Garrett Motion Inc (GTX) 2025 Q2 法說會逐字稿

Hello, my name is Megan, and I will be your operator this morning. I would like to welcome everyone to the Garrett Motion second quarter 2025 financial results conference call. This call is being recorded, and a replay will be made available later today. (Operator Instructions)

您好，我叫梅根，今天早上我將擔任您的接線生。歡迎大家參加 Garrett Motion 2025 年第二季財務業績電話會議。此次通話將被錄音，重播將於今天晚些時候提供。（操作員指示）

I would now like to hand the conference call over to Cyril Grandjean, Garrett's Vice President, Investor Relations and Treasurer.

現在，我想將電話會議交給 Garrett 的投資者關係副總裁兼財務主管 Cyril Grandjean。

Thank you, Megan. Good day, and welcome everyone. Thank you for attending the Garrett Motion second quarter 2025 financial results conference call. Before we begin, I would like to mention that today's presentation and earnings press release are available on the IR section of Garrett Motion's website at investors.garrettmotion.com. There, you will also find links to our SEC filings, along with other important information about the company.

謝謝你，梅根。大家好，歡迎大家。感謝您參加 Garrett Motion 2025 年第二季財務業績電話會議。在開始之前，我想提一下，今天的簡報和收益新聞稿可以在 Garrett Motion 網站的投資者關係 (IR) 板塊（網址：investors.garrettmotion.com）上找到。您還可以在那裡找到我們提交給美國證券交易委員會 (SEC) 的文件鏈接，以及其他有關公司的重要資訊。

We note that this presentation contains forward-looking statements within the meaning of the US federal securities laws. These statements, which can be identified by words such as anticipate, intend, plan, believe, expect, may, should, or similar expressions, represent management's current expectations and are subject to various risks and uncertainties that could cause our actual results to differ materially from such expectations.

我們注意到本簡報包含美國聯邦證券法所定義的前瞻性陳述。這些陳述可以透過預期、打算、計劃、相信、期望、可能、應該等詞語或類似表達來識別，代表管理層當前的預期，並受各種風險和不確定性的影響，可能導致我們的實際結果與這些預期有重大差異。

These risks and uncertainties include the factors identified in our annual report on Form 10-K and all the filings with the Securities and Exchange Commission, and include risks related to the automotive industry, competitive landscape, and macroeconomic and geopolitical conditions, among others.

這些風險和不確定性包括我們在 10-K 表格年度報告和向美國證券交易委員會提交的所有文件中確定的因素，還包括與汽車行業、競爭格局、宏觀經濟和地緣政治條件等相關的風險。

Please review the disclaimers on slide two of our presentation as the content of our call will be governed by this language. Today's presentation also includes certain non-GAAP measures, which we use to help describe how we manage and operate our business. We reconcile each of these measures to the most directly comparable GAAP measure in the appendix of our presentation and related press release.

請查看我們簡報第二張投影片上的免責聲明，因為我們電話會議的內容將受此語言的約束。今天的演示還包括某些非公認會計準則指標，我們使用它們來幫助描述我們如何管理和經營我們的業務。我們將這些指標與簡報和相關新聞稿附錄中最直接可比較的 GAAP 指標進行協調。

Finally, in today's presentation and comments, we may refer to light vehicle diesel and light vehicle gasoline products by using the terms diesel and gasoline only. With us today are Olivier Rabiller, Garrett's President and Chief Executive Officer; and Sean Deason, Garrett's Senior Vice President and Chief Financial Officer.

最後，在今天的演示和評論中，我們可能僅使用柴油和汽油這兩個術語來指稱輕型車輛柴油和輕型車輛汽油產品。今天與我們一起出席的有 Garrett 總裁兼執行長 Olivier Rabiller 和 Garrett 高級副總裁兼財務長 Sean Deason。

I will now hand the call over to Olivier.

我現在將電話交給奧利維爾。

Thank you, Cyril, and thank you all for joining today's call. I am pleased to report that Garrett delivered another set of very solid financial results in the second quarter, thanks to strong sales performance in a soft environment. Net sales for the first quarter were $913 million, which is flat at constant currency, representing outperformance over the industry in light vehicle turbo sales for both gasoline and diesel applications.

