# Aptiv (APTV) Financial Model Free Excel 3-statement financial model and company analysis for Aptiv. - Canonical: https://finamodel.com/companies/aptiv - Industry: Automotive - Downloadable model: Yes - Excel download: https://finamodel.com/company-models/APTV.xlsx ## Model Purpose This model projects the standalone financial performance and equity valuation of "New Aptiv" following the April 2026 tax-free spin-off of its Electrical Distribution Systems business (Versigent), allowing analysts to assess the margin expansion and growth trajectory of the remaining higher-margin technology segments. ## Company Overview Aptiv PLC is a global technology company that designs and manufactures vehicle components, focusing on active safety, autonomous driving technologies, and smart vehicle connectivity. The company operates as a Tier 1 automotive supplier, bridging the gap between traditional auto parts and advanced software-defined vehicle architectures. In early 2025, Aptiv realigned into three segments: Intelligent Systems (formerly Advanced Safety and User Experience, ~22% of revenue), Engineered Components Group (~32% of revenue), and Electrical Distribution Systems (~46% of revenue). Geographically, the company generates revenue across North America, Europe, Asia (with a strong presence in China), and South America. The business model is transitioning from an asset-heavy manufacturing base to a more asset-light, software-centric platform, particularly within the Intelligent Systems segment. Competitively, Aptiv is a market leader in vehicle architecture and advanced driver assistance systems (ADAS), competing with firms like Mobileye, Magna, and TE Connectivity. A major recent event is the planned April 1, 2026 spin-off of the Electrical Distribution Systems segment into an independent public company named Versigent, alongside a $648 million non-cash goodwill impairment charge in 2025 related to its 2022 acquisition of Wind River. ## Revenue Deep Dive ### Intelligent Systems (formerly Advanced Safety and User Experience) - **Segment name:** Intelligent Systems (renamed from Advanced Safety and User Experience in Q1 2026) - **Revenue driver formula:** Global Light Vehicle Production (LVP) x Aptiv Content Per Vehicle (CPV) in ADAS and Compute - **Historical growth rate:** 5% to 8% CAGR - **Key growth levers and headwinds:** Driven by increasing ADAS penetration, Level 2+ autonomy adoption, and software-defined vehicle architectures. Headwinds include delays in 5G adoption and slower-than-expected OEM software program launches. - **Pricing dynamics:** Long-term contractual platforms with built-in productivity price downs, offset by new feature additions. - **Revenue recognition notes:** Hardware recognized upon shipment; software recognized over time or upon milestone delivery. - **Seasonality:** Generally tracks global auto production, with Q3 often slightly weaker due to European summer plant shutdowns and Q4 being the strongest. ### Engineered Components Group - **Segment name:** Engineered Components Group - **Revenue driver formula:** Global LVP x Engineered Components CPV - **Historical growth rate:** 3% to 5% CAGR - **Key growth levers and headwinds:** Driven by the electrification of vehicles requiring more complex connectors and high-voltage systems. Headwinds include raw material availability and global auto production cyclicality. - **Pricing dynamics:** Contractual with raw material pass-through mechanisms (e.g., copper and resin indexation). - **Revenue recognition notes:** Recognized at a point in time upon shipment to the OEM. - **Seasonality:** Mirrors standard automotive production cycles. ### Electrical Distribution Systems (Versigent Spin-off) - **Segment name:** Electrical Distribution Systems - **Revenue driver formula:** Global LVP x Wiring Harness CPV - **Historical growth rate:** 1% to 3% CAGR - **Key growth levers and headwinds:** Driven by vehicle complexity. Headwinds include heavy labour intensity and supply chain disruptions. - **Pricing dynamics:** Highly competitive, volume-driven pricing with commodity pass-throughs. - **Revenue recognition notes:** Recognized upon shipment. - **Seasonality:** Standard automotive seasonality. ## Cost Structure ### Variable Costs / COGS - **Line-by-line breakdown:** Direct materials (copper, resins, electronic components, semiconductors), direct labour (highly concentrated in the EDS segment), and manufacturing overhead. - **Gross margin range:** 15% to 18% historically (expected to expand post-spin as the lower-margin EDS business is removed). - **Key input costs and commodity exposures:** Copper is a massive input for EDS; semiconductors and electronic components drive Intelligent Systems. - **How COGS scales with revenue:** Step-function scaling based on manufacturing plant capacity utilization, with significant operating leverage once a platform is launched. ### Operating Expenses - **R&D:** Approximately 8% to 10% of revenue, heavily skewed towards Intelligent Systems for software and ADAS development. Capitalisation of software development costs occurs once technological feasibility is reached. - **SG&A:** Approximately 5% to 7% of revenue, largely headcount-driven and corporate overhead. - **Depreciation & Amortisation:** Approximately 4% to 5% of revenue, split between tangible manufacturing equipment and amortisation of acquired intangibles (e.g., Wind River). - **Stock-Based Compensation:** Approximately 0.8% to 1.2% of revenue. - **Restructuring / one-time charges:** Frequent footprint optimization charges, typically $100 million to $200 million annually, plus major one-offs like the $648 million Wind River goodwill impairment in 2025. ### Margin Profile - **Gross margin:** 15% to 18% - **EBITDA margin:** 14% to 16% consolidated (2025 Adjusted EBITDA margin was 15.8%). Post-spin "New Aptiv" is guided to 18.6%, while Versigent is guided to 10.7%. - **Operating margin:** 9% to 12% (Adjusted Operating Margin was 12.0% in 2025). - **Net margin:** 5% to 9% (highly skewed in 2025 by impairment charges). - **Margin trend:** Expanding for New Aptiv due to a mix shift towards high-margin software and compute platforms, while shedding the labour-intensive EDS business. ## Balance Sheet Structure - **Total assets:** Approximately $20 billion to $22 billion. - **Key asset categories:** Accounts receivable, inventory, PP&E, and significant goodwill/intangibles. - **Goodwill & intangibles as % of total assets:** Historically 35% to 40%, reflecting a history of acquisitions (e.g., Wind River, HellermannTyton), though reduced by the 2025 impairment. - **Working capital profile:** - **Days Sales Outstanding (DSO):** 60 to 70 days. - **Days Inventory Outstanding (DIO):** 45 to 55 days. - **Days Payable Outstanding (DPO):** 70 to 80 days. - **Net working capital as % of revenue:** 5% to 8%. - **Is working capital positive or negative?** Positive. The company requires working capital to fund inventory builds for new vehicle platform launches. - **PP&E:** Manufacturing facilities, tooling, and test equipment. Useful lives range from 3 to 15 years. - **Right-of-use assets / operating leases:** Material, representing leased manufacturing and office space globally. ## Capital Expenditure & Investment - **Capex as % of revenue:** 4.5% to 5.0% ($880 million guided for 2025). - **Maintenance capex vs. growth capex:** Approximately 40% maintenance, 60% growth (tooling for new OEM platforms). - **Major capex programmes underway or planned:** Investments in automated manufacturing for Engineered Components and testing facilities for Intelligent Systems. - **Capitalised software / development costs:** Material for the Intelligent Systems segment, specifically related to Wind River and ADAS middleware. - **M&A pattern:** Historically a mix of bolt-on and transformational acquisitions, but currently focused on divestitures (the Versigent spin-off). - **Typical acquisition multiple paid:** 15x to 20x EBITDA for software assets. ## Debt & Capital Structure - **Total debt:** Approximately $6.5 billion to $7.0 billion. - **Debt/EBITDA ratio:** 1.5x to 2.0x. - **Credit rating:** Investment grade (BBB/Baa2). - **Key debt instruments:** Senior unsecured notes and a revolving credit facility. - **Maturity profile:** Well-laddered with average maturities exceeding 5 years. - **Interest rate profile:** Predominantly fixed-rate senior notes. - **Covenants:** Standard investment-grade covenants (interest coverage and leverage maximums). - **Share repurchase programme:** Highly active. The company executed a $3.0 billion Accelerated Share Repurchase in 2024/2025 and has $2.5 billion remaining on its authorization as of late 2025. - **Dividend policy:** The company generally does not pay a regular cash dividend, preferring share repurchases. ## Cash Flow Characteristics - **Operating cash flow conversion:** Strong, typically >1.0x Adjusted Net Income ($2.185 billion OCF in 2025). - **Free cash flow margin:** 6% to 8% of revenue. - **Major non-cash items:** $648 million goodwill impairment in 2025, depreciation, amortisation, and deferred taxes. - **Working capital cash flow impact:** Typically a use of cash during periods of high LVP growth, but managed tightly. - **Capex intensity:** Moderate (4.5% to 5.0% of revenue). - **Cash tax rate vs. GAAP effective tax rate:** Cash taxes are often lower than the GAAP effective tax rate (~17.5%) due to jurisdictional mix and deferred tax assets. ## Sheet Structure 1. **Assumptions**: Macro drivers (Global LVP), segment CPV growth, margin targets, and Versigent spin-off timing mechanics. 2. **Revenue Build**: LVP and CPV calculations broken out by Intelligent Systems, Engineered Components, and Electrical Distribution Systems. 3. **Income Statement**: Consolidated view with a switch to move EDS to Discontinued Operations starting Q2 2026. 