PHINIA Inc. (PHIN) — Agentic Tribune

Item 1. Business

PHINIA Inc. (together with its consolidated subsidiaries, the Company or PHINIA) is a Delaware corporation incorporated in 2023. The Company is a leader in the development, design and manufacture of integrated components and systems that are designed to optimize performance, increase efficiency and reduce emissions in combustion and hybrid propulsion for commercial vehicles and industrial applications (medium-duty and heavy-duty trucks, buses and other off-highway construction, marine, agricultural and aerospace and defense), light commercial vehicles (vans and trucks) and light passenger vehicles (passenger cars, mini-vans, cross-overs and sport-utility vehicles). We are a global supplier to most major original equipment manufacturers (OEMs) seeking to meet and exceed increasingly stringent global regulatory requirements and satisfy consumer demands for an enhanced user experience. Additionally, we offer a wide range of original equipment service (OES) solutions and remanufactured products as well as an expanded range of products for the independent (non-OEM) aftermarket (IAM).

Transition to Standalone Company

On December 6, 2022, BorgWarner Inc., a manufacturer and supplier of automotive industry components and parts (BorgWarner, or Former Parent) announced plans for the complete legal and structural separation of its Fuel Systems and Aftermarket businesses by the spin-off of its wholly-owned subsidiary, PHINIA, which was formed on February 9, 2023 (the Spin-Off).

On July 3, 2023, BorgWarner completed the Spin-Off in a transaction intended to qualify as tax-free to BorgWarner’s stockholders for U.S. federal income tax purposes, which was accomplished by the distribution of the outstanding common stock of PHINIA to holders of record of common stock of BorgWarner on a pro rata basis. Each holder of record of BorgWarner common stock received one share of PHINIA common stock for every five shares of BorgWarner common stock held on June 23, 2023, the record date. In lieu of fractional shares of PHINIA, BorgWarner stockholders received cash. As a result of these transactions, all of the assets, liabilities, and legal entities comprising BorgWarner’s Fuel Systems and Aftermarket businesses are now owned directly, or indirectly through its subsidiaries, by PHINIA. PHINIA is an independent public company trading under the symbol “PHIN” on the New York Stock Exchange.

Recent Acquisition

On August 1, 2025, the Company acquired 100% of Swedish Electromagnet Invest AB (SEM) for $47 million, comprised of $15 million of cash paid and $32 million cash used to extinguish debt assumed through the acquisition. SEM is part of the Fuel Systems segment, and is a prominent provider of advanced natural gas, hydrogen and other alternative fuel ignition systems, injector stators and linear position sensors. Refer to Note 2, “Acquisition” to the Consolidated Financial Statements in Item 8 of this Form 10-K for more information.

Narrative Description of Reportable Segments

The Company reports its results under two reportable segments: Fuel Systems and Aftermarket.

In the fourth quarter of 2025, the Company made a strategic decision to shift a significant portion of the OES business, previously reported in its Aftermarket segment, to the Fuel Systems segment, as distribution will now be handled by the Fuel Systems locations that manufacture the products. This is expected to streamline the sales structure to external customers while also reducing administrative efforts. The reporting segment disclosures have been updated accordingly which included recasting prior period information for the new reporting structure.

Net sales by reportable segment were as follows:

	Year Ended December 31,
(in millions)	2025		2024		2023
Fuel Systems	$	2,320	$	2,275	$	2,417
Aftermarket	1,306		1,282		1,231
Inter-segment eliminations	(143)		(154)		(148)
Net sales	$	3,483	$	3,403	$	3,500

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The sales information presented above does not include the sales by the Company’s unconsolidated joint venture (see sub-heading “Joint Venture” below). Such unconsolidated sales totaled approximately $256 million, $224 million, and $228 million for the years ended December 31, 2025, 2024 and 2023, respectively.

Fuel Systems

The Fuel Systems segment provides advanced fuel injection systems, fuel delivery modules, canisters, sensors, electronic control modules and associated software, as well as OES solutions. Our highly engineered fuel injection systems portfolio includes pumps, injectors, fuel rail assemblies, engine control modules, and complete systems, including software and calibration services, that reduce emissions and improve fuel economy for traditional and hybrid applications.

