VISTEON CORP — Call Transcript 2026

Good morning. I'm Kris Doyle, Vice President of Investor Relations in FP&A. Welcome to our earnings call for the first quarter of 2026. Before we begin this morning's call, I'd like to remind you that today's presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future performance and are subject to various risks, uncertainties, and assumptions that could cause actual results to differ materially from those expressed. Please refer to the page titled "Forward-Looking Statements" in our earnings material for more detail. Presentation materials for today's call were posted this morning on the Investors section of Visteon's website. Joining us today are Sachin Lawande, President and Chief Executive Officer, and Jerome Rouquet, Senior Vice President and Chief Financial Officer. We've scheduled the call for one hour, and we'll open the lines for questions after Sachin's and Jerome's prepared remarks. Please limit your participation to one question and one follow-up. Thank you again for joining us. Now I'll turn the call over to Sachin. Thank you, Kris, and good morning, everyone. Visteon delivered a solid start to the year with first quarter sales coming ahead of our expectations. Net sales were $954 million, up 2% year-over-year, despite lower industry and customer vehicle production. New product launches and customer recoveries more than offset the anticipated headwinds from lower BMS volumes and vehicle discontinuations at Ford. Growth over market in the quarter was 3%. Adjusted EBITDA was $104 million, broadly in line with our expectations. During the quarter, we saw elevated semiconductor costs, while the associated recoveries from customers are expected to be weighted more to the later part of the year. Adjusted free cash flow was negative $23 million, primarily driven by normal seasonality and higher inventory levels. We continue to maintain a strong balance sheet with net cash of $385 million, providing ample flexibility to execute our capital allocation strategy. New business wins were just over $1 billion, led by cockpit domain controllers and digital clusters. A key highlight was our high-performance compute win with SAIC in China, a third customer for AI-based SmartCockpit systems, reinforcing our first-mover advantage in this emerging technology, similar to our early leadership with SmartCore. Q1 was a busy quarter for operations with 20 launches across 11 automakers, including on several high-profile vehicles, underscoring our continued execution excellence in a dynamic supply chain environment. Finally, we continued to return capital to shareholders. During the quarter, we returned $40 million through share repurchases and dividends. Overall, the quarter reflects a good start to the year with strong execution across all parts of our business and continued progress on our strategic priorities. Turning to page three. This page shows our Q1 sales performance by region, representing a solid start to the year with balanced global customer demand. In the Americas, demand for cockpit electronics was strong, driven by ramp-up of recently launched products, including new display programs with Nissan and GM. We also benefited from one-time customer recoveries related to prior EV volume declines. Offsetting these were the anticipated headwinds from vehicle discontinuations at Ford and lower BMS volumes due to changes in EV policies and incentives. In Europe, we benefited from strong ramp-ups on several successful vehicle programs. Key contributors included a curved panoramic display referred to as a digital stage, combining a 12-inch digital cluster and a slightly larger center information display on the Audi Q3, digital clusters and displays on the Renault 4 and 5 EVs, and digital clusters on the new Nissan Qashqai and Juke. These programs supported Q1 sales growth despite a weak vehicle production environment. The engineering services acquisition from last year also contributed modestly to our sales in Europe. In rest of Asia, India was a strong market for Visteon, with ramp-ups of a new SmartCore system for Mahindra and a digital cluster for TVS, a leading two-wheeler OEM. We also launched new digital cluster programs with Nissan and Mitsubishi for Japan and ASEAN markets, offsetting a Mazda program roll-off. In China, policy reset and demand pull forward late last year led to lower Q1 vehicle production, particularly in the price-sensitive segments. Our sales were in line with expectations, supported by greater exposure to higher-value segments that are less affected by policy changes. We also benefited from several recently launched programs, including a new cockpit domain controller with Zeekr, an upgraded digital cluster on the Toyota Corolla, and a new digital cluster on the Toyota Frontlander. The year-over-year decline in our sales has reduced significantly versus prior quarters and is now tracking more in line with customer production volumes. Looking ahead, we have multiple launches in the second half that are expected to drive modest growth in China this year, followed by a more meaningful step-up in 2027. In summary, we started the year very well with stable global demand for cockpit electronics and new product launches offsetting the expected headwinds, primarily from lower BMS volumes. Turning to page 4. Q1 was a busy launch quarter with 20 new products launched with 11 car makers, and on some strategically important vehicles for our customers. This page highlights a few key programs. We marked a significant milestone with our first launch for Toyota's Lexus brand on the fully redesigned Lexus ES, a flagship model leading the next generation electrified lineup for Lexus. Our driver display is standard on all trims globally, reinforcing Visteon's role in advancing premium in-cabin experiences with Toyota, and contributing to our growth with this customer. We also launched a digital cluster on the first-ever Infiniti QX60, a mid-sized luxury SUV from Nissan for U.S. and Middle East markets. This new vehicle is a key part of Nissan's turnaround strategy in the U.S., and our 12-inch digital cluster comes standard in all trim lines of this vehicle. In China, we launched a driver display for the new electric Ford Bronco, developed specifically for that market. The automotive market in China is evolving beyond electrification to highly specialized segments with focus on technology and lifestyle applications. The electric Bronco is significant for Ford in China, designed to compete directly with local EV manufacturers. India is one of the fastest-growing auto markets, and in Q1, we launched multiple products, including a digital cluster with Hyundai, infotainment with Tata, and a center information display with Renault. Hyundai and Tata are already well-positioned in India as number 2 and number 3 players, and Renault has recently made India a cornerstone of its strategy. India today represents nearly 10% of our total sales, and these launches position us to grow alongside our customers in what will be a key growth market going forward. In summary, we had a solid start in Q1 with new launches that laid the foundation for growth in the coming quarters and underscored Visteon's role in automakers' go-to-market strategies worldwide. Turning to page five. We secured approximately $1 billion in new business during the quarter. As expected, customer sourcing in Q1 was somewhat lighter following a strong finish to last year, and some display opportunities were shifted into the second quarter. Our product portfolio remains well-aligned with key industry trends, and our new business opportunity pipeline is strong for the rest of the year. Based on current visibility, we remain on track to achieve our full-year target of $6 billion. I would like to highlight a few of the key first quarter wins on this page. In China, we secured our third customer for an AI-capable cockpit system with SAIC Motor for its IM brand. SAIC Motor is one of the largest car makers in China, and IM is their new brand targeting the premium car segment. Automakers in China are rapidly adopting agentic AI to enhance in-cabin experiences, driving demand for high-performance cockpit systems capable of running LLMs and vision language models, or VLMs, using the latest silicon, such as Qualcomm's fifth generation Snapdragon chips. These high-performance systems also enable greater ECU integration, accelerating the shift towards centralized domain architectures. Importantly, Visteon has established an early mover advantage with three OEM wins in this space, more than any other tier one supplier, positioning us very well to take advantage of this emerging trend. Mainstream vehicles will continue to use conventional cockpit domain controllers for affordability reasons, with premium vehicles transitioning to AI-based cockpits. In India, we secured a SmartCore cockpit domain controller win with a European OEM for their vehicles for India and other emerging markets, our first SmartCore win with this customer. The system will power three cockpit displays and support advanced infotainment and entertainment features, similar to recent SmartCore launches in China and India. Beyond strong product-market fit of SmartCore, speed was a key competitive differentiator and the main reason for this win, as the start of production of the vehicle is under 12 months. We also expanded our commercial vehicle business by adding a new customer for digital clusters with a U.S. manufacturer of purpose-built vehicles for defense, delivery, and fire and emergency markets. The 12-inch cluster will feature on their next generation delivery vehicles, with production starting in early 2028, reflecting the growing adoption of digital cockpits in all kinds of commercial vehicles, and not just for heavy-duty trucks. In two-wheelers, we expanded our digital cluster program with Honda to additional models representing an incremental $100 million of lifetime sales, further strengthening our engagement with the world's largest two-wheeler OEM. In summary, our Q1 performance was highlighted by strategic wins in key markets, reinforcing our technology leadership, and supporting a strong pipeline that keeps us on track for our $6 billion full-year target. Turning to page six. China, the world's largest auto market, is also the most competitive, with intense pricing pressure in budget and mainstream segments, which Visteon has strategically avoided to protect profitability. Above mainstream, the market is now evolving beyond electrification into more specialized segments centered on intelligence, luxury, and lifestyle. A key area of growth is the emerging premium tech segment. As traditional OEMs compete with tech-first players such as Tesla, XPeng, and Li Auto, with vehicles that combine luxury with advanced technology. OEMs such as Geely, Chery, and SAIC, who are among the largest in China, are defining their premium brands around the convergence of premium design, immersive digital experiences, and most importantly, artificial intelligence. The cockpit is at the center of differentiation with agentic AI enabling a new level of in-cabin intelligence. Unlike traditional command-based systems, AI-powered smart cabins can understand user intent, reason through complex tasks, and act proactively on behalf of the user. For example, instead of manually entering a destination, the system can anticipate and suggest it based on context or what it hears from conversation. It can also translate incoming messages in real time, draft responses with minimal input, and answer open-ended questions about surroundings, what the driver may be seeing outside the window, for example, delivering a far more intuitive and personalized in-cabin experience. This level of intelligence requires a step change in computing power to run AI workloads far beyond what current cockpit domain controllers can provide. Visteon was the first Tier 1 supplier to develop a high-performance version of SmartCore using the newest fifth-generation chip from Qualcomm. We also developed the first cockpit-specific agentic AI software framework, Cognito AI, to enable the development of use cases like I just mentioned. Our early investments in AI helped establish Visteon as a preferred partner for car makers in China for their AI-enabled cockpit systems. These next-generation systems carry significantly higher content value, and the business booked with the three OEMs thus far is already over $1 billion in value. We expect more vehicles to be added to the programs after the initial launches, which are happening this year. While China is leading adoption of AI, we see this as a global inflection point. AI will also become a competitive must-have in other parts of the world, accelerated by the international expansion of Chinese OEMs and drive the next phase of growth for Visteon. Turning to page seven. Before wrapping up, let me briefly discuss our outlook for the remainder of the year. Since issuing our guidance, S&P has lowered its global light vehicle production forecast for our customers by approximately 1.5 percentage points, with most of the impact in the second half of the year. The main reason being the Middle East conflict, and there could be further downside if the hostilities persist for longer than anticipated. Production for our key customers is now expected to decline in the mid-single digits year-over-year. On the supply side, memory remains constrained as strong demand from AI and data centers limits availability for automotive. Automotive continues to rely on older memory technologies that suppliers are phasing out in favor of newer nodes, creating a structural supply-demand imbalance and driving pricing pressure and tightness in supply. We expect this environment to persist through 2027 before easing as new capacity starts to come online. In this environment, we are proactively managing supply by working closely with existing suppliers and qualifying additional sources. We were able to secure sufficient supply in Q1 through proactive actions, ensuring no impact on our customers. We expect supply to remain tight throughout the rest of the year, with incremental supply from new sources starting to become more meaningful in the second half of the year. On the positive side, customer demand has remained resilient, with Q1 coming in ahead of expectations and Q2 schedules indicating continued strength. Importantly, our key launches remain on track. Taking all this into account and based on current data, we are reaffirming our full-year sales guidance despite incremental headwinds in the broader market. We'll continue to closely monitor macro and supply conditions and provide updates as the year progresses. Now I will hand it over to Jerome to discuss financials in more detail. Thank you, Sachin, and good morning, everyone. We delivered in Q1 a balanced set of financial results in what continues to be a dynamic operating environment. For the quarter, sales were $954 million, a 2% increase from the prior year. We continue to see strong growth with new product launches and benefit from solid commercial execution, partially offset by lower customer production and expected headwinds, including lower BMS sales with GM and the discontinuation of several car lines at Ford. Growth over market was 3%, in line with our full-year expectations of low double-digit outperformance. Adjusted EBITDA was $104 million, representing a margin of 10.9%. We indicated on the prior call we expected Q1 to be the low point for EBITDA, with improvement throughout the year as we make progress on customer recovery agreements and cost initiatives. In the quarter, we were impacted by elevated semiconductor costs and the timing mismatch of customer recoveries. Adjusted free cash flow was negative in the quarter, primarily driven by an increase in working capital, particularly inventory, and a 2025 incentive compensation, which was paid in Q1. We continue to execute on our balanced capital allocation strategy, returning $40 million to shareholders with $30 million in share repurchases and $10 million in dividends. We ended the quarter with a strong balance sheet and net cash of $385 million, providing flexibility to deploy capital while navigating the current market environment. Turning to page 10. Sales for the quarter were $954 million, an increase of $20 million year over year. Customer production volumes were down 4%, while growth over market was 3% when excluding pricing and currency. Compared to our internal expectations a couple of months ago, we benefited from higher customer volumes, better pricing dynamics, and additional benefits from EV program commercial settlements. As Sachin already provided details on customer volumes in the quarter, let me provide some additional color on pricing and EV commercial settlements and how they impacted both sales and EBITDA. First, pricing was a headwind of $5 million in the quarter, which was lower than what we typically see. As a reminder, pricing in this environment is influenced by several moving pieces. These include annual and discrete price changes with customers, the unwinding or maintaining of surcharges put in place during the prior semiconductor shortage, and more recently, customer recoveries related to memory cost increases. During the first quarter, we were able to mitigate a portion of the elevated semiconductor costs through short-term commercial pricing agreements while we continue to work towards longer-term recovery arrangements. We're making good progress on these longer-term agreements, and we expect that incremental costs will be offset by more permanent recoveries as we move throughout 2026, consistent with the assumptions embedded in our guidance. From an EBITDA perspective, the lower pricing we achieved with customers in the first quarter, combined with supplier cost reductions and value engineering activities, allowed us to partially mitigate the elevated cost from memory and resourcing actions. The net impact of these commercial activities was a headwind of just over $15 million. Second, the additional benefit to sales from one-time settlements, primarily related to EV programs, was approximately $20 million, while the EBITDA was approximately $10 million as we closed out supplier settlements as well. As a reminder, our full-year guidance included $10 million of expected one-timers from program settlements, which was achieved in Q1. With this context, let me provide more color on our year-over-year Q1 EBITDA bridge. First, let me remind everyone that prior year results included approximately $15 million of one-time items, which impacts the year-over-year comparison. Second, as just mentioned, the negative impact from all commercial activities, including customer and supplier pricing, was a headwind of $15 million, which was partially offset by the benefit of EV settlements, as I also highlighted. The remaining year-over-year decline in EBITDA of approximately $5 million was driven by lower volume and favorable FX, and slightly higher freight and logistics, partially offset by ongoing cost initiatives, including vertical integration and engineering productivity. Turning to page 11. Adjusted free cash flow for the quarter was negative $23 million, reflecting the typical seasonality of our business, with Q1 generally being one of the lower quarters for cash flow. In 2026, this dynamic was more pronounced for a few reasons. First, EBITDA in the quarter was at the low point for the year, as expected. Second, we increased inventory levels during the quarter due to normal seasonality, inflation, and as a deliberate action to manage supply chain risk and market volatility. Third, the annual incentive compensation payout is in Q1, reflective of the strong performance last year and is reported in the line other changes. As it relates to the remainder of cash flow items, cash taxes were slightly lower year-over-year, primarily due to lower profitability in the quarter and timing of payments last year. Interest income continued to offset interest expense. Capital expenditures were in line with the prior year and continue to support new program launches. Turning to capital allocation, we deployed $40 million in the quarter through share repurchases and dividends. We ended the quarter with $385 million on net cash and expect to continue deploying capital in a disciplined and balanced manner. Turning to page 12. Turning to our outlook, we are reaffirming our full-year guidance across all key financial metrics as the strong start of the year will help us offset a softer-than-expected market setup in the second half of the year. Starting with sales, we continue to expect revenue in the range of $3.625-$3.825 billion, which represents a low single-digit growth over market. This reflects the strength of our product portfolio, strong customer demand in the first half of the year, and the continued ramp of recent launches despite the softer than anticipated second half production environment Sachin outlined. Moving to profitability, we continue to expect adjusted EBITDA in the range of $455 million-$495 million, which corresponds to a margin of approximately 12.8% at the midpoint. Compared to the first quarter, we expect margins to improve as the year progresses. This is primarily driven by higher customer recoveries as well as the continued impact of our cost initiatives, including product costing actions, vertical integration, engineering productivity, as well as resource rebalancing across our global footprints. On free cash flow, we continue to expect adjusted free cash flow in the range of $170 million-$210 million. That said, we're currently trending towards the lower end of this range. This reflects our plan to maintain higher levels of inventory as we proactively manage supply constraints, especially around certain semiconductor and memory components. Importantly, our strong balance sheet provides us with significant flexibility to navigate these dynamics. Maintaining financial strength continues to be a core pillar of our capital allocation philosophy, enabling us to invest in the business and return cash to shareholders while managing near-term volatility. We plan to provide a more comprehensive update on our longer-term capital allocation priorities at our upcoming Investor Day. Turning to page 13. Visteon continues to be a compelling long-term investment opportunity. We have spent the last couple of years rebuilding our growth algorithm while executing operationally and commercially throughout a dynamic environment. We remain confident in our long-term opportunity, and we look forward to sharing more with you at our upcoming Investor Day on June 25th in New York City. Thank you for your time today. I would like now to open the call for your questions. Your first question comes from Mark Delaney with Goldman Sachs. Yes. Good morning. Thank you for taking the question. I was hoping to start with a question on the demand and production environment. The company spoke in its prepared remarks about S&P lowering its forecast for 2026, driven by the Middle East conflict. Sachin, you said, though, at least for the first half, customer schedules have actually been solid, if not even a bit better than expected. Could you speak a bit more on what Visteon is seeing with respect to LVP? As you look into the second half, are you seeing any softening in your own customer conversations? And maybe clarify what you're trying to bake into guidance for the year and the 1H to 2H trajectory. Yeah. Thanks, Mark. It's Jerome. Let me answer that question. We are, as you heard, we're maintaining our full-year guidance for sales and as well for EBITDA. Let me give you a little bit of color by quarter. Q1 came in a little stronger than what we had anticipated. We were also positively impacted by some EV settlements, about $20 million. It's important to make sure that we don't annualize that $20 million. Q2, even with the Middle East conflict, we do have a pretty strong setup for Q2. We have good visibility on our orders, and I would say that Q2 looks similar to what we had in Q1 from an order standpoint. Pretty robust first half of the year. As far as the second half is concerned, we are using S&P. S&P revised their numbers recently and dropped the second half of the year for us by approximately 2%. A softer setup as we go into the second half. We do have strong launches that are supposed to come in line in Q3 and Q4, mostly around Toyota as well as the HPC launches. Overall, a strong H1 with a little bit of a softer H2 than anticipated allows us to stay on guidance for the full year. I would say as well that we still have got a fairly large range this year on sales for the guidance, $100 million each way. It allows us to have some leeway as well, up and down versus the midpoint. That's helpful, Jerome. Just to clarify, when you talk about the softening in 2H and basing it off of what S&P has projected, it doesn't sound like you've actually seen a change in your own customers' schedules. Is that correct? You're trying- That is correct for Q2. To be somewhat conservative. That is correct for Q2. Indeed, yes. We have normal visibility for the next three months. Okay. My other question was just on memory. The company's guidance had assumed you'd substantially recover the increasing costs in your full year guidance. You spoke a bit around the progress you're making there in the first quarter, but maybe talk about how far along you are in securing those recoveries, and are you still expecting to substantially recover all of the higher semiconductor and memory costs for this year's guidance? Thanks. That's a good point. Maybe before we even talk about recovery, we should probably talk about supply, because if supply is an issue, recovery is maybe an issue, which is not our case. Let me hand over to Sachin, and then I'll talk again about recoveries. Thanks, Jerome. I think this is a point that we probably need to make sure that we express clearly the situation so we can understand what's happening with supply, which obviously has implications on our ability to recover as well. As you probably are aware, there are