謝謝你，西里爾，也謝謝大家參加今天的電話會議。我很高興地報告，由於疲軟環境下強勁的銷售表現，加勒特在第二季再次取得了非常穩健的財務表現。第一季淨銷售額為 9.13 億美元，以固定匯率計算持平，顯示其汽油和柴油輕型車輛渦輪增壓器銷售表現優於該行業。

In fact, gasoline turbo sales grew by 4% in the quarter, outperforming the industry. Thanks to the team's effort, we've achieved another quarter of solid operating performance. Adjusted EBIT was $124 million, and our adjusted EBIT margin was 13.6%, including 30 basis points of margin rate dilution from tariff.

事實上，本季汽油渦輪增壓引擎的銷量成長了 4%，超過了行業平均水平。感謝團隊的努力，我們又一個季度取得了穩健的營運表現。調整後的息稅前利潤為 1.24 億美元，調整後的息稅前利潤率為 13.6%，其中包括關稅導致的 30 個基點的利潤率稀釋。

We also delivered strong adjusted free cash flow of $121 million for the quarter, placing our first half 2025 conversion at 62% of adjusted EBIT above our stated target. We are also raising our outlook for 2025 to reflect the euro/dollar exchange rate. We will indeed remain alert and ready to take measures to adapt to slowing demand should it become necessary.

本季我們也實現了強勁的調整後自由現金流，達到 1.21 億美元，使我們 2025 年上半年的轉換率達到調整後息稅前利潤的 62%，高於我們設定的目標。我們也上調了對 2025 年的展望，以反映歐元/美元的匯率。我們確實會保持警惕，並準備在必要時採取措施來適應需求放緩。

In addition, we continue to allocate capital in line with our stated framework and our commitment to delivering value to shareholders. During the second quarter, we repurchased $22 million of common stock and paid a $12 million quarterly dividend. Additionally, our board of directors has just declared a third quarter dividend payable on the September 16, 2025. Finally, Garrett was included in the Russell 2,000 in the June index reconstitution, reflecting the positive impact of our capital structure transformation and discipline approach to capital allocation.

此外，我們將繼續按照既定框架和為股東創造價值的承諾分配資本。第二季度，我們回購了價值 2,200 萬美元的普通股，並支付了 1,200 萬美元的季度股息。此外，我們的董事會剛剛宣布第三季股利將於 2025 年 9 月 16 日支付。最後，加勒特在 6 月的指數重組中被納入羅素 2000 指數，這反映了我們的資本結構轉型和嚴格的資本配置方法的正面影響。

Let me now move to slide four to share more about Garrett's continued success across our differentiated technologies. I am very happy to share that we were awarded over $1 billion of light vehicle program extensions in Q2, some of which will last until 2034. This achievement increases visibility on future turbo sales and is a testament to the strong demand we continue to see for our differentiated turbo technologies.

現在，請允許我轉到第四張投影片，以進一步分享有關 Garrett 在我們的差異化技術方面持續取得的成功。我很高興地告訴大家，我們在第二季度獲得了超過 10 億美元的輕型車輛項目延期，其中一些將持續到 2034 年。這項成就提高了未來渦輪增壓器銷售的可見性，並證明了我們對差異化渦輪增壓技術的持續強勁需求。

Moreover, we continue to see growing interest in the development of turbochargers for range-extended electric vehicles. We secured three additional wins to serve this technology in China this quarter. We were also awarded another major E-Turbo program in Europe, which highlights our leadership in electric boosting. In addition, we won five awards for on-highway commercial vehicles and two for off-highway tractors with global OEMs.

此外，我們持續看到人們對增程式電動車渦輪增壓器開發的興趣日益濃厚。本季度，我們又獲得了三項在中國提供此技術服務的新合約。我們還獲得了歐洲另一個重要的 E-Turbo 項目，這凸顯了我們在電動增壓領域的領導地位。此外，我們還與全球原始設備製造商合作，贏得了五項公路商用車獎項和兩項非公路拖拉機獎項。

Lastly, the recent field test of our Garrett MEG Turbo demonstrated superior performance against the existing turbo solutions for gensets. As a reminder, the MEG Turbo line is the new line of products we launched at the end of 2023 to address the needs of big engines for genset and marine application. These products represent the largest turbo we have ever engineered at Garrett, and they serve an industry that is seeing significant growth, mostly driven by data centers backed to power.

