter in our PowerDrive Systems and Battery & Charging Systems segments. These and other non-comparable items are listed in the table above, which is provided by the Company for comparison with other results and the most directly comparable U.S. GAAP measures. The increase in adjusted net earnings per diluted share was primarily due to the impact of higher adjusted operating income, the impact of our share repurchases and a lower effective tax rate.

Full Year 2026 Guidance: At the mid-point of its 2026 guidance, BorgWarner expects to deliver another year of adjusted operating margin improvement and adjusted earnings per share growth despite the Company's expectation that its weighted light vehicle markets will be down 3% to approximately flat and a decline in the Company's Battery & Charging Systems segment sales. Net sales are expected to be in the range of $14.0 billion to $14.3 billion in 2026, compared with 2025 sales of $14.3 billion. The Company's net sales guidance implies a year-over-year change in organic sales of down 3.5% to down 1.5%. The Company's net sales guidance includes an expected year-over-year sales decline of approximately $210 million in the Company's Battery & Charging Systems segment, which represents approximately a 1.5% headwind to organic growth in 2026. Foreign currencies are expected to result in a year-over-year increase in sales of approximately $200 million primarily due to the strengthening of the Euro and Chinese Renminbi against the U.S. dollar.

U.S. GAAP operating margin is expected to be in the range of 9.8% to 10.0% in 2026. Excluding the impact of non-comparable items and the add back of intangible asset amortization expense, adjusted operating margin is expected to be in the range of 10.7% to 10.9%. U.S. GAAP net earnings are expected to be within a range of $4.74 to $4.91 per diluted share. Excluding the impact of non-comparable items, adjusted net earnings are expected to be within a range of $5.00 to $5.20 per diluted share. Full-year operating cash flow is expected to be in the range of $1,600 million to $1,700 million, while free cash flow is expected to be in the range of $900 million to $1,100 million.

At 9:30 a.m. ET today, a brief conference call concerning fourth quarter and full year 2025 results and full year 2026 guidance will be webcast at: https://www.borgwarner.com/investors. Additionally, an earnings call presentation will be available at https://www.borgwarner.com/investors.

For more than 130 years, BorgWarner Inc. (NYSE: BWA) has been a transformative global product leader bringing successful mobility innovation to market. Today, we're accelerating the world's transition to eMobility -- to help build a cleaner, healthier, safer future for all.

Forward Looking Statements: This release may contain forward-looking statements as contemplated by the 1995 Private Securities Litigation Reform Act that are based on management's current outlook, expectations, estimates and projections. Words such as "anticipates," "believes," "continues," "could," "designed," "effect," "estimates," "evaluates," "expects," "forecasts," "goal," "guidance," "initiative," "intends," "may," "outlook," "plans," "potential," "predicts," "project," "pursue," "seek," "should ," "target," "when," "will," "would," and variations of such words and similar expressions are intended to identify such forward-looking statements. Further, all statements, other than statements of historical fact, contained or incorporated by reference in this release that we expect or anticipate will or may occur in the future regarding our financial position, including our guidance for full year 2026, our business strategy and measures to implement that strategy, including changes to operations, competitive strengths, goals, expansion and profitable growth of our business and operations, plans, references to future success, including the launch of the turbine generator system and our other new business awards, and other such matters, are forward-looking statements. Accounting estimates, such as those described under the heading "Critical Accounting Policies and Estimates" in Item 7 of our most recently filed Annual Report on Form 10-K ("Form 10-K"), are inherently forward-looking. All forward-looking statements are based on assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. Forward-looking statements are not guarantees of performance, and the Company's actual results may differ materially from those expressed, projected or implied in or by the forward-looking statements.

