What changed in Gentherm Inc's 10-K — 2024 vs 2025
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Paragraph-level year-over-year comparison of Gentherm Inc's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.
+128 added−136 removedSource: 10-K (2026-02-19) vs 10-K (2025-02-19)
Top changes in Gentherm Inc's 2025 10-K
128 paragraphs added · 136 removed · 96 edited across 1 sections
- Item 1C. Cybersecurity+128 / −136 · 96 edited
Item 1C. Cybersecurity
Cybersecurity — threats and controls disclosure
96 edited+32 added−40 removed89 unchanged
Item 1C. Cybersecurity
Cybersecurity — threats and controls disclosure
96 edited+32 added−40 removed89 unchanged
2024 filing
2025 filing
Biggest changeThe results of operations for the years ended December 31, 2024 and 2023, in thousands, were as follows: Year Ended December 31, 2024 2023 Favorable / (Unfavorable) Product revenues $ 1,456,124 $ 1,469,076 $ (12,952 ) Cost of sales 1,089,693 1,117,452 27,759 Gross margin 366,431 351,624 14,807 Operating expenses: Net research and development expenses 88,697 94,358 5,661 Selling, general and administrative expenses 155,108 155,579 471 Restructuring expenses, net 13,110 4,739 (8,371 ) Impairment of intangible assets and property and equipment 2,501 — (2,501 ) Impairment of goodwill — 19,509 19,509 Total operating expenses 259,416 274,185 14,769 Operating income 107,015 77,439 29,576 Interest expense, net (15,300 ) (14,641 ) (659 ) Foreign currency gain (loss) 9,599 (5,918 ) 15,517 Other income (loss) 951 (1,926 ) 2,877 Earnings before income tax 102,265 54,954 47,311 Income tax expense 37,318 14,611 (22,707 ) Net income $ 64,947 $ 40,343 $ 24,604 39 Product revenues by product category, in thousands, for the years ended December 31, 2024 and 2023 were as follows: Year Ended December 31, 2024 2023 % Change Climate Control Seat $ 468,820 $ 482,665 (2.9 )% Seat Heaters 297,866 308,588 (3.5 )% Lumbar and Massage Comfort Solutions 178,584 144,923 23.2 % Steering Wheel Heaters 169,763 153,943 10.3 % Valve Systems 105,056 106,262 (1.1 )% Automotive Cables 73,091 79,993 (8.6 )% Battery Performance Solutions 58,183 75,484 (22.9 )% Electronics 33,065 40,387 (18.1 )% Other Automotive 21,850 30,707 (28.8 )% Subtotal Automotive segment 1,406,278 1,422,952 (1.2 )% Medical segment 49,846 46,124 8.1 % Total Company $ 1,456,124 $ 1,469,076 (0.9 )% Product Revenues Below is a summary of our product revenues, in thousands, for the years ended December 31, 2024 and 2023: Year Ended December 31, Variance Due To: 2024 2023 Favorable / (Unfavorable) Automotive Volume FX Pricing/ Other Total Product revenues $ 1,456,124 $ 1,469,076 $ (12,952 ) $ 3,931 $ (7,129 ) $ (9,754 ) $ (12,952 ) Product revenues for the year ended December 31, 2024 decreased 0.9% as compared to the year ended December 31, 2023.
Biggest changeThe results of operations for the years ended December 31, 2025 and 2024, in thousands, were as follows: Year Ended December 31, 2025 2024 Favorable / (Unfavorable) Product revenues $ 1,498,602 $ 1,456,124 $ 42,478 Cost of sales 1,136,426 1,089,693 (46,733 ) Gross margin 362,176 366,431 (4,255 ) Operating expenses: Net research and development expenses 94,759 88,697 (6,062 ) Selling, general and administrative expenses 170,045 155,108 (14,937 ) Restructuring expenses, net 12,476 13,110 634 Loss on sale of land and building, net 2,196 — (2,196 ) Impairment of intangible assets and property and equipment — 2,501 2,501 Total operating expenses 279,476 259,416 (20,060 ) Operating income 82,700 107,015 (24,315 ) Interest expense, net (13,811 ) (15,300 ) 1,489 Foreign currency (loss) gain (28,415 ) 9,599 (38,014 ) Other (loss) income (4,639 ) 951 (5,590 ) Earnings before income tax 35,835 102,265 (66,430 ) Income tax expense 17,550 37,318 19,768 Net income $ 18,285 $ 64,947 $ (46,662 ) 32 Table of Contents Product revenues by product category, in thousands, for the years ended December 31, 2025 and 2024 were as follows: Year Ended December 31, 2025 2024 (a) % Change Climate Control Seats $ 793,314 $ 771,310 2.9 % Lumbar and Massage Comfort Solutions 212,182 178,584 18.8 % Climate Control Interiors 197,901 186,972 5.8 % Climate and Comfort Electronics 29,664 17,363 70.8 % Automotive Climate and Comfort Solutions 1,233,061 1,154,229 6.8 % Valve Systems 96,877 105,056 (7.8 )% Other Automotive 118,888 146,993 (19.1 )% Subtotal Automotive segment 1,448,826 1,406,278 3.0 % Medical segment 49,776 49,846 (0.1 )% Total Company $ 1,498,602 $ 1,456,124 2.9 % (a) Product categories have been modified, and prior-period amounts have been recast to conform with the current period presentation.
Depending on the environment, we implement and maintain various technical, physical, and organizational measures, processes, standards, and/or policies designed to manage and mitigate material risks from cybersecurity threats to our information systems and data, including risk 30 assessments, incident detection and response, vulnerability management, disaster recovery and business continuity plans, internal controls within our accounting and financial reporting functions, encryption of data, network security controls, access controls, physical security, asset management, systems monitoring, vendor risk management program and employee training.
Depending on the environment, we implement and maintain various technical, physical, and organizational measures, processes, standards, and/or policies designed to manage and mitigate material risks from cybersecurity threats to our information systems and data, including risk assessments, incident detection and response, vulnerability management, disaster recovery and business continuity plans, internal controls within our accounting and financial reporting functions, encryption of data, network security controls, access controls, physical security, asset management, systems monitoring, vendor risk management program and employee training.
Our IT Security Committee includes members of our IT security function and executive management of our legal, finance and internal audit/risk, human resources and corporate communications and technology functions. I TEM 2. PROPERTIES As of December 31, 2024, we operate in more than 30 locations across 13 countries, which are primarily for manufacturing, assembly, distribution, warehousing, engineering and testing.
