Sensata Technologies Holding plc

1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements reflect the financial position, results of operations, comprehensive income, cash flows, and changes in shareholders' equity of Sensata Technologies Holding plc, a public limited company incorporated under the laws of England and Wales, and its consolidated subsidiaries, collectively referred to as the "Company," "Sensata," "we," "our," or "us."

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States ("U.S.") generally accepted accounting principles ("GAAP") for interim financial information and the instructions to Form 10-Q. Accordingly, these interim financial statements do not include all of the information and note disclosures required by U.S. GAAP for complete financial statements. The accompanying interim financial information reflects all normal recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the interim period results. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the U.S. Securities and Exchange Commission (the "SEC") on February 28, 2025 (the "2024 Annual Report").

We present financial information fortwo reportable segments, Performance Sensing ("PS") and Sensing Solutions ("SS"). Additionally, our business strategy involves leveraging new and emerging technologies, which complement our existing product offerings, and we refer to these trends collectively as “megatrends.” Our operating segments’ performance is primarily evaluated based on segment operating income. In the three months ended March 31, 2025, we realigned the definition of segment operating income to include megatrend costs, which were previously excluded from segment operating income and included in corporate and other costs. Prior period amounts in this Quarterly Report on Form 10-Q have been recast to reflect this realignment and to conform to current year presentation. Refer to Note 15: Segment Reporting for additional information.

All U.S. dollar ("USD") and share amounts presented, except per share amounts, are stated in thousands, unless otherwise indicated. Certain prior period amounts have been recast to conform to current year presentation.

2. New Accounting Standards

In December 2023, the FASB issued Accounting Standards Update ("ASU") No. 2023-09, Income taxes (Topic 740): Improvements to Income Tax Disclosures, which requires (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) disclosure of income taxes paid disaggregated by jurisdiction. ASU No. 2023-09 also includes certain other updates to improve the effectiveness of income tax disclosures. ASU No. 2023-09 is effective for annual periods beginning after December 15, 2024, and should be applied prospectively, with retrospective application also a permitted option. The Company is currently evaluating the impact that the adoption of ASU No. 2023-09 will have on its consolidated financial statements and disclosures.

In November 2024, the FASB issued ASU No. 2024-03 Income Statement (Topic 220): Reporting Comprehensive Income, which requires additional disclosure of the nature of expenses included in the income statement as well as disclosures about specific types of expenses included in the expense captions presented in the income statement. ASU No. 2024-03 does not change or remove current expense presentation requirements within the Consolidated Statements of Operations. However, the update requires disclosure, on an annual and interim basis, of disaggregated information about certain income statement expense line items within the notes to the consolidated financial statements. ASU No. 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact that the adoption of ASU No. 2024-03 will have on its consolidated financial statements and disclosures.

3. Revenue Recognition

The following table presents net revenue disaggregated by end market for the three and six months ended June 30, 2025 and 2024:

4. Share-Based Payment Plans

The following table presents the components of non-cash compensation expense related to our equity awards for the three and six months ended June 30, 2025 and 2024:

Equity Awards

We granted the following restricted stock units ("RSUs" and each, an "RSU") and performance-based restricted stock units ("PRSUs" and each, a "PRSU") during the six months ended June 30, 2025:

(1) These awards cliff vest up toone year from the grant date (various dates between January 2026 and June 2026).

(2) These RSUs vest ratably over three years, one-third per year beginning on the first anniversary of the grant date. These RSUs will fully vest on various dates between January 2028 and June 2028.

(3) These PRSUs vest in April 2028. The number of units that ultimately vest will be between 0% and 150% and is dependent on the achievement of certain performance criteria.

(4) These awards include certain PRSUs with market performance conditions that will be evaluated relative to the performance of certain peers as defined in the award agreement. The number of units that ultimately vest (in April 2028) will be from

0% to 150%, depending on achievement of these performance criteria. Total grant date value of these PRSUs is approximately $6.4 million and was valued using the Monte Carlo method.

5. Restructuring and Other Charges, Net

2H 2024 Plan

In the year ended December 31, 2024, we committed to a plan to reorganize our business (the “2H 2024 Plan”). The 2H 2024 Plan, consisting of involuntary reductions-in-force, site closures, and other cost-savings initiatives, was commenced to adjust our cost structure and business activities to better align with weaker market demand and continued economic uncertainty in many of our end markets and to take active measures to accelerate our margin recovery.