最後，我們最近對 Garrett MEG Turbo 進行的現場測試表明，其性能優於現有的發電機組渦輪增壓解決方案。提醒一下，MEG Turbo 系列是我們在 2023 年底推出的新產品系列，旨在滿足發電機組和船舶應用對大型引擎的需求。這些產品是 Garrett 迄今為止設計的最大的渦輪增壓器，它們服務於一個正在經歷顯著增長的行業，而該行業主要由電力支援的資料中心推動。

This quarter, we continue to make significant progress across our differentiated zero-emission products. For our high-speed E-Powertrain business, we secured an additional proof-of-concept award with a major European passenger vehicle OEM. In addition, we have seen growing interest from commercial vehicle OEMs for our offering since announcing our award with Hyundai Axial earlier this year.

本季度，我們在差異化零排放產品方面持續取得重大進展。對於我們的高速電子動力傳動系統業務，我們與一家歐洲主要乘用車 OEM 廠商獲得了額外的概念驗證獎。此外，自今年稍早宣布與現代 Axial 合作以來，我們看到商用車原始設備製造商對我們的產品的興趣日益濃厚。

On the E-Cooling side, we are happy with the traction we get for industrial non-automotive cooling. We have demonstrated our ability to outperform existing compressor technology and exceed targets shared by existing players in that field. This is very promising for this venture outside of the automotive space.

在電子冷卻方面，我們對工業非汽車冷卻領域的進展感到滿意。我們已經證明了我們有能力超越現有的壓縮機技術，並超越該領域現有參與者所設定的目標。對於汽車領域以外的企業來說，這是非常有前景的。

Additionally, we secured one of our largest awards to date for our fuel cell compressor from a leading Asian OEM, which again demonstrates the significant value of our product and our industry-leading portfolio in this area. Given the momentum we are seeing across our zero-emission technologies, we have also inaugurated a new state-of-the-art R&D center in Wuhan, China, reinforcing our presence in this fast-moving region.

此外，我們的燃料電池壓縮機還獲得了迄今為止亞洲領先 OEM 授予的最大獎項之一，這再次證明了我們的產品和我們在該領域行業領先產品組合的巨大價值。鑑於我們的零排放技術所展現出的強勁勢頭，我們也在中國武漢開設了一個新的最先進的研發中心，以加強我們在這個快速發展地區的地位。

I will now hand it over to Sean to provide more details on our financial results analysis.

現在我將把時間交給肖恩，讓他提供更多關於我們財務結果分析的細節。

Thanks, Olivier. And good morning, everyone. I will begin my remarks on slide 5. As Olivier highlighted, we delivered solid second quarter financial performance. Our net sales were $913 million, driven by favorable foreign currency impacts, tariff recoveries, and new gasoline launches and ramp-ups in Europe and North America, partially offset by continued weakness in diesel and aftermarket.

謝謝，奧利維爾。大家早安。我將從第 5 張投影片開始發言。正如奧利維爾所強調的，我們第二季的財務表現穩健。我們的淨銷售額為 9.13 億美元，受有利的外匯影響、關稅恢復以及歐洲和北美新汽油的推出和增加所推動，但柴油和售後市場的持續疲軟部分抵消了這一影響。

We delivered $124 million of adjusted EBIT in the quarter, which equates to a 13.6% margin, a sequential decline resulting from continued unfavorable sales mix, tariff dilution, which was partially offset by favorable foreign currency impacts.

本季度，我們實現了 1.24 億美元的調整後息稅前利潤，相當於 13.6% 的利潤率，這是由於持續不利的銷售組合和關稅稀釋導致的連續下降，但有利的外匯影響部分抵消了這一下降。

Finally, adjusted free cash flow of $121 million, representing a marked increase over the prior quarter as we converted earnings into cash and released working capital, resulting in a free cash flow conversion of 98% for the quarter and 62% for the first half.