You should not place undue reliance on these forward-looking statements, which speak only as of the date of this release. Forward-looking statements are subject to risks and uncertainties, many of which are difficult to predict and generally beyond our control, that could cause actual results to differ materially from those expressed, projected or implied in or by the forward-looking statements. These risks and uncertainties, among others, include: supply disruptions impacting us or our customers, commodity availability and pricing, and an inability to achieve expected levels of recoverability in commercial negotiations with customers concerning these costs; competitive challenges from existing and new competitors, including original equipment manufacturer ("OEM") customers; the challenges associated with rapidly changing technologies, including artificial intelligence, and our ability to innovate in response; potential delays and other challenges associated with launching a new product, such as the turbine generator system, as it involves a new industry for the company; the difficulty in forecasting demand for electric vehicles and our electric vehicles revenue growth; potential future changes in laws and regulations, including, by way of example, taxes and tariffs, in the countries in which we operate; potential disruptions in the global economy caused by wars or other geopolitical conflicts; the ability to identify targets and consummate acquisitions on acceptable terms; failure to realize the expected benefits of acquisitions on a timely basis; the possibility that our 2023 tax-free spin-off of our former Fuel Systems and Aftermarket segments into a separate publicly traded company will not achieve its intended benefits; the failure to promptly and effectively integrate acquired businesses; the potential for unknown or inestimable liabilities relating to the acquired businesses; impacts of our exit of the charging business; our dependence on automotive and truck production, which is highly cyclical and subject to disruptions; our reliance on major OEM customers; impacts of any future strikes involving any of our OEM customers and any actions such OEM customers take in response; fluctuations in interest rates and foreign currency exchange rates; our dependence on information systems; the uncertainty of the global economic environment; the uncertainty surrounding global trade policies, including tariffs and export restrictions and their impact on the Company, its customers and its suppliers; the outcome of existing or any future legal proceedings, including litigation with respect to various claims, or governmental investigations, including related litigation; impacts from any potential future acquisition or disposition transactions; and the other risks discussed in reports that we file with the Securities and Exchange Commission, including in Item 1A. "Risk Factors" in our most recently filed Annual Report on Form 10-K and/or Quarterly Report on Form 10-Q. We do not undertake any obligation to update or announce publicly any updates to or revisions to any of the forward-looking statements in this release to reflect any change in our expectations or any change in events, conditions, circumstances, or assumptions underlying the statements.

BorgWarner Inc.

Condensed Consolidated Statements of Operations (Unaudited)

(in millions, except per share amounts)

Three Months Ended

Year Ended

December 31,

2025

2024

2025

2024

Net sales

$ 3,572

$ 3,439

$ 14,316

$ 14,086

Cost of sales

2,841

2,756

11,642

11,438

Gross profit

731

683

2,674

2,648

Gross margin

20.5 %

19.9 %

18.7 %

18.8 %

Selling, general and administrative expenses

331

340

1,304

1,350

Restructuring expense

101

Other operating expense (income), net

109

Impairment charges

582

646

624

646

Operating (loss) income

(238)

(316)

536

546

Equity in affiliates' earnings, net of tax

(6)

(4)

(35)

(27)

Unrealized and realized (gain) loss on debt and equity securities

(1)

(3)

Interest expense, net

Other postretirement expense

(Loss) earnings from continuing operations before income taxes and

noncontrolling interest

(240)

(319)

524

539

Provision for income taxes

189

111

Net (loss) earnings from continuing operations

(241)

(386)

335

428

Net earnings from continuing operations attributable to the noncontrolling

interest, net of tax

Net (loss) earnings from continuing operations attributable to BorgWarner

Inc.

$ (262)

$ (403)

$ 277

$ 367

BorgWarner Inc.

Condensed Consolidated Balance Sheets (Unaudited)

(in millions)

December 31,

2025

December 31,

2024

ASSETS

Cash and cash equivalents

$ 2,313

$ 2,094

Receivables, net

2,962

2,843

Inventories

1,207

1,251

Prepayments and other current assets

313

333

Total current assets

6,795

6,521

Property, plant and equipment, net

3,330

3,575

Other non-current assets

3,644

3,897

Total assets

$ 13,769

$ 13,993

LIABILITIES AND EQUITY

Notes payable and other short-term debt

$ 5

$ 398

Accounts payable

1,996

2,032

Other current liabilities

1,281

1,216

Total current liabilities

3,282

3,646

Long-term debt

3,894

3,763

Other non-current liabilities

979

878

Total liabilities

8,155

8,287

Total BorgWarner Inc. stockholders' equity

5,442

5,532

Noncontrolling interest

172

174

Total equity

5,614

5,706

Total liabilities and equity

$ 13,769

$ 13,993

BorgWarner Inc.

