Garrett Motion's 2024 Earnings: A Tale of Resilience and Growth

In the face of a challenging industry environment, Garrett Motion Inc. (Nasdaq: GTX) delivered a strong performance in the fourth quarter and full year of 2024, demonstrating the company's resilience and commitment to growth. The company's focus on differentiated automotive technology and zero-emission technologies has paid off, as evidenced by its expanded adjusted EBITDA margin and significant adjusted free cash flow.

Garrett Motion's financial highlights for the fourth quarter of 2024 include:

* Net sales totaled $844 million, down 11% on a reported basis and down 10% at constant currency.
* Net income totaled $100 million, with a net income margin of 11.8%.
* Adjusted EBITDA totaled $153 million, with an adjusted EBITDA margin of 18.1%.
* Net cash provided by operating activities totaled $131 million.
* Adjusted free cash flow totaled $157 million.

For the full year of 2024, Garrett Motion's financial highlights include:

* Net sales totaled $3,475 million, down 11% on a reported basis and down 10% at constant currency.
* Net income totaled $282 million, with a net income margin of 8.1%.
* Adjusted EBITDA totaled $598 million, with an adjusted EBITDA margin of 17.2%.
* Net cash provided by operating activities totaled $408 million.
* Adjusted free cash flow totaled $358 million.



Garrett Motion's business highlights for 2024 showcase the company's ability to win in the turbo market across all geographies, including with new players and across all hybrid types. The company secured contracts for marine and back-up power with its largest turbocharger for start of production in 2026, entered into a letter of intent with SinoTruk to co-develop e-powertrain systems for light and heavy trucks by 2027, and was recognized with the 2024 Stellantis Innovation Award for its differentiated zero-emission technologies. OEM customers also validated Garrett's proprietary 3-in-1 E-powertrain high-speed technology, revolutionary refrigerant compression technology, and broad range of highly efficient fuel cell compressors.

Garrett Motion's success in 2024 can be attributed to several key factors:

1. Expanding Turbo Offerings: Garrett continued to win in the turbo market across all geographies, including with new players and across all hybrid types. This expansion has helped the company maintain its leading industry position.
2. Securing Contracts for Marine and Back-up Power: Garrett secured contracts for its largest turbocharger for start of production in 2026, indicating growth in the marine and back-up power sectors.
3. Partnerships and New Business Wins: Garrett entered into a letter of intent with SinoTruk to co-develop e-powertrain systems for light and heavy trucks by 2027. This partnership, along with other new business wins, demonstrates the company's ability to secure significant customer wins.
4. Innovation and Technology Validation: Garrett was recognized with the 2024 Stellantis Innovation Award for its differentiated zero-emission technologies. Additionally, OEM customers validated Garrett's proprietary 3-in-1 E-powertrain high-speed technology, revolutionary refrigerant compression technology, and broad range of highly efficient fuel cell compressors. These validations indicate the strength and potential of Garrett's zero-emission technologies.

Looking ahead, Garrett Motion's prospects for continued growth in these areas are promising. The company is actively testing its products with customers, with launches planned for as early as 2027. Garrett's 2024 adjusted free cash flow of $358 million also enabled the company to return significant value to shareholders, with a $296 million share repurchase and the initiation of a $50 million annual dividend. This financial strength will allow Garrett to continue investing in its portfolio of innovative and differentiated products, securing significant customer wins, and delivering strong financial performance in 2025 and beyond.

In conclusion, Garrett Motion's 2024 earnings call highlights the company's resilience and growth in the face of a challenging industry environment. By focusing on differentiated automotive technology and zero-emission technologies, Garrett Motion has expanded its adjusted EBITDA margin and generated significant adjusted free cash flow. The company's strategic partnerships and new business wins, such as the letter of intent with SinoTruk, have contributed to its business growth and provide opportunities for further expansion in the global market. As Garrett Motion continues to innovate and invest in its products, it is well-positioned to maintain its strong financial performance and navigate future challenges.