BorgWarner Reports 2025 Results and Provides 2026 Guidance, Returned Approximately $630 Million to Shareholders in 2025, Strategically Enters Data Center Market with Turbine Generator System Award

Auburn Hills, Michigan, February 11, 2026 – BorgWarner Inc. (NYSE: BWA) today reported fourth quarter and full-year 2025 results and provided 2026 guidance.

Full Year 2025 Highlights

• Light vehicle eProducts grew approximately 23% in 2025 compared with 2024 due to demand for the Company’s leading-edge hybrid and electric technologies in Europe and Asia.
• The Company’s U.S. GAAP operating margin was 3.7%, which includes $624 million of goodwill, intangible asset and property, plant and equipment impairment charges within our PowerDrive Systems and Battery & Charging Systems segments. BorgWarner achieved an adjusted operating margin of 10.7% during 2025, up 60 basis points compared with 2024. This increase was driven by strong eProducts growth and cost controls across the business.
• Operating cash flow increased to $1,648 million, up approximately 19% compared to 2024. Free cash flow increased to $1,208 million, up approximately 66% compared with 2024 due to strong operating income and capital expenditure management.
• The Company’s U.S. GAAP net earnings per diluted share were $1.28. Adjusted net earnings per diluted share were $4.91, up approximately 14% compared with 2024 due to higher adjusted operating income and over $500 million in share repurchases.
• Secured a supply agreement for a turbine generator system for the artificial intelligence (AI) driven data center market and other microgrid applications.
• Secured a record number of light vehicle awards across the Company’s Foundational and eProduct portfolios that we expect will accelerate profitable growth in 2027 and beyond.

New Business Awards Across Portfolio

The Company secured multiple new business awards that are expected to support its long-term profitable growth, including the following:

Turbine Generator System Award for AI Driven Data Center Market and Other Microgrid Applications

• Master Supply Agreement with TurboCell, a subsidiary of full stack data center infrastructure developer Endeavour, to supply a highly modular turbine generator system. This product has been in development for over three years and utilizes the Company’s turbocharging, thermal management, power electronics, advanced software controls and high-speed rotating electric core competencies to bring an innovative solution for the next wave of artificial intelligence driven data center demand and other microgrid applications. BorgWarner’s turbine generator system is expected to be transformative by addressing the growing demand for high-power alternatives to traditional power generation. Additionally, the turbine generator system provides significant power, modular and fuel flexibility, while also providing a lower emissions footprint versus traditional products. Production is expected to begin in early 2027 with estimated sales of more than $300 million during the first year of production.

Other New Business Awards

• Variable turbine geometry turbocharger (VTG) conquest award with a major European OEM for the North American market used on hybrid vehicles. Production is expected to begin in 2028.
• Integrated drive module (iDM) award with a major North American OEM used on range extended electric vehicle trucks and large-frame SUVs. Production is expected to begin in 2029.
• Integrated drive module (iDM) award with a premium European OEM to support a hybrid range extended powertrain architecture. Production is expected to begin in 2029.
• Battery management system (BMS) award with a global OEM supporting additional B-segment and C-segment passenger cars as well as light commercial vehicles for both battery electric and plug-in hybrid electric vehicles. Production is expected to begin in 2029.
• Electric cross differential (eXD) award with a leading Chinese OEM used on 48V electrical and electronic architectures.

Fourth Quarter Highlights (continuing operations basis):

• U.S. GAAP net sales of $3,572 million, an increase of 3.9% compared with fourth quarter 2024.
• Excluding the impact of foreign currencies, organic sales were up 0.8% compared with fourth quarter 2024.
• U.S. GAAP net loss of $(1.23) per diluted share.
• Excluding the $2.58 of net losses per diluted share related to non-comparable items (detailed in the table below), adjusted net earnings were $1.35 per diluted share.
• U.S. GAAP operating loss of $(238) million, or (6.7)% of net sales.
• Excluding $665 million of net pretax expense related to non-comparable items, adjusted operating income was $427 million, or 12.0% of net sales.
• Net cash provided by operating activities of $619 million.
• Free cash flow of $470 million.

