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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

☒ Annual report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934

for the fiscal year ended December 31, 2025

☐ Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934

for the transition period from to .

Commission file number 0-21810

GENTHERM INCORPORATED

(Exact name of registrant as specified in its charter)


Michigan		95-4318554
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
28875 Cabot Drive, Novi, MI		48377
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (248) 504-0500

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, no par value	THRM	Nasdaq

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has ﬁled a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting ﬁrm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

The aggregate market value of the registrant’s Common Stock held by non-affiliates of the registrant, computed by reference to the closing price of such Common Stock on The Nasdaq Global Select Market as of the last business day of the registrant’s most recently completed second fiscal quarter, June 30, 2025, was $853,967,174. For purposes of this computation, the registrant has excluded the market value of all shares of its Common Stock reported as being beneficially owned by executive officers and directors.

As of February 13, 2026, there were 30,526,465 issued and outstanding shares of Common Stock of the registrant.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the proxy statement for the 2026 annual meeting of shareholders are incorporated by reference into Part III of this Annual Report to the extent described herein.

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TABLE OF CONTENTS


Part I
Item 1:	Business	3
Item 1A:	Risk Factors	11
Item 1B:	Unresolved Staff Comments	24
Item 1C:	Cybersecurity	24
Item 2:	Properties	26
Item 3:	Legal Proceedings	26
Item 4:	Mine Safety Disclosures	26
Part II		27
Item 5:	Market for the Registrant’s Common Stock, Related Stockholder Matters and Issuer Purchases of Equity Securities	27
Item 6:	Reserved	28
Item 7:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
Item 7A:	Quantitative and Qualitative Disclosures About Market Risk	43
Item 8:	Financial Statements and Supplementary Data	45
Item 9:	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	45
Item 9A:	Controls and Procedures	45
Item 9B:	Other Information	46
Item 9C:	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	46
Part III		47
Item 10:	Directors, Executive Officers and Corporate Governance	47
Item 11:	Executive Compensation	47
Item 12:	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	47
Item 13:	Certain Relationships and Related Transactions and Director Independence	47
Item 14:	Principal Accounting Fees and Services	47
Part IV		48
Item 15:	Exhibits and Financial Statement Schedules	48
Item 16:	Form 10-K Summary	51

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GENTHERM INCORPORATED

PART I

Forward-Looking Statements

This Annual Report on Form 10-K for the year ended December 31, 2025 (this “Annual Report”) contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent our goals, beliefs, plans and expectations about our prospects for the future and other future events, such as: the expected light vehicle production in the Company’s key markets; the impact of macroeconomic and geopolitical conditions; the components of and our execution of our strategic plan, product and technology development and manufacturing footprint optimization restructuring plans; our operating performance; long-term consumer and technological trends in the automotive industry and our related market opportunity for our existing and new products and technologies; the competitive landscape; the impact of global tax reform legislation and other regulatory matters; the sufficiency of our cash balances and cash generated from operating, investing and financing activities for our future liquidity and capital resource needs; our ability to finance sufficient working capital; and significant matters related to the Modine Transaction, including the expected closing timing and structure thereof, the ability of the parties to complete such transaction and planned actions to satisfy the closing conditions, the expected benefits thereof, the tax consequences thereof, the terms and scope of the expected financing in connection with such transaction, and the combined company’s plans, objectives, expectations and intentions. Reference is made in particular to forward-looking statements included in “Item 1. Business,” “Item 1A. Risk Factors” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Such statements may be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “believe”, “estimate”, “anticipate”, “intend”, “continue”, or similar terms, variations of such terms or the negative of such terms.

The forward-looking statements included in this Annual Report are made as of the date hereof or as of the date specified and are based on management’s reasonable expectations and beliefs. In making these statements, we rely on assumptions and analyses based on our experience and perception of historical trends, current conditions and expected future developments, third-party information and projections from sources that management believes to be reputable, as well as other factors we consider appropriate under the circumstances. Such statements are subject to a number of assumptions, risks, uncertainties and other factors, which are set forth in "Item 1A. Risk Factors" and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations," which are incorporated herein by reference, or as described in subsequent reports we file with the United States Securities and Exchange Commission (the "SEC"), and which could cause actual results and performance to differ materially from that described in or implied by the forward-looking statements. Moreover, we operate in a very competitive and rapidly changing environment and new risks emerge from time to time.

In addition, with reasonable frequency, we have entered into business combinations, acquisitions, divestitures, strategic investments and other significant transactions. Such forward-looking statements do not include the potential impact of any such transactions that may be completed after the date hereof, each of which may present material risks to the Company’s future business and financial results. Except as required by law, we expressly disclaim any obligation or undertaking to update any forward-looking statements to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

ITEM 1. BUSINESS

Unless otherwise indicated, references to “Gentherm”, “the Company”, “we”, “our” and “us” in this Annual Report refer to Gentherm Incorporated and its consolidated subsidiaries.

Except to the extent expressly noted herein, the content of our website or the websites of other third parties noted herein are not incorporated by reference in this Annual Report.

Overview

Gentherm Incorporated is a global market leader of innovative thermal management and pneumatic comfort technologies. Our automotive products include Climate Control Seats (CCS®), Climate Control Interiors (CCI™), Lumbar and Massage Comfort Solutions, Valve Systems, and Climate and Comfort Electronics. We operate in locations aligned with our major customers’ product strategies to provide locally enhanced design, integration and production capabilities. Our medical products include patient

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temperature management systems that can be found in hospitals throughout the world.

On January 29, 2026, the Company entered into definitive agreements with Modine Manufacturing Company, a Wisconsin corporation (“Modine”), Platinum SpinCo Inc, a Delaware corporation and wholly owned subsidiary of Modine (“SpinCo”), and Platinum Gold Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of the Company (“Merger Sub”), with respect to a Reverse Morris Trust ("RMT") transaction (the "Modine Transaction"), and pursuant to and subject to the terms and conditions of such definitive agreements, (i) Modine will transfer (or cause to be transferred) and SpinCo will accept and assume (or cause to be accepted and assumed) all of the rights, titles and interests to and under certain assets and liabilities relating to Modine’s Performance Technologies business (“Performance Technologies”), (ii) Modine will distribute to its shareholders all of the issued and outstanding shares of common stock, $0.01 par value per share, of SpinCo (“SpinCo Common Stock”) held by Modine by way of a pro rata distribution (the “Spin-Off” and the disposition by Modine of 100% of the SpinCo Common Stock by way of the Spin-Off, the “Distribution”) and (iii) following the Distribution, Merger Sub will be merged with and into SpinCo, with SpinCo as the surviving entity (the “Merger”) and all SpinCo Common Stock will be converted into the right to receive shares of our common stock, no par value ("Common Stock"), as calculated and subject to adjustment as set forth in the Agreement and Plan of Merger, dated as of January 29, 2026, by and among the Company, Modine, Merger Sub and SpinCo (the “Merger Agreement”). Following consummation of the Merger, SpinCo will become a wholly owned subsidiary of the Company.

Closing of the Modine Transaction is subject to various closing conditions, including specified approvals by our shareholders, completion of financing for SpinCo, a customary IRS tax ruling, receipt of required regulatory approvals and the satisfaction of other customary closing conditions.

The Modine Transaction is described more fully under “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Overview.”

Available Information

We are incorporated under the laws of the State of Michigan. Our website is www.gentherm.com. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are made available free of charge through our website, www.gentherm.com, as soon as reasonably practicable after we electronically file them with or furnish them to the SEC. These reports are also available on the SEC’s website, www.sec.gov.

Segments

The Company is organized under two reportable segments: Automotive and Medical.

The Automotive reporting segment is comprised of our global automotive businesses, including the design, development, manufacturing and sales of our Automotive Climate and Comfort Solutions (including Climate Control Seats, Climate Control Interiors, Lumbar and Massage Comfort Solutions and Climate and Comfort Electronics), Valve Systems and other automotive products.

The Medical reporting segment is comprised of our patient temperature management business in the medical industry. Patient temperature management includes temperature management systems across multiple product categories addressing the needs of hyper-hypothermia therapy in intensive care, normothermia in surgical procedures and additional warming/cooling therapies utilized in acute and chronic care departments and non-hospital facilities.

Research, Development and Partnerships

Our research, development and partnerships activities are an essential part of our efforts to develop new or improved innovative products, devise new ways to use our core technologies together to create value for consumers, and scale our products and core technologies into adjacent markets. Research and development is conducted globally at several sites to support our geographically diverse customers, allowing us to better meet their needs.

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To offer our customers cutting-edge products and technologies, our strategy includes partnering with key technology leaders. These activities are critical to optimize energy utilization and production efficiencies, improve effectiveness in our products and minimize the cost to integrate our products with those of our customers.

Core Technologies

Gentherm's core technologies align well with near-term and long-term consumer and technological trends. We believe increased consumer demand for personalized comfort in a vehicle is driving increased adoption of our thermal and pneumatic Lumbar and Massage Comfort Solutions. We believe there is also demand for similar occupant experiences in other end markets, including power-sports, commercial vehicles, agriculture and home and office. We are committed to developing innovative products and technologies that fulfill this demand. Additionally, our core technologies have broad market applications which will allow us to scale across new end markets.

Gentherm's core technologies are:

Thermal Management

Gentherm's heating technologies use all three primary forms of heat transfer: conductive, convective, and radiant. Resistive heater technologies are comprised of wire, carbon fiber or positive thermal coefficient (“PTC”) heating elements that quickly and effectively deliver heat to people and objects. Wire heating elements are designed from stainless steel, copper, or our proprietary carbon fiber woven lattice technology called Carbotex® based on the specifications for a particular product application. Resistive heaters have multiple applications, including seat heating, steering wheel heating, interior panel heating and battery heating in the automotive segment and patient warming within the medical segment.

Air Moving Devices

Gentherm's air moving devices offer a broad range of scalable blower solutions developed for next-generation thermal systems. Our product families include compact, slim, quiet, high-power and special application series backed by engineering in motor design, aerodynamics, mechanical systems and electronics.

Pneumatic Solutions

Gentherm's pneumatic Lumbar and Massage Comfort Solutions are differentiated because our underlying valve technology for regulating air flow is based on shape memory alloy ("SMA") valves. Our products operate by inflation and deflation of lifting elements (air bladders) to achieve desired comfort effect. Our innovative control elements produce precise mechanical forces and movements using wires made of memory metals, without the labor-intensive use of additional sensors.

Valves

Gentherm's valves are designed and developed with our extensive expertise in advanced injection molding. Our passive valves manage flow in fluid-carrying circuits through spring-loaded actuation. Our active valves provide precise electronic flow regulation in liquid and air or gas circuits using solenoid and SMA actuation.

Products

The Gentherm core technologies are essential in building our strong product portfolio:

Automotive Climate and Comfort Solutions – Climate Control Seats (CCS®)

Gentherm offers a range of CCS products utilizing proprietary technologies for regulating temperature and enhancing the comfort of vehicle passengers. Heated seats, based on our resistive heater core technology, are seamlessly integrated into automotive seat designs, and are constructed using materials that offer the best capacity, installation characteristics and durability. Our design and manufacturing capabilities allow customers to choose from a variety of resistive heater materials based on their individual vehicle specifications.

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Our CCS Vent products move air through the seat to provide conditioning. Our CCS Active products utilize thermoelectric devices to heat and cool air used to condition the seat. The conditioned air circulates by one of our specially designed air moving devices through an air distribution system installed in the seat cushion and seat back, so that the seat surface can be heated, ventilated or cooled. Each seat has individual electronic controls to adjust the level of heating, ventilating or cooling. Our CCS products improve comfort compared with conventional vehicle cabin air conditioners by focusing heating and cooling directly on the passenger through the seat.

Intelligent neck conditioning systems ventilate warm or cabin temperature air directly onto the passenger’s neck and shoulder area. The system combines electronics, air moving device technologies and a PTC heating element into a compact, integrated headrest design that can be adjusted to suit the body size of the passenger.

Automotive Climate and Comfort Solutions – Climate Control Interiors (CCI™)

Gentherm offers heated steering wheels and products for other thermally conductive or radiative surfaces such as door panels and center console armrests. Heated steering wheels deliver heating comfort to automobile drivers through resistive elements. Heated door panels and armrests complement our climate-controlled seat and steering wheel products and provide a superior level of thermal comfort to the driving experience.

Automotive Climate and Comfort Solutions – Lumbar and Massage Comfort Solutions

Gentherm offers a seat ergonomics system that consists primarily of pneumatic lifting elements (air bladders) which are mounted under the surface of seat cushion and seat back. In addition, our Puls.A® solution uses precision micro air pressure bursts to deliver a soothing, pulsating massage that lets drivers and passengers enjoy deep, personal relaxation on every trip. All of our Lumbar and Massage Comfort Solutions utilize Gentherm's Valve Systems.

Automotive Climate and Comfort Solutions – Climate and Comfort Electronics

Gentherm offers electronic control modules used to control certain electrical motors in a vehicle. Our Intelligent Positioning System (IPS®) product suite utilizes proprietary software to determine the position of a power seat and control the memory seat module. Our PilotSenseTM Hands-on Detection Electronic Control Module is a sensor integrated into the steering wheel that monitors whether the driver’s hands are maintaining contact with the steering wheel. This product is available for both heated and non-heated steering wheels.

Valve Systems

Gentherm offers a variety of valve system solutions for applications in engine systems, brake systems and fuel management such as actuators, thermal management valves, pneumatic lumbar and massage valves, crank case ventilation valves, non-return valves, mechanical switching valves, servo assistance valves, fuel limit vent valves, roll over valves and drain valves.

Other Automotive

Gentherm's other automotive products include battery thermal management, battery cell connection systems and cable systems.

Medical - Patient Temperature Management Systems

Gentherm provides healthcare professionals with superior temperature management solutions and clinical expertise that improve patient outcomes, increase the standard of care and enhance patient satisfaction. We provide a full portfolio of patient temperature management systems that utilize air, water and resistive technologies across multiple product categories addressing the needs of hyper-hypothermia therapy in intensive care, normothermia in surgical procedures and additional warming/cooling therapies utilized in acute and chronic care departments and non-hospital facilities. Our core brands include Blanketrol®, a hyper-hypothermia system, and Astotherm®, a fluid and blood warming system.

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Business Strategy

Gentherm is creating a resilient future for our customers, employees and communities by building a portfolio of essential technology solutions. Our revised strategy centers around a framework focusing on Profitable Growth, Operational Excellence and Financial Performance, all supported by leveraging our world-class talent and culture to deliver superior total shareholder return:

Drive Strategic Profitable Growth

We believe our four core technologies create a path for profitable growth in end market applications within the light-vehicle automotive industry and medical industry and also translate and scale to multiple new applications and end markets.

In automotive, we have a market leading global position for climate and comfort solutions with a commercial model built around direct OEM engagement. Our engineering expertise and strong technical competencies enable us to develop innovative, value-add solutions for our customers. We will continue to seek opportunities to secure new business awards that protect and expand our existing programs, capture incremental market share through conquest wins, increase content per vehicle, and expand our presence in targeted geographic regions.

In medical, we will continue to bring together our automotive and medical engineers to identify medical use cases in patient and physician thermal management to develop innovative new products.

In addition to our continued market leadership in the automotive light-vehicle and medical industries, we believe our four core technologies provide us with the opportunity to scale our existing technologies across new applications and end markets. We will leverage our existing intellectual property, manufacturing assets, and engineering capabilities to scale addressable markets without significant incremental capital investment. We have identified and secured business in new end markets including home and office, power-sports, and commercial vehicles. We will continue to explore opportunities within those markets and other markets that we believe will provide an opportunity to grow profitably, without significant incremental investment.

Build Operational Excellence

We have accelerated our focus on operational excellence with the rollout of a formalized company operating system. Our enhanced focus on production and inventory control, standardized key performance indicators, and disciplined financial management, will enable more effective benchmarking of our facilities and replication of best-in-class practices globally. This approach will drive greater standardization across the business, improve asset utilization, lower capital expenditures and reinforce a culture of continuous improvement across the organization.

Achieve Superior Financial Performance

We will achieve superior financial performance by delivering on profitable growth opportunities, expanding margins through operational excellence, and maintaining a disciplined approach to capital allocation. We have built a performance-driven culture focused on high-return growth opportunities across several end markets. By strengthening operational excellence, we are positioning the business for margin expansion and stronger cash flow generation. We are continuing to invest in our manufacturing footprint to ensure we have an optimal cost structure and produce in the right locations to best serve our global customers. In addition, we regularly evaluate opportunities, including mergers, acquisitions or joint ventures, which could enhance our product portfolio, expand our access to new end markets, customers, and geographic regions, and or complement our current capabilities.

Leverage World Class Talent and Culture

We have built a talented global team by fostering leaders who think strategically, execute with discipline, and work together to unlock the full potential of our people. Guided by accountability, collaboration, transparency, and urgency, we cultivate a culture rooted in trust, resilience, and continuous learning. Together, this foundation positions us to deliver results today while driving sustainable growth for the future.

Automotive Customers

Our automotive products can be found on light vehicles manufactured by nearly all the major OEMs operating in North America and Europe, and several major OEMs in Asia. As such, our customers primarily include light vehicle OEMs and Tier 1s.

