Turbocharger technology company Garrett Motion (NYSE: GTX) reported Q3 CY2025 results exceeding the market’s revenue expectations, with sales up 9.2% year on year to $902 million. The company’s full-year revenue guidance of $3.55 billion at the midpoint came in 0.6% above analysts’ estimates. Its GAAP profit of $0.38 per share was 19.1% above analysts’ consensus estimates.

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Company Overview

A key player in the transition to cleaner vehicles, Garrett Motion (NYSE: GTX) designs and manufactures turbochargers, air compressors, and electric motor technologies for vehicle manufacturers and industrial applications.

Revenue Growth

Reviewing a company’s long-term sales performance reveals insights into its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last five years, Garrett Motion grew its sales at a sluggish 4.4% compounded annual growth rate. This was below our standard for the industrials sector and is a poor baseline for our analysis.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Garrett Motion’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 4% annually.

This quarter, Garrett Motion reported year-on-year revenue growth of 9.2%, and its $902 million of revenue exceeded Wall Street’s estimates by 4.1%.

Looking ahead, sell-side analysts expect revenue to remain flat over the next 12 months. While this projection implies its newer products and services will spur better top-line performance, it is still below average for the sector.

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Operating Margin

Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.

Garrett Motion’s operating margin has risen over the last 12 months and averaged 13.6% over the last five years. On top of that, its profitability was top-notch for an industrials business, showing it’s an well-run company with an efficient cost structure. This result was particularly impressive because of its low gross margin, which is mostly a factor of what it sells and takes huge shifts to move meaningfully. Companies have more control over their operating margins, and it’s a show of well-managed operations if they’re high when gross margins are low.

Analyzing the trend in its profitability, Garrett Motion’s operating margin might fluctuated slightly but has generally stayed the same over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.

This quarter, Garrett Motion generated an operating margin profit margin of 14.4%, in line with the same quarter last year. This indicates the company’s cost structure has recently been stable.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Sadly for Garrett Motion, its EPS declined by 12.7% annually over the last five years while its revenue grew by 4.4%. However, its operating margin actually improved during this time, telling us that non-fundamental factors such as interest expenses and taxes affected its ultimate earnings.

We can take a deeper look into Garrett Motion’s earnings to better understand the drivers of its performance. A five-year view shows Garrett Motion has diluted its shareholders, growing its share count by 166%. This has led to lower per share earnings. Taxes and interest expenses can also affect EPS but don’t tell us as much about a company’s fundamentals.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For Garrett Motion, its two-year annual EPS growth of 35.2% was higher than its five-year trend. This acceleration made it one of the faster-growing industrials companies in recent history.

In Q3, Garrett Motion reported EPS of $0.38, up from $0.24 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Garrett Motion’s full-year EPS of $1.57 to shrink by 1.5%.

Key Takeaways from Garrett Motion’s Q3 Results

We were impressed by how significantly Garrett Motion blew past analysts’ EBITDA expectations this quarter. We were also excited its revenue outperformed Wall Street’s estimates by a wide margin. Zooming out, we think this was a good print with some key areas of upside. The stock remained flat at $17.43 immediately after reporting.

Is Garrett Motion an attractive investment opportunity right now? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.