Aftermarket

The Aftermarket segment sells products to independent aftermarket customers. Its product portfolio includes a wide range of products as well as maintenance, test equipment and vehicle diagnostics solutions. Additionally, we offer a diverse portfolio of original equipment service solutions and remanufactured products. The Aftermarket segment also includes sales of starters and alternators to OEMs.

Financial Information About Reportable Segments

Refer to Note 24, “Reportable Segments and Related Information,” to the Consolidated Financial Statements in Item 8 of this Form 10-K for financial information about the Company's reportable segments.

Joint Venture

As of December 31, 2025, the Company had one unconsolidated joint venture in which it exercises significant influence but has a less-than-100% ownership interest. Results from the unconsolidated joint venture are reported by the Company using the equity method of accounting pursuant to which the Company records its proportionate share of the joint venture’s income or loss each period.

Management of the unconsolidated joint venture is shared with the Company’s joint venture partner. Certain information concerning the Company's unconsolidated joint venture is set forth below:

Joint venture

Products

Year organized

Percentage
owned by the
Company

Location of
operation

Joint venture partner

Delphi-TVS Diesel Systems Ltd

Diesel fuel injection equipment

2001

52.5%

India

Cheema TVS Industrial Ventures Private Limited

Financial Information About Geographic Areas

The Company has a global presence. During the year ended December 31, 2025, approximately 37% of the Company’s net sales were generated in the United States, and 63% were generated outside the United States. Refer to Note 24, “Reportable Segments and Related Information,” to the Consolidated Financial Statements in Item 8 of this Form 10-K for additional financial information about geographic areas.

Product Lines and Customers

During the year ended December 31, 2025, approximately 35% of the Company’s net sales were for Service (OES and IAM), approximately 25% were for light passenger vehicle applications, approximately 19% were for light commercial vehicle applications, approximately 15% were for medium and heavy duty commercial vehicle applications, and 6% for off-highway, industrial and other markets.

During the year ended December 31, 2025, approximately 16% of the Company’s net sales were gasoline fuel systems for light passenger vehicle applications and approximately 12% were diesel fuel systems for medium and heavy duty commercial vehicle applications.

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The Company’s worldwide net sales to General Motors Company during the years ended December 31, 2025, 2024, and 2023 were 18%, 17%, and 16%, respectively. No other single customer accounted for more than 10% of the Company’s consolidated net sales in any of the years presented. Sales to the Company’s top five customers represented 37% of sales for the year ended December 31, 2025.

Certain of the Company’s products are generally sold directly to OEMs, substantially pursuant to negotiated annual contracts, long-term supply agreements or terms and conditions as may be modified by the parties. Deliveries are subject to periodic authorizations based upon OEM production schedules. The Company typically ships its products directly from its plants to the OEMs.

Sales and Marketing

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Financial statements

data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .

From 10-Q filed 2026-04-30 (period ending 2026-03-31).

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

INTRODUCTION

PHINIA is a diversified industrial supplier and global leader in the development of fuel systems, electrical systems, and aftermarket solutions, with a strong portfolio of trusted brands that includes DELPHI®, DELCO REMY®, and HARTRIDGE™. With over 100 years of manufacturing expertise and industry relationships, PHINIA has approximately 12,500 talented employees and over 40 locations in 20 countries and is headquartered in Auburn Hills, Michigan, USA. PHINIA systems and solutions are designed to keep combustion engines operating at peak performance across a variety of applications: medium- and heavy-duty commercial vehicle (on-road vehicles used for commercial transport classified class 4–8, 14,001 pounds or heavier); light commercial vehicle (on-road vehicles used for commercial transport classified class 1–3, 14,000 pounds or lighter); light passenger vehicles (on-road vehicles used primarily for carrying passengers); and off-highway, industrial, and other (including construction and agricultural machinery, vocational vehicles, marine, industrial applications, power generation, and aerospace and defense). PHINIA’s service solutions include vehicle repair and replacement parts, offering both new and remanufactured products through the original equipment manufacturer dealer network and the independent aftermarket channel.