Our IT Security Committee includes members of our IT security function and executive management of our legal, finance and internal audit/risk, human resources and corporate communications and technology functions. I TEM 2. PROPERTIES As of December 31, 2025, we operate in more than 30 locations across 13 countries, which are primarily for manufacturing, assembly, distribution, warehousing, engineering and testing.
In preparing these consolidated financial statements, management was required to make 47 estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses.
In preparing these consolidated financial statements, management was required to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses.
OTHER INFORMATION During the three months ended December 31, 2024 , none of the Company's directors or Section 16 officers adopted or terminated (i) any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act or (ii) any non-Rule 10b5-1 trading arrangement .
OTHER INFORMATION During the three months ended December 31, 2025 , none of the Company's directors or Section 16 officers adopted or terminated (i) any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act or (ii) any non-Rule 10b5-1 trading arrangement .
Under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer, management conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2024 based on the framework set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in “Internal Control-Integrated Framework (2013).” Based on that evaluation, management has concluded that the Company’s internal control over financial reporting was effective as of December 31, 2024.
Under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer, management conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2025 based on the framework set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in “Internal Control-Integrated Framework (2013).” Based on that evaluation, management has concluded that the Company’s internal control over financial reporting was effective as of December 31, 2025.
LEGAL PROCEEDINGS We are subject to litigation from time to time in the ordinary course of our business, however, there is no current material pending litigation to which we are a party and no material legal proceedings were terminated, settled or otherwise resolved during the fourth quarter of the fiscal year ended December 31, 2024. I TEM 4.
LEGAL PROCEEDINGS We are subject to litigation from time to time in the ordinary course of our business, however, there is no current material pending litigation to which we are a party and no material legal proceedings were terminated, settled or otherwise resolved during the fourth quarter of the fiscal year ended December 31, 2025. I TEM 4.
The Company's reporting units in its Automotive segment each have a fair value that is substantially in excess of its respective carrying value as of December 31, 2024. Income Taxes Critical estimates: The Company is subject to income taxes in the United States and numerous international jurisdictions.
The Company's reporting units in its Automotive segment each have a fair value that is substantially in excess of its respective carrying value as of December 31, 2025. Income Taxes Critical estimates: The Company is subject to income taxes in the United States and numerous international jurisdictions.
See Note 9, “Debt,” to the consolidated financial statements included in this Annual Report for additional information. (2) See Note 8, “Leases,” to the consolidated financial statements included in this Annual Report for additional information. (3) Capital commitments is comprised of commitments for capital expenditures. Such commitments are typically less than one year.
See Note 8, “Debt,” to the consolidated financial statements included in this Annual Report for additional information. (2) See Note 7, “Leases,” to the consolidated financial statements included in this Annual Report for additional information. (3) Capital commitments is comprised of commitments for capital expenditures. Such commitments are typically less than one year.
Although automotive new business awards are not firm customer orders, we believe that new business awards are an indicator of future revenue. New business awards are not projections of revenue or future business as of December 31, 2024, the date of this Annual Report or any other date.
Although automotive new business awards are not firm customer orders, we believe that new business awards are an indicator of future revenue. New business awards are not projections of revenue or future business as of December 31, 2025, the date of this Annual Report or any other date.
Federal statutory rate of 21% primarily due to the unfavorable impact of the global intangible low-tax income ("GILTI"), withholding taxes, other non-deductible expenses, and the settlement of a prior period tax audit, partially offset by the impact of income taxes on foreign earnings at tax rates varying from the U.S. statutory tax rate, research and development credits and incentive tax rates in various jurisdictions.
Federal statutory rate of 21% primarily due to the unfavorable impact of GILTI, withholding taxes, other non-deductible expenses, and the settlement of a prior period tax audit, partially offset by the impact of income taxes on foreign earnings at tax rates varying from the U.S. Federal statutory tax rate, research and development credits and incentive tax rates in various jurisdictions.
To hedge the Company's exposure to interest payment fluctuations on a portion of the borrowings, we entered into a floating-to-fixed interest rate swap agreement with a notional amount of $100.0 million. 51 Exchange Rate Sensitivity The table below provides information about the Company’s foreign currency forward exchange rate agreements that are sensitive to changes in foreign currency exchange rates.
To hedge the Company's exposure to interest payment fluctuations on a portion of the borrowings, we entered into a floating-to-fixed interest rate swap agreement with a notional amount of $100.0 million. 43 Table of Contents Exchange Rate Sensitivity The table below provides information about the Company’s foreign currency forward exchange rate agreements that are sensitive to changes in foreign currency exchange rates.
CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures Management of the Company, under the supervision and with the participation of the Chief Executive Officer and the Chief Financial Officer, carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of December 31, 2024.
CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures Management of the Company, under the supervision and with the participation of the Chief Executive Officer and the Chief Financial Officer, carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of December 31, 2025.
Changes in Internal Control Over Financial Reporting There were no changes in our internal control over financial reporting during the quarter ended December 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Changes in Internal Control Over Financial Reporting There were no changes in our internal control over financial reporting during the quarter ended December 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
We have not included amounts for material and component purchase obligations related to standard recurring purchases of materials for use in our manufacturing operations as these amounts are generally consistent from year to year, closely reflect our levels of production, and are not long-term in nature.
We have not included amounts for material and component purchase obligations related to 38 Table of Contents standard recurring purchases of materials for use in our manufacturing operations as these amounts are generally consistent from year to year, closely reflect our levels of production, and are not long-term in nature.
The estimated future cash flows reflect management's latest assumptions of the financial projections based on current and anticipated competitive landscape, including estimates of revenue based on production volumes over the foreseeable future and long-term growth rates, and operating margins based on historical trends and future cost containment activities.
The estimated future cash flows reflect management's latest assumptions of the financial projections based on current and anticipated competitive landscape, including estimates of revenue based on production volumes over 40 Table of Contents the foreseeable future and long-term growth rates, and operating margins based on historical trends and future cost containment activities.
Foreign currency exchange risks are attributable to sales to foreign customers and purchases from foreign suppliers not denominated in a location’s functional currency, foreign plant operations, intercompany indebtedness, acquisitions denominated in foreign currencies, intercompany investments and include exposures to the Euro, Mexican Peso, Canadian Dollar, Hungarian Forint, North Macedonian Denar, Ukrainian Hryvnia, Japanese Yen, Chinese Renminbi, Korean Won, Czech Koruna and Vietnamese Dong.
