Gentex Cuts 2026 Revenue Outlook to $2.65 Billion as Margins Weaken
Key Facts
On October 23, Gentex reported results for the three months ended September 30 and cut its 2026 revenue estimate to about $2.65 billion from a previous range of $2.65 billion to $2.75 billion. It also lowered its expected full-year gross margin range to 34.0–34.5%, compared with 34.5–35.5% previously. The company said quarterly revenue was about $35 million below its estimate at the start of the period, attributing the gap to issues at some customers and delayed launches during the quarter. Gross margin fell to 33.4% in the quarter from 34.4% a year earlier. The company reported these results after the daily closing prices recorded for its shares on October 21 and 22, so those sessions’ data do not establish a subsequent decline following the announcement.
Net sales were $655.2 million in the third quarter of 2025, while diluted earnings per share were $0.43 in the third quarter of 2026, compared with $0.46 a year earlier. Gentex attributed the margin decline mainly to higher precious-metal costs and lower-than-expected sales, which resulted in an unfavorable product mix and operating leverage. CEO Steve Downing said, "Sales falling short of our expectations at the start of the quarter reduced operating leverage during the quarter." In the second quarter of 2026, sales were $651.3 million and gross margin was 37.0%, putting the third-quarter reading below the prior quarter. The company’s third-quarter 2025 sales had risen 8% to $655.2 million from $608.5 million in the same period of 2024; VOXX contributed $84.9 million in revenue at the time.
Automotive performance varied by geography: North American automotive revenue rose about 3% year over year despite a 5% decline in regional light-vehicle production. In Europe, automotive revenue increased 13% year over year, excluding the impact of the loss of a Volkswagen program. In China, automotive revenue fell 44% to $22.072 million from $39.107 million in the third quarter of 2025. The company said issues at some customers and delayed launches contributed to the revenue gap versus its internal estimate. The figures show a contrast between revenue growth in North America and Europe and a sharp contraction in China, alongside the impact of the aforementioned European program loss.
By contrast, Premium Audio sales rose to $54.7 million from $43.0 million a year earlier, an increase of about 27%. Other Products sales totaled $40.5 million, up 5% year over year, driven by growth in aviation and fire-protection revenue. Aviation revenue climbed 135%, while fire-protection revenue increased 36%, partly offsetting lower aftermarket and accessories sales. These categories provide sources of growth beyond automotive sales, at a time when declining revenue in China and the loss of the European program weighed on the core business. But these increases did not prevent the company from lowering its annual revenue and margin outlook ranges.
The updated guidance includes estimated additional costs of between $10 million and $15 million in the fourth quarter of 2026, and Gentex does not expect to recover the related amounts before the first half of 2027. The company kept its 2027 revenue outlook at a range of $2.80–$2.90 billion, assuming vehicle production in its main markets declines about 1% during the year. The earnings announcement and investor call were scheduled for October 23 at 9:30 a.m. Eastern Time. For the stock, EL7 data recorded a close of $21.00 on October 21, followed by $21.74 on October 22. These closes do not support a post-announcement decline for an announcement made the following day, and they do not provide the session high and low prices cited in the initial draft.