THRM earnings analysis
What we found in THRM's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Gentherm reported product revenues of $393.706M in Q1 2026, up $39.852M (11.3%) year-over-year, with gross margin expanding to 24.7% from 24.4%. Operating income declined to $11.285M (operating margin ~2.9%) from $17.061M a year earlier due to $16.827M higher SG&A (including $14.8M of M&A expenses); net income was $4.218M. Operating cash flow was negative $5.043M and free cash flow was negative ~$10.693M for the quarter; liquidity includes $177.401M cash and $278.1M available on the credit facility.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue beat and Y/Y growth
- Product revenues were $393.706M in Q1 2026, up $39.852M or 11.3% versus $353.854M in Q1 2025 (filed numbers).
- Automotive segment strength
- Automotive revenues increased to $382.166M from $341.874M, up $40.292M or 11.8% year-over-year (three months ended March 31, 2026 vs 2025).
- Gross margin modestly improved
- Gross margin increased to 24.7% in Q1 2026 from 24.4% in Q1 2025 (gross margin dollars $97.227M vs $86.465M).
- Adjusted/Operational profitability signal (net income positive)
- Net income was $4.218M in Q1 2026 versus a net loss of $0.128M in Q1 2025 (increase of $4.346M), showing bottom-line improvement despite operating pressure.
- Liquidity position intact
- As of March 31, 2026 the Company held $177.401M of cash and cash equivalents and had $278.1M of availability under its credit agreement.
- New business awards
- The Company reported $395M of automotive new business awards in Q1 2026 (aggregate projected lifetime revenue of new awards).
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Operating income compression from M&A costs
- Operating income fell to $11.285M in Q1 2026 from $17.061M in Q1 2025 (down $5.776M) as SG&A rose $16.827M to $55.305M, driven by $14.8M of merger and acquisition expenses related to the Modine Transaction.
- Negative operating and free cash flow this quarter
- Net cash used in operating activities was $(5.043)M and net cash used in investing activities was $(5.650)M, implying a free cash flow of approximately $(10.693)M for the quarter.
- Working capital consumption from receivables and inventory
- Changes in working capital reduced operating cash flow, including $26.3M related to increases in accounts receivable and $10.3M related to increases in inventory during the quarter.
- Transaction and financing contingencies (Modine)
- The Modine Transaction is expected to close in Q4 2026 and involves a $1,000.0M valuation estimate, a SpinCo cash distribution of $210.0M (subject to adjustment), a Bridge Facility commitment of $290.0M and a possible $45.0M termination fee — all of which introduce execution and financing risk.
- Tariff / trade uncertainty remains
- Management notes a rapidly changing tariff environment and states it 'cannot reasonably estimate the total financial impact' of recent tariff rulings, creating potential future cost or margin pressure (as disclosed in MD&A).
- Restructuring and one-time items increasing expense
- Restructuring expenses rose to $6.691M in Q1 2026 from $4.514M in Q1 2025 (increase of $2.177M), and the company incurred $3.0M of fees associated with bridge financing and backstop commitments recorded in SG&A.
What they reported.
What the company itself reported, taken out of the document.
- Gross margin
- 24.7%
- Operating margin
- 2.9%
- Segment
- Automotive: $382,166,000 (up $40,292,000, +11.8% vs Q1 2025)
- Segment
- Medical: $11,540,000 (down $440,000, -3.7% vs Q1 2025)
What they said about what is next.
The Form 10-Q does not provide new numeric revenue or EPS guidance. MD&A states the Modine Transaction is expected to close in Q4 2026 and management believes cash, cash equivalents and borrowings will be adequate for at least the next twelve months; full-year guidance was addressed in related filings (see earnings release/8‑K) rather than in this 10-Q.
The filing reads about the same as the one before it.
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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