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In many cases, the OEMs direct us to work with their suppliers, primarily their Tier 1s, to integrate our products into the vehicle’s seat or interior design. As an independent supplier we can work with any OEM and any seat manufacturer to create innovative and unique configurations for their applications. Once the integration work is complete, prototypes are sent to the OEMs for evaluation and testing. If an OEM awards us the business to include our products in a vehicle model, it normally takes one to three years from the time an OEM awards us the business to actual production for that vehicle model. During this rollout process, we derive minimal funding from prototype sales but do not earn significant revenue until mass production begins. Upon commencement of mass production, our products are sold by Tier 1s to the OEMs. Inherent to the automotive supplier market are costs and commitments that are incurred well in advance of the receipt of orders and resulting revenues from customers.

The volume of products we sell is significantly affected by global and regional automotive production levels and the general business conditions in the automotive industry. Our industry broadly utilizes a “just-in-time” manufacturing process, and our production volumes established in a new business award frequently change in amount and timing based on updated production schedules from the OEMs and Tier 1s. Our product revenues are generally based upon purchase orders issued by our customers, which occur close to production and delivery of our products. As such, we typically do not have a backlog of firm orders at any point in time. Once we are selected to supply products for a particular vehicle model, we typically supply those products for the platform life, which is normally five to ten years (or shorter for China OEMs). In addition, when we are the incumbent supplier to a given platform, we believe we have a competitive advantage in winning the redesign or replacement platform.

For 2025, our revenues from sales to our two largest customers, Lear Corporation (“Lear”) and Adient plc (“Adient”) were $234 million and $164 million, respectively, representing 16% and 11% of our product revenues, respectively. Revenues from Lear and Adient represent sales of our climate and comfort solutions.

As noted above, in many cases automotive OEMs direct their suppliers to work with us. Therefore, it is relevant to understand how our revenues are divided among the OEMs, as shown below.

Product revenues by OEM, as a percentage of total Product revenues, for each of the past three years were as follows:


	2025			2024			2023
Volkswagen		12	%		12	%		9	%
General Motors		12	%		13	%		13	%
BMW		9	%		8	%		8	%
Ford Motor Company		8	%		9	%		7	%
Hyundai		7	%		9	%		10	%
Mercedes-Benz		6	%		7	%		8	%
Global EV manufacturer		5	%		5	%		4	%
Stellantis		5	%		4	%		6	%
Honda		5	%		4	%		4	%
Jaguar/Land Rover		3	%		4	%		3	%
Other (including Medical)		28	%		25	%		28	%
Total		100	%		100	%		100	%

Suppliers

We procure our raw materials from a variety of suppliers around the world. These suppliers are generally located near our manufacturing facilities, however, logistics costs may be impacted due to geopolitical factors. Some of our products contain key components such as semi-conductor chips and copper which cannot be substituted and are affected by market conditions. In the normal course of business, we do not carry substantial inventories of these raw materials in excess of levels reasonably required to meet our near-term production requirements.

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Proprietary Rights and Patents

The development or acquisition of new or improved technologies is critical to the execution of our business strategy. Currently owned patents and patents obtained for new or improved technologies underpin the success of our research and development efforts and business. We have a policy of obtaining, where practical, the exclusive rights to use technology related to our products and their relevant applications through patents or licenses for proprietary technologies or processes. We adapt and commercialize such technologies in products for mass production. We also have developed technologies or furthered the development of acquired technologies through internal research and development efforts.

As of December 31, 2025, Gentherm held 382 issued patents, of which 181 were U.S. patents and 201 were non-U.S. patents. The Company continuously evaluates its patents and makes strategic decisions to reduce low-value patents and patents unrelated to current or planned business strategies, while still increasing patent use in-line with our current and planned business strategies.

Competition

Gentherm faces competition from other automotive suppliers and, with respect to certain products, from the OEMs and Tier 1s who manufacture or have the capability to manufacture certain products that Gentherm manufactures and supplies. The automotive supply industry competes on the basis of technology, quality, reliability of supply, design, engineering capability and competitive pricing. The automotive technology and components industry remains extremely competitive among existing and new market participants. We believe our technical expertise, flexibility integrating with specific OEM designs, global footprint and broad product offerings make us well positioned to compete against the traditional thermal management systems and pneumatic comfort suppliers, global Tier 1s and component specialists. The competitive landscape for patient temperature management systems includes patient temperature management medical device manufacturers.

Seasonality

Our principal operations are directly related to the automotive industry. Consequently, we have historically experienced seasonal fluctuations to the extent automotive vehicle production slows, such as in the summer months when many customer plants close for model year changeovers and in December when many customer plants close for the holidays.

Human Capital Management

At Gentherm, our people are the foundation of our success and we believe they provide us with a competitive advantage. Our human capital strategy is focused on creating the right working environment and developing the right skill sets to advance our performance culture and unlock our innovation and growth strategy. We also strive to promote a safe work environment and a culture that values engagement and belonging.

We attract, retain and motivate our employees, with oversight by our Board of Directors and its Committees, through a broad range of human capital management topics, including corporate culture, talent and succession planning, pay equity, health and safety, training and development, total rewards and engagement and belonging.

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People Demographics

Our global workforce operates in more than 30 locations across 13 countries. As of December 31, 2025, and 2024, Gentherm’s employment levels worldwide were as follows:


	2025		2024
Mexico		5,546		5,478
China		1,852		1,734
North Macedonia		1,850		2,416
Ukraine		1,302		1,520
Vietnam		1,195		1,244
Morocco	764			52
Germany	530			576
United States	464			481
Hungary	339			355
Czech Republic	255			318
Korea	50			48
Japan	18			14
United Kingdom	9			8
Malta		—		2
Total		14,174		14,246

Environmental and Regulatory Compliance

Gentherm operates in a dynamic global regulatory environment and is subject to numerous regulatory requirements. Failure to comply with global and specific country regulations could subject us to civil penalties, production disruptions, or limitations on the sale of affected products. We believe we are materially in compliance with substantially all of these requirements in effect.

Chemical Regulation

There are numerous global laws and regulations that prohibit or restrict the selection and use of certain chemicals for product development and manufacturing and potentially impact an automobile manufacturer’s responsibility for vehicle components at the end of a vehicle’s life. New chemical regulations continue to be introduced and passed, such as the European requirements that suppliers of parts and vehicles to the European market disclose certain substances of concern in parts. Further, increases in the use of circuit boards and other electronics may require additional assessment under the directives related to certain hazardous substances and waste from electrical and electronic equipment.

Vehicle Safety

In the U.S., the National Traffic and Motor Vehicle Safety Act of 1966 (the “Safety Act”) regulates motor vehicle equipment that we manufacture and sell as well as vehicles. The Safety Act prohibits the sale in the United States of any new vehicle or equipment that does not conform to applicable federal motor vehicle safety standards established by the National Highway Traffic Safety Administration (“NHTSA”). The Safety Act further requires that if a vehicle manufacturer or NHTSA determine a vehicle or an item of vehicle equipment does not comply with a safety standard, or that vehicle or equipment contains a defect that poses an unreasonable safety risk, the vehicle manufacturer must conduct a safety recall to remedy that condition in the affected vehicles. Should a vehicle manufacturer or NHTSA determine a safety defect or noncompliance issue exists with respect to any of our products, the cost of such recall campaigns could be substantial and may not be covered by insurance. Further, many other countries have established vehicle and vehicle equipment safety standards and regulations. Meeting or exceeding the many safety standards is costly as global compliance and non-governmental assessment requirements lack harmonization globally and continue to evolve with greater complexity.

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ITEM 1A. RISK FACTORS

You should carefully consider each of the risks, assumptions, uncertainties and other factors described below and elsewhere in this Annual Report, as well as any amendments or updates reflected in subsequent filings with the SEC. We believe these risks, assumptions, uncertainties and other factors, individually or in the aggregate, could cause our actual results to differ materially from expected and historical results and could materially and adversely affect our business operations, results of operations, financial condition and liquidity.

Industry and Operational Risks

We operate in a highly competitive industry and efforts by our competitors, as well as new entrants to the industry, could adversely affect our business, results of operations and financial condition.

The automotive component supply industry is subject to intense competition. Business is typically awarded to the supplier offering the most favorable combination of cost, quality, timely delivery, technological innovation and service. Our competitors’ efforts to grow market share could exert downward pressure on our product pricing and margins. Vertical integration by existing and new market entrant competitors, customers and suppliers could continue to complicate and impact sourcing decisions by our customers and adversely affect our sales. We are experiencing increased competition from Chinese-based component suppliers that are developing relationships with Chinese-based OEMs, which are growing market share in China, and are expanding in key global markets, including Europe and North America.

The material reduction in sales from any of our principal customers, due to their acquisition activity, insourcing, product quality and delivery or otherwise, could materially and adversely affect our business, results of operations, cash flows and financial condition.

For the year ended December 31, 2025, our top two customers were Lear and Adient, which comprised 16% and 11%, respectively, of our product revenues. Our products supplied to General Motors and Volkswagen each represented 12% of our product revenues for the year ended December 31, 2025. The continued growth, viability and financial stability of our principal customers, as well as the OEMs to which our products are supplied, are critical to our success. The loss of any significant portion of our sales from these customers or other significant customers, whether due to their acquisition activity, insourcing, product quality and delivery or otherwise, would have a material adverse effect on our business, results of operations, cash flows and financial condition.

Our ability to attract and retain talented, diverse and highly skilled employees is critical to our success and competitiveness, and attracting and retaining such employees has caused and could continue to cause an increase in labor costs and may be adversely impacted by current macroeconomic factors in the automotive industry.

Our success depends on our ability to recruit and retain talented and diverse employees who are highly skilled in their areas. In particular, our technologies and products increasingly rely on software and hardware that is highly technical and complex and the market for highly skilled workers and leaders in our industry is extremely competitive and costly. The difficulty of attracting, hiring, developing, motivating and retaining highly qualified and diverse employees throughout our Company has caused and could continue to cause increases in the cost of labor due to wage inflation. Failure to continue attracting and retaining such highly qualified and diverse employees could further increase labor costs, disrupt our operations and adversely affect our strategic plans.

Labor shortages, work stoppages and additional workforce disruptions impacting us, our suppliers or customers periodically have disrupted our operations and our growth strategies, and resulting increases in labor and related operating costs may adversely impact our financial performance.

Labor shortages, work stoppages and additional workforce disruptions due to illness, quarantines and absenteeism, including ours and those at our suppliers or customers, periodically have disrupted our business and adversely impacted our financial performance. Because the automotive industry relies heavily on “just-in-time” delivery of components, labor shortages or work stoppages at one or more of Gentherm's production facilities or those of our suppliers could have adverse effects on the business and financial results. Similarly, the purchase of our products may be limited if one or more of our direct customers or an OEM were to experience labor shortages or work stoppages, which could result in the temporary shutdown of the related Gentherm production facilities or other restructuring initiatives.

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Approximately 36% of the Company's workforce are members of industrial trade unions or worker councils and we believe a significant percentage of employees of our largest customers and suppliers are members of such organizations, all of whom are employed under the terms of various labor agreements. A union strike or inability to enter into a new labor agreement prior to expiration of an existing agreement could have an adverse impact on us or our suppliers or customers.

Our inability to effectively manage the development, timing, quality and costs of new product launches could adversely affect our financial performance.

The launch of new products and technologies is complex, the success of which depends on a wide range of factors, including the capacity of our internal teams, robustness of our product and manufacturing process development, success in sourcing new components and commodities with suitable suppliers, readiness of our and our suppliers' manufacturing facilities and manufacturing processes, as well as factors related to tooling, equipment, employees, initial product quality and other factors. Given the complexity of new product and technology launches, we may experience difficulties managing product quality, timeliness and associated costs.

The process of designing and developing new technology, products and services is costly and uncertain and requires extensive capital investment. In addition, new program launches require a significant ramp up of costs up to a few years prior to sales of such products. However, our sales related to these new programs generally are dependent upon the timing and success of our customers’ introduction of new vehicles. Our inability to effectively manage the timing, quality and costs of these new program launches could have a materially adverse effect on our business, results of operations and financial condition.

To the extent we are not able to successfully launch new business, or if we are unable to prevent or effectively remedy errors, bugs, vulnerabilities or defects in our new products and technologies, vehicle production at our customers could be significantly delayed or shut down. Such operating failures could result in significant financial penalties to us or a diversion of personnel and financial resources to improving or fixing launches rather than investment in continuous process improvement or other growth initiatives, and could result in our customers shifting work away from us to a competitor. Any of the foregoing matters could result in a significant loss of revenue and market share and could have an adverse effect on our profitability and cash flows.

Our ability to grow our product portfolio successfully depends on the sustained acceptance of new products and technologies that we invest in by existing and potential customers and consumers, as well as the success of our customers.

Growing our product portfolio is core to our business, and we regularly identify and evaluate potential new products and technologies to add to our product offerings. In such growth efforts, we have been, and will continue to be, required to educate potential customers and demonstrate that the merits of additional products and technologies we develop, acquire or license justify the costs associated with them. Customers will only adopt new products and technologies if there appears to be significant consumer demand at proposed pricing, and some OEMs may develop their own, be slow to adopt or may never adopt such products and technologies.

For our automotive products, we rely on OEMs and applicable dealer networks to market new products and technologies to consumers, and we do not have any control over the applicable marketing budget or messaging nor the training of employees and agents. Without acceptance of such products by customers and consumers, our ability to sustain growth in our product portfolio will be inhibited, which could have a material adverse effect on our results of operations, financial condition, business and business strategy. Further, our failure to adapt our strategies and operations appropriately could have a material adverse effect on our business, results of operations and financial condition.

The automotive industry, our primary market, is cyclical and is significantly impacted by macroeconomic, geopolitical and similar global factors, and a decline in the production levels of our major customers and OEMs, could materially and adversely affect our business, results of operations and financial condition.

Our Automotive segment represents 97% of our product revenues for each of the years ended December 31, 2025, 2024 and 2023. Demand for our automotive products is significantly impacted by light vehicle production in key markets of North America, Europe, China, Japan, and Korea, and is ultimately dependent on consumer demand for automotive vehicles, our content per vehicle, and other factors that may limit or otherwise impact production by us, our supply chain and our customers. Automotive sales and production are cyclical and are materially affected by macroeconomic, geopolitical and industry conditions that are outside of our control and the control of our customers and suppliers. These conditions include monetary fiscal policy, economic recessions,

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inflation, political instability, labor relations issues, energy prices, regulatory requirements, government initiatives, trade restrictions and agreements, capital and liquidity constraints, ongoing geopolitical conflicts, acts of war and terrorism, and natural and man-made disasters, such as the current conflicts between Russia and Ukraine, in the Middle East, and heightened tensions in the Red Sea and South China Sea. Additionally, the global automotive industry is experiencing a period of significant technological change. In recent years, automotive light vehicle demand and production have been materially impacted by the unexpected shifting demand and plans for EV and the mix of ICE and EV programs. We, like other manufacturers, have a high proportion of fixed structural costs, and therefore relatively small changes in industry vehicle production can have a substantial effect on our financial results. When automotive light vehicle production in our key markets and our sales decline to levels significantly below our planning assumption, as we have experienced periodically, our financial condition, results of operations, and cash flow has been adversely affected. Our operational costs are similarly impacted by such macroeconomic, geopolitical and industry conditions, which has and may continue to adversely impact our margins and profitability.

Our business in China may be subject to aggressive competition and is sensitive to economic, political, and market conditions.

Maintaining a strong position in the Chinese market is a key component of our global growth strategy. The automotive supply market in China is highly competitive, with competition from many of the largest global manufacturers and numerous smaller domestic manufacturers. Our automotive sales volume growth in China has varied significantly in each of the last few years. Domestic Chinese OEMs have continued to expand their market share in China and have lower-cost products to begin to penetrate other global markets, and as a result, several non-Chinese OEMs in China and in other global markets in which such Chinese OEMs participate have experienced declines in revenue and market share. As the Chinese market and Chinese OEM pricing strategy evolves, we anticipate that market participants in China and in other global markets impacted by Chinese OEM pricing will act aggressively to increase or maintain their market share. Increased competition has resulted in price reductions, reduced margins and our inability to gain or hold market share. If we are unable to maintain our position in the Chinese market or if vehicle sales in China continue to experience varied growth rates or decrease, our business and financial results could be materially adversely affected.

Our operations within Ukraine subject us to risks that may harm our operations and financial results.

The conflict between Russia and Ukraine, and certain measures taken in response, have impacted the availability and prices of certain raw materials and energy (especially in Europe) and have led to various economic sanctions, which could have a lasting impact on regional and global economies. Our facility in Vynohradiv, Ukraine is on the far western corner within the Transcarpathia region near the Hungary border. In 2025, 2024 and 2023, products manufactured at our Ukraine facility represented approximately 5%, 6% and 6% of the Company’s total revenue, including automotive cables, seat heaters and steering wheel heaters. At this time, our Ukraine facility is operating at normal levels. Our response to the ongoing conflict is based on a severity level contingency response plan that has been developed with certain customers. Execution of the contingency response plans may require us to relocate specific equipment and production to other Gentherm manufacturing sites. We have experienced and may continue to experience interruptions in power supply at our Ukraine facility. We have contingency measures in place to address intermittent power supply interruptions, however, extended interruptions could significantly impact our ability to operate the facility. Further, most of our products manufactured in Ukraine are shipped across the border from Ukraine to Hungary for further delivery to our customers. If that border crossing were to be closed or restricted for any reason, we may experience a significant disruption to our operations. As the situation in Ukraine is fluid, we continue to monitor its effects on our business and we continue to work closely with our customers to adjust our contingency response as necessary.

