0001521332-26-000009
SEC filingAptiv's 2025 revenue grew 3% to $20.4B, but GAAP operating income fell 36% due to $648M goodwill impairment; adjusted operating margin was 12.1%.
Aptiv is a global industrial technology company focused on enabling a more automated, electrified and digitalized future. The company delivers flexible and scalable solutions supporting customers’ transition to an increasingly software-defined future, with technologies reaching from sensor to cloud. In December 2024, Aptiv completed a reorganization transaction in which a new publicly-listed Jersey parent company, Aptiv Holdings Limited (renamed Aptiv PLC), was established, resident for tax purposes in Switzerland, with no material changes in operations or governance.
As of 2025, Aptiv realigned its business into three reportable operating segments: Advanced Safety and User Experience, Engineered Components Group, and Electrical Distribution Systems. The Advanced Safety and User Experience segment provides critical technologies and services to enhance vehicle safety, security, comfort and convenience, including intelligent sensors, high-performance compute platforms, and advanced software tools and services. The Engineered Components Group segment provides connection systems, high-performance interconnects, and cable management and protection solutions. The Electrical Distribution Systems segment provides low voltage and high voltage power, signal and data distribution solutions. The Company is pursuing a separation of the Electrical Distribution Systems business into a new independent publicly traded company named Versigent, expected to be completed by April 1, 2026, and in 2025 incurred approximately $178 million in separation-related costs.
Products are organized around core product lines. Advanced Safety includes solutions enabling advanced safety features and vehicle automation, as well as radar, vision and other sensing technologies. User Experience encompasses in-cabin solutions for infotainment, driver interface and interior sensing. Smart Vehicle Compute and Software consists of zone control and centralized compute platforms, as well as edge-to-cloud DevOps tools. The company also holds a minority equity interest (approximately 13% as of December 31, 2025) in Motional AD LLC, a joint venture with Hyundai Motor Group focused on autonomous driving technologies. In December 2022, Aptiv acquired Wind River Systems, a global leader in software for the intelligent edge.
Aptiv serves the 25 largest automotive OEMs globally, as well as leading aerospace and defense companies and global telecom operators. The ten largest customers accounted for approximately 56% of total net sales in 2025, with one individual Global OEM representing approximately 10%. Products are supplied through purchase orders governed by general terms and conditions, with relationships typically extending over the life of the related vehicle. The company operates 139 major manufacturing facilities and 11 major technical centers using a regional service model structured to serve North America from Mexico, South America from Brazil, Europe from Eastern Europe and North Africa, and Asia Pacific from China.
The automotive technology and components industry is extremely competitive, with new entrants in best cost countries such as China and in evolving vehicle technologies like intelligent systems software and automated driving. Named competitors include Bosch Group, Denso Corporation, Harman International, Mobileye, Valeo, Amphenol Corporation, TE Connectivity, Lear Corporation, and Yazaki Corporation, among others.
The company's strategy includes disciplined investing to grow and enhance product offerings, strategically focusing the portfolio in high-technology, high-growth spaces to meet consumer preferences, and leveraging an industry-leading cost structure to expand operating margins. Aptiv aims to capitalize on secular trends of automation, electrification, and digitalization, and plans to complete the separation of its Electrical Distribution Systems segment by April 1, 2026.
As of December 31, 2025, Aptiv employed approximately 140,000 people, including 30,000 salaried and 110,000 hourly employees, plus a contingent workforce of approximately 51,000. Approximately 20,700 scientists, engineers and technicians are focused on developing market-relevant solutions. The workforce is 50% women, with approximately 25% of management roles held by women. In 2025, approximately 55% of management role openings were filled through internal promotions. The company achieved a lost time injury frequency rate of 0.21 cases per million hours worked and a lost workday case rate of 0.043 per 100 employees, with 92% of manufacturing sites certified to ISO 45001.
Aptiv's 2025 revenue rose 3% to $20.4B, driven by 3% volume growth (outpacing AWM production growth of 1%), favorable FX of $129M, and $90M commodity pass-through. Gross margin expanded 30 bps to 19.1%, aided by operational improvements and volume leverage. However, GAAP operating income fell 36% to $1.18B, primarily due to a $648M non-cash goodwill impairment at the Wind River reporting unit. Excluding special items, adjusted operating income reached a record $2.5B (12.1% margin), up from $2.4B in 2024. Net income attributable to Aptiv was $165M, down from $1.8B, impacted by the impairment and higher tax expense ($700M vs $223M) which included a $294M valuation allowance on Swiss deferred tax assets.
Segment mix shifted toward EDS, which now represents 43% of total revenue, while ASUE share remained at 28%.
Management's outlook centers on the planned separation of Electrical Distribution Systems (Versigent) by April 1, 2026, with $178M separation costs incurred in 2025. For 2026, Aptiv expects non-cash amortization of $215M, restructuring cash outflows of $110M, and additional restructuring expense of ~$75M. R&D spending (net of co-investment) is guided to $1.2B. The company continues to invest in automation, electrification, and digitalization trends, though OEM delays in software-defined vehicles pose headwinds. No explicit revenue or margin guidance was provided, but management highlighted a flexible cost structure (97% hourly in best-cost countries, 31% contingent) targeting EBITDA breakeven at a 45% volume decline. The share repurchase program retains $2.1B of authorization.