最後，調整後的自由現金流為 1.21 億美元，較上一季顯著增加，因為我們將收益轉換為現金並釋放了營運資金，導致本季度自由現金流轉換率為 98%，上半年自由現金流轉換率為 62%。

Moving now to slide 6, we show our Q2 net sales bridge by product category as compared with the same period last year. In the quarter, net sales increased by $23 million versus the prior year, or 3% on a reported basis and flat on a constant currency basis, reflecting favorable foreign currency impacts.

現在轉到投影片 6，我們按產品類別顯示了與去年同期相比的第二季淨銷售額。本季度，淨銷售額較上年同期增加 2,300 萬美元，按報告基礎計算成長 3%，以固定匯率計算持平，反映了有利的外匯影響。

We continued to experience strong gasoline growth, outperformed the industry, and is driven by continued share of demand gains and new launches. This is partially offset by diesel softness, resulting from lower industry production in Europe as well as lower demand for aftermarket applications, primarily in North America. Additionally, we recovered $14 million of tariffs within the quarter.

我們的汽油業務持續保持強勁成長勢頭，表現優於行業平均水平，這得益於需求份額的持續成長和新產品的推出。這被柴油市場的疲軟所部分抵消，原因是歐洲工業產量下降以及售後市場應用需求下降（主要是北美）。此外，我們在本季度收回了1400萬美元的關稅。

Turning to slide 7, we show our Q2 adjusted EBIT bridge as compared with the same period last year. Within the quarter, we delivered $124 million of adjusted EBIT, representing a $1 million increase over the same period last year and a margin rate of 13.6%, a 20 basis point decline.

翻到第 7 張投影片，我們展示了與去年同期相比，第二季調整後的息稅前利潤橋。本季度，我們的調整後息稅前利潤為 1.24 億美元，比去年同期增加 100 萬美元，利潤率為 13.6%，下降了 20 個基點。

Those softness in demand for aftermarket and diesel applications drive unfavorable product mix. We continue to benefit from the impact of sustained fixed cost action and variable cost productivity. In the quarter, the impact of newly implemented tariffs drove 30 basis points of margin rate dilution. Additionally, we benefited from $11 million or 80 basis points of contribution from favorable foreign exchange impacts year-over-year.

售後市場和柴油應用需求的疲軟導致產品組合不利。我們繼續受益於持續的固定成本行動和變動成本生產力的影響。本季度，新實施的關稅的影響導致利潤率下降30個基點。此外，與去年同期相比，我們也從有利的外匯影響中獲益 1,100 萬美元或 80 個基點。

Turning now to slide 8, I'll walk you through the adjusted EBIT to adjusted free cash flow bridge for the quarter. We delivered strong adjusted free cash flow of $121 million. This performance was due to higher sequential sales and the conversion of earnings into cash, complemented by the release of working capital. Cash taxes, capital expenditures, depreciation, and cash interest were all in line with our expectations and this strong Q2 result equates to a free cash flow conversion of 62% for the first half of 2025.

現在翻到第 8 張投影片，我將向您介紹本季調整後的 EBIT 與調整後的自由現金流之間的橋樑。我們實現了強勁的調整後自由現金流，達到 1.21 億美元。這一業績得益於連續更高的銷售額和收益轉化為現金，以及營運資本的釋放。現金稅、資本支出、折舊和現金利息均符合我們的預期，強勁的第二季業績相當於 2025 年上半年自由現金流轉換率為 62%。

Moving now to slide 9. We ended the quarter with a liquidity position of $862 million, comprised of $630 million of undrawn revolving credit facility capacity and $232 million of unrestricted cash. In the second quarter, our strong cash generation enabled us to pay our second $12 million quarterly dividend and repurchase $22 million of common stock in Q2 for a total of $52 million in the first half under our $250 million share repurchase program.

