Versigent Q2 2026 Earnings Call Transcript

Versigent (NYSE: VGNT ) released second-quarter financial results and hosted an earnings call on Tuesday. Read the complete transcript below. APIs provide real-time access to earnings call transcripts and financial data. Visit to learn more.

4 billion, driven by higher volumes in North America and Asia Pacific. 1%, attributed to strong operational execution and higher volumes. The company launched 39 large-scale programs in Q2, supporting 22 new and existing customers, achieving more than 99% quality and on-time delivery. Strategic initiatives included expanding engineering and manufacturing capabilities to new markets such as commercial vehicles and agriculture.

Versigent announced the initiation of a quarterly dividend and reaffirmed its $250 million share repurchase authorization, reflecting confidence in its long-term outlook. 03 billion. Versigent's performance in Asia Pacific was notably strong, with adjusted net sales growth of 15%, driven by complex wiring harness programs and export activities. The company emphasized its continued efforts in operational excellence, with investments in advanced engineering and a focus on expanding its go-to-market capabilities.

Full Transcript OPERATOR Good day and welcome to the Versigent second quarter 2026 earnings conference call. During the Company's opening remarks, all participants will be in a listen-only mode. Following the opening remarks, we will conduct a question-and-answer session. As a reminder, today's conference is being recorded.

I'd now like to turn the call over to Erin Vanyess, Vice President of Investor Relations. Please proceed. Erin Vanyess, Vice President of Investor Relations Thank you and welcome to everyone joining us. I'm joined today by Joe Beattini, our Chief Executive Officer, and Doug Osterman, our Chief Financial Officer.

Before we begin today's call, I would like to direct you to the cautionary statement regarding forward-looking statements on page two of our presentation and in our earnings release issued earlier today, which are both available under the Investor Relations section of our website. Today's call includes forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied. These risks are described in our filings with the Securities and Exchange Commission, including the Risk Factors section of our amended Form 10-12B registration statement filed on March 6, 2026.

As is customary, the content of today's call and presentation will be governed by this language. Our guidance reflects management's current expectations and should not be relied upon as a guarantee of future performance. We undertake no obligation to update these statements except as required by law. In addition, during today's call we will be discussing non-GAAP financial measures.

Please refer to our earnings release and presentation materials for additional information regarding these non-GAAP financial measures and the reconciliations to the most directly comparable GAAP measure. With that, I will now turn the call over to our CEO, Joe Beattini. Joe Beattini, Chief Executive Officer Thank you, Erin. And thank you all on the call for joining us today.

Versigent delivered a solid quarter driven by the unique value we create for our customers, the agility of our global team, and a firm commitment to disciplined execution at every level. Today I'm joined by Doug Osterman, our Chief Financial Officer. Together we're eager to walk through the financials and share our reflections on the first quarter as an independent company.

When we stepped forward as Versigent, we did so with clear priorities: strengthen our market-leading position by leveraging our full-service engineering capabilities, continue optimizing our cost structure through automation and footprint discipline, deliver consistent financial results through execution, and allocate capital in a disciplined manner to ultimately drive long-term shareholder value. These priorities guide how our entire global team shows up every day—focused, accountable, execution-driven, and ready to deliver the mission-critical power and data solutions our partners depend on. The proof is in our performance.

Customers trust our ability to turn complexity into clarity, empowering them to act with certainty. 8 billion in new awards in the second quarter, and earned every day in our deep commitment to disciplined execution. With more launches planned this year than in our history, our global team launched 39 large-scale programs supporting 22 new and existing customers in the second quarter, all with more than 99% quality and 99% on-time delivery while navigating a dynamic market.

Many of the programs launched this quarter reflect our unique market position—featuring trusted engineering expertise working in close partnership with customers to solve their highly complex, incredibly challenging data and power needs, including new premium and high-content vehicle programs requiring advanced electrical architectures and seamless alignment between our engineering experts and OEM partners. A great example is a recent win from a leading European OEM who, following the successful award of another program, also awarded Versigent their high-voltage, high-complexity architecture exhibiting innovative characteristics related to compactness and modularity.