Acquisition of Swedish Electromagnet Invest AB (SEM)

On August 1, 2025, PHINIA completed the acquisition of Swedish Electromagnet Invest AB (SEM), a provider of advanced natural gas, hydrogen and other alternative fuel ignition systems, injector stators and linear position sensors, for $47 million, comprised of $15 million of cash consideration and $32 million cash used to extinguish debt assumed through the acquisition. See Note 2, “Acquisition”, for further discussion.

Key Trends and Economic Factors

The global economy continues to grapple with semi-conductor shortages, supply chain disruptions, and economic and geopolitical tensions. These factors may affect production, pricing, and consumer demand. In addition, evolving trade restrictions, including export controls, and increases in tariffs could have a material impact on our business, financial condition, or results of operations, including increasing our input costs and decreasing the demand for our products. Although the nature of these trade restrictions and tariffs continue to change, they increase the risk for elevated inflation more generally, which may drive an increase in our other input costs.

Outlook

We expect improved earnings and cash generation in 2026, as we expect foreign currency, operational efficiencies, and share gains to more than offset a softening original equipment (OE) market. Continued economic and geopolitical uncertainty is expected to continue to impact light vehicle (LV) volumes, which are expected to decline by mid-single percentages in our key markets. Commercial vehicle (CV) volumes are expected to remain flat in our key markets. Assuming constant foreign exchange rates and excluding sales from acquisitions, we expect a modest increase in sales. Additionally, we expect to continue to be impacted by other macroeconomic challenges in 2026, which may include but are not limited to elevated inflation, supply chain constraints, market volatility, higher tariffs (particularly in Mexico and China), evolving trade restrictions, government shutdowns, geopolitical tensions, and changes in international trade relations.

Despite the near-term uncertainties, the Company maintains a positive long-term outlook for its global business and is committed to new product development and strategic investments to support its product leadership and growth strategies. There are several trends that are driving the Company’s long-term growth that management expects to continue, including expansion in the CV market, growth in overall vehicle parc that supports aftermarket demand, increased consumer interest in hybrid and plug-in hybrid

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electric vehicles, adoption of additional product offerings enabling zero- and lower-carbon fuel solutions for combustion vehicles, and continued expansion in the aerospace and defense industry. In addition, we believe we are well positioned to continue to expand our differentiated offerings and capabilities across electronics, software and complete systems.

Use of Non-GAAP Financial Measures

This Form 10-Q contains information about PHINIA’s financial results that is not presented in accordance with accounting principles generally accepted in the United States (GAAP). Such non-GAAP financial measures are reconciled to their most directly comparable GAAP financial measures in this Form 10-Q. The reconciliations include all information reasonably available to the Company at the date of this Form 10-Q and the adjustments that management can reasonably predict.

Management believes that these non-GAAP financial measures are useful to management, investors, and banking institutions in their analysis of the Company's business and operating performance. Management also uses this information for operational planning and decision-making purposes.

Non-GAAP financial measures are not and should not be considered a substitute for any GAAP measure. Additionally, because not all companies use identical calculations, the non-GAAP financial measures as presented by PHINIA may not be comparable to similarly titled measures reported by other companies.

RESULTS OF OPERATIONS

Three Months Ended March 31, 2026 vs. Three Months Ended March 31, 2025

The following table presents a summary of the Company’s operating results:

	Three Months Ended March 31,
(in millions)	2026				2025
Net sales			% of net sales				% of net sales
Fuel Systems	$	582	66.3	%	$	529	66.5	%
Aftermarket	329		37.5	%	306		38.4	%
Inter-segment eliminations	(33)		(3.8)	%	(39)		(4.9)	%
Total net sales	878		100.0	%	796		100.0	%
Cost of sales	690		78.6	%	624		78.4	%
Gross profit	188		21.4	%	172		21.6	%
Selling, general and administrative expenses	115		13.1	%	107		13.4	%
Restructuring expense	3		0.3	%	5		0.7	%
Other operating expense (income), net	1		0.1	%	(2)		(0.3)	%
Operating income	69		7.9	%	62		7.8	%
Equity in affiliates’ earnings, net of tax	(5)		(0.6)	%	(4)		(0.5)	%
Interest income	(2)		(0.2)	%	(4)		(0.5)	%
Interest expense	20		2.3	%	19		2.4	%
Other postretirement (income) expense, net	(1)		(0.1)	%	1		0.1	%
Earnings before income taxes	57		6.5	%	50		6.3	%
Provision for income taxes	20		2.3	%	24		3.0	%
Net earnings	$	37	4.2	%	$	26	3.3	%

