Adient (ADNT -1.80%), a leading global manufacturer specializing in automotive seating systems for major vehicle producers, released its fiscal third-quarter earnings on August 6, 2025. The most significant news was its revenue result, which reached $3.74 billion (GAAP), surpassing analyst expectations of $3.62 billion (GAAP) revenue and inching up 0.7% from the prior year. However, adjusted diluted earnings per share was $0.45, slightly below the consensus estimate of $0.47 (non-GAAP). While the company delivered improved profitability on an adjusted (non-GAAP) basis, the EMEA region recorded a $333 million goodwill impairment, underscoring persistent headwinds in its European operation. Overall, the quarter reflected resilience in most operating areas and effective tariff risk management, tempered by regional challenges.
| Metric | Q3 2025 | Q3 2025 Estimate | Q3 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $0.45 | $0.47 | $0.32 | 40.6% |
| Revenue | $3,741 million | $3,622 million | $3,716 million | 0.7% |
| Adjusted EBITDA | $226 million | $202 million | 11.9% | |
| Free Cash Flow (Non-GAAP) | $115 million | $88 million | 30.7% | |
| Adjusted EBITDA Margin | 6.0% | 5.4% | 0.6 pp |
Source: Analyst estimates for the quarter provided by FactSet.
Company overview and strategic focus
Adient designs and manufactures complete seat systems and components for the global automotive industry. With operations spanning more than 200 sites in 29 countries, Adient supplies seating solutions for passenger cars, trucks, and commercial vehicles, working with automakers worldwide.
The business is heavily focused on four critical areas: maintaining an expansive global manufacturing footprint, investing in technological innovation, fostering strong customer relationships, and cementing a leadership position in China’s market. Enhancing sustainability across its operations and products also ranks high on its agenda. Key success factors include agile supply chains to manage tariffs, leadership in seating technology, and tailoring products to the evolving needs of original equipment manufacturers (OEMs).
Quarter in detail: Segment results and key developments
The quarter’s GAAP revenue exceeded analyst forecasts. Adjusted EBITDA, a measure of operational profitability before one-time costs and non-cash items, rose 11.9% year-over-year. While the underlying drivers varied by region and product line.
In the Americas, net sales (GAAP) improved to $1.76 billion, with adjusted EBITDA for the Americas segment was $112 million and adjusted EBITDA margin expanding to 6.4%. These gains stemmed from commercial actions and reduced operating costs, especially as major customer programs moved past their early launch stages. The EMEA segment, however, saw net sales of $1.27 billion and recorded only $21 million in adjusted EBITDA for EMEA, translating to a slimmer 1.7% adjusted EBITDA margin for EMEA. This reflects weak market demand and the impact of a $333 million non-cash goodwill impairment, which resulted from a lower market value and ongoing uncertainty about vehicle production volumes. Management described restructuring in Europe as “holding levels” until higher-margin business can phase in during FY2026. Asia/Pacific, including China, reported GAAP net sales of $721 million. Despite lower volumes from luxury OEMs, the region held an impressive 15.7% adjusted EBITDA margin and reported $113 million in adjusted EBITDA for Asia, with growth attributed to business with local Chinese automakers.
The company leveraged its broad global manufacturing presence to offset trade and tariff challenges. Management highlighted that about 95% of components sent from Mexico and Canada to the US comply with United States-Mexico-Canada Agreement (USMCA) rules, according to company statements during the earnings call, so these avoid US import tariffs. Exposure to tariffs on China-sourced parts remains a risk, but the company has resolved about 75% of that exposure through resourcing and negotiated customer recoveries.
On the product side, Adient continues developing innovative seating systems, such as the first mechanical massage seat system for the GAC Trumpchi M8 plug-in hybrid. Investments in the China Technical Center aim to advance automation, artificial intelligence for inspection, and sustainable materials -- all aimed at keeping Adient aligned with industry trends in electrification and “smart” vehicles. Several new business awards, including seat system contracts with FAW Hongqi H5 and component wins with Kia and Ram, support future growth.
This quarter also reflected progress on sustainability initiatives, such as receiving Hyundai’s Best Supplier Award for environmental, social, and governance (ESG) management.
Balance sheet, cash flow, and forward outlook
Net debt (non-GAAP) edged higher from the prior fiscal year-end to $1.53 billion. Liquidity was about $1.6 billion, and the company continued to extend its average debt term.
Share repurchases of $50 million continued.
Looking forward, management reaffirmed revenue and adjusted EBITDA outlook, assuming no deterioration in tariff policies or automotive production volumes. However, full-year free cash flow guidance was modestly lowered to $150–$170 million, reflecting increased European restructuring outlays and some uncertainties around the timing of customer recoveries later in the year. Interest expense is now expected to be $190 million, slightly higher than previous guidance.
One-time items such as the EMEA goodwill impairment and ongoing regional restructuring will shape future financial impacts. While the majority of global tariff exposure is addressed, 25% remains on the mitigation “roadmap.” Management highlighted that further progress on restructuring in Europe and new business ramp-ups in China will be critical factors to watch over the coming quarters.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