The global automotive supply chain has been adversely impacted by raw material and component shortages, manufacturing disruptions and delays, logistics challenges and tariffs, inflationary and other cost pressures, and we expect such conditions to continue to adversely affect our business, profitability and results of operations.

Our products contain a significant number of components that we source globally from suppliers who, in turn, source components from their global suppliers. The availability of raw materials and product components fluctuates due to factors outside of our control, including supply and demand imbalances, geopolitical and macroeconomic factors, labor disruptions or shortages, trade laws and tariffs, natural disasters, and global pandemics, which has and we expect will continue to impact the ability of our supply chain to meet our production requirements and therefore our ability to meet the production demands of our customers. In some instances, we purchase components, raw materials and parts that are ultimately derived from a single source and may be at an increased risk for supply disruptions and cost pressures. If our supply chain fails to deliver products to us in sufficient quality and

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quantity on a timely basis, we will be challenged to meet our production schedules and fulfill our orders due to the “just-in-time” manufacturing process that is broadly utilized in our industry, which would decrease sales and profits and could damage our commercial reputation and customer relationships. Furthermore, sudden changes in the production schedules of OEMs and Tier 1s caused by raw material and component shortages also have resulted and may continue to result in operating inefficiencies, which could adversely affect our profitability and results of operations. Additionally, if we are the primary cause for a customer being forced to halt production, the customer may seek to recoup all of its losses and expenses from the Company. Similarly, OEMs and Tier 1s to whom we supply our products are dependent on an ever-greater number of global suppliers to manufacture and sell their products to consumers, which drives sales of our products.

Our inability to achieve product cost reductions which offset customer-imposed price reductions could adversely affect our financial performance.

Downward pricing pressure is customarily applied by automotive manufacturers to the automotive supply chain. Our customer contracts generally provide for annual price reductions over the production life of the vehicle, while requiring us to assume significant responsibility for the design, development and engineering of our products, as well as the costs incurred through our supply chain. Prices may also be adjusted on an ongoing basis to reflect changes in product content/costs and other commercial factors. Our inability to achieve product cost reductions that offset customer-imposed price reductions has and could continue to adversely affect our financial condition, results of operations and cash flows.

Security breaches and other disruptions to our information technology networks and systems, including a disruption related to cybersecurity, could interfere with our operations and could compromise the confidentiality of our proprietary information or personal information.

We rely on our information technology, communication networks, enterprise applications, accounting and financial reporting platforms and related systems in connection with many of our business activities. Some of these networks and systems are managed by third-party service providers and are not under our direct control. Our operations routinely involve receiving, storing, processing and transmitting sensitive information pertaining to our business, customers, suppliers, employees and other sensitive matters. We rely upon the capacity, reliability and security of our IT and data security infrastructure, as well as our ability to expand and continually update this infrastructure in response to the changing needs of our business. If we experience a problem with the functioning of an important IT system or a security breach of our IT systems, due to failure to timely upgrade systems or during system upgrades and/or new system implementations, or resulting from failures of our third-party service providers, the resulting disruptions could have an adverse effect on our business.

As with most companies, we have experienced cybersecurity incidents, attempts to breach our systems and other similar incidents, none of which were material in 2025.

Any future cybersecurity incidents could, however: materially disrupt operational systems; result in loss of trade secrets or other proprietary or competitively sensitive information; compromise personally identifiable information regarding customers or employees; delay our ability to deliver products to customers; and jeopardize the security of our facilities. A cybersecurity incident could be caused by malicious outsiders (including state-sponsored espionage or cyberwarfare, which has become commonplace) or insiders using sophisticated methods to circumvent firewalls, encryption and other security defenses. Because techniques used to obtain unauthorized access or to sabotage systems change frequently and generally are not recognized until they are launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures. Information technology security threats, including security breaches, computer malware, “ransomware” and other cybersecurity incidents, are increasing in frequency, uniqueness and sophistication to evade detection and remove forensic evidence of the incident, including due to emerging technologies such as artificial intelligence and machine learning, which may cause cybersecurity incidents to be more difficult to detect for periods of time or at all. Many victims of ransomware are forced to pay significant ransoms to regain access to their critical business data, and we may not be permitted under various regulations and laws to make such payments.

We have implemented and maintain various information security processes designed to identify, assess and manage material risks from cybersecurity threats to our critical systems and our proprietary, strategic or competitive data, which we review for quality and effectiveness on a regular basis. Our IT systems, like those of other companies, are vulnerable to intrusion or damages from computer viruses or worms, natural disasters (which may become more frequent due to climate change), unauthorized access, cybersecurity incidents, breaches due to errors, negligence or malfeasance by employees, contractors or others who have access to

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these systems and other similar disruptions. Any system failure, accident or security breach could result in disruptions to our operations and include the theft of our intellectual property, trade secrets, customer information, human resources information or other confidential information. The foregoing matters could cause significant damage to our reputation, affect our relationships with our customers, lead to claims against us, fines and other penalties assessed upon us by governmental authorities, and ultimately harm our business and financial performance. In addition, we may be required to incur significant costs to remediate and protect against damage caused by these disruptions or security breaches in the future.

Our global operations subject us to risks that may harm our operations and financial results.

In 2025, 66% of our product revenue was generated from sales to customers outside the United States (based on shipment destination), including Europe and Asia. Further, we have significant personnel, property, equipment and operations located outside of the United States. We also conduct certain investing and financing activities in local currencies.

In addition to the general risks relating to our operations, our international operations are subject to significant unique risks inherent in doing business abroad, many of which have had a significant impact on our business and financial performance in recent years, including:

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exposure to local economic, political, social and labor practices and conditions;

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different, complex and continuously changing local laws and regulations and enforcement thereof;

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changes in government leadership;

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increases in costs of and disruptions in international shipping related to global conflicts and environmental conditions;

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increases in duties, tariffs and taxation on the import or export of our products related to U.S. trade disputes, trade restrictions, potential trade wars and other global conflicts;

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exposure to infectious disease and epidemics, including the effects on our business operations, and those of our customers and suppliers, in geographic locations impacted by an outbreak;

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violence and civil unrest (including acts of terrorism, drug-cartel related and other forms of violence and outbreaks of war);

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expropriation, nationalization or other protectionist activities;

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currency exchange rate fluctuations and currency controls;

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withholding and other taxes on repatriated funds and other payments by subsidiaries;

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difficulties in managing or overseeing foreign operations and agents; and

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different credit risks.

We work with select domestic manufacturers in China, with over 15% of our 2025 product revenue generated from sales to customers in China. Chinese-based OEMs and automotive suppliers are growing market share in global markets. However, continued U.S.-China trade tensions and weakening economic conditions, among other factors, may result in reduced sales, profitability and margins, increased operating costs and challenges to gaining or holding market share with such OEMs. Furthermore, certain risks and uncertainties of doing business in China are solely within the control of the Chinese government and such regulations may favor domestic Chinese automotive suppliers, including Chinese regulation of the scope of our business and investments in China, as well as our ability to provide cash to and repatriate cash from our business entities in China. In order to maintain access to the Chinese market, we may be required to comply with significant technical and other regulatory requirements that are unique to the Chinese market, at times with challenging lead times. These actions may increase the cost of doing business in China, hinder our ability to compete with Chinese-based automotive suppliers and limit how and under what conditions we may do business in China, which could materially and adversely affect our profitability and financial condition.

Our ongoing efforts to optimize our cost structure and our global manufacturing footprint could cause supply disruptions and be more costly, time-consuming and resource-intensive than expected.

Our ongoing efforts to optimize the efficiency of our global operations could cause supply disruptions and could be more expensive, time-consuming and resource-intensive than expected. In recent years, we have initiated restructuring actions to streamline our manufacturing operations and optimize the Company's cost structure. We have and may continue to experience significant cash

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and non-cash expense, including employee severance, retention and termination costs, capital expenditures, accelerated depreciation and impairment of fixed assets, and other transition costs including recruiting, relocation, and machinery and equipment move and set up costs. The actual timing, costs and savings from these projects may differ materially from the Company’s expectations and estimates. Additionally, restructuring actions may adversely affect our ability to recruit, retain and motivate skilled personnel. Such restructuring actions may also be distracting to employees and management and may negatively impact our business operations, reputation, or ability to serve our customers.

We manage our business based on projected future sales volume, which is highly dependent on information received from customers and general market data, and any inaccuracies or changes in such information could adversely affect our business, results of operations and financial condition.

We manage our business based upon projected future sales volumes, which are based upon many factors, including awarded business and assumptions of conversion rates thereof, customers’ forecasts and general macroeconomic and industry market data. Our industry broadly utilizes a “just-in-time” manufacturing process, and our production volumes established in a new business award frequently change in amount and timing based on updated production schedules from the OEMs and Tier 1s. Our product revenues generally are based upon purchase orders issued by our customers, which occur close to production and delivery of our products, and our customers generally do not guarantee sales volumes. As such, we typically do not have a backlog of firm orders at any point in time. In addition, awarded business may include arrangements under which our customers have the right to terminate without penalty at any time. Further, our customers’ forecasts are subject to numerous assumptions, and such forecasts often are changed rapidly with limited notice. Therefore, our actual sales volumes and the resulting amount of revenue are not committed. We also must incur costs and make commitments well in advance of the receipt of orders and resulting revenues from customers. If actual production orders from our customers are not consistent with our projected future sales volumes, especially for our higher-margin products, we could realize substantially less revenue and incur greater expenses over the life of vehicle programs. In recent years, we have been awarded record new business awards, which has enhanced the foregoing risks.

The receipt of orders and resulting revenues from customers is significantly affected by global automotive production levels. Recent macroeconomic, geopolitical and industry factors noted above have made it particularly challenging for us to project future sales volumes and manage our business.

We use important intellectual property in our business. If we are unable to protect our intellectual property or if a third party makes assertions against us or our customers relating to intellectual property rights, our business could be adversely affected.

We own important intellectual property, including patents, trademarks, copyrights and trade secrets. Our intellectual property plays an important role in maintaining our competitive position in many of the markets that we serve.

We cannot guarantee, however, that we will be able to secure all desired protection, nor that the steps we have taken to protect our intellectual property will be adequate, to prevent infringement of our rights or misappropriation or theft of our technology, trade secrets or know-how. For example, effective patent, trademark, copyright and trade secret protection may be unavailable or limited in some of the countries in which we operate. Foreign governments may adopt regulations, and foreign governments or courts may render decisions, requiring compulsory licensing of intellectual property rights, or foreign governments may require products to meet standards that serve to favor local companies or provide reduced protection relative to other countries.

In addition, while we generally enter into confidentiality agreements with our employees and third parties to protect our trade secrets, know-how, business strategy and other proprietary information, such confidentiality agreements could be breached or otherwise may not provide meaningful protection. Further, adequate litigation and other remedies may be costly or otherwise not be available in the event of an unauthorized theft, use or disclosure. Finally, for those products in our portfolio that rely on patent protection, once a patent has expired, the product is generally open to competition. If we fail to successfully enforce our intellectual property rights, our competitive position and the value of our intangible assets could suffer, which could harm our business, financial condition, results of operations and cash flows.

Further, our competitors may develop technologies that are similar or superior to our proprietary technologies or design around the patents we own or license.

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If we fail to manage our growth effectively or to integrate successfully any business ventures, acquisitions, investments or strategic alliance into our business, or realize the benefits from divestitures or business exits, our business and financial performance could be materially adversely harmed.

We regularly consider opportunities to pursue business ventures, acquisitions, investments and strategic alliances that could leverage our products, technologies and capabilities, as well as, enhance our customer base, geographic penetration and scale, to complement our current businesses, some of which could be material. See “—Risks Related to the Modine Transaction” below.

Finding and assessing a potential growth opportunity and completing a transaction involves extensive due diligence, management time and expense. Further, we can give no assurance that any such transaction will positively affect our financial performance or will perform as planned, including regarding anticipated synergies or other financial or operational benefits. For significant transactions, we would expect to incur additional debt, issue equity and/or increase capital expenditures, which may increase leverage risks, result in dilution or reduce capital available for other investments in ongoing operations. If we fail to identify and complete suitable acquisition and investment opportunities in a timely and successful manner, our business, growth strategy reputation and results of operations could be materially and adversely impacted.

Furthermore, the success of our acquisitions is dependent, in part, on our ability to realize the expected benefits from the integration of the acquired businesses or assets. We may incur an unexpected amount of liabilities or make incorrect estimates regarding the planned accounting for acquisitions, such as the need to record non-recurring charges or write-off of significant amounts of goodwill or other assets that could adversely affect our results of operations, and we may not have sufficient contractual protections. Further, the integration of acquired businesses is a complex, costly and time-consuming process that requires significant management attention and resources. It is possible that the integration process could result in the loss of key employees, the disruption of our operations, the inability to maintain or increase our competitive presence, inconsistencies in and incompatibility of information technology and accounting systems, as well as other compliance standards, controls, procedures and policies, difficulties in achieving anticipated cost savings, synergies, business opportunities and growth prospects from the acquisition, additional litigation, compliance or regulatory risk, the diversion of management’s attention to integration matters and difficulties in the assimilation of employees and corporate cultures, especially if the acquisition involves a business, supply chain or operations in one or more countries in which we have a limited history and lack of experience. Any of these factors, many of which are out of our control, and our increased debt leverage following the closing of any significant transaction could have an adverse effect on our business and financial performance, including reduced profitability and future impairment of any associated goodwill and intangible asset balances.

Periodically, we also evaluate opportunities to divest or shut-down non-core businesses and assets, and the Company may consider strategic dispositions and shut-downs in the future. However, we may not achieve some or all of the targeted benefits we originally anticipated at the time of disposition or shut-down, we may continue to retain material liabilities by contract or applicable law, and we may incur impairment charges. Further, for dispositions, we may need to provide material transition services following the transaction, any of which could have an adverse impact on our returns and our overall profitability.

Gentherm’s adoption of new technology such as artificial intelligence could adversely impact its business, operations and reputation.

Gentherm is in the early stages of incorporating artificial intelligence capabilities into the development of technologies and business operations, and into products and services. Artificial intelligence technology is complex and rapidly evolving, and may subject Gentherm to significant competitive, legal, regulatory, operational and other risks. The implementation of artificial intelligence can be costly and there is no guarantee that Gentherm’s use of artificial intelligence will enhance its technologies, benefit its business operations, or produce products and services that are preferred by its customers. Gentherm’s competitors may be more successful in their artificial intelligence strategy and develop superior products and services with the aid of artificial intelligence technology. Additionally, artificial intelligence algorithms or training methodologies may be flawed, and datasets may contain irrelevant, insufficient or biased information, which can cause errors in outputs. This may give rise to legal liability, reputational damage, and materially harm Gentherm’s business. The use of artificial intelligence in the development of Gentherm’s products and services could also cause loss of intellectual property, as well as subject it to risks related to intellectual property infringement or misappropriation, data privacy and cybersecurity. Furthermore, the U.S. and other countries may adopt laws and regulations related to artificial intelligence. Such laws and regulations could cause Gentherm to incur greater compliance costs and limit the use of artificial intelligence in the development of its products and services. Any failure or perceived failure by Gentherm to comply with such

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regulatory requirements could subject Gentherm to legal liabilities, reputational damage, or otherwise have a material and adverse impact on Gentherm’s business.

Legal, Regulatory and Compliance Risks

Economic and trade policy, including tariffs and customs regulations, could have a material and adverse effect on our business.

The U.S. has established free trade laws and regulations that set certain duties and tariffs for qualifying imports and exports, subject to compliance with the applicable classification and other requirements. Changes in laws or policies governing the terms of foreign trade, and in particular increased trade restrictions, tariffs or taxes on imports from countries where we manufacture products, such as China and Mexico, could have a material adverse effect on our business and financial results. In recent years, the U.S. and Chinese governments have imposed a series of significant incremental retaliatory tariffs to certain imported products. Most notably with respect to the automotive industry, the U.S. imposed tariffs on imports of certain steel, aluminum and automotive components, and China imposed retaliatory tariffs on imports of U.S. vehicles and certain automotive components. The U.S. administration recently has periodically enacted additional or enhanced tariffs in various jurisdictions relevant to our business. Implementation of tariffs or other restrictive trade measures by the United States and potentially reciprocally by other countries subject to such to tariffs remains highly uncertain. Due to the global nature of our business, specifically in the jurisdictions impacted by the recent tariffs announcements, if the actual and potential tariffs and reciprocal tariffs are implemented as currently proposed, our results of operations could be materially negatively impacted, both directly and indirectly through negative effects to our supply chain, as a result of increased costs, decreased demand and other adverse economic impacts, and we may not be able to successfully mitigate or offset such impacts. Depending upon their implementation and duration, as well as our ability to mitigate their impact, these tariffs and any other future regulatory actions implemented on a broader range of products or raw materials could materially affect our business, including increased cost of our products, reduction of sales, disruption of our supply chain and may impair our ability to effectively operate and compete in the countries where we do business.