Foreign currency exchange risks are attributable to sales to foreign customers and purchases from foreign suppliers not denominated in a location’s functional currency, foreign plant operations, intercompany indebtedness, acquisitions denominated in foreign currencies, intercompany investments and include exposures to the Euro, Mexican Peso, Hungarian Forint, North Macedonian Denar, Ukrainian Hryvnia, Japanese Yen, Chinese Renminbi, Korean Won, Czech Koruna, Vietnamese Dong and Moroccan Dirham.
Customer projections regularly change over time, and we do not update our calculation of any new business award after the date initially communicated. Automotive new business awards in 2024 also do not reflect, in particular, the impact of macroeconomic and 38 geopolitical challenges on future business.
Customer projections regularly change over time, and we do not update our calculation of any new business award after the date initially communicated. Automotive new business awards in 2025 also do not reflect, in particular, the impact of macroeconomic and geopolitical challenges on future business.
Based upon this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective as of December 31, 2024.
Based upon this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective as of December 31, 2025.
Cash flows associated with derivatives are reported in net cash provided by operating activities in the Company’s consolidated statements of cash flows. Information related to the fair values of all derivative instruments in our consolidated balance sheet as of December 31, 2024 is set forth in Note 14, “Financial Instruments” in the consolidated financial statements included in this Annual Report.
Cash flows associated with derivatives are reported in net cash provided by operating activities in the Company’s consolidated statements of cash flows. Information related to the fair values of all derivative instruments in our consolidated balance sheet as of December 31, 2025 is set forth in Note 13, “Financial Instruments” in the consolidated financial statements included in this Annual Report.
Effects of Inflation The automotive component supply industry has historically been subject to inflationary pressures with respect to materials and labor. At times in recent years, the automotive industry has experienced significant volatility in the costs of certain materials and components, labor and transportation.
Effects of Inflation The automotive component supply industry has historically been subject to inflationary pressures with respect to materials and labor. At times in recent years, the automotive industry has experienced significant volatility in the costs of certain materials and 39 Table of Contents components, labor and transportation.
RESERVED 35 I TEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis should be read in conjunction with, and is qualified in its entirety by, our consolidated financial statements (and notes related thereto) and other more detailed financial information appearing elsewhere in this Annual Report.
RESERVED 28 Table of Contents I TEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis should be read in conjunction with, and is qualified in its entirety by, our consolidated financial statements (and notes related thereto) and other more detailed financial information appearing elsewhere in this Annual Report.
Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected. 53 I TEM 9B.
Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected. 45 Table of Contents I TEM 9B.
Results of Operations Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 This section discusses our consolidated results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Results of Operations Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 This section discusses our consolidated results of operations for the year ended December 31, 2025 compared to the year ended December 31, 2024.
For a detailed discussion of our consolidated results of operations for the years ended December 31, 2023 compared to the year ended December 31, 2022, see Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operation” under “Results of Operations Year Ended December 31, 2023 Compared to December 31, 2022” in our annual report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC on February 21, 2024.
For a detailed discussion of our consolidated results of operations for the years ended December 31, 2024 compared to the year ended December 31, 2023, see Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operation” under “Results of Operations Year Ended December 31, 2024 Compared to December 31, 2023” in our annual report on Form 10-K for the year ended December 31, 2024, which was filed with the SEC on February 19, 2025.
Historically, new vehicle demand and product content (i.e. vehicle features) have been driven by macroeconomic and other factors, such as interest rates, automotive manufacturer and dealer sales incentives, fuel prices, consumer confidence, employment levels, income growth trends and government and tax incentives.
Historically, new vehicle demand and product content (i.e. vehicle features) have been driven by macroeconomic and other factors, such as interest rates, automotive manufacturer and dealer sales incentives, fuel prices, consumer confidence, employment levels, income growth trends and government incentives. Vehicle content has also been driven by trends in consumer preferences.
The Company has made contributions of approximately $1.8 million to the Autotech Fund III, LP as of December 31, 2024. Timing of the remaining $3.2 million of capital contributions is unknown and therefore amounts have been excluded from the Material Cash Requirements table above.
The Company has made contributions of approximately $2.9 million to the Autotech Fund III, LP as of December 31, 2025. Timing of the remaining $2.1 million of capital contributions is unknown and therefore amounts have been excluded from the Material Cash Requirements table above.
The estimated fair value of the Medical reporting unit exceeded its carrying value by approximately 15% as of December 31, 2024. The Medical reporting unit is at risk of failing future impairment tests, as the estimate of fair value does not substantially exceed its carrying value.
The estimated fair value of the Medical reporting unit exceeded its carrying value by approximately 25% as of December 31, 2025. The Medical reporting unit is at risk of failing future impairment tests, as the estimate of fair value does not substantially exceed its carrying value.
New Business Awards We believe that innovation is an important element to gaining market acceptance of our products and strengthening our market position. During 2024, we secured an estimated $2,400 million of automotive new business awards.
New Business Awards We believe that innovation is an important element to gaining market acceptance of our products and strengthening our market position. During 2025, we secured an estimated $2,200 million of automotive new business awards.
According to the forecasting firm S&P Global Mobility (February 2025 release), global light vehicle production in 2024 in the Company’s key markets of North America, Europe, China, Japan and South Korea, as compared to 2023, are shown below (in millions of units): 2024 2023 % Change North America 15.4 15.7 (1.5 )% Europe 17.2 18.0 (4.3 )% Greater China 30.1 29.0 3.6 % Japan / South Korea 12.0 12.8 (6.3 )% Total light vehicle production volume in key markets 74.7 75.5 (1.0 )% The S&P Global Mobility report (February 2025 release) forecasted light vehicle production volume in the Company’s key markets for full year 2025 to decrease to 74.2 million units, a 0.6% decrease from full year 2024 light vehicle production volumes.
According to the forecasting firm S&P Global Mobility (February 2026 release), global light vehicle production in 2025 in the Company’s key markets of North America, Europe, China, Japan and South Korea, as compared to 2024, are shown below (in millions of units): 2025 2024 % Change North America 15.3 15.4 (1.2 )% Europe 17.0 17.2 (0.8 )% Greater China 33.1 30.1 10.0 % Japan / South Korea 12.1 12.0 0.8 % Total light vehicle production volume in key markets 77.5 74.7 3.7 % The S&P Global Mobility report (February 2026 release) forecasted light vehicle production volume in the Company’s key markets for full year 2026 to decrease to 76.7 million units, a 1.0% decrease from full year 2025 light vehicle production volumes.