two factors that are really driving the supply situation. One is the higher than expected demand for memory, I should say, driven by AI, for data centers, for smartphones, et cetera. Very importantly, many of our traditional large memory suppliers are shifting away from the older tech nodes that have been used by automotive to newer tech nodes, which also reduces capacity for auto. This is what has created this imbalance between supply and demand, which has lowered availability of memory for industries like auto and others as well, by the way. I think the impression all of us should have is that there's no segment of the industry that will get enough memory in the short term, and obviously that has resulted in higher prices. Now, as the smaller suppliers look at this environment, they see this as an opportunity to enter the market for autos, so smaller fabs in particular. We are working with some of them to bring them into our supply base, and in fact, have managed to secure some supply already for this year. About 10% of our total full-year demand this year, for the first time, will be met by some of these emerging suppliers. One more point that I would like to add is that unlike in the prior semiconductor crisis where the lead times for new capacity to come online was fairly long, 2+ years, in this case, with memories, it's shorter. If there's clean room space available, new capacity can come online in about a year. That's helpful, and so we believe with more suppliers coming in, this situation that we have right now will probably last perhaps into middle of next year, maybe towards the end of next year, and start to get better from there. That will also help in terms of drawing the prices down as more supply comes into the market. That's the situation we're dealing with. We have done, as a team, a very good job of ensuring that none of our customers are impacted in terms of their production for Q1, and we anticipate with all of the measures that we have in place, working closely with our current suppliers and the new ones, that we'll be able to mitigate the situation. Although it's going to be tight, we should be in the position to meet the customer demand. Then on the recovery, so maybe first on cost. Cost came in in line with expectation in Q1, slightly higher than $20 million, as we had indicated during our last call. In terms of progressing with customers in terms of negotiations, we've done pretty well so far. Let me give you a little bit more color than on the overall impact that all this had in Q1. In Q1, we've reported an outflow of $15 million on what we call our commercial items. It's the net between our supplier savings and what we give to our customers. Overall, we had anticipated we would have some level of leakage in Q1 as we were obviously working on long-term contracts. What we did, just for Q1, was executing very short-term commercial agreements with some of our customers, and that helped us mitigate some of these additional costs that we got, $20 million, as I just said. Overall progression is going on well with negotiations, and we are expecting most of the negotiation to be closed by end of Q2. We'll see as a result of that, some level of catch-up in the second quarter. We are expecting our commercial business equation to be neutral in the second quarter as some of the improvements that we have with our regular suppliers come online. Overall, for the full year, we're maintaining our guidance in terms of recovery, and we are still expecting to have some level of leakage, largely because of the timing issues that we'll have for the full year. Thank you. Your next question comes from Colin Langan with Wells Fargo. Oh, great. Thanks for taking my questions. Just to follow up on this issue. You have over $20 million in costs, but you had $15 million of recoveries. You got something close to 75% recoveries already, and then you expect to have that caught up in Q2. Does that mean we get a little additional boost already in Q2 from recovery timing? Yes, Colin, that's Jerome. Correct. We've had this $15 million leakage, and we like to combine essentially what we're giving to customers versus what we're getting from suppliers, in some cases, increases, obviously. We look at this holistically with negotiating, I would say, with customers, the full pricing package with them. That includes not only the annual price reduction, it includes as well the legacy recoveries from prior chip shortages, as well as now the new memory cost increases that we're passing on to customers. We are expecting this leakage of $15 million to be neutral in the second half of the year and then slightly improve as we go in Q3 and Q4 so that we have a minimal leakage for the full year, as I indicated, and per our guidance. Okay. I think I actually had that wrong. You have about a third is recovered in the quarter, but does that all jump back? Does that 15 become a positive in Q2? Sorry. It does, yes. It does, absolutely. It does become positive in Q2, and it will improve even slightly better. It will improve slightly in Q3 and Q4, for a slight negative for the full year. Got it. The guide for the year is low single digit growth over market. You made it abundantly clear that the first half was going to be really tough with roll-offs and the BMS, but you still did 3% in Q1. Is mid-single now more likely as we go through the year, given you have highlighted pretty strong second half launches? Yes. I would say Q1 came in pretty close to our expectations. We had not given guidance per quarter, so 3% was generally in line with the low single digit for the full year. We're expecting to hold that performance pretty much throughout the year. We're expecting all regions to perform pretty well, maybe with the exception of the Americas, largely because of the BMS situation. Overall, a pretty consistent growth over market throughout the year. Okay. All right. Thanks for taking my questions. Your next question comes from Emmanuel Rosner with Wolfe Research. Great. Thank you so much. I appreciate all the color on the memory supply and discussion and trying to de-risk the outlook. Just curious, as we sort of start looking into next year and you speak to OEMs about trying to mitigate the risk of disruptions, are there any conversations around potential de-contenting or using essentially less memory or solutions that use less of it? I'm also curious on the pricing side or the recovery side, the nature of the longer term agreements that you're working on with the OEMs, would those essentially allow ongoing passthrough even into next year if the DRAM costs keep rising? Yeah. Let me take that, Emmanuel. On the first topic, we are not actually seeing any interest in de-contenting. The discussions have been mostly around how do we secure enough supply for 2027. Now, as you can imagine, most of the time thus far has been gone into securing supply for this year, and there's still a lot of activity, as I've just mentioned on my previous comment. As we start to think about 2027, we are working with all of our suppliers, the ones traditional suppliers, plus the new ones that we are bringing online. As I mentioned, I think the supply next year will largely depend on our ability to secure enough quantity of parts from these newer suppliers that are emerging, largely because of the fact that many of the existing larger suppliers to automotive are shifting their technologies to newer technologies. That dynamic has to be managed first and foremost, and that's what we are focused on. We expect that over the course of this year and maybe towards Q3, we should be in a position to have our supply secured for next year. In terms of pricing negotiations that we are currently having, I think they are kind of different by different customers. Some of them are signing up for a multi-year pricing agreement, so it's going into the piece price, essentially, and some are preferring to have annual pricing negotiations. It will depend on each customer in terms of how they address it. Understood. Can you talk a little bit more about the expected ramp-up in launches in the second half? Yeah ... the growth of a market holding on, but how should we think about this in relation to your comments about, or I guess, S&P's outlook about weaker volume is? Do you have a good sense that this should not really affect ramp curves? Yeah. I think so because this was also evident in Q1. A lot of our performance was driven by new launches, not so much the underlying vehicle production environment of the car makers. A lot of our launches this year are the high-value ones, are in the second half, and in fact, they're ramping up in Q4. In terms of the total number of launches, this year looks a lot like last year. I would say even a few more launches this year than last year. There are some that are very consequential, especially the ones with Toyota and the HPC launches that we spent quite a bit of time on in our prepared remarks. Those are pretty high value, although their real ramp-up begins in Q4, so contribution this year is still relatively small but meaningful, and this is what is helping us offset what we have seen thus far as the reduction in vehicle production. I do believe, if the environment hopefully stabilizes, especially in the Middle East, that if we go forward from here, there may be a potential benefit to us if the underlying vehicle production holds up. At this point in time, it's too early to say whether this growth over market will improve from here, but it's been a really good start to the year. Q2 looks pretty strong, and so the second half, considering where we're at the beginning of the year, we'll have to wait and see as we proceed here how that develops. Perfect. Thank you. Your next question comes from the line of Winnie Dong with Deutsche Bank. Hi. Thanks so much for taking my question. My first one is on the new business win of $1 billion for the quarter. For context, would you mind giving us some, I guess, color on whether this is a typical seasonality, or whether you're seeing any sort of pushout or positioning in terms of wins? Secondly, in terms of the growth drivers in 2027 and beyond, perhaps you can tease your investor day in June a little bit and outline some big buckets of drivers there that we can look forward to. Thank you. Yeah. The first quarter was expected to be a little lighter given that we had a fairly strong finish to last year. We also had, as I mentioned, a few display opportunities that got pushed out into Q2, about $300 million-$400 million worth. I would say even with that, it might be considered a little light, but pretty, I would say normal for first quarter in terms of seasonality of new business wins. Now, if you look at the pipeline for the remainder of the year, I would say again, much like the new product launches, new business wins also look very similar to 2025 in aggregate, but the mix is different. The product mix and the regional mix are both different. In 2025, we had, I would say, even number and value of wins for displays in cockpit electronics. This year we are seeing more of opportunities for cockpit electronics and also more in Asia. The display opportunities this year are more evenly spread between Europe as well as Americas. Overall, we are pretty pleased with what we see as new business opportunities in this environment, and we expect this year to look similar to last year in total in terms of the value of new business wins. To your second question, we do want to leave something for our investor day to share with you, but I think that the main drivers that you are referring to there are going to be the new products that we have won and that we are launching, that we have been discussing quite a bit in our earnings calls over the last few quarters. Displays obviously will have a very big role to play in our growth given the high wins that we've had in the last few quarters, which will be coming into production here very soon. HPC, simply because of the very high content value, will also have a very meaningful impact. The other growth drivers that we have talked about, Toyota as targeted customers, and then two-wheelers and commercial vehicles. What's interesting about our growth profile here is that we are not relying on just one or two things for us to be able to make our numbers. We have a number of things that are in play that are all growing. We have a lot more of confidence that we will be able to achieve that given the diversification that we have. Thank you so much for the color. Thanks. Your next question comes from Joe Spak with UBS. Thanks, everyone. Sachin, sorry to go back to memory, but just one more point on this. My understanding is some of that additional supply that's coming online is from China. I just want to make sure your customers are okay with that. I thought I heard you mention that you already secured about 10% of this year's supply from these new sources. Why would it not be at least at that level or if not better for next year? Yeah. To answer your second question first, absolutely. We don't see that it should not be better than that. We absolutely expect it to be better and the question is by how much and to what extent. To give you some sense of the number of different memory chips that we buy, we buy about, I would say about 60 different types of chips that go into the DRAM category. Then there are also NAND flash, eMMC and UFS as well as NOR. Not to confuse you, but just the point is that there are many different types of memories in different densities that we need. Typically, very few of these suppliers are able to offer you all of the parts that you need. We have to have a mix of suppliers that tend to have their strengths in specific categories, and that's the sort of process that we have been going through, identifying these suppliers, building relationships, and starting supply so that we can test their parts, qualify them, and then introduce them in our customers' production. That's the current situation with supply. I believe that, going back to your first part of the question, do you mind repeating your first part? Just if customers are okay with some of the new sources coming online from China and other places. In this environment where there is shortage of parts, there's absolutely no problem with that. The first thing is to make sure that we have the production secured. Obviously, they would like it to be non-China based if there is availability, but in this environment, we do not see that as a problem. Okay. I guess the second question, Jerome, just on capital allocation. I know you said more details on the long-term plan at the Analyst Day. You did buy back $30 million this quarter. I think that means you've got $45 million left on authorization. I know you said last quarter you could do about $100 million, and you also earmarked about $300 million for M&A. I guess I'm just wondering if there's any sort of change to that thinking, with some of the comments you made about free cash flow or the pipeline or even really the current share price and could we expect an increase in authorization? Because it does seem like you're coming to the end there. Right. Generally, no, nothing has changed. We had highlighted that it was up to $300 million for M&A, up to $150 million for share repurchases. With the cash balance that we have at the end of Q1, even with potentially tracking towards the low end of the range for adjusted free cash flow for this year, we could still do everything. We're still very focused on M&A, and we'll continue as well to return, in an opportunistic manner, cash to shareholders with share repurchases as well as continue on our dividends. Overall, nothing has fundamentally changed in terms of our philosophy. Okay. Thank you. Your next question is from Dan Levy with Barclays. Hi. Good morning. Thanks for taking the question. I wanted to just first double-click on the growth dynamics. We saw negative growth in China in the first quarter. Maybe you could just unpack some of the mix dynamics where I would've assumed that with the lower end of the market underperforming, the higher end outperforming, that would've helped you. Is the view that you can still get that positive growth for the full year with the launches in 2H enough to sort of bring you up to the positive growth? Yeah. Let me take that. If you see what has happened in China, as you mentioned, lower growth in vehicle production in the more price-sensitive segments and I would say a better performance, but not necessarily a lot of growth in the upper end of the market. That is certainly more helpful to us. I do want to also mention at the same time, there is the headwind of the market share loss of the global OEMs that is still ongoing. It's not all good news, necessarily. The new launches, so far, have been largely offsetting what we saw as declines with our traditional global OEMs. Therefore, for Q1, it was kind of even in terms of our performance and vehicle production. As we go forward, especially with the HPC launches, I believe we will start to see growth relative to production in China, and that will continue and have more of a step function next year as those launches get into a production ramp-up. Okay, great. Thank you. As a follow-up, sorry, I know we keep on getting questions on the DRAM here. On a longer-term basis, is there any ability for you to transition your products to be using DDR5 to address some of the supply issues? Is your point that these newer Chinese suppliers are going to be more than enough to offset some of the large suppliers that are eventually phasing out DDR4, and so longer term, this issue will be addressed by these other smaller suppliers? No, that's a great question, and let me just also take a step back. When you look at a technology like DDR4 versus DDR5, the five is not backwards compatible with four. These memories typically are interfaced to a micro or a SoC or a system on a chip. That micro or SoC needs to have the capability to be able to be interfaced to a DDR5 for us to move to DDR5. Now, the majority of the micros used in the industry for the cockpit are not capable of being interfaced to DDR5. That's one point, right? That transition has to happen. The evolution of the micros and SoCs that are used for cockpit, which come from suppliers such as Qualcomm or NXP and others, they have to be able to provide these SoCs. There has to be then other changes because they're not going to just introduce a single change like moving from DDR4 to DDR5. It's a bigger change, and a bigger change typically requires longer time for automotive. That's one dynamic. Now, what we are seeing, though, is the higher-end CDCs and HPCs already use DDR5. What this might do is to push the industry faster towards HPCs, upper-end CDCs, and HPCs simply because of the shift in the underlying technologies. Now, DDR5 will come at a density that is fundamentally a step higher than DDR4. We'll be able to do more with this processing power and the memory that's going to be available, which I think will accelerate the trend towards more integrated cockpit domain controllers, and eventually central domain controllers like the HPC. We believe that this trend, in some ways, is going to push the industry to adopt more content simply because it'll be cheaper to do it that way than to stay with older technologies with more function-specific, feature-specific implementations. Great. Thank you. Your next question is from Luke Junk with Baird. Good morning. Thanks for taking the questions. First question, Sachin, just curious to get some perspective on what you mentioned as the early mover advantage in HPC. I think you said your three wins are more than any other tier one supplier. Just hoping we could double-click maybe on the competitive landscape on a relative basis, and then given the award this morning that you announced that's launching within a year or so, I think you said within 12 months, just the near-term pipeline for maybe adding additional awards, including on maybe additional vehicles with your current customers. Thank you. Yeah. No. Thanks, Luke. We have three customers that are launching this year, as I mentioned, and they're all launching initially on their flagship vehicles. At the same time, they're lining up vehicles following that initial launch that we are in discussions with them on, which will extend this business. That has been one of the sort of new learnings for us as well. When we were first discussing AI and HPC, let's say about a year ago, our thought was that it was more limited in application to perhaps just the very top-end, the flagship vehicles. The competitive dynamics now in the China market with what's happening, especially with the emerging premium tech segment that I discussed, that's really driving more volume to adopt AI as one of the key foundational capabilities of the cockpit of those vehicles. We actually see that market grow quite rapidly starting in China. Because of exports, we expect that technology to start to make impact in other regions, probably starting with Europe, initially, before it comes to other parts of the world. Helpful. Then Jerome, maybe, just hoping to make sure we're calibrating the launch cadence right in the back half of the year. I guess two specific things in that. First would be in terms of the high compute launches, any initial demand indications? I know there's a level of variability just on the demand for the vehicles themselves. Then you also made the comment about the foreign exchange fluctuation. Was that mainly a Toyota-related comment, or is there some China color that we need to understand there as well? Thank you. You got it. I was about to say, we are using IHS for the HPC launches, and these have been holding pretty well compared to what we had initially guided to. No major changes. Sachin, do you want to take the second? Yeah. In general, on the cadence itself, what I would say is that there has been no change on the launch plans and in terms of the volumes as well. We have been very focused on ensuring that we have supply of components because the lead times, as you can imagine, especially with this third win, has been extremely short. So I would say for now, Luke, the focus is on ensuring that we can launch and achieve the ramp of volume that we have for this year, which has remained pretty steady. There's been no change. If anything, depending upon availability of supply, that there may be the ability to increase it, but given where we stand with lead times and so on, I would think that would be a fairly big challenge for us to accomplish. I've got it. I'll leave it there. Thank you. Our next question is from Tom Narayan with RBC. Thanks. Sticking to the question. Just two quick follow-ups. The first one on the $300 million M&A. I know in the past you've said this is likely tuck-ins, but just curious, is there a reason why this is being prioritized now? Is it because you're seeing deals kind of at attractive pricing? Is it something that you see that works well with what you're trying to achieve now versus later? A follow-up. Yeah. Yes, in some parts, but it's really more driven by how we see the trends emerge in the industry. There's a very big trend towards a software-driven, more integrated domain controller approach for these vehicles. That requires that you have all of the software capabilities to implement those features. That's the primary driver of trying to secure those capabilities that would allow us to offer more and more integrated domain controllers. Eventually, we see a certain level of ADAS also getting integrated with cockpit as features like AEB become mandated in all jurisdictions, right? It's already a mandate in Europe. In 2028 and 2029, China and U.S. will follow. As standard requirements, OEMs will not be able to price for them. They will be essentially part of the standard equipment. We expect more and more features to get standardized or de facto Required and therefore integrated. The cost is going to be a prime driver, and that will drive greater levels of integration. That's one thing. The second thing that's driving our M&A strategy is the fact that with all of these technologies that are emerging very rapidly, coming from mainstream tech industries and impacting automotive at a pace that's been faster than ever before, we see opportunity for offering services, outsourced R&D services, expert services, to help OEMs define how to use those technologies in their vehicles. What we're finding, now your question, we're finding these opportunities, these companies that have a lot of depth of expertise, but they don't necessarily have the scale. We believe that we can provide that scaling ability to these companies, help the OEMs, and in turn, that helps us make our platform more future-proof. It's got that virtuous cycle where us engaging in advanced technologies activities with OEMs helps us understand how to keep our platforms competitive and in time for the market introduction. That's the second. The third driver of M&A has always been vertical integration. We have been very successful with that so far, and we want to continue to take it forward as we see opportunities to bring more of the manufacturing value content into our plants, rather than to rely on an extended supply chain. Which eventually also helps us counter this request that we get from customers to be less dependent on China and other parts of the world, where we are today perhaps more exposed than we should be. Got it. Thanks for a very robust answer. Jerome, just to clarify, the guidance being maintained despite the S&P cutting, was it that the Q1 coming in ahead of your expectations, was that the main driver of being able to do that? Correct, yes. Along as well with some good visibility and robust orders that we see for the second quarter. You're absolutely correct, yes. Okay, got it. Thanks. Thank you. Thank you. This concludes our earnings call for the first quarter of 2026. Thank you for participating in today's call and your ongoing interest in Visteon. This concludes Visteon's first quarter 2026 results earnings call. You may now disconnect.

