Strategic Evolution and Performance Drivers

• Completed the separation of the Electrical Distribution Systems business into Versigent, focusing 'New Aptiv' on advanced software and hardware tech stacks.

• Performance in Q1 was impacted by a supplier fire at a major North American OEM and legacy program cancellations in China, which management expects to anniversary by mid-year.

• Strategic diversification is accelerating with non-automotive markets growing 9% and software and services revenue increasing 10% year-over-year.

• Management attributes margin resilience to an operating model that passes the majority of input cost inflation, such as resins and metals, through to customers.

• The company is leveraging automotive domain expertise in sensing and compute to penetrate high-growth adjacencies including aerospace, defense, and robotics.

• Market positioning in China is shifting toward leading local OEMs, supporting both domestic production and their expanding export volumes.

Outlook and Growth Framework

• Full-year 2026 guidance assumes a revenue acceleration in the second half driven by 300 basis points from program launches and 100 basis points from improved vehicle production.

• Management expects to secure over $20 billion in new business bookings for 2026, supported by a growing pipeline in next-generation ADAS and vehicle architectures.

• Financial targets include a plan to eliminate $70 million in annualized stranded costs resulting from the Versigent separation by the end of 2027.

• Guidance methodology incorporates a 'hedge' for potential delays in customer launch schedules and fluid production volumes in the China market.

• Aptiv is maintaining a balanced capital allocation strategy that includes bolt-on acquisitions to gain specialized sales forces and industry positioning, alongside returning excess cash to shareholders. These initiatives support growth in non-automotive sectors such as AI, data centers, and robotics.

Risk Factors and Structural Adjustments

• Rising input costs for copper, silver, and oil-based resins due to Middle East instability are cited as an incremental headwind for the remainder of the year.

• Free cash flow for Q1 was negative $362 million, primarily due to $260 million in transaction-related payments for the corporate separation.

• Management explicitly addressed and refuted market rumors regarding a loss of business at General Motors, clarifying they retained the most complex, high-margin harness content.

• Aptiv is maintaining higher inventory levels for semiconductors to ensure supply chain resiliency against potential geopolitical disruptions.