Financial Analysis

Note 7 Commitments and Contingencies Legal and Other Contingencies The Company is subject to various legal actions and claims in the ordinary course of its business, which may include those arising out of breach of contracts, intellectual property rights, environmental matters, regulatory matters and employment-related matters. The Company establishes accruals for matters which it believes that losses are probable and can be reasonably estimated. Although it is not possible to predict with certainty the outcome of these matters, the Company is of the opinion that the ultimate resolution of these matters outstanding as of June 30, 2026 will not have a material adverse effect on its results of operations or financial position. Product liability and warranty reserves are recorded separately from legal reserves. Product Liability and Warranty Matters Our products subject us to warranty claims and, from time to time, product liability claims based on the Companys products alleged failure to perform as expected or resulting in alleged bodily injury or property damage. If any of our products are or are alleged to be defective, we may be required to participate in a recall or other corrective action involving such products. The Company maintains warranty and product liability insurance coverage at levels based on commercial norms and historical claims experience. Such policies may not cover all costs associated with a claim. The Company can provide no assurances that it will not expe …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

Note 6 Debt The following table summarizes the Companys debt as of June 30, 2026 and December 31, 2025: June 30, 2026 December 31, 2025 Interest Rate Principal Balance Interest Rate Principal Balance Revolving Credit Facility (U.S. Dollar denominations) 4.76 % $ 260,000 4.95 % $ 189,000 Finance leases 10.55 % 13,258 3.34 % 73 Total debt 273,258 189,073 Less: current maturities ( 868 ) ( 73 ) Long-term debt, less current maturities $ 272,390 $ 189,000 Credit Agreement On June 29, 2026, the Company entered into a Third Amended and Restated Credit Agreement (amending and restating in its entirety the Second Amended and Restated Credit Agreement, dated as of June 10, 2022, as amended) described below, the Credit Agreement with a consortium of lenders and Bank of America, N.A., as administrative agent (the Agent). The amendment, among other things, extended the maturity date to June 29, 2031 . The Credit Agreement provides for a $ 550,000 secured revolving credit facility (the Revolving Credit Facility), with a $ 50,000 sublimit for swing line loans and a $ 30,000 sublimit for the issuance of letters of credit. Any amount of the facility utilized for swing line loans or l etters of credit outstanding will reduce the amount available under the Credit Agreement. Gentherm can increase the Revolving Credit Facility or establish incremental facilities subject to specified conditions. Under the Credit Agreement, all obligations are unconditionally guaranteed by certain of the Companys s …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

Note 5 Goodwill and Other Intangibles Goodwill Changes in the carrying amount of goodwill, by reportable segment, for the six months ended June 30, 2026 were as follows: Automotive Medical Total Balance as of December 31, 2025 $ 81,031 $ 27,887 $ 108,918 Currency translation ( 2,008 ) 201 ( 1,807 ) Balance as of June 30, 2026 $ 79,023 $ 28,088 $ 107,111 The accumulated impairment losses of goodwill for Automotive and Medical were $ 0 and $ 19,509 , respectively, as of June 30, 2026. Other Intangible Assets Other intangible assets and accumulated amortization balances as of June 30, 2026 and December 31, 2025 were as follows: Gross Carrying Value Accumulated Amortization Accumulated Impairment Net Carrying Value Definite-lived: Customer relationships $ 119,515 $ ( 81,820 ) $ ( 6,185 ) $ 31,510 Technology 47,433 ( 36,420 ) ( 27 ) 10,986 Product development costs 19,274 ( 19,110 ) ( 71 ) 93 Software development 1,007 ( 503 ) 504 Indefinite-lived: Trade names 7,140 ( 530 ) 6,610 Balance as of June 30, 2026 $ 194,369 $ ( 137,853 ) $ ( 6,813 ) $ 49,703 Gross Carrying Value Accumulated Amortization Accumulated Impairment Net Carrying Value Definite-lived: Customer relationships $ 121,316 $ ( 81,785 ) $ ( 6,185 ) $ 33,346 Technology 48,478 ( 36,238 ) ( 27 ) 12,213 Product development costs 19,943 ( 19,774 ) ( 71 ) 98 Software development 1,007 ( 403 ) 604 Indefinite-lived: Trade names 7,065 ( 530 ) 6,535 Balance as of December 31, 2025 $ 197,809 $ ( 138,200 ) $ ( 6,813 ) $ 52,796 …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