Our Board members also engage in ad hoc conversations with management on cybersecurity-related news events and discuss any updates to our cybersecurity risk management and strategy programs.
Our Board 25 Table of Contents members also engage in ad hoc conversations with management on cybersecurity-related news events and discuss any updates to our cybersecurity risk management and strategy programs.
See Note 20, “Segment Reporting,” to the consolidated financial statements included in this Annual Report for a description of our reportable segments as well as their proportional contribution to the Company’s reported product revenues, operating income (loss) and significant segment expenses.
See Note 19, “Segment Reporting,” to the consolidated financial statements included in this Annual Report for a description of our reportable segments as well as their proportional contribution to the Company’s reported product revenues, operating income and depreciation and amortization.
See Note 5, "Restructuring and Impairments," in the notes to the consolidated financial statements included in this Annual Report for additional information.
See Note 4, "Restructuring" in the notes to the consolidated financial statements included in this Annual Report for additional information.
The payment of future dividends is within the discretion of our Board of Directors and will depend upon business conditions, our earnings and financial condition and other factors. Currently, our bank credit facilities limit payment of dividends on our Common Stock.
The payment of future dividends is within the discretion of our Board of Directors and will depend upon business conditions, our earnings and financial condition and other factors. Currently, payment of dividends on our Common Stock would require meeting certain restrictive covenants on our bank credit facilities.
The Company’s 48 estimated future cash flow projections for the Medical reporting unit for the period of 2025 through 2029 assume a compound annual growth rate for revenue of approximately 13.1%, which we deem to be a critical assumption in the fair value determination as of December 31, 2024.
The Company’s estimated future cash flow projections for the Medical reporting unit for the period of 2026 through 2030 assume a compound annual growth rate for revenue of approximately 14.0%, which we deem to be a critical assumption in the fair value determination as of December 31, 2025.
Also, the market valuation approach is highly subjective as it requires the selection of comparable companies and valuation multiples. Impact if actual results differ from assumptions: As of December 31, 2024, our goodwill balance included $72.8 million related to our Automotive segment and $26.8 million related to our Medical segment.
Also, the market valuation approach is highly subjective as it requires the selection of comparable companies and valuation multiples. Impact if actual results differ from assumptions: As of December 31, 2025, our goodwill balance included $81.0 million related to our Automotive segment and $27.9 million related to our Medical segment.
Expected Maturity Date 2025 2026 2027 2028 Total Fair Value Liabilities Long-Term Debt: Variable rate $ — $ — $ 220,000 $ — $ 220,000 $ 220,000 Variable interest rate as of December 31, 2024 5.86 % 5.86 % Based on the amounts outstanding as of December 31, 2024, a hypothetical 100 basis point change (increase or decrease) in interest rates would impact annual interest expense by $2.2 million.
Expected Maturity Date 2026 2027 2028 2029 Total Fair Value Liabilities Long-Term Debt: Variable rate $ — $ 189,000 $ — $ — $ 189,000 $ 189,000 Variable interest rate as of December 31, 2025 4.95 % 4.95 % Based on the amounts outstanding as of December 31, 2025, a hypothetical 100 basis point change (increase or decrease) in interest rates would impact annual interest expense by $1.9 million.
Further, there is the potential that certain political pressures, such as changes to international trade agreements, increases in trade tariffs, import quotas or other trade restrictions or actions, including retaliatory responses to such actions, could affect the operations of our OEM customers, resulting in reduced automotive production in certain regions or shifts in the mix of production to higher cost regions.
Further, it is reasonably possible that certain political pressures, such as changes to international trade agreements, increases in tariffs, import quotas or other trade restrictions or actions, including export controls and other retaliatory responses to such actions, could continue to affect the operations of our OEM customers, resulting in reduced automotive production in certain regions or shifts in the 30 Table of Contents mix of production to higher cost regions.
Cash Flows From Financing Activities Net cash used in financing activities totaled $51.7 million and $106.1 million for the years ended December 31, 2024 and 2023, respectively.
Cash Flows From Financing Activities Net cash used in financing activities totaled $42.5 million and $51.7 million for the years ended December 31, 2025 and 2024, respectively.
The decrease in product revenues is due to unfavorable pricing and foreign currency impacts primarily attributable to the Chinese Renminbi, the Korean Won and the Japanese Yen, partially offset by favorable volumes in several product lines within the Automotive segment and favorable foreign currency impacts primarily attributable to the Euro.
The increase in product revenues is due to favorable automotive volumes and favorable foreign currency impacts primarily attributable to the Euro, partially offset by unfavorable pricing and unfavorable currency impacts primarily attributable to the Chinese Renminbi and Korean Won.
As of December 31, 2024, the Company had $134.1 million of cash and cash equivalents and $280.0 million of availability under our Second Amended and Restated Credit Agreement. We may issue debt or equity securities, which may provide an additional source of liquidity.
As of December 31, 2025, the Company had $160.8 million of cash and cash equivalents and $307.9 million of availability under our Second Amended and Restated Credit Agreement. We may issue debt or equity securities, which may provide an additional source of liquidity.
This forecasted revenue growth, which is significantly higher than historical periods, is primarily driven by our anticipated product launches that are expected to increase volume and price due to new features and product capabilities. Realization of this assumed revenue growth is dependent on the successful launch of these new products and product features and the acceptance of customers.
This forecasted revenue growth, which is significantly higher than historical periods, is primarily driven by our anticipated product launches. Realization of this assumed revenue growth is dependent on the successful launch of these new products and the acceptance of customers.
As of December 31, 2024, the Company’s cash and cash equivalents held by our non-U.S. subsidiaries totaled $106.9 million.
As of December 31, 2025, the Company’s cash and cash equivalents held by our non-U.S. subsidiaries totaled $103.1 million.
Cash flows used in investing activities for the year ended December 31, 2023 primarily included capital expenditures of $37.6 million and technology investments of $0.8 million, partially offset by proceeds from deferred purchase price of factored receivables of $13.9 million and proceeds from the sale of property and equipment of $0.4 million.
Cash flows used in investing activities for the year ended December 31, 2025 primarily included capital expenditures of $55.7 million and technology investments of $1.2 million, partially offset by proceeds from the sale of property and equipment of $3.8 million and proceeds from deferred purchase price of factored receivables of $0.7 million.
