Sensata Technologies Holding plc

Previous wording

The following discussion and analysis of our financial condition and results of operations supplements should be read in conjunction with the discussion in Item 7: Management's Discussion and Analysis of Financial Condition and Results of Operations included in our 2025 Annual Report. The following discussion should also be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto (the "Financial Statements") included elsewhere in this Report. Amounts and percentages in the following discussions and tables have been calculated based on unrounded numbers. Accordingly, certain amounts may not appear to recalculate due to the effect of rounding.

Current wording

The following discussion and analysis of our financial condition and results of operations supplements, and should be read in conjunction with, the discussion in Item 7: Management's Discussion and Analysis of Financial Condition and Results of Operations included in our 2025 Annual Report. The following discussion should also be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto (the "Financial Statements") included elsewhere in this Report. Amounts and percentages in the following discussions and tables have been calculated based on unrounded numbers. Accordingly, certain amounts may not appear to recalculate due to the effect of rounding.

Previous wording

Net revenue for the three months ended June 30, 2026 was $990.6 million, an increase of 5.0% on a reported basis compared to $943.4 million in the prior period. Excluding an increase of 1.1% attributed to changes in foreign currency exchange rates and a decrease of 0.5% related to the effect of disposals, net revenue increased 4.4% on an organic basis. Organic revenue growth (or decline), discussed throughout this Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations (this "MD&A"), is a financial measure not presented in accordance with U.S. GAAP. Refer to Non-GAAP Financial Measures included elsewhere in this MD&A for additional information regarding our use of organic revenue growth (or decline). Net revenue for the six months ended June 30, 2026 was $1,925.4 million, an increase of 3.8% on a reported basis compared to $1,854.6 million in the prior period. Excluding an increase of 1.6% attributed to changes in foreign currency exchange rates and a decrease of 2.1% related to the effect of disposals, net revenue increased 4.3% on an organic basis.

Current wording

Net revenue for the three months ended September 30, 2026 was $1,003.6 million, an increase of 7.7% on a reported basis compared to $932.0 million in the prior period. Excluding an increase of 0.9% attributed to changes in foreign currency exchange rates, net revenue increased 6.8% on an organic basis. Organic revenue growth (or decline), discussed throughout this Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations (this "MD&A"), is a financial measure not presented in accordance with U.S. GAAP. Refer to Non-GAAP Financial Measures included elsewhere in this MD&A for additional information regarding our use of organic revenue growth (or decline). Net revenue for the nine months ended September 30, 2026 was $2,929.1 million, an increase of 5.1% on a reported basis compared to $2,786.6 million in the prior period. Excluding an increase of 1.4% attributed to changes in foreign currency exchange rates and a decrease of 1.4% related to the effect of disposals, net revenue increased 5.1% on an organic basis.

Previous wording

Operating income for the three months ended June 30, 2026 was $165.4 million (16.7% of net revenue), an increase of $27.3 million, or 19.8%, compared to operating income of $138.1 million (14.6% of net revenue) in the three months ended June 30, 2025. Operating income for the six months ended June 30, 2026 was $307.0 million (15.9% of net revenue), an increase of $46.7 million, or 18.0%, compared to operating income of $260.3 million (14.0% of net revenue) in the six months ended June 30, 2025. Refer to Results of Operations included elsewhere in this MD&A for additional discussion of our earnings results for the three and six months ended June 30, 2026 compared to the prior periods.

Current wording

Operating income for the three months ended September 30, 2026 was $175.3 million (17.5% of net revenue), an increase of $298.1 million compared to operating loss of $122.9 million (13.2% of net revenue) in the three months ended September 30, 2025. Operating income for the nine months ended September 30, 2026 was $482.3 million (16.5% of net revenue), an increase of $344.9 million compared to operating income of $137.4 million (4.9% of net revenue) in the nine months ended September 30, 2025. Refer to Results of Operations included elsewhere in this MD&A for additional discussion of our earnings results for the three and nine months ended September 30, 2026 compared to the prior periods.

Previous wording

We generated $332.5 million of operating cash flows in the six months ended June 30, 2026, ending the quarter with $403.3 million in cash and cash equivalents. In addition to $401.1 million used to pay debt, in the six months ended June 30, 2026, we used cash of approximately $41.5 million for capital expenditures, $34.9 million for payment of dividends, and $25.1 million for share repurchases as part of our share repurchase plan.

