Cash and cash equivalents increased to $190.4 million, debt was $374.5 million, and inventory decreased by $32.2 million compared to March 31, 2025.
Gross margin was 46.7%, consistent with the prior year quarter despite higher input and labor costs, with North America gross margin at 49.7% and Europe at 36.2%.
Net income totaled $103.5 million or $2.47 per fully diluted share, compared to $97.8 million or $2.31 per share last year.
Net sales for Q2 2025 were $631.1 million, up 5.7% year-over-year, with North America net sales increasing 6.4% to $492.7 million and Europe net sales increasing 2.7% to $133.4 million.
Operating expenses increased 6.5% to $154.4 million, driven by higher personnel costs, variable compensation, and software/hardware costs.
Operating margin was 22.2%, flat with the prior year, and consolidated adjusted EBITDA increased 4.8% to $159.6 million, with a margin of 25.3%.
Strong cash flow from operations of $124.7 million enabled capital expenditures of $39.9 million, dividends of $11.8 million, and $35 million in share repurchases.
Volumes were relatively flat year-on-year, with North American volumes exceeding U.S. housing starts by approximately 240 basis points over the last 12 months.
Adjusted EBITDA for Q2 2025 was $28.3 million, above the forecasted range of $21 million to $25 million, despite increased contractor and material costs in Unmanned Systems and a less favorable mix in Space, Training and Cyber.
Cash flow used in operations was $10.6 million, reflecting working capital needs from revenue growth, increased inventory, and investments in development initiatives.
Contract mix for Q2 was 65% fixed price, 31% cost plus, and 4% time and material, with 71% of revenues from U.S. government contracts.
Days sales outstanding (DSO) improved slightly from 104 to 103 days quarter-over-quarter.
Free cash flow used was $31.1 million after $20.5 million in capital expenditures, primarily for expanding manufacturing and production facilities.
KGS segment revenue increased by $64 million year-over-year with organic growth of 27.1%, excluding the impact of the Norden Millimeter acquisition.
Second quarter 2025 revenues were $351.5 million, exceeding the estimated range of $300 million to $310 million, with notable growth in defense rocket support and C5ISR businesses.
Unmanned Systems revenue declined by $12.6 million year-over-year due to prior year international target drone shipments, partially offset by increased tactical drone revenues.
Adjusted EPS increased by $0.02 year-over-year, aided by share repurchases.
Adjusted operating income was $373 million, slightly down $8 million on a comparable basis due to $31 million lower sales but offset by cost controls and tariff management.
Adjusted operating margin was strong at 10.3%, despite a 40 basis point tariff headwind, marking the fifth consecutive quarter with margin at or above 10%.
BorgWarner reported second quarter 2025 sales of just over $3.6 billion, relatively flat year-over-year excluding foreign exchange, in line with market production.
Free cash flow was $507 million, a 71% increase from the prior year, driven by strong working capital and capital expenditure performance.
Light vehicle eProduct sales increased 31% year-over-year, driven by strong growth in Europe and Asia.
The company returned over $130 million to shareholders in the quarter through dividends and share repurchases.
Adjusted EBITDA increased by $3.1 million year-over-year in Q4 but declined $35.5 million for the full year.
Advertising as a percentage of revenue declined 120 basis points to 11.3% in Q4, contributing to a 5% growth in contribution profit and slight margin improvement.
Consolidated Q4 revenue grew 4% on a reported basis and 2% on an organic constant currency basis; full year revenue grew 3% on both reported and constant currency basis.
Currency fluctuations, notably euro strengthening, benefited adjusted EBITDA by $3.6 million in Q4.
Gross margin compressed by 110 basis points in Q4, including a $3 million tariff impact, but gross profit dollars grew year-over-year.
Legacy products such as business cards declined, with Vista's business cards down 6% in Q4, impacting gross margins due to product mix shift.
Tariff impacts primarily affected National Pen and promotional products with Chinese origin; mitigated through pricing and sourcing.
Vista's organic constant currency revenue grew 4% in Q4, driven by promotional products, apparel, gifts, signage, packaging, and labels.
Year-over-year adjusted EBITDA decline driven by non-repeating fiscal '24 benefits and one-time negative items in fiscal '25.
Dafinchi
