PHINIA Inc.

PHINIA reported Q2 net sales of $940 million, up 5.6% from the prior year. Adjusted EBITDA was $130 million, up $4 million year over year, with a 13.8% margin; adjusted EPS was $1.53 versus $1.27 a year ago. Fuel Systems sales were $584 million, up 5%, with an 11% adjusted operating margin, and Aftermarket sales were $356 million, up 6.6%, with a 17.1% adjusted operating margin. For 2026, the company now expects revenue of $3.57 billion to $3.67 billion, adjusted EBITDA of $485 million to $515 million, adjusted EBITDA margin of 13.5% to 14.1%, adjusted free cash flow of $210 million to $250 million, and an adjusted tax rate of 30% to 33%. Management said the revenue range is being tightened while keeping the midpoint, and that full-year guidance does not include the impact of the stoba acquisition.

Brady Ericson said the quarter reflected PHINIA’s diversified portfolio, disciplined execution, and resilience in a mixed macro backdrop. He highlighted continued growth in both Fuel Systems and Aftermarket, new business wins across OE and aftermarket, and a robust M&A pipeline. He also framed the stoba deal as a strategic tuck-in that strengthens supply-chain control, expands exposure to off-highway, industrial, aerospace and defense, and adds another semiconductor-related capability.

Chris Gropp said Q2 results were in line with expectations and broke down the year-over-year sales increase as $18 million from volume and mix, offset by $21 million of unfavorable FX and $7 million of net tariff pass-through, plus $18 million from SEM. He said adjusted EBITDA of $130 million included an $11 million tariff-related contribution, a $3 million contribution from SEM, and a roughly $9 million increase in other costs, largely incentive compensation. He also noted cash and cash equivalents of $370 million, liquidity of $820 million, cash from operations of $91 million, adjusted free cash flow of $74 million, and that the stoba deal is expected to be accretive on a run-rate basis with about $80 million of third-party sales and $25 million of EBITDA.

Analysts focused on why full-year guidance was refined despite a seemingly healthy demand backdrop, and management pointed to weaker global light vehicle conditions, especially China, along with tariff refunds reducing sales. Questions on stoba centered on how much of its EBITDA would come from vertical integration versus stand-alone operations; management said the right way to think about it is roughly $10 million of external EBIT and about $15 million of vertical integration savings. On capital allocation, management said the acquisition should not change the buyback/dividend posture materially, and on future M&A they said the pipeline remains robust and active.