Gentherm Reports Decline in Revenue and Profitability in Q2 2025

Gentherm Incorporated reported its financial results for the second quarter of 2025, revealing a slight decline in product revenues and profitability compared to the same period in 2024. For the three months ended June 30, 2025, the company generated product revenues of $375.1 million, a decrease of 0.2% from $375.7 million in the prior year. The net income for the quarter was $477,000, significantly down from $18.9 million in the same quarter last year, resulting in basic and diluted earnings per share of $0.02, compared to $0.60 in the previous year.

The company's gross margin also experienced a decline, falling to $89.8 million, or 23.9% of product revenues, from $96.7 million, or 25.7%, in the prior year. This decrease was attributed to higher costs of sales, which rose to $285.3 million from $279.0 million, driven by increased labor costs and unfavorable foreign currency impacts. Operating income for the quarter was $24.0 million, down from $33.0 million in the same period last year, reflecting a challenging operating environment.

In terms of strategic developments, Gentherm has been actively restructuring its operations to optimize its manufacturing footprint. The company announced plans to close its facility in Plzeň, Czech Republic, and relocate manufacturing activities to other existing facilities in Europe. This restructuring is expected to incur costs between $4 million and $6 million for employee severance and retention, along with additional transition costs. Furthermore, Gentherm secured automotive new business awards totaling $620 million during the second quarter, indicating potential future revenue growth despite current challenges.

Operationally, Gentherm's total assets increased to $1.36 billion as of June 30, 2025, up from $1.25 billion at the end of 2024. The company reported a cash balance of $128.3 million, with total liabilities of $661.7 million, resulting in shareholders' equity of $699.7 million. The company’s employee headcount remained stable, and it continues to focus on enhancing its product offerings in both the automotive and medical sectors, which are critical to its long-term growth strategy.

Looking ahead, Gentherm anticipates that macroeconomic conditions, including inflationary pressures and global trade uncertainties, may continue to impact its operations. However, the company remains optimistic about its ability to navigate these challenges, leveraging its diversified customer base and innovative product portfolio. The management expressed confidence in maintaining adequate liquidity to meet operational needs and pursue growth opportunities in the coming months.