The reductions-in-force, which are subject to the laws and regulations of the countries in which the actions were executed or planned, are expected to impact approximately 240 positions. Over the life of the 2H 2024 Plan, we expect to incur restructuring charges of between $15.5 million and $16.5 million, primarily related to reductions-in-force. The majority of the actions under the 2H 2024 Plan are expected to be completed on or before December 31, 2025. We expect to settle these charges with cash on hand.

Q3 2023 Plan

In the year ended December 31, 2023, we committed to a plan to reorganize our business (the “Q3 2023 Plan”). The Q3 2023 Plan, consisting of voluntary and involuntary reductions-in-force, site closures, and other cost-savings initiatives, was commenced to adjust our cost structure and business activities.

The reductions-in-force, which are subject to the laws and regulations of the countries in which the actions were executed or planned, impacted 505 positions. Over the life of the Q3 2023 Plan, we expect to incur restructuring charges of between $26.7 million and $27.6 million, primarily related to reductions-in-force. The majority of the actions under the Q3 2023 Plan are expected to be completed on or before December 31, 2025. We expect to settle these charges with cash on hand.

Summary

The following table presents the components of restructuring and other charges, net for the three and six months ended June 30, 2025, and 2024:

(1)Acquisition-related compensation arrangements consist of incentive compensation to previous owners of companies we have acquired. Payment is generally tied to technical and/or financial targets set at the time of acquisition.

The following table presents a rollforward of our severance liability, which is primarily related to the 2H 2024 Plan, for the six months ended June 30, 2025:

The severance liability as of June 30, 2025 and December 31, 2024 was entirely recorded in accrued expenses and other current liabilities on our condensed consolidated balance sheets.

Other

In the three months ended June 30, 2024, we initiated certain actions related to restructuring of our IT operations and product lifecycle management including product line discontinuations, which, for the three and six months ended June 30, 2024, resulted in total costs of $15.9 million, including severance, contract termination costs, and inventory charges. Of the costs recognized, $13.2 million was included within cost of revenue and the remainder was included within restructuring and other charges, net.

6. Other, Net

The following table presents the components of other, net for the three and six months ended June 30, 2025 and 2024:

(1)The six months ended June 30, 2024 primarily includes a loss on an equity investment that does not have a readily determinable fair value for which we use the measurement alternative prescribed in FASB ASC Topic 321, Investments—Equity Securities. Refer to Note 13: Fair Value Measures for additional information.

7. Income Taxes

The following table presents the provision for income taxes for the three and six months ended June 30, 2025 and 2024:

The provision for income taxes consists of (1) current tax expense, which relates primarily to our profitable operations in tax jurisdictions with limited or no net operating loss carryforwards and withholding taxes related to management fees, royalties, and the repatriation of foreign earnings; and (2) deferred tax expense (or benefit), which represents adjustments in book-to-tax basis differences primarily related to (a) book versus tax basis in intangible assets, (b) changes in net operating loss carryforwards and tax credits, and (c) changes in withholding taxes on unremitted earnings.

In July 2025, the U.S. enacted the One Big Beautiful Bill Act, which introduced significant changes to the federal tax code such as the permanent extension of select Tax Cuts and Jobs Act measures, updates to international tax rules, and the reinstatement of favorable business tax treatments. The One Big Beautiful Bill Act includes multiple effective dates, with some provisions retroactive to January 1, 2025, and others will become effective through 2027. The Company is currently evaluating the impact on our consolidated financial statements and disclosures.

8. Net Income per Share

Basic and diluted net income per share are calculated by dividing net income by the number of basic and diluted weighted-average ordinary shares outstanding during the period. For the three and six months ended June 30, 2025 and 2024 the weighted-average ordinary shares outstanding used to calculate basic and diluted net income per share were as follows:

Net income and net income per share are presented in the condensed consolidated statements of operations.

Certain potential ordinary shares were excluded from our calculation of diluted weighted-average ordinary shares outstanding because either they would have had an anti-dilutive effect on net income per share or they related to equity awards that were contingently issuable for which the contingency had not been satisfied. These potential ordinary shares were as follows:

9. Inventories

The following table presents the components of inventories as of June 30, 2025 and December 31, 2024:

10. Debt

The following table presents the components of long-term debt, net and finance lease obligations as of June 30, 2025 and December 31, 2024:

Our indebtedness as of June 30, 2025 and December 31, 2024 consists of various tranches of senior unsecured notes as shown in the table above. We also have secured credit facilities (the "Senior Secured Credit Facilities") which provide for our $750.0 million revolving credit facility (the "Revolving Credit Facility") and incremental availability under which additional debt can be issued. Refer to Note 14: Debt of our 2024 Annual Report for additional information related to our indebtedness.