現在轉到投影片 9。截至本季末，我們的流動資金狀況為 8.62 億美元，其中包括 6.3 億美元未提取的循環信貸額度和 2.32 億美元的非限制現金。在第二季度，我們強勁的現金產生能力使我們能夠支付第二筆 1,200 萬美元的季度股息，並在第二季度回購 2,200 萬美元的普通股，根據我們 2.5 億美元的股票回購計劃，上半年的回購總額達到 5,200 萬美元。

It's important to note that since Q1 of 2023, we have reduced total outstanding shares by 39% through our share repurchase programs, demonstrating our commitment to return capital to shareholders. In line with our capital allocation policy, we continue to target a distribution of at least 75% of our adjusted free cash flow to shareholders over time through dividends and share repurchases. As Olivier mentioned earlier today, our Board of Directors has also declared a third quarter cash dividend payable in September 2025.

值得注意的是，自 2023 年第一季以來，我們已透過股票回購計畫將總流通股減少了 39%，這表明我們致力於向股東返還資本。根據我們的資本配置政策，我們將繼續致力於透過股利和股票回購的方式，將至少 75% 的調整後自由現金流分配給股東。正如 Olivier 今天稍早提到的，我們的董事會也宣布將於 2025 年 9 月支付第三季現金股利。

I will now transition to slide 10 to discuss our 2025 outlook. We are raising our 2025 outlook to reflect the impact of a stronger Euro/US dollar exchange rate, reaffirming our commitment to deliver operating performance consistent with our prior outlook. This outlook maintains our prior industry view and reflects the impact of newly implemented tariffs on sales and adjusted EBIT margin net of recovery.

我現在將轉到第 10 張幻燈片來討論我們的 2025 年展望。我們上調了 2025 年的展望，以反映歐元/美元匯率走強的影響，並重申我們致力於實現與先前展望一致的經營業績的承諾。這一前景維持了我們先前的行業觀點，並反映了新實施的關稅對銷售額和調整後的息稅前利潤率（扣除復甦）的影響。

This implies the following midpoints. Net sales of $3.5 billion, net sales growth at constant currency of minus 1%, net income of $256 million, adjusted EBIT of $500 million, net cash provided by operating activities of $410 million, and finally, adjusted free cash flow of $370 million.

這意味著以下中點。淨銷售額為 35 億美元，以固定匯率計算的淨銷售額成長率為 -1%，淨收入為 2.56 億美元，調整後息稅前利潤為 5 億美元，經營活動提供的淨現金為 4.1 億美元，最後，調整後的自由現金流為 3.7 億美元。

Turning now to slide 11, this bridge illustrates our updated midpoint outlook of adjusted EBIT compared to the prior outlook. We anticipate continued gasoline strength and incremental operating performance will offset unfavorable product mix, slightly improving our margin rate before foreign exchange and tariffs. Foreign exchange is expected to drive 70 basis points of rate improvement, and the impact of full tariff recovery is expected to drive 20 basis points of margin dilution for the year.

現在翻到第 11 張投影片，這張投影片展示了我們更新後的調整後息稅前利潤中點展望與先前的展望的對比。我們預期汽油價格的持續走強和經營績效的提升將抵銷不利的產品結構，略微提高外匯和關稅之前的利潤率。預計外匯將推動利率提高70個基點，而全面恢復關稅的影響預計將導致今年的利潤率稀釋20個基點。

I will now turn the call back to Olivier for his closing remarks.

現在我將把電話轉回給奧利維爾，請他作結束語。

Thank you, Sean. Turning now to slide 12, our strategic priorities remain clear and consistent. We aim to identify and deliver on customer needs by leveraging our capabilities to develop differentiated, high-speed, and highly efficient technologies. In doing so, we generate robust returns for our shareholders.

謝謝你，肖恩。現在翻到第 12 張投影片，我們的策略重點依然清晰且一致。我們的目標是利用我們的能力開發差異化、高速、高效的技術來識別和滿足客戶需求。透過這樣做，我們為股東創造了豐厚的回報。

Let me wrap this up on our final slide, which is next slide. First, we deliver very solid results with an adjusted EBIT of $124 million, and adjusted free cash flow of $121 million, with gasoline sales outperforming the industry due to share of demand gains and new product launches. Second, we continue to return capital to our shareholders. This quarter, we paid our second quarterly dividend and completed $52 million in share repurchases in the first half.

