10-Q · April 30, 2026
Garrett Motion (GTX) reported strong Q1 2026 results, with net sales reaching $985 million, up 12% from the prior period, while diluted EPS came in at $0.39. The company raised its full-year revenue guidance to between…
Earnings analysis · 10-Q
GTX earnings analysis
Filed July 29, 2026 · Our reading of the company's report
The latest report
Garrett delivered broad-based Q2 growth, with revenue up 7% year over year to $976 million and gross margin up 190 basis points to 21.7%. Net income rose to $101 million and Adjusted EBIT increased to $152 million,…
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Garrett delivered broad-based Q2 growth, with revenue up 7% year over year to $976 million and gross margin up 190 basis points to 21.7%. Net income rose to $101 million and Adjusted EBIT increased to $152 million, supported by volumes, productivity, pricing and favorable mix. Liquidity remains solid despite cash falling to $158 million, as six-month operating cash flow reached $243 million, revolver availability was $630 million, and term-loan principal declined to $583 million. The filing itself does not provide quantitative earnings guidance, while noting ongoing inflation, FX and working-capital pressures.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
Reported figures
- Gross margin
- 21.7%
What stood out
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Revenue grew 7% to $976 million
Q2 net sales rose $63 million, or 7%, year over year to $976 million. Growth was broad based across all verticals, with $15 million of favorable foreign-exchange impact.
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Gross margin expanded 190 basis points
Gross margin expanded 190 basis points year over year to 21.7% from 19.8%, as gross profit increased $31 million to $212 million. Productivity contributed $8 million and price net of inflation pass-through contributed $8 million to gross profit.
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Net income rose 16% to $101 million
Net income increased $14 million to $101 million and net-income margin improved to 10.3% from 9.5%. Adjusted EBIT rose $28 million to $152 million, driven by $16 million of higher volumes and $10 million of productivity.
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Commercial and aftermarket demand accelerated
Commercial Vehicle/Industrial was the fastest major product line, increasing $18 million, or 10%, to $188 million, supported by China volume recovery and North American data-center genset demand. Aftermarket sales grew $8 million, or 8%, to $119 million.
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Operating cash flow rose and term debt declined
Six-month operating cash flow increased $29 million year over year to $243 million. Term-loan principal fell $54 million from year-end to $583 million following a $50 million early repayment, while revolving-facility availability remained $630 million.
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Material capital returns continued
The company returned $146 million to shareholders in the first half through $115 million of buybacks and $31 million of dividends; $135 million remained under the $250 million 2026 repurchase authorization at June 30.
What to watch
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Working capital constrained cash conversion
Management reported $66 million of unfavorable working-capital changes in six-month operating cash flow, partly offsetting $32 million of higher net income net of non-cash charges and $63 million of favorable other-assets-and-liabilities changes.
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Inflation and FX remain margin headwinds
Commodity, transportation and energy inflation reduced Q2 gross profit by $8 million, while unfavorable foreign-currency effects reduced Q2 Adjusted EBIT by $5 million.
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Risk factors unchanged; FX sensitivity is material
No material changes were made to risk factors from the 2025 Form 10-K. However, the filing quantifies currency exposure: a hypothetical 10% adverse exchange-rate move could reduce fair value by $291 million at June 30, 2026.
Management's outlook
The 10-Q contains no quantitative revenue or EPS outlook. Management states that expected operating cash flows, term loans, $800 million of 2032 Senior Notes and the revolving facility should provide adequate liquidity for operations and strategic investments for at least the next 12 months.
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.