In addition, various countries regulate cross-border transactions of certain products through import permitting and licensing requirements. The exportation, re-exportation, transfers within foreign countries and importation of our products, including by our suppliers and vendors, must comply with these laws and regulations, and any violations may result in reputational harm, government investigations and penalties, and a denial or curtailment of importing or exporting activities. Complying with U.S. export, sanctions and import laws, including ongoing and rapidly changing sanctions against certain countries, regions, governments and related persons and entities, may be time consuming, may increase our costs, and may result in the delay or loss of sales opportunities. If we are found to be in violation of U.S. export, sanctions or import laws, or similar laws in other jurisdictions, we and the individuals working for us could incur substantial fines and penalties. Changes in export, sanctions or import laws or regulations may delay the introduction and sale of our products in the U.S. and international markets, require us to spend resources to seek necessary government authorizations or to develop different versions of our products, or, in some cases, prevent the export or import of our products to certain countries, regions, governments, persons or entities, which could adversely affect our business, financial condition and operating results.

We may face particular privacy, data security and data protection risks.

We are subject to several data privacy and data security laws and regulations in the various jurisdictions that we operate. An increasing number of U.S. states have enacted data privacy and security laws and regulations that govern the collection, use, disclosure, transfer, storage, disposal, and protection of personal information, such as social security numbers, financial information and other information. For example, several U.S. territories and all 50 states have adopted data breach rules that require timely notification if a company has experienced the unauthorized access or acquisition of personal information. States have enacted privacy laws in recent years and other states are considering doing so. These privacy laws may impose substantial penalties for violations, impose significant costs for investigations and compliance, allow private class-action litigation and carry significant potential liability for our business and reputation.

Legislators and/or regulators in foreign countries in which we operate are increasingly adopting or revising privacy, information security and data protection laws as well. In particular, the European Union’s General Data Protection Regulation (“GDPR”) imposes additional obligations and risk upon our business and which increases substantially the penalties to which we could be subject in the event of any non-compliance. Many countries have enacted similar types of legislative and regulatory requirements concerning data protection, and additional countries are considering similar legal frameworks.

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The CCPA, GDPR and other similar laws and regulations including those recently or soon to be enacted, as well as any associated inquiries or investigations or any other government actions, may be costly and burdensome to comply with, lead to a decline in consumer engagement, result in negative publicity, increase our operating costs, require significant management time and attention to monitor and be in compliance with, and subject us to remedies that may harm our business, including fines or demands or orders that we modify or cease existing business practices. Moreover, regulatory actions seeking to impose significant financial penalties for noncompliance and/or legal actions (including pursuant to laws providing for private rights of action by consumers) could be brought against us in the event of a data compromise, misuse of consumer information, or perceived or actual non-compliance with data protection or privacy requirements, privacy, or artificial intelligence requirements. The rapid evolution and increased adoption of artificial intelligence technologies may intensify these risks.

Defects or quality issues associated with our automotive and medical products, as well as a significant product liability lawsuit, warranty claim or product recall involving us or one of our major customers, or an investigation regarding vehicle safety generally, could adversely affect the results of our operations.

Our design, manufacture and marketing of automotive products subject us to warranty and product liability claims in the event that customers, consumers or regulators believe that our products (or the products of our customers that incorporate our products) failed to perform as expected and, in the case of product liability, such failure of our products (or the products of our customers that incorporate our products) results or is alleged to result in bodily injury or property damage. If any of our products are or are alleged to be defective, we also may be required by our customers or regulators to participate in a recall or other corrective action involving such products, which we have been subject to periodically. Automotive manufacturers are increasingly looking to their suppliers for contribution when faced with recalls and product liability claims, as well as requiring their suppliers to guarantee or warrant their products and bear the costs of repair and replacement of such products under new vehicle warranties. In addition, governmental regulatory agencies throughout the world, such as NHTSA in the U.S., have safety standards that require manufacturers to remedy defects related to vehicle safety through safety recall campaigns, and a manufacturer is obligated to recall vehicles if it determines that the vehicles do not comply with a safety standard. See Note 10 “Commitments and Contingencies” to the consolidated financial statements included in this Annual Report for information regarding recent or ongoing product liability and warranty matters.

Any large liability claims, if made, could exceed our insurance coverage limits and insurance may not continue to be available on commercially acceptable terms, if at all, and we may incur significant costs to defend these claims. In certain instances, allegedly defective products may be the result of components supplied by our supply chain, and we may be limited in our ability to obtain recovery from our suppliers of materials or services included within our products that are associated with product liability and warranty claims, particularly if the affected items relate to global platforms or involve defects that are identified years after production. A recall, product liability or warranty claim brought against us that is not insured or is in excess of our available insurance, and if other third parties do not contribute or indemnify us, could have an adverse impact on our results of operations and reputation or market acceptance of our products.

The design, manufacture and marketing of medical products involve certain inherent risks. Manufacturing or design defects, component failures, unapproved or improper use of our products, or inadequate disclosure of risks or other information relating to the use of our products can lead to regulatory action, injury or other serious adverse events. These events could lead to recalls or safety alerts relating to our products (either voluntary or as required by the Food and Drug Administration (“FDA”) or similar governmental authorities in other countries), and could result, in certain cases, in the removal of a product from the market. A recall, inadequate disclosure or defect could result in significant costs and lost sales and customers, enforcement actions and/or investigations by state and federal governments or other enforcement bodies, as well as negative publicity and damage to our reputation that could reduce future demand for our products. Personal injuries relating to the use of our products can also result in significant product liability claims being brought against us. In some circumstances, such adverse events could also cause delays in regulatory approval of new products or the imposition of post-market approval requirements, such as further clinical testing. Such clinical testing is costly and time-consuming and could delay market approval or the meeting of additional post-market requirements.

Tax matters, including changes in the corporate tax rates, disagreement with taxing authorities and imposition of new taxes could impact our results of operations and financial condition.

We are subject to income and other taxes in the U.S. and internationally. We are also subject to regular reviews, examinations, and audits by the Internal Revenue Service and other taxing authorities with respect to our taxes. Although we believe our tax

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estimates are reasonable, if a taxing authority disagrees with the positions we have taken, we could face additional tax liability, including interest and penalties. There can be no assurance that payment of such additional amounts upon final adjudication of any disputes will not have a material impact on our results of operations and financial position.

We also need to comply with new, evolving or revised tax laws and regulations. The enactment of other changes in the application or interpretation of tax legislation and other initiatives may have an adverse effect on our business or on our results of operations.

The value of our deferred tax assets may not be realized, which could materially and adversely affect our operating results.

As of December 31, 2025, we had approximately $73.7 million in net deferred tax assets, inclusive of a $11.4 million valuation allowance. These deferred tax assets include net operating loss carryovers and tax credits that can be used to offset taxable income in future periods and reduce income taxes payable in those future periods. Each quarter, we determine the probability of the realization of deferred tax assets, using significant judgments and estimates with respect to, among other things, historical operating results and expectations of future earnings and tax planning strategies. If we determine in the future that there is not sufficient positive evidence to support the valuation of these assets, due to the risk factors described herein or other factors, we may be required to further adjust the valuation allowance to reduce our deferred tax assets. Such a reduction could result in material non-cash expenses in the period in which the valuation allowance is adjusted and could have a material adverse effect on our financial statements.

Our patient temperature management business is subject to extensive industry regulation and failure to comply with all applicable rules and regulation may adversely impact us.

Our patient temperature management business is subject to extensive, complex, costly and evolving government regulation. In the U.S., this is principally administered by the FDA. Various regulatory agencies in foreign countries where our medical products are sold also regulate that business. Under both U.S. and foreign country regulations, we are subject to periodic inspection of our facilities (including third-party facilities that are performing services for us), procedures and operations and testing of our products. Following such FDA inspections, should any noncompliance with regulations or other quality issues be noted, we may receive observations, notices, citations and/or warning letters that could require us to get FDA approval of a corrective action plan and modify certain activities identified during the inspection, possibly at a significant cost. We are also required to report adverse events associated with our medical products to the FDA and other foreign regulatory authorities where our products have been approved or received market clearance. Unexpected or serious health or safety concerns could result in liability claims, recalls, market withdrawals or other regulatory actions. Changes in laws or regulations could require us to change the way we operate or to utilize resources to maintain compliance, which could increase costs or otherwise disrupt operations. In addition, failure to comply with any applicable laws or regulations could result in fines or revocation of our operating permits and licenses or, in rare circumstances, market withdrawal of the product.

The process for obtaining governmental approval to manufacture and market new medical devices is time-consuming and costly. We are dependent on receiving FDA and other governmental or third-party approvals prior to manufacturing, marketing and shipping any new medical products. We cannot be certain that any new medical products we develop will receive FDA or other necessary approvals. Also receipt of approval in one country does not guarantee approval by the FDA or any other foreign regulatory agency.

Any failure to comply with anti-corruption laws and regulations could have a material and adverse effect on our reputation, business and financial results.

Our operations outside of the United States require us to comply with various anti-bribery and anti-corruption regulations, including but not limited to the U.S. Foreign Corrupt Practices Act, the United Kingdom Bribery Act and the China Anti-Unfair Competition Law. Compliance with these laws and regulations have become increasingly complex due to the increasing global operations of OEMs and automotive component suppliers, including us. Violations of these laws, which are complex and often difficult to interpret and apply, could result in significant criminal penalties or sanctions that could adversely affect our business, financial condition, results of operations and cash flows. Additionally, we have periodically, and intend in the future, to complete acquisitions of and investments in companies, which may have different historical policies, practices and standards that increase the risk of our compliance with various regulations while we integrate such companies.

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Our business may be negatively impacted by the effects of climate change and by regulatory and stakeholder-imposed requirements to address climate change and other sustainability issues.

As evidenced by shifting industry and consumer behaviors, including the development and use of EVs, the automotive industry and stakeholders have a heightened focus on climate change and the environmental impact of product manufacturing and end use. This increased focus on sustainability and the environmental impact of the automotive industry and manufacturing processes has caused our customers and other stakeholders to impose additional requirements on us and our suppliers, which often exceed regulatory standards. These customer requirements include increased tracking and reporting of greenhouse gas emissions and other environmental metrics, reduced waste and wastewater from operations, increased use of sustainable materials in our products, and the use of renewable energy sources in our factory operations. We have begun, and expect to continue, to incur increased operating costs and capital expenditures to procure renewable energy and additional equipment or make operational and process changes to comply with customer requirements in addition to state and federal regulations. To the extent we are unable to meet or exceed customer sustainability requirements, demand for our products and our revenues could be adversely impacted. A failure to adequately meet other stakeholder expectations may result in the loss of business, diluted market valuation, an inability to attract customers or an inability to attract and retain top talent.

We are involved from time to time in various legal and regulatory proceedings and claims, which could adversely affect our financial performance.

We are involved in various legal and regulatory proceedings and claims that, from time to time, are significant. These are typically claims that arise in the normal course of business including, without limitation, commercial or contractual disputes, including disputes with our customers, suppliers or competitors, intellectual property matters, personal injury claims, environmental matters, tax matters and employment matters. Such legal and regulatory proceedings could result in an adverse outcome for the Company that would adversely affect our financial condition, results of operations and cash flows.

Financial Risks

We are subject to significant foreign currency risk and foreign exchange exposure related to our global operations.

A significant portion of our global transactions is conducted in currencies other than the U.S. dollar, including the Euro, Mexican Peso, Hungarian Forint, North Macedonian Denar, Ukrainian Hryvnia, Japanese Yen, Chinese Renminbi, Korean Won, Czech Koruna, Vietnamese Dong and Moroccan Dirham. While we sometimes employ financial instruments to hedge some of our transactional foreign exchange exposure, developing an effective and economical foreign currency risk strategy is complex and expensive and no strategy can completely insulate us from those exposures. Exchange rates can be volatile and could adversely affect our financial results and comparability of results from period to period. Such exchange rate volatility could also increase the costs of raw materials or components from foreign suppliers, and as a result, our profitability could be adversely affected.

Our existing indebtedness and the inability to access capital markets could restrict our business activities or our ability to execute our strategic objectives or adversely affect our financial performance.

As of December 31, 2025, our total consolidated indebtedness was $189.1 million, with $307.9 million available for additional borrowings under the Second Amended and Restated Credit Agreement subject to specified conditions that Gentherm currently satisfies. We may incur additional indebtedness in the future, including in connection with acquisitions or significant capital expenditures. If our outstanding borrowings increase, including under existing availability of revolving credit or if we incur additional indebtedness, the amount of our outstanding debt could have important, adverse consequences to us and our investors, including:

▪

requiring a substantial portion of our cash flow from operations to make interest payments;

▪

making it more difficult to satisfy other obligations;

▪

increasing our vulnerability to general adverse economic and industry conditions;

▪

reducing the cash flow available to fund capital expenditures and other corporate purposes and to grow our businesses;

▪

limiting our flexibility in planning for, or reacting to, changes in our businesses and industries; and

▪

limiting our ability to borrow additional funds as needed or take advantage of business opportunities as they arise.

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Our debt agreements contain certain restrictive covenants and customary events of default. These restrictive covenants limit our ability to take certain actions, such as, among other things: incur additional debt, create liens, make certain payments or distributions (including for the repurchase or redemption of our shares), engage in mergers or consolidations, make certain dispositions and transfers of assets, enter into transactions with affiliates and guarantee indebtedness. While not unusual for financings of the type that we have, the restrictions in our credit facilities may prevent us from taking actions that we believe would be in the best interest of our business and may make it difficult for us to execute our business plans, take advantage of business opportunities, or react to changing industry conditions.

To the extent that we incur additional indebtedness, the risks described above could increase. In addition, our actual cash requirements in the future may be greater than expected. Our ability to make payments of principal and interest on our indebtedness depends upon our future performance. If our cash flow from operations is not sufficient to service our outstanding debt or to repay the outstanding debt as it becomes due, we may not be able to borrow money, sell assets or otherwise raise funds on acceptable terms, or at all, to service or refinance our debt and we may have to reduce or delay planned capital or operating expenditures. The occurrence of any of such events could have a material adverse effect upon our business, cash flows, financial condition and results of operations. If an event of default would occur under our existing debt agreements or any additional indebtedness, our lenders could declare all amounts outstanding to be immediately due and payable, which may cause cross-defaults under our other debt obligations. If our lenders accelerate the maturity of our indebtedness, we may not have sufficient capital available at that time to pay the amounts due to all lenders on a timely basis, and there is no guarantee that we would be able to repay, refinance, or restructure the payments on such debt. Further, under our existing credit facilities, the lenders would have the right to foreclose on certain of our assets, which could have a material adverse effect on our business, results of operations and financial condition.

We utilize various strategies to move funds between countries to manage global liquidity needs without material adverse tax consequences. Any repatriation of cash to the U.S. may result in various tax consequences and the movement of capital remains subject to evolving government regulation, which could have an adverse impact on our liquidity and cash flows.

We continue to expect to be able to move funds between different countries to manage our global liquidity needs without material adverse tax implications, subject to current monetary policies and the terms of the Second Amended and Restated Credit Agreement. We utilize a combination of strategies and currently there are no significant restrictions on the ability of our subsidiaries to pay dividends or make other distributions to Gentherm Incorporated. As of December 31, 2025, the Company’s cash and cash equivalents held by our non-U.S. subsidiaries totaled $103.1 million. If additional non-U.S. cash was needed for our U.S. operations, we may be required to accrue and pay withholding if we were to distribute such funds from non-U.S. subsidiaries to the U.S. In addition, the movement of capital between our subsidiaries and us in different countries remains subject to evolving government regulation and geopolitical stability, and our liquidity and cash flows could be impacted adversely upon regulatory and geopolitical changes in the future.

Common Stock Investment Risks

The price of our Common Stock may fluctuate significantly.

The price of our Common Stock on the Nasdaq Global Select Market has experienced substantial price volatility and may continue to do so in the future. Additionally, the Company, the automotive industry and the stock market as a whole have experienced significant stock price and volume pressures and fluctuations that have affected stock prices in ways that may have been unrelated to these companies’ operating performance. In particular, while stock price multiples had previously increased in recent years for OEMs and automotive component suppliers to reflect the growth opportunity of the rapid shift to EV production, stock price multiples have declined more recently during this period of uncertainty regarding the pace of EV adoption and general macroeconomic challenges.

The Company has and may continue to repurchase its Common Stock, from time to time, in amounts and at prices the Company deems appropriate, subject to market conditions, applicable legal requirements, debt covenants and other considerations. Any Company stock repurchases may result in stock price and volume fluctuations. Price volatility over a given period may cause the average price at which the Company repurchases its Common Stock to exceed the price at a given point in time.

If the Company or the automotive industry generally fails to meet expectations related to future growth, profitability, share repurchases or other market expectations, the Company’s Common Stock price may decline significantly, which could have a material adverse impact on investor confidence, the perceived value of our Common Stock and our ability to continue to use stock based

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compensation to attract, retain and motivate employees. Any significant sale of Common Stock by any of our largest shareholders also may have a material adverse effect on our stock price and investor confidence.

