Aptiv PLC

to the Aptiv Q3 2025 earnings call. Today's conference is being recorded. At this time, I would like to turn the conference over to Betsy Frank, Vice President, Investor Relations. Please go ahead.

Thank you, Jess. Good morning, and thank you for joining Aptiv's third quarter 2025 earnings conference call. The press release and related tables, along with the slide presentation, can be found on the Investor Relations portion of our website at Aptiv.com. Today's review of our financials exclude amortization, restructuring, and other special items, and will address the continuing operations of Aptiv. The reconciliations between GAAP and non-GAAP measures are included at the back of the slide presentation and the earnings press release. Unless stated otherwise, all references to growth rates are on an adjusted year-over-year basis. During today's call, we will be providing certain forward-looking information that reflects Aptiv's current view of future financial performance and may be materially different for reasons that we cite in our Form 10-K and other SEC filings. Joining us today will be Kevin Clark, Aptiv's Chair and Chief Executive Officer, and Varon LaRoya, Executive Vice President and Chief Financial Officer. Kevin will provide a strategic update on the business, and Barron will cover the financial results in more detail before we open the call to Q&A. With that, I'd like to turn the call over to Kevin.

Thank you, Betsy, and thanks, everyone, for joining us this morning. Starting on slide three, we had another strong quarter. We capitalized on the underlying growth in vehicle production in North America and Asia Pacific, while also continuing to experience strong revenue growth in non-automotive markets. Our resilient operating model has allowed us to proactively respond to shifting global trade policies, allowing us to keep our customers connected with minimal impact to our operations and profitability. Thanks to our in-region, four-region integrated supply chain network underpinned by the end-to-end global visibility provided by our comprehensive supply chain digital twin. Our robust operating model has been validated by the Supplier Quality Excellence Awards we've received from Volkswagen and General Motors this year, underscoring how Aptiv is trusted by our customers to consistently deliver high quality solutions on time. And when combined with our unique full system solutions, we're able to provide our customers with flexibility and cost savings, which expands our competitive moat and which we've leveraged to accelerate our penetration of other end markets. Lastly, with our focus on further maximizing shareholder value, We're progressing as planned with the separation of our electrical distribution systems business by the end of the first quarter of 2026. Moving on to our third quarter financial performance, the strength of our product portfolio and operating execution translated into another quarter of record financial results, including revenue, operating income, and earnings for share. Our third quarter bookings of $8.4 billion validate customer confidence and strong market demand for our portfolio of advanced technologies. Revenues increased 6% to 5.2 billion, reflecting strength across multiple areas of our business, as well as stronger than expected vehicle production in North America and China. Operating income increased 10% to 654 million, reflecting the flow through on volume growth and continued strong operating performance. Increased operating earnings and lower share count DROVE RECORD EARNINGS PER SHARE OF $2.17. AND LASTLY, WE GENERATED $584 MILLION OF OPERATING CASH FLOW AND DEPLOYED $250 MILLION FOR SHARE REPURCHASES AND DEBT PAYDOWN. VERNON WILL DISCUSS EACH OF THESE IN MORE DETAIL LATER. MOVING TO SLIDE FOUR TO REVIEW OUR THIRD QUARTER BUSINESS BOOKINGS. AS EXPECTED, CUSTOMER REWARDS ACCELERATED IN THE QUARTER. Our portfolio of advanced technologies and track record of flawless customer service led to $8.4 billion of new business awards, including $1.6 billion in our advanced safety and user experience segment, $2.1 billion in our engineered components group, and $4.7 billion in electrical distribution systems, bringing our year-to-date new business bookings to roughly $19 billion. We exited the third quarter with momentum, and our customer award pipeline remains large and is growing. We continue to expect roughly $31 billion in new business bookings for the year, although timing of some program awards slated for the fourth quarter could shift into 2026. Let's move on to review each segment in more detail. Moving to slide five to review the third quarter highlights for our advanced safety and user experience segment. Revenue was flat year over year, reflecting the launch of new programs and continued strong growth for Wind River. over 20% in the quarter, partially offset by the ongoing headwinds related to the roll-off of a legacy infotainment program and the cancellation of certain programs with two Chinese local OEMs, both of which we discussed last quarter. Third quarter program launches reflect the breadth of our product offering. Highlights include the launch of APTA's new Gen 8 radar product, which unlocks new possibilities for hands-free driving in complex urban environments. with improved cost and efficiency for our customers. The first high-performance cockpit controller launch for Mahindra's market-leading BE6 and XEV9E high-volume electric SUVs, further underscoring APTA's ability to support different configurations based on customer needs. And several launches for ADAS controllers with leading Chinese local OEMs, including Chang'an, incorporating an increased percentage of locally sourced components. Moving to new business bookings, we continue to experience strong demand for active safety products, as well as our next-generation user experience solutions, evidenced by multiple awards with global OEMs extending their L2 and L2 Plus ADAS programs, a full-stack cross-platform next-generation in-cabin sensing solution for a major Korean OEM, and awards with leading Chinese local OEMs, including Geely, Cherry, and Chang'an, across numerous product lines, including advanced active safety. Wind River was awarded new business across multiple end markets, including enterprise cloud offerings for Black Box, a global leader in digital infrastructure solutions, software application, and VxWork RTOS on mission-critical systems for an aerospace and defense prime, and real-time operating system software for industrial market applications. Efforts to expand Wind River's edge AI ecosystem continue with three new strategic AI partnerships for this quarter, including with Leighton AI to bring AI capabilities to real-time edge platforms for mission-critical infrastructure, Toradex to advance innovation for aerospace and defense by uniting certifiable reliability with rapid development, and SAKI integrating its time-sensitive networking solution with VxWorks RTOS to create a scalable, secure, and certifiable foundation for mission-critical applications. Moving to slide six to review the highlights for our engineered components group. Our new business awards and program launches validate the strength of our product portfolio and established position across multiple end markets. Notable program launches include high-speed connector assemblies for an all-new fully electric midsize SUV a global oem high voltage solutions for multiple asia pacific oems including connectors for a mass market electric vehicle platform with a japanese oem and an electrical center for voya dong feng's luxury electric vehicle brand during the quarter new business bookings included a cross-platform award for a large european oem integrating our connectors and cables into our inter-cable automotive bus bar application, enabling DC fast charging. High-voltage connector will work with multiple global OEMs, including a conquest award for next-generation EV platforms. Customer awards for high-speed connector assemblies across nearly a dozen OEMs, including BYD, Cherry, and Chang'an. Interconnects and assemblies for Alstom, transportation, a global leader of high-end passenger rail vehicles and equipment, and interconnects across energy, data centers, and A&D applications. Turning to slide seven to review our electrical distribution systems business, which delivered double-digit revenue growth, reflecting solid business performance and an easier year-over-year comp.