Speaker 6: Good morning. I'm Kris Doyle, Vice President of Investor Relations in FP&A. Welcome to our earnings call for the first quarter of 2026. Before we begin this morning's call, I'd like to remind you that today's presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future performance and are subject to various risks, uncertainties, and assumptions that could cause actual results to differ materially from those expressed. Please refer to the page titled "Forward-Looking Statements" in our earnings material for more detail. Presentation materials for today's call were posted this morning on the Investors section of Visteon's website. Joining us today are Sachin Lawande, President and Chief Executive Officer, and Jerome Rouquet, Senior Vice President and Chief Financial Officer. Good morning. good morning I'm Kris Doyle, Vice President of Investor Relations in FP&A. i'm kris doyle vice president of investor relations in fp&a Welcome to our earnings call for the first quarter of 2026. welcome to our earnings call for the first quarter of 2026 Before we begin this morning's call, I'd like to remind you that today's presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. before we begin this morning's call i'd like to remind you that today's presentation contains forward-looking statements within the meaning of the private securities litigation reform act of 1995 These statements are not guarantees of future performance and are subject to various risks, uncertainties, and assumptions that could cause actual results to differ materially from those expressed. these statements are not guarantees of future performance and are subject to various risks uncertainties and assumptions that could cause actual results to differ materially from those expressed Please refer to the page titled "Forward-Looking Statements" in our earnings material for more detail. please refer to the page titled "forward-looking statements" in our earnings material for more detail Presentation materials for today's call were posted this morning on the Investors section of Visteon's website. presentation materials for today's call were posted this morning on the investors section of visteon's website Joining us today are Sachin Lawande, President and Chief Executive Officer, and Jerome Rouquet, Senior Vice President and Chief Financial Officer. joining us today are sachin lawande president and chief executive officer and jerome rouquet senior vice president and chief financial officer We've scheduled the call for one hour, and we'll open the lines for questions after Sachin's and Jerome's prepared remarks. Please limit your participation to one question and one follow-up. Thank you again for joining us. Now I'll turn the call over to Sachin. We've scheduled the call for one hour, and we'll open the lines for questions after Sachin's and Jerome's prepared remarks. we've scheduled the call for one hour and we'll open the lines for questions after sachin's and jerome's prepared remarks Please limit your participation to one question and one follow-up. please limit your participation to one question and one follow-up Thank you again for joining us. thank you again for joining us Now I'll turn the call over to Sachin. now i'll turn the call over to sachin

Speaker 10: Thank you, Kris, and good morning, everyone. Visteon delivered a solid start to the year with first quarter sales coming ahead of our expectations. Net sales were $954 million, up 2% year-over-year, despite lower industry and customer vehicle production. New product launches and customer recoveries more than offset the anticipated headwinds from lower BMS volumes and vehicle discontinuations at Ford. Growth over market in the quarter was 3%. Adjusted EBITDA was $104 million, broadly in line with our expectations. During the quarter, we saw elevated semiconductor costs, while the associated recoveries from customers are expected to be weighted more to the later part of the year. Adjusted free cash flow was negative $23 million, primarily driven by normal seasonality and higher inventory levels. We continue to maintain a strong balance sheet with net cash of $385 million, providing ample flexibility to execute our capital allocation strategy. Thank you, Kris, and good morning, everyone. thank you kris and good morning everyone Visteon delivered a solid start to the year with first quarter sales coming ahead of our expectations. visteon delivered a solid start to the year with first quarter sales coming ahead of our expectations Net sales were $954 million, up 2% year-over-year, despite lower industry and customer vehicle production. net sales were $954 million up 2% year-over-year despite lower industry and customer vehicle production New product launches and customer recoveries more than offset the anticipated headwinds from lower BMS volumes and vehicle discontinuations at Ford. new product launches and customer recoveries more than offset the anticipated headwinds from lower bms volumes and vehicle discontinuations at ford Growth over market in the quarter was 3%. growth over market in the quarter was 3% Adjusted EBITDA was $104 million, broadly in line with our expectations. adjusted ebitda was $104 million broadly in line with our expectations During the quarter, we saw elevated semiconductor costs, while the associated recoveries from customers are expected to be weighted more to the later part of the year. during the quarter we saw elevated semiconductor costs while the associated recoveries from customers are expected to be weighted more to the later part of the year Adjusted free cash flow was negative $23 million, primarily driven by normal seasonality and higher inventory levels. adjusted free cash flow was negative $23 million primarily driven by normal seasonality and higher inventory levels We continue to maintain a strong balance sheet with net cash of $385 million, providing ample flexibility to execute our capital allocation strategy. we continue to maintain a strong balance sheet with net cash of $385 million providing ample flexibility to execute our capital allocation strategy New business wins were just over $1 billion, led by cockpit domain controllers and digital clusters. A key highlight was our high-performance compute win with SAIC in China, a third customer for AI-based SmartCockpit systems, reinforcing our first-mover advantage in this emerging technology, similar to our early leadership with SmartCore. Q1 was a busy quarter for operations with 20 launches across 11 automakers, including on several high-profile vehicles, underscoring our continued execution excellence in a dynamic supply chain environment. Finally, we continued to return capital to shareholders. During the quarter, we returned $40 million through share repurchases and dividends. Overall, the quarter reflects a good start to the year with strong execution across all parts of our business and continued progress on our strategic priorities. Turning to page three. New business wins were just over $1 billion, led by cockpit domain controllers and digital clusters. new business wins were just over $1 billion led by cockpit domain controllers and digital clusters A key highlight was our high-performance compute win with SAIC in China, a third customer for AI-based SmartCockpit systems, reinforcing our first-mover advantage in this emerging technology, similar to our early leadership with SmartCore. a key highlight was our high-performance compute win with saic in china a third customer for ai-based smartcockpit systems reinforcing our first-mover advantage in this emerging technology similar to our early leadership with smartcore Q1 was a busy quarter for operations with 20 launches across 11 automakers, including on several high-profile vehicles, underscoring our continued execution excellence in a dynamic supply chain environment. q1 was a busy quarter for operations with 20 launches across 11 automakers including on several high-profile vehicles underscoring our continued execution excellence in a dynamic supply chain environment Finally, we continued to return capital to shareholders. finally we continued to return capital to shareholders During the quarter, we returned $40 million through share repurchases and dividends. during the quarter we returned $40 million through share repurchases and dividends Overall, the quarter reflects a good start to the year with strong execution across all parts of our business and continued progress on our strategic priorities. overall the quarter reflects a good start to the year with strong execution across all parts of our business and continued progress on our strategic priorities Turning to page three. turning to page three This page shows our Q1 sales performance by region, representing a solid start to the year with balanced global customer demand. In the Americas, demand for cockpit electronics was strong, driven by ramp-up of recently launched products, including new display programs with Nissan and GM. We also benefited from one-time customer recoveries related to prior EV volume declines. Offsetting these were the anticipated headwinds from vehicle discontinuations at Ford and lower BMS volumes due to changes in EV policies and incentives. In Europe, we benefited from strong ramp-ups on several successful vehicle programs. Key contributors included a curved panoramic display referred to as a digital stage, combining a 12-inch digital cluster and a slightly larger center information display on the Audi Q3, digital clusters and displays on the Renault 4 and 5 EVs, and digital clusters on the new Nissan Qashqai and Juke. This page shows our Q1 sales performance by region, representing a solid start to the year with balanced global customer demand. this page shows our q1 sales performance by region representing a solid start to the year with balanced global customer demand In the Americas, demand for cockpit electronics was strong, driven by ramp-up of recently launched products, including new display programs with Nissan and GM. in the americas demand for cockpit electronics was strong driven by ramp-up of recently launched products including new display programs with nissan and gm We also benefited from one-time customer recoveries related to prior EV volume declines. we also benefited from one-time customer recoveries related to prior ev volume declines Offsetting these were the anticipated headwinds from vehicle discontinuations at Ford and lower BMS volumes due to changes in EV policies and incentives. offsetting these were the anticipated headwinds from vehicle discontinuations at ford and lower bms volumes due to changes in ev policies and incentives In Europe, we benefited from strong ramp-ups on several successful vehicle programs. in europe we benefited from strong ramp-ups on several successful vehicle programs Key contributors included a curved panoramic display referred to as a digital stage, combining a 12-inch digital cluster and a slightly larger center information display on the Audi Q3, digital clusters and displays on the Renault 4 and 5 EVs, and digital clusters on the new Nissan Qashqai and Juke. key contributors included a curved panoramic display referred to as a digital stage combining a 12-inch digital cluster and a slightly larger center information display on the audi q3 digital clusters and displays on the renault 4 and 5 evs and digital clusters on the new nissan qashqai and juke These programs supported Q1 sales growth despite a weak vehicle production environment. The engineering services acquisition from last year also contributed modestly to our sales in Europe. In rest of Asia, India was a strong market for Visteon, with ramp-ups of a new SmartCore system for Mahindra and a digital cluster for TVS, a leading two-wheeler OEM. We also launched new digital cluster programs with Nissan and Mitsubishi for Japan and ASEAN markets, offsetting a Mazda program roll-off. In China, policy reset and demand pull forward late last year led to lower Q1 vehicle production, particularly in the price-sensitive segments. Our sales were in line with expectations, supported by greater exposure to higher-value segments that are less affected by policy changes. These programs supported Q1 sales growth despite a weak vehicle production environment. these programs supported q1 sales growth despite a weak vehicle production environment The engineering services acquisition from last year also contributed modestly to our sales in Europe. the engineering services acquisition from last year also contributed modestly to our sales in europe In rest of Asia, India was a strong market for Visteon, with ramp-ups of a new SmartCore system for Mahindra and a digital cluster for TVS, a leading two-wheeler OEM. in rest of asia india was a strong market for visteon with ramp-ups of a new smartcore system for mahindra and a digital cluster for tvs a leading two-wheeler oem We also launched new digital cluster programs with Nissan and Mitsubishi for Japan and ASEAN markets, offsetting a Mazda program roll-off. we also launched new digital cluster programs with nissan and mitsubishi for japan and asean markets offsetting a mazda program roll-off In China, policy reset and demand pull forward late last year led to lower Q1 vehicle production, particularly in the price-sensitive segments. in china policy reset and demand pull forward late last year led to lower q1 vehicle production particularly in the price-sensitive segments Our sales were in line with expectations, supported by greater exposure to higher-value segments that are less affected by policy changes. our sales were in line with expectations supported by greater exposure to higher-value segments that are less affected by policy changes We also benefited from several recently launched programs, including a new cockpit domain controller with Zeekr, an upgraded digital cluster on the Toyota Corolla, and a new digital cluster on the Toyota Frontlander. The year-over-year decline in our sales has reduced significantly versus prior quarters and is now tracking more in line with customer production volumes. Looking ahead, we have multiple launches in the second half that are expected to drive modest growth in China this year, followed by a more meaningful step-up in 2027. In summary, we started the year very well with stable global demand for cockpit electronics and new product launches offsetting the expected headwinds, primarily from lower BMS volumes. Turning to page 4. Q1 was a busy launch quarter with 20 new products launched with 11 car makers, and on some strategically important vehicles for our customers. This page highlights a few key programs. We also benefited from several recently launched programs, including a new cockpit domain controller with Zeekr, an upgraded digital cluster on the Toyota Corolla, and a new digital cluster on the Toyota Frontlander. we also benefited from several recently launched programs including a new cockpit domain controller with zeekr an upgraded digital cluster on the toyota corolla and a new digital cluster on the toyota frontlander The year-over-year decline in our sales has reduced significantly versus prior quarters and is now tracking more in line with customer production volumes. the year-over-year decline in our sales has reduced significantly versus prior quarters and is now tracking more in line with customer production volumes Looking ahead, we have multiple launches in the second half that are expected to drive modest growth in China this year, followed by a more meaningful step-up in 2027. looking ahead we have multiple launches in the second half that are expected to drive modest growth in china this year followed by a more meaningful step-up in 2027 In summary, we started the year very well with stable global demand for cockpit electronics and new product launches offsetting the expected headwinds, primarily from lower BMS volumes. in summary we started the year very well with stable global demand for cockpit electronics and new product launches offsetting the expected headwinds primarily from lower bms volumes Turning to page 4. Q1 was a busy launch quarter with 20 new products launched with 11 car makers, and on some strategically important vehicles for our customers. turning to page 4. q1 was a busy launch quarter with 20 new products launched with 11 car makers and on some strategically important vehicles for our customers This page highlights a few key programs. this page highlights a few key programs We marked a significant milestone with our first launch for Toyota's Lexus brand on the fully redesigned Lexus ES, a flagship model leading the next generation electrified lineup for Lexus. Our driver display is standard on all trims globally, reinforcing Visteon's role in advancing premium in-cabin experiences with Toyota, and contributing to our growth with this customer. We also launched a digital cluster on the first-ever Infiniti QX60, a mid-sized luxury SUV from Nissan for U.S. and Middle East markets. This new vehicle is a key part of Nissan's turnaround strategy in the U.S., and our 12-inch digital cluster comes standard in all trim lines of this vehicle. In China, we launched a driver display for the new electric Ford Bronco, developed specifically for that market. The automotive market in China is evolving beyond electrification to highly specialized segments with focus on technology and lifestyle applications. We marked a significant milestone with our first launch for Toyota's Lexus brand on the fully redesigned Lexus ES, a flagship model leading the next generation electrified lineup for Lexus. we marked a significant milestone with our first launch for toyota's lexus brand on the fully redesigned lexus es a flagship model leading the next generation electrified lineup for lexus Our driver display is standard on all trims globally, reinforcing Visteon's role in advancing premium in-cabin experiences with Toyota, and contributing to our growth with this customer. our driver display is standard on all trims globally reinforcing visteon's role in advancing premium in-cabin experiences with toyota and contributing to our growth with this customer We also launched a digital cluster on the first-ever Infiniti QX60, a mid-sized luxury SUV from Nissan for U.S. and Middle East markets. we also launched a digital cluster on the first-ever infiniti qx60 a mid-sized luxury suv from nissan for u.s and middle east markets This new vehicle is a key part of Nissan's turnaround strategy in the U.S., and our 12-inch digital cluster comes standard in all trim lines of this vehicle. this new vehicle is a key part of nissan's turnaround strategy in the u.s and our 12-inch digital cluster comes standard in all trim lines of this vehicle In China, we launched a driver display for the new electric Ford Bronco, developed specifically for that market. in china we launched a driver display for the new electric ford bronco developed specifically for that market The automotive market in China is evolving beyond electrification to highly specialized segments with focus on technology and lifestyle applications. the automotive market in china is evolving beyond electrification to highly specialized segments with focus on technology and lifestyle applications The electric Bronco is significant for Ford in China, designed to compete directly with local EV manufacturers. India is one of the fastest-growing auto markets, and in Q1, we launched multiple products, including a digital cluster with Hyundai, infotainment with Tata, and a center information display with Renault. Hyundai and Tata are already well-positioned in India as number 2 and number 3 players, and Renault has recently made India a cornerstone of its strategy. India today represents nearly 10% of our total sales, and these launches position us to grow alongside our customers in what will be a key growth market going forward. In summary, we had a solid start in Q1 with new launches that laid the foundation for growth in the coming quarters and underscored Visteon's role in automakers' go-to-market strategies worldwide. Turning to page five. We secured approximately $1 billion in new business during the quarter. The electric Bronco is significant for Ford in China, designed to compete directly with local EV manufacturers. the electric bronco is significant for ford in china designed to compete directly with local ev manufacturers India is one of the fastest-growing auto markets, and in Q1, we launched multiple products, including a digital cluster with Hyundai, infotainment with Tata, and a center information display with Renault. india is one of the fastest-growing auto markets and in q1 we launched multiple products including a digital cluster with hyundai infotainment with tata and a center information display with renault Hyundai and Tata are already well-positioned in India as number 2 and number 3 players, and Renault has recently made India a cornerstone of its strategy. hyundai and tata are already well-positioned in india as number 2 and number 3 players and renault has recently made india a cornerstone of its strategy India today represents nearly 10% of our total sales, and these launches position us to grow alongside our customers in what will be a key growth market going forward. india today represents nearly 10% of our total sales and these launches position us to grow alongside our customers in what will be a key growth market going forward In summary, we had a solid start in Q1 with new launches that laid the foundation for growth in the coming quarters and underscored Visteon's role in automakers' go-to-market strategies worldwide. in summary we had a solid start in q1 with new launches that laid the foundation for growth in the coming quarters and underscored visteon's role in automakers' go-to-market strategies worldwide Turning to page five. turning to page five We secured approximately $1 billion in new business during the quarter. we secured approximately $1 billion in new business during the quarter As expected, customer sourcing in Q1 was somewhat lighter following a strong finish to last year, and some display opportunities were shifted into the second quarter. Our product portfolio remains well-aligned with key industry trends, and our new business opportunity pipeline is strong for the rest of the year. Based on current visibility, we remain on track to achieve our full-year target of $6 billion. I would like to highlight a few of the key first quarter wins on this page. In China, we secured our third customer for an AI-capable cockpit system with SAIC Motor for its IM brand. SAIC Motor is one of the largest car makers in China, and IM is their new brand targeting the premium car segment. As expected, customer sourcing in Q1 was somewhat lighter following a strong finish to last year, and some display opportunities were shifted into the second quarter. as expected customer sourcing in q1 was somewhat lighter following a strong finish to last year and some display opportunities were shifted into the second quarter Our product portfolio remains well-aligned with key industry trends, and our new business opportunity pipeline is strong for the rest of the year. our product portfolio remains well-aligned with key industry trends and our new business opportunity pipeline is strong for the rest of the year Based on current visibility, we remain on track to achieve our full-year target of $6 billion. based on current visibility we remain on track to achieve our full-year target of $6 billion I would like to highlight a few of the key first quarter wins on this page. i would like to highlight a few of the key first quarter wins on this page In China, we secured our third customer for an AI-capable cockpit system with SAIC Motor for its IM brand. in china we secured our third customer for an ai-capable cockpit system with saic motor for its im brand SAIC Motor is one of the largest car makers in China, and IM is their new brand targeting the premium car segment. saic motor is one of the largest car makers in china and im is their new brand targeting the premium car segment Automakers in China are rapidly adopting agentic AI to enhance in-cabin experiences, driving demand for high-performance cockpit systems capable of running LLMs and vision language models, or VLMs, using the latest silicon, such as Qualcomm's fifth generation Snapdragon chips. These high-performance systems also enable greater ECU integration, accelerating the shift towards centralized domain architectures. Importantly, Visteon has established an early mover advantage with three OEM wins in this space, more than any other tier one supplier, positioning us very well to take advantage of this emerging trend. Mainstream vehicles will continue to use conventional cockpit domain controllers for affordability reasons, with premium vehicles transitioning to AI-based cockpits. In India, we secured a SmartCore cockpit domain controller win with a European OEM for their vehicles for India and other emerging markets, our first SmartCore win with this customer. Automakers in China are rapidly adopting agentic AI to enhance in-cabin experiences, driving demand for high-performance cockpit systems capable of running LLMs and vision language models, or VLMs, using the latest silicon, such as Qualcomm's fifth generation Snapdragon chips. automakers in china are rapidly adopting agentic ai to enhance in-cabin experiences driving demand for high-performance cockpit systems capable of running llms and vision language models or vlms using the latest silicon such as qualcomm's fifth generation snapdragon chips These high-performance systems also enable greater ECU integration, accelerating the shift towards centralized domain architectures. these high-performance systems also enable greater ecu integration accelerating the shift towards centralized domain architectures Importantly, Visteon has established an early mover advantage with three OEM wins in this space, more than any other tier one supplier, positioning us very well to take advantage of this emerging trend. importantly visteon has established an early mover advantage with three oem wins in this space more than any other tier one supplier positioning us very well to take advantage of this emerging trend Mainstream vehicles will continue to use conventional cockpit domain controllers for affordability reasons, with premium vehicles transitioning to AI-based cockpits. mainstream vehicles will continue to use conventional cockpit domain controllers for affordability reasons with premium vehicles transitioning to ai-based cockpits In India, we secured a SmartCore cockpit domain controller win with a European OEM for their vehicles for India and other emerging markets, our first SmartCore win with this customer. in india we secured a smartcore cockpit domain controller win with a european oem for their vehicles for india and other emerging markets our first smartcore win with this customer The system will power three cockpit displays and support advanced infotainment and entertainment features, similar to recent SmartCore launches in China and India. Beyond strong product-market fit of SmartCore, speed was a key competitive differentiator and the main reason for this win, as the start of production of the vehicle is under 12 months. We also expanded our commercial vehicle business by adding a new customer for digital clusters with a U.S. manufacturer of purpose-built vehicles for defense, delivery, and fire and emergency markets. The 12-inch cluster will feature on their next generation delivery vehicles, with production starting in early 2028, reflecting the growing adoption of digital cockpits in all kinds of commercial vehicles, and not just for heavy-duty trucks. The system will power three cockpit displays and support advanced infotainment and entertainment features, similar to recent SmartCore launches in China and India. the system will power three cockpit displays and support advanced infotainment and entertainment features similar to recent smartcore launches in china and india Beyond strong product-market fit of SmartCore, speed was a key competitive differentiator and the main reason for this win, as the start of production of the vehicle is under 12 months. beyond strong product-market fit of smartcore speed was a key competitive differentiator and the main reason for this win as the start of production of the vehicle is under 12 months We also expanded our commercial vehicle business by adding a new customer for digital clusters with a U.S. manufacturer of purpose-built vehicles for defense, delivery, and fire and emergency markets. we also expanded our commercial vehicle business by adding a new customer for digital clusters with a u.s manufacturer of purpose-built vehicles for defense delivery and fire and emergency markets The 12-inch cluster will feature on their next generation delivery vehicles, with production starting in early 2028, reflecting the growing adoption of digital cockpits in all kinds of commercial vehicles, and not just for heavy-duty trucks. the 12-inch cluster will feature on their next generation delivery vehicles with production starting in early 2028 reflecting the growing adoption of digital cockpits in all kinds of commercial vehicles and not just for heavy-duty trucks In two-wheelers, we expanded our digital cluster program with Honda to additional models representing an incremental $100 million of lifetime sales, further strengthening our engagement with the world's largest two-wheeler OEM. In summary, our Q1 performance was highlighted by strategic wins in key markets, reinforcing our technology leadership, and supporting a strong pipeline that keeps us on track for our $6 billion full-year target. Turning to page six. China, the world's largest auto market, is also the most competitive, with intense pricing pressure in budget and mainstream segments, which Visteon has strategically avoided to protect profitability. Above mainstream, the market is now evolving beyond electrification into more specialized segments centered on intelligence, luxury, and lifestyle. A key area of growth is the emerging premium tech segment. As traditional OEMs compete with tech-first players such as Tesla, XPeng, and Li Auto, with vehicles that combine luxury with advanced technology. In two-wheelers, we expanded our digital cluster program with Honda to additional models representing an incremental $100 million of lifetime sales, further strengthening our engagement with the world's largest two-wheeler OEM. in two-wheelers we expanded our digital cluster program with honda to additional models representing an incremental $100 million of lifetime sales further strengthening our engagement with the world's largest two-wheeler oem In summary, our Q1 performance was highlighted by strategic wins in key markets, reinforcing our technology leadership, and supporting a strong pipeline that keeps us on track for our $6 billion full-year target. in summary our q1 performance was highlighted by strategic wins in key markets reinforcing our technology leadership and supporting a strong pipeline that keeps us on track for our $6 billion full-year target Turning to page six. turning to page six China, the world's largest auto market, is also the most competitive, with intense pricing pressure in budget and mainstream segments, which Visteon has strategically avoided to protect profitability. china the world's largest auto market is also the most competitive with intense pricing pressure in budget and mainstream segments which visteon has strategically avoided to protect profitability Above mainstream, the market is now evolving beyond electrification into more specialized segments centered on intelligence, luxury, and lifestyle. above mainstream the market is now evolving beyond electrification into more specialized segments centered on intelligence luxury and lifestyle A key area of growth is the emerging premium tech segment. As traditional OEMs compete with tech-first players such as Tesla, XPeng, and Li Auto, with vehicles that combine luxury with advanced technology. a key area of growth is the emerging premium tech segment. as traditional oems compete with tech-first players such as tesla xpeng and li auto with vehicles that combine luxury with advanced technology OEMs such as Geely, Chery, and SAIC, who are among the largest in China, are defining their premium brands around the convergence of premium design, immersive digital experiences, and most importantly, artificial intelligence. The cockpit is at the center of differentiation with agentic AI enabling a new level of in-cabin intelligence. Unlike traditional command-based systems, AI-powered smart cabins can understand user intent, reason through complex tasks, and act proactively on behalf of the user. For example, instead of manually entering a destination, the system can anticipate and suggest it based on context or what it hears from conversation. It can also translate incoming messages in real time, draft responses with minimal input, and answer open-ended questions about surroundings, what the driver may be seeing outside the window, for example, delivering a far more intuitive and personalized in-cabin experience. OEMs such as Geely, Chery, and SAIC, who are among the largest in China, are defining their premium brands around the convergence of premium design, immersive digital experiences, and most importantly, artificial intelligence. oems such as geely chery and saic who are among the largest in china are defining their premium brands around the convergence of premium design immersive digital experiences and most importantly artificial intelligence The cockpit is at the center of differentiation with agentic AI enabling a new level of in-cabin intelligence. the cockpit is at the center of differentiation with agentic ai enabling a new level of in-cabin intelligence Unlike traditional command-based systems, AI-powered smart cabins can understand user intent, reason through complex tasks, and act proactively on behalf of the user. unlike traditional command-based systems ai-powered smart cabins can understand user intent reason through complex tasks and act proactively on behalf of the user For example, instead of manually entering a destination, the system can anticipate and suggest it based on context or what it hears from conversation. for example instead of manually entering a destination the system can anticipate and suggest it based on context or what it hears from conversation It can also translate incoming messages in real time, draft responses with minimal input, and answer open-ended questions about surroundings, what the driver may be seeing outside the window, for example, delivering a far more intuitive and personalized in-cabin experience. it can also translate incoming messages in real time draft responses with minimal input and answer open-ended questions about surroundings what the driver may be seeing outside the window for example delivering a far more intuitive and personalized in-cabin experience This level of intelligence requires a step change in computing power to run AI workloads far beyond what current cockpit domain controllers can provide. Visteon was the first Tier 1 supplier to develop a high-performance version of SmartCore using the newest fifth-generation chip from Qualcomm. We also developed the first cockpit-specific agentic AI software framework, Cognito AI, to enable the development of use cases like I just mentioned. Our early investments in AI helped establish Visteon as a preferred partner for car makers in China for their AI-enabled cockpit systems. These next-generation systems carry significantly higher content value, and the business booked with the three OEMs thus far is already over $1 billion in value. We expect more vehicles to be added to the programs after the initial launches, which are happening this year. While China is leading adoption of AI, we see this as a global inflection point. This level of intelligence requires a step change in computing power to run AI workloads far beyond what current cockpit domain controllers can provide. this level of intelligence requires a step change in computing power to run ai workloads far beyond what current cockpit domain controllers can provide Visteon was the first Tier 1 supplier to develop a high-performance version of SmartCore using the newest fifth-generation chip from Qualcomm. visteon was the first tier 1 supplier to develop a high-performance version of smartcore using the newest fifth-generation chip from qualcomm We also developed the first cockpit-specific agentic AI software framework, Cognito AI, to enable the development of use cases like I just mentioned. we also developed the first cockpit-specific agentic ai software framework cognito ai to enable the development of use cases like i just mentioned Our early investments in AI helped establish Visteon as a preferred partner for car makers in China for their AI-enabled cockpit systems. our early investments in ai helped establish visteon as a preferred partner for car makers in china for their ai-enabled cockpit systems These next-generation systems carry significantly higher content value, and the business booked with the three OEMs thus far is already over $1 billion in value. these next-generation systems carry significantly higher content value and the business booked with the three oems thus far is already over $1 billion in value We expect more vehicles to be added to the programs after the initial launches, which are happening this year. we expect more vehicles to be added to the programs after the initial launches which are happening this year While China is leading adoption of AI, we see this as a global inflection point. while china is leading adoption of ai we see this as a global inflection point AI will also become a competitive must-have in other parts of the world, accelerated by the international expansion of Chinese OEMs and drive the next phase of growth for Visteon. Turning to page seven. Before wrapping up, let me briefly discuss our outlook for the remainder of the year. Since issuing our guidance, S&P has lowered its global light vehicle production forecast for our customers by approximately 1.5 percentage points, with most of the impact in the second half of the year. The main reason being the Middle East conflict, and there could be further downside if the hostilities persist for longer than anticipated. Production for our key customers is now expected to decline in the mid-single digits year-over-year. On the supply side, memory remains constrained as strong demand from AI and data centers limits availability for automotive. AI will also become a competitive must-have in other parts of the world, accelerated by the international expansion of Chinese OEMs and drive the next phase of growth for Visteon. ai will also become a competitive must-have in other parts of the world accelerated by the international expansion of chinese oems and drive the next phase of growth for visteon Turning to page seven. turning to page seven Before wrapping up, let me briefly discuss our outlook for the remainder of the year. before wrapping up let me briefly discuss our outlook for the remainder of the year Since issuing our guidance, S&P has lowered its global light vehicle production forecast for our customers by approximately 1.5 percentage points, with most of the impact in the second half of the year. since issuing our guidance s&p has lowered its global light vehicle production forecast for our customers by approximately 1.5 percentage points with most of the impact in the second half of the year The main reason being the Middle East conflict, and there could be further downside if the hostilities persist for longer than anticipated. the main reason being the middle east conflict and there could be further downside if the hostilities persist for longer than anticipated Production for our key customers is now expected to decline in the mid-single digits year-over-year. production for our key customers is now expected to decline in the mid-single digits year-over-year On the supply side, memory remains constrained as strong demand from AI and data centers limits availability for automotive. on the supply side memory remains constrained as strong demand from ai and data centers limits availability for automotive Automotive continues to rely on older memory technologies that suppliers are phasing out in favor of newer nodes, creating a structural supply-demand imbalance and driving pricing pressure and tightness in supply. We expect this environment to persist through 2027 before easing as new capacity starts to come online. In this environment, we are proactively managing supply by working closely with existing suppliers and qualifying additional sources. We were able to secure sufficient supply in Q1 through proactive actions, ensuring no impact on our customers. We expect supply to remain tight throughout the rest of the year, with incremental supply from new sources starting to become more meaningful in the second half of the year. On the positive side, customer demand has remained resilient, with Q1 coming in ahead of expectations and Q2 schedules indicating continued strength. Importantly, our key launches remain on track. Automotive continues to rely on older memory technologies that suppliers are phasing out in favor of newer nodes, creating a structural supply-demand imbalance and driving pricing pressure and tightness in supply. automotive continues to rely on older memory technologies that suppliers are phasing out in favor of newer nodes creating a structural supply-demand imbalance and driving pricing pressure and tightness in supply We expect this environment to persist through 2027 before easing as new capacity starts to come online. we expect this environment to persist through 2027 before easing as new capacity starts to come online In this environment, we are proactively managing supply by working closely with existing suppliers and qualifying additional sources. in this environment we are proactively managing supply by working closely with existing suppliers and qualifying additional sources We were able to secure sufficient supply in Q1 through proactive actions, ensuring no impact on our customers. we were able to secure sufficient supply in q1 through proactive actions ensuring no impact on our customers We expect supply to remain tight throughout the rest of the year, with incremental supply from new sources starting to become more meaningful in the second half of the year. we expect supply to remain tight throughout the rest of the year with incremental supply from new sources starting to become more meaningful in the second half of the year On the positive side, customer demand has remained resilient, with Q1 coming in ahead of expectations and Q2 schedules indicating continued strength. on the positive side customer demand has remained resilient with q1 coming in ahead of expectations and q2 schedules indicating continued strength Importantly, our key launches remain on track. importantly our key launches remain on track Taking all this into account and based on current data, we are reaffirming our full-year sales guidance despite incremental headwinds in the broader market. We'll continue to closely monitor macro and supply conditions and provide updates as the year progresses. Now I will hand it over to Jerome to discuss financials in more detail. Taking all this into account and based on current data, we are reaffirming our full-year sales guidance despite incremental headwinds in the broader market. taking all this into account and based on current data we are reaffirming our full-year sales guidance despite incremental headwinds in the broader market We'll continue to closely monitor macro and supply conditions and provide updates as the year progresses. we'll continue to closely monitor macro and supply conditions and provide updates as the year progresses Now I will hand it over to Jerome to discuss financials in more detail. now i will hand it over to jerome to discuss financials in more detail

