Aptiv PLC

Please stand by. Good day and welcome to the Aptiv Q1 2026 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, Cynthia. Good morning and thanks for joining Aptiv's first quarter 2026 earnings conference call. The press release, slide presentation, and updated new Aptiv pro forma financials 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 as of March 31st. 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. 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, the first quarter concluded with the successful completion of the separation of our electrical distribution systems business into a new independent public company, Versagen, which you'll hear more about following their earnings release and conference call after the market closes later today. This step in our portfolio evolution better positions Aptiv to enhance our advanced software and hardware tech stack, further diversify our end market mix, and accelerate our revenue and earnings growth. I'll start by covering our first quarter total Aptiv results. We continue to flawlessly execute for our customers in an increasingly dynamic environment, further amplified by the conflict in the Middle East, enabled by our operating rigor and the resilience of our business model. We secured $7 billion of new business awards while also delivering solid financial results, including revenue of over $5 billion, an increase of 1% versus the prior year, despite a deterioration in underlying vehicle production. Adjusted EBITDA of over $750 million, driven by flow-through on volume growth and strong operating performance, which helped to offset significant year-over-year headwinds from FX and commodities. when combined with lower net interest expense and a lower share count, resulted in record earnings per share of $1.71. Varen will review our financial results in more detail later. Turning to slide four, my remaining prepared remarks will be focused exclusively on NuActive, a leading provider of advanced software and optimized hardware solutions across multiple end markets that are being shaped by the acceleration of automation, electrification, and digitalization. Our deep domain expertise and experience providing OEMs with our technology staff to enable their vehicles to sense, think, act, and continually optimize increasingly can be utilized for applications in other end markets, which I'll talk more about in a moment. Competitively, we're well-positioned with content on all market-leading platforms across automotive, commercial aerospace, and telecoms. And roughly one quarter of our business is in markets outside of automotive. And we have several strategic priorities underway to further increase our penetration of those markets. And we maintain a diversified regional revenue mix and have significant momentum gaining share with the leading local China OEMs on vehicle platforms sold in China, as well as exported to or manufactured in overseas markets. In addition, we've made significant progress further penetrating the leading OEMs serving the markets in Japan, Korea, and India. Turn to slide five to spend a moment discussing new AAPTA's investment thesis. First, we've built a comprehensive portfolio that collectively powers intelligence at the edge by enabling devices and systems to sense, think, act, and continually optimize. Second, we deliver our unique product portfolio through a robust operating model that leverages our global engineering, supply chain, manufacturing, and commercial capabilities, enabling us to provide high-performance, cost-optimized solutions backed by a resilient supply chain on a global scale, ensuring flawless execution in a dynamic environment. Third, our unique product portfolio and robust operating model are leveraged to create an attractive financial profile that includes more diversified, higher margin revenues, and lastly, generates a significant amount of free cash flow that can be allocated both organically and inorganically to enhance the earnings power of our business while also returning capital to shareholders. We made solid progress across each of these pillars in the first quarter. Continued product innovation supporting new and emerging use cases across diverse end markets, including two that were showcased at last week's Beijing Auto Show. the advancement of our next generation end-to-end AI-powered ADAS platform designed to deliver safer and more enhanced hands-free L2++ autonomy in both highway and urban environments. And in robotics, we partnered to enhance the functionality and performance of both an AI-powered collaborative robot and an autonomous mobile robot for material handling, each of which integrates our award-winning pulse sensor and advanced compute solutions. We successfully navigated ongoing geopolitical dynamics in the evolving macro environment by leveraging our resilient operating model to manage through changing vehicle production schedules and increasing headwinds associated with rising input costs, including resins and metals, enabling us to deliver strong operating performance in the quarter more than offsetting ongoing headwinds while continuing to invest in key strategic initiatives. Our financial results reflected continued momentum advancing our strategic priorities, including high single-digit revenue growth in non-automotive markets and double-digit revenue growth across our software and services product portfolio, as well