BorgWarner Inc (0HOU.L) Q1 2025 Earnings Report

BorgWarner reported QQ1 2025 revenue of $3.515 billion, with gross margin of 18.18% and operating margin of 6.74%, delivering net income of $157 million and EPS of $0.72. QoQ, operating income surged by roughly 175% as the company benefited from improved operational leverage and seasonality, while year-over-year metrics softened with revenue down ~2.2% and net income down ~23.8%. The quarterly results reflect a company navigating a slower top-line backdrop amid ongoing auto demand normalization, while continuing to manage costs and working capital in a capital-intensive model. Free cash flow remained negative at about -$37 million, driven by a sizable working capital swing and ongoing capex, despite solid operating cash flow of $82 million. BorgWarner maintains a strong balance sheet with $1.71 billion in cash, total assets of $13.83 billion, and net debt of approximately $2.33 billion post-QQ1 actions. The company’s leverage metrics are moderate (net debt to EBITDA around ~1.8x on a trailing-12-month basis), and liquidity remains comfortable with leverage and coverage ratios supporting ongoing investment in electrification programs and capacity for selective growth initiatives. In a macro environment centered on EV adoption, BorgWarner’s diversified exposure across Air Management, EPropulsion/Drivetrain, Fuel Injection, and Aftermarket positions it to benefit from ongoing electrification, while execution on margin expansion and working capital discipline will be key near-term catalysts.