Revolving Credit Facility

As of June 30, 2025, we had $745.8 million available under the Revolving Credit Facility, net of $4.2 million of obligations in respect of outstanding letters of credit issued thereunder. Outstanding letters of credit are issued primarily for the benefit of certain operating activities. As of June 30, 2025, no amounts had been drawn against these outstanding letters of credit.

Accrued Interest

Accrued interest associated with our outstanding debt is included as a component of accrued expenses and other current liabilities in the condensed consolidated balance sheets. As of June 30, 2025 and December 31, 2024, accrued interest totaled $51.6 million and $55.2 million, respectively.

11. Commitments and Contingencies

We are regularly involved in a number of claims and litigation matters that arise in the ordinary course of business. Although it is not feasible to predict the outcome of these matters, based upon our experience and current information known to us, we do not expect the outcome of these matters, either individually or in the aggregate, to have a material adverse effect on our results of operations, financial condition, and/or cash flows.

Cybersecurity Incident

In April 2025, we experienced a ransomware incident that encrypted certain devices in our network. The incident temporarily impacted our operations, but the incident did not have a material impact on the Company’s financial results and operations for the three and six months ended June 30, 2025.

12. Shareholders' Equity

Purchase of Noncontrolling Interest in Joint Venture

In February 2024, we purchased the remaining 50% interest in our joint venture with Dongguan Churod Electronics Co., Ltd. for approximately $79.4 million. Prior to the transaction, we had been consolidating the joint venture. The purchase of the 50% non-controlling interest was accounted for as an equity transaction. No gain or loss was recognized in the condensed consolidated statements of operations. The difference between the fair value of the consideration paid and the amount by which the non-controlling interest was adjusted was recognized as a reduction of additional paid in capital recorded in equity.

Cash Dividends

In the three and six months ended June 30, 2025, we paid aggregate cash dividends of $17.6 million and $35.5 million, respectively, compared to $18.1 million and $36.1 million in the three and six months ended June 30, 2024, respectively. In July 2025, we announced that our Board of Directors approved a quarterly dividend of $0.12 per share, payable in August 2025 to shareholders of record as of August 13, 2025.

Treasury Shares

From time to time, our Board of Directors has authorized various share repurchase programs, which may be modified or terminated by the Board at any time. Under these programs, we may repurchase ordinary shares at such times and in amounts to be determined by our management, based on market conditions, legal requirements, and other corporate considerations, on the open market or in privately negotiated transactions, provided that such transactions were completed pursuant to an agreement and with a third party approved by our shareholders at the annual general meeting. Ordinary shares repurchased by us are recognized, measured at cost, and presented as treasury shares on our consolidated balance sheets, resulting in a reduction of shareholders' equity. In September 2023, our Board of Directors authorized a $500.0 million ordinary share repurchase program (the “September 2023 Program”), which became effective on October 1, 2023.

In the three months ended June 30, 2025, we repurchased 0.7 million ordinary shares for $20.1 million, under the September 2023 Program. In the three months ended June 30, 2024, we didnot purchase any shares under our share repurchase program. In the six months ended June 30, 2025 and 2024, we repurchased 4.2 million and 0.3 million ordinary shares, respectively, for $120.6 million and $10.1 million, respectively. All share repurchases in the three and six months ended June 30, 2025 and 2024 were made under the September 2023 Program. As of June 30, 2025, $282.4 million remained available for repurchase under the September 2023 Program.

Accumulated Other Comprehensive Loss

The following table presents the components of accumulated other comprehensive loss for the six months ended June 30, 2025:

The following table presents the amounts reclassified from accumulated other comprehensive loss for the three and six months ended June 30, 2025 and 2024:

(1) Refer to Note 14: Derivative Instruments and Hedging Activities for additional information regarding amounts to be reclassified from accumulated other comprehensive loss in future periods.

13. Fair Value Measures

Measured on a Recurring Basis

The fair values of our assets and liabilities measured at fair value on a recurring basis as of June 30, 2025 and December 31, 2024 are shown in the below table.

Refer to Note 14: Derivative Instruments and Hedging Activities for additional information regarding our forward contracts. Cash equivalents consist of U.S. Government Treasury money market funds and are classified as Level 1 as they are exchange traded in an active market.

Financial Instruments Not Recorded at Fair Value

The following table presents the carrying values and fair values of financial instruments not recorded at fair value in the condensed consolidated balance sheets as of June 30, 2025 and December 31, 2024. All fair value measures presented are categorized in Level 2 of the fair value hierarchy.