The 2024 Stock Repurchase Program may be modified, extended or terminated at any time without prior notice. 33 Issuer Purchases of Equity Securities During Fourth Quarter 2024 Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Repurchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Purchased Under the 2024 Stock Repurchase Program October 1, 2024 to October 31, 2024 — $ — — $ 130,117,303 November 1, 2024 to November 30, 2024 — — — 130,117,303 December 1, 2024 to December 31, 2024 233,449 42.84 233,449 120,117,332 34 Performance graph The following graph reflects the comparative changes in the value from December 31, 2019 through December 31, 2024, assuming an initial investment of $100 and the reinvestment of dividends, if any, in (1) our Common Stock, (2) the NASDAQ Composite index, (3) the Russell 2000 Index and (4) the Dow Jones U.S.
Issuer Purchases of Equity Securities During Fourth Quarter 2025 Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Repurchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Purchased Under the 2024 Stock Repurchase Program October 1, 2025 to October 31, 2025 — $ — — $ 110,102,528 November 1, 2025 to November 30, 2025 — — — 110,102,528 December 1, 2025 to December 31, 2025 — — — 110,102,528 27 Table of Contents Performance graph The following graph reflects the comparative changes in the value from December 31, 2020 through December 31, 2025, assuming an initial investment of $100 and the reinvestment of dividends, if any, in (1) our Common Stock, (2) the NASDAQ Composite index, (3) the Russell 2000 Index and (4) the Dow Jones U.S.
ITE M 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS None. 54 P ART III
ITE M 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS None. 46 Table of Contents P ART III
Impairment of Intangible Assets and Property and Equipment Below is a summary of our impairment of intangible assets and property and equipment, in thousands, for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 Favorable / (Unfavorable) Impairment of intangible assets and property and equipment $ 2,501 $ — $ (2,501 ) Impairment of intangible assets and property and equipment for the year ended December 31, 2024 is related to equipment determined to have no future use and one of our tradenames. 41 Impairment of Goodwill Below is a summary of our impairment of goodwill, in thousands, for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 Favorable / (Unfavorable) Impairment of goodwill $ — $ 19,509 $ 19,509 Impairment of goodwill for the year ended December 31, 2023 is related to the recorded Medical reporting unit goodwill impairment.
Impairment of Intangible Assets and Property and Equipment Below is a summary of our impairment of intangible assets and property and equipment, in thousands, for the years ended December 31, 2025 and 2024: Year Ended December 31, 2025 2024 Favorable / (Unfavorable) Impairment of intangible assets and property and equipment $ — $ 2,501 $ 2,501 Impairment of intangible assets and property and equipment for the year ended December 31, 2024 related to equipment determined to have no future use.
When the underlying hedge transaction is realized, the gain or loss included in accumulated other comprehensive loss is recorded in earnings in the consolidated statements of income on the same line as the gain or loss on the hedged item attributable to the hedged risk.
When the underlying hedge transaction is realized, the gain or loss included in accumulated other comprehensive loss is recorded in earnings in the consolidated statements of income on the same line as the hedged item. Also, the Company records the ineffective portion, if any, on the same line as the hedged item.
Selling, General and Administrative Expenses Below is a summary of our selling, general and administrative expenses, in thousands, for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 Favorable / (Unfavorable) Selling, general and administrative expenses $ 155,108 $ 155,579 $ 471 Percentage of product revenues 10.7 % 10.6 % Selling, general and administrative expenses for the year ended December 31, 2024 decreased 0.3% as compared to the year ended December 31, 2023.
Selling, General and Administrative Expenses Below is a summary of our selling, general and administrative expenses, in thousands, for the years ended December 31, 2025 and 2024: Year Ended December 31, 2025 2024 Favorable / (Unfavorable) Selling, general and administrative expenses $ 170,045 $ 155,108 $ (14,937 ) Percentage of product revenues 11.3 % 10.7 % Selling, general and administrative expenses for the year ended December 31, 2025 increased 9.6% as compared to the year ended December 31, 2024.
We also have sales offices, warehouses and engineering centers, strategically located throughout the world. Nearly all of our manufacturing and distribution sites in Mexico and Asia are leased, while most of our European sites are owned. I TEM 3.
We also have sales offices, warehouses and engineering centers, strategically located throughout the world. Our global manufacturing and distribution facilities are located close to our key customers and strategically in low cost regions. Nearly all of our sites in North America and Asia are leased, while most of our European sites are owned. I TEM 3.
Foreign currency loss for the year ended December 31, 2023 included net realized foreign currency gain of $3.2 million and unrealized net foreign currency loss of $9.1 million.
Foreign currency gain for the year ended December 31, 2024 included net realized foreign currency loss of $1.1 million and unrealized net foreign currency gain of $10.7 million.
See Note 2, "Summary of Significant Accounting Policies," in the notes to the consolidated financial statements included in this Annual Report for additional information. 42 Income Tax Expense Below is a summary of our income tax expense, in thousands, for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 Favorable / (Unfavorable) Income tax expense $ 37,318 $ 14,611 $ (22,707 ) Income tax expense was $37.3 million for the year ended December 31, 2024, on earnings before income tax of $102.3 million, representing an effective tax rate of 36.5 %.
See Note 2, "Summary of Significant Accounting Policies," in the notes to the consolidated financial statements included in this Annual Report for additional information. 35 Table of Contents Income Tax Expense Below is a summary of our income tax expense, in thousands, for the years ended December 31, 2025 and 2024: Year Ended December 31, 2025 2024 Favorable / (Unfavorable) Income tax expense $ 17,550 $ 37,318 $ 19,768 Income tax expense was $17.6 million for the year ended December 31, 2025, on earnings before income tax of $35.8 million, representing an effective tax rate of 49.0.%.
Cash flows used in financing activities for the year ended December 31, 2023 primarily included $91.1 million of cash paid for the repurchase of Common Stock, $12.3 million of net debt activity and $2.9 million paid for employee taxes related to the net settlement of restricted stock units that vested during the year, partially offset by $0.2 million of proceeds from the exercise of Common Stock options.
Cash flows used in financing activities for the year ended December 31, 2025 primarily included $31.1 million net repayments of debt, $10.0 million of cash paid for the repurchase of Common Stock and $1.3 million paid for employee taxes related to the net settlement of restricted stock units that vested during the year.
Cash flows used in financing activities for the year ended December 31, 2024 primarily included $2.6 million of net debt activity, $51.6 million of cash paid for the repurchase of Common Stock and $3.3 million paid for employee taxes related to the net settlement of restricted stock units that vested during the year, partially offset by $5.8 million of proceeds from the exercise of Common Stock options.
