Strattec Security (STRT -8.02%), a leading designer and manufacturer of mechanical and electronic locks and access control products for the automotive industry, released its fourth quarter fiscal 2025 earnings on August 14, 2025. The release showed results well ahead of analyst expectations, with non-GAAP EPS of $2.06 versus an estimate of $1.07 and GAAP revenue of $152.0 million versus an estimate of $143.51 million.—revenue (GAAP) climbed to $152.0 million, outpacing the consensus estimate by $8.5 million (GAAP), and non-GAAP diluted earnings per share reached $2.06 versus an expected $1.07. Compared to the same period a year ago, gross margin (GAAP) improved sharply and cash flow from operations increased significantly in both the quarter and FY2025. Overall, the quarter showed margin expansion and positive cash generation, with continued progress on the company’s operational transformation.
| Metric | Q4 FY2025(ended June 29, 2025) | Q4 Estimate | Q4 FY2024(ended June 30, 2024) | Y/Y Change |
|---|---|---|---|---|
| EPS (Diluted, Non-GAAP) | $2.06 | $1.07 | $2.42 | (14.9%) |
| Revenue (GAAP) | $152.0 million | $143.51 million | $143.1 million | 6.2 % |
| Gross Margin | 16.7 % | 13.0 % | 3.7 pp | |
| Adjusted EBITDA (Non-GAAP) | $13.0 million | $13.8 million | (-5.8 %) |
Source: Analyst estimates for the quarter provided by FactSet.
Company Overview and Key Areas of Focus
Strattec Security delivers mechanical and electronic vehicle access solutions—including locksets, ignition locks, latches, electronic keys, and power access systems—to major automotive manufacturers and the aftermarket. The company’s core business centers on products like power liftgate motion control, power tailgate systems, and electronic locking devices for vehicles. Its products are integrated into new vehicles and used for replacement in North America and key international markets.
Recently, Strattec has focused on cost controls, restructuring its joint ventures, and deepening partnerships—especially a key cooperation with WITTE Automotive, following divestment of its stake in VAST LLC. Success for Strattec depends on strong relationships with its top customers, keeping pace with automotive technology, and delivering value through pricing and operational efficiency. Roughly two-thirds of its sales rely on the three major U.S. automakers—General Motors, Ford, and Stellantis—which accounted for approximately 66% of net sales in FY2024 and FY2023, making customer concentration a critical factor.
Quarterly Performance and Business Developments
Revenue (GAAP) was up 6.3% year over year, beating GAAP revenue estimates by $8.492 million. Growth was driven by new pricing actions, higher demand from automotive manufacturers, and a lift from new product programs. In detail, $3.7 million in additional pricing, $4.1 million of increased demand, and $1.2 million in new launches contributed to this gain, alongside an improved sales mix.
The gross margin (GAAP) rose to 16.7%, up from 13.0% in Q4 FY2024. Improvements here came from favorable foreign exchange (delivering a $3.0 million benefit), successful restructuring (saving $1.3 million), and stronger pricing. These factors outweighed a $1.6 million increase in tariff costs and $1.1 million of higher labor costs in its Mexican operations. Despite these benefits, higher selling, administrative, and engineering expenses increased to $16.9 million, mostly reflecting lapping of a $4.7 million one-time engineering recovery in the prior period, as well as increased performance-based compensation and transformation spending.
The company generated $30.2 million in cash from operations, compared with $19.5 million in cash from operations in Q4 FY2024. Cash and cash equivalents at quarter end were $84.6 million, a sharp increase from $25.4 million at the end of FY2024. This cash build occurred despite continued investments in property and equipment, which totaled $7.2 million for the year. Debt related to joint ventures declined to $8 million from $13 million at FY2024 year-end.
Profitability metrics were mixed. While non-GAAP diluted earnings per share was well above analyst estimates, it fell from a strong prior-year print that included a one-time engineering recovery benefit. Adjusted earnings before interest, taxes, depreciation, and amortization (commonly called EBITDA, which measures core profitability before the effect of financing and non-cash costs) declined 1.1 percentage points year-over-year as a share of revenue, from 9.6% in Q4 FY2024 to 8.5%, down to 8.5% (adjusted EBITDA margin, non-GAAP). This reflected increases in performance compensation and investments in business transformation.
Strattec’s power access product family—such as its motion control systems for power liftgates and sliding power doors—remained a core focus. These electro-mechanical systems integrate automatic opening and closing functionality for vehicle doors and tailgates, meeting new demands from automakers and end-users. The company continued to invest in talent and engineering to keep up with evolving automotive technology, with business transformation costs and investments in talent contributing to higher administrative costs. Management confirmed ongoing work on product innovation and deeper customer engagement in areas like automated and secure access systems for next-generation vehicles.
No new material one-time events were noted in the quarter, although the prior-year comparison period included a significant one-time engineering design and development recovery. There were no dividend declarations or increases reported for the quarter. STRT does not currently pay a dividend.
Looking Ahead: Outlook and Risks to Watch
Management did not provide formal financial guidance for future quarters or the coming year. In its commentary, leadership noted both excitement for long-term prospects and caution for the near term, referencing downward revisions in North American automotive production forecasts and a pause in new vehicle program launches by key customers.
Investors should pay attention to Strattec’s ability to manage continued risks, navigating cost pressures from tariffs and labor, and securing new program launches in a slower production environment. The company expects tariff costs to increase by $5–$7 million annually before further mitigation and will need to continue passing through these costs or finding operational efficiencies to protect margins. No clear earnings or revenue targets were offered by management in the earnings release or call.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
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