Aptiv PLC

Aptiv reported Q2 2026 revenue of $3.3 billion, adjusted growth of 2% year over year, adjusted EBITDA of $613 million, and adjusted EBITDA margin expansion of 10 basis points. EPS was $1.63, up $0.12 versus the new Aptiv pro forma results in Q2 2025, and free cash flow was an outflow of $33 million, including about $70 million of cash separation costs tied to the Versigent spin. By region, North America revenue grew 10%, Europe was down 8%, and Asia Pacific rose 6%, including 5% growth in China. For full-year 2026, Aptiv now expects revenue of $12.6 billion-$12.8 billion, adjusted EBITDA of $2.31 billion-$2.37 billion, EPS of $5.60-$5.80, and free cash flow of $625 million-$725 million. Third-quarter guidance implies adjusted revenue growth of 1% at the midpoint, adjusted EBITDA of $560 million at the midpoint, EBITDA margin of 17.7%, and EPS of $1.30. Management said the $300 million midpoint revenue cut is mainly from about $150 million of customer schedule changes, $100 million of delayed launches/ramps, and about $50 million of timing in enterprise software and services sales.

Kevin Clark said the quarter showed continued progress on diversification, with double-digit non-auto growth, meaningful new awards, and early traction in robotics, drones, energy storage, and data center-related opportunities. At the same time, he was candid that domestic China weakness and export-platform reductions from European OEMs are pressuring the near-term automotive outlook and forcing a more conservative planning approach. His tone was constructive but realistic: long-term confidence remained intact, but the company is clearly prioritizing mix improvement, execution, and shareholder value actions.

Varun Laroyia framed Q2 as a solid quarter operationally but below the midpoint of guidance, with $3.3 billion of revenue, $613 million of adjusted EBITDA, and 10 bps of margin expansion. He highlighted that FX and commodities were a 30 bps margin headwind and that the EBITDA line benefited from timing of recoveries and operating performance, while free cash flow was negative $33 million due in part to about $70 million of separation costs. On the full-year outlook, he said the EBITDA and EPS cuts mainly reflect lower revenue expectations, partially offset by performance, a slightly lower tax rate, a lower share count, and another $300 million of buybacks in the back half; he also noted full-year free cash flow is expected to be $625 million-$725 million. He added that Intelligent Systems is disproportionately affected by the revenue revision, while Engineered Components should still grow in the low- to mid-single digits for the year.

Analysts pressed management on how the revised second-half assumptions affect the longer-term 2027 growth framework, and Kevin Clark said the long-term view remains intact, though he declined to give a detailed 2027 update yet. Questions also focused on China exposure, especially why Aptiv’s revenue growth there did not match the stronger bookings mix; management said revenue still lags bookings and that domestic China and European export schedules are the main issue. On margins and guidance, analysts challenged the apparent high decremental from the revenue cut; management said the software timing item creates a higher-than-normal flow-through, and Kevin explained Q4 should improve as software, volume, and recoveries rebound. A separate thread covered non-auto wins in drones and robotics, where management said these markets have a faster path to revenue and higher margins, with roughly a 6-month path from award to revenue in some cases.