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Net sales and Cost of sales

Net sales for the three months ended March 31, 2026 totaled $878 million, an increase of $82 million, or 10%, compared to the three months ended March 31, 2025. Cost of sales and cost of sales as a percentage of net sales were $690 million and 79%, respectively, during the three months ended March 31, 2026, compared to $624 million and 78%, respectively, during the three months ended March 31, 2025. The change in net sales, cost of sales, and gross profit for the three months ended March 31, 2026 was primarily driven by the impacts below.

(in millions)	Net Sales		Cost of Sales		Gross Profit
Three Months Ended March 31, 2025	$	796	$	624	$	172
Volume and mix	17		18		(1)
Supplier costs	—		(3)		3
Tariff cost and recovery	12		9		3
Employee costs	—		8		(8)
SEM acquisition	14		11		3
Foreign currency and other	39		23		16
Three Months Ended March 31, 2026	$	878	$	690	$	188

Selling, general and administrative expenses (SG&A)

SG&A for the three months ended March 31, 2026 was $115 million as compared to $107 million for the three months ended March 31, 2025. SG&A as a percentage of net sales was 13% for the three months ended March 31, 2026 and 2025. SG&A expenses increased period-over-period, primarily attributable to increased employee costs, including stock-based compensation.

	Three Months Ended March 31,
(in millions)	2026		2025		Change ($)
Employee costs	$	42	$	35	$	7
Research & development	29		28		1
Amortization of acquisition-related intangibles	8		7		1
Information technology	6		8		(2)
Other	30		29		1
Selling, general and administrative expenses	$	115	$	107	$	8

Restructuring expense

Restructuring expense was $3 million and $5 million for the three months ended March 31, 2026 and 2025, respectively. See Note 4, “Restructuring”, for further discussion.

Other operating expense (income), net

Other operating expense (income), net was expense of $1 million compared to income of $2 million for the three months ended March 31, 2026 and 2025. The change in other operating expense, net was primarily driven by an increase in separation-related costs. Other operating expense (income), net was comprised of the following:

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	Three Months Ended March 31,
(in millions)	2026		2025		Change ($)
Separation-related costs (benefits)	$	2	$	(4)	$	6
Merger and acquisition expense	1		3		(2)
Other operating income, net	(2)		(1)		(1)
Other operating expense (income), net	$	1	$	(2)	$	3

Equity in affiliates’ earnings, net of tax

Equity in affiliates’ earnings, net of tax was $5 million and $4 million in each of the three months ended March 31, 2026 and 2025, respectively. This line item is driven by the results of the Company’s unconsolidated joint venture.

Interest income

Interest income was $2 million and $4 million in the three months ended March 31, 2026 and 2025, respectively. The interest income is primarily related to interest earned on funds held in money market, local overnight deposits, and short term investments.

Interest expense

Interest expense was $20 million and $19 million in the three months ended March 31, 2026 and 2025, respectively. See Note 13, “Notes Payable and Debt”, for further discussion.

Provision for income taxes

Provision for income taxes was $20 million for the three months ended March 31, 2026, resulting in an effective tax rate of 35%. This is compared to $24 million, or 48%, for the three months ended March 31, 2025. The effective tax rate for the three months ended March 31, 2026 decreased as compared to the prior year as a result of an uncertain tax position recorded discretely in the three month period ended March 31, 2025 that did not recur in the three month period ended March 31, 2026.

