Gentherm Lifts 2026 Outlook After Modine Close

The Tip Desk · November 8, 2026 · 4 min read

Full-year product revenue guidance rose to $1.825 billion–$1.925 billion after the October 1 combination, while third-quarter product revenues were $405.1 million.

Gentherm Incorporated (THRM), a maker of thermal and precision flow management technologies, completed its combination with Modine Performance Technologies on October 1 and raised full-year 2026 product revenue guidance to $1.825 billion–$1.925 billion from $1.55 billion–$1.65 billion as of July.

The thermal-technology company also lifted Adjusted EBITDA guidance to $210 million–$230 million from $185 million–$200 million, and Adjusted free cash flow to $100 million–$120 million from $85 million–$100 million. The company said the updated ranges reflect the expected contribution from Modine Performance Technologies in the fourth quarter.

President and Chief Executive Officer Bill Presley said third-quarter results were in line with expectations as the company made progress on growth and operational excellence initiatives and closed the Modine deal. He said Gentherm is “fundamentally a different company” and is entering a new phase with industry-leading platforms.

Product revenues were $405.1 million in the third quarter ended September 30, 2026, up 4.7% from $386.9 million a year earlier, or 4.4% excluding foreign currency. That followed a record $416.2 million second quarter that had grown 11.0%, or 9.5% excluding currency.

Automotive Climate and Comfort Solutions, the company’s largest product line, generated $346.4 million, up 8.8% year over year, or 8.5% excluding currency. Gentherm said that growth outperformed S&P Global’s mid-October light-vehicle production report in relevant markets by 12 percentage points. The prior quarter’s year-over-year increase in that category was 14.1%, or 12.7% excluding currency.

Within the category, Climate Control Seats revenue was $215.6 million, up 7.1%. Lumbar and Massage Comfort Solutions was $70.9 million, up 27.1%. Climate Control Interiors was $51.9 million, down 1.3%, and Climate and Comfort Electronics was $7.9 million, down 7.8%. Valve Systems revenue was $21.6 million, down 11.8%, and Other Automotive was $22.6 million, down 28.0%. The Automotive segment subtotal was $390.6 million, up 4.4%. Medical segment revenue was $14.5 million, up 14.6%.

Gross margin was 23.3%, compared with 24.6% a year earlier. The company attributed the decline primarily to foreign exchange, higher net material costs and inflation, partially offset by strong operating leverage. The second-quarter margin was 23.2%.

Net loss was $2.6 million, or $(0.08) a share, versus net income of $14.9 million, or $0.49 a share, a year earlier. Adjusted diluted earnings were $0.33 a share, compared with $0.73 a year earlier. Adjusted EBITDA was $45.0 million, or 11.1% of revenue, compared with $49.0 million, or 12.7% of revenue, a year earlier. Merger and acquisition expenses of $6.5 million appeared in the quarter, with none a year earlier; restructuring expenses, net, were $4.8 million versus $4.0 million.

Cash flow from operations was $33.7 million in the third quarter, compared with $56.1 million a year earlier. Adjusted free cash flow was $43.6 million, compared with $51.6 million a year earlier.

Automotive new business awards totaled $555 million in the quarter, after $690 million in the second quarter. The company also launched the ThermAffyx Patient Safety System and Puls.A, and on July 1 acquired Innovative Medical Equipment, provider of the ThermaZone thermal therapy device.

The quarter ended with net leverage of about 0.4 times and liquidity of $494.2 million, versus about 0.3 times leverage and $502.3 million of liquidity at the end of the second quarter.

On October 7, Gentherm returned $63.5 million to shareholders through a special cash dividend of $2.07 a share as part of the Modine transaction. In July the board authorized a new repurchase program of up to $400 million; after the October close the company bought back $60 million of common stock, leaving about $340 million remaining. Chief Financial Officer Jon Douyard said the company remains committed to returning capital to shareholders, particularly in times of value dislocation.