BorgWarner Inc. (BWA) is a prominent global supplier of advanced propulsion technologies, catering to a wide spectrum of vehicles including those powered ...
BorgWarner Inc. (NYSE: BWA) is a leading global supplier of innovative propulsion systems and components, headquartered in Auburn Hills, Michigan. With a history dating back to 1928, the company has evolved to become a key player in the transition to clean mobility, generating revenues of approximately US$14.2 billion and employing ...BorgWarner Inc. (NYSE: BWA) is a leading global supplier of innovative propulsion systems and components, headquartered in Auburn Hills, Michigan. With a history dating back to 1928, the company has evolved to become a key player in the transition to clean mobility, generating revenues of approximately US$14.2 billion and employing around 39,900 people. The company's four main business units deliver a diverse portfolio: Air Management focuses on turbocharging (including eBoosters and eTurbos), engine timing, thermal management, and battery systems; E-Propulsion & Drivetrain provides electric motors, power electronics, and transmission components; Fuel Injection produces precision fuel delivery systems for gasoline and diesel engines; and Aftermarket supplies repair parts, diagnostic tools, and maintenance products. BorgWarner's customers include major OEMs of light, commercial, and off-highway vehicles, as well as Tier 1 suppliers and the independent aftermarket. The company emphasizes sustainability, with a pledge to achieve carbon neutrality by 2035 and a growing share of revenue from EV and emissions-reducing technologies. Recent leadership transition saw Joseph F. Fadool become CEO in February 2025, succeeding Frédéric Lissalde. Financially, BorgWarner maintains a strong balance sheet with a market cap of about $14 billion, a gross margin of ~19.5%, and a commitment to shareholder returns through dividends and buybacks.
YoYYoY means Year-over-Year. It compares the latest annual value with the previous annual value to show long-term trend strength.
QoQQoQ means Quarter-over-Quarter. It compares the latest quarter with the immediately previous quarter to show short-term momentum changes.
RevenueThe total money that came through the front door from selling things, before paying a single bill. Think of it as the grand total of every credit card swipe from customers. (YoY compares this year to last year's performance, while QoQ compares the current three months to the previous three).
$14.3B
+1.7%
+3.3%
Net IncomeThe absolute bottom line. If the company paid every single supplier, employee, banker, and tax collector, this is the actual money left in their pocket at the end of the day.
$277.0M
-18.0%
+14.5%
Gross MarginThe basic markup. If they sell a $100 pair of sneakers, this percentage tells you how much of that price tag is profit right after paying for the rubber and shoelaces, but before paying for things like store rent or TV commercials.
+18.7%
+0.7%
+3.1%
Operating MarginThe 'day job' efficiency score. Out of every dollar a customer spends, this shows how many cents the company keeps after making the product AND paying for all the everyday corporate overhead (like salaries, marketing, and keeping the lights on).
+3.7%
-58.1%
+2.7%
Net MarginThe final take-home percentage. When you strip away every conceivable cost, tax, and interest payment, this is the exact number of cents the company truly gets to keep from every dollar in sales.
+1.9%
-19.4%
+10.9%
Free Cash FlowThe holy grail of corporate cash. It's the spendable, physical money left over after the business pays for its daily operations AND buys the big, expensive upgrades (like new factories or servers) it needs to survive. This is the 'free' money they can use to pay dividends or buy back stock.
$1.2B
+77.4%
+5344.4%
FCF MarginThe ultimate cash conversion rate. It shows how good the company is at turning regular sales directly into cold, hard, spendable cash. A high percentage means the business is an absolute cash-printing machine.
+8.4%
+74.5%
+5172.8%
Debt / EquityThe financial risk gauge. It compares how much of the company's empire was built using borrowed money (loans) versus the owners' own money (shareholders). A high number means they are heavily leveraged and playing a riskier game; a low number means they are playing it safe.
74.5%
-5.0%
-2.7%
Current RatioThe 12-month survival check. It simply compares the cash they have right now (plus things they can quickly turn into cash) against the immediate bills they absolutely must pay this year. A score above 1 means they have enough in the wallet to cover the upcoming bills without panicking.
2.07x
+15.8%
-0.2%
Total AssetsThe absolute size of the company's empire. It bundles together absolutely everything of value they own—from the cash in the register and the inventory in the warehouse, to the software patents in the vault and the factories on the ground.
Operator: Good morning. My name is Nick, and I will be your conference specialist. At this time, I would like to welcome everyone to the BorgWarner 2026 Second Quarter Results Conference Call. [Operator Instructions] I would now like to turn the call over to Patrick Nolan, Vice President of Investor Relations. Mr. Nolan, you may begin your conference.
Patrick Nolan: Thank you, Nick. Good morning, everyone, and thank you for joining us today. We issued our earnings release earlier this morning. It's posted on our website, borgwarner.com, both on our home page and on our Investor Relations homepage. With regard to our Investor Relations calendar, we will be attending investor conferences between now and our next earnings release. Please see the Events section of our Investor Relations homepage for a full list. Before we begin, I need to inform you that during this call, we may make forward-looking statements, which involve risks and uncertainties as detailed in our 10-K. Our actual results may differ significantly from the matters discussed today. In addition, during today's presentation, we'll highlight certain non-GAAP measures in order to provide a clearer picture of how the core business performed and for comparison purposes with prior periods. When you hear us say adjusted, that means excluding noncomparable items. When you hear us say organic, that means excluding the impact of FX and net M&A. We will also refer to our incremental margin performance. Our incremental margin is defined as the organic change in our adjusted operating income divided by the organic change in our sales. We will also refer to our growth compared to our market. When you hear us say market, that means the change in light vehicle production weighted for our geographic exposure. Please note that we posted today's earnings call presentation to the IR page of our website. We encourage you to follow along with these slides during our discussion. With that, I'm happy to turn the call over to Joe.
Joseph Fadool: Thank you, Pat, and good morning, everyone. I'm pleased to share our results for the second quarter of 2026 and provide an overall company update, starting on Slide 5. I want to begin by thanking our employees, customers and suppliers for all of their trust, efforts and continued support. In the quarter, we achieved sales of over $3.6 billion. Excluding the decline in our Battery Energy Systems segment, our organic net sales were up modestly year-over-year, outperforming the decline in market production, primarily due to strong North American transfer case volumes. Our adjusted operating margin, adjusted earnings per share and cash flow performance was strong in the quarter. The company continued to operate at a very high level and delivered 100 basis points of adjusted margin expansion and 17% of earnings per share growth in a relatively flat year-over-year sales environment. This outstanding result was once again driven by our focus on cost controls across our …
