Garrett Motion Inc. Navigates Macro Challenges, Delivers Strong Q3 2025 Results

Garrett Motion Inc., a leading provider of turbocharging and electric powertrain technologies, has reported its financial results for the third quarter and first nine months of 2025. Despite facing ongoing macroeconomic headwinds, the company delivered solid performance, driven by sustainable cost initiatives, successful recovery of import tariffs, and a favorable foreign exchange environment.

Financial Highlights

For the third quarter of 2025, Garrett Motion reported net sales of $902 million, a 9.2% increase compared to the same period in 2024. This growth was primarily driven by higher demand in the gasoline and diesel product segments, as well as favorable foreign currency impacts. The company’s net income for the quarter was $77 million, up from $52 million in the prior year period.

Over the first nine months of 2025, net sales increased by 2.4% to $2.693 billion, with gains in gasoline and commercial vehicle sales offsetting weaker demand for aftermarket replacement parts. Net income for the nine-month period rose to $226 million, compared to $182 million in the same period of 2024.

Operational Highlights

Garrett Motion continued to see success across its differentiated technologies, securing new business in both turbocharger and zero-emission offerings. The company won light vehicle turbo awards in the U.S., India, and Brazil, and also continued to win commercial vehicle and industrial business globally, including turbo technology for data centers.

In the zero-emission space, Garrett deepened its strategic collaborations with OEMs by executing additional E-Powertrain proof-of-concept initiatives. The company also received positive feedback from mobility and industrial customers regarding the efficiency gains of its E-Cooling oil-free compressor technology.

Cost Management and Capital Allocation

Driven by sustainable cost initiatives implemented over the past year and in 2025, Garrett Motion was able to partially offset the impact of inflationary pressures on its cost of goods sold. The company’s gross profit margin improved to 20.6% in the third quarter, up from 20.1% in the prior year period.

During the first nine months of 2025, Garrett Motion repurchased $136 million of its common stock under its $250 million share repurchase program. This included $62 million in shares repurchased from funds affiliated with Oaktree Capital Management, a related party. The company also paid $36 million in cash dividends to shareholders during the period.

Outlook and Risks

Garrett Motion’s management remains cautiously optimistic about the company’s future prospects, citing continued growth opportunities in both its turbocharger and zero-emission product lines. However, the company also highlighted several risks and uncertainties it faces, including:

• Ongoing macroeconomic challenges and volatility in commodity, transportation, and energy costs
• Potential supply chain disruptions and supplier distress
• Regulatory changes related to environmental and tax policies
• Geopolitical tensions and the risk of catastrophic events
• Risks associated with the company’s substantial indebtedness

Non-GAAP Measures

To provide investors with a better understanding of its core operating performance, Garrett Motion reports certain non-GAAP financial measures, including EBIT (earnings before interest and taxes) and Adjusted EBIT. These metrics exclude the effects of financing activities, income taxes, and certain non-recurring or non-operating items, allowing for a more apples-to-apples comparison of the company’s underlying business performance.

For the third quarter of 2025, Adjusted EBIT was $133 million, up from $117 million in the prior year period. The increase was driven by higher sales volumes, productivity gains, and favorable foreign exchange impacts, partially offset by unfavorable product mix and lower pricing.

Over the first nine months of 2025, Adjusted EBIT increased to $388 million, compared to $361 million in the same period of 2024. The improvement was primarily attributable to increased productivity, higher sales volumes, and commodity, transportation, and energy deflation, which offset the impact of unfavorable product mix and lower pricing.

Conclusion

Despite the challenging macroeconomic environment, Garrett Motion delivered a solid financial performance in the third quarter and first nine months of 2025. The company’s focus on cost management, successful recovery of import tariffs, and growth in its turbocharger and zero-emission product lines have positioned it well to navigate the current uncertainties.

Looking ahead, Garrett Motion remains cautiously optimistic about its future prospects, but is also mindful of the various risks and uncertainties that could impact its business. The company’s strong liquidity position and continued investment in new technologies and strategic growth opportunities should help it weather the storm and capitalize on emerging opportunities in the evolving automotive industry.