For further details, see Note 7, “Income Taxes,” to the Condensed Consolidated Financial Statements for the three months ended March 31, 2026 and 2025.

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Net earnings per diluted share and adjusted net earnings per diluted share

The Company’s net earnings per diluted share was $0.96 and $0.63 for the three months ended March 31, 2026 and 2025, respectively. The Company’s adjusted net earnings per diluted share was $1.29 and $0.94 for the three months ended March 31, 2026 and 2025, respectively. The Company defines adjusted net earnings per diluted share, a non-GAAP measure, as net earnings per diluted share adjusted to exclude: (i) the impact of restructuring expense, separation-related costs, merger and acquisition costs, impairment charges and other gains, losses and tax effects and adjustments not reflective of the Company’s ongoing operations; and (ii) acquisition-related intangibles amortization expense because it pertains to non-cash expenses that the Company does not use to evaluate core operating performance. Management believes that adjusted net earnings per diluted share is useful to investors in assessing the Company’s ongoing financial performance, as it provides improved comparability between periods through the exclusion of certain items that management believes are not indicative of the Company’s core operating performance.

	Three Months Ended March 31,
	2026		2025
Net earnings per diluted share	$	0.96	$	0.63
Amortization of acquisition-related intangibles	0.21		0.17
Restructuring expense	0.08		0.12
Separation-related costs (benefits)	0.05		(0.09)
Merger and acquisition expense	0.02		0.07
Tax effects and adjustments	(0.03)		0.04
Adjusted net earnings per diluted share	$	1.29	$	0.94

Results by Reportable Segment for the three months ended March 31, 2026 and 2025

The Company’s business is comprised of two reportable segments: Fuel Systems and Aftermarket.

Segment Adjusted Operating Income (AOI) is the measure of segment income or loss used by the Company. Segment AOI is comprised of segment operating income adjusted for restructuring, separation-related costs, merger and acquisition costs, intangible asset amortization expense, impairment charges and other items not reflective of ongoing operating income or loss. The Company believes Segment AOI is most reflective of the operational profitability or loss of its reportable segments.

Segment AOI excludes certain corporate costs, which primarily represent corporate expenses not directly attributable to the individual segments. Corporate expenses not allocated to Segment AOI were $24 million for the three months ended March 31, 2026 and 2025.

Refer to Note 21, “Reportable Segments and Related Information” to the Condensed Consolidated Financial Statements, for more information.

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The following table presents Net sales and Segment AOI for the Company’s reportable segments:

	Three Months Ended March 31,
	2026						2025
(in millions)	Net Sales to Customers		Segment AOI		% Margin		Net Sales to Customers		Segment AOI		% Margin
Fuel Systems	$	549	$	51	9.3	%	$	490	$	46	9.4	%
Aftermarket	329		56		17.0	%	306		51		16.7	%
Totals	$	878	$	107			$	796	$	97

The following table presents the year-over-year change in net sales and Segment AOI for the Company’s reportable segments for the three months ended:

	Fuel Systems				Aftermarket
(in millions)	Net sales		Segment AOI		Net sales		Segment AOI
March 31, 2025	$	490	$	46	$	306	$	51
Core business drivers	13		2		4		3
Tariff cost and recovery	4		1		8		2
SEM acquisition	14		1		—		—
Foreign currency, SG&A and all other	28		1		11		—
March 31, 2026	$	549	$	51	$	329	$	56

The Fuel Systems segment’s Segment Adjusted Operating margin was 9.3% for the three months ended March 31, 2026, compared to 9.4% for the three months ended March 31, 2025. The Segment Adjusted Operating margin decrease was primarily due to unfavorable product mix in Europe and Asia, partially offset by cost control measures and supplier savings.

The Aftermarket segment’s Segment Adjusted Operating margin was 17.0% for the three months ended March 31, 2026, compared to 16.7% for the three months ended March 31, 2025. The Segment Adjusted Operating margin increase was primarily due to cost control measures and tariff recoveries.