讓我在最後一張投影片，也就是下一張投影片總結一下。首先，我們取得了非常穩健的業績，調整後的息稅前利潤為 1.24 億美元，調整後的自由現金流為 1.21 億美元，由於需求份額的增長和新產品的推出，汽油銷售表現優於行業。第二，我們繼續向股東返還資本。本季度，我們支付了第二次季度股息，並在上半年完成了 5,200 萬美元的股票回購。

Overall, we have reduced our share count by 39% since June 2023 through our repurchase program. This quarter, we also secured significant business wins, including awards for over $1 billion in light vehicle turbo program extensions. These wins reinforce our position and provide strong revenue visibility moving forward.

總體而言，自 2023 年 6 月以來，我們透過回購計畫將股票數量減少了 39%。本季度，我們還取得了重大的業務勝利，包括超過 10 億美元的輕型汽車渦輪增壓項目延期獎勵。這些勝利鞏固了我們的地位，並為未來收入提供了強勁的可預見性。

In terms of innovation, we are making steady progress on zero emission technologies. This includes a new proof of concept partnership on an E-Powertrain, strong test results for our oil-free E-Cooling solutions, and a significant fuel cell program award.

在創新方面，我們在零排放技術方面正在穩步推進。其中包括在 E-Powertrain 上建立新的概念驗證合作夥伴關係、對我們的無油 E-Cooling 解決方案取得的強大測試結果以及重要的燃料電池計劃獎項。

Finally, we increased our 2025 outlook to reflect a stronger euro/dollar exchange rate. I am proud to highlight these achievements and the promising start we've had this year. With these strong first half results, it's positioning us very well for the rest of 2025 and beyond.

最後，我們上調了 2025 年的展望，以反映歐元兌美元匯率的走強。我很自豪地強調這些成就以及我們今年的良好開端。憑藉著上半年的強勁業績，我們為 2025 年剩餘時間及以後的發展做好了充分準備。

Thank you for your time, and operator, we are now ready for Q&A.

感謝您的時間，接線員，我們現在準備好進行問答了。

(Operator Instructions) Hamed Khorsand, BWS Financial.

（操作員指示） Hamed Khorsand，BWS Financial。

Hi, so my first question was, could you just talk a little bit about this unfavorable sales mix and how you're adjusting the business for such an environment?

您好，我的第一個問題是，您能否簡單談談這種不利的銷售組合以及您如何針對這種環境調整業務？

Well, that's a very good question. I mean, what we call unfavorable sales mix is basically driven by two things. On the one hand, there is a very positive thing that's happening to us, which is we are growing very fast on the gasoline side -- and we are growing very fast on the gasoline side all over the world, whether it's in Asia, Europe, and to a certain extent in North America.

嗯，這是一個非常好的問題。我的意思是，我們所說的不利的銷售組合基本上是由兩件事造成的。一方面，我們正在經歷一件非常積極的事情，那就是我們在汽油方面的成長非常快——我們在世界各地的汽油方面的成長都非常快，無論是在亞洲、歐洲，還是在北美。

So we are very pleased with that. But as you know, the margin rate on gasoline turbochargers is a bit lower than what we have on the rest of the business. But this unfavorable mix is a good thing to us. Where we are seeing on the other end a little bit of softness that is impacting us, that's the second aspect of that mix, is more on aftermarket off highway.

因此我們對此感到非常高興。但正如您所知，汽油渦輪增壓器的利潤率比我們其他業務的利潤率略低。但這種不利的組合對我們來說是件好事。另一方面，我們看到了一些對我們產生影響的疲軟現象，這是該組合的第二個方面，更多的是在非公路售後市場。

And that's basically more in North America, where we have not seen the traction yet on the aftermarket that would reflect demand recovering, because usually the demand is recovering first on aftermarket before it gets into OE. And I think our customers are probably still suffering from the fact that their sales channels have been having a lot of inventory, or have built up a lot of inventory for the past few years.