Cash flows used in financing activities for the year ended December 31, 2024 primarily included $2.6 million net repayments of debt, $51.6 million of cash paid for the repurchase of Common Stock and $3.3 million paid for employee taxes related to the net settlement of restricted stock units that vested during the year, partially offset by $5.8 million of proceeds from the exercise of Common Stock options. 37 Table of Contents Debt The following table summarizes the Company’s debt at December 31, 2025 and 2024 (dollars in thousands): December 31, 2025 2024 Interest Rate Principal Balance Interest Rate Principal Balance Revolving Credit Facility (U.S.
MINE SAFETY DISCLOSURES. Not applicable. 32 P ART II I TEM 5. MARKET FOR THE REGISTRANT’S COMMON STOCK, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our Common Stock trades on the Nasdaq Global Select Market under the symbol “THRM.” Holders As of February 13, 2025, our Common Stock was held by 37 shareholders of record.
MARKET FOR THE REGISTRANT’S COMMON STOCK, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our Common Stock trades on the Nasdaq Global Select Market under the symbol “THRM.” Holders As of February 13, 2026, our Common Stock was held by 36 shareholders of record.
We use these systems, among others, to manage our product development and manufacturing, to communicate internally and externally, to operate our accounting and record-keeping functions, and for many other key aspects of our business. Our business operations rely on the secure collection, storage, transmission, and other processing of proprietary, confidential, and sensitive data.
We use these systems, among others, to manage our product development and manufacturing, to communicate internally and externally, to operate our accounting and record-keeping functions, and for many other key aspects of our business.
In June 2024, the Board of Directors authorized the “2024 Stock Repurchase Program” to commence upon expiration of the 2020 Stock Repurchase Program on June 30, 2024. Under the 2024 Stock Repurchase Program, the Company is authorized to repurchase up to $150.0 million of its issued and outstanding Common Stock over a three-year period, expiring June 30, 2027.
Under the 2024 Stock Repurchase Program, the Company is authorized to repurchase up to $150.0 million of its issued and outstanding Common Stock over a three-year period, expiring June 30, 2027. The Company repurchased $10.0 million of Common Stock in the open market under the 2024 Stock Repurchase Program in 2025.
Foreign Currency Gain (Loss) Below is a summary of our foreign currency gain (loss), in thousands, for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 Favorable / (Unfavorable) Foreign currency gain (loss) $ 9,599 $ (5,918 ) $ 15,517 Foreign currency gain for the year ended December 31, 2024 included net realized foreign currency loss of $1.1 million and unrealized net foreign currency gain of $10.7 million.
Foreign Currency (Loss) Gain Below is a summary of our foreign currency gain (loss), in thousands, for the years ended December 31, 2025 and 2024: Year Ended December 31, 2025 2024 Favorable / (Unfavorable) Foreign currency (loss) gain $ (28,415 ) $ 9,599 $ (38,014 ) Foreign currency loss for the year ended December 31, 2025 included net realized foreign currency gain of $1.8 million and unrealized net foreign currency loss of $30.3 million.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company is exposed to various market risks including, but not limited to, changes in foreign currency exchange rates, changes in interest rates and price fluctuations of certain material commodities such as copper.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company is exposed to various market risks including, but not limited to, changes in foreign currency exchange rates, changes in interest rates and price fluctuations of certain material commodities. Market risks for changes in interest rates relate primarily to the Company's debt obligations under the Second Amended and Restated Credit Agreement.
For the year ended December 31, 2024, each change of the effective tax rate by one percentage point would impact income tax expense by $1.0 million. 49 Recent Accounting Pronouncements For a complete description of recent accounting standards which we have not yet been required to implement which may be applicable to our operations, as well as significant accounting standards that have been adopted during the year ended December 31, 2024, see Note 3, “New Accounting Pronouncements,” to the consolidated financial statements included in this Annual Report. 50 I TEM 7A.
Recent Accounting Pronouncements For a complete description of recent accounting standards which we have not yet been required to implement which may be applicable to our operations, as well as accounting standards that have been adopted during the year ended December 31, 2025, see Note 3, “New Accounting Pronouncements,” to the consolidated financial statements included in this Annual Report. 42 Table of Contents I TEM 7A.
Restructuring Expenses, net Below is a summary of our restructuring expenses, net, in thousands, for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 Favorable / (Unfavorable) Restructuring expenses, net $ 13,110 $ 4,739 $ (8,371 ) Restructuring expenses, net primarily relate to the 2023 Plan and other discrete restructuring activities focused on optimizing our manufacturing and engineering footprint and the reduction of global overhead expenses.
Restructuring Expenses, net Below is a summary of our restructuring expenses, net, in thousands, for the years ended December 31, 2025 and 2024: Year Ended December 31, 2025 2024 Favorable / (Unfavorable) Restructuring expenses, net $ 12,476 $ 13,110 $ 634 Restructuring expenses, net primarily relate to discrete restructuring activities focused on optimizing our manufacturing footprint and cost structure.
Expected Maturity or Transaction Date Anticipated Transactions and Related Derivatives 2025 2026 Total Fair Value USD Functional Currency Exchange Agreements: (Receive MXN / Pay USD) Total contract amount $ 79,359 $ 35,122 $ 114,481 $ (1,952 ) Average contract rate 19.85 20.50 20.05 (Receive HUF / Pay EUR) Total contract amount $ 12,015 $ — $ 12,015 $ (86 ) Average contract rate 399.50 — 399.50 The table below presents the potential gain and loss in fair value for the foreign currency derivative contracts from a hypothetical 10% change in quoted currency exchange rates. 2024 2023 Exchange Rate Sensitivity Potential loss in fair value Potential gain in fair value Potential loss in fair value Potential gain in fair value Exchange Agreements:(Receive MXN / Pay USD) $ 6,243 $ 7,359 $ 7,179 $ 9,798 Exchange Agreements:(Receive HUF / Pay EUR) 917 1,120 — — 52 I TEM 8.
Expected Maturity or Transaction Date Anticipated Transactions and Related Derivatives 2026 2027 Total Fair Value USD Functional Currency Exchange Agreements: (Receive MXN / Pay USD) Total contract amount $ 35,122 $ — $ 35,122 $ 4,521 Average contract rate 20.50 — 20.50 The table below presents the potential gain and loss in fair value for the foreign currency derivative contracts from a hypothetical 10% change in quoted currency exchange rates. 2025 2024 Exchange Rate Sensitivity Potential loss in fair value Potential gain in fair value Potential loss in fair value Potential gain in fair value Exchange Agreements:(Receive MXN / Pay USD) $ 3,328 $ 4,327 $ 6,243 $ 7,359 44 Table of Contents I TEM 8.