LIQUIDITY AND CAPITAL RESOURCES

Overview

The Company maintains various liquidity sources, including cash and cash equivalents and the unused portion of its $500 million revolving credit facility maturing in July 2028 (the Revolving Facility). As of March 31, 2026, the Company had liquidity of $808 million, comprised of cash and cash equivalent balances of $328 million and availability on the Revolving Facility of $480 million. Given the Company’s strong liquidity position, management believes that it will have sufficient liquidity and will maintain compliance with all covenants through at least the next 12 months.

At March 31, 2026 and December 31, 2025, the Company had $328 million and $359 million of cash and cash equivalents, respectively, of which $315 million and $330 million, respectively, was held by our subsidiaries outside of the United States. We believe our existing cash and cash flows generated from operations and the Revolving Facility will be responsive to the needs of our current and planned operations for at least the next 12 months and the foreseeable future thereafter.

We utilize certain arrangements with various financial institutions to sell eligible trade receivables from certain customers in North America and Europe. We may terminate any or all of these arrangements at any time subject to prior written notice. While we do not depend on these arrangements for our liquidity, if

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we elected to terminate these arrangements, there would be a one-time unfavorable timing impact on the collection of any outstanding receivables.

Cash Flows

Operating Activities

Net cash provided by operating activities was $53 million and $40 million in the three months ended March 31, 2026 and 2025, respectively. The increase in cash from operating activities for the three months ended March 31, 2026 compared with the three months ended March 31, 2025 was primarily due to increased net earnings.

Investing Activities

Net cash used in investing activities was $32 million and $35 million in the three months ended March 31, 2026 and 2025, respectively, related to capital expenditures. As a percentage of sales, capital expenditures were 3.6% and 4.4% for the three months ended March 31, 2026 and 2025, respectively.

Financing Activities

Net cash used in financing activities was $50 million and $117 million in the three months ended March 31, 2026 and 2025, respectively. The decrease is primarily due to borrowings on the Revolving Facility and lower stock repurchases.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Critical accounting policies and estimates disclosures appear in “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies And Estimates,” in the Company’s Form 10-K filed on February 12, 2026. There were no material changes to this information during the quarter ended March 31, 2026.

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Held by

holders ( registered funds via N-PORT, institutional investors via 13F). Showing top by dollar value.

Holder	Type	ETF	MF	Position ($)	% of holder	Δ % of holder	Holder AUM

Recent insider activity

Last 90 days. Open-market trades (purchases & sales) by directors, officers, and 10%+ owners. 2 transactions across 2 insiders. Net: -3,477 shares, -$284,189.

Date	Insider	Role	Action	Shares	Price	Value
2026-06-10	Pombier Samantha	Vice President and Controller	Sell	-2,227	$82.36	-$183,427
2026-06-10	Coetzee Michael	VP and GM Fuel Syst. Americas	Sell	-1,250	$80.61	-$100,762

Source: SEC Form 4 filings.

Next expected filings

~2026-10-24 10-Q expected by 2026-11-03 (in 90 days)
~2027-02-04 10-K expected by 2027-02-20 (in 193 days)
~2027-04-26 10-Q expected by 2027-05-06 (in 274 days)
~2027-07-20 10-Q expected by 2027-07-30 (in 359 days)

Predicted from historical filing cadence; not an SEC commitment.

Recent SEC filings

2026-04-30 8-K Earnings Release; Financial Statements and Exhibits
2026-04-30 10-Q Quarterly Report
2026-04-09 DEF 14A Proxy Statement
2026-02-12 10-K Annual Report
2026-02-12 8-K/A Changes in Auditor
2026-02-12 8-K Earnings Release; Financial Statements and Exhibits
2025-11-03 8-K Changes in Auditor; Financial Statements and Exhibits
2025-10-28 10-Q Quarterly Report
2025-10-28 8-K Earnings Release; Financial Statements and Exhibits
2025-10-21 8-K Material Agreement Entered
2025-07-24 10-Q Quarterly Report
2025-07-24 8-K Earnings Release; Financial Statements and Exhibits
2025-04-25 10-Q Quarterly Report
2025-04-25 8-K Earnings Release; Financial Statements and Exhibits
2025-02-13 10-K Annual Report

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