這基本上更多地發生在北美，我們尚未看到售後市場的牽引力來反映需求的復甦，因為通常需求在進入 OE 之前首先在售後市場復甦。我認為我們的客戶可能仍然受到銷售通路庫存過多或過去幾年積累了大量庫存的困擾。

So these are the things -- adjusting the business for us, do we adjust the business with the same recipe as we usually have? We have a high variable cost structure, and therefore for us it's working on the fixed cost like we do every year. But more than that, it's adjusting on the variable cost side. And this is something we know how to do very well in the company.

所以這些都是事情——為我們調整業務，我們是否按照通常的方法來調整業務？我們的成本結構變動很大，因此我們每年都在處理固定成本。但更重要的是，它正在對可變成本方面進行調整。我們公司非常清楚如何做好這件事。

Okay. My other question was, you ended the quarter with significantly more cash. Any reason why you didn't buy back more stock?

好的。我的另一個問題是，本季結束時您的現金明顯增加。您沒有回購更多股票的原因是什麼？

Hi, Hamed. This is Sean. Our buyback is not linear. But as I mentioned in my prepared remarks, we're committed to returning 75% or more of cash over time to shareholders. So we believe the buyback is a very important tool to return value to our shareholder base. And we'll continue to do so. But it's not linear.

你好，哈米德。這是肖恩。我們的回購並不是線性的。但正如我在準備好的演講中提到的那樣，我們致力於隨著時間的推移向股東返還 75％或更多的現金。因此，我們認為回購是向股東返還價值的一個非常重要的工具。我們將繼續這樣做。但它不是線性的。

Okay. Thank you.

好的。謝謝。

Jake Scholl, BNP.

英國國家黨的傑克·肖爾。

Hey, guys. Congrats on the great quarter. I just wanted to ask if you could help us understand some of the drivers of your stronger operating performance in the second half, especially with volume assumptions roughly unchanged.

嘿，大家好。恭喜本季取得如此出色的成績。我只是想問一下，您是否可以幫助我們了解下半年營運業績更強勁的一些驅動因素，尤其是在銷售假設基本上保持不變的情況下。

Sure. We will continue to benefit from cost control. And I would say the other point I wanted to make is that right now we've maintained our prior view. I think the latest S&P estimate might be showing a bit more favorability.

當然。我們將繼續受益於成本控制。我想說的另一點是，目前我們仍然維持先前的觀點。我認為最新的標準普爾估計可能會顯示出更多的有利因素。

So depending upon how the second half works out, more importantly, that could give us an opportunity to trend toward the upper end of our range if we start to see volume stabilize. But at the moment, we felt it prudent to be a bit more conservative in our guide from a volume and revenue standpoint as the impact of tariffs starts to work its way through the system.

因此，這取決於下半年的進展情況，更重要的是，如果我們開始看到交易量穩定，這可能給我們一個機會趨向於我們區間的上限。但目前，隨著關稅的影響開始在整個系統中顯現，我們認為從數量和收入的角度來看，我們的指南應該更加保守一些。

Got it. Thank you. And then just a smaller one. If you could provide an update on the tariff recovery situation, do you guys still expect to be able to fully recover your tariff costs this year?

知道了。謝謝。然後再小一點。如果您可以提供關稅恢復情況的最新消息，您是否仍預計今年將能夠完全收回關稅成本？

Absolutely. Absolutely. We expect that. Not only do we expect that this is what we've achieved, and obviously the situation changing will add up to the changing tariff. We have the tools in place. And since we've been recovering everything since the beginning, there should not be a change moving forward.

絕對地。絕對地。我們期待這一點。我們不僅期望這是我們已經實現的目標，而且顯然情況的變化將導致關稅的變化。我們已準備好工具。而且由於我們從一開始就一直在恢復一切，因此未來應該不會再有任何改變。

Thanks, guys.

謝謝大家。

Eric Gregg, Four Tree Island Advisory.

艾瑞克‧格雷格 (Eric Gregg)，四樹島顧問公司。

Thank you. And to the Garrett team, just excellent results. Great to see all this communication on multiple levels. Two questions. In terms of these large turbos for backup data center, AI and whatnot, is that -- can you give us a sense of when you think that business or if you think that business will ever get to as much as 10% of revenues? I don't want to limit you there, but how big do you think that business can grow and how substantial do you think it can be for Garrett?