The Technology Committee of the Board of Directors oversees the management of risks associated with the Company’s products and technologies, including cybersecurity risks related to new product technologies or significant innovations to existing product technologies, in accordance with its charter. 31 Our Vice President & Chief Information Officer (the “CIO”) leads our global information security organization and reports to the Board of Directors on matters related to cybersecurity on behalf of the Company’s management.
The Technology Committee of the Board of Directors oversees the management of risks associated with the Company’s products and technologies, including cybersecurity risks related to new product technologies or significant innovations to existing product technologies, in accordance with its charter.
Our cash requirements consist principally of working capital, capital expenditures, research and development, operating lease payments, income tax payments and general corporate purposes. We generally reinvest available cash flows from operations into our business, while opportunistically utilizing our authorized stock repurchase program. Further, we continuously evaluate acquisition and investment opportunities that will enhance our business strategies.
We generally reinvest available cash flows from operations into our business, while opportunistically utilizing our authorized stock repurchase program. Further, we continuously evaluate acquisition and investment opportunities that will enhance our business strategies.
Risk Management and Strategy We recognize the importance of assessing, identifying, and managing material risks associated with cybersecurity threats, as such term is defined in Item 106(a) of Regulation S-K.
Our business operations rely on the secure collection, storage, transmission, and other processing of proprietary, confidential, and sensitive data. 24 Table of Contents Risk Management and Strategy We recognize the importance of assessing, identifying, and managing material risks associated with cybersecurity threats, as such term is defined in Item 106(a) of Regulation S-K.
Our CIO has over 20 years of industry experience, including serving in similar roles leading and overseeing cybersecurity programs at other public companies. Team members who support our information security program have relevant educational and industry experience, including holding similar positions at large industrial and technology companies.
Team members who support our information security program have relevant educational and industry experience, including holding similar positions at large industrial and technology companies.
Interest Expense, net Below is a summary of our interest expense, net, in thousands, for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 Favorable / (Unfavorable) Interest expense, net $ (15,300 ) $ (14,641 ) $ (659 ) The increase in interest expense during the year ended December 31, 2024 compared to 2023 is primarily related to the impact from the change in fair value of the interest rate swap derivative.
Interest Expense, net Below is a summary of our interest expense, net, in thousands, for the years ended December 31, 2025 and 2024: Year Ended December 31, 2025 2024 Favorable / (Unfavorable) Interest expense, net $ (13,811 ) $ (15,300 ) $ 1,489 The decrease in interest expense during the year ended December 31, 2025 compared to 2024 is primarily related to a lower average borrowing on the Revolving Credit Facility and the change in fair value of an interest rate swap derivative in the prior year period.
Our automotive products can be found on vehicles manufactured by nearly all the major original equipment manufacturers ("OEMs") operating in North America and Europe, and several major OEMs in Asia. We operate in locations aligned with our major customers’ product strategies to provide locally enhanced design, integration and production capabilities. Medical products include patient temperature management systems.
We operate in locations aligned with our major customers’ product strategies to provide locally enhanced design, integration and production capabilities. Our medical products include patient temperature management systems that can be found in hospitals throughout the world.
Cash flow provided by operating activities for the year ended December 31, 2023 consisted primarily of net income of $40.3 million, increased by $66.2 million for non-cash charges for depreciation, amortization, stock based compensation, loss on disposition of property and equipment and other, $6.9 million for inventory provisions, and $19.5 million of goodwill impairment, partially offset by non-cash charges of $13.1 million for deferred income taxes and $0.6 million related to changes in assets and liabilities. 44 Cash Flows From Investing Activities Net cash used in investing activities totaled $53.5 million and $24.1 million for the years ended December 31, 2024 and 2023, respectively.
Cash flow provided by operating activities for the year ended December 31, 2025 consisted primarily of net income of $18.3 million, increased by $110.2 million for non-cash charges for depreciation and amortization, unrealized stock based compensation, provisions for inventory, loss on disposition of property and equipment and other, including unrealized foreign currency loss, $27.6 million related to increase in accounts payable and $13.9 million for changes in net other assets and liabilities, partially offset by $22.3 million for non-cash deferred income taxes, $21.6 million of change in inventory and $9.3 million change in accounts receivable .
The Company generally adjusts its liabilities for unrecognized tax benefits and related indemnification obligations through earnings in the period in which an uncertain tax position is effectively settled, the statute of limitations expires for the relevant taxing authority to examine the tax position, or when more information becomes available.
The Company generally adjusts its liabilities for unrecognized tax benefits and related indemnification obligations through earnings in the period in which an uncertain tax position is effectively settled, the statute of limitations expires for the relevant taxing authority to examine the tax position, or when more information becomes available. 41 Table of Contents Although management believes that the judgments and estimates discussed herein are reasonable, actual results could differ, and may materially increase or decrease the effective tax rate, as well as impact the Company’s operating results.
See also “Forward-Looking Statements” in Part I of this Annual Report. Overview Gentherm Incorporated is the global market leader of innovative thermal management and pneumatic comfort technologies for the automotive industry and a leader in medical patient temperature management.
See also “Forward-Looking Statements” in Part I of this Annual Report. Overview Gentherm Incorporated is a global market leader of innovative thermal management and pneumatic comfort technologies. Our automotive products include Climate Control Seats (CCS ® ), Climate Control Interiors (CCI), Lumbar and Massage Comfort Solutions, Valve Systems, and Climate and Comfort Electronics.
We are monitoring and evaluating the impacts of recently announced potential tariffs and reciprocal tariffs on our supply chain and results of operations. We, like other manufacturers, have a high proportion of fixed structural costs, and therefore relatively small changes in industry vehicle production can have a substantial effect on our financial results.
See “—Tariffs and Global Trade Environment” above for further information on the impact of tariffs and the global trade environment in 2025. We, like other manufacturers, have a high proportion of fixed structural costs, and therefore relatively small changes in industry vehicle production can have a substantial effect on our financial results.
The Company does not enter into derivative financial instruments for speculative or trading purposes. Some derivative contracts do not qualify for hedge accounting; for other derivative contracts, we elect to not apply hedge accounting.
The Company does not enter into derivative financial instruments for speculative or trading purposes.