Risks Related to the Modine Transaction

The Modine Transaction may not be completed on the terms or timeline currently contemplated, or at all, and the failure to complete the Modine Transaction could adversely impact the market price of our Common Stock.

The consummation of the Modine Transaction is subject to certain conditions, as described in this report, including, among other things: (i) shareholder approval of our issuance of Common Stock to SpinCo shareholders in connection with the Merger, and the amendment to our Articles of Incorporation to increase the number of our authorized Common Stock; (ii) obtaining antitrust or competition law regulatory approvals in certain jurisdictions; (iii) the consummation of the financing contemplated by the debt commitments (or alternative permanent financing); and (iv) receipt by Modine of an IRS ruling that the Distribution will be tax-free to Modine shareholders under the tax code. There is no assurance that these conditions will be met or that the Modine Transaction will be completed on the terms or timeline currently contemplated, or at all.

If the Modine Transaction is not completed for any reason, the price of Common Stock may decline.

If the Modine Transaction is completed, we may not realize the anticipated financial and other benefits, including growth opportunities, expected from the Modine Transaction.

We expect that we will realize synergies, growth opportunities and other financial and operating benefits as a result of the Modine Transaction. Our success in realizing these benefits, and the timing of their realization, depends, among other things, on the successful integration of the business operations of Performance Technologies. Even if we are able to integrate Performance Technologies successfully, we cannot predict with certainty if or when these synergies, growth opportunities and other benefits will be realized, or the extent to which they will actually be achieved. For example, the benefits from the Modine Transaction may be partially or fully offset by costs incurred in integrating Performance Technologies or in otherwise consummating the Modine Transaction. Realization of any synergies, growth opportunities or other benefits could be affected by the factors described in other risk factors and a number of factors beyond our control, including, without limitation, general economic conditions, increased operating costs and regulatory developments.

The integration of Performance Technologies following the Modine Transaction may present significant challenges, and the failure to successfully integrate Performance Technologies could have a material adverse effect on the combined company’s business, financial condition or results of operations.

Although we intend to run Performance Technologies as a separate division of the Company, there will still be significant integration activities upon closing of the transaction. There is a significant degree of difficulty inherent in the process of integrating Performance Technologies, including ensuring the effectiveness of internal control over financial reporting across a larger company and integrating certain information technology and regulatory compliance systems.

The process of integrating operations could result in significant costs and cause an interruption of, or loss of momentum in, the activities of Performance Technologies or our current business. If our senior management is not able to effectively manage the integration process, or if any significant business activities are interrupted as a result of the integration process, our existing business or Performance Technologies could be materially adversely affected.

The pendency of the Modine Transaction could have an adverse effect on our stock price, business, financial condition, results of operations or business prospects.

The announcement and pendency of the Modine Transaction could disrupt our business in negative ways. For example, customers and other third-party business partners of our business or Performance Technologies could seek to terminate or renegotiate their relationships with us or Performance Technologies as a result of the Modine Transaction, whether pursuant to the terms of their existing agreements or otherwise. In addition, our current and prospective employees and those of Performance Technologies may experience uncertainty regarding their future roles with the combined company, which might adversely affect our ability to retain, recruit and motivate key personnel. Should they occur, any of these events could adversely affect the stock price of, or adversely affect our financial condition, results of operations or business prospects.

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We will incur significant costs related to the Modine Transaction that could have a material adverse effect on our liquidity, cash flows and operating results.

We expect to incur significant one-time costs in connection with the Modine Transaction. These costs have been, and will continue to be, substantial and, in many cases, a substantial portion of which will be borne by us whether or not the Merger is completed. A substantial majority of these one-time costs will be transaction-related fees and expenses and include, among others, fees paid to financial, legal and accounting and other professional advisors and transition and pre-Merger integration planning-related expenses. If the Modine Transaction is not consummated because the Merger Agreement is terminated for specified reasons, we may be required to pay Modine a termination fee of $45 million or may be required to reimburse Modine for expenses. While we expect to be able to fund these one-time costs using cash from operations and/or borrowings under existing and anticipated credit sources, these costs could negatively impact our liquidity, cash flows and results of operations.

We are required to abide by restrictions which could limit our ability to undertake certain corporate actions that otherwise could be advantageous.

The Merger Agreement will restrict us from taking specified actions without Modine’s consent until the Modine Transaction is completed or the Merger Agreement is terminated, including making certain significant acquisitions or investments, entering into certain new lines of business, incurring certain indebtedness in excess of certain thresholds, making non-ordinary course capital expenditures, amending or modifying certain contracts, divesting certain assets (including certain intellectual property rights) and making certain non-ordinary course changes to personnel and employee compensation.

We will enter into the Tax Matters Agreement as of the closing of the Modine Transaction, the form of which we agreed to in the Merger Agreement. As discussed in this report, the Tax Matters Agreement will generally prohibit Modine, SpinCo and Gentherm and their respective subsidiaries from taking certain actions that could cause the Distribution, the Merger or certain related transactions to fail to qualify as tax-free transactions for the benefit of Modine’s shareholders for U.S. federal income tax purposes. We will also be restricted from taking specified actions, which may have been materially beneficial for our business and financial performance, for two years following the date of the Distribution to preserve the intended tax treatment.

If we intend to take any action that is otherwise prohibited by the Tax Matters Agreement, prior to taking such action, we will be required to (1) obtain a favorable IRS ruling or an unqualified tax opinion, in each case, reasonably satisfactory to Modine to the effect that such action will not affect the tax-free status of the Distribution, the Merger or related transactions, or (2) receive from Modine a written waiver of the requirement to obtain such private letter ruling or unqualified tax opinion. These restrictions may limit our ability to pursue certain strategic transactions or engage in other transactions, including using Common Stock to make acquisitions and in connection with equity capital market transactions or disposing of certain assets that might increase our value.

Current shareholders’ percentage ownership interest in us will be substantially diluted in the Merger.

As currently contemplated by the Merger Agreement, which is subject to adjustment under limited circumstances, immediately following the Merger, our pre-Merger shareholders will own approximately 60% of the issued and outstanding shares of Common Stock in the aggregate on a fully diluted basis. Consequently, our pre-Merger shareholders, as a group, will be substantially diluted in the Merger and have less ability to exercise influence over our management and policies following the Merger than immediately prior to the Merger.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 1C. CYBERSECURITY

Our corporate information technology, communication networks, enterprise applications, accounting and financial reporting platforms, and related systems are necessary for the operation of our business. We use these systems, among others, to manage our product development and manufacturing, to communicate internally and externally, to operate our accounting and record-keeping functions, and for many other key aspects of our business. Our business operations rely on the secure collection, storage, transmission, and other processing of proprietary, confidential, and sensitive data.

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Risk Management and Strategy

We recognize the importance of assessing, identifying, and managing material risks associated with cybersecurity threats, as such term is defined in Item 106(a) of Regulation S-K. These risks include, among other things: operational risks, intellectual property theft, fraud, extortion, harm to employees or customers, violation of data privacy or security laws, litigation, and legal, financial and reputational risk.

We have implemented and maintain various information security processes designed to identify, assess and manage material risks from cybersecurity threats to our critical systems and our proprietary, strategic or competitive data. Depending on the environment, we implement and maintain various technical, physical, and organizational measures, processes, standards, and/or policies designed to manage and mitigate material risks from cybersecurity threats to our information systems and data, including risk assessments, incident detection and response, vulnerability management, disaster recovery and business continuity plans, internal controls within our accounting and financial reporting functions, encryption of data, network security controls, access controls, physical security, asset management, systems monitoring, vendor risk management program and employee training. We conduct regular reviews and tests of our information security program and also leverage audits by our internal audit team, tabletop exercises, penetration and vulnerability testing, and other exercises to evaluate the effectiveness of our information security program and improve our security measures and planning. We have an incident response process that relies on a multidisciplinary team for assessing and managing cybersecurity incidents, including an escalation framework based on the materiality of incidents. The multidisciplinary team includes members of our IT security function, executive management of our legal, finance, human resources, corporate communications and internal audit/risk functions and third party service providers of technical, legal and insurance services, as well as coordination with law enforcement as appropriate. Our IT security function also addresses cybersecurity threats through regular vulnerability reviews, risk registry reviews and global team meetings.

Our information security processes are integrated into our overall enterprise risk management (“ERM”) process and system. Our ERM process relies on designated risk managers to identify and assess material risks from cybersecurity threats. The risk managers form a multidisciplinary group including members of our IT security, finance, human resources and legal functions, operations and executive management, and are responsible for timely reporting of risks on an ongoing basis. Our ERM process includes an annual evaluation and ranking of the top risks captured in our ERM system against leading third party benchmark reports on global risks.

We work with third parties from time to time that assist us to identify, assess, and manage cybersecurity risks, including professional services firms, consulting firms, threat intelligence service providers, and penetration testing firms.

To operate our business, we utilize certain third-party service providers to support a variety of functions. We seek to engage reliable, reputable service providers that maintain cybersecurity programs. Depending on the nature of the services provided, the sensitivity and quantity of information processed, and the identity of the service provider, our vendor management process may include reviewing the cybersecurity practices of such provider, contractually imposing obligations on the provider, conducting security assessments, and conducting periodic reassessments during their engagement.

Our systems periodically experience directed attacks that may be intended to lead to financial loss, interruptions and delays in our operations as well as loss, misuse or theft of personal information (of third parties, employees, and other stakeholders) and other data, confidential information or intellectual property. These attacks are increasing in frequency, uniqueness and sophistication to evade detection and remove forensic evidence of the incident, including due to emerging technologies such as artificial intelligence and machine learning, which may cause cybersecurity incidents to be more difficult to detect for periods of time or at all. However, we are not aware of any risks from cybersecurity threats, including as a result of any cybersecurity incidents, which have materially affected or are reasonably likely to materially affect our Company, including our business strategy, results of operations, or financial condition. Refer to “Item 1A. Risk Factors” in this annual report on Form 10-K for additional discussion about cybersecurity-related risks.

Governance

Our Board of Directors holds oversight responsibility for the Company’s strategy and risk management, including material risks related to cybersecurity threats. This oversight is executed directly by the Board of Directors and through its committees. Our Board

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members also engage in ad hoc conversations with management on cybersecurity-related news events and discuss any updates to our cybersecurity risk management and strategy programs.

The Audit Committee of the Board of Directors (the “Audit Committee”) oversees the quality and effectiveness of the control and enterprise risk management processes of systemic risks, including cybersecurity, in accordance with its charter. The Audit Committee receives reports and engages in regular discussions with management regarding the Company’s significant financial risk exposures and the measures implemented to monitor and reasonably manage these risks, including those that may result from material cybersecurity threats. The Audit Committee also receives reports on material cybersecurity and data privacy incidents (if any), which would include plans to mitigate and respond to such incidents, and status on key information security initiatives. These discussions include the Company’s enterprise risk assessment and risk management policies.

The Technology Committee of the Board of Directors oversees the management of risks associated with the Company’s products and technologies, including cybersecurity risks related to new product technologies or significant innovations to existing product technologies, in accordance with its charter.

Our Vice President and Chief Information Officer (the “CIO”) leads our global information security organization and reports to the Board of Directors on matters related to cybersecurity on behalf of the Company’s management. Our CIO has over 20 years of industry experience, including serving in similar roles leading and overseeing cybersecurity programs at other public companies. Team members who support our information security program have relevant educational and industry experience, including holding similar positions at large industrial and technology companies.

Our CIO leads an internal IT Security Committee that meets regularly to oversee company-wide efforts to address cybersecurity threats, to assess the effectiveness of our information security program and to prioritize efforts to improve our security measures and planning. Our IT Security Committee includes members of our IT security function and executive management of our legal, finance and internal audit/risk, human resources and corporate communications and technology functions.

ITEM 2. PROPERTIES

As of December 31, 2025, we operate in more than 30 locations across 13 countries, which are primarily for manufacturing, assembly, distribution, warehousing, engineering and testing. The majority of our Automotive facilities located outside of the U.S. are principally used in manufacturing and distribution and are located in China, Hungary, Mexico, Morocco, North Macedonia, South Korea, Ukraine, Czech Republic, Germany, and Vietnam. Our global headquarters is located in Novi, Michigan, our European headquarters is located in Odelzhausen, Germany and our Asia-Pacific headquarters is located in Shanghai, China. Our Medical business is principally comprised of our headquarters and manufacturing site located in Cincinnati, Ohio and our manufacturing sites in Germany and China. We also have sales offices, warehouses and engineering centers, strategically located throughout the world. Our global manufacturing and distribution facilities are located close to our key customers and strategically in low cost regions. Nearly all of our sites in North America and Asia are leased, while most of our European sites are owned.

ITEM 3. LEGAL PROCEEDINGS

We are subject to litigation from time to time in the ordinary course of our business, however, there is no current material pending litigation to which we are a party and no material legal proceedings were terminated, settled or otherwise resolved during the fourth quarter of the fiscal year ended December 31, 2025.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

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PART II

ITEM 5. MARKET FOR THE REGISTRANT’S COMMON STOCK, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Our Common Stock trades on the Nasdaq Global Select Market under the symbol “THRM.”

Holders

As of February 13, 2026, our Common Stock was held by 36 shareholders of record. A substantially greater number of holders are beneficial owners whose shares of record are held by banks, brokers and other nominees.

Dividends

We have not paid any Common Stock cash dividends since formation, and we do not expect to pay any in the foreseeable future. The payment of future dividends is within the discretion of our Board of Directors and will depend upon business conditions, our earnings and financial condition and other factors. Currently, payment of dividends on our Common Stock would require meeting certain restrictive covenants on our bank credit facilities.

Stock Repurchase Program

In June 2024, the Board of Directors authorized a stock repurchase program (the “2024 Stock Repurchase Program”) to commence upon expiration of the Company’s prior stock repurchase program on June 30, 2024. Under the 2024 Stock Repurchase Program, the Company is authorized to repurchase up to $150.0 million of its issued and outstanding Common Stock over a three-year period, expiring June 30, 2027. The Company repurchased $10.0 million of Common Stock in the open market under the 2024 Stock Repurchase Program in 2025.

Repurchases under the 2024 Stock Repurchase Program may be made, from time to time, in amounts and at prices the Company deems appropriate, subject to market conditions, applicable legal requirements, debt covenants and other considerations. Any such repurchases may be executed using open market purchases, accelerated share repurchase programs, privately negotiated agreements or other transactions (including Rule 10b5-1 trading plans), and may be funded from cash on hand, available borrowings or proceeds from potential debt or other capital markets sources. The 2024 Stock Repurchase Program may be modified, extended or terminated at any time without prior notice.

Issuer Purchases of Equity Securities During Fourth Quarter 2025


Period	Total Number of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Repurchased as Part of Publicly Announced Plans or Programs		Approximate Dollar Value of Shares That May Yet Be Purchased Under the 2024 Stock Repurchase Program
October 1, 2025 to October 31, 2025		—	$	—		—	$	110,102,528
November 1, 2025 to November 30, 2025		—		—		—		110,102,528
December 1, 2025 to December 31, 2025		—		—		—		110,102,528

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Performance graph

The following graph reflects the comparative changes in the value from December 31, 2020 through December 31, 2025, assuming an initial investment of $100 and the reinvestment of dividends, if any, in (1) our Common Stock, (2) the NASDAQ Composite index, (3) the Russell 2000 Index and (4) the Dow Jones U.S. Auto Parts Index. Historical performance may not be indicative of future shareholder returns.


			As of December 31,
			2021		2022		2023		2024		2025
Gentherm Incorporated	$	100.00	$	133.24	$	100.11	$	80.28	$	61.22	$	55.77
NASDAQ Composite	$	100.00	$	122.18	$	82.43	$	119.22	$	154.48	$	187.14
Russell 2000	$	100.00	$	114.82	$	91.35	$	106.82	$	119.14	$	134.40
Dow Jones US Auto Parts	$	100.00	$	120.99	$	89.00	$	88.96	$	68.86	$	79.56

ITEM 6. RESERVED

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with, and is qualified in its entirety by, our consolidated financial statements (and notes related thereto) and other more detailed financial information appearing elsewhere in this Annual Report. Further, you should read the following discussion and analysis of our financial condition and results of operations together with the “Risk Factors” included elsewhere in this Annual Report for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. See also “Forward-Looking Statements” in Part I of this Annual Report.

Overview

Our Automotive sales are driven by the number of light vehicles produced by the OEMs primarily in our key markets of North America, Europe, China, Japan and South Korea, which is ultimately dependent on consumer demand for automotive light vehicles, our product content per vehicle, and other factors that may limit or otherwise impact production by us, our supply chain and our customers. Historically, new vehicle demand and product content (i.e. vehicle features) have been driven by macroeconomic and other factors, such as interest rates, automotive manufacturer and dealer sales incentives, fuel prices, consumer confidence, employment levels, income growth trends and government incentives. Vehicle content has also been driven by trends in consumer preferences. We believe our diversified OEM customer base and geographic revenue base, along with our flexible cost structure, have well positioned us to withstand the impact of industry downturns and benefit from industry upturns in the ordinary course. Our industry is increasingly progressing towards a focus on human comfort, health and wellness, which is evidenced by increasing adoption rates for comfort products. Gentherm is an independent partner that can cooperate with any combination of the vehicle OEMs and seat manufacturers globally, to create innovative and unique configurations that adapt to industry trends.