Speaker 4: Thank you, Sachin, and good morning, everyone. We delivered in Q1 a balanced set of financial results in what continues to be a dynamic operating environment. For the quarter, sales were $954 million, a 2% increase from the prior year. We continue to see strong growth with new product launches and benefit from solid commercial execution, partially offset by lower customer production and expected headwinds, including lower BMS sales with GM and the discontinuation of several car lines at Ford. Growth over market was 3%, in line with our full-year expectations of low double-digit outperformance. Adjusted EBITDA was $104 million, representing a margin of 10.9%. We indicated on the prior call we expected Q1 to be the low point for EBITDA, with improvement throughout the year as we make progress on customer recovery agreements and cost initiatives. Thank you, Sachin, and good morning, everyone. thank you sachin and good morning everyone We delivered in Q1 a balanced set of financial results in what continues to be a dynamic operating environment. we delivered in q1 a balanced set of financial results in what continues to be a dynamic operating environment For the quarter, sales were $954 million, a 2% increase from the prior year. for the quarter sales were $954 million a 2% increase from the prior year We continue to see strong growth with new product launches and benefit from solid commercial execution, partially offset by lower customer production and expected headwinds, including lower BMS sales with GM and the discontinuation of several car lines at Ford. we continue to see strong growth with new product launches and benefit from solid commercial execution partially offset by lower customer production and expected headwinds including lower bms sales with gm and the discontinuation of several car lines at ford Growth over market was 3%, in line with our full-year expectations of low double-digit outperformance. growth over market was 3% in line with our full-year expectations of low double-digit outperformance Adjusted EBITDA was $104 million, representing a margin of 10.9%. adjusted ebitda was $104 million representing a margin of 10.9% We indicated on the prior call we expected Q1 to be the low point for EBITDA, with improvement throughout the year as we make progress on customer recovery agreements and cost initiatives. we indicated on the prior call we expected q1 to be the low point for ebitda with improvement throughout the year as we make progress on customer recovery agreements and cost initiatives In the quarter, we were impacted by elevated semiconductor costs and the timing mismatch of customer recoveries. Adjusted free cash flow was negative in the quarter, primarily driven by an increase in working capital, particularly inventory, and a 2025 incentive compensation, which was paid in Q1. We continue to execute on our balanced capital allocation strategy, returning $40 million to shareholders with $30 million in share repurchases and $10 million in dividends. We ended the quarter with a strong balance sheet and net cash of $385 million, providing flexibility to deploy capital while navigating the current market environment. Turning to page 10. Sales for the quarter were $954 million, an increase of $20 million year over year. Customer production volumes were down 4%, while growth over market was 3% when excluding pricing and currency. In the quarter, we were impacted by elevated semiconductor costs and the timing mismatch of customer recoveries. in the quarter we were impacted by elevated semiconductor costs and the timing mismatch of customer recoveries Adjusted free cash flow was negative in the quarter, primarily driven by an increase in working capital, particularly inventory, and a 2025 incentive compensation, which was paid in Q1. We continue to execute on our balanced capital allocation strategy, returning $40 million to shareholders with $30 million in share repurchases and $10 million in dividends. adjusted free cash flow was negative in the quarter primarily driven by an increase in working capital particularly inventory and a 2025 incentive compensation which was paid in q1. we continue to execute on our balanced capital allocation strategy returning $40 million to shareholders with $30 million in share repurchases and $10 million in dividends We ended the quarter with a strong balance sheet and net cash of $385 million, providing flexibility to deploy capital while navigating the current market environment. we ended the quarter with a strong balance sheet and net cash of $385 million providing flexibility to deploy capital while navigating the current market environment Turning to page 10. turning to page 10 Sales for the quarter were $954 million, an increase of $20 million year over year. sales for the quarter were $954 million an increase of $20 million year over year Customer production volumes were down 4%, while growth over market was 3% when excluding pricing and currency. customer production volumes were down 4% while growth over market was 3% when excluding pricing and currency Compared to our internal expectations a couple of months ago, we benefited from higher customer volumes, better pricing dynamics, and additional benefits from EV program commercial settlements. As Sachin already provided details on customer volumes in the quarter, let me provide some additional color on pricing and EV commercial settlements and how they impacted both sales and EBITDA. First, pricing was a headwind of $5 million in the quarter, which was lower than what we typically see. As a reminder, pricing in this environment is influenced by several moving pieces. These include annual and discrete price changes with customers, the unwinding or maintaining of surcharges put in place during the prior semiconductor shortage, and more recently, customer recoveries related to memory cost increases. Compared to our internal expectations a couple of months ago, we benefited from higher customer volumes, better pricing dynamics, and additional benefits from EV program commercial settlements. compared to our internal expectations a couple of months ago we benefited from higher customer volumes better pricing dynamics and additional benefits from ev program commercial settlements As Sachin already provided details on customer volumes in the quarter, let me provide some additional color on pricing and EV commercial settlements and how they impacted both sales and EBITDA. as sachin already provided details on customer volumes in the quarter let me provide some additional color on pricing and ev commercial settlements and how they impacted both sales and ebitda First, pricing was a headwind of $5 million in the quarter, which was lower than what we typically see. first pricing was a headwind of $5 million in the quarter which was lower than what we typically see As a reminder, pricing in this environment is influenced by several moving pieces. as a reminder pricing in this environment is influenced by several moving pieces These include annual and discrete price changes with customers, the unwinding or maintaining of surcharges put in place during the prior semiconductor shortage, and more recently, customer recoveries related to memory cost increases. these include annual and discrete price changes with customers the unwinding or maintaining of surcharges put in place during the prior semiconductor shortage and more recently customer recoveries related to memory cost increases During the first quarter, we were able to mitigate a portion of the elevated semiconductor costs through short-term commercial pricing agreements while we continue to work towards longer-term recovery arrangements. We're making good progress on these longer-term agreements, and we expect that incremental costs will be offset by more permanent recoveries as we move throughout 2026, consistent with the assumptions embedded in our guidance. From an EBITDA perspective, the lower pricing we achieved with customers in the first quarter, combined with supplier cost reductions and value engineering activities, allowed us to partially mitigate the elevated cost from memory and resourcing actions. The net impact of these commercial activities was a headwind of just over $15 million. Second, the additional benefit to sales from one-time settlements, primarily related to EV programs, was approximately $20 million, while the EBITDA was approximately $10 million as we closed out supplier settlements as well. During the first quarter, we were able to mitigate a portion of the elevated semiconductor costs through short-term commercial pricing agreements while we continue to work towards longer-term recovery arrangements. during the first quarter we were able to mitigate a portion of the elevated semiconductor costs through short-term commercial pricing agreements while we continue to work towards longer-term recovery arrangements We're making good progress on these longer-term agreements, and we expect that incremental costs will be offset by more permanent recoveries as we move throughout 2026, consistent with the assumptions embedded in our guidance. we're making good progress on these longer-term agreements and we expect that incremental costs will be offset by more permanent recoveries as we move throughout 2026 consistent with the assumptions embedded in our guidance From an EBITDA perspective, the lower pricing we achieved with customers in the first quarter, combined with supplier cost reductions and value engineering activities, allowed us to partially mitigate the elevated cost from memory and resourcing actions. from an ebitda perspective the lower pricing we achieved with customers in the first quarter combined with supplier cost reductions and value engineering activities allowed us to partially mitigate the elevated cost from memory and resourcing actions The net impact of these commercial activities was a headwind of just over $15 million. the net impact of these commercial activities was a headwind of just over $15 million Second, the additional benefit to sales from one-time settlements, primarily related to EV programs, was approximately $20 million, while the EBITDA was approximately $10 million as we closed out supplier settlements as well. second the additional benefit to sales from one-time settlements primarily related to ev programs was approximately $20 million while the ebitda was approximately $10 million as we closed out supplier settlements as well As a reminder, our full-year guidance included $10 million of expected one-timers from program settlements, which was achieved in Q1. With this context, let me provide more color on our year-over-year Q1 EBITDA bridge. First, let me remind everyone that prior year results included approximately $15 million of one-time items, which impacts the year-over-year comparison. Second, as just mentioned, the negative impact from all commercial activities, including customer and supplier pricing, was a headwind of $15 million, which was partially offset by the benefit of EV settlements, as I also highlighted. The remaining year-over-year decline in EBITDA of approximately $5 million was driven by lower volume and favorable FX, and slightly higher freight and logistics, partially offset by ongoing cost initiatives, including vertical integration and engineering productivity. Turning to page 11. As a reminder, our full-year guidance included $10 million of expected one-timers from program settlements, which was achieved in Q1. as a reminder our full-year guidance included $10 million of expected one-timers from program settlements which was achieved in q1 With this context, let me provide more color on our year-over-year Q1 EBITDA bridge. with this context let me provide more color on our year-over-year q1 ebitda bridge First, let me remind everyone that prior year results included approximately $15 million of one-time items, which impacts the year-over-year comparison. first let me remind everyone that prior year results included approximately $15 million of one-time items which impacts the year-over-year comparison Second, as just mentioned, the negative impact from all commercial activities, including customer and supplier pricing, was a headwind of $15 million, which was partially offset by the benefit of EV settlements, as I also highlighted. second as just mentioned the negative impact from all commercial activities including customer and supplier pricing was a headwind of $15 million which was partially offset by the benefit of ev settlements as i also highlighted The remaining year-over-year decline in EBITDA of approximately $5 million was driven by lower volume and favorable FX, and slightly higher freight and logistics, partially offset by ongoing cost initiatives, including vertical integration and engineering productivity. the remaining year-over-year decline in ebitda of approximately $5 million was driven by lower volume and favorable fx and slightly higher freight and logistics partially offset by ongoing cost initiatives including vertical integration and engineering productivity Turning to page 11. turning to page 11 Adjusted free cash flow for the quarter was negative $23 million, reflecting the typical seasonality of our business, with Q1 generally being one of the lower quarters for cash flow. In 2026, this dynamic was more pronounced for a few reasons. First, EBITDA in the quarter was at the low point for the year, as expected. Second, we increased inventory levels during the quarter due to normal seasonality, inflation, and as a deliberate action to manage supply chain risk and market volatility. Third, the annual incentive compensation payout is in Q1, reflective of the strong performance last year and is reported in the line other changes. As it relates to the remainder of cash flow items, cash taxes were slightly lower year-over-year, primarily due to lower profitability in the quarter and timing of payments last year. Interest income continued to offset interest expense. Adjusted free cash flow for the quarter was negative $23 million, reflecting the typical seasonality of our business, with Q1 generally being one of the lower quarters for cash flow. adjusted free cash flow for the quarter was negative $23 million reflecting the typical seasonality of our business with q1 generally being one of the lower quarters for cash flow In 2026, this dynamic was more pronounced for a few reasons. in 2026 this dynamic was more pronounced for a few reasons First, EBITDA in the quarter was at the low point for the year, as expected. first ebitda in the quarter was at the low point for the year as expected Second, we increased inventory levels during the quarter due to normal seasonality, inflation, and as a deliberate action to manage supply chain risk and market volatility. second we increased inventory levels during the quarter due to normal seasonality inflation and as a deliberate action to manage supply chain risk and market volatility Third, the annual incentive compensation payout is in Q1, reflective of the strong performance last year and is reported in the line other changes. third the annual incentive compensation payout is in q1 reflective of the strong performance last year and is reported in the line other changes As it relates to the remainder of cash flow items, cash taxes were slightly lower year-over-year, primarily due to lower profitability in the quarter and timing of payments last year. as it relates to the remainder of cash flow items cash taxes were slightly lower year-over-year primarily due to lower profitability in the quarter and timing of payments last year Interest income continued to offset interest expense. interest income continued to offset interest expense Capital expenditures were in line with the prior year and continue to support new program launches. Turning to capital allocation, we deployed $40 million in the quarter through share repurchases and dividends. We ended the quarter with $385 million on net cash and expect to continue deploying capital in a disciplined and balanced manner. Turning to page 12. Turning to our outlook, we are reaffirming our full-year guidance across all key financial metrics as the strong start of the year will help us offset a softer-than-expected market setup in the second half of the year. Starting with sales, we continue to expect revenue in the range of $3.625-$3.825 billion, which represents a low single-digit growth over market. Capital expenditures were in line with the prior year and continue to support new program launches. capital expenditures were in line with the prior year and continue to support new program launches Turning to capital allocation, we deployed $40 million in the quarter through share repurchases and dividends. turning to capital allocation we deployed $40 million in the quarter through share repurchases and dividends We ended the quarter with $385 million on net cash and expect to continue deploying capital in a disciplined and balanced manner. we ended the quarter with $385 million on net cash and expect to continue deploying capital in a disciplined and balanced manner Turning to page 12. turning to page 12 Turning to our outlook, we are reaffirming our full-year guidance across all key financial metrics as the strong start of the year will help us offset a softer-than-expected market setup in the second half of the year. turning to our outlook we are reaffirming our full-year guidance across all key financial metrics as the strong start of the year will help us offset a softer-than-expected market setup in the second half of the year Starting with sales, we continue to expect revenue in the range of $3.625-$3.825 billion, which represents a low single-digit growth over market. starting with sales we continue to expect revenue in the range of $3.625-$3.825 billion which represents a low single-digit growth over market This reflects the strength of our product portfolio, strong customer demand in the first half of the year, and the continued ramp of recent launches despite the softer than anticipated second half production environment Sachin outlined. Moving to profitability, we continue to expect adjusted EBITDA in the range of $455 million-$495 million, which corresponds to a margin of approximately 12.8% at the midpoint. Compared to the first quarter, we expect margins to improve as the year progresses. This is primarily driven by higher customer recoveries as well as the continued impact of our cost initiatives, including product costing actions, vertical integration, engineering productivity, as well as resource rebalancing across our global footprints. On free cash flow, we continue to expect adjusted free cash flow in the range of $170 million-$210 million. That said, we're currently trending towards the lower end of this range. This reflects the strength of our product portfolio, strong customer demand in the first half of the year, and the continued ramp of recent launches despite the softer than anticipated second half production environment Sachin outlined. this reflects the strength of our product portfolio strong customer demand in the first half of the year and the continued ramp of recent launches despite the softer than anticipated second half production environment sachin outlined Moving to profitability, we continue to expect adjusted EBITDA in the range of $455 million-$495 million, which corresponds to a margin of approximately 12.8% at the midpoint. moving to profitability we continue to expect adjusted ebitda in the range of $455 million-$495 million which corresponds to a margin of approximately 12.8% at the midpoint Compared to the first quarter, we expect margins to improve as the year progresses. This is primarily driven by higher customer recoveries as well as the continued impact of our cost initiatives, including product costing actions, vertical integration, engineering productivity, as well as resource rebalancing across our global footprints. compared to the first quarter we expect margins to improve as the year progresses. this is primarily driven by higher customer recoveries as well as the continued impact of our cost initiatives including product costing actions vertical integration engineering productivity as well as resource rebalancing across our global footprints On free cash flow, we continue to expect adjusted free cash flow in the range of $170 million-$210 million. on free cash flow we continue to expect adjusted free cash flow in the range of $170 million-$210 million That said, we're currently trending towards the lower end of this range. that said we're currently trending towards the lower end of this range This reflects our plan to maintain higher levels of inventory as we proactively manage supply constraints, especially around certain semiconductor and memory components. Importantly, our strong balance sheet provides us with significant flexibility to navigate these dynamics. Maintaining financial strength continues to be a core pillar of our capital allocation philosophy, enabling us to invest in the business and return cash to shareholders while managing near-term volatility. We plan to provide a more comprehensive update on our longer-term capital allocation priorities at our upcoming Investor Day. Turning to page 13. Visteon continues to be a compelling long-term investment opportunity. We have spent the last couple of years rebuilding our growth algorithm while executing operationally and commercially throughout a dynamic environment. We remain confident in our long-term opportunity, and we look forward to sharing more with you at our upcoming Investor Day on June 25th in New York City. This reflects our plan to maintain higher levels of inventory as we proactively manage supply constraints, especially around certain semiconductor and memory components. this reflects our plan to maintain higher levels of inventory as we proactively manage supply constraints especially around certain semiconductor and memory components Importantly, our strong balance sheet provides us with significant flexibility to navigate these dynamics. importantly our strong balance sheet provides us with significant flexibility to navigate these dynamics Maintaining financial strength continues to be a core pillar of our capital allocation philosophy, enabling us to invest in the business and return cash to shareholders while managing near-term volatility. maintaining financial strength continues to be a core pillar of our capital allocation philosophy enabling us to invest in the business and return cash to shareholders while managing near-term volatility We plan to provide a more comprehensive update on our longer-term capital allocation priorities at our upcoming Investor Day. we plan to provide a more comprehensive update on our longer-term capital allocation priorities at our upcoming investor day Turning to page 13. turning to page 13 Visteon continues to be a compelling long-term investment opportunity. visteon continues to be a compelling long-term investment opportunity We have spent the last couple of years rebuilding our growth algorithm while executing operationally and commercially throughout a dynamic environment. we have spent the last couple of years rebuilding our growth algorithm while executing operationally and commercially throughout a dynamic environment We remain confident in our long-term opportunity, and we look forward to sharing more with you at our upcoming Investor Day on June 25th in New York City. we remain confident in our long-term opportunity and we look forward to sharing more with you at our upcoming investor day on june 25th in new york city Thank you for your time today. I would like now to open the call for your questions. Thank you for your time today. thank you for your time today I would like now to open the call for your questions. i would like now to open the call for your questions

