BorgWarner Announces 2025 Performance and 2026 Strategic Outlook with Focus on AI Market

BorgWarner Reports Strong Performance in 2025

BorgWarner Inc. (NYSE: BWA) has recently shared its comprehensive report for the fourth quarter and full year of 2025, demonstrating the company's commendable financial performance alongside a clear strategic direction for 2026.

2025 Highlights

The company noted a remarkable 23% increase in light vehicle eProducts, attributed to the surging demand for its advanced hybrid and electric technologies in regions like Europe and Asia. Despite the challenges posed by impairment charges totaling around $624 million related to goodwill and assets, BorgWarner achieved an adjusted operating margin of 10.7% in 2025, reflecting a 60 basis points improvement from the previous year. This increase stemmed from an uptick in eProducts sales and stringent cost control measures across the organization.

Operating cash flow reached an impressive $1.648 billion, marking a 19% rise from 2024, while free cash flow surged by 66% to $1.208 billion due to strong operational output and disciplined capital expenditure management.

The company reported U.S. GAAP net earnings per diluted share at $1.28, whereas the adjusted figure stood at $4.91, a 14% increase compared to 2024. Additionally, BorgWarner initiated over $500 million in share buybacks, showcasing its commitment to returning capital to shareholders.

Strategic Moves into New Markets

In a significant move, BorgWarner secured a supply agreement for a turbine generator system tailored for the artificial intelligence-driven data center market, alongside other microgrid applications. This innovative turbine generator system, anticipated to be ready for production by early 2027, will focus on high-power alternatives to conventional power generation, offering extensive power, modular capabilities, and fuel flexibility while maintaining a lower emissions profile. Initial sales projections for the first year of product availability are estimated at over $300 million.

The company has also received an unprecedented number of awards for light vehicle products, expected to catalyze growth well into 2027 and beyond, further solidifying BorgWarner's position in emerging markets.

Other notable awards include a variable turbine geometry turbocharger for a major European OEM intended for the North American market, with production slated for 2028, and integrated drive modules for hybrid vehicles set to launch in 2029.

Fourth Quarter Overview

In its fourth quarter report, BorgWarner disclosed net sales of $3.572 billion, a 3.9% increase over the previous year. This growth was driven by a surge in eProduct sales, tempered somewhat by lower industry volume and decreased sales in the Battery Charging Systems segment. Although the net loss for the quarter was reported at $(1.23) per diluted share, the adjusted net earnings, excluding non-comparable items, were $1.35 per diluted share, reflecting a substantial 34% increase from the previous year's adjusted figure.

2026 Guidance

Looking ahead, BorgWarner forecasts another year of enhanced adjusted operating margin and earnings per share growth for 2026, even amid expectations of a slight decline in light vehicle market performance. The anticipated net sales range for 2026 is between $14.0 billion and $14.3 billion, alongside an expected operating margin between 9.8% and 10.0%. The company expects to face a sales decline of about $210 million in its Battery Charging Systems segment, representing a 1.5% decline in organic growth for the coming year.

BorgWarner's strategic focus on advancing its operations while venturing into the AI-powered data center market reflects its commitment to sustaining its leadership position within the automotive sector as it transitions towards more sustainable solutions.

For investors and stakeholders, BorgWarner remains a pivotal player in shaping the future of mobility with innovative approaches to technology and environmental responsibility. Moreover, a conference call discussing these results is scheduled for today at 9:30 AM ET on the company's investor relations webpage. This marks a significant moment for BorgWarner as it sets the stage for an ambitious 2026.

With over 130 years of experience, BorgWarner Inc. continues to lead in mobility innovation, driving towards a cleaner, healthier, and safer future.