Lear NYSE: LEA executives told investors the company closed 2025 with higher revenue, record net operating performance savings, and a surge of new business awards that management said reinforce its competitive positioning in Seating and E-Systems.
2025 results: revenue growth, record net performance, and shareholder returns
On the call, President and CEO Ray Scott said Lear delivered a 5% increase in fourth-quarter revenue and generated $23.3 billion in full-year 2025 revenue. Core operating earnings were $1.1 billion, or 4.6% of net sales for the year. Adjusted earnings per share were $12.80, up 1% from 2024, marking what management described as the fifth consecutive year of year-over-year adjusted EPS increases.
Scott and CFO Jason Cardew highlighted cash generation and capital returns. Lear reported $527 million of free cash flow in 2025 and repurchased $325 million of shares, exceeding its initial $250 million target. Including dividends, the company said it returned “almost $500 million” to shareholders for the year.
Management also emphasized operating execution. For 2025, Lear generated approximately $195 million in “net operating performance,” which executives translated as 60 basis points of benefit in Seating and 110 basis points in E-Systems. Cardew said the company started the year with a $125 million target, raised it to $170 million, and ultimately outperformed that updated goal.
Major new business wins in Seating and E-Systems
Scott described 2025 as one of Lear’s strongest years for awards, including what he called “some of the most significant new business awards in Lear’s history.” In Seating, Lear won complete seat business on a major truck program from an American-based automaker, which Scott characterized as the largest seating conquest award on record. The company also announced an award from General Motors to supply complete seats for large SUVs and full-size pickup trucks produced at Orion Assembly starting in 2027.
In China, Lear cited complete seat program wins with domestic automakers Changan, Dongfeng, and Leapmotor, plus a thermal comfort award with BYD. Scott also noted Lear took operating control of two joint ventures supporting programs for BYD and Seres, which management said will support growth in 2026 and beyond.
In E-Systems, Lear reported continued momentum, including awards for nine wire harness programs and multiple electronics and connection system programs across major regions. Management cited the Volkswagen Group in Europe and South America, along with Chinese automakers BAIC, Geely, and SAIC. For the full year, Lear said it secured more than $1.4 billion in E-Systems business awards, its strongest performance in over a decade and the second-highest annual total in company history.
Thermal comfort, automation, and digital tools highlighted as differentiators
Lear outlined progress in thermal comfort, which it has built through acquisitions (including Kongsberg and IGB) and internal development. Scott said Lear has secured 33 awards for thermal comfort solutions, including ComfortFlex modules, ComfortMax seat systems, FlexAir foam alternatives, and INTU applications. At peak production, management said these awards are expected to generate average annual revenue of about $170 million. Lear said nine programs are already in production, with 14 additional launches secured for 2026, which management called an “inflection point” for thermal comfort. The company also said 2025 awards for thermal comfort “core components” are expected to generate average annual sales of about $80 million.
Scott emphasized Lear’s investments in automation and digital transformation under its “IDEA by Lear” umbrella. He said Palantir Foundry reached more than 17,000 users and generated more than 300 custom applications in 2025. As examples, Scott cited:
- A “cycle time deviation” tool deployed across 100% of North American and European just-in-time facilities that delivered a 3%–5% efficiency gain, generating $10 million in 2025 savings and an expected $15 million in 2026 as the rollout expands globally.
- A tariff tracking solution built in 10 days that management said helped Lear recover nearly 100% of tariff costs within the year and accelerate customer reimbursements.
Scott also said Lear’s IDEA initiatives and automation investments generated $70 million in savings in 2025, while restructuring actions produced $85 million of restructuring savings, $30 million above the original $55 million target. Lear reduced global hourly headcount by 7,000 in 2025 and by 22,000 over the last two years, though Scott noted joint venture consolidations and production schedule changes led to slightly higher hourly headcount than originally projected.
Quarterly and full-year segment performance
Cardew reported fourth-quarter 2025 sales of $6.0 billion, up 5% year over year. Operating earnings were $259 million versus $258 million a year ago, and adjusted EPS was $3.41 versus $2.94, which management attributed to share repurchases and a lower tax rate. Fourth-quarter operating cash flow was $476 million, down from $681 million due primarily to working capital timing.
By segment in the fourth quarter:
- Seating: Sales were $4.4 billion, up 5%. Adjusted earnings were $263 million, with a 6.0% adjusted operating margin. Management said margins were lower year over year due to volume and mix, partially offset by net performance and “margin-accretive backlog.”
- E-Systems: Sales were $1.6 billion, up 3%. Adjusted earnings were $84 million, or 5.3% of sales, up from 5.0% in 2024, driven by net performance and backlog, with foreign exchange also cited as a benefit.
For the full year, Seating revenue was $17.3 billion, up 0.4%, while E-Systems revenue was $6.0 billion, down 2%. Seating adjusted operating margins were 6.4%, and E-Systems adjusted operating margins were 4.9%.
2026 outlook: modest revenue growth, margin improvement, and continued buybacks
For 2026, Lear guided to revenue of $23.2 billion to $24.0 billion, with core operating earnings of $1.03 billion to $1.2 billion. At the midpoint, management expects revenue to rise about 2% year over year and core operating earnings to increase 5%.
Lear’s outlook assumes global industry production will be down 1% on a Lear sales-weighted basis. The company’s currency assumptions include an average euro exchange rate of $1.16 and an average RMB exchange rate of 7.1 to the dollar.
Cardew said Lear expects restructuring costs of approximately $175 million in 2026 and capital spending of about $660 million for launches and automation. Operating cash flow is expected to be $1.2 billion to $1.3 billion, with free cash flow around $600 million at the midpoint, consistent with free cash flow conversion of above 80%.
Management also reiterated a shareholder return focus, saying it is targeting share repurchases of more than $300 million in 2026. Cardew said Lear’s current repurchase authorization has about $775 million remaining through Dec. 31, 2026, and noted the company has repurchased $5.9 billion of shares since initiating its program in 2011.
In Q&A, executives discussed the cadence of 2026 performance, saying they expect the first quarter to resemble the fourth quarter, with revenue around $6 billion and operating income around $260 million, while noting that downtime related to a changeover at a T1 facility would likely affect volumes more in the second half, particularly the third quarter. Management also said major negotiations tied to canceled EV-related programs are “largely complete,” with some cash benefit embedded in 2026 guidance and some deferred revenue reflected in other line items.
On thermal comfort, management said the previously discussed $1 billion revenue target and 10% EBIT margin ambition remain intact, but the timing has been pushed out due to weaker-than-expected EV demand and related program changes.
About Lear NYSE: LEA
Lear Corporation NYSE: LEA is a global supplier of automotive seating and electrical distribution systems. The company designs, engineers and manufactures complete seat systems, seat components and power solutions for major vehicle manufacturers. Its electrical business delivers modules and components for battery management, infotainment, body and safety electronics, as well as advanced connectivity and electrification solutions.
The seating division develops lightweight, ergonomic seat structures, trim and mechanisms that address comfort, safety and environmental targets.
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