Current wording

We generated $557.8 million of operating cash flows in the nine months ended September 30, 2026, ending the quarter with $553.4 million in cash and cash equivalents. During the nine months ended September 30, 2026, we allocated capital across several priorities, including $433.2 million for reduction of debt, $68.5 million for capital expenditures, $52.4 million for payment of dividends, and $25.1 million for share repurchases as part of our share repurchase plan.

Previous wording

The table below presents our historical results of operations, in millions of dollars and as a percentage of net revenue, for the three and six months ended June 30, 2026 compared to the three and six months ended June 30, 2025. We have derived the results of operations from the Financial Statements included elsewhere in this Report. Amounts and percentages in the table below have been calculated based on unrounded numbers. Accordingly, certain amounts may not appear to recalculate due to the effect of rounding.

Current wording

The table below presents our historical results of operations, in millions of dollars and as a percentage of net revenue, for the three and nine months ended September 30, 2026 compared to the three and nine months ended September 30, 2025. We have derived the results of operations from the Financial Statements included elsewhere in this Report. Amounts and percentages in the table below have been calculated based on unrounded numbers. Accordingly, certain amounts may not appear to recalculate due to the effect of rounding.

Previous wording

Net revenue for the three months ended June 30, 2026 increased 5.0% compared to the prior period. Net revenue increased 4.4% on an organic basis, which excludes an increase of 1.1% attributed to changes in foreign currency exchange rates and a decrease of 0.5% due primarily to the effects of discontinued product lines in 2025.

Current wording

Net revenue for the three months ended September 30, 2026 increased 7.7% compared to the prior period, which includes $24.0 million related to an electric vehicle program cancellation. Net revenue increased 6.8% on an organic basis, which excludes an increase of 0.9% attributed to changes in foreign currency exchange rates.

Previous wording

Net revenue for the six months ended June 30, 2026 increased 3.8% compared to the prior period. Net revenue increased 4.3% on an organic basis, which excludes an increase of 1.6% attributed to changes in foreign currency exchange rates and a decrease of 2.1% due primarily to the effects of the divestiture of the Magnetic Speed and Position Business ("MSP Business") in the first quarter of 2025. Refer to Note 16: Disposals of the Financial Statements, included elsewhere in this Report, for additional information on the sale of the MSP Business.

Current wording

Net revenue for the nine months ended September 30, 2026 increased 5.1% compared to the prior period. Net revenue increased 5.1% on an organic basis, which excludes an increase of 1.4% attributed to changes in foreign currency exchange rates and a decrease of 1.4% due primarily to the effects of a divestiture in the first quarter of 2025. Refer to Note 16: Disposals of the Financial Statements, included elsewhere in this Report, for additional information.

Previous wording

Automotive net revenue for the three months ended June 30, 2026 increased 3.3% compared to the prior period. Excluding an increase of 1.5% attributed to changes in foreign currency exchange rates, Automotive net revenue increased 1.8% on an organic basis compared to the prior period, which was primarily due to content growth in our Automotive business segment.

Current wording

Automotive net revenue for the three months ended September 30, 2026 increased 3.7% compared to the prior period, which includes $24.0 million related to an electric vehicle program cancellation. Excluding an increase of 1.1% attributed to changes in foreign currency exchange rates, Automotive net revenue increased 2.6% on an organic basis compared to the prior period, which was primarily due to the termination revenue from the previously mentioned program cancellation, partially offset by a decrease in light vehicle production.

Previous wording

Automotive net revenue for the six months ended June 30, 2026 increased 1.4% compared to the prior period. Excluding an increase of 2.0% attributed to changes in foreign currency exchange and a decrease of 2.0% due to the effects of a divestiture, Automotive net revenue increased 1.4% on an organic basis compared to the prior period, which was primarily due to content growth in our Automotive business segment.

Current wording

Automotive net revenue for the nine months ended September 30, 2026 increased 2.2% compared to the prior period. Excluding an increase of 1.7% attributed to changes in foreign currency exchange rates and a decrease of 1.3% due to the effects of a divestiture, Automotive net revenue increased 1.8% on an organic basis compared to the prior period, which was primarily due to content growth, partially offset by a decrease in light vehicle production.