Key strategic priorities include commercializing software-defined systems, targeting right customers, and maintaining financial flexibility to pursue acquisitions and return capital.
Cash and cash equivalents increased to $1.851 billion as of December 31, 2025 from $1.573 billion a year earlier. Total debt decreased to $7.551 billion from $8.352 billion, driven by the full repayment of the $250 million Term Loan A in Q1 2025 and partial redemptions of senior notes totaling $300 million aggregate principal amount (repurchased for $298 million including accrued interest). The company had no outstanding borrowings under its $2 billion Revolving Credit Facility as of year-end, with only $2 million in letters of credit issued. The European accounts receivable factoring facility had a zero balance at December 31, 2025, compared to $450 million at December 31, 2024.
The notes disclose restructuring liabilities of $122 million as of December 31, 2025, with an expectation to incur additional restructuring costs of approximately $75 million within the next twelve months, primarily in the Electrical Distribution Systems segment ($40 million) and Advanced Safety and User Experience segment ($25 million). A Spin-Off Credit Agreement was entered into in November 2025 for $1.35 billion in senior secured credit facilities ($500 million term loan and $850 million revolving credit facility), but no amounts were drawn as of year-end. No other aggregate purchase commitments or supply agreements were disclosed in the notes.
The company repurchased $397 million of ordinary shares in 2025 and entered into forward contracts for share repurchases totaling $750 million. Combined, total share repurchases amounted to approximately $1.15 billion for the year. Capital expenditures were $656 million, down from $830 million in 2024 and $906 million in 2023. No dividends were declared or paid on ordinary shares. The company fully repaid the $250 million Term Loan A in Q1 2025 and partially redeemed $300 million of senior notes, resulting in a net debt decrease of approximately $800 million for the year.
Segment-level financial results were not provided in the notes, but restructuring charges were disclosed by segment: Electrical Distribution Systems ($86 million), Advanced Safety and User Experience ($58 million), and Engineered Components Group ($41 million). The goodwill impairment of $648 million was entirely attributable to the Wind River reporting unit within the Advanced Safety and User Experience segment. The company's ten largest customers accounted for approximately 56% of total net sales in 2025, with one individual Global OEM exceeding 10%.
Aptiv's risk factors emphasize significant exposure to global supply chain disruptions. The company relies on just-in-time delivery for raw materials (copper, resins, semiconductors) and components. Past semiconductor shortages and trade policy uncertainties (US tariffs on China/Mexico) have caused production volatility. The company has increased inventory levels to mitigate but warns that any single subcomponent failure could halt production. Additionally, supply chain disruptions could lead to customer claims for consequential damages, including lost profits.
Cyclical automotive sales directly impact Aptiv's revenue. A prolonged recession or downturn would reduce OEM production, potentially forcing plant shutdowns or impairments. The China market is particularly competitive; domestic OEMs are gaining share, and traditional customers like GM have restructured, reducing demand. Aptiv's growth strategy relies on China and new technologies (ADAS, autonomy, high-voltage electrification), but delayed customer investments in software-defined vehicles could slow growth. Pricing pressure from OEMs (annual 1-3% reductions) and the ability to re-source business further pressure margins.
The planned spin-off of the Electrical Distribution Systems business (Versigent) is a major risk. Completion depends on market conditions and tax-free qualification under US and Swiss law. Failure to qualify could result in significant tax liabilities for the company and US shareholders. The company incurred $178M in spin-off costs in 2025. Goodwill impairment risk is highlighted by the $648M non-cash charge on the Wind River reporting unit in Q3 2025. Further impairments could occur if economic or operating conditions deteriorate.
Aptiv operates globally, with 64% of revenue outside the US. Tariffs, trade barriers, and geopolitical conflicts (Ukraine-Russia, Middle East) pose risks. Mexico's labor reforms (minimum wage increases, potential 40-hour work week) are increasing costs. Cybersecurity threats are growing; the company has implemented risk management but cannot guarantee against material incidents. Environmental regulations, including climate change rules, could impose additional costs.
Overall, Aptiv's risk factors are comprehensive and reflect a company heavily dependent on global automotive production, with significant exposure to supply chain disruptions, competitive pressures in China, and the execution of a major spin-off. The materialization of these risks could materially affect financial performance.
Operating cash flow (CFO) of $2.185 billion in 2025 was significantly higher than net income of $181 million, reflecting large non-cash charges including $648 million goodwill impairment, $783 million depreciation, and $208 million amortization. The CFO decline from $2.446 billion in 2024 was driven by a $216 million increase in accounts receivable and a $241 million inventory build, partially offset by a $251 million increase in accounts payable. Capex intensity moderated to $656 million (30% of CFO) from $830 million (34% of CFO) in 2024. Free cash flow (CFO less capex) was $1.529 billion, covering share repurchases of $397 million and debt repayments. Notable anomalies include a $394 million deferred tax expense in 2025 versus a $34 million benefit in 2024, and a $648 million goodwill impairment that did not affect cash. The company also generated $164 million from sale of equity method investments. Overall, cash generation remains solid despite working capital headwinds and lower net income.