Versigent Q3 Adjusted EBITDA Rises 11%, Free Cash Flow Outlook Increased

Versigent (VGNT) updated its full-year 2026 outlook after third-quarter adjusted EBITDA rose 11% and its margin expanded, even as the company operated against lower global automotive production. The company raised the midpoint of its net sales range because of higher commodity pass-throughs and increased both the midpoint and upper end of its free cash flow guidance.

Third-quarter net sales increased 7% year over year to $2.45 billion from $2.29 billion. Excluding foreign-exchange and commodity movements, adjusted net sales growth was 1%. Versigent said reported growth included about five percentage points from commodity pass-throughs and one percentage point from favorable currency movements, with underlying volume growth led by Asia Pacific.

Adjusted EBITDA increased to $275 million from $248 million, while adjusted EBITDA margin widened by 40 basis points to 11.2%. Favorable year-over-year net pricing and operational execution supported the result despite a significant number of program launches. Commodity pass-throughs and currency effects created a net margin headwind of about 70 basis points.

GAAP net income attributable to Versigent declined to $102 million from $109 million, and diluted earnings per share fell to $1.41 from $1.54. Adjusted diluted EPS increased 6% to $1.91, helped by an adjusted effective tax rate of 22%, compared with 33% a year earlier. Higher interest expense following debt financing completed in the first quarter of 2026 weighed on earnings.

Asia Pacific leads regional growth

Asia Pacific was the strongest region, with quarterly sales rising 18% to $868 million and adjusted net sales growth of 9%. Americas sales increased 6% to $1.11 billion, representing 1% adjusted growth. EMEA sales declined 6% to $471 million, or 8% after adjustment for foreign-exchange and commodity movements.

Versigent reported $2.1 billion of third-quarter bookings across new and existing customers and completed 55 launches for 21 customers. Bookings represent estimated cumulative sales over the expected production lives of awarded programs and remain subject to changes in content, volume and production-life assumptions.

The company also opened its Jiang Cheng research, development and manufacturing center in Wuhan, China, describing it as its most advanced integrated and automated manufacturing facility. In adjacent markets, Versigent reported production-launch momentum in agriculture in the Americas and commercial vehicles in the Americas and EMEA.

For the first nine months of 2026, net sales increased 9% to $7.11 billion, while adjusted net sales growth was 3%. Adjusted EBITDA rose 13% to $750 million, and the adjusted margin improved by 40 basis points to 10.6%. Adjusted diluted EPS increased 11% to $5.90. GAAP net income attributable to Versigent was $298 million, down from $311 million.

Free cash flow guidance increased

Third-quarter free cash flow declined 5% to $170 million from $179 million. Net cash provided by operating activities rose slightly to $225 million, but capital expenditures increased to $55 million from $44 million as Versigent supported elevated launch activity. The quarter also included $11 million of separation-related costs, up from $7 million.

Year-to-date free cash flow fell 15% to $247 million. Higher capital expenditures, separation costs and interest payments more than offset the increase in adjusted EBITDA.

Versigent now expects 2026 net sales of $9.5 billion to $9.6 billion, compared with its previous range of $9.4 billion to $9.6 billion. The company maintained its forecast for 2% adjusted net sales growth and attributed the higher sales midpoint to commodity pass-throughs.

Adjusted EBITDA is projected at $970 million to $1.01 billion, narrowing the previous range of $950 million to $1.03 billion. Free cash flow is expected to be $275 million to $325 million, up from the prior $200 million to $300 million range. The updated free cash flow forecast continues to include about $70 million of separation-related costs.

At September 30, Versigent had $1.5 billion of available liquidity, consisting of $638 million in cash and an undrawn $850 million revolving credit facility. Its non-GAAP net leverage ratio was 1.5 times.

The board declared a quarterly dividend of $0.13 per ordinary share, payable December 17 to holders of record on December 4. Versigent also has a $250 million share-repurchase authorization available and targets capital expenditures of about 3% of annual net sales. The company projects roughly $1 billion of cumulative free cash flow from 2026 through 2028, although future dividends remain subject to board approval and financial conditions.

Management’s priorities include increasing market share, expanding in automotive and other targeted markets, deploying more automation and optimizing the manufacturing footprint. The company also plans to invest in organic and inorganic growth while directing excess cash toward share repurchases after dividends.

Versigent cautioned that its outlook is exposed to lower automotive demand, raw-material disruptions, inflation, geopolitical and currency volatility, labor disruptions, supplier issues and higher interest rates. Additional uncertainty stems from its transition to a standalone public company following the April 1, 2026 spin-off and from whether it realizes the expected benefits of that separation.