Stoneridge (NYSE:SRI) executives told investors the company navigated a difficult 2025 operating environment by leaning on growth in its MirrorEye camera-monitor platform, pursuing cost and quality improvements, and generating positive free cash flow, even as commercial vehicle production declined meaningfully versus expectations.
2025 results: MirrorEye growth and market outperformance
President and CEO Jim Zizelman said Stoneridge’s “focused growth strategy,” continuous improvement efforts on material and quality-related costs, and structural cost controls helped the company “successfully navigate another year marked by very challenging macroeconomic conditions.” He highlighted that the company outperformed its weighted average OEM end markets by 150 basis points in 2025, despite lower production volumes across the transportation industry.
Chief Financial Officer Matthew Horvath provided additional detail, stating that electronics segment MirrorEye sales totaled $111 million in 2025, up $45 million, or 69%, from 2024. He also said MirrorEye bus revenue grew by approximately 34% on strong market feedback for the latest-generation camera systems.
Business awards and portfolio focus after Control Devices divestiture
Zizelman said Stoneridge announced approximately $830 million in estimated lifetime revenue from new business awards in 2025 spanning electronics and Stoneridge Brazil. He described this as including the largest business award in company history—an extension of a global OEM MirrorEye program—as well as the largest OEM program award in Stoneridge Brazil’s history, plus additional programs tied to secondary displays, the Smart 2 tachograph, and other electronic control products.
The company also emphasized its shift in focus following the sale of its Control Devices segment. Zizelman noted Stoneridge completed the sale for a base purchase price of $59 million, calling it an important milestone that would allow the company to concentrate on “highest growth, highest return businesses,” reduce organizational complexity, and use proceeds to pay down debt and reduce interest expense.
Incoming CEO Natalia Noblet said the divestiture allows Stoneridge to focus resources and maintain its global footprint across Europe, North America, and Brazil, supported by engineering resources in those regions and partnerships in India. She framed the company’s current portfolio around industry trends toward automation and connected vehicle technologies, with offerings in vision and safety (including MirrorEye), vehicle intelligence and electronic controls (including driver information systems and secondary displays), and connectivity products (including telematics, tachographs, and digital services).
Fourth-quarter 2025 shortfalls: tariffs, FX, and quality costs
While management described progress in 2025, Zizelman acknowledged fourth-quarter results “did underperform” prior expectations. He said the (now-divested) Control Devices segment underperformed by about $2 million due primarily to foreign exchange impacts and incremental tariffs. He added that tariffs affected the remaining business by another $1.2 million in the quarter versus expectations.
Zizelman said the company expects to recover a “significant portion, if not all” of incremental tariff costs, but noted timing differences between when tariffs are incurred and when recoveries are realized. He also said the fourth quarter included approximately $3.3 million of incremental quality-related costs versus expectations, tied to legacy warranty issues and settlements with key customers. He characterized those settlements as allowing Stoneridge to move beyond historical issues and focus on stronger relationships and future growth, while reinforcing the need to improve quality earlier in product development.
Margins, cash flow, and 2026 outlook
On profitability, Zizelman said adjusted operating margin was pressured by the decline in sales and macro headwinds including tariff impacts and reduced production at certain customers. He said Stoneridge partially mitigated the impact through improved material costs (an 80-basis-point improvement year-over-year) and a $6.6 million reduction in quality-related costs, which he said contributed another 50 basis points to operating performance.
Excluding other non-operating expense of $3.6 million—primarily adverse foreign currency impacts—Zizelman said full-year adjusted EBITDA was $28.6 million, or 3.3% of sales, down 60 basis points versus the prior year. He also pointed to a decremental contribution margin of 14.2% versus a historical average of 25%–30% as evidence of operational actions that helped limit the downside from lower volumes.
Management repeatedly highlighted cash performance. Zizelman said adjusted free cash flow was approximately $19 million in 2025, driven by an $18.7 million improvement in inventory balances.
Interim CFO Robert Hartman outlined management’s view that end markets are expected to begin recovering in 2026, citing third-party production forecasts indicating North American OEM production could improve 9.8% and European production 6.6%, for expected weighted average end market growth of 7.1% in 2026. However, he said Stoneridge is taking a “relatively conservative approach” to revenue expectations by assuming OEM end markets remain flat, citing geopolitical volatility.
Within that framework, Hartman said the company expects MirrorEye to grow by approximately $50 million to at least $160 million in 2026—about 45% growth—driven by maturing OEM programs, improving take rates in Europe and North America, and customer marketing efforts highlighting safety, fuel economy, and driver comfort benefits. He also said the company expects significant growth in MirrorEye bus programs due to strong feedback on the latest camera system.
Hartman noted a headwind in the Smart 2 tachograph business: after two strong years of aftermarket sales tied to regulatory requirements, Stoneridge expects a decline of roughly $12 million in 2026 versus 2025, while OEM Smart 2 programs are expected to be flat year-over-year.
Based on midpoint guidance, Hartman said Stoneridge expects revenue growth of approximately 4.2% in 2026, primarily from MirrorEye growth. He also said the company expects structural cost reductions to provide at least $5 million of benefit in 2026, though incentive compensation and wage increases are expected to create a $6.7 million year-over-year headwind. The company’s midpoint 2026 EBITDA guidance is $22.5 million, with management expecting approximately break-even EBITDA in the first quarter as volumes start low, followed by improvement through the year, particularly in the second half.
Leadership transition and longer-term targets
The call also included significant leadership updates. Zizelman reiterated he will remain CEO through March 31, with Noblet becoming president and CEO effective April 1. Zizelman said he will stay on the board and serve as a strategic advisor through May 20, when his retirement becomes effective.
On the finance side, Horvath said this was his final earnings call and that Chief Accounting Officer Robert Hartman will serve as interim CFO upon Horvath’s resignation effective March 31.
Looking beyond 2026, Noblet discussed medium- and long-term targets. She said the company currently estimates revenue of at least $750 million in 2027 and expects revenue of $850 million to $1 billion by 2030, driven by market recovery and continued expansion of MirrorEye and other technology offerings. She also discussed expectations for EBITDA improvement tied to revenue growth and execution on cost, quality, and structural initiatives.
About Stoneridge (NYSE:SRI)
Stoneridge, Inc (NYSE: SRI) is a global developer and manufacturer of highly engineered electrical and electronic components for the automotive and commercial vehicle markets. The company’s product offerings span a range of safety, convenience and control systems, delivering tailored solutions that help original equipment manufacturers (OEMs) meet increasingly stringent regulatory and performance requirements.
Among Stoneridge’s core products are rearview and side-view mirror systems, camera-based advanced driver assistance systems (ADAS) and interior and exterior lighting solutions.
