0001521332-26-000048
SEC filingRevenue grew 5% YoY to $5.1B, driven by volume and commodity pass-through, while gross margin compressed 100 bps to 18.1%.
For the three months ended March 31, 2026, Aptiv reported net sales of $5.086 billion, a 5% increase compared to $4.825 billion in the same period of 2025. The growth was driven by a 2% increase in volumes (outpacing a 3% decline in global automotive production), favorable foreign currency impacts of $148 million, and commodity pass-through of $60 million, partially offset by contractual price reductions of $27 million.
Gross margin remained flat at $920 million, but as a percentage of net sales declined 100 basis points to 18.1% from 19.1%. Cost of sales increased by $261 million, driven by unfavorable currency exchange, higher volumes, and operational performance, partially offset by decreased warranty costs of approximately $15 million.
Operating income decreased 16% to $378 million from $448 million, primarily due to a $43 million increase in selling, general and administrative expenses (driven by a $38 million increase in Separation costs), a $25 million increase in restructuring charges, and a $2 million increase in amortization.
Net income attributable to Aptiv was $189 million, a significant improvement from a net loss of $11 million in the prior year. This swing was largely due to a $275 million favorable change in income tax expense, which included $281 million of discrete tax expense in the prior year related to valuation allowance changes.
Electrical Distribution Systems: Revenue increased 9% to $2.212 billion, driven by volume growth, FX, and commodity pass-through. Gross margin declined 130 basis points to 10.9%. Adjusted operating income rose $6 million to $149 million, supported by volume and operational performance.
Engineered Components: Revenue increased 5% to $1.657 billion, primarily from FX and commodity pass-through. Gross margin declined 30 basis points to 25.9%. Adjusted operating income decreased $3 million to $271 million, impacted by volume and operational performance.
Intelligent Systems: Revenue increased 1% to $1.433 billion, driven by FX. Gross margin declined 80 basis points to 17.4%. Adjusted operating income fell $13 million to $142 million, primarily due to volume declines.
Management highlighted several key trends and uncertainties. The company completed the spin-off of its Electrical Distribution Systems business into Versigent PLC on April 1, 2026, and will present it as a discontinued operation starting in Q2 2026. Separation costs are expected to continue, including approximately $50 million in bank-related success fees in Q2 2026.
The company expects to continue incurring restructuring expenses, with approximately $20 million in approved programs as of March 31, 2026. Management noted ongoing risks from trade tariffs, global supply chain disruptions, and inflationary pressures, but believes its flexible cost structure and strong balance sheet position it to navigate these challenges. The company also highlighted long-term growth opportunities from automation, electrification, and digitalization trends, despite delays in some OEM software-defined vehicle investment strategies.
Aptiv ended Q1 2026 with $3,173 million in cash and cash equivalents, up from $1,851 million at year-end 2025, driven largely by proceeds from the Versigent spin-off debt issuance. Restricted cash was $4 million. Total debt rose to $9,350 million from $7,551 million, reflecting $1,577 million in net proceeds from senior notes and $486 million from the Spin-Off Term Loan A, partially offset by the $270 million redemption of 4.35% senior notes. The estimated fair value of debt was $8,386 million, below carrying value. Shareholders' equity increased slightly to $9,423 million from $9,397 million, with retained earnings growing to $6,351 million.
No material purchase commitments are disclosed. Warranty obligations totaled $100 million (current $85M, long-term $15M), with a reasonably possible range of $0 to $40 million above reserves. Restructuring liabilities were $126 million, expected to incur additional $20 million over the next twelve months. Environmental reserves were $4 million. Remaining performance obligations for software contracts were $168 million, with 60% expected to be recognized within one year. Spin-off debt ($789M 6.125% notes due 2031, $788M 6.375% notes due 2034, $495M Term Loan A) was transferred to Versigent on April 1, 2026.
Aptiv repurchased 1.0 million shares for $75 million in the open market, leaving $2,040 million remaining under the July 2024 $5.0 billion authorization. No dividends were paid to common shareholders. Capital expenditures totaled $219 million, or 4.3% of net sales (computed). Debt increased by $1.8 billion net, primarily for the spin-off financing. The company also redeemed $266 million of 4.35% senior notes, incurring a $5 million loss on extinguishment.
Three reportable segments: Electrical Distribution Systems (EDS), Engineered Components, and Intelligent Systems. EDS net sales grew 9.3% YoY to $2,212 million, adjusted operating income $149 million. Engineered Components sales rose 4.8% to $1,657 million, income $271 million. Intelligent Systems sales increased 0.6% to $1,433 million, income $142 million. Geographic breakdown (by manufacturing location): North America $1,934M, Europe/Middle East/Africa $1,647M, Asia Pacific $1,411M, South America $94M. The EDS segment is now divested via spin-off effective April 1, 2026, and will be reported as discontinued operations from Q2 2026.