Previous wording

Industrials net revenue grew 2.2% on an organic basis compared to the prior period, which primarily reflects content growth in our Industrials business segment.

Current wording

Industrials net revenue for the three months ended September 30, 2026 increased 12.6% compared to the prior period. Excluding an increase of 0.8% attributed to changes in foreign currency exchange rates, Industrials net revenue grew 11.8% on an organic basis compared to the prior period, which primarily reflects content growth in our Industrials business segment.

Previous wording

Industrials net revenue for the three months ended June 30, 2026 increased 2.9% compared to the prior period. Excluding an increase of 0.9% attributed to changes in foreign currency exchange and a decrease of 2.2% due to the effect of discontinued product lines, Industrials net revenue grew 4.2% on an organic basis compared to the prior period, which primarily reflects content growth in our Industrials business segment.

Current wording

Industrials net revenue for the nine months ended September 30, 2026 increased 4.6% compared to the prior period. Excluding an increase of 1.1% attributed to changes in foreign currency exchange rates and a decrease of 1.8% due to the effect of divestitures, Industrials net revenue grew 5.3% on an organic basis compared to the prior period, which primarily reflects content growth in our Industrials business segment.

Previous wording

Aerospace, Defense, and Commercial Equipment net revenue for the three months ended June 30, 2026 increased 11.5% compared to the prior period. Excluding an increase of 0.6% attributed to changes in foreign currency exchange rates, Aerospace, Defense, and Commercial Equipment net revenue grew 10.9% on an organic basis due to growth in our commercial equipment and aerospace business and product mix in the markets we serve.

Current wording

Aerospace, Defense, and Commercial Equipment net revenue for the three months ended September 30, 2026 increased 13.4% compared to the prior period. Excluding an increase of 0.2% attributed to changes in foreign currency exchange rates, Aerospace, Defense, and Commercial Equipment net revenue grew 13.2% on an organic basis due to growth in our commercial equipment and aerospace business and product mix in the markets we serve.

Previous wording

Aerospace, Defense, and Commercial Equipment net revenue for the six months ended June 30, 2026 increased 13.1% compared to the prior period. Excluding an increase of 1.2% attributed to changes in foreign currency exchange rates and a decline of 1.8% due to the effects of a divestiture, Aerospace, Defense, and Commercial Equipment net revenue grew 13.7% on an organic basis due to growth in our commercial equipment and aerospace business and product mix in the markets we serve.

Current wording

Aerospace, Defense, and Commercial Equipment net revenue for the nine months ended September 30, 2026 increased 13.2% compared to the prior period. Excluding an increase of 0.9% attributed to changes in foreign currency exchange rates and a decrease of 1.2% due to the effects of a divestiture, Aerospace, Defense, and Commercial Equipment net revenue grew 13.5% on an organic basis due to growth in our commercial equipment and aerospace businesses and product mix in the markets we serve.

Previous wording

Operating costs and expenses for the three and six months ended June 30, 2026 and 2025 are presented, in millions of dollars and as a percentage of net revenue, in the following table. Amounts and percentages in the table below have been calculated based on unrounded numbers. Accordingly, certain amounts may not appear to recalculate due to the effect of rounding.

Current wording

Operating costs and expenses for the three and nine months ended September 30, 2026 and 2025 are presented, in millions of dollars and as a percentage of net revenue, in the following table. Amounts and percentages in the table below have been calculated based on unrounded numbers. Accordingly, certain amounts may not appear to recalculate due to the effect of rounding.

Previous wording

For the three months ended June 30, 2026, cost of revenue as a percentage of net revenue decreased from the prior period, primarily due to organic revenue growth, partially offset by the net impacts of inflation on material and logistics costs and tariffs.

Current wording

For the three months ended September 30, 2026, cost of revenue as a percentage of net revenue decreased from the prior period, primarily due to organic revenue growth and the absence of charges for a slower than expected adoption of electric vehicles in the current period, partially offset by the net impacts of inflation on material and logistics costs and tariffs.

Previous wording

For the six months ended June 30, 2026, cost of revenue as a percentage of net revenue decreased from the prior period, primarily due to the favorable effects of the MSP divestiture in the first quarter of 2025 and organic revenue growth, partially offset by the net impacts of inflation on material and logistics costs and tariffs.