This mid-production shift reflects their confidence in our ability to execute complex programs and ensure a seamless transition. Strategic investments in advanced engineering, operational excellence, and our inherently resilient in-region-for-region supply chain fortify our long-term competitive position as a proven innovator, giving our customers the competitive edge they need in automotive and beyond. Adjacent markets face many of the same pressures we already solve for—more content and features, greater reliability, and tighter tolerances.

Complexity is compounding and accelerating faster than capability, which increases demand for Versigent's differentiated solutions, requiring a selective and disciplined approach to high-value, additive growth. In the second quarter we extended our proven engineering and manufacturing capabilities into new product wins as well as launched important programs within the commercial vehicle and agricultural markets, all without changing our operating model, our execution in discipline, resource intensity, or risk profile.

For example, by translating our capabilities in advanced power and data distribution from our automotive and commercial truck solutions, we're actively applying that specific expertise in other markets with similar requirements, including battery energy storage. Redeploying our proven engineering and manufacturing strengths attracts new business and amplifies long-term growth. We are intentionally focusing our efforts to aggressively pursue the right adjacent opportunities—ones that play directly into our strengths. From an engineering and technical capability perspective, we have the right solutions.

What we are actively building is the go-to-market muscle required to execute with the level of discipline and excellence Versigent is known for. Given the early stage of our adjacent market commercialization efforts in some of these new sectors, I want to reiterate that our previously communicated 2028 outlook does not rely on a meaningful contribution from these opportunities. We view them instead as a source of potential upside beyond our previously provided outlook. In the meantime, we remain focused on executing our go-to-market strategy, expanding customer relationships, and positioning Versigent for long-term success in every market we pursue.

Operational excellence generated strong commercial momentum throughout the quarter. I had the honor of receiving the Poggio Ferrari Excellence Award on behalf of the entire Versigent team in June. The award, the first of its kind, recognized Versigent for three decades of outstanding partnership and customer service. This, in addition to important quality recognitions from VW and Mahindra, illustrates Versigent's global reputation as a valuable partner, particularly on highly complex global platforms where reliability and performance are critical.

Together, these execution outcomes supported the volume growth achieved in the quarter and demonstrate how our priorities are translating into real results. As we look ahead to the second half of the year, we do so with confidence and purpose, guided by our commitment to create long-term value for our stakeholders. Our disciplined approach to capital allocation prioritizes both investing in our business and generating attractive shareholder returns, underpinned by the strength of our business and the durability of our cash flow generation.

I'm proud to announce an important milestone for Versigent: the initiation of a quarterly dividend, which Doug will go into greater detail in his remarks. Together with our previously announced $250 million share repurchase authorization, these measures reinforce our confidence in our long-term outlook and fortify Versigent's ability to meaningfully impact our customers, employees, and shareholders alike. Guided by our strategic priorities, strong execution capabilities, and disciplined capital allocation, we are leading our industry as a highly engineered, globally scaled, and cash-generative company ready to unlock even greater value.

With that, I'll turn the call over to Doug to walk through the financials of the quarter and our updated full-year 2026 guidance. UNKNOWN, Chief Financial Officer Thank you, Joe. Let's turn to our second quarter financial highlights on slide 6. We delivered a strong set of results in our first full quarter as an independent company set against the backdrop of lower global automotive production.

Our double digit net sales growth, underpinned by strong adjusted EBITDA margins and cash generation, reflects the resiliency of our business as well as the deep value customers place on our differentiated capabilities. 4 billion, up 11% versus the second quarter of 2025. Excluding the impact of FX and commodity movements, adjusted net sales growth was approximately 5%. This was driven primarily by higher volumes in both North America and Asia Pacific, which were partially offset by softer volumes in EMEA.

Adjusted EBITDA was 272 million, up 25% year over year. 1%, reflecting both our disciplined operating execution as well as higher volumes. Net income attributable to Versigent was 118 million, up 10% year over year, reflecting higher net sales and strong operating performance. 92, reflecting the strong operating performance delivered during the quarter.

89 million Versigent ordinary shares that were outstanding immediately following the April 1st spinoff. Our adjusted effective tax rate was 27% in the quarter compared to 16% in the second quarter of 2025. The higher tax rate in 2026 primarily reflects the year over year impact of discrete tax items which were favorable in the second quarter of 2025 and unfavorable in the second quarter of 2026. While these items impacted the quarterly rate, our full year expectations remain unchanged.