Condensed Consolidated Statements of Cash Flows (Unaudited)

(in millions)

Year Ended

December 31,

2025

2024

OPERATING ACTIVITIES OF CONTINUING OPERATIONS

Net cash provided by operating activities from continuing operations

$ 1,648

$ 1,382

INVESTING ACTIVITIES OF CONTINUING OPERATIONS

Capital expenditures, including tooling outlays

(469)

(671)

Customer advances related to capital expenditures

Insurance proceeds received for damage to property, plant and equipment

—

Proceeds from sale of businesses, net

Proceeds from settlement of net investment hedges, net

Payments for investments in debt and equity securities, net

—

(8)

Proceeds from asset disposals and other, net

Net cash used in investing activities from continuing operations

(368)

(603)

FINANCING ACTIVITIES OF CONTINUING OPERATIONS

Payments on notes payable

(5)

—

Additions to debt

—

1,008

Repayments of debt, including current portion

(409)

(525)

Payments for debt issuance costs

—

(9)

Payments for purchase of treasury stock

(508)

(402)

Payments for stock-based compensation items

(22)

(23)

Payments for business acquired, net of cash acquired

—

(4)

Payments for contingent consideration

(4)

(1)

Dividends paid to BorgWarner stockholders

(119)

(98)

Dividends paid to noncontrolling stockholders

(49)

(113)

Net cash used in financing activities from continuing operations

(1,116)

(167)

CASH FLOWS FROM DISCONTINUED OPERATIONS

Operating activities of discontinued operations

—

(30)

Net used in discontinued operations

—

(30)

Effect of exchange rate changes on cash

(22)

Net increase in cash and cash equivalents

219

560

Cash and cash equivalents at beginning of year

2,094

1,534

Cash and cash equivalents at end of year

$ 2,313

$ 2,094

Supplemental Financial Information (Unaudited)

(in millions)

Year Ended

December 31,

2025

2024

Depreciation and tooling amortization

$ 653

$ 604

Intangible asset amortization

Non-GAAP Financial Measures

This press release contains certain information about BorgWarner's financial results that is not presented in accordance with U.S. GAAP. Such non-GAAP financial measures are reconciled to their closest U.S. GAAP financial measures below and in the Financial Results table above. The provision of these comparable U.S. GAAP financial measures is not intended to indicate that BorgWarner is explicitly or implicitly providing projections on those U.S. GAAP financial measures, and actual results for such measures are likely to vary from those presented. The reconciliations include all information reasonably available to the Company at the date of this press release and the adjustments that management can reasonably predict.

Management believes that these non-GAAP financial measures are useful to management, investors, and banking institutions in their analyses of the Company's business and operating performance to facilitate comparisons and better identify trends in our business. Management also uses this information for operational planning and decision-making purposes.

Non-GAAP financial measures are not and should not be considered a substitute for any U.S. GAAP measure. Additionally, because not all companies use identical calculations, the non-GAAP financial measures as presented by BorgWarner may not be comparable to similarly titled measures reported by other companies.

Adjusted Operating Income and Adjusted Operating Margin

The Company defines adjusted operating income as operating income adjusted to exclude the impact of restructuring expense, impairment charges, merger, acquisition and divestiture expense, intangible asset amortization expense, other net expenses, discontinued operations, and other gains and losses not reflective of the Company's ongoing operations. Adjusted operating margin is defined as adjusted operating income divided by net sales.

Adjusted Net Earnings

The Company defines adjusted net earnings as net earnings attributable to BorgWarner Inc. adjusted to eliminate the impact of restructuring expense, merger, acquisition and divestiture expense, other net expenses, discontinued operations, and other gains and losses not reflective of the Company's ongoing operations, and related tax effects. The impact of intangible asset amortization expense continues to be included in adjusted net earnings.

Adjusted Earnings per Diluted Share

The Company defines adjusted earnings per diluted share as earnings per diluted share adjusted to eliminate the impact of restructuring expense, merger, acquisition and divestiture expense, other net expenses, discontinued operations, and other gains and losses not reflective of the Company's ongoing operations, and related tax effects. The impact of intangible asset amortization expense continues to be included in adjusted earnings per share.

Free Cash Flow

The Company defines free cash flow as net cash provided by operating activities minus capital expenditures, net of customer advances related to capital expenditures. The Company believes this measure is useful to both management and investors in evaluating the Company's ability to service and repay its debt.

Organic Net Sales Change

The Company defines organic net sales changes as net sales change year-over-year excluding the estimated impact of foreign exchange (FX) and net mergers, acquisitions and divestitures.

