Gentherm Reports Slight Revenue Decline but Significant Operating Income Increase for Fiscal Year 2024

Gentherm Incorporated reported a slight decline in product revenues for the fiscal year ended December 31, 2024, totaling $1.456 billion, down 0.9% from $1.469 billion in 2023. The decrease was attributed to unfavorable pricing and foreign currency impacts, particularly from the Chinese Renminbi, Korean Won, and Japanese Yen. However, the company experienced favorable volume increases in several automotive product lines, which partially offset these declines. Gross margin improved to 25.2%, up from 23.9% in the previous year, driven by cost reductions in supplier expenses and value engineering initiatives.

The company’s operating income rose significantly to $107 million, compared to $77.4 million in 2023, reflecting a $29.6 million increase. This improvement was supported by a reduction in total operating expenses, which fell to $259.4 million from $274.2 million. Notably, Gentherm recorded a substantial decrease in research and development expenses, which were $88.7 million, down from $94.4 million in the prior year. The company also reported a foreign currency gain of $9.6 million, a significant turnaround from a loss of $5.9 million in 2023.

Strategically, Gentherm has focused on optimizing its manufacturing footprint and reducing overhead costs through its "Fit-for-Growth 2.0" initiative. This program has led to significant cost reductions and operational efficiencies. Additionally, the company completed the exit of its non-automotive electronics business, which is expected to strengthen its core automotive and medical segments. Gentherm also announced plans to close its facility in Greenville, South Carolina, relocating operations to Monterrey, Mexico, which is part of its ongoing restructuring efforts.

As of December 31, 2024, Gentherm employed 14,246 individuals, a slight decrease from 14,504 in 2023. The company continues to expand its global presence, with manufacturing sites strategically located in low-cost regions to align with major customers. In 2024, Gentherm secured approximately $2.4 billion in new business awards, indicating strong future revenue potential despite the current challenges in the automotive market.

Looking ahead, Gentherm anticipates continued pressure from macroeconomic factors, including inflation and geopolitical tensions, which may impact automotive production levels. The company expects light vehicle production in its key markets to decrease slightly in 2025. However, Gentherm remains optimistic about its product innovations and market positioning, particularly in the growing sectors of electric and connected vehicles, which are expected to drive demand for its thermal management and comfort technologies.