謝謝。對於加勒特團隊來說，這真是出色的成績。很高興看到這種多層次的交流。兩個問題。就這些用於備份資料中心、人工智慧等的大型渦輪增壓器而言，您能否告訴我們您認為該業務何時會實現，或者您是否認為該業務是否會達到收入的 10%？我不想限制你，但你認為這項業務可以發展到多大，以及你認為它對加勒特有多重要？

It's a very substantial business. It's a big business for us because it's coming. When you get into very large turbo, I'm not talking only about the genset one, but more widely all the applications.There are a lot of genset and there are some marine.

這是一項非常重要的業務。這對我們來說是一筆大生意，因為它即將到來。當您進入非常大的渦輪機時，我談論的不僅僅是發電機組，而是更廣泛的所有應用。有很多發電機組和一些船用渦輪機。

A significant part of the revenue, once you've established your position, is coming from aftermarket. And we love that -- we love aftermarket. We have a very strong brand in aftermarket. We have a very strong network of distributors on aftermarket, and that's an additional activity that we would develop with them.

一旦確立了自己的地位，很大一部分收入就來自售後市場。我們熱愛這一點——我們熱愛售後市場。我們在售後市場擁有非常強大的品牌。我們在售後市場擁有非常強大的經銷商網絡，這是我們將與他們共同開發的額外活動。

Before we get there, obviously, we need to establish our install base. I'm not saying that it should reach 10% of the activity just on the genset backup power because today that would be a big number. We would talk about $400 million a year, and I'm not sure that there is any player out there that's doing $400 million a year on the turbo business. I don't even think that the industry is that big to allow that, but it will be in the hundreds of millions of dollars anyway, and that should come within the next three to five years.

顯然，在實現這一目標之前，我們需要建立我們的安裝基礎。我並不是說僅依靠發電機組備用電源就應該達到 10% 的活動，因為今天這個數字已經很大了。我們談論的是每年 4 億美元，但我不確定是否有任何參與者能夠在渦輪增壓業務上每年賺取 4 億美元。我什至不認為這個行業已經大到可以實現這一點，但無論如何，這將會是數億美元的規模，而且應該會在未來三到五年內實現。

Great. And then the second question is really digging a little bit further on the linearity comments on stocker purchase. You probably did almost twice as much free cash flow this quarter. You had some of your sponsors who were more active on the sales front. Your valuation is incredibly low, and you did almost 30% less stocker purchase this quarter. Can you give us a better sense of how it's nonlinear, but why you didn't dig in further this quarter, and do you think you'll be more aggressive throughout the rest of the year?

偉大的。然後第二個問題實際上是進一步深入挖掘有關庫存購買的線性評論。本季您的自由現金流可能幾乎增加了一倍。您的一些贊助商在銷售方面更為活躍。您的估值令人難以置信地低，而且本季度您的庫存採購量減少了近 30%。您能否讓我們更了解它是如何非線性的，但為什麼您本季沒有進一步深入研究，並且您認為您在今年剩餘時間內會更加積極主動嗎？

Like I said, it's not linear, and we had a very busy quarter, but what I would say is we also recognize that we have some dry powder for block trades as well if they happen to come up, but again, I would just reiterate the company's commitment and the board's commitment to deliver to our capital allocation framework, which is 75% or more of free cash flow to our shareholder base.

就像我說的，這不是線性的，我們度過了一個非常繁忙的季度，但我想說的是，我們也認識到，如果碰巧出現大宗交易，我們也有一些可用的資金，但我再次重申公司的承諾和董事會對實現資本配置框架的承諾，即為股東提供 75% 或更多的自由現金流。

Well, great quarter. Thanks, everyone.

嗯，這一季表現非常好。謝謝大家。

Thank you.

謝謝。

This concludes our question and answer session.

我們的問答環節到此結束。

This concludes our call.

我們的通話到此結束。

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

會議現已結束。感謝您參加今天的演講。您現在可以斷開連線。