Full Year Highlights (continuing operations basis):

• U.S. GAAP net sales of $14,316 million, an increase of 1.6% when compared with 2024.
• Excluding the impact of foreign currencies, organic sales were up 0.5% compared with 2024.
• U.S. GAAP net earnings of $1.28 per diluted share.
• Excluding $3.63 of net losses per diluted share related to non-comparable items (detailed in the table below), adjusted net earnings were $4.91 per diluted share, an increase of approximately 14% compared with 2024.
• U.S. GAAP operating income of $536 million, or 3.7% of net sales.
• Excluding $1,001 million of net pretax expense related to non-comparable items, adjusted operating income was $1,537 million, or 10.7% of net sales, up 60 basis points compared with 2024.
• Net cash provided by operating activities of $1,648 million.
• Free cash flow of $1,208 million, an increase of approximately 66% compared with 2024.

Financial Results (continuing operations basis):

The Company believes the following table is useful in highlighting non-comparable items that impacted its GAAP net earnings per diluted share. The non-comparable items presented below are calculated after tax using the corresponding effective tax rate discrete to each item and the weighted average number of diluted shares for the periods presented. The Company defines adjusted earnings per diluted share as earnings per diluted share adjusted to eliminate the impact of restructuring expense, merger, acquisition and divestiture expense, other net expenses, discontinued operations, other gains and losses not reflective of the Company’s ongoing operations and related tax effects.

Net sales were $3,572 million for the fourth quarter 2025, an increase of approximately 3.9% compared with the fourth quarter 2024. This increase was primarily due to light vehicle eProduct sales growth, partially offset by lower industry volume and lower Battery & Charging Systems segment sales. Net loss for the fourth quarter 2025 was $262 million, or $(1.23) per diluted share, compared with net loss of $403 million, or $(1.84) per diluted share, for the fourth quarter 2024. Adjusted net earnings per diluted share for the fourth quarter 2025 were $1.35, up approximately 34% from adjusted net earnings per diluted share of $1.01 for the fourth quarter 2024. Adjusted net earnings for the fourth quarter 2025 excluded net non-comparable items of $(2.58) per diluted share, while adjusted net earnings for the fourth quarter 2024 excluded net non-comparable items of $(2.85) per diluted share. Non-comparable items include $582 million of goodwill, intangible asset and property, plant and equipment impairment charges recorded during the fourth quarter in our PowerDrive Systems and Battery & Charging Systems segments. These and other non-comparable items are listed in the table above, which is provided by the Company for comparison with other results and the most directly comparable U.S. GAAP measures. The increase in adjusted net earnings per diluted share was primarily due to the impact of higher adjusted operating income, the impact of our share repurchases and a lower effective tax rate.

Full Year 2026 Guidance: At the mid-point of its 2026 guidance, BorgWarner expects to deliver another year of adjusted operating margin improvement and adjusted earnings per share growth despite the Company’s expectation that its weighted light vehicle markets will be down 3% to approximately flat and a decline in the Company’s Battery & Charging Systems segment sales. Net sales are expected to be in the range of $14.0 billion to $14.3 billion in 2026, compared with 2025 sales of $14.3 billion. The Company’s net sales guidance implies a year-over-year change in organic sales of down 3.5% to down 1.5%. The Company’s net sales guidance includes an expected year-over-year sales decline of approximately $210 million in the Company’s Battery & Charging Systems segment, which represents approximately a 1.5% headwind to organic growth in 2026. Foreign currencies are expected to result in a year-over-year increase in sales of approximately $200 million primarily due to the strengthening of the Euro and Chinese Renminbi against the U.S. dollar.

U.S. GAAP operating margin is expected to be in the range of 9.8% to 10.0% in 2026. Excluding the impact of non-comparable items and the add back of intangible asset amortization expense, adjusted operating margin is expected to be in the range of 10.7% to 10.9%. U.S. GAAP net earnings are expected to be within a range of $4.74 to $4.91 per diluted share. Excluding the impact of noncomparable items, adjusted net earnings are expected to be within a range of $5.00 to $5.20 per diluted share. Full-year operating cash flow is expected to be in the range of $1,600 million to $1,700 million, while free cash flow is expected to be in the range of $900 million to $1,100 million.

At 9:30 a.m. ET today, a brief conference call concerning fourth quarter and full year 2025 results and full year 2026 guidance will be webcast at: https://www.borgwarner.com/investors. Additionally, an earnings call presentation will be available at https://www.borgwarner.com/investors.