(1) Excluding any related debt discounts, premiums, and deferred financing costs.

In addition to the above, we hold certain equity investments that do not have readily determinable fair values for which we use the measurement alternative prescribed in FASB ASC Topic 321. Such investments are measured at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. As of June 30, 2025 and December 31, 2024, we held equity investments under the measurement alternative of $7.3 million and $6.1 million, respectively, which are presented in other assets in the condensed consolidated balance sheets.

14. Derivative Instruments and Hedging Activities

Foreign Currency Derivatives

As of June 30, 2025, we had the following outstanding foreign currency forward contracts, which had the below hedge accounting designation in accordance with FASB ASC Topic 815, Derivatives and Hedging:

(1) Derivative financial instruments not designated as hedges are used to manage our exposure to currency exchange rate risk. They are intended to preserve economic value, and they are not used for trading or speculative purposes.

As of June 30, 2025, we estimate that $17.7 million of net losses will be reclassified from accumulated other comprehensive loss to earnings during the twelve-month period ending June 30, 2026.

Commodity Risk Derivatives

As of June 30, 2025, we had the following outstanding commodity forward contracts, none of which were designated for hedge accounting treatment:

Financial Instrument Presentation

The following table presents the fair values of our derivative financial instruments and their classification in the condensed consolidated balance sheets as of June 30, 2025 and December 31, 2024:

These fair value measurements were all categorized within Level 2 of the fair value hierarchy.

The following tables present the effect of our derivative financial instruments on the condensed consolidated statements of operations and the condensed consolidated statements of comprehensive income for the three months ended June 30, 2025 and 2024:

The following tables present the effect of our derivative financial instruments on the condensed consolidated statements of operations and the condensed consolidated statements of comprehensive income for the six months ended June 30, 2025 and 2024:

Credit Risk Related Contingent Features

We have agreements with our derivative counterparties that contain a provision whereby if we default on our indebtedness and repayment of the indebtedness has been accelerated by the lender, then we could also be declared in default on our derivative obligations.

As of June 30, 2025, the termination value of outstanding derivatives in a liability position, excluding any adjustment for non-performance risk, was $33.0 million. As of June 30, 2025, we hadnot posted any cash collateral related to these agreements. If we breach any of the default provisions on any of our indebtedness as described above, we could be required to settle our obligations under the derivative agreements at their termination values.

15. Segment Reporting

We present financial information fortwo reportable segments, Performance Sensing and Sensing Solutions. Our segments are businesses that we manage as components of an enterprise, for which separate financial information is evaluated regularly by our chief operating decision maker ("CODM"), who is our chief executive officer, in deciding how to allocate resources and assess performance.

A segment’s performance is primarily evaluated based on segment operating income, which excludes amortization of intangible assets, impairment of goodwill and other intangible assets, restructuring charges, and certain corporate costs or credits not associated with the operations of the segment. Corporate and other costs excluded from a segment’s performance are separately stated below and include costs that are related to functional areas such as finance, information technology, legal, and human resources. The CODM uses operating income primarily in the annual budget and forecasting process. The CODM considers budget-to-actual variances on a quarterly basis for operating income when making decisions about the allocation of operating and capital resources to each segment. Significant expenses are reviewed by the CODM on a consolidated basis and not at the operating segment level. We believe that segment operating income, as defined above, is an appropriate measure for evaluating the operating performance of our segments. However, this measure should be considered in addition to, and not as a substitute for, or superior to, operating income or other measures of financial performance prepared in accordance with U.S. GAAP. The accounting policies of each of our operating and reportable segments are materially consistent with those described in Note 2: Significant Accounting Policies of the audited consolidated financial statements and notes thereto included in our 2024 Annual Report.

The Performance Sensing segment serves the automotive and HVOR industries through the development and manufacture of sensors, high-voltage solutions (i.e., electrical protection components), and other solutions that are used in mission-critical systems and applications. Examples include those used in subsystems of automobiles, on-road trucks, and off-road equipment, such as tire pressure monitoring, thermal management, electrical protection, regenerative braking, powertrain (engine/transmission), and exhaust management. These products are used in subsystems that, among other things, improve operating performance and efficiency and contribute to environmentally sustainable and safe solutions.

The Sensing Solutions segment primarily serves the industrial and aerospace industries through the development and manufacture of a broad portfolio of application-specific sensor and electrical protection products used in a diverse range of industrial markets, including the appliance, HVAC, water management, operator controls, charging infrastructure, renewable energy generation, green hydrogen production, and microgrid applications and markets, as well as the aerospace market, including commercial aircraft, defense, and aftermarket markets.