We have a global manufacturing footprint that enables us to serve our customers in the regions they operate and shift production between regions to remain competitive.
We have a global manufacturing footprint that enables us to serve our customers in the regions they operate and shift production between regions to remain competitive. There have been various ongoing geopolitical conflicts, such as the current conflicts between Russia and Ukraine and in the Middle East and heightened tensions in the Red Sea and in the South China Sea.
Cost of Sales Below is a summary of our cost of sales and gross margin, in thousands, for the years ended December 31, 2024 and 2023: Year Ended December 31, Variance Due To: 2024 2023 Favorable / (Unfavorable) Automotive Volume FX Operational Performance Other Total Cost of sales $ 1,089,693 $ 1,117,452 $ 27,759 $ (2,443 ) $ 6,603 $ 34,026 $ (10,427 ) $ 27,759 Gross margin 366,431 351,624 14,807 1,488 (526 ) 36,136 (22,291 ) 14,807 Gross margin - Percentage of product revenues 25.2 % 23.9 % Cost of sales for the year ended December 31, 2024 decreased by 2.5% as compared to the year ended December 31, 2023.
Cost of Sales Below is a summary of our cost of sales and gross margin, in thousands, for the years ended December 31, 2025 and 2024: Year Ended December 31, Variance Due To: 2025 2024 Favorable / (Unfavorable) Automotive Volume FX Operational Performance Other Total Cost of sales $ 1,136,426 $ 1,089,693 $ (46,733 ) $ (27,128 ) $ (8,276 ) $ 3,289 $ (14,618 ) $ (46,733 ) Gross margin 362,176 366,431 (4,255 ) 10,003 8,451 3,289 (25,998 ) (4,255 ) Gross margin - Percentage of product revenues 24.2 % 25.2 % Cost of sales for the year ended December 31, 2025 increased by 4.3% as compared to the year ended December 31, 2024.
We believe cash on hand, 46 cash generated from operations, and the borrowing capacity available under our Second Amended and Restated Credit Agreement will be sufficient to support our capital expenditures. Stock Repurchase Program In December 2020, the Board of Directors of Gentherm Incorporated (the “Board of Directors”) authorized the 2020 Stock Repurchase Program.
We will continue to support organic growth through capacity expansion in our facilities and make capital improvements as necessary. We believe cash on hand, cash generated from operations, and the borrowing capacity available under our Second Amended and Restated Credit Agreement will be sufficient to support our capital expenditures.
Revenues resulting from automotive new business awards also are subject to additional risks and uncertainties as described in Item 1 under “Forward-Looking Statements” of this Annual Report. Reportable Segments The Company has two reportable segments for financial reporting purposes: Automotive and Medical.
Revenues resulting from automotive new business awards also are subject to additional risks and uncertainties as described in Item 1 under “Forward-Looking Statements” of this Annual Report. Stock Repurchase Program In June 2024, the Board of Directors authorized the 2024 Stock Repurchase Program to commence upon expiration of the Company’s prior stock repurchase program on June 30, 2024.
These decreases were partially offset by higher wages, higher automotive volumes, start-up costs from our new plants in Tangier, Morocco and Monterrey, Mexico and unfavorable foreign currency impacts primarily attributable to the Euro. 40 Net Research and Development Expenses Below is a summary of our net research and development expenses, in thousands, for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 Favorable / (Unfavorable) Research and development expenses $ 117,826 $ 125,692 $ 7,866 Reimbursed research and development expenses (29,129 ) (31,334 ) (2,205 ) Net research and development expenses $ 88,697 $ 94,358 $ 5,661 Percentage of product revenues 6.1 % 6.4 % Net research and development expenses for the year ended December 31, 2024 decreased 6.0% as compared to the year ended December 31, 2023.
The increase in cost of sales is primarily due to higher automotive volumes, unfavorable foreign currency impacts primarily attributable to the Euro, higher quality costs and higher labor costs, partially offset by material purchasing savings. 33 Table of Contents Net Research and Development Expenses Below is a summary of our net research and development expenses, in thousands, for the years ended December 31, 2025 and 2024: Year Ended December 31, 2025 2024 Favorable / (Unfavorable) Research and development expenses $ 125,398 $ 117,826 $ (7,572 ) Reimbursed research and development expenses (30,639 ) (29,129 ) 1,510 Net research and development expenses $ 94,759 $ 88,697 $ (6,062 ) Percentage of product revenues 6.3 % 6.1 % Net research and development expenses for the year ended December 31, 2025 increased 6.8% as compared to the year ended December 31, 2024.
Cash and Cash Flows The table below summarizes our cash activity for each of the last two fiscal years (in thousands): Year Ended December 31, 2024 2023 Cash and cash equivalents at beginning of period $ 149,673 $ 153,891 Net cash provided by operating activities 109,646 119,265 Net cash used in investing activities (53,531 ) (24,123 ) Net cash used in financing activities (51,705 ) (106,051 ) Foreign currency effect on cash and cash equivalents (19,949 ) 6,691 Cash and cash equivalents at end of period $ 134,134 $ 149,673 Cash Flows From Operating Activities Net cash provided by operating activities totaled $109.6 million and $119.3 million for the years ended December 31, 2024 and 2023, respectively.
We currently believe that our cash and cash equivalents and borrowings available under our Second Amended and Restated Credit Agreement and cash flows from operations will be adequate to meet anticipated cash requirements for at least the next twelve months and the foreseeable future. 36 Table of Contents Cash and Cash Flows The table below summarizes our cash activity for each of the last two fiscal years (in thousands): Year Ended December 31, 2025 2024 Cash and cash equivalents at beginning of period $ 134,134 $ 149,673 Net cash provided by operating activities 116,791 109,646 Net cash used in investing activities (52,398 ) (53,531 ) Net cash used in financing activities (42,483 ) (51,705 ) Foreign currency effect on cash and cash equivalents 4,789 (19,949 ) Cash and cash equivalents at end of period $ 160,833 $ 134,134 Cash Flows From Operating Activities Net cash provided by operating activities totaled $116.8 million and $109.6 million for the years ended December 31, 2025 and 2024, respectively.
As of December 31, 2024 there were remaining receivables factored and outstanding that will be collected in the future, however, no further factoring can occur under these factoring agreements. Material Cash Requirements The following table summarizes current and long-term material cash requirements as of December 31, 2024, which we expect to fund primarily with operating cash flows.
Material Cash Requirements The following table summarizes current and long-term material cash requirements as of December 31, 2025, which we expect to fund primarily with operating cash flows.
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