APTV

Aptiv PLC Q2 2026 Filing Summary

Business Context and Reporting Period

This Form 10-Q covers the quarterly period ended June 30, 2026. Aptiv PLC, a global industrial technology company, operates through two primary segments: Engineered Components and Intelligent Systems. A material event during the period was the completion of the spin-off of its Electrical Distribution Systems business into a new independent company, Versigent PLC, on April 1, 2026. Consequently, the results of the Electrical Distribution Systems segment are presented as discontinued operations for all periods reported.

Key Financial Metrics

Note: Q2 2025 Net Income was significantly boosted by $133 million in income from discontinued operations, whereas Q2 2026 included a $50 million loss from discontinued operations.

Material Changes vs. Prior Period

• Revenue Growth: Net sales increased 2% year-over-year for both the quarter and the six-month period, driven by volume growth in North America and Asia Pacific, partially offset by declines in Europe.
• Profitability: Operating income increased 13% for the quarter and 4% year-to-date. Gross margin improved to 23.7% in Q2 2026 from 22.9% in Q2 2025.
• Discontinued Operations Impact: The spin-off of Versigent resulted in a $50 million loss in Q2 2026 (primarily bank-related success fees) compared to $133 million of income in Q2 2025. This is the primary driver for the decrease in reported Net Income for the quarter.
• Debt Reduction: Total debt decreased significantly from $7,490 million at year-end 2025 to $5,354 million at June 30, 2026. This reduction was funded by a $1.9 billion cash distribution received from Versigent, which was used to redeem approximately $2.05 billion in senior notes.
• Other Income: Other income, net, increased to $58 million in Q2 2026 from $15 million in Q2 2025, largely due to a $44 million gain on debt extinguishment.

Guidance, Outlook, and Risks

• Outlook: Management expects to continue adjusting cost structures and optimizing the manufacturing footprint in response to global automotive market changes. The company maintains a focus on investing in advanced technologies and engineering.
• Restructuring: The company expects to incur an additional $15 million in restructuring costs over the next twelve months related to approved programs.
• Liquidity: As of June 30, 2026, total available liquidity was approximately $3.3 billion, including cash and unutilized credit facilities. The company remains in compliance with all debt covenants.
• Risks: Key risks include global economic conditions, geopolitical conflicts (Ukraine/Russia, Middle East), supply chain disruptions, semiconductor shortages, and potential impacts from trade tariffs and labor reforms in Mexico.
• Unusual Items: The $50 million loss in discontinued operations and the $44 million gain on debt extinguishment are non-recurring items impacting the current period's bottom line.

Investor Verification Checklist

• Discontinued Operations: Verify the separation of Versigent's financial results and the specific $50 million success fee impact on Q2 2026 earnings.
• Debt Structure: Confirm the details of the $2.05 billion debt redemption and the remaining debt maturity profile post-spin-off.
• Segment Performance: Review the divergence between Engineered Components (growing sales and margin) and Intelligent Systems (flat sales, margin pressure) to understand future growth drivers.
• Cash Flow Quality: Analyze the significant drop in operating cash flow from continuing operations ($531M in YTD 2025 vs. $82M in YTD 2026) driven by changes in working capital.
• Share Repurchases: Note that approximately $1.79 billion remains available under the current share repurchase program.