Some of the products and solutions sold by the Sensing Solutions segment include pressure, temperature, and position sensors, motor and compressor protectors, high-voltage contactors, solid state relays, bimetal electromechanical controls, power inverters, charge controllers, battery management systems, operator controls, and power conversion systems. Sensing Solutions products perform many functions, including prevention of damage from excess heat or electrical current, optimization of system performance, low-power circuit control, renewable energy generation, and power conversion from direct current power to alternating current power.

The following table presents net revenue, segment and non-segment operating expenses, and segment and non-segment operating income for the reportable segments and other operating results not allocated to our reportable segments for the three and six months ended June 30, 2025 and 2024:

(1) Other segment and non-segment expenses include associated cost of revenue, research and development, and selling, general and administrative expenses.

The following table presents depreciation and amortization expense for our reportable segments and corporate and other for the three and six months ended June 30, 2025 and 2024:

(1)Included within corporate and other is amortization of intangible assets, accelerated depreciation recognized in connection with restructuring actions, and depreciation of certain assets. We do not allocate these amounts to our segments. This treatment is consistent with the financial information reviewed by our chief operating decision maker.

The following table presents additions to PP&E and capitalized software for our reportable segments and corporate and other for the three and six months ended June 30, 2025 and 2024:

Geographic Area Information

The following tables present net revenue by geographic area and by significant country for the three and six months ended June 30, 2025 and 2024. In these tables, net revenue is aggregated according to the location of our subsidiaries.

The following tables present PP&E, net, by geographic area and by significant country as of June 30, 2025 and 2024. In these tables, PP&E, net is aggregated based on the location of our subsidiaries.

16. Disposals

Insights Business

In August 2024, we executed a purchase agreement whereby we agreed to sell the Insights Business to an affiliate of Balmoral Funds ("the Buyer"). The closing of the transaction ("Closing") occurred in the third quarter of 2024, at which time net assets transferred to the Buyer.

Concurrent with the Closing, the parties entered into a Transition Services Agreement ("TSA") and a Supply Agreement. The terms of the TSA require that we provide various forms of commercial, operational, and back-office support to the Buyer. The Supply Agreement commenced at Closing and has a term offive years or less. The terms of this agreement require that we sell certain tire pressure monitoring system products to the Buyer over the term of the agreement.

For the three and six months ended June 30, 2024, the Insights Business was included in our Other segment.

Magnetic Speed and Position Business ("MSP Business")

In November 2024, we executed a purchase agreement whereby we agreed to sell the MSP Business to a third party. The closing of the transaction occurred in the first quarter of 2025, at which time net assets transferred to the Buyer.

Cautionary Statements Concerning Forward-Looking Statements

This Quarterly Report on Form 10-Q includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by terminology such as "may," "will," "could," "should," "expect," "anticipate," "believe," "estimate," "predict," "project," "forecast," "continue," "intend," "plan," "potential," "opportunity," "guidance," and similar terms or phrases. Forward-looking statements involve, among other things, expectations, projections, and assumptions about future financial and operating results, objectives, business and market outlook, megatrends, priorities, growth, shareholder value, capital expenditures, cash flows, demand for products and services, share repurchases, and Sensata’s strategic initiatives, including those relating to acquisitions and dispositions and the impact of such transactions on our strategic and operational plans and financial results. These statements are subject to risks, uncertainties, and other important factors relating to our operations and business environment, and we can give no assurances that these forward-looking statements will prove to be correct.

A wide variety of potential risks, uncertainties, and other factors could materially affect our ability to achieve the results either expressed or implied by these forward-looking statements, including, but not limited to, risks related to instability and changes in the global markets, supplier interruption or non-performance, changes in trade-related tariffs and risks with uncertain trade environments, the acquisition or disposition of businesses, adverse conditions or competition in the industries upon which we are dependent, intellectual property, product liability, warranty, and recall claims, public health crises, market acceptance of new product introductions and product innovations, labor disruptions or increased labor costs, changes in existing environmental or safety laws, regulations, and programs, and the impact of our recently reported cybersecurity incident or other incidents that may occur in the future.

Investors and others should carefully consider the foregoing factors and other uncertainties, risks, and potential events including, but not limited to, those described in Item 1A: Risk Factors included in our 2024 Annual Report and as may be updated from time to time in Item 1A: Risk Factors included in our quarterly reports on Form 10-Q or other subsequent filings with the United States Securities and Exchange Commission. All such forward-looking statements speak only as of the date they are made, and we do not undertake any obligation to update these statements other than as required by law.