10-Q · May 6, 2026
Gentex delivered a strong performance in Q1 2026 with consolidated revenue of $675.4 million, up 17% year-over-year, surpassing estimates. The reported diluted EPS of $0.46 also exceeded projections, reflecting core…
Earnings analysis · 10-Q
GNTX earnings analysis
Filed August 4, 2026 · Our reading of the company's report
The latest report
Gentex delivered Q2 GAAP diluted EPS of $0.54, up from $0.43 a year ago, despite a 1% revenue decline to $651.3 million. Margin performance was strong, with gross margin rising to 37.0% and calculated operating margin…
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Gentex delivered Q2 GAAP diluted EPS of $0.54, up from $0.43 a year ago, despite a 1% revenue decline to $651.3 million. Margin performance was strong, with gross margin rising to 37.0% and calculated operating margin reaching 21.7%, though approximately $18 million of tariff reimbursements materially aided cost of goods sold. Automotive weakness remains the key offset: automotive sales fell to $560.2 million and mirror shipments declined 10%, while management maintained its $2.65 billion-$2.75 billion FY2026 revenue outlook amid an expected 3% global light-vehicle-production decline.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
Reported figures
- Earnings per share
- $0.54
What stood out
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Earnings rose despite modest sales decline
Q2 revenue was $651.3 million, down 1% year over year from $657.9 million and down 3.5% sequentially from $675 million in Q1 2026. Despite the sales decline, GAAP diluted EPS rose to $0.54 from $0.43 a year ago and $0.46 in Q1 2026.
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Gross margin expanded sharply
GAAP gross margin expanded to 37.0% from 34.2% in Q2 2025 and 33.9% in Q1 2026. Approximately $18 million of IEEPA tariff reimbursements reduced Q2 cost of goods sold, alongside favorable mix.
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Operating leverage drove profit growth
GAAP operating income increased to $141.3 million from $118.5 million in Q2 2025; the calculated operating margin rose to 21.7% from 18.0%. Operating expenses fell to $99.7 million from $106.8 million, primarily because the prior year included severance costs.
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Non-auto categories grew
Premium Audio sales increased $7.2 million year over year to $51.7 million, while Other sales rose 12% to $39.4 million. Dimmable aircraft-window sales grew to $6.5 million from $4.0 million, and security/access-control sales were $2.7 million, up $2.5 million.
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Cash generation and liquidity strengthened
Six-month operating cash flow reached a record first-half $321.7 million, up $7.0 million year over year, while capex declined to $36.2 million from $67.8 million. Cash increased $87.8 million to $233.4 million and working capital increased to $825.8 million from $740.9 million.
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Margin outlook raised; capex outlook reduced
Management maintained FY2026 revenue guidance of $2.65 billion-$2.75 billion, raised gross-margin guidance by 50 basis points to 34.5%-35.5%, and cut capex guidance to $115 million-$125 million from $125 million-$140 million.
What to watch
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Automotive volumes and international demand weakened
Automotive sales declined to $560.2 million from $578.1 million, while total auto-dimming mirror shipments fell 10% to 10.416 million units. International interior-mirror shipments declined 26% to 3.928 million units, reflecting lower production and demand in key overseas markets.
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Tariff reimbursement benefit may not recur
The 37.0% Q2 gross margin benefited from approximately $18 million of tariff reimbursements. Gentex has directly paid approximately $42 million of IEEPA tariffs, and management says the availability, amount, and timing of further refunds are uncertain.
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Investment impairments and credit losses increased
Other loss increased to $4.5 million from $3.0 million, including a $9.4 million technology-investment impairment and a $2.9 million increase in loan-receivable credit-loss reserves. Six-month technology-investment impairments totaled $12.2 million.
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2026 vehicle-production outlook remains negative
The company forecasts global light-vehicle production to decline 3% in 2026 to 75.49 million units from 77.49 million in 2025; China is forecast to decline 5% to 31.58 million units. Automotive represented approximately 86% of first-half revenue, making production conditions material.
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Receivables and inventories increased
Accounts receivable increased approximately $17.8 million and inventories increased to $519.0 million from $516.3 million at year-end. The working-capital build can pressure cash conversion if customer payment timing or demand weakens.
Management's outlook
FY2026 consolidated revenue outlook remains $2.65 billion-$2.75 billion. Gross-margin outlook was raised to 34.5%-35.5% from 34.0%-35.0%; operating-expense outlook was reduced to $405 million-$415 million from $410 million-$420 million; capex was reduced to $115 million-$125 million from $125 million-$140 million. The company continues to expect 2027 revenue of $2.80 billion-$2.90 billion.
Earlier filings 1
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.