Lear Caps Strong 2025 with Record Wins and Strategic Pivot, Eyes Steady Growth Amid Industry Shifts
DETROIT – Lear Corporation (NYSE: LEA), a leading global automotive technology supplier, closed the books on a resilient 2025, delivering revenue growth and record operational performance despite a challenging industry backdrop. The company's fourth-quarter earnings call revealed a year marked by strategic business wins, aggressive cost management, and a sharpened focus on high-growth technology segments like thermal comfort and electrification.
For the full year, Lear generated $23.3 billion in revenue, a 5% increase in Q4 contributing to the annual total. Core operating earnings reached $1.1 billion. Adjusted earnings per share rose to $12.80, marking the fifth consecutive year of annual growth. Perhaps more telling was the company's operational discipline, achieving $195 million in net operating performance savings—surpassing its own raised targets—and generating $527 million in free cash flow.
"2025 demonstrated our ability to execute and win in a dynamic environment," said President and CEO Ray Scott. "We secured some of the most significant new business awards in our history, which reinforces our competitive moat and sets the stage for future growth."
The awards pipeline was indeed robust. In its core Seating division, Lear won a landmark complete seat program for a major American truck platform, described by Scott as its largest-ever seating conquest award. It also secured a key award from General Motors for seats on large SUVs and pickups starting in 2027. In China, the company expanded its footprint with wins from domestic leaders like Changan, BYD, and Leapmotor.
The E-Systems unit also saw its strongest performance in over a decade, with over $1.4 billion in new business awards. Key wins spanned major OEMs including Volkswagen Group across Europe and South America, and Chinese automakers BAIC, Geely, and SAIC.
A significant growth vector highlighted was Lear's thermal comfort business, built through acquisitions like Kongsberg and IGB. The company has secured 33 awards for solutions like ComfortFlex and FlexAir, expected to generate about $170 million in annual revenue at peak. Management called 2026 an "inflection point" for this segment, with 14 new launches scheduled, though broader EV demand softness has pushed out the timeline for its ambitious $1 billion revenue target for the technology.
CFO Jason Cardew emphasized the company's shareholder returns, with $325 million in share repurchases and nearly $500 million returned in total for the year. For 2026, Lear guided for revenue between $23.2 and $24.0 billion, with core operating earnings projected between $1.03 and $1.2 billion. The outlook assumes a slight 1% decline in global industry production on a Lear-weighted basis.
Underpinning these efforts is Lear's "IDEA" digital transformation initiative, which leveraged the Palantir Foundry platform to generate $70 million in savings last year. Combined with restructuring actions, these moves have reshaped the company's cost structure, even as it reduced its global hourly headcount by 22,000 over two years.
Analyst & Investor Commentary:
"The operational beat and the quality of the awards are impressive," said Michael Thorne, automotive analyst at Veritas Capital Insights. "It shows Lear isn't just riding the industry cycle; it's taking share and improving its margin profile through efficiency. The thermal comfort pipeline, despite the delay, is a genuine differentiator."
"The guidance looks conservative, which is prudent given the macro uncertainty," noted Sarah Chen, portfolio manager at Horizon Growth Fund. "Their capital return commitment is solid, and the automation savings appear sustainable. I'm watching the E-Systems margin recovery closely in 2026."
"Let's not gloss over the human cost," countered David R. Miller, a columnist for The Auto Sector Watch. "22,000 jobs cut in two years is staggering, even if some are through JV consolidations. They're touting 'record performance' built on massive restructuring. It's efficient, sure, but it raises questions about long-term industrial capacity and morale."
"The China story here is critical and under-discussed," added Anya Petrova, an independent consultant specializing in Asian supply chains. "Wins with BYD, Changan, and Leapmotor aren't just incremental; they're a strategic foothold in the fastest-evolving EV market. Their operational control of those JVs is a smart move to capture value."