Stoneridge (NYSE:SRI) raised its 2026 revenue outlook after third-quarter sales grew 30%, but said it expects adjusted earnings to land at the bottom of its prior forecast as electronic-component inflation, currency pressures and legacy costs weigh on results.
The vehicle technology supplier reported adjusted third-quarter revenue of $180 million and adjusted EBITDA of $7.3 million, its strongest quarterly performance on that measure in more than two years. The adjusted figures exclude the impact of an arbitration ruling involving the company’s former Control Devices business.
Stoneridge now expects full-year revenue of $690 million to $700 million, an increase of $37.5 million at the midpoint from its prior outlook. It expects adjusted EBITDA at the bottom of its previously issued $20 million to $25 million range.
Growth led by commercial vehicle demand
President and CEO Natalia Noblet said third-quarter revenue grew nearly 26% excluding currency effects and contract manufacturing revenue associated with the sale of Control Devices. That outpaced growth in the company’s weighted average original-equipment manufacturer production markets by 8 percentage points.
MirrorEye, Stoneridge’s camera monitoring system, recorded more than $37 million in quarterly sales, up 48% from a year earlier. Noblet said the increase was driven more heavily by the ramp-up of North American OEM programs, where adoption remains at an early stage.
The company also secured additional orders for another existing camera system that it expects to generate approximately $180 million in cumulative incremental sales through 2028. Noblet said the global OEM program is not MirrorEye and will begin ramping up at the start of 2027. She declined to identify the application, citing confidentiality obligations.
Stoneridge Brazil reported record third-quarter sales of $21.5 million, up 25%, or more than 19% excluding currency benefits. CFO Scott Humphrey attributed the growth to the company’s focus and investments in its Brazilian OEM business.
Margins face warranty and inflation costs
Adjusted gross margin fell 382 basis points from a year earlier to 19.9%, as inventory-related expenses and settlements of legacy warranty obligations outweighed cost improvements. Adjusted EBITDA margin rose 34 basis points to 4.1%, helped by higher sales and efficiencies, while selling, general and administrative expenses fell to 13.1% of adjusted sales from a year earlier.
Noblet said settlements of separate legacy warranty matters had an incremental $3 million impact in the quarter. Humphrey confirmed that amount remained in adjusted EBITDA. Noblet said the company does not expect major incremental impacts from those matters in coming quarters.
For the fourth quarter, Humphrey identified inflation, particularly for memory components, as the biggest pressure the company is trying to manage. He said Stoneridge had received customer cooperation in addressing third-quarter costs and hoped for a similar result in the fourth quarter. The company also cited a less favorable currency environment and uncertainty about realizing further cost recoveries before year-end.
Arbitration ruling and balance sheet
An arbitrator awarded approximately $25.5 million to a customer over warranty claims involving a particulate matter sensor formerly manufactured by Control Devices. Stoneridge exited the product line in 2019 and sold the business in January 2026.
Noblet said the company disagrees with the ruling and is evaluating its options. The ruling resulted in an approximately $24 million noncash pretax charge, net of existing accruals, recorded as a reduction to reported sales. She said Stoneridge has sufficient cash on hand to satisfy the award at its current amount.
The company ended September with approximately $63 million in cash and just under $144 million in debt. Humphrey said Stoneridge continues to work on refinancing its credit facility, which matures in July 2027, and has held constructive discussions with banking partners.
Management expects to provide an update on its plans for 2027 on its next earnings call. Humphrey said the company is working through its budget and intends to increase adjusted EBITDA as a percentage of sales in 2027 and beyond.
About Stoneridge (NYSE:SRI)
Stoneridge, Inc (NYSE: SRI) is a global designer and manufacturer of highly engineered electrical and electronic systems for the automotive, commercial vehicle and off-highway vehicle markets. The company develops technologies intended to improve vehicle safety, efficiency, connectivity and the driver experience.
Its products include electronic instrument clusters and driver-information systems, vehicle controls and switches, sensors, wiring and connectivity solutions, telematics systems, and camera-based vision technologies.
