PHINIA Q2 Earnings Call Highlights

PHINIA Q2 Earnings Call Highlights

Key Points Second-quarter results improved: Revenue rose 5.6% year over year to $940 million, while adjusted EBITDA increased to $130 million and adjusted EPS climbed 20.5% to $1.53. Fuel Systems sales grew 5% and Aftermarket sales rose 6.6%.

PHINIA agreed to acquire stoba Group in a deal expected to close in the fourth quarter of 2026. The acquisition is expected to add approximately $80 million in annual third-party revenue and $25 million in adjusted EBITDA while expanding exposure to aerospace, defense, industrial and off-highway markets.

The company tightened its 2026 outlook to $3.57 billion-$3.67 billion in revenue, $485 million-$515 million in adjusted EBITDA and $210 million-$250 million in adjusted free cash flow. PHINIA also returned $53 million to shareholders during the quarter through buybacks and dividends.

PHINIA NYSE: PHIN reported second-quarter revenue growth in both its fuel systems and aftermarket businesses, while announcing an agreement to acquire precision-components supplier stoba Group and refining its full-year outlook. Chief Executive Officer Brady Ericson said the quarter developed “largely as we expected,” citing continued growth across the company’s two operating segments. Net sales rose 5.6% year over year to $940 million. Excluding foreign exchange effects, tariff recoveries and the contribution from SEM, revenue increased 2%. Adjusted EBITDA increased $4 million from the prior-year period to $130 million, representing a 13.8% margin. Adjusted diluted earnings per share, excluding non-operating items, rose 20.5% to $1.53 from $1.27 a year earlier.

Segment Results Fuel Systems sales rose 5% to $584 million during the quarter, with an adjusted operating margin of 11%. The Aftermarket segment recorded sales of $356 million, up 6.6% from a year earlier, and an adjusted operating margin of 17.1%. Ericson said the company continued to benefit from replacement-cycle fundamentals and positive conditions in commercial vehicles, while navigating geopolitical and trade uncertainty, shipping challenges and regional production variability. Chief Financial Officer Chris Gropp said foreign exchange created a $21 million headwind to quarterly sales as the Chinese renminbi, euro and Brazilian real strengthened against the U.S. dollar. Volume and mix added $18 million, supported by customer pricing and higher Americas aftermarket sales. SEM, meanwhile, contributed $18 million in revenue. Net tariff pass-through reduced quarterly revenue by $7 million, primarily reflecting anticipated government tariff refunds that PHINIA expects to pass through to customers that had previously reimbursed the company for portions of the tariff impact. On profitability, Gropp said net tariff expense and anticipated refunds contributed $11 million to earnings in the quarter. SEM contributed $3 million of adjusted EBITDA, representing a 16.6% margin. Product mix was a $1 million headwind, partially offset by supplier savings and cost-control measures, while other costs increased by about $9 million, largely due to short- and long-term incentive compensation adjustments.

stoba Acquisition Expands Manufacturing and End-Market Exposure PHINIA entered a definitive agreement to acquire stoba Group, a global technology partner specializing in high-precision components, systems and integrated solutions. The transaction is expected to close in the fourth quarter of 2026, subject to regulatory approvals and customary closing conditions, and will be funded with available liquidity. stoba operates in four countries and has seven manufacturing sites in the U.K., China, the Czech Republic and Germany. PHINIA expects the acquired business to add about $80 million in annual third-party revenue and approximately $25 million in a...