Modine Transaction

On January 29, 2026, the Company entered into definitive agreements with Modine, SpinCo and Merger Sub with respect to a Reverse Morris Trust transaction, and pursuant to and subject to the terms and conditions of such definitive agreements, (i) Modine will transfer (or cause to be transferred) and SpinCo will accept and assume (or cause to be accepted and assumed) all of the rights, titles and interests to and under certain assets and liabilities relating to Performance Technologies, (ii) Modine will execute the Spin-Off and make the Distribution of SpinCo Common Stock to its shareholders and (iii) following the Distribution, Merger Sub will be merged with and into SpinCo. The Modine Transaction was unanimously approved by the Boards of Directors of both Modine and the Company.

Upon completion of the Merger, SpinCo will become a wholly owned subsidiary of the Company. In addition, shareholders of the Company immediately prior to the Merger will own approximately 60.0% and former SpinCo shareholders as of the Distribution will own approximately 40.0% of the outstanding shares of the Common Stock on a fully diluted basis.

The definitive agreements entered into in connection with the Modine Transaction include (i) Merger Agreement, including the forms of specified ancillary agreements to be entered into as of closing, and (ii) the Separation Agreement.

Prior to and as a condition of, the Distribution, SpinCo will make a cash payment to Modine of $210 million (the “SpinCo Cash Distribution”), subject to adjustment for cash, working capital and indebtedness of SpinCo and subject to decrease if additional shares of Common Stock will be issued to Modine shareholders to support the intended tax-free treatment of the Distribution to Modine’s shareholders for U.S. federal income tax purposes.

On January 29, 2026, SpinCo and the Company executed a 364-day bridge loan facility commitment letter with a financial institution, pursuant to which such financial institution committed to provide up to $790 million in aggregate (collectively, the “Bridge Facilities”) to SpinCo and the Company. The commitment letter provides funding for the SpinCo Cash Distribution. The commitment

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letter also provides funding to the Company to backstop capacity under the Revolving Credit Facility (as defined below) while the Company seeks lender consent for the Modine Transaction, to pay a special dividend to the Company’s shareholders, if necessary to support the intended tax-free treatment of the Distribution to Modine shareholders, and to pay fees and expenses of the Modine Transaction. The Bridge Facility is expected to be replaced with permanent financing. If the Modine Transaction is consummated, any indebtedness incurred by SpinCo under the Bridge Facility or the permanent financing will become indebtedness of a wholly owned subsidiary of the Company.

The Modine Transaction is expected to close in the fourth quarter of 2026, subject to various closing conditions, including specified approvals by the Company’s shareholders, completion of financing for SpinCo, a customary IRS tax ruling, receipt of required regulatory approvals and the satisfaction of other customary closing conditions.

Recent Trends

Tariffs and Global Trade Environment

Since March 2025, the U.S. government has periodically announced additional significant tariffs on various goods imported to the U.S. and other countries have periodically announced reciprocal tariffs on goods imported to such countries, including goods used by or manufactured by us. There has been significant uncertainty resulting from the implementation, termination and/or conditional pause of these additional tariffs, as well as related litigation challenging the legality of some tariffs. Further, it is reasonably possible that new or additional tariffs will be periodically announced in the future given the current global trade environment. We continue to monitor and evaluate the direct and indirect impacts of these tariffs and heightened global trade disputes. Our business model of regionally-focused manufacturing and delivery limits the global impact of certain trade restrictions and tariffs. Further, the majority of our supply components are not currently subject to the additional tariffs or are compliant with exceptions, and we believe that we can generally mitigate the direct impact of any such tariffs currently in effect by directly or indirectly passing the additional costs through to customers. We are taking and will continue to take additional actions to mitigate any direct and indirect impacts.

For the year ended December 31, 2025, the additional tariffs did not have a material impact on our results of operations, financial position, and cash flows. However, these matters are changing rapidly and there is significant uncertainty as to how long and to what degree that Gentherm and the automotive industry will be impacted by these or other additional tariffs, the adverse global trade environment and the resulting economic uncertainty.

Global Conditions

The global automotive light vehicle industry is impacted by a number of factors, including global and regional economic conditions. At times in recent years, the global economy has experienced significant volatility, inflationary pressures and supply chain disruptions, which have a widespread adverse effect on the global automotive industry. These macroeconomic conditions have resulted in fluctuating demand and production disruptions, facility closures, labor shortages, work stoppages, and increased prices of inputs to our products. Although some supply chain conditions have steadily improved and certain inflationary pressures have moderated, rising costs of materials, labor, equipment and other inputs used to manufacture and sell our products, including freight and logistics costs, have impacted, and may in the future impact, operating costs and operating results. We continue to employ measures to mitigate the impact of cost increases through identification of sourcing and manufacturing efficiencies where possible. However, we have been unable to fully mitigate or pass through the increases in our operating costs, which may continue in the future.

We are exposed to foreign currency risk due to the translation and remeasurement of the results of certain international operations into U.S. dollars as part of the consolidation process. Therefore, fluctuations in foreign currency exchange rates can create volatility in the results of operations and may adversely affect our financial condition.

We have a global manufacturing footprint that enables us to serve our customers in the regions they operate and shift production between regions to remain competitive. There have been various ongoing geopolitical conflicts, such as the current conflicts between Russia and Ukraine and in the Middle East and heightened tensions in the Red Sea and in the South China Sea. These conflicts have interrupted ocean freight shipping and if prolonged or intensified, could have a substantial adverse effect on our financial results. Further, it is reasonably possible that certain political pressures, such as changes to international trade agreements, increases in tariffs, import quotas or other trade restrictions or actions, including export controls and other retaliatory responses to such actions, could continue to affect the operations of our OEM customers, resulting in reduced automotive production in certain regions or shifts in the

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mix of production to higher cost regions. See “—Tariffs and Global Trade Environment” above for further information on the impact of tariffs and the global trade environment in 2025. We, like other manufacturers, have a high proportion of fixed structural costs, and therefore relatively small changes in industry vehicle production can have a substantial effect on our financial results.

Light Vehicle Production Volumes

Our sales are driven by the number of vehicles produced by the automotive manufacturers, which is ultimately dependent on consumer demand for automotive vehicles, and our content per vehicle, and other factors that may limit or otherwise impact production by us, our supply chain and our customers. According to the forecasting firm S&P Global Mobility (February 2026 release), global light vehicle production in 2025 in the Company’s key markets of North America, Europe, China, Japan and South Korea, as compared to 2024, are shown below (in millions of units):


	2025		2024		% Change
North America		15.3		15.4		(1.2	)%
Europe		17.0		17.2		(0.8	)%
Greater China		33.1		30.1		10.0	%
Japan / South Korea		12.1		12.0		0.8	%
Total light vehicle production volume in key markets		77.5		74.7		3.7	%

The S&P Global Mobility report (February 2026 release) forecasted light vehicle production volume in the Company’s key markets for full year 2026 to decrease to 76.7 million units, a 1.0% decrease from full year 2025 light vehicle production volumes. Forecasted light vehicle production volumes are a component of the data we use in forecasting future business. However, these forecasts generally are updated monthly, and future forecasts have been and may continue to be significantly different from period to period due to changes in macroeconomic conditions or matters specific to the automotive industry. Further, due to differences in regional product mix at our manufacturing facilities, as well as material production schedules from our customers for our products on specific vehicle programs, our future forecasted results do not directly correlate with the global and/or regional light vehicle production forecasts of S&P Global Mobility or other third-party sources.

New Business Awards

We believe that innovation is an important element to gaining market acceptance of our products and strengthening our market position. During 2025, we secured an estimated $2,200 million of automotive new business awards. Automotive new business awards represent the aggregate projected lifetime revenue of new awards provided by our customers to Gentherm in the applicable period, with the value based on the price and volume projections received from each customer as of the award date. Although automotive new business awards are not firm customer orders, we believe that new business awards are an indicator of future revenue. New business awards are not projections of revenue or future business as of December 31, 2025, the date of this Annual Report or any other date. Customer projections regularly change over time, and we do not update our calculation of any new business award after the date initially communicated. Automotive new business awards in 2025 also do not reflect, in particular, the impact of macroeconomic and geopolitical challenges on future business. Revenues resulting from automotive new business awards also are subject to additional risks and uncertainties as described in Item 1 under “Forward-Looking Statements” of this Annual Report.

Stock Repurchase Program

In June 2024, the Board of Directors authorized the 2024 Stock Repurchase Program to commence upon expiration of the Company’s prior stock repurchase program on June 30, 2024. Under the 2024 Stock Repurchase Program, the Company is authorized to repurchase up to $150.0 million of its issued and outstanding Common Stock over a three-year period, expiring June 30, 2027. Repurchases under the 2024 Stock Repurchase Program may be made, from time to time, in amounts and at prices the Company deems appropriate, subject to market conditions, applicable legal requirements, debt covenants and other considerations. Any such repurchases may be executed using open market purchases, accelerated share repurchase programs, privately negotiated agreements or other transactions. Repurchases may be funded from cash on hand, available borrowings or proceeds from potential debt or other capital markets sources.

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During the year ended December 31, 2025, the Company repurchased $10.0 million of Common Stock with an average price paid per share of $26.24. The 2024 Stock Repurchase Program had $110.1 million of repurchase authorization remaining as of December 31, 2025.

Reportable Segments

The Company has two reportable segments for financial reporting purposes: Automotive and Medical. See Note 19, “Segment Reporting,” to the consolidated financial statements included in this Annual Report for a description of our reportable segments as well as their proportional contribution to the Company’s reported product revenues, operating income and depreciation and amortization.

Results of Operations Year Ended December 31, 2025 Compared to Year Ended December 31, 2024

This section discusses our consolidated results of operations for the year ended December 31, 2025 compared to the year ended December 31, 2024. For a detailed discussion of our consolidated results of operations for the years ended December 31, 2024 compared to the year ended December 31, 2023, see Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operation” under “Results of Operations Year Ended December 31, 2024 Compared to December 31, 2023” in our annual report on Form 10-K for the year ended December 31, 2024, which was filed with the SEC on February 19, 2025.

The results of operations for the years ended December 31, 2025 and 2024, in thousands, were as follows:


	Year Ended December 31,
	2025			2024			Favorable / (Unfavorable)
Product revenues	$	1,498,602		$	1,456,124		$	42,478
Cost of sales		1,136,426			1,089,693			(46,733	)
Gross margin		362,176			366,431			(4,255	)
Operating expenses:
Net research and development expenses		94,759			88,697			(6,062	)
Selling, general and administrative expenses		170,045			155,108			(14,937	)
Restructuring expenses, net		12,476			13,110			634
Loss on sale of land and building, net		2,196			—			(2,196	)
Impairment of intangible assets and property and equipment		—			2,501			2,501
Total operating expenses		279,476			259,416			(20,060	)
Operating income		82,700			107,015			(24,315	)
Interest expense, net		(13,811	)		(15,300	)		1,489
Foreign currency (loss) gain		(28,415	)		9,599			(38,014	)
Other (loss) income		(4,639	)		951			(5,590	)
Earnings before income tax		35,835			102,265			(66,430	)
Income tax expense		17,550			37,318			19,768
Net income	$	18,285		$	64,947		$	(46,662	)

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Product revenues by product category, in thousands, for the years ended December 31, 2025 and 2024 were as follows:


	Year Ended December 31,
	2025		2024 (a)		% Change
Climate Control Seats	$	793,314	$	771,310		2.9	%
Lumbar and Massage Comfort Solutions		212,182		178,584		18.8	%
Climate Control Interiors		197,901		186,972		5.8	%
Climate and Comfort Electronics		29,664		17,363		70.8	%
Automotive Climate and Comfort Solutions		1,233,061		1,154,229		6.8	%
Valve Systems		96,877		105,056		(7.8	)%
Other Automotive		118,888		146,993		(19.1	)%
Subtotal Automotive segment		1,448,826		1,406,278		3.0	%
Medical segment		49,776		49,846		(0.1	)%
Total Company	$	1,498,602	$	1,456,124		2.9	%

(a)

Product categories have been modified, and prior-period amounts have been recast to conform with the current period presentation. Climate Control Seats (CCS) includes CCS Heat (previously Seat Heaters), CCS Vent/CCS Active (previously CCS) and CCS Neck Conditioners (previously included in Other Automotive). Climate Control Interiors (CCI) includes CCI Steering Wheel Heat and CCI Interior Heat (previously included in Other Automotive). Other Automotive includes Automotive Cables, Battery Performance Solutions, non-automotive electronics and contract manufacturing electronics (previously classified as Electronics).

Product Revenues

Below is a summary of our product revenues, in thousands, for the years ended December 31, 2025 and 2024:


	Year Ended December 31,						Variance Due To:
	2025		2024		Favorable / (Unfavorable)		Automotive Volume		FX		Pricing/ Other			Total
Product revenues	$	1,498,602	$	1,456,124	$	42,478	$	37,131	$	16,727	$	(11,380	)	$	42,478

Product revenues for the year ended December 31, 2025 increased 2.9% as compared to the year ended December 31, 2024. The increase in product revenues is due to favorable automotive volumes and favorable foreign currency impacts primarily attributable to the Euro, partially offset by unfavorable pricing and unfavorable currency impacts primarily attributable to the Chinese Renminbi and Korean Won.

Cost of Sales

Below is a summary of our cost of sales and gross margin, in thousands, for the years ended December 31, 2025 and 2024:


	Year Ended December 31,									Variance Due To:
	2025			2024			Favorable / (Unfavorable)			Automotive Volume			FX			Operational Performance		Other			Total
Cost of sales	$	1,136,426		$	1,089,693		$	(46,733	)	$	(27,128	)	$	(8,276	)	$	3,289	$	(14,618	)	$	(46,733	)
Gross margin		362,176			366,431			(4,255	)		10,003			8,451			3,289		(25,998	)		(4,255	)
Gross margin - Percentage of product revenues		24.2	%		25.2	%

Cost of sales for the year ended December 31, 2025 increased by 4.3% as compared to the year ended December 31, 2024. The increase in cost of sales is primarily due to higher automotive volumes, unfavorable foreign currency impacts primarily attributable to the Euro, higher quality costs and higher labor costs, partially offset by material purchasing savings.

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Net Research and Development Expenses

Below is a summary of our net research and development expenses, in thousands, for the years ended December 31, 2025 and 2024:


	Year Ended December 31,
	2025			2024			Favorable / (Unfavorable)
Research and development expenses	$	125,398		$	117,826		$	(7,572	)
Reimbursed research and development expenses		(30,639	)		(29,129	)		1,510
Net research and development expenses	$	94,759		$	88,697		$	(6,062	)
Percentage of product revenues		6.3	%		6.1	%

Net research and development expenses for the year ended December 31, 2025 increased 6.8% as compared to the year ended December 31, 2024. The increase in net research and development expenses is primarily related to higher employee compensation and tooling and development expenses.

Selling, General and Administrative Expenses

Below is a summary of our selling, general and administrative expenses, in thousands, for the years ended December 31, 2025 and 2024:


	Year Ended December 31,
	2025			2024			Favorable / (Unfavorable)
Selling, general and administrative expenses	$	170,045		$	155,108		$	(14,937	)
Percentage of product revenues		11.3	%		10.7	%

Selling, general and administrative expenses for the year ended December 31, 2025 increased 9.6% as compared to the year ended December 31, 2024. Merger and acquisition expenses were $6.6 million for the year ended December 31, 2025. The remaining increase in selling, general and administrative expenses is primarily related to higher expenses for leases, leadership transition, information technology and employee compensation and unfavorable foreign currency impacts primarily attributable to the Euro and Mexican Peso.

Restructuring Expenses, net

Below is a summary of our restructuring expenses, net, in thousands, for the years ended December 31, 2025 and 2024:


	Year Ended December 31,
	2025		2024		Favorable / (Unfavorable)
Restructuring expenses, net	$	12,476	$	13,110	$	634

Restructuring expenses, net primarily relate to discrete restructuring activities focused on optimizing our manufacturing footprint and cost structure. See Note 4, "Restructuring" in the notes to the consolidated financial statements included in this Annual Report for additional information.

Loss on Sale of Land and Building, net

Below is a summary of our loss on sale of land and building, net, in thousands, for the years ended December 31, 2025 and 2024:


	Year Ended December 31,
	2025		2024		Favorable / (Unfavorable)
Loss on sale of land and building, net	$	2,196	$	—	$	(2,196	)

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Loss on sale of land and building, net for the year ended December 31, 2025 is primarily due to the sale of our former headquarters building in Northville, Michigan in January 2025.

Impairment of Intangible Assets and Property and Equipment

Below is a summary of our impairment of intangible assets and property and equipment, in thousands, for the years ended December 31, 2025 and 2024:


	Year Ended December 31,
	2025		2024		Favorable / (Unfavorable)
Impairment of intangible assets and property and equipment	$	—	$	2,501	$	2,501

Impairment of intangible assets and property and equipment for the year ended December 31, 2024 related to equipment determined to have no future use.