Current wording

For the nine months ended September 30, 2026, cost of revenue as a percentage of net revenue decreased from the prior period, primarily due to the favorable effects of the MSP divestiture in the first quarter of 2025 and organic revenue growth, partially offset by the net impacts of inflation on material and logistics costs and tariffs.

Previous wording

For the three and six months ended June 30, 2026, research and development expense did not fluctuate materially from the prior period.

Current wording

For the three and nine months ended September 30, 2026, research and development expense did not fluctuate materially from the prior period.

Previous wording

For the three and six months ended June 30, 2026, selling, general and administrative expense did not fluctuate materially from the prior period.

Current wording

For the three and nine months ended September 30, 2026, selling, general and administrative expense did not fluctuate materially from the prior period.

Previous wording

For the three and six months ended June 30, 2026, amortization of intangible assets decreased from the prior period, primarily due to the effect of amortization of intangible assets in accordance with their expected economic benefit, which generally results in acceleration of amortization expense in the early years of the life of an intangible asset.

Current wording

For the three and nine months ended September 30, 2026, amortization of intangible assets decreased from the prior period, primarily due to the effect of amortization of intangible assets in accordance with their expected economic benefit, which generally results in acceleration of amortization expense in the early years of the life of an intangible asset.

Previous wording

In the three and six months ended June 30, 2026, restructuring and other charges, net decreased from the prior period, primarily due to higher transaction-related charges in 2025 corresponding to the business divestitures that took place in that year, partially offset by higher charges related to the Transformation Plan in the current period.

Current wording

In the three and nine months ended September 30, 2026, restructuring and other charges, net decreased from the prior period, primarily due to higher transaction-related charges in 2025 corresponding to the business divestitures that took place in that year, partially offset by higher charges related to the Transformation Plan in the current period.

Previous wording

For the three months ended June 30, 2026, operating income was $165.4 million, compared to operating income of $138.1 million in the prior period. This favorable impact was driven primarily by (1) higher revenue in the current period, (2) a decrease in restructuring charges and amortization of intangibles, and (3) cost savings as a result of actions taken as part of our restructuring plans, partially offset by the net impacts of inflation on material and logistics costs.

Current wording

For the three months ended September 30, 2026, operating income was $175.3 million, compared to operating loss of $122.9 million in the prior period. This favorable impact was driven primarily by (1) higher revenue in the current period, (2) a goodwill impairment charge taken in the prior year, and (3) cost savings as a result of actions taken as part of our restructuring plans, partially offset by the net impacts of inflation on material and logistics costs.

Previous wording

For the six months ended June 30, 2026, operating income was $307.0 million, compared to operating income of $260.3 million in the prior period. This favorable impact was driven primarily by (1) higher revenue in the current period, (2) a decrease in restructuring charges and amortization of intangibles, and (3) cost savings as a result of actions taken as part of our restructuring plans, partially offset by the net impacts of inflation on material and logistics costs.

Current wording

For the nine months ended September 30, 2026, operating income was $482.3 million, compared to operating income of $137.4 million in the prior period. This favorable impact was driven primarily by (1) higher revenue in the current period, (2) a goodwill impairment charge taken in the prior year, and (3) cost savings as a result of actions taken as part of our restructuring plans, partially offset by the net impacts of inflation on material and logistics costs.

Previous wording

For the three and six months ended June 30, 2026, interest expense did not fluctuate materially from the prior period.

Current wording

For the three and nine months ended September 30, 2026, interest expense did not fluctuate materially from the prior period.

Previous wording

For the three and six months ended June 30, 2026, interest income did not fluctuate materially from the prior period.

Current wording

For the three and nine months ended September 30, 2026, interest income did not fluctuate materially from the prior period.

Previous wording

For the three months ended June 30, 2026, other, net represented a net loss of $3.6 million, an unfavorable impact on

Current wording

For the three months ended September 30, 2026, other, net represented a net gain of $6.2 million, an unfavorable impact on

Previous wording

earnings of $4.6 million compared to a net gain of $0.9 million in the prior period. This unfavorable impact was primarily due to losses on commodity forward contracts and on the remeasurement of net monetary assets in the current year, partially offset by the gain on debt financing transactions in the current period.

Current wording

earnings of $0.7 million compared to a net gain of $6.9 million in the prior period. This unfavorable impact was primarily due to a lower gain on commodity forward contracts, partially offset by the gain on equity investments in the current period.

Previous wording

For the six months