Aptiv NYSE: APTV reported first-quarter 2026 results alongside the completion of a major portfolio shift, after the company separated its Electrical Distribution Systems (EDS) business into a newly independent public company, Versigent. Executives said the move sharpens Aptiv’s focus on advanced software and optimized hardware solutions and supports efforts to diversify beyond automotive.
Separation of EDS and focus on “new Aptiv”
Chair and CEO Kevin Clark said the first quarter “concluded with the successful completion of the separation of our Electrical Distribution Systems business” into Versigent, describing it as a step that better positions Aptiv to “enhance our advanced software and hardware tech stack, further diversify our end market mix, and accelerate our revenue and earnings growth.” Clark noted that roughly one-quarter of Aptiv’s business is now in non-automotive markets, with content across automotive, commercial aerospace, and telecom.
Clark also pointed to increased momentum with local China OEMs, including platforms sold in China and exported or manufactured overseas, and said Aptiv has made progress with OEMs in Japan, Korea, and India.
Q1 financial results: revenue up slightly, EPS at a record
On a “total Aptiv” basis (including EDS for the quarter), the company posted revenue of $5.1 billion, which CFO Varun Laroyia said increased 1% on an adjusted year-over-year basis. Adjusted EBITDA was $752 million, while adjusted EBITDA margin declined 90 basis points year-over-year. Laroyia attributed the margin pressure primarily to foreign exchange and commodity impacts totaling 180 basis points—above the 120 basis points the company had forecast for the quarter.
Earnings per share were $1.71, up $0.02 from the prior year, which Laroyia said reflected lower interest expense and a lower share count, partially offset by a higher tax rate.
Free cash flow was negative $362 million, which Laroyia said included about $260 million in transaction payments related to the separation across both companies. He added Aptiv expects roughly $100 million of separation costs for “new Aptiv” in the second quarter, and expects to recoup around $80 million of tax-related transaction payments later in the year.
Segment performance and regional trends
Laroyia said new Aptiv’s first-quarter revenue reflected “customer mix headwinds,” but highlighted progress in diversification, including 9% growth in non-automotive markets and 10% growth in software and services.
- Intelligent Systems: Revenue of $1.4 billion decreased 1% year-over-year. Laroyia cited two factors: 2025 program cancellations at local China OEMs (expected to anniversary mid-year) and lower production at a large North American customer due to supply chain constraints following a supplier fire. He said these two factors totaled about 250 basis points of headwinds to segment growth. Segment adjusted EBITDA margin declined 90 basis points, including a 60 basis-point FX and commodity headwind, plus incremental investments in engineering and go-to-market for non-automotive growth.
- Engineered Components: Revenue of $1.7 billion was flat on an adjusted basis. Laroyia said non-automotive revenue grew 6%, including double-digit growth in diversified industrials, offset by a 2% decline in automotive tied to customer mix headwinds in China amid broad production declines, including at the largest local OEM. Adjusted EBITDA margin declined 90 basis points, which he said was “entirely” due to a 140 basis-point headwind from commodities and FX; excluding that, margin improved on performance initiatives.
- EDS (now Versigent): EDS revenue was $2.2 billion, up 3% adjusted, driven by strength in Asia Pacific and favorable mix in North America. EDS adjusted EBITDA margin fell 70 basis points due to a 260 basis-point FX and commodity headwind, partly offset by recoveries and volume flow-through.
By region for new Aptiv, Laroyia said North America revenue rose 7% on double-digit Intelligent Systems growth and strength in non-automotive. Europe revenue fell 5% due to unfavorable mix and a slower-than-expected ramp of next-generation programs at a large Intelligent Systems customer. Asia Pacific revenue fell 5%, which he said was “essentially in line with vehicle production,” while Aptiv continued improving its mix with local China OEMs and growing with OEMs outside China.
Bookings and product highlights across automotive and non-automotive
Clark said total first-quarter customer awards for new Aptiv were $4.6 billion, about 15% above the 2025 quarterly average, including roughly $900 million in non-automotive bookings. He said Aptiv expects more than $20 billion of bookings in 2026.
In Intelligent Systems, Clark highlighted launches including an interior camera system for a luxury German OEM and a cockpit controller for an Indian OEM’s electric SUV lineup. He also cited new awards spanning active safety for a North American OEM; sensors and compute for a local China OEM’s next-generation EV platform; and software awards including VxWorks RTOS and Helix Virtualization Platform for a defense prime, plus a software tool chain award supporting a North American OEM’s “software factory” initiative. Clark also discussed partnerships in robotics and drones, including an agreement with Comau, and said Aptiv expects pilots and proofs of concept to translate into commercial agreements.
In Engineered Components, Aptiv discussed launches of high-speed interconnect products across more than two dozen nameplates and OEMs, as well as high-voltage electrical centers for two local China OEMs. New awards included a high-voltage inverter for a Korean OEM, interconnects for aerospace and defense primes, and a low-voltage connection system for an integrated high-power energy storage solution for a North American-based global EV OEM.
On the timing of non-automotive programs, Clark told analysts that award-to-revenue cycles in these markets can be “as short as a few months” and typically under a year, which he described as shorter than traditional automotive lead times.
Guidance maintained amid input cost volatility
Aptiv maintained its full-year 2026 guidance on a pro forma basis excluding EDS. Laroyia said the company continues to expect 4% adjusted revenue growth at the midpoint, $2.4 billion of adjusted EBITDA with an 18.6% margin at the midpoint, and adjusted EPS of $5.70 to $6.10 (assuming an 18.5% effective tax rate). Free cash flow is expected to be $750 million at the midpoint, inclusive of separation transaction costs and continued investments in semiconductor supply chain resiliency.
For the second quarter, Aptiv guided to 2% adjusted revenue growth at the midpoint, adjusted EBITDA of $580 million and a 17.6% margin, and EPS of $1.40 at the midpoint.
Laroyia said the company is seeing “incremental inflationary pressures on materials” tied to the conflict in the Middle East, particularly commodities. In Q&A, Laroyia said Aptiv-weighted vehicle production assumptions were down 2% in the first half and down 1% in the second half, and Clark said that view was roughly in line with S&P estimates.
Clark said Aptiv expects to manage higher commodity and resin costs largely through performance initiatives and selective customer pass-throughs, adding that the company is “not relying on customer recoveries to achieve our full-year outlook.” He also noted a lag in commodity recoveries, and Laroyia said second-half profitability cadence is expected to benefit from engineering credit true-ups, commodity recovery timing, and seasonality in software and services.
Laroyia also noted that on day one after the EDS separation, new Aptiv carries $70 million in annualized stranded costs, which the company is working to eliminate by the end of 2027.
In his closing remarks, Clark said Aptiv sees “significant long-term opportunity” across automation, electrification, and digitalization, while acknowledging near-term uncertainty from macro conditions and supply chain risks. He added that Aptiv believes its supply chain visibility and resilience can be a differentiator with customers across both automotive and emerging non-automotive markets.
About Aptiv NYSE: APTV
Aptiv plc is a global automotive technology company that develops safer, greener and more connected solutions for the mobility industry. The company designs and supplies advanced electrical architectures, electronic systems and software that enable vehicle connectivity, active safety, advanced driver-assistance systems (ADAS) and autonomous driving capabilities. Aptiv's customers include major automakers and mobility service providers seeking to integrate higher levels of automation, electrification and software-defined features into production vehicles and mobility platforms.
Product and service offerings span vehicle electrical systems and wiring, connectors and harnesses, high-voltage electrification components, power electronics and charging solutions, sensors and compute platforms that support ADAS and autonomous functions, and the software and services required to integrate and manage these systems.
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