as margin expansion of 30 basis points, excluding FX and commodities, a measure more reflective of the results of our business, given we passed the majority of input cost inflation on to our customers. And lastly, we worked diligently through the Versagent separation to position both companies for success with strong operating models, resilient supply chains, and solid balance sheets. However, there's still more for us to do, and I'm confident that we'll continue to make progress further strengthening our value proposition and creating shareholder value. Moving to slide six, customer awards were strong in the first quarter. totaling $4.6 billion, an increase of approximately 15% from the 2025 quarterly average, and included roughly $900 million of bookings with non-automotive customers. Both business segments posted solid results, with approximately $2.4 billion in awards for intelligent systems and $2.2 billion for engineer components. I'll talk more about some of the key customer awards across each segment in a moment, but would also note that we have a large and growing pipeline of commercial opportunities and expect 2026 bookings of more than 20 billion. Let's now review each segment in more detail, starting with intelligence systems on slide seven. Our tech stack, which first enabled intelligence at the edge for automotive applications, is now gaining momentum for applications in other markets, such as drones within aerospace and defense, and robotics within diversified industrials. During the quarter, there were a number of new program and product launches. A few of strategic importance include the launch of an intelligent interior camera that incorporates our entire software and hardware stack, enabling enhanced interior sensing functionality, including driver monitoring and driver view features for the flagship sedan vehicle platform of a luxury German OEM. and the launch of an integrated high-performance cockpit controller for the high-volume, mid-level variant of an Indian OEM's electric SUV lineup, which follows a successful launch last year of an entry-level model. We also secured several important new business bookings in the quarter, including active safety awards from a large North American OEM that integrates our full tech stack from sensors to compute to software for incremental large truck and SUV platforms, underscoring the flexibility of our solutions and deep technology partnerships with several customers, and sensors and advanced compute awards for a leading China local OEM for their next generation EV platform, which support production for both the China market and export volumes. We also secured several notable software and service awards, including a VxWorks RTOS and a Helix Virtualization Software Award for a leading defense prime. building upon an established long-term partnership with this customer, and a Software Toolchain Award for a large North American OEM that will be used to optimize, which will be used to build optimized deterministic software for mission-critical and safety-critical embedded systems. This award supports this OEM's software factory initiative to move towards cloud-based development and software-defined solutions. Lastly, our commercial momentum has also accelerated in the robotics and drone markets. In addition to our partnership with Robust AI and Vecna Robotics, this quarter we secured another partnership agreement with Kamau, a top 10 industrial robotics company. In addition, we've been executing several proofs of concept and pilots in both the robotics and drone markets that we're confident will translate to commercial agreements, and we plan to share further progress on these efforts in the near future. Moving on to slide eight to cover engineer components, notable new program launches during the quarter included a broad array of high-speed interconnect launches, including mini-coax, Ethernet, and other flexible and modular assemblies across more than two dozen nameplates and OEMs, ranging from North America to Europe to China, powering next-generation software-defined vehicle architectures. high voltage electrical centers for two major local China OEMs, which will support production for both the China market and export volumes. Continued proof points of the progress we're making growing in the China market, specifically with the top 10 local OEMs that are growing both domestically and overseas, and terminals across numerous models within the portfolio and across regions for a North American-based global EV automaker. Moving on to new business awards, we secured a high-voltage inverter award from a major Korean OEM that combines high performance at a competitive cost, supporting its next-generation, multi-powertrain, software-defined vehicle platform. High-speed interconnects and components for multiple aerospace and defense primes, including for low-Earth orbit satellite and subsea applications, and a low-voltage connection system award for an integrated high-power energy storage solution from a North American-based global EV OEM that scales to support grid-level performance and resilience. Collectively, these awards reflect the breadth of our solutions, meeting demanding performance and reliability requirements in automotive, which also translate across a range of other end markets. I'll now turn the call over to Varen to go through our financial results and our full year and second quarter guidance