We continue to expect our full year 2026 adjusted effective tax rate to be approximately 23% with a similar cash tax rate. Free cash flow was 107 million in the second quarter and was essentially in line with the prior year quarter despite higher capital expenditures and separation related costs, which I'll discuss in more detail in a moment. Moving now to Slide 7, we see the primary drivers of the 238 million or 11% year over year increase in second quarter net sales.

Before walking through the bridge, I'd like to highlight that we have enhanced the level of detail in both our year over year net sales and adjusted EBITDA bridges by separately presenting net pricing, FX, and commodity impacts, which we believe provides additional transparency into the key drivers of our performance. We've also included the corresponding year to date bridges in the appendix. 4 billion in the quarter. Volume contributed approximately 120 million of the year over year growth driven by higher production on key customer programs, particularly in North America and Asia Pacific.

FX contributed approximately 40 million while commodity related pass-throughs contributed approximately 96 million. Net pricing excluding commodity pass-throughs was a headwind of approximately 18 million year over year, which was primarily driven by customary customer price downs which were broadly consistent with our expectations for the quarter, partially offset by customer recoveries during the period. Just as a reminder, customer price downs are a normal feature of our business and typically average about 1 to 2% annually.

These reductions generally reflect the sharing of cost savings generated through engineering improvements, productivity gains, and other operating efficiencies achieved over the life of a program. Consistent with our commitments last quarter, we believe it is important to distinguish these underlying pricing dynamics from commodity pass-throughs. The net pricing category excludes the commodity related movements, while contractual commodity pass-throughs are reflected separately in the commodity bucket. Adjusted net sales growth excludes the impact of FX and commodity related movements, providing a clearer view of underlying sales performance.

On that basis, adjusted net sales growth was approximately 5% in the quarter compared to relatively flat to slightly down global automotive production. From a regional perspective, performance was strongest in the Americas and Asia Pacific. 1 billion, up 11% year over year with adjusted net sales growth of approximately 6%. Growth was driven by higher volumes on key customer programs and continued strong execution across the region.

We remain well positioned with leading North American OEMs, particularly on large truck and SUV platforms where increasingly complex electrical architectures require high levels of reliability, integration, and scale which play directly into our strength. In Asia Pacific, net sales were approximately 825 million, up 24% year over year with adjusted net sales growth of approximately 15%. Performance was driven by launch activity, growth with both global and local OEMs, and continued demand across key markets, including China.

As we discussed last quarter, we continue to see growth with customers in China that are benefiting from strong export demand into other regions, including Europe. Given these dynamics, we believe the Asia Pacific and EMEA results should be considered together as some vehicle production serving European demand is increasingly occurring in China rather than the region itself. In EMEA, net sales were approximately 524 million, down 6% year over year while adjusted net sales declined 11%. The decline reflected continued softness in regional production and the end of production impacts on certain programs.

Overall, our regional performance reflects continued growth over market in the Americas and Asia Pacific. In Europe, market conditions remain challenging and our volumes declined more than the market. We are taking targeted actions to improve competitiveness and accelerate performance in that region. Turning to Slide 8, adjusted EBITDA increased 54 million, or 25% year over year, to 272 million.

1%. The bridge highlights the key drivers of the year over year improvement: volume contributed approximately 30 million of benefit, reflecting strong flow through of higher net sales. Net pricing, excluding commodities, was a headwind of approximately 18 million. FX contributed approximately 13 million and net performance contributed approximately 38 million.

The net performance category reflects the benefits of our operational execution including purchasing cost savings, material productivity, value engineering and content optimization initiatives, along with manufacturing productivity and footprint actions. Net performance also included the recognition of approximately 7 million of IA Petera refunds during the quarter. Commodity impacts were a headwind of approximately 9 million in the quarter and, as we discussed last quarter, the rapid increase in copper prices during the first quarter created a temporary margin headwind as higher input costs were incurred ahead of the customer pass-throughs.

Approximately three quarters of our copper exposure is covered by contractual escalation agreements which typically result in a three to four month lag between changes in the copper costs and the corresponding customer pass-throughs. The remaining portion of our exposure is managed proactively through financial hedges.