Speaker 9: Your first question comes from Mark Delaney with Goldman Sachs. Your first question comes from Mark Delaney with Goldman Sachs. your first question comes from mark delaney with goldman sachs

Speaker 8: Yes. Good morning. Thank you for taking the question. I was hoping to start with a question on the demand and production environment. The company spoke in its prepared remarks about S&P lowering its forecast for 2026, driven by the Middle East conflict. Sachin, you said, though, at least for the first half, customer schedules have actually been solid, if not even a bit better than expected. Could you speak a bit more on what Visteon is seeing with respect to LVP? As you look into the second half, are you seeing any softening in your own customer conversations? And maybe clarify what you're trying to bake into guidance for the year and the 1H to 2H trajectory. Yes. yes Good morning. good morning Thank you for taking the question. thank you for taking the question I was hoping to start with a question on the demand and production environment. i was hoping to start with a question on the demand and production environment The company spoke in its prepared remarks about S&P lowering its forecast for 2026, driven by the Middle East conflict. the company spoke in its prepared remarks about s&p lowering its forecast for 2026 driven by the middle east conflict Sachin, you said, though, at least for the first half, customer schedules have actually been solid, if not even a bit better than expected. sachin you said though at least for the first half customer schedules have actually been solid if not even a bit better than expected Could you speak a bit more on what Visteon is seeing with respect to LVP? could you speak a bit more on what visteon is seeing with respect to lvp As you look into the second half, are you seeing any softening in your own customer conversations? as you look into the second half are you seeing any softening in your own customer conversations And maybe clarify what you're trying to bake into guidance for the year and the 1H to 2H trajectory. and maybe clarify what you're trying to bake into guidance for the year and the 1h to 2h trajectory

Speaker 4: Yeah. Thanks, Mark. It's Jerome. Let me answer that question. We are, as you heard, we're maintaining our full-year guidance for sales and as well for EBITDA. Let me give you a little bit of color by quarter. Q1 came in a little stronger than what we had anticipated. We were also positively impacted by some EV settlements, about $20 million. It's important to make sure that we don't annualize that $20 million. Q2, even with the Middle East conflict, we do have a pretty strong setup for Q2. We have good visibility on our orders, and I would say that Q2 looks similar to what we had in Q1 from an order standpoint. Pretty robust first half of the year. As far as the second half is concerned, we are using S&P. Yeah. yeah Thanks, Mark. thanks mark It's Jerome. it's jerome Let me answer that question. let me answer that question We are, as you heard, we're maintaining our full-year guidance for sales and as well for EBITDA. we are as you heard we're maintaining our full-year guidance for sales and as well for ebitda Let me give you a little bit of color by quarter. let me give you a little bit of color by quarter Q1 came in a little stronger than what we had anticipated. q1 came in a little stronger than what we had anticipated We were also positively impacted by some EV settlements, about $20 million. we were also positively impacted by some ev settlements about $20 million It's important to make sure that we don't annualize that $20 million. it's important to make sure that we don't annualize that $20 million Q2, even with the Middle East conflict, we do have a pretty strong setup for Q2. q2 even with the middle east conflict we do have a pretty strong setup for q2 We have good visibility on our orders, and I would say that Q2 looks similar to what we had in Q1 from an order standpoint. we have good visibility on our orders and i would say that q2 looks similar to what we had in q1 from an order standpoint Pretty robust first half of the year. pretty robust first half of the year As far as the second half is concerned, we are using S&P. as far as the second half is concerned we are using s&p S&P revised their numbers recently and dropped the second half of the year for us by approximately 2%. A softer setup as we go into the second half. We do have strong launches that are supposed to come in line in Q3 and Q4, mostly around Toyota as well as the HPC launches. Overall, a strong H1 with a little bit of a softer H2 than anticipated allows us to stay on guidance for the full year. I would say as well that we still have got a fairly large range this year on sales for the guidance, $100 million each way. It allows us to have some leeway as well, up and down versus the midpoint. S&P revised their numbers recently and dropped the second half of the year for us by approximately 2%. s&p revised their numbers recently and dropped the second half of the year for us by approximately 2% A softer setup as we go into the second half. a softer setup as we go into the second half We do have strong launches that are supposed to come in line in Q3 and Q4, mostly around Toyota as well as the HPC launches. we do have strong launches that are supposed to come in line in q3 and q4 mostly around toyota as well as the hpc launches Overall, a strong H1 with a little bit of a softer H2 than anticipated allows us to stay on guidance for the full year. overall a strong h1 with a little bit of a softer h2 than anticipated allows us to stay on guidance for the full year I would say as well that we still have got a fairly large range this year on sales for the guidance, $100 million each way. i would say as well that we still have got a fairly large range this year on sales for the guidance $100 million each way It allows us to have some leeway as well, up and down versus the midpoint. it allows us to have some leeway as well up and down versus the midpoint

Speaker 8: That's helpful, Jerome. Just to clarify, when you talk about the softening in 2H and basing it off of what S&P has projected, it doesn't sound like you've actually seen a change in your own customers' schedules. Is that correct? You're trying- That's helpful, Jerome. that's helpful jerome Just to clarify, when you talk about the softening in 2H and basing it off of what S&P has projected, it doesn't sound like you've actually seen a change in your own customers' schedules. just to clarify when you talk about the softening in 2h and basing it off of what s&p has projected it doesn't sound like you've actually seen a change in your own customers' schedules Is that correct? is that correct You're trying- you're trying-

Speaker 4: That is correct for Q2. That is correct for Q2. that is correct for q2

Speaker 8: To be somewhat conservative. To be somewhat conservative. to be somewhat conservative

Speaker 4: That is correct for Q2. Indeed, yes. We have normal visibility for the next three months. That is correct for Q2. that is correct for q2 Indeed, yes. indeed yes We have normal visibility for the next three months. we have normal visibility for the next three months

Speaker 8: Okay. My other question was just on memory. The company's guidance had assumed you'd substantially recover the increasing costs in your full year guidance. You spoke a bit around the progress you're making there in the first quarter, but maybe talk about how far along you are in securing those recoveries, and are you still expecting to substantially recover all of the higher semiconductor and memory costs for this year's guidance? Thanks. Okay. okay My other question was just on memory. my other question was just on memory The company's guidance had assumed you'd substantially recover the increasing costs in your full year guidance. the company's guidance had assumed you'd substantially recover the increasing costs in your full year guidance You spoke a bit around the progress you're making there in the first quarter, but maybe talk about how far along you are in securing those recoveries, and are you still expecting to substantially recover all of the higher semiconductor and memory costs for this year's guidance? you spoke a bit around the progress you're making there in the first quarter but maybe talk about how far along you are in securing those recoveries and are you still expecting to substantially recover all of the higher semiconductor and memory costs for this year's guidance Thanks. thanks