Adjusted Operating Income and Adjusted Operating Margin (Unaudited)

Three Months Ended

Year Ended

December 31,

(in millions)

2025

2024

2025

2024

Net sales

$ 3,572

$ 3,439

$ 14,316

$ 14,086

Operating (loss) income

(238)

(316)

536

546

Operating margin

(6.7) %

(9.2) %

3.7 %

3.9 %

Non-comparable items:

Impairment charges

$ 582

$ 646

$ 624

$ 646

Restructuring expense

101

Accelerated depreciation

Intangible asset amortization

Legal settlement

—

Costs to exit charging business

—

Impairment of investment

—

Chief Executive Officer ("CEO") transition compensation

—

Loss on sale of assets

Adjustments associated with Spin-Off related balances

—

Write-off customer incentive asset

—

Merger and acquisition expense, net

Loss on sale of businesses

—

Change in accounting method

—

(29)

—

(29)

Commercial contract settlement

—

Insurance recovery

—

(21)

—

Other non-comparable items

(1)

Net non-comparable items

$ 665

$ 668

$ 1,001

$ 871

Adjusted operating income

$ 427

$ 352

$ 1,537

$ 1,417

Adjusted operating margin

12.0 %

10.2 %

10.7 %

10.1 %

Free Cash Flow Reconciliation (Unaudited)

Three Months Ended

December 31,

Year Ended

December 31,

(in millions)

2025

2024

2025

2024

Net cash provided by operating activities from continuing operations

$ 619

$ 682

$ 1,648

$ 1,382

Capital expenditures, including tooling outlays

(162)

(161)

(469)

(671)

Customer advances related to capital expenditures

Free cash flow

$ 470

$ 539

$ 1,208

$ 729

Fourth Quarter 2025 Organic Net Sales Change (Unaudited)

(in millions)

Q4 2024 Net

Sales

Organic Net

Sales

Change

Q4 2025 Net

Sales

Organic Net

Sales

Change %

Turbos & Thermal Technologies

$ 1,412

$ 53

$ (65)

$ 1,400

(4.6) %

Drivetrain & Morse Systems

1,351

1,412

2.5 %

PowerDrive Systems

525

623

15.4 %

Battery & Charging Systems

162

(20)

149

(12.3) %

Inter-segment eliminations

(11)

—

(1)

(12)

9.1 %

Net sales

$ 3,439

$ 104

$ 29

$ 3,572

0.8 %

Full Year 2025 Organic Net Sales Change (Unaudited)

(in millions)

2024 Net

Sales

Organic Net

Sales

Change

2025 Net

Sales

Organic Net

Sales

Change %

Turbos & Thermal Technologies

$ 5,887

$ 77

$ (192)

$ 5,772

(3.3) %

Drivetrain & Morse Systems

5,577

5,654

0.6 %

PowerDrive Systems

1,937

388

2,347

20.0 %

Battery & Charging Systems

729

(152)

590

(20.9) %

Inter-segment eliminations

(44)

—

(3)

(47)

6.8 %

Net sales

$ 14,086

$ 154

$ 76

$ 14,316

0.5 %

Adjusted Operating Income and Adjusted Operating Margin Guidance Reconciliation (Unaudited)

Full-Year 2026 Guidance

(in millions)

Low

High

Net sales

$ 14,000

$ 14,300

Operating income

$ 1,373

$ 1,428

Operating margin

9.8 %

10.0 %

Non-comparable items:

Restructuring expense

$ 70

$ 80

Intangible asset amortization

Adjusted operating income

$ 1,500

$ 1,565

Adjusted operating margin

10.7 %

10.9 %

Adjusted Earnings Per Diluted Share Guidance Reconciliation (Unaudited)

Full-Year 2026 Guidance

Low

High

Earnings per Diluted Share

$ 4.74

$ 4.91

Non-comparable items:

Restructuring expense

0.26

0.29

Adjusted Earnings per Diluted Share

$ 5.00

$ 5.20

Free Cash Flow Guidance Reconciliation From Continuing Operations (Unaudited)

Full-Year 2026 Guidance

(in millions)

Low

High

Net cash provided by operating activities

$ 1,600

$ 1,700

Capital expenditures, including tooling outlays

(700)

(600)

Free cash flow

$ 900

$ 1,100

Full Year 2026 Organic Net Sales Change Guidance Reconciliation (Unaudited)

(in millions)

FY 2025 Net

Sales

Organic Net

Sales

Change

FY 2026 Net

Sales

Organic Net

Sales

Change %

LV Weighted

Market

Outgrowth

Low

$ 14,316

$ 200

$ (516)

$ 14,000

(3.6) %

(3.0) %

(0.6) %

High

$ 14,316

$ 200

$ (216)

$ 14,300

(1.5) %

— %

(1.5) %

Full Year 2026 Estimated Year-Over-Year Change in Production (Unaudited)

North America

Europe

China

Total

BorgWarner

Weighted Total

Light vehicle

(5)% to (1)%

(2)% to 0.5%

(4)% to (1)%

(2)% to 0%

(3)% to 0%

SOURCE BorgWarner