Interest Expense, net

Below is a summary of our interest expense, net, in thousands, for the years ended December 31, 2025 and 2024:


	Year Ended December 31,
	2025			2024			Favorable / (Unfavorable)
Interest expense, net	$	(13,811	)	$	(15,300	)	$	1,489

The decrease in interest expense during the year ended December 31, 2025 compared to 2024 is primarily related to a lower average borrowing on the Revolving Credit Facility and the change in fair value of an interest rate swap derivative in the prior year period.

Foreign Currency (Loss) Gain

Below is a summary of our foreign currency gain (loss), in thousands, for the years ended December 31, 2025 and 2024:


	Year Ended December 31,
	2025			2024		Favorable / (Unfavorable)
Foreign currency (loss) gain	$	(28,415	)	$	9,599	$	(38,014	)

Foreign currency loss for the year ended December 31, 2025 included net realized foreign currency gain of $1.8 million and unrealized net foreign currency loss of $30.3 million.

Foreign currency gain for the year ended December 31, 2024 included net realized foreign currency loss of $1.1 million and unrealized net foreign currency gain of $10.7 million.

Other (Loss) Income

Below is a summary of our other (loss) income, in thousands, for the years ended December 31, 2025 and 2024:


	Year Ended December 31,
	2025			2024		Favorable / (Unfavorable)
Other (loss) income	$	(4,639	)	$	951	$	(5,590	)

The decrease is primarily driven by non-cash impairment charges related to our non-consolidated equity investments during the year ended December 31, 2025. See Note 2, "Summary of Significant Accounting Policies," in the notes to the consolidated financial statements included in this Annual Report for additional information.

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Income Tax Expense

Below is a summary of our income tax expense, in thousands, for the years ended December 31, 2025 and 2024:


	Year Ended December 31,
	2025		2024		Favorable / (Unfavorable)
Income tax expense	$	17,550	$	37,318	$	19,768

Income tax expense was $17.6 million for the year ended December 31, 2025, on earnings before income tax of $35.8 million, representing an effective tax rate of 49.0.%. The effective tax rate differed from the U.S. Federal statutory rate of 21% primarily due to the unfavorable impact of global intangible low tax income ("GILTI"), withholding taxes, unfavorable tax effects of equity vesting and other non-deductible expenses, partially offset by the impact of income taxes on foreign earnings at tax rates varying from the U.S. Federal statutory tax rate, research and development credits, and incentive tax rates in various jurisdictions.

Income tax expense was $37.3 million for the year ended December 31, 2024, on earnings before income tax of $102.3 million, representing an effective tax rate of 36.5%. The effective tax rate differed from the U.S. Federal statutory rate of 21% primarily due to the unfavorable impact of GILTI, withholding taxes, other non-deductible expenses, and the settlement of a prior period tax audit, partially offset by the impact of income taxes on foreign earnings at tax rates varying from the U.S. Federal statutory tax rate, research and development credits and incentive tax rates in various jurisdictions.

Liquidity and Capital Resources

Overview

Our primary sources of liquidity and capital resources are cash flows from operations and borrowings available under our Second Amended and Restated Credit Agreement. Our cash requirements consist principally of working capital, capital expenditures, research and development, operating lease payments, income tax payments and general corporate purposes. We generally reinvest available cash flows from operations into our business, while opportunistically utilizing our authorized stock repurchase program. Further, we continuously evaluate acquisition and investment opportunities that will enhance our business strategies.

As of December 31, 2025, the Company had $160.8 million of cash and cash equivalents and $307.9 million of availability under our Second Amended and Restated Credit Agreement. We may issue debt or equity securities, which may provide an additional source of liquidity. However, there can be no assurance equity or debt financing will be available to us when we need it or, if available, the terms will be satisfactory to us and not dilutive to our then-current shareholders.

We continue to expect to be able to move funds between different countries to manage our global liquidity needs without material adverse tax implications, subject to current monetary policies and the terms of the Second Amended and Restated Credit Agreement. We utilize a combination of strategies, including dividends, cash pooling arrangements, intercompany loan repayments and other distributions and advances to provide the funds necessary to meet our global liquidity needs. There are no significant restrictions on the ability of our subsidiaries to pay dividends or make other distributions to Gentherm Incorporated. As of December 31, 2025, the Company’s cash and cash equivalents held by our non-U.S. subsidiaries totaled $103.1 million. If additional non-U.S. cash was needed for our U.S. operations, we may be required to accrue and pay withholding if we were to distribute such funds from non-U.S. subsidiaries to the U.S.; however, based on our current liquidity needs and strategies, we do not anticipate a need to accrue and pay such additional amounts.

We currently believe that our cash and cash equivalents and borrowings available under our Second Amended and Restated Credit Agreement and cash flows from operations will be adequate to meet anticipated cash requirements for at least the next twelve months and the foreseeable future.

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Cash and Cash Flows

The table below summarizes our cash activity for each of the last two fiscal years (in thousands):


	Year Ended December 31,
	2025			2024
Cash and cash equivalents at beginning of period	$	134,134		$	149,673
Net cash provided by operating activities		116,791			109,646
Net cash used in investing activities		(52,398	)		(53,531	)
Net cash used in financing activities		(42,483	)		(51,705	)
Foreign currency effect on cash and cash equivalents		4,789			(19,949	)
Cash and cash equivalents at end of period	$	160,833		$	134,134

Cash Flows From Operating Activities

Net cash provided by operating activities totaled $116.8 million and $109.6 million for the years ended December 31, 2025 and 2024, respectively. Cash flow provided by operating activities for the year ended December 31, 2025 consisted primarily of net income of $18.3 million, increased by $110.2 million for non-cash charges for depreciation and amortization, unrealized stock based compensation, provisions for inventory, loss on disposition of property and equipment and other, including unrealized foreign currency loss, $27.6 million related to increase in accounts payable and $13.9 million for changes in net other assets and liabilities, partially offset by $22.3 million for non-cash deferred income taxes, $21.6 million of change in inventory and $9.3 million change in accounts receivable. Cash flow provided by operating activities for the year ended December 31, 2024 consisted primarily of net income of $64.9 million, increased by $82.9 million for non-cash charges for depreciation, amortization, stock based compensation, deferred income taxes, impairment of intangible assets and property and equipment and provision for inventory, partially offset by $35.5 million related to changes in assets and liabilities, $1.6 million for a gain on disposition of property and equipment and $1.1 million of other.

Cash Flows From Investing Activities

Net cash used in investing activities totaled $52.4 million and $53.5 million for the years ended December 31, 2025 and 2024, respectively. Cash flows used in investing activities for the year ended December 31, 2025 primarily included capital expenditures of $55.7 million and technology investments of $1.2 million, partially offset by proceeds from the sale of property and equipment of $3.8 million and proceeds from deferred purchase price of factored receivables of $0.7 million. Cash flows used in investing activities for the year ended December 31, 2024 primarily included capital expenditures of $73.3 million and technology investments of $1.0 million, partially offset by proceeds from deferred purchase price of factored receivables of $12.9 million and proceeds from the sale of property and equipment of $7.9 million.

Cash Flows From Financing Activities

Net cash used in financing activities totaled $42.5 million and $51.7 million for the years ended December 31, 2025 and 2024, respectively. Cash flows used in financing activities for the year ended December 31, 2025 primarily included $31.1 million net repayments of debt, $10.0 million of cash paid for the repurchase of Common Stock and $1.3 million paid for employee taxes related to the net settlement of restricted stock units that vested during the year. Cash flows used in financing activities for the year ended December 31, 2024 primarily included $2.6 million net repayments of debt, $51.6 million of cash paid for the repurchase of Common Stock and $3.3 million paid for employee taxes related to the net settlement of restricted stock units that vested during the year, partially offset by $5.8 million of proceeds from the exercise of Common Stock options.

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Debt

The following table summarizes the Company’s debt at December 31, 2025 and 2024 (dollars in thousands):


	December 31,
	2025						2024
	Interest Rate			Principal Balance			Interest Rate			Principal Balance
Revolving Credit Facility (U.S. Dollar denominations)		4.95	%	$	189,000			5.86	%	$	220,000
Finance leases		3.34	%		73			3.46	%		201
Total debt					189,073						220,201
Less: current maturities					(73	)					(137	)
Long-term debt, less current maturities				$	189,000					$	220,064

Credit Agreement

Gentherm, together with certain of its subsidiaries, maintains a revolving credit note (“Revolving Credit Facility”) under its Second Amended and Restated Credit Agreement (the “Second Amended and Restated Credit Agreement”) with a consortium of lenders and Bank of America, N.A. as administrative agent (the "Agent"). The Second Amended and Restated Credit Agreement was entered into on June 10, 2022 and amends and restates in its entirety the Amended and Restated Credit Agreement dated June 27, 2019, by and among Gentherm, certain of its direct and indirect subsidiaries, the lenders party thereto and the Agent. The Second Amended and Restated Credit Agreement has a maximum borrowing capacity of $500 million and matures on June 10, 2027. The Second Amended and Restated Credit Agreement contains covenants, that, among other things, (i) prohibit or limit the ability of the borrowers and any material subsidiary to incur additional indebtedness, create liens, pay dividends, make certain types of investments (including acquisitions), enter into certain types of transactions with affiliates, prepay other indebtedness, sell assets or enter into certain other transactions outside the ordinary course of business, and (ii) require that Gentherm maintain a minimum Consolidated Interest Coverage Ratio and a maximum Consolidated Net Leverage Ratio (based on consolidated EBITDA for the applicable trailing four fiscal quarters) as of the end of any fiscal quarter.

Finance Leases

As of December 31, 2025 and 2024, there was $0.1 million and $0.2 million of outstanding finance leases, respectively.

Modine Transaction

On January 29, 2026, the Company and SpinCo executed a 364-day bridge loan facility commitment letter with Barclays Bank PLC (“Barclays Bank”), pursuant to which Barclays Bank has committed financing to the Company and SpinCo of $790 million in the aggregate, including (i) $290 million to fund the SpinCo Distribution, to pay a special dividend to the Company’s shareholders, if necessary to support the intended tax-free treatment of the Distribution to Modine shareholders, and to pay fees and expenses of the Modine Transaction, and (ii) $500 million to backstop capacity under the Revolving Credit Facility while the Company seeks lender consent for the Modine Transaction. The Bridge Facility is expected to be replaced with permanent financing. If the Modine Transaction is consummated, any indebtedness incurred by SpinCo under the Bridge Facility or the permanent financing will become indebtedness of a wholly owned subsidiary of the Company.

Material Cash Requirements

The following table summarizes current and long-term material cash requirements as of December 31, 2025, which we expect to fund primarily with operating cash flows. We have not included amounts for material and component purchase obligations related to

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standard recurring purchases of materials for use in our manufacturing operations as these amounts are generally consistent from year to year, closely reflect our levels of production, and are not long-term in nature.


	Payments Due by Period
Material Cash Requirements (in thousands)	Total		Less than 1 year		1 to 3 years		3 to 5 years		More than 5 years
Long-term debt obligations (1)	$	189,073	$	73	$	189,000	$	—	$	—
Operating lease obligations (2)		78,056		12,113		16,158		12,744		37,041
Capital commitments (3)		7,272		7,272		—		—		—
Total	$	274,401	$	19,458	$	205,158	$	12,744	$	37,041

(1)

Long-term debt obligations do not include an amount payable for interest. See Note 8, “Debt,” to the consolidated financial statements included in this Annual Report for additional information.

(2)

See Note 7, “Leases,” to the consolidated financial statements included in this Annual Report for additional information.

(3)

Capital commitments is comprised of commitments for capital expenditures. Such commitments are typically less than one year.

Restructuring

In July 2025, we committed to a restructuring plan to further optimize our manufacturing footprint by realigning our global manufacturing capacity. We expect to incur cash restructuring costs of between $3 million and $4 million for employee severance and retention costs and $1 million of other transition costs primarily for machinery and equipment move and set up costs. Additionally, we expect to incur capital expenditures of between $1 million and $2 million.

In February 2025, we committed to a restructuring plan to further optimize our manufacturing footprint by realigning our manufacturing capacity in Europe. We expect to incur cash restructuring costs of between $4 million and $6 million for employee severance and retention costs and between $2 million and $3 million of other transition costs primarily for machinery and equipment move and set up costs. Additionally, we expect to incur capital expenditures of between $1 million and $2 million.

In February 2025, we committed to an additional restructuring plan to further optimize our manufacturing footprint by realigning our manufacturing capacity in Asia. We expect to incur cash restructuring costs of between $2 million and $3 million for employee severance and retention costs and $1 million of other transition costs primarily for machinery and equipment move and set up costs. Additionally, we expect to incur capital expenditures of between $2 million and $3 million.

See Note 4, “Restructuring,” to the consolidated financial statements included in this Annual Report for additional information regarding these plans.

Capital Expenditures

We anticipate capital expenditures in fiscal year 2026 of approximately $45 million to $55 million. We will continue to support organic growth through capacity expansion in our facilities and make capital improvements as necessary. We believe cash on hand, cash generated from operations, and the borrowing capacity available under our Second Amended and Restated Credit Agreement will be sufficient to support our capital expenditures.

Other Commitments

In December 2021, the Company committed to make a $5 million investment in Autotech Fund III, L.P., pursuant to a limited partnership agreement. As a limited partner, the Company will periodically make capital contributions toward this total commitment amount over the expected ten year life of the fund. The Company has made contributions of approximately $2.9 million to the Autotech Fund III, LP as of December 31, 2025. Timing of the remaining $2.1 million of capital contributions is unknown and therefore amounts have been excluded from the Material Cash Requirements table above.

Effects of Inflation

The automotive component supply industry has historically been subject to inflationary pressures with respect to materials and labor. At times in recent years, the automotive industry has experienced significant volatility in the costs of certain materials and

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components, labor and transportation. Although supply chain conditions have steadily improved and certain inflationary pressures have moderated, rising costs of materials, labor, equipment and other inputs used to manufacture and sell our products, including freight and logistics costs, have impacted, and may in the future impact, operating costs and operating results. Although the Company has developed and implemented strategies to mitigate the impact of higher material component costs and transportation costs through sourcing and manufacturing efficiencies where possible, these strategies together with commercial negotiations with Gentherm's customers and suppliers have not fully offset to date and may not fully offset our future cost increases. Such inflationary cost increase may increase the cash required to fund our operations by a material amount.

Critical Accounting Estimates

Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). In preparing these consolidated financial statements, management was required to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. These estimates and assumptions are based on our historical experience, the terms of existing contracts, our evaluation of trends in the industry, information provided by our customers and suppliers and information available from other outside sources, as appropriate. These estimates and assumptions are subject to an inherent degree of uncertainty. Because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material to our financial statements.

We have identified the following estimates as our most critical accounting estimates, which are those that are most important to aid in fully understanding and evaluating the Company’s financial condition and results of operations, and that require management’s most subjective and complex judgments. Information regarding our other significant accounting estimates and policies are disclosed in Note 2, "Summary of Significant Accounting Policies", of the notes to the consolidated financial statements.

Goodwill

Critical estimates: Goodwill is tested for impairment at least annually as of December 31 and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. In conducting our annual impairment assessment testing, we first perform a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount. If not, no further goodwill impairment testing is performed. If it is more likely than not that a reporting unit’s fair value is less than its carrying amount, or if we elect not to perform a qualitative assessment of a reporting unit, we then compare the fair value of the reporting unit to the related net book value. If the net book value of a reporting unit exceeds its fair value, an impairment loss is measured and recognized.

The Company utilizes an income approach to estimate the fair value of a reporting unit and a market valuation approach to further support this analysis. The income approach is based on projected debt-free cash flow that is discounted to the present value using discount factors that consider the timing and risk of cash flows. We believe that this approach is appropriate because it provides a fair value estimate based on the reporting unit’s expected long-term operating cash flow performance. This approach also mitigates the impact of cyclical trends that occur in our industry. Fair value is estimated using internally developed forecasts, as well as commercial and discount rate assumptions. The discount rate used is the value-weighted average of our estimated cost of equity and of debt (“cost of capital”) derived using both known and estimated customary market metrics. Our weighted average cost of capital is adjusted to reflect risk, if necessary. Other significant assumptions include terminal value growth rates and terminal value margin rates. To further support the fair value estimate determined by the income approach, the Company utilizes a market valuation approach to estimate the fair value of a reporting unit. The market approach considers historical and/or anticipated financial metrics of a reporting unit and applies valuation multiples based on recent observed transactions involving companies similar enough to the reporting units from which to draw meaningful conclusions.

Judgments and uncertainties: These fair value calculations contain uncertainties as they require management to make assumptions about future cash flows and appropriate discount rates to reflect the risk inherent in the future cash flows and to derive a reasonable enterprise value and related premium. Our ability to realize the future cash flows used in our fair value calculations is affected by factors such as the success of strategic initiatives, changes in economic conditions, changes in our operating performance and changes in our business strategies. The estimated future cash flows reflect management's latest assumptions of the financial projections based on current and anticipated competitive landscape, including estimates of revenue based on production volumes over

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the foreseeable future and long-term growth rates, and operating margins based on historical trends and future cost containment activities.

Also, the market valuation approach is highly subjective as it requires the selection of comparable companies and valuation multiples.