Speaker 4: That's a good point. Maybe before we even talk about recovery, we should probably talk about supply, because if supply is an issue, recovery is maybe an issue, which is not our case. Let me hand over to Sachin, and then I'll talk again about recoveries. That's a good point. that's a good point Maybe before we even talk about recovery, we should probably talk about supply, because if supply is an issue, recovery is maybe an issue, which is not our case. maybe before we even talk about recovery we should probably talk about supply because if supply is an issue recovery is maybe an issue which is not our case Let me hand over to Sachin, and then I'll talk again about recoveries. let me hand over to sachin and then i'll talk again about recoveries

Speaker 10: Thanks, Jerome. I think this is a point that we probably need to make sure that we express clearly the situation so we can understand what's happening with supply, which obviously has implications on our ability to recover as well. As you probably are aware, there are two factors that are really driving the supply situation. One is the higher than expected demand for memory, I should say, driven by AI, for data centers, for smartphones, et cetera. Very importantly, many of our traditional large memory suppliers are shifting away from the older tech nodes that have been used by automotive to newer tech nodes, which also reduces capacity for auto. This is what has created this imbalance between supply and demand, which has lowered availability of memory for industries like auto and others as well, by the way. Thanks, Jerome. thanks jerome I think this is a point that we probably need to make sure that we express clearly the situation so we can understand what's happening with supply, which obviously has implications on our ability to recover as well. i think this is a point that we probably need to make sure that we express clearly the situation so we can understand what's happening with supply which obviously has implications on our ability to recover as well As you probably are aware, there are two factors that are really driving the supply situation. as you probably are aware there are two factors that are really driving the supply situation One is the higher than expected demand for memory, I should say, driven by AI, for data centers, for smartphones, et cetera. one is the higher than expected demand for memory i should say driven by ai for data centers for smartphones et cetera Very importantly, many of our traditional large memory suppliers are shifting away from the older tech nodes that have been used by automotive to newer tech nodes, which also reduces capacity for auto. very importantly many of our traditional large memory suppliers are shifting away from the older tech nodes that have been used by automotive to newer tech nodes which also reduces capacity for auto This is what has created this imbalance between supply and demand, which has lowered availability of memory for industries like auto and others as well, by the way. this is what has created this imbalance between supply and demand which has lowered availability of memory for industries like auto and others as well by the way I think the impression all of us should have is that there's no segment of the industry that will get enough memory in the short term, and obviously that has resulted in higher prices. Now, as the smaller suppliers look at this environment, they see this as an opportunity to enter the market for autos, so smaller fabs in particular. We are working with some of them to bring them into our supply base, and in fact, have managed to secure some supply already for this year. About 10% of our total full-year demand this year, for the first time, will be met by some of these emerging suppliers. One more point that I would like to add is that unlike in the prior semiconductor crisis where the lead times for new capacity to come online was fairly long, 2+ years, in this case, with memories, it's shorter. I think the impression all of us should have is that there's no segment of the industry that will get enough memory in the short term, and obviously that has resulted in higher prices. i think the impression all of us should have is that there's no segment of the industry that will get enough memory in the short term and obviously that has resulted in higher prices Now, as the smaller suppliers look at this environment, they see this as an opportunity to enter the market for autos, so smaller fabs in particular. now as the smaller suppliers look at this environment they see this as an opportunity to enter the market for autos so smaller fabs in particular We are working with some of them to bring them into our supply base, and in fact, have managed to secure some supply already for this year. we are working with some of them to bring them into our supply base and in fact have managed to secure some supply already for this year About 10% of our total full-year demand this year, for the first time, will be met by some of these emerging suppliers. about 10% of our total full-year demand this year for the first time will be met by some of these emerging suppliers One more point that I would like to add is that unlike in the prior semiconductor crisis where the lead times for new capacity to come online was fairly long, 2+ years, in this case, with memories, it's shorter. one more point that i would like to add is that unlike in the prior semiconductor crisis where the lead times for new capacity to come online was fairly long 2+ years in this case with memories it's shorter If there's clean room space available, new capacity can come online in about a year. That's helpful, and so we believe with more suppliers coming in, this situation that we have right now will probably last perhaps into middle of next year, maybe towards the end of next year, and start to get better from there. That will also help in terms of drawing the prices down as more supply comes into the market. That's the situation we're dealing with. We have done, as a team, a very good job of ensuring that none of our customers are impacted in terms of their production for Q1, and we anticipate with all of the measures that we have in place, working closely with our current suppliers and the new ones, that we'll be able to mitigate the situation. If there's clean room space available, new capacity can come online in about a year. if there's clean room space available new capacity can come online in about a year That's helpful, and so we believe with more suppliers coming in, this situation that we have right now will probably last perhaps into middle of next year, maybe towards the end of next year, and start to get better from there. that's helpful and so we believe with more suppliers coming in this situation that we have right now will probably last perhaps into middle of next year maybe towards the end of next year and start to get better from there That will also help in terms of drawing the prices down as more supply comes into the market. that will also help in terms of drawing the prices down as more supply comes into the market That's the situation we're dealing with. that's the situation we're dealing with We have done, as a team, a very good job of ensuring that none of our customers are impacted in terms of their production for Q1, and we anticipate with all of the measures that we have in place, working closely with our current suppliers and the new ones, that we'll be able to mitigate the situation. we have done as a team a very good job of ensuring that none of our customers are impacted in terms of their production for q1 and we anticipate with all of the measures that we have in place working closely with our current suppliers and the new ones that we'll be able to mitigate the situation Although it's going to be tight, we should be in the position to meet the customer demand. Although it's going to be tight, we should be in the position to meet the customer demand. although it's going to be tight we should be in the position to meet the customer demand

Speaker 4: Then on the recovery, so maybe first on cost. Cost came in in line with expectation in Q1, slightly higher than $20 million, as we had indicated during our last call. In terms of progressing with customers in terms of negotiations, we've done pretty well so far. Let me give you a little bit more color than on the overall impact that all this had in Q1. In Q1, we've reported an outflow of $15 million on what we call our commercial items. It's the net between our supplier savings and what we give to our customers. Overall, we had anticipated we would have some level of leakage in Q1 as we were obviously working on long-term contracts. Then on the recovery, so maybe first on cost. then on the recovery so maybe first on cost Cost came in in line with expectation in Q1, slightly higher than $20 million, as we had indicated during our last call. cost came in in line with expectation in q1 slightly higher than $20 million as we had indicated during our last call In terms of progressing with customers in terms of negotiations, we've done pretty well so far. in terms of progressing with customers in terms of negotiations we've done pretty well so far Let me give you a little bit more color than on the overall impact that all this had in Q1. let me give you a little bit more color than on the overall impact that all this had in q1 In Q1, we've reported an outflow of $15 million on what we call our commercial items. in q1 we've reported an outflow of $15 million on what we call our commercial items It's the net between our supplier savings and what we give to our customers. it's the net between our supplier savings and what we give to our customers Overall, we had anticipated we would have some level of leakage in Q1 as we were obviously working on long-term contracts. overall we had anticipated we would have some level of leakage in q1 as we were obviously working on long-term contracts What we did, just for Q1, was executing very short-term commercial agreements with some of our customers, and that helped us mitigate some of these additional costs that we got, $20 million, as I just said. Overall progression is going on well with negotiations, and we are expecting most of the negotiation to be closed by end of Q2. We'll see as a result of that, some level of catch-up in the second quarter. We are expecting our commercial business equation to be neutral in the second quarter as some of the improvements that we have with our regular suppliers come online. Overall, for the full year, we're maintaining our guidance in terms of recovery, and we are still expecting to have some level of leakage, largely because of the timing issues that we'll have for the full year. What we did, just for Q1, was executing very short-term commercial agreements with some of our customers, and that helped us mitigate some of these additional costs that we got, $20 million, as I just said. what we did just for q1 was executing very short-term commercial agreements with some of our customers and that helped us mitigate some of these additional costs that we got $20 million as i just said Overall progression is going on well with negotiations, and we are expecting most of the negotiation to be closed by end of Q2. overall progression is going on well with negotiations and we are expecting most of the negotiation to be closed by end of q2 We'll see as a result of that, some level of catch-up in the second quarter. we'll see as a result of that some level of catch-up in the second quarter We are expecting our commercial business equation to be neutral in the second quarter as some of the improvements that we have with our regular suppliers come online. we are expecting our commercial business equation to be neutral in the second quarter as some of the improvements that we have with our regular suppliers come online Overall, for the full year, we're maintaining our guidance in terms of recovery, and we are still expecting to have some level of leakage, largely because of the timing issues that we'll have for the full year. overall for the full year we're maintaining our guidance in terms of recovery and we are still expecting to have some level of leakage largely because of the timing issues that we'll have for the full year

Speaker 8: Thank you. Thank you. thank you

Speaker 9: Your next question comes from Colin Langan with Wells Fargo. Your next question comes from Colin Langan with Wells Fargo. your next question comes from colin langan with wells fargo

Speaker 1: Oh, great. Thanks for taking my questions. Just to follow up on this issue. You have over $20 million in costs, but you had $15 million of recoveries. You got something close to 75% recoveries already, and then you expect to have that caught up in Q2. Does that mean we get a little additional boost already in Q2 from recovery timing? Oh, great. oh great Thanks for taking my questions. thanks for taking my questions Just to follow up on this issue. just to follow up on this issue You have over $20 million in costs, but you had $15 million of recoveries. you have over $20 million in costs but you had $15 million of recoveries You got something close to 75% recoveries already, and then you expect to have that caught up in Q2. you got something close to 75% recoveries already and then you expect to have that caught up in q2 Does that mean we get a little additional boost already in Q2 from recovery timing? does that mean we get a little additional boost already in q2 from recovery timing

Speaker 4: Yes, Colin, that's Jerome. Correct. We've had this $15 million leakage, and we like to combine essentially what we're giving to customers versus what we're getting from suppliers, in some cases, increases, obviously. We look at this holistically with negotiating, I would say, with customers, the full pricing package with them. That includes not only the annual price reduction, it includes as well the legacy recoveries from prior chip shortages, as well as now the new memory cost increases that we're passing on to customers. We are expecting this leakage of $15 million to be neutral in the second half of the year and then slightly improve as we go in Q3 and Q4 so that we have a minimal leakage for the full year, as I indicated, and per our guidance. Yes, Colin, that's Jerome. yes colin that's jerome Correct. correct We've had this $15 million leakage, and we like to combine essentially what we're giving to customers versus what we're getting from suppliers, in some cases, increases, obviously. we've had this $15 million leakage and we like to combine essentially what we're giving to customers versus what we're getting from suppliers in some cases increases obviously We look at this holistically with negotiating, I would say, with customers, the full pricing package with them. we look at this holistically with negotiating i would say with customers the full pricing package with them That includes not only the annual price reduction, it includes as well the legacy recoveries from prior chip shortages, as well as now the new memory cost increases that we're passing on to customers. that includes not only the annual price reduction it includes as well the legacy recoveries from prior chip shortages as well as now the new memory cost increases that we're passing on to customers We are expecting this leakage of $15 million to be neutral in the second half of the year and then slightly improve as we go in Q3 and Q4 so that we have a minimal leakage for the full year, as I indicated, and per our guidance. we are expecting this leakage of $15 million to be neutral in the second half of the year and then slightly improve as we go in q3 and q4 so that we have a minimal leakage for the full year as i indicated and per our guidance

Speaker 1: Okay. I think I actually had that wrong. You have about a third is recovered in the quarter, but does that all jump back? Does that 15 become a positive in Q2? Sorry. Okay. okay I think I actually had that wrong. i think i actually had that wrong You have about a third is recovered in the quarter, but does that all jump back? you have about a third is recovered in the quarter but does that all jump back Does that 15 become a positive in Q2? does that 15 become a positive in q2 Sorry. sorry

Speaker 4: It does, yes. It does, absolutely. It does become positive in Q2, and it will improve even slightly better. It will improve slightly in Q3 and Q4, for a slight negative for the full year. It does, yes. it does yes It does, absolutely. it does absolutely It does become positive in Q2, and it will improve even slightly better. it does become positive in q2 and it will improve even slightly better It will improve slightly in Q3 and Q4, for a slight negative for the full year. it will improve slightly in q3 and q4 for a slight negative for the full year

Speaker 1: Got it. The guide for the year is low single digit growth over market. You made it abundantly clear that the first half was going to be really tough with roll-offs and the BMS, but you still did 3% in Q1. Is mid-single now more likely as we go through the year, given you have highlighted pretty strong second half launches? Got it. got it The guide for the year is low single digit growth over market. the guide for the year is low single digit growth over market You made it abundantly clear that the first half was going to be really tough with roll-offs and the BMS, but you still did 3% in Q1. you made it abundantly clear that the first half was going to be really tough with roll-offs and the bms but you still did 3% in q1 Is mid-single now more likely as we go through the year, given you have highlighted pretty strong second half launches? is mid-single now more likely as we go through the year given you have highlighted pretty strong second half launches

Speaker 4: Yes. I would say Q1 came in pretty close to our expectations. We had not given guidance per quarter, so 3% was generally in line with the low single digit for the full year. We're expecting to hold that performance pretty much throughout the year. We're expecting all regions to perform pretty well, maybe with the exception of the Americas, largely because of the BMS situation. Overall, a pretty consistent growth over market throughout the year. Yes. yes I would say Q1 came in pretty close to our expectations. i would say q1 came in pretty close to our expectations We had not given guidance per quarter, so 3% was generally in line with the low single digit for the full year. we had not given guidance per quarter so 3% was generally in line with the low single digit for the full year We're expecting to hold that performance pretty much throughout the year. we're expecting to hold that performance pretty much throughout the year We're expecting all regions to perform pretty well, maybe with the exception of the Americas, largely because of the BMS situation. we're expecting all regions to perform pretty well maybe with the exception of the americas largely because of the bms situation Overall, a pretty consistent growth over market throughout the year. overall a pretty consistent growth over market throughout the year

Speaker 1: Okay. All right. Thanks for taking my questions. Okay. okay All right. all right Thanks for taking my questions. thanks for taking my questions

Speaker 9: Your next question comes from Emmanuel Rosner with Wolfe Research. Your next question comes from Emmanuel Rosner with Wolfe Research. your next question comes from emmanuel rosner with wolfe research

Speaker 3: Great. Thank you so much. I appreciate all the color on the memory supply and discussion and trying to de-risk the outlook. Just curious, as we sort of start looking into next year and you speak to OEMs about trying to mitigate the risk of disruptions, are there any conversations around potential de-contenting or using essentially less memory or solutions that use less of it? I'm also curious on the pricing side or the recovery side, the nature of the longer term agreements that you're working on with the OEMs, would those essentially allow ongoing passthrough even into next year if the DRAM costs keep rising? Great. great Thank you so much. thank you so much I appreciate all the color on the memory supply and discussion and trying to de-risk the outlook. i appreciate all the color on the memory supply and discussion and trying to de-risk the outlook Just curious, as we sort of start looking into next year and you speak to OEMs about trying to mitigate the risk of disruptions, are there any conversations around potential de-contenting or using essentially less memory or solutions that use less of it? just curious as we sort of start looking into next year and you speak to oems about trying to mitigate the risk of disruptions are there any conversations around potential de-contenting or using essentially less memory or solutions that use less of it I'm also curious on the pricing side or the recovery side, the nature of the longer term agreements that you're working on with the OEMs, would those essentially allow ongoing passthrough even into next year if the DRAM costs keep rising? i'm also curious on the pricing side or the recovery side the nature of the longer term agreements that you're working on with the oems would those essentially allow ongoing passthrough even into next year if the dram costs keep rising

Speaker 10: Yeah. Let me take that, Emmanuel. On the first topic, we are not actually seeing any interest in de-contenting. The discussions have been mostly around how do we secure enough supply for 2027. Now, as you can imagine, most of the time thus far has been gone into securing supply for this year, and there's still a lot of activity, as I've just mentioned on my previous comment. As we start to think about 2027, we are working with all of our suppliers, the ones traditional suppliers, plus the new ones that we are bringing online. As I mentioned, I think the supply next year will largely depend on our ability to secure enough quantity of parts from these newer suppliers that are emerging, largely because of the fact that many of the existing larger suppliers to automotive are shifting their technologies to newer technologies. Yeah. yeah Let me take that, Emmanuel. let me take that emmanuel On the first topic, we are not actually seeing any interest in de-contenting. on the first topic we are not actually seeing any interest in de-contenting The discussions have been mostly around how do we secure enough supply for 2027. the discussions have been mostly around how do we secure enough supply for 2027 Now, as you can imagine, most of the time thus far has been gone into securing supply for this year, and there's still a lot of activity, as I've just mentioned on my previous comment. now as you can imagine most of the time thus far has been gone into securing supply for this year and there's still a lot of activity as i've just mentioned on my previous comment As we start to think about 2027, we are working with all of our suppliers, the ones traditional suppliers, plus the new ones that we are bringing online. as we start to think about 2027 we are working with all of our suppliers the ones traditional suppliers plus the new ones that we are bringing online As I mentioned, I think the supply next year will largely depend on our ability to secure enough quantity of parts from these newer suppliers that are emerging, largely because of the fact that many of the existing larger suppliers to automotive are shifting their technologies to newer technologies. as i mentioned i think the supply next year will largely depend on our ability to secure enough quantity of parts from these newer suppliers that are emerging largely because of the fact that many of the existing larger suppliers to automotive are shifting their technologies to newer technologies That dynamic has to be managed first and foremost, and that's what we are focused on. We expect that over the course of this year and maybe towards Q3, we should be in a position to have our supply secured for next year. In terms of pricing negotiations that we are currently having, I think they are kind of different by different customers. Some of them are signing up for a multi-year pricing agreement, so it's going into the piece price, essentially, and some are preferring to have annual pricing negotiations. It will depend on each customer in terms of how they address it. That dynamic has to be managed first and foremost, and that's what we are focused on. that dynamic has to be managed first and foremost and that's what we are focused on We expect that over the course of this year and maybe towards Q3, we should be in a position to have our supply secured for next year. we expect that over the course of this year and maybe towards q3 we should be in a position to have our supply secured for next year In terms of pricing negotiations that we are currently having, I think they are kind of different by different customers. in terms of pricing negotiations that we are currently having i think they are kind of different by different customers Some of them are signing up for a multi-year pricing agreement, so it's going into the piece price, essentially, and some are preferring to have annual pricing negotiations. some of them are signing up for a multi-year pricing agreement so it's going into the piece price essentially and some are preferring to have annual pricing negotiations It will depend on each customer in terms of how they address it. it will depend on each customer in terms of how they address it

Speaker 3: Understood. Can you talk a little bit more about the expected ramp-up in launches in the second half? Understood. understood Can you talk a little bit more about the expected ramp-up in launches in the second half? can you talk a little bit more about the expected ramp-up in launches in the second half

Speaker 10: Yeah Yeah yeah

Speaker 3: ... the growth of a market holding on, but how should we think about this in relation to your comments about, or I guess, S&P's outlook about weaker volume is? Do you have a good sense that this should not really affect ramp curves? ... the growth of a market holding on, but how should we think about this in relation to your comments about, or I guess, S&P's outlook about weaker volume is? the growth of a market holding on but how should we think about this in relation to your comments about or i guess s&p's outlook about weaker volume is Do you have a good sense that this should not really affect ramp curves? do you have a good sense that this should not really affect ramp curves