Note 14 Income Taxes At the end of each interim period, the Company makes an estimate of the annual expected effective income tax rate and applies that rate to its ordinary year-to-date earnings or loss. The income tax provision or benefit related to unusual or infrequent items, if applicable, that will be separately reported or reported net of their related tax effects are individually computed and recognized in the interim period in which those items occur. In addition, the effect of changes in enacted tax laws or rates, tax status, judgment on the realizability of a beginning-of-the-year deferred tax asset in future years or income tax contingencies is recognized in the interim period in which the change occurs. The computation of the annual expected effective income tax rate at each interim period requires certain estimates and assumptions including, but not limited to, the expected pre-tax income (or loss) for the year, projections of the proportion of income (and/or loss) earned and taxed in respective jurisdictions, permanent and temporary differences, and the likelihood of the realizability of deferred tax assets generated in the current year. Jurisdictions with a projected loss for the year for which no tax benefit can be recognized due to a valuation allowance are excluded from the estimated annual effective tax rate. The impact of such an exclusion could result in a higher or lower effective tax rate during a particular quarter, based upon the composition and timin …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Note 3 Restructur ing The Company continuously monitors market developments, industry trends and changing customer needs and in response, has taken and may continue to undertake restructuring actions, as necessary, to execute managements strategy, streamline operations and optimize the Companys cost structure. Restructuring actions may include the realignment of existing manufacturing footprint, facility closures or similar actions, either in the normal course of business or pursuant to significant restructuring programs. These actions may result in employees receiving voluntary or involuntary employee termination benefits, which are mainly statutory requirements or other contractual agreements. Voluntary termination benefits are accrued when an employee accepts the related offer. Involuntary termination benefits are accrued upon the commitment to a termination plan and when the benefit arrangement is communicated to affected employees, or when liabilities are determined to be probable and estimable, depending on the existence of a substantive plan for separation or termination. 2026 Plan In February 2026, the Company committed to a restructuring plan to realign its operating model and organizational structure to deliver on its key financial and operational priorities (2026 Plan). The 2026 Plan is expected to result in structural cost reductions impacting the Companys global salaried workforce. The Company expects to incur cash restructuring costs of between $ 9,000 and $ 9,5 …

RestructuringAndRelatedActivitiesDisclosureTextBlock · excerpt; the full note is in the filing

Note 15 Segment Reporting 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 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. The Corporate and other unallocated expenses category includes certain enterprise and governance activities resulting in unallocated corporate costs and other activity and net costs that the Company may choose not to allocate directly to its business segments. A measure of assets has not been disclosed for each segment as it is not regularly reviewed by our chief operating decision maker. The table below presents se gment information about the reported product revenues, significant segment expenses, operating income (loss) and depreciation and amortization of the Company for th …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

Note 12 Equity In June 2024, the Board of Directors (the Board) authorized a stock repurchase program (the 2024 Stock Repurchase Program) to commence upon expiration of the Companys prior stock repurchase program on June 30, 2024. Under the 2024 Stock Repurchase Program, the Company was authorized to repurchase up to $ 150,000 of its issued and outstanding Common Stock over a three-year period, expiring June 30, 2027 . In July 2026, the Board terminated the 2024 Stock Repurchase Program and authorized a new stock repurchase program (the 2026 Stock Repurchase Program), pursuant to which the Company is authorized to repurchase up to $ 400,000 of its issued and outstanding Common Stock over a three-year period, expiring July 27, 2029 . At the time of termination, the 2024 Stock Repurchase Program had $ 110,103 of share repurchase authorization remaining. Repurchases 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 contractual restrictions and other considerations. During the three and six months ended June 30, 2026 , the Company did no t repurchase any sh ares. During the three and six months ended June 30, 2025 , the Company repurchased $ 10,015 under the 2024 Stock Repurchase Program with an average price paid per share of $ 26.24 . Stock repurchases are subject to excise tax, subject to specified exclusions and adjustments. Excise tax of $ 100 was charg …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing