Aptiv Posts Record Q4 Revenue, Charts Ambitious 2026 Path as Major Spinoff Looms

DUBLIN – Aptiv PLC (NYSE: APTV) delivered a strong finish to 2025, announcing record fourth-quarter revenue and laying out a detailed roadmap for the pivotal year ahead, which will see the company split into two focused, publicly-traded entities.

The automotive technology supplier reported Q4 revenue of $5.2 billion, a 5% increase on a reported basis. Adjusted earnings per share rose 6% year-over-year to $1.86. CEO Kevin Clark characterized the performance as "solid," achieved despite a challenging macroeconomic climate marked by foreign exchange volatility and commodity price pressures.

"We are operating from a position of strength," Clark told analysts. "Our results reflect both disciplined execution and proactive investments in the high-growth areas of vehicle electrification, automation, and digital architecture."

The quarter's narrative was dominated by preparations for the planned April 1 separation of Aptiv's Electrical Distribution Systems (EDS) business, which will begin trading as VersaGen. CFO Varun Laroyia noted the spin-off incurred approximately $80 million in separation costs during the quarter, impacting operating cash flow, which totaled $818 million.

Regional Performance & Strategic Pivot

Geographically, results were mixed. North America led with 8% adjusted revenue growth, while Europe saw a 1% decline, tracking regional production. In China, revenue fell 5%, which management attributed to an unfavorable product mix, though they emphasized improved performance relative to the overall market. Notably, approximately 80% of Aptiv's 2025 new business awards in China came from local OEMs, signaling a strategic inroad.

Beyond automotive, Aptiv is aggressively pursuing diversification. The quarter featured partnerships with robotics firms Robust.AI and Vecna Robotics, and the launch of a connector series developed jointly by its automotive and aerospace engineering teams. "Our technology stack is increasingly relevant in adjacent markets driven by the same mega-trends," Clark added.

2026 Outlook: Two Companies, Focused Futures

Management provided 2026 guidance on a pro forma basis for the two future companies:

• New Aptiv (focused on advanced vehicle architecture and autonomy) is projected to generate revenue of $12.8B to $13.2B, up 4% at the midpoint. EBITDA margin is expected to be 18.6%, supported by growth in higher-margin software and services.
• VersaGen (the pure-play EDS business) expects revenue of $9.1B to $9.4B, aiming for growth despite a forecast of flat global vehicle production. Its midpoint EBITDA margin is projected at 10.7%.

Both companies are expected to maintain a conservative gross leverage ratio between 2.0x and 2.5x following the spin-off and a planned debt paydown of about $1.9 billion.

Executives also addressed industry-wide concerns around semiconductor memory (DRAM) pricing, confirming expected low double-digit cost increases for 2026. Clark stated Aptiv is engaged with OEM customers and is confident in its ability to pass through these higher input costs.

"VersaGen is entering this new chapter with strong momentum," said Joe Liotine, who will serve as CEO of the independent company. "Our team is laser-focused on a seamless transition for our customers and shareholders."

Analyst & Investor Reactions

"The guidance is prudent and the spin-off rationale is clear—unlocking value by letting each business run its own race," said Michael Thorne, portfolio manager at Horizon Capital Advisors. "New Aptiv's margin profile, driven by software, is particularly compelling."

"I'm skeptical about the 'easing headwinds' narrative for 2026," countered Sarah Chen, an independent auto tech analyst. "Between persistent FX issues, DRAM costs, and the massive execution risk of a spin-off during economic uncertainty, these targets feel optimistic. The market is punishing complexity, and Aptiv is creating more of it."

"The diversification into robotics and aerospace is a smart, long-term hedge," noted David Riggs, a veteran industry consultant. "It reduces their cyclical dependence on automotive production volumes, which is crucial as the EV transition pace remains uneven globally."

Aptiv will report its first-quarter 2026 results as a combined entity, providing the final snapshot before VersaGen begins its journey as a separate company.