Speaker 10: Yeah. I think so because this was also evident in Q1. A lot of our performance was driven by new launches, not so much the underlying vehicle production environment of the car makers. A lot of our launches this year are the high-value ones, are in the second half, and in fact, they're ramping up in Q4. In terms of the total number of launches, this year looks a lot like last year. I would say even a few more launches this year than last year. There are some that are very consequential, especially the ones with Toyota and the HPC launches that we spent quite a bit of time on in our prepared remarks. Yeah. yeah I think so because this was also evident in Q1. i think so because this was also evident in q1 A lot of our performance was driven by new launches, not so much the underlying vehicle production environment of the car makers. a lot of our performance was driven by new launches not so much the underlying vehicle production environment of the car makers A lot of our launches this year are the high-value ones, are in the second half, and in fact, they're ramping up in Q4. a lot of our launches this year are the high-value ones are in the second half and in fact they're ramping up in q4 In terms of the total number of launches, this year looks a lot like last year. in terms of the total number of launches this year looks a lot like last year I would say even a few more launches this year than last year. i would say even a few more launches this year than last year There are some that are very consequential, especially the ones with Toyota and the HPC launches that we spent quite a bit of time on in our prepared remarks. there are some that are very consequential especially the ones with toyota and the hpc launches that we spent quite a bit of time on in our prepared remarks Those are pretty high value, although their real ramp-up begins in Q4, so contribution this year is still relatively small but meaningful, and this is what is helping us offset what we have seen thus far as the reduction in vehicle production. I do believe, if the environment hopefully stabilizes, especially in the Middle East, that if we go forward from here, there may be a potential benefit to us if the underlying vehicle production holds up. At this point in time, it's too early to say whether this growth over market will improve from here, but it's been a really good start to the year. Q2 looks pretty strong, and so the second half, considering where we're at the beginning of the year, we'll have to wait and see as we proceed here how that develops. Those are pretty high value, although their real ramp-up begins in Q4, so contribution this year is still relatively small but meaningful, and this is what is helping us offset what we have seen thus far as the reduction in vehicle production. those are pretty high value although their real ramp-up begins in q4 so contribution this year is still relatively small but meaningful and this is what is helping us offset what we have seen thus far as the reduction in vehicle production I do believe, if the environment hopefully stabilizes, especially in the Middle East, that if we go forward from here, there may be a potential benefit to us if the underlying vehicle production holds up. i do believe if the environment hopefully stabilizes especially in the middle east that if we go forward from here there may be a potential benefit to us if the underlying vehicle production holds up At this point in time, it's too early to say whether this growth over market will improve from here, but it's been a really good start to the year. at this point in time it's too early to say whether this growth over market will improve from here but it's been a really good start to the year Q2 looks pretty strong, and so the second half, considering where we're at the beginning of the year, we'll have to wait and see as we proceed here how that develops. q2 looks pretty strong and so the second half considering where we're at the beginning of the year we'll have to wait and see as we proceed here how that develops

Speaker 3: Perfect. Thank you. Perfect. perfect Thank you. thank you

Speaker 9: Your next question comes from the line of Winnie Dong with Deutsche Bank. Your next question comes from the line of Winnie Dong with Deutsche Bank. your next question comes from the line of winnie dong with deutsche bank

Speaker 12: Hi. Thanks so much for taking my question. My first one is on the new business win of $1 billion for the quarter. For context, would you mind giving us some, I guess, color on whether this is a typical seasonality, or whether you're seeing any sort of pushout or positioning in terms of wins? Secondly, in terms of the growth drivers in 2027 and beyond, perhaps you can tease your investor day in June a little bit and outline some big buckets of drivers there that we can look forward to. Thank you. Hi. hi Thanks so much for taking my question. thanks so much for taking my question My first one is on the new business win of $1 billion for the quarter. my first one is on the new business win of $1 billion for the quarter For context, would you mind giving us some, I guess, color on whether this is a typical seasonality, or whether you're seeing any sort of pushout or positioning in terms of wins? for context would you mind giving us some i guess color on whether this is a typical seasonality or whether you're seeing any sort of pushout or positioning in terms of wins Secondly, in terms of the growth drivers in 2027 and beyond, perhaps you can tease your investor day in June a little bit and outline some big buckets of drivers there that we can look forward to. secondly in terms of the growth drivers in 2027 and beyond perhaps you can tease your investor day in june a little bit and outline some big buckets of drivers there that we can look forward to Thank you. thank you

Speaker 10: Yeah. The first quarter was expected to be a little lighter given that we had a fairly strong finish to last year. We also had, as I mentioned, a few display opportunities that got pushed out into Q2, about $300 million-$400 million worth. I would say even with that, it might be considered a little light, but pretty, I would say normal for first quarter in terms of seasonality of new business wins. Now, if you look at the pipeline for the remainder of the year, I would say again, much like the new product launches, new business wins also look very similar to 2025 in aggregate, but the mix is different. The product mix and the regional mix are both different. Yeah. yeah The first quarter was expected to be a little lighter given that we had a fairly strong finish to last year. the first quarter was expected to be a little lighter given that we had a fairly strong finish to last year We also had, as I mentioned, a few display opportunities that got pushed out into Q2, about $300 million-$400 million worth. we also had as i mentioned a few display opportunities that got pushed out into q2 about $300 million-$400 million worth I would say even with that, it might be considered a little light, but pretty, I would say normal for first quarter in terms of seasonality of new business wins. i would say even with that it might be considered a little light but pretty i would say normal for first quarter in terms of seasonality of new business wins Now, if you look at the pipeline for the remainder of the year, I would say again, much like the new product launches, new business wins also look very similar to 2025 in aggregate, but the mix is different. now if you look at the pipeline for the remainder of the year i would say again much like the new product launches new business wins also look very similar to 2025 in aggregate but the mix is different The product mix and the regional mix are both different. the product mix and the regional mix are both different In 2025, we had, I would say, even number and value of wins for displays in cockpit electronics. This year we are seeing more of opportunities for cockpit electronics and also more in Asia. The display opportunities this year are more evenly spread between Europe as well as Americas. Overall, we are pretty pleased with what we see as new business opportunities in this environment, and we expect this year to look similar to last year in total in terms of the value of new business wins. In 2025, we had, I would say, even number and value of wins for displays in cockpit electronics. in 2025 we had i would say even number and value of wins for displays in cockpit electronics This year we are seeing more of opportunities for cockpit electronics and also more in Asia. this year we are seeing more of opportunities for cockpit electronics and also more in asia The display opportunities this year are more evenly spread between Europe as well as Americas. the display opportunities this year are more evenly spread between europe as well as americas Overall, we are pretty pleased with what we see as new business opportunities in this environment, and we expect this year to look similar to last year in total in terms of the value of new business wins. overall we are pretty pleased with what we see as new business opportunities in this environment and we expect this year to look similar to last year in total in terms of the value of new business wins To your second question, we do want to leave something for our investor day to share with you, but I think that the main drivers that you are referring to there are going to be the new products that we have won and that we are launching, that we have been discussing quite a bit in our earnings calls over the last few quarters. Displays obviously will have a very big role to play in our growth given the high wins that we've had in the last few quarters, which will be coming into production here very soon. HPC, simply because of the very high content value, will also have a very meaningful impact. The other growth drivers that we have talked about, Toyota as targeted customers, and then two-wheelers and commercial vehicles. To your second question, we do want to leave something for our investor day to share with you, but I think that the main drivers that you are referring to there are going to be the new products that we have won and that we are launching, that we have been discussing quite a bit in our earnings calls over the last few quarters. to your second question we do want to leave something for our investor day to share with you but i think that the main drivers that you are referring to there are going to be the new products that we have won and that we are launching that we have been discussing quite a bit in our earnings calls over the last few quarters Displays obviously will have a very big role to play in our growth given the high wins that we've had in the last few quarters, which will be coming into production here very soon. displays obviously will have a very big role to play in our growth given the high wins that we've had in the last few quarters which will be coming into production here very soon HPC, simply because of the very high content value, will also have a very meaningful impact. hpc simply because of the very high content value will also have a very meaningful impact The other growth drivers that we have talked about, Toyota as targeted customers, and then two-wheelers and commercial vehicles. the other growth drivers that we have talked about toyota as targeted customers and then two-wheelers and commercial vehicles What's interesting about our growth profile here is that we are not relying on just one or two things for us to be able to make our numbers. We have a number of things that are in play that are all growing. We have a lot more of confidence that we will be able to achieve that given the diversification that we have. What's interesting about our growth profile here is that we are not relying on just one or two things for us to be able to make our numbers. what's interesting about our growth profile here is that we are not relying on just one or two things for us to be able to make our numbers We have a number of things that are in play that are all growing. we have a number of things that are in play that are all growing We have a lot more of confidence that we will be able to achieve that given the diversification that we have. we have a lot more of confidence that we will be able to achieve that given the diversification that we have

Speaker 12: Thank you so much for the color. Thanks. Thank you so much for the color. thank you so much for the color Thanks. thanks

Speaker 9: Your next question comes from Joe Spak with UBS. Your next question comes from Joe Spak with UBS. your next question comes from joe spak with ubs

Speaker 5: Thanks, everyone. Sachin, sorry to go back to memory, but just one more point on this. My understanding is some of that additional supply that's coming online is from China. I just want to make sure your customers are okay with that. I thought I heard you mention that you already secured about 10% of this year's supply from these new sources. Why would it not be at least at that level or if not better for next year? Thanks, everyone. thanks everyone Sachin, sorry to go back to memory, but just one more point on this. sachin sorry to go back to memory but just one more point on this My understanding is some of that additional supply that's coming online is from China. my understanding is some of that additional supply that's coming online is from china I just want to make sure your customers are okay with that. i just want to make sure your customers are okay with that I thought I heard you mention that you already secured about 10% of this year's supply from these new sources. i thought i heard you mention that you already secured about 10% of this year's supply from these new sources Why would it not be at least at that level or if not better for next year? why would it not be at least at that level or if not better for next year

Speaker 10: Yeah. To answer your second question first, absolutely. We don't see that it should not be better than that. We absolutely expect it to be better and the question is by how much and to what extent. To give you some sense of the number of different memory chips that we buy, we buy about, I would say about 60 different types of chips that go into the DRAM category. Then there are also NAND flash, eMMC and UFS as well as NOR. Not to confuse you, but just the point is that there are many different types of memories in different densities that we need. Typically, very few of these suppliers are able to offer you all of the parts that you need. Yeah. yeah To answer your second question first, absolutely. to answer your second question first absolutely We don't see that it should not be better than that. we don't see that it should not be better than that We absolutely expect it to be better and the question is by how much and to what extent. we absolutely expect it to be better and the question is by how much and to what extent To give you some sense of the number of different memory chips that we buy, we buy about, I would say about 60 different types of chips that go into the DRAM category. to give you some sense of the number of different memory chips that we buy we buy about i would say about 60 different types of chips that go into the dram category Then there are also NAND flash, eMMC and UFS as well as NOR. then there are also nand flash emmc and ufs as well as nor Not to confuse you, but just the point is that there are many different types of memories in different densities that we need. not to confuse you but just the point is that there are many different types of memories in different densities that we need Typically, very few of these suppliers are able to offer you all of the parts that you need. typically very few of these suppliers are able to offer you all of the parts that you need We have to have a mix of suppliers that tend to have their strengths in specific categories, and that's the sort of process that we have been going through, identifying these suppliers, building relationships, and starting supply so that we can test their parts, qualify them, and then introduce them in our customers' production. That's the current situation with supply. I believe that, going back to your first part of the question, do you mind repeating your first part? We have to have a mix of suppliers that tend to have their strengths in specific categories, and that's the sort of process that we have been going through, identifying these suppliers, building relationships, and starting supply so that we can test their parts, qualify them, and then introduce them in our customers' production. we have to have a mix of suppliers that tend to have their strengths in specific categories and that's the sort of process that we have been going through identifying these suppliers building relationships and starting supply so that we can test their parts qualify them and then introduce them in our customers' production That's the current situation with supply. that's the current situation with supply I believe that, going back to your first part of the question, do you mind repeating your first part? i believe that going back to your first part of the question do you mind repeating your first part

Speaker 5: Just if customers are okay with some of the new sources coming online from China and other places. Just if customers are okay with some of the new sources coming online from China and other places. just if customers are okay with some of the new sources coming online from china and other places

Speaker 10: In this environment where there is shortage of parts, there's absolutely no problem with that. The first thing is to make sure that we have the production secured. Obviously, they would like it to be non-China based if there is availability, but in this environment, we do not see that as a problem. In this environment where there is shortage of parts, there's absolutely no problem with that. in this environment where there is shortage of parts, there's absolutely no problem with that The first thing is to make sure that we have the production secured. the first thing is to make sure that we have the production secured Obviously, they would like it to be non-China based if there is availability, but in this environment, we do not see that as a problem. obviously they would like it to be non-china based if there is availability but in this environment we do not see that as a problem

Speaker 5: Okay. I guess the second question, Jerome, just on capital allocation. I know you said more details on the long-term plan at the Analyst Day. You did buy back $30 million this quarter. I think that means you've got $45 million left on authorization. I know you said last quarter you could do about $100 million, and you also earmarked about $300 million for M&A. I guess I'm just wondering if there's any sort of change to that thinking, with some of the comments you made about free cash flow or the pipeline or even really the current share price and could we expect an increase in authorization? Because it does seem like you're coming to the end there. Okay. okay I guess the second question, Jerome, just on capital allocation. i guess the second question jerome just on capital allocation I know you said more details on the long-term plan at the Analyst Day. i know you said more details on the long-term plan at the analyst day You did buy back $30 million this quarter. you did buy back $30 million this quarter I think that means you've got $45 million left on authorization. i think that means you've got $45 million left on authorization I know you said last quarter you could do about $100 million, and you also earmarked about $300 million for M&A. i know you said last quarter you could do about $100 million and you also earmarked about $300 million for m&a I guess I'm just wondering if there's any sort of change to that thinking, with some of the comments you made about free cash flow or the pipeline or even really the current share price and could we expect an increase in authorization? i guess i'm just wondering if there's any sort of change to that thinking with some of the comments you made about free cash flow or the pipeline or even really the current share price and could we expect an increase in authorization Because it does seem like you're coming to the end there. because it does seem like you're coming to the end there

Speaker 4: Right. Generally, no, nothing has changed. We had highlighted that it was up to $300 million for M&A, up to $150 million for share repurchases. With the cash balance that we have at the end of Q1, even with potentially tracking towards the low end of the range for adjusted free cash flow for this year, we could still do everything. We're still very focused on M&A, and we'll continue as well to return, in an opportunistic manner, cash to shareholders with share repurchases as well as continue on our dividends. Overall, nothing has fundamentally changed in terms of our philosophy. Right. right Generally, no, nothing has changed. generally no nothing has changed We had highlighted that it was up to $300 million for M&A, up to $150 million for share repurchases. we had highlighted that it was up to $300 million for m&a up to $150 million for share repurchases With the cash balance that we have at the end of Q1, even with potentially tracking towards the low end of the range for adjusted free cash flow for this year, we could still do everything. with the cash balance that we have at the end of q1 even with potentially tracking towards the low end of the range for adjusted free cash flow for this year we could still do everything We're still very focused on M&A, and we'll continue as well to return, in an opportunistic manner, cash to shareholders with share repurchases as well as continue on our dividends. we're still very focused on m&a and we'll continue as well to return in an opportunistic manner cash to shareholders with share repurchases as well as continue on our dividends Overall, nothing has fundamentally changed in terms of our philosophy. overall nothing has fundamentally changed in terms of our philosophy

Speaker 5: Okay. Thank you. Okay. okay Thank you. thank you

Speaker 9: Your next question is from Dan Levy with Barclays. Your next question is from Dan Levy with Barclays. your next question is from dan levy with barclays

Speaker 2: Hi. Good morning. Thanks for taking the question. I wanted to just first double-click on the growth dynamics. We saw negative growth in China in the first quarter. Maybe you could just unpack some of the mix dynamics where I would've assumed that with the lower end of the market underperforming, the higher end outperforming, that would've helped you. Is the view that you can still get that positive growth for the full year with the launches in 2H enough to sort of bring you up to the positive growth? Hi. hi Good morning. good morning Thanks for taking the question. I wanted to just first double-click on the growth dynamics. thanks for taking the question. i wanted to just first double-click on the growth dynamics We saw negative growth in China in the first quarter. we saw negative growth in china in the first quarter Maybe you could just unpack some of the mix dynamics where I would've assumed that with the lower end of the market underperforming, the higher end outperforming, that would've helped you. maybe you could just unpack some of the mix dynamics where i would've assumed that with the lower end of the market underperforming the higher end outperforming that would've helped you Is the view that you can still get that positive growth for the full year with the launches in 2H enough to sort of bring you up to the positive growth? is the view that you can still get that positive growth for the full year with the launches in 2h enough to sort of bring you up to the positive growth

Speaker 10: Yeah. Let me take that. If you see what has happened in China, as you mentioned, lower growth in vehicle production in the more price-sensitive segments and I would say a better performance, but not necessarily a lot of growth in the upper end of the market. That is certainly more helpful to us. I do want to also mention at the same time, there is the headwind of the market share loss of the global OEMs that is still ongoing. It's not all good news, necessarily. The new launches, so far, have been largely offsetting what we saw as declines with our traditional global OEMs. Therefore, for Q1, it was kind of even in terms of our performance and vehicle production. Yeah. yeah Let me take that. let me take that If you see what has happened in China, as you mentioned, lower growth in vehicle production in the more price-sensitive segments and I would say a better performance, but not necessarily a lot of growth in the upper end of the market. if you see what has happened in china as you mentioned lower growth in vehicle production in the more price-sensitive segments and i would say a better performance but not necessarily a lot of growth in the upper end of the market That is certainly more helpful to us. that is certainly more helpful to us I do want to also mention at the same time, there is the headwind of the market share loss of the global OEMs that is still ongoing. i do want to also mention at the same time there is the headwind of the market share loss of the global oems that is still ongoing It's not all good news, necessarily. it's not all good news necessarily The new launches, so far, have been largely offsetting what we saw as declines with our traditional global OEMs. the new launches so far have been largely offsetting what we saw as declines with our traditional global oems Therefore, for Q1, it was kind of even in terms of our performance and vehicle production. therefore for q1 it was kind of even in terms of our performance and vehicle production As we go forward, especially with the HPC launches, I believe we will start to see growth relative to production in China, and that will continue and have more of a step function next year as those launches get into a production ramp-up. As we go forward, especially with the HPC launches, I believe we will start to see growth relative to production in China, and that will continue and have more of a step function next year as those launches get into a production ramp-up. as we go forward especially with the hpc launches i believe we will start to see growth relative to production in china and that will continue and have more of a step function next year as those launches get into a production ramp-up