Impact if actual results differ from assumptions: As of December 31, 2025, our goodwill balance included $81.0 million related to our Automotive segment and $27.9 million related to our Medical segment. These balances could be fully or partially impaired if management does not achieve the expected cash flows assumed in the fair value estimates or if assumptions and cash flow estimates change in future periods.

The Company’s Medical segment is comprised of one reporting unit (the “Medical reporting unit”). The estimated fair value of the Medical reporting unit exceeded its carrying value by approximately 25% as of December 31, 2025. The Medical reporting unit is at risk of failing future impairment tests, as the estimate of fair value does not substantially exceed its carrying value. The Company’s estimated future cash flow projections for the Medical reporting unit for the period of 2026 through 2030 assume a compound annual growth rate for revenue of approximately 14.0%, which we deem to be a critical assumption in the fair value determination as of December 31, 2025. This forecasted revenue growth, which is significantly higher than historical periods, is primarily driven by our anticipated product launches. Realization of this assumed revenue growth is dependent on the successful launch of these new products and the acceptance of customers. If this revenue growth is not achieved or if the estimated growth rates are reduced because of new information or experience, the fair value of the Medical reporting unit could decrease, which could result in a material impairment of goodwill. Additionally, forecasted cash flows assume margin expansion as a direct result of the forecasted revenue growth. If we experience higher costs than assumed in our forecast or if we experience other deviations from forecasted results and/or external factors (e.g., increase of interest rates), it could result in a material impairment.

The Company's reporting units in its Automotive segment each have a fair value that is substantially in excess of its respective carrying value as of December 31, 2025.

Income Taxes

Critical estimates: The Company is subject to income taxes in the United States and numerous international jurisdictions. In calculating our effective income tax rate, we make judgments regarding certain tax positions, including the timing and amount of deductions and allocations of income among various tax jurisdictions. When determining whether we will be able to realize deferred tax assets, judgment is used to evaluate the positive and negative evidence, including forecasting taxable income using historical and future operating results. The provision for income taxes includes current income taxes as well as deferred income taxes. Deferred tax assets and liabilities are measured based on the difference between the financial statement and tax base of assets and liabilities at the applicable enacted tax rates.

Judgments and uncertainties: We have various tax filing positions with regard to the timing and amount of deductions and credits and the allocation of income among various tax jurisdictions, based on our interpretation of local tax laws, supported by external advisor review for material positions.

Valuation allowances are established when necessary on a jurisdictional basis to reduce deferred tax assets to the amounts expected to be realized when management considers it more likely than not that some portion or all of a deferred tax asset will not be realized. The determination as to whether a deferred tax asset will be realized is based on the evaluation of positive and negative evidence, which includes historical profitability, future market growth, future taxable income, the expected timing of the reversals of existing temporary differences and tax planning strategies. The Company assesses deferred taxes and the adequacy or need for a valuation allowance on a quarterly basis.

The Company is subject to ongoing tax examinations and assessments in various jurisdictions. At any time, multiple tax years are subject to audit by the various tax authorities and a number of years may elapse before a particular matter, for which a liability has been established, is audited and fully resolved or clarified. In evaluating the exposures associated with various tax filing positions, the Company may record liabilities for such exposures. The Company generally adjusts its liabilities for unrecognized tax benefits and related indemnification obligations through earnings in the period in which an uncertain tax position is effectively settled, the statute of limitations expires for the relevant taxing authority to examine the tax position, or when more information becomes available.

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Although management believes that the judgments and estimates discussed herein are reasonable, actual results could differ, and may materially increase or decrease the effective tax rate, as well as impact the Company’s operating results.

Impact if actual results differ from assumptions: Some or all of management’s judgments are subject to review by the taxing authorities. If one or more of the taxing authorities were to successfully challenge our right to realize some or all of the tax benefit we have recorded, and we were unable to realize this benefit, it could have a material adverse effect on our financial results and cash flows. Further, if the Company is unable to generate sufficient future taxable income, there is a material change in the actual effective tax rates, a change to the time period within which the underlying temporary differences become taxable or deductible, or if the tax laws change unfavorably, then the Company could be required to increase the valuation allowance against deferred tax assets, resulting in an increase in income tax expense and the effective tax rate.

For the year ended December 31, 2025, each change of the effective tax rate by one percentage point would impact income tax expense by $0.4 million.

Recent Accounting Pronouncements

For a complete description of recent accounting standards which we have not yet been required to implement which may be applicable to our operations, as well as accounting standards that have been adopted during the year ended December 31, 2025, see Note 3, “New Accounting Pronouncements,” to the consolidated financial statements included in this Annual Report.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to various market risks including, but not limited to, changes in foreign currency exchange rates, changes in interest rates and price fluctuations of certain material commodities. Market risks for changes in interest rates relate primarily to the Company's debt obligations under the Second Amended and Restated Credit Agreement. Foreign currency exchange risks are attributable to sales to foreign customers and purchases from foreign suppliers not denominated in a location’s functional currency, foreign plant operations, intercompany indebtedness, acquisitions denominated in foreign currencies, intercompany investments and include exposures to the Euro, Mexican Peso, Hungarian Forint, North Macedonian Denar, Ukrainian Hryvnia, Japanese Yen, Chinese Renminbi, Korean Won, Czech Koruna, Vietnamese Dong and Moroccan Dirham.

The Company regularly enters into derivative contracts with the objective of managing its financial and operational exposure arising from these risks by offsetting gains and losses on the underlying exposures with gains and losses on the financial instruments used to hedge them. The decision of whether and when to execute derivative financial instruments, along with the duration of the instrument, may vary from period to period depending on market conditions, the relative costs of the instruments and capacity to hedge. The duration is linked to the timing of the underlying exposure, with the connection between the two being regularly monitored. The Company does not enter into derivative financial instruments for speculative or trading purposes.

The Company’s designated hedging relationships are formally documented at the inception of the hedge, and hedges must be highly effective in offsetting changes to future cash flows on hedged transactions both at the inception of a hedge and on an ongoing basis to be designated for hedge accounting treatment. For derivative contracts that can be classified as a cash flow hedge, the effective portion of the change in the fair value of the derivative is recorded to accumulated other comprehensive loss in the consolidated balance sheets. When the underlying hedge transaction is realized, the gain or loss included in accumulated other comprehensive loss is recorded in earnings in the consolidated statements of income on the same line as the hedged item. Also, the Company records the ineffective portion, if any, on the same line as the hedged item. Cash flows associated with derivatives are reported in net cash provided by operating activities in the Company’s consolidated statements of cash flows.

Information related to the fair values of all derivative instruments in our consolidated balance sheet as of December 31, 2025 is set forth in Note 13, “Financial Instruments” in the consolidated financial statements included in this Annual Report.

Interest Rate Sensitivity

The table presents principal cash flows and related weighted average interest rates by expected maturity dates for each of the Company’s debt obligations, excluding finance leases. The information is presented in U.S. dollar equivalents, which is the Company’s reporting currency.


	Expected Maturity Date
	2026		2027			2028		2029		Total			Fair Value
Liabilities
Long-Term Debt:
Variable rate	$	—	$	189,000		$	—	$	—	$	189,000		$	189,000
Variable interest rate as of December 31, 2025				4.95	%						4.95	%

Based on the amounts outstanding as of December 31, 2025, a hypothetical 100 basis point change (increase or decrease) in interest rates would impact annual interest expense by $1.9 million. To hedge the Company's exposure to interest payment fluctuations on a portion of the borrowings, we entered into a floating-to-fixed interest rate swap agreement with a notional amount of $100.0 million.

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Exchange Rate Sensitivity

The table below provides information about the Company’s foreign currency forward exchange rate agreements that are sensitive to changes in foreign currency exchange rates. The table presents the notional amounts and weighted average exchange rates by expected (contractual) maturity dates for each type of foreign currency forward exchange agreement. These notional amounts generally are used to calculate the contractual payments to be exchanged under the contract.


	Expected Maturity or Transaction Date
Anticipated Transactions and Related Derivatives	2026		2027		Total		Fair Value
USD Functional Currency
Exchange Agreements:
(Receive MXN / Pay USD)
Total contract amount	$	35,122	$	—	$	35,122	$	4,521
Average contract rate		20.50		—		20.50

The table below presents the potential gain and loss in fair value for the foreign currency derivative contracts from a hypothetical 10% change in quoted currency exchange rates.


	2025				2024
Exchange Rate Sensitivity	Potential loss in fair value		Potential gain in fair value		Potential loss in fair value		Potential gain in fair value
Exchange Agreements:(Receive MXN / Pay USD)	$	3,328	$	4,327	$	6,243	$	7,359

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The audited consolidated financial statements and related financial information required to be filed hereunder are indexed on page F-1 of this Annual Report and are incorporated herein by reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Management of the Company, under the supervision and with the participation of the Chief Executive Officer and the Chief Financial Officer, carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of December 31, 2025. As defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (as amended, the “Exchange Act”), disclosure controls and procedures are controls and procedures designed to provide reasonable assurance that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported on a timely basis, and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Based upon this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective as of December 31, 2025.

Management’s Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f), for the Company. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer, management conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2025 based on the framework set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in “Internal Control-Integrated Framework (2013).” Based on that evaluation, management has concluded that the Company’s internal control over financial reporting was effective as of December 31, 2025.

The attestation report of the Company’s independent registered public accounting firm, regarding the effectiveness of the Company’s internal control over financial reporting, is set forth in Item 15, "Exhibits and Financial Statement Schedules," included under the caption "Report of Independent Registered Public Accounting Firm".

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended December 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our management, including the Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well-designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected.

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ITEM 9B. OTHER INFORMATION

During the three months ended December 31, 2025, none of the Company's directors or Section 16 officers adopted or terminated (i) any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act or (ii) any non-Rule 10b5-1 trading arrangement.

ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

None.

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PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this item is set forth under the following captions in our proxy statement to be filed with respect to the 2026 annual meeting of shareholders (the “Proxy Statement”), all of which is incorporated herein by reference: “Proposal No. 1 – Election of Directors”, “Corporate Governance – Key Policies and Practices”, “Corporate Governance – Standing Committees of the Board”, “Executive Officers” and “Additional Information – Requirements for Submission of Shareholder Proposals and Nominations for 2027 Annual Meeting.”

ITEM 11. EXECUTIVE COMPENSATION.

The information required by this item set forth under the following captions in our Proxy Statement, all of which is incorporated herein by reference: “Director Compensation”, “Compensation Discussion & Analysis”, “Compensation and Talent Committee Report”, and “Named Executive Officer Compensation Tables.”

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

The information required by this item is set forth under the following caption in our Proxy Statement, which is incorporated herein by reference: “Security Ownership of Certain Beneficial Owners and Management.”

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

The information required by this item is set forth under the following captions in our Proxy Statement, all of which is incorporated herein by reference: “Proposal No. 1 – Election of Directors – Director Independence” and “Related Person Transactions.”

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.

The information required by this item is set forth under the following caption in our Proxy Statement, which is incorporated herein by reference: “Proposal No. 3 – Ratification of Appointment of Independent Registered Public Accounting Firm For 2026" and "Audit Committee Matters.”

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PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

The following documents are filed as part of this Annual Report:

Financial Statements.

The following financial statements of the Company and reports of independent accountants are included in Item 15 of this Annual Report:


		Page
Reports of Ernst & Young LLP, Independent Registered Public Accounting Firm (PCAOB ID: 42)		F-2
Consolidated Balance Sheets		F-5
Consolidated Statements of Income		F-6
Consolidated Statements of Comprehensive Income		F-7
Consolidated Statements of Changes in Shareholders’ Equity		F-8
Consolidated Statements of Cash Flows		F-9
Notes to the Consolidated Financial Statements		F-10

Financial Statement Schedule.

The following Schedule to Financial Statements is included herein:

Schedule II — Valuation and Qualifying Accounts.

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Exhibits.

The exhibits to this Annual Report are as follows:

      
     Incorporated by Reference

     Exhibit
Number

     Exhibit Description

     Filed/Furnished Herewith

     Form

     Period Ending

     Exhibit / Appendix Number

     Filing Date

     2*

     Share Purchase and Transfer Agreement, dated May 4, 2022, by and among Gebhardt Holding GmbH, ELBER GmbH, Gentherm GmbH, and Andreas Gebhardt, Markus Gebhardt and Dr. Johann Vialberth

     10-Q

     3/31/22

     2.1

     5/4/22

      3.1

     Second Amended and Restated Articles of Incorporation of Gentherm Incorporated

     8-K 

     3.2

     3/5/18

      3.2

     Amended and Restated Bylaws of Gentherm Incorporated

     8-K

     3.1

     5/26/16

      4

     Description of Securities

     10-K

     12/31/19

     4

     2/20/20

     10.1**

     Summary of Non-Employee Director Compensation (effective starting with the 2024 annual meeting of shareholders)

     X

     10.2**

     Second Amended and Restated Gentherm Incorporated Senior Level Performance Bonus Plan

     8-K 

     10.1 

     3/15/21

     10.3.1**

     2013 Equity Incentive Plan

     Schedule 14A

     A

     4/22/13

     10.3.2** 

     Amendment to the Gentherm Incorporated 2013 Equity Incentive Plan

     8-K

     10.2

     5/19/17

     10.3.3**

     Second Amendment to the Gentherm Incorporated 2013 Equity Incentive Plan, effective as of May 21, 2020

     8-K

     10.1

     5/26/20

     10.3.4**

     Form of Stock Option Award Agreement under the 2013 Equity Incentive Plan

     8-K

     10.1

     6/27/13

     10.3.5**

     Form of Stock Appreciation Right Award Agreement under the 2013 Equity Incentive Plan

     8-K

     10.2

     6/27/13

     10.3.6**

     Form of Restricted Stock Award Agreement under the 2013 Equity Incentive Plan 

     8-K

     10.3

     6/27/13

     10.3.7**

     Form of Restricted Stock Award Agreement (Retention Award) under the 2013 Equity Incentive Plan

     8-K

     10.1

     10/4/17

     10.3.8**

     Form of Restricted Stock Unit Award Agreement (Performance-Based) under the 2013 Equity Incentive Plan

     8-K

     10.1

     6/13/18

     10.3.9**

     Form of Restricted Stock Unit Award Agreement (Time-Based) under the 2013 Equity Incentive Plan

     8-K

     10.2

     6/13/18

     10.3.10**

     Form of Restricted Stock Unit Award Agreement (Performance-Based) under the 2013 Equity Incentive Plan (effective as of 2020 grants)

     10-Q

     3/31/20

     10.1

     5/7/20

     10.3.11**

     Form of Restricted Stock Unit Award Agreement (Time-Based) under the 2013 Equity Incentive Plan (effective as of 2020 grants)

     10-Q

     3/31/20

     10.2

     5/7/20

     10.3.12**

     Form of Restricted Stock Award Agreement (Director) under the Gentherm Incorporated 2013 Equity Incentive Plan 

     10-Q 

      6/30/20

     10.7 

     8/4/20

     10.3.13**

     Form of Restricted Stock Unit Award Agreement under the 2013 Equity Incentive Plan (effective as of 2021 grants)

     8-K

     10.2

     3/15/21

     10.3.14**

     Form of Performance Stock Unit Award Agreement under the 2013 Equity Incentive Plan (effective as of 2021 grants)

     8-K

     10.3

     3/15/21

     10.4.1**

     Gentherm Incorporated 2023 Equity Incentive Plan

     8-K

     10.1

     5/18/23

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     Incorporated by Reference

     Exhibit
Number

     Exhibit Description

     Filed/Furnished Herewith

     Form

     Period Ending

     Exhibit / Appendix Number

     Filing Date

     10.4.2**

     Form of Performance Stock Unit Award Agreement under the Gentherm Incorporated 2023 Equity Incentive Plan

     8-K

     10.2

     5/18/23

     10.4.3**

     Form of Restricted Stock Unit Award Agreement under the Gentherm Incorporated 2023 Equity Incentive Plan

     8-K

     10.3

     5/18/23

     10.4.4**

     Form of Restricted Stock Award Agreement (Director) under the Gentherm Incorporated 2023 Equity Incentive Plan

     8-K

     10.4

     5/18/23

     10.5.1

     Second Amended and Restated Credit Agreement, dated as of June 10, 2022, by and among Gentherm Incorporated, Gentherm (Texas), Inc., Gentherm Licensing, Limited Partnership, Gentherm Medical, LLC, Gentherm GmbH, Gentherm Enterprises GmbH and Gentherm Licensing GmbH, the lenders party thereto, and Bank of America, N.A., as administrative agent, swing line lender and L/C issuer.

     8-K

     10.1

     6/13/22

     10.5.2

     Second Amended and Restated Pledge and Security Agreement, dated as of June 10, 2022, by and among Gentherm Incorporated, Gentherm (Texas), Inc., Gentherm Medical, LLC, Gentherm Properties I, LLC, Gentherm Properties II, LLC and Bank of America, N.A.

     8-K

     10.2

     6/13/22

     10.6.1**

     Employment Contract between Gentherm GmbH and Thomas Stocker, effective September 1, 2019

     10-Q

     9/30/19 

     10.1

     10/29/19

     10.6.2**

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

Gentherm Inc 10-K