4. **Balance Sheet**: Standard assets, liabilities, and equity, with a pro-forma adjustment column for the April 2026 spin-off. 5. **Cash Flow Statement**: Indirect method starting from Net Income, bridging to OCF, CFI, and CFF. 6. **Debt Schedule**: Tranche-by-tranche debt build, interest expense calculation, and the $1.5 billion dividend recapitalization from Versigent to Aptiv. 7. **Working Capital**: Schedules for receivables, inventory, and payables driven by DSO, DIO, and DPO. 8. **Depreciation & Amortisation**: Waterfall schedules for PP&E and intangible assets. 9. **Spin-off Pro-Forma**: A dedicated sheet calculating the exact assets, liabilities, and equity leaving the consolidated group on April 1, 2026. 10. **DCF Valuation**: Unlevered free cash flow calculation, WACC build, and terminal value for "New Aptiv". ## Key Financial Relationships 1. `Intelligent Systems Revenue = Global Light Vehicle Production x Intelligent Systems Content Per Vehicle` 2. `Engineered Components Revenue = Global Light Vehicle Production x Engineered Components Content Per Vehicle` 3. `EDS Revenue = Global Light Vehicle Production x EDS Content Per Vehicle` (Zeroed out in consolidated revenue post-Q1 2026) 4. `Consolidated Revenue = Intelligent Systems Revenue + Engineered Components Revenue + EDS Revenue + Eliminations` 5. `Segment Adjusted Operating Income = Segment Revenue x Segment Adjusted Operating Margin` 6. `Consolidated Adjusted EBITDA = Consolidated Adjusted Operating Income + Depreciation + Amortisation` 7. `U.S. GAAP Net Income = Adjusted Net Income - Restructuring - Goodwill Impairment - Amortisation of Acquired Intangibles` 8. `Accounts Receivable = (Consolidated Revenue / 365) x DSO` 9. `Inventory = (COGS / 365) x DIO` 10. `Accounts Payable = (COGS / 365) x DPO` 11. `Free Cash Flow = Operating Cash Flow - Capital Expenditures` 12. `New Aptiv Pro-Forma Cash Balance (Q2 2026) = Q1 2026 Ending Cash + $1.5 Billion Versigent Dividend - Spin-off Transaction Costs` ## Cross-Sheet Dependencies The **Assumptions** sheet dictates the LVP and CPV inputs on the **Revenue Build**. The **Revenue Build** feeds the top line of the **Income Statement**. The **Income Statement** generates Net Income, which starts the **Cash Flow Statement**. The **Working Capital** and **Depreciation & Amortisation** sheets feed the operating section of the **Cash Flow Statement**. The **Spin-off Pro-Forma** sheet is critical; it triggers in Q2 2026, removing EDS assets/liabilities from the **Balance Sheet** and injecting the $1.5 billion dividend into the **Cash Flow Statement** (CFI/CFF). The **Debt Schedule** calculates interest expense, which feeds back into the **Income Statement**, creating a circular reference that must be managed with a circuit breaker toggle. ## Sign Convention - **Revenue and Income:** Positive - **Assets:** Positive - **Liabilities and Equity:** Positive - **Expenses (COGS, SG&A, Interest):** Positive in their specific build schedules, but subtracted in the Income Statement formulas (e.g., `Gross Profit = Revenue - COGS`). - **Cash Flow:** Inflows are positive, outflows (Capex, debt repayment, share repurchases) are negative. ## Things Most Likely to Go Wrong - The April 2026 Versigent spin-off is the largest structural risk in the model. The builder must correctly move EDS revenue and operating expenses to Discontinued Operations starting Q2 2026. - Failing to remove the Versigent balance sheet items (working capital, specific PP&E) in Q2 2026 will cause the balance sheet to break. - The $1.5 billion private offering of senior notes by Versigent to fund a dividend to Aptiv must be captured as a cash inflow for New Aptiv at the spin date. - The $648 million non-cash goodwill impairment from 2025 must be added back to calculate Adjusted EBITDA and Adjusted Net Income correctly; failing to do so will severely understate historical cash generation. - Segment renaming: The model must map historical "Advanced Safety and User Experience" data to the new "Intelligent Systems" segment name seamlessly. - Commodity pass-throughs inflate revenue and COGS equally, which dilutes gross margin percentages even if gross profit dollars remain flat. - The model must account for the massive reduction in share count due to the $3.0 billion Accelerated Share Repurchase program executed across 2024 and 2025. - Capitalised software development costs flatter operating cash flow; the DCF must deduct these as part of total capital expenditures to reflect true free cash flow. ## Validation Checks - 2025 Consolidated Revenue must tie to $20.4 billion. - 2025 Adjusted EBITDA must tie to $3,228 million. - 2025 U.S. GAAP Net Income must reflect the $165 million actual figure (inclusive of the $648 million impairment). - Post-spin (2026) New Aptiv EBITDA margin should jump to approximately 18.6% as guided. - Post-spin (2026) Versigent EBITDA margin should be approximately 