Speaker 2: Okay, great. Thank you. As a follow-up, sorry, I know we keep on getting questions on the DRAM here. On a longer-term basis, is there any ability for you to transition your products to be using DDR5 to address some of the supply issues? Is your point that these newer Chinese suppliers are going to be more than enough to offset some of the large suppliers that are eventually phasing out DDR4, and so longer term, this issue will be addressed by these other smaller suppliers? Okay, great. okay great Thank you. thank you As a follow-up, sorry, I know we keep on getting questions on the DRAM here. as a follow-up sorry i know we keep on getting questions on the dram here On a longer-term basis, is there any ability for you to transition your products to be using DDR5 to address some of the supply issues? on a longer-term basis is there any ability for you to transition your products to be using ddr5 to address some of the supply issues Is your point that these newer Chinese suppliers are going to be more than enough to offset some of the large suppliers that are eventually phasing out DDR4, and so longer term, this issue will be addressed by these other smaller suppliers? is your point that these newer chinese suppliers are going to be more than enough to offset some of the large suppliers that are eventually phasing out ddr4 and so longer term this issue will be addressed by these other smaller suppliers

Speaker 10: No, that's a great question, and let me just also take a step back. When you look at a technology like DDR4 versus DDR5, the five is not backwards compatible with four. These memories typically are interfaced to a micro or a SoC or a system on a chip. That micro or SoC needs to have the capability to be able to be interfaced to a DDR5 for us to move to DDR5. Now, the majority of the micros used in the industry for the cockpit are not capable of being interfaced to DDR5. That's one point, right? That transition has to happen. The evolution of the micros and SoCs that are used for cockpit, which come from suppliers such as Qualcomm or NXP and others, they have to be able to provide these SoCs. No, that's a great question, and let me just also take a step back. no that's a great question and let me just also take a step back When you look at a technology like DDR4 versus DDR5, the five is not backwards compatible with four. when you look at a technology like ddr4 versus ddr5 the five is not backwards compatible with four These memories typically are interfaced to a micro or a SoC or a system on a chip. these memories typically are interfaced to a micro or a soc or a system on a chip That micro or SoC needs to have the capability to be able to be interfaced to a DDR5 for us to move to DDR5. that micro or soc needs to have the capability to be able to be interfaced to a ddr5 for us to move to ddr5 Now, the majority of the micros used in the industry for the cockpit are not capable of being interfaced to DDR5. now the majority of the micros used in the industry for the cockpit are not capable of being interfaced to ddr5 That's one point, right? that's one point right That transition has to happen. that transition has to happen The evolution of the micros and SoCs that are used for cockpit, which come from suppliers such as Qualcomm or NXP and others, they have to be able to provide these SoCs. the evolution of the micros and socs that are used for cockpit which come from suppliers such as qualcomm or nxp and others they have to be able to provide these socs There has to be then other changes because they're not going to just introduce a single change like moving from DDR4 to DDR5. It's a bigger change, and a bigger change typically requires longer time for automotive. That's one dynamic. Now, what we are seeing, though, is the higher-end CDCs and HPCs already use DDR5. What this might do is to push the industry faster towards HPCs, upper-end CDCs, and HPCs simply because of the shift in the underlying technologies. Now, DDR5 will come at a density that is fundamentally a step higher than DDR4. We'll be able to do more with this processing power and the memory that's going to be available, which I think will accelerate the trend towards more integrated cockpit domain controllers, and eventually central domain controllers like the HPC. There has to be then other changes because they're not going to just introduce a single change like moving from DDR4 to DDR5. there has to be then other changes because they're not going to just introduce a single change like moving from ddr4 to ddr5 It's a bigger change, and a bigger change typically requires longer time for automotive. it's a bigger change and a bigger change typically requires longer time for automotive That's one dynamic. that's one dynamic Now, what we are seeing, though, is the higher-end CDCs and HPCs already use DDR5. now what we are seeing though is the higher-end cdcs and hpcs already use ddr5 What this might do is to push the industry faster towards HPCs, upper-end CDCs, and HPCs simply because of the shift in the underlying technologies. what this might do is to push the industry faster towards hpcs upper-end cdcs and hpcs simply because of the shift in the underlying technologies Now, DDR5 will come at a density that is fundamentally a step higher than DDR4. now ddr5 will come at a density that is fundamentally a step higher than ddr4 We'll be able to do more with this processing power and the memory that's going to be available, which I think will accelerate the trend towards more integrated cockpit domain controllers, and eventually central domain controllers like the HPC. we'll be able to do more with this processing power and the memory that's going to be available which i think will accelerate the trend towards more integrated cockpit domain controllers and eventually central domain controllers like the hpc We believe that this trend, in some ways, is going to push the industry to adopt more content simply because it'll be cheaper to do it that way than to stay with older technologies with more function-specific, feature-specific implementations. We believe that this trend, in some ways, is going to push the industry to adopt more content simply because it'll be cheaper to do it that way than to stay with older technologies with more function-specific, feature-specific implementations. we believe that this trend in some ways is going to push the industry to adopt more content simply because it'll be cheaper to do it that way than to stay with older technologies with more function-specific feature-specific implementations

Speaker 2: Great. Thank you. Great. great Thank you. thank you

Speaker 9: Your next question is from Luke Junk with Baird. Your next question is from Luke Junk with Baird. your next question is from luke junk with baird

Speaker 7: Good morning. Thanks for taking the questions. First question, Sachin, just curious to get some perspective on what you mentioned as the early mover advantage in HPC. I think you said your three wins are more than any other tier one supplier. Just hoping we could double-click maybe on the competitive landscape on a relative basis, and then given the award this morning that you announced that's launching within a year or so, I think you said within 12 months, just the near-term pipeline for maybe adding additional awards, including on maybe additional vehicles with your current customers. Thank you. Good morning. good morning Thanks for taking the questions. thanks for taking the questions First question, Sachin, just curious to get some perspective on what you mentioned as the early mover advantage in HPC. first question sachin just curious to get some perspective on what you mentioned as the early mover advantage in hpc I think you said your three wins are more than any other tier one supplier. i think you said your three wins are more than any other tier one supplier Just hoping we could double-click maybe on the competitive landscape on a relative basis, and then given the award this morning that you announced that's launching within a year or so, I think you said within 12 months, just the near-term pipeline for maybe adding additional awards, including on maybe additional vehicles with your current customers. just hoping we could double-click maybe on the competitive landscape on a relative basis and then given the award this morning that you announced that's launching within a year or so i think you said within 12 months just the near-term pipeline for maybe adding additional awards including on maybe additional vehicles with your current customers Thank you. thank you

Speaker 10: Yeah. No. Thanks, Luke. We have three customers that are launching this year, as I mentioned, and they're all launching initially on their flagship vehicles. At the same time, they're lining up vehicles following that initial launch that we are in discussions with them on, which will extend this business. That has been one of the sort of new learnings for us as well. When we were first discussing AI and HPC, let's say about a year ago, our thought was that it was more limited in application to perhaps just the very top-end, the flagship vehicles. The competitive dynamics now in the China market with what's happening, especially with the emerging premium tech segment that I discussed, that's really driving more volume to adopt AI as one of the key foundational capabilities of the cockpit of those vehicles. Yeah. yeah No. no Thanks, Luke. thanks luke We have three customers that are launching this year, as I mentioned, and they're all launching initially on their flagship vehicles. we have three customers that are launching this year as i mentioned and they're all launching initially on their flagship vehicles At the same time, they're lining up vehicles following that initial launch that we are in discussions with them on, which will extend this business. at the same time they're lining up vehicles following that initial launch that we are in discussions with them on which will extend this business That has been one of the sort of new learnings for us as well. that has been one of the sort of new learnings for us as well When we were first discussing AI and HPC, let's say about a year ago, our thought was that it was more limited in application to perhaps just the very top-end, the flagship vehicles. when we were first discussing ai and hpc let's say about a year ago our thought was that it was more limited in application to perhaps just the very top-end the flagship vehicles The competitive dynamics now in the China market with what's happening, especially with the emerging premium tech segment that I discussed, that's really driving more volume to adopt AI as one of the key foundational capabilities of the cockpit of those vehicles. the competitive dynamics now in the china market with what's happening especially with the emerging premium tech segment that i discussed that's really driving more volume to adopt ai as one of the key foundational capabilities of the cockpit of those vehicles We actually see that market grow quite rapidly starting in China. Because of exports, we expect that technology to start to make impact in other regions, probably starting with Europe, initially, before it comes to other parts of the world. We actually see that market grow quite rapidly starting in China. we actually see that market grow quite rapidly starting in china Because of exports, we expect that technology to start to make impact in other regions, probably starting with Europe, initially, before it comes to other parts of the world. because of exports we expect that technology to start to make impact in other regions probably starting with europe initially before it comes to other parts of the world

Speaker 7: Helpful. Then Jerome, maybe, just hoping to make sure we're calibrating the launch cadence right in the back half of the year. I guess two specific things in that. First would be in terms of the high compute launches, any initial demand indications? I know there's a level of variability just on the demand for the vehicles themselves. Then you also made the comment about the foreign exchange fluctuation. Was that mainly a Toyota-related comment, or is there some China color that we need to understand there as well? Thank you. Helpful. helpful Then Jerome, maybe, just hoping to make sure we're calibrating the launch cadence right in the back half of the year. then jerome maybe just hoping to make sure we're calibrating the launch cadence right in the back half of the year I guess two specific things in that. i guess two specific things in that First would be in terms of the high compute launches, any initial demand indications? first would be in terms of the high compute launches any initial demand indications I know there's a level of variability just on the demand for the vehicles themselves. i know there's a level of variability just on the demand for the vehicles themselves Then you also made the comment about the foreign exchange fluctuation. then you also made the comment about the foreign exchange fluctuation Was that mainly a Toyota-related comment, or is there some China color that we need to understand there as well? was that mainly a toyota-related comment or is there some china color that we need to understand there as well Thank you. thank you

Speaker 4: You got it. I was about to say, we are using IHS for the HPC launches, and these have been holding pretty well compared to what we had initially guided to. No major changes. Sachin, do you want to take the second? You got it. you got it I was about to say, we are using IHS for the HPC launches, and these have been holding pretty well compared to what we had initially guided to. i was about to say we are using ihs for the hpc launches and these have been holding pretty well compared to what we had initially guided to No major changes. no major changes Sachin, do you want to take the second? sachin do you want to take the second

Speaker 10: Yeah. In general, on the cadence itself, what I would say is that there has been no change on the launch plans and in terms of the volumes as well. We have been very focused on ensuring that we have supply of components because the lead times, as you can imagine, especially with this third win, has been extremely short. So I would say for now, Luke, the focus is on ensuring that we can launch and achieve the ramp of volume that we have for this year, which has remained pretty steady. There's been no change. If anything, depending upon availability of supply, that there may be the ability to increase it, but given where we stand with lead times and so on, I would think that would be a fairly big challenge for us to accomplish. Yeah. yeah In general, on the cadence itself, what I would say is that there has been no change on the launch plans and in terms of the volumes as well. in general on the cadence itself what i would say is that there has been no change on the launch plans and in terms of the volumes as well We have been very focused on ensuring that we have supply of components because the lead times, as you can imagine, especially with this third win, has been extremely short. we have been very focused on ensuring that we have supply of components because the lead times as you can imagine especially with this third win has been extremely short So I would say for now, Luke, the focus is on ensuring that we can launch and achieve the ramp of volume that we have for this year, which has remained pretty steady. so i would say for now luke the focus is on ensuring that we can launch and achieve the ramp of volume that we have for this year which has remained pretty steady There's been no change. there's been no change If anything, depending upon availability of supply, that there may be the ability to increase it, but given where we stand with lead times and so on, I would think that would be a fairly big challenge for us to accomplish. if anything depending upon availability of supply that there may be the ability to increase it but given where we stand with lead times and so on i would think that would be a fairly big challenge for us to accomplish

Speaker 7: I've got it. I'll leave it there. Thank you. I've got it. i've got it I'll leave it there. i'll leave it there Thank you. thank you

Speaker 9: Our next question is from Tom Narayan with RBC. Our next question is from Tom Narayan with RBC. our next question is from tom narayan with rbc

Speaker 11: Thanks. Sticking to the question. Just two quick follow-ups. The first one on the $300 million M&A. I know in the past you've said this is likely tuck-ins, but just curious, is there a reason why this is being prioritized now? Is it because you're seeing deals kind of at attractive pricing? Is it something that you see that works well with what you're trying to achieve now versus later? A follow-up. Thanks. thanks Sticking to the question. sticking to the question Just two quick follow-ups. just two quick follow-ups The first one on the $300 million M&A. the first one on the $300 million m&a I know in the past you've said this is likely tuck-ins, but just curious, is there a reason why this is being prioritized now? i know in the past you've said this is likely tuck-ins but just curious is there a reason why this is being prioritized now Is it because you're seeing deals kind of at attractive pricing? is it because you're seeing deals kind of at attractive pricing Is it something that you see that works well with what you're trying to achieve now versus later? is it something that you see that works well with what you're trying to achieve now versus later A follow-up. a follow-up

Speaker 10: Yeah. Yes, in some parts, but it's really more driven by how we see the trends emerge in the industry. There's a very big trend towards a software-driven, more integrated domain controller approach for these vehicles. That requires that you have all of the software capabilities to implement those features. That's the primary driver of trying to secure those capabilities that would allow us to offer more and more integrated domain controllers. Eventually, we see a certain level of ADAS also getting integrated with cockpit as features like AEB become mandated in all jurisdictions, right? It's already a mandate in Europe. In 2028 and 2029, China and U.S. will follow. As standard requirements, OEMs will not be able to price for them. They will be essentially part of the standard equipment. We expect more and more features to get standardized or Yeah. yeah Yes, in some parts, but it's really more driven by how we see the trends emerge in the industry. yes in some parts but it's really more driven by how we see the trends emerge in the industry There's a very big trend towards a software-driven, more integrated domain controller approach for these vehicles. there's a very big trend towards a software-driven more integrated domain controller approach for these vehicles That requires that you have all of the software capabilities to implement those features. that requires that you have all of the software capabilities to implement those features That's the primary driver of trying to secure those capabilities that would allow us to offer more and more integrated domain controllers. that's the primary driver of trying to secure those capabilities that would allow us to offer more and more integrated domain controllers Eventually, we see a certain level of ADAS also getting integrated with cockpit as features like AEB become mandated in all jurisdictions, right? eventually we see a certain level of adas also getting integrated with cockpit as features like aeb become mandated in all jurisdictions right It's already a mandate in Europe. it's already a mandate in europe In 2028 and 2029, China and U.S. will follow. in 2028 and 2029 china and u.s will follow As standard requirements, OEMs will not be able to price for them. as standard requirements oems will not be able to price for them They will be essentially part of the standard equipment. they will be essentially part of the standard equipment We expect more and more features to get standardized or we expect more and more features to get standardized or de facto de facto de facto Required and therefore integrated. The cost is going to be a prime driver, and that will drive greater levels of integration. That's one thing. The second thing that's driving our M&A strategy is the fact that with all of these technologies that are emerging very rapidly, coming from mainstream tech industries and impacting automotive at a pace that's been faster than ever before, we see opportunity for offering services, outsourced R&D services, expert services, to help OEMs define how to use those technologies in their vehicles. What we're finding, now your question, we're finding these opportunities, these companies that have a lot of depth of expertise, but they don't necessarily have the scale. We believe that we can provide that scaling ability to these companies, help the OEMs, and in turn, that helps us make our platform more future-proof. Required and therefore integrated. required and therefore integrated The cost is going to be a prime driver, and that will drive greater levels of integration. the cost is going to be a prime driver and that will drive greater levels of integration That's one thing. that's one thing The second thing that's driving our M&A strategy is the fact that with all of these technologies that are emerging very rapidly, coming from mainstream tech industries and impacting automotive at a pace that's been faster than ever before, we see opportunity for offering services, outsourced R&D services, expert services, to help OEMs define how to use those technologies in their vehicles. the second thing that's driving our m&a strategy is the fact that with all of these technologies that are emerging very rapidly coming from mainstream tech industries and impacting automotive at a pace that's been faster than ever before we see opportunity for offering services outsourced r&d services expert services to help oems define how to use those technologies in their vehicles What we're finding, now your question, we're finding these opportunities, these companies that have a lot of depth of expertise, but they don't necessarily have the scale. what we're finding now your question we're finding these opportunities these companies that have a lot of depth of expertise but they don't necessarily have the scale We believe that we can provide that scaling ability to these companies, help the OEMs, and in turn, that helps us make our platform more future-proof. we believe that we can provide that scaling ability to these companies help the oems and in turn that helps us make our platform more future-proof It's got that virtuous cycle where us engaging in advanced technologies activities with OEMs helps us understand how to keep our platforms competitive and in time for the market introduction. That's the second. The third driver of M&A has always been vertical integration. We have been very successful with that so far, and we want to continue to take it forward as we see opportunities to bring more of the manufacturing value content into our plants, rather than to rely on an extended supply chain. Which eventually also helps us counter this request that we get from customers to be less dependent on China and other parts of the world, where we are today perhaps more exposed than we should be. It's got that virtuous cycle where us engaging in advanced technologies activities with OEMs helps us understand how to keep our platforms competitive and in time for the market introduction. it's got that virtuous cycle where us engaging in advanced technologies activities with oems helps us understand how to keep our platforms competitive and in time for the market introduction That's the second. that's the second The third driver of M&A has always been vertical integration. the third driver of m&a has always been vertical integration We have been very successful with that so far, and we want to continue to take it forward as we see opportunities to bring more of the manufacturing value content into our plants, rather than to rely on an extended supply chain. we have been very successful with that so far and we want to continue to take it forward as we see opportunities to bring more of the manufacturing value content into our plants rather than to rely on an extended supply chain Which eventually also helps us counter this request that we get from customers to be less dependent on China and other parts of the world, where we are today perhaps more exposed than we should be. which eventually also helps us counter this request that we get from customers to be less dependent on china and other parts of the world where we are today perhaps more exposed than we should be

Speaker 11: Got it. Thanks for a very robust answer. Jerome, just to clarify, the guidance being maintained despite the S&P cutting, was it that the Q1 coming in ahead of your expectations, was that the main driver of being able to do that? Got it. got it Thanks for a very robust answer. thanks for a very robust answer Jerome, just to clarify, the guidance being maintained despite the S&P cutting, was it that the Q1 coming in ahead of your expectations, was that the main driver of being able to do that? jerome just to clarify the guidance being maintained despite the s&p cutting was it that the q1 coming in ahead of your expectations was that the main driver of being able to do that

Speaker 4: Correct, yes. Along as well with some good visibility and robust orders that we see for the second quarter. You're absolutely correct, yes. Correct, yes. correct yes Along as well with some good visibility and robust orders that we see for the second quarter. along as well with some good visibility and robust orders that we see for the second quarter You're absolutely correct, yes. you're absolutely correct yes

Speaker 11: Okay, got it. Thanks. Okay, got it. okay got it Thanks. thanks

Speaker 4: Thank you. Thank you. thank you

Speaker 6: Thank you. This concludes our earnings call for the first quarter of 2026. Thank you for participating in today's call and your ongoing interest in Visteon. Thank you. thank you This concludes our earnings call for the first quarter of 2026. this concludes our earnings call for the first quarter of 2026 Thank you for participating in today's call and your ongoing interest in Visteon. thank you for participating in today's call and your ongoing interest in visteon

Speaker 9: This concludes Visteon's first quarter 2026 results earnings call. You may now disconnect. This concludes Visteon's first quarter 2026 results earnings call. this concludes visteon's first quarter 2026 results earnings call You may now disconnect. you may now disconnect