10.7%. - The Balance Sheet must balance: Total Assets = Total Liabilities + Equity in every period, especially across the Q1 to Q2 2026 spin-off boundary. - Capex as a percentage of revenue should remain between 4.5% and 5.0%. - Effective tax rate should remain near the guided 17.5%. ## Key Assumptions (Default Values) | Assumption | Default Value | Unit | Rationale | |---|---|---|---| | Global Light Vehicle Production Growth | 1.5 | % | Consensus industry estimates for modest global volume growth | | Intelligent Systems CPV Growth | 6.0 | % | Driven by ADAS penetration and software-defined vehicle architectures | | Engineered Components CPV Growth | 4.0 | % | Driven by high-voltage electrification requirements | | EDS CPV Growth | 2.0 | % | Mature market with modest content growth | | New Aptiv EBITDA Margin (Post-Spin) | 18.6 | % | Management 2026 guidance for the remaining business | | Versigent EBITDA Margin (Post-Spin) | 10.7 | % | Management 2026 guidance for the standalone EDS business | | Capex as % of Revenue | 4.5 | % | Historical average and management guidance | | Effective Tax Rate | 17.5 | % | 2025 actual adjusted effective tax rate | | Days Sales Outstanding (DSO) | 65 | Days | Based on historical receivables and revenue | | Days Inventory Outstanding (DIO) | 50 | Days | Based on historical inventory and COGS | | Days Payable Outstanding (DPO) | 75 | Days | Based on historical payables and COGS | | Share Count (Q1 2026) | 212.7 | Millions | Actual outstanding shares as of January 2026 | | Versigent Dividend to Aptiv | 1,500 | $ Millions | Stated capital structure plan for the spin-off | | WACC | 9.5 | % | Standard automotive technology supplier discount rate | | Terminal Growth Rate | 2.5 | % | Long-term GDP growth plus slight automotive tech premium | ## Data Sources & Benchmarks - **Filings:** SEC EDGAR (Aptiv PLC Form 10-K, Form 10-Q, Form 8-K), Aptiv Investor Relations website. - **Peers for Benchmarking:** Mobileye (MBLY), Magna International (MGA), Lear Corporation (LEA), TE Connectivity (TEL). - **Industry Data Sources:** S&P Global Mobility (formerly IHS Markit) for Global Light Vehicle Production forecasts. - **Consensus Estimates:** FactSet or Bloomberg for forward-looking analyst estimates on New Aptiv and Versigent. ## Sources - Aptiv PLC Form 10-K for the fiscal year ended December 31, 2025 (filed February 2026). - Aptiv Fourth Quarter 2025 Financial Results Press Release (February 2, 2026). - Aptiv 2025 Investor Day Presentation and Transcript (November 18, 2025). - Aptiv Third Quarter 2025 Financial Results Press Release (October 30, 2025). - Aptiv Investor Relations Website (ir.aptiv.com). --- ## Frequently asked questions ### What does Aptiv do and what are its main business segments? Aptiv PLC is a global technology company that designs and manufactures vehicle components, focusing on active safety, autonomous driving, and smart vehicle connectivity. As of early 2025, its main segments include Intelligent Systems, Engineered Components Group, and Electrical Distribution Systems. ### How does Aptiv generate revenue, and what is its business model transitioning towards? Aptiv generates revenue as a Tier 1 automotive supplier, providing advanced technology solutions across North America, Europe, Asia, and South America. The company's business model is transitioning from an asset-heavy manufacturing base to a more asset-light, software-centric platform, particularly within its Intelligent Systems segment. ### What are the key capital expenditure assumptions in Aptiv's financial model? The financial model assumes capital expenditure as approximately 4.6% of revenue. This capex is split with roughly 40% allocated to maintenance and 60% to growth, funding initiatives like automated manufacturing and testing facilities. ### What is the projected revenue growth rate used in the Aptiv financial model? The Aptiv financial model incorporates a projected revenue growth rate of approximately 8.7%. This assumption drives the top-line forecast for the company's standalone operations from FY2026 through FY2030. ### How does the planned spin-off of Versigent impact the financial model's purpose and valuation of Aptiv? The financial model is specifically designed to project the standalone performance and equity valuation of "New Aptiv" following the April 2026 spin-off of its Electrical Distribution Systems business (Versigent). This allows analysts to assess the margin expansion and growth trajectory of the remaining higher-margin technology segments. ### Where can I download a financial model for Aptiv and what is its forecast horizon? A downloadable Excel financial model for Aptiv is available, allowing users to analyze the company's projected performance. This model provides a forecast horizon spanning from fiscal year 2026 through fiscal year 2030. [Interactive forecast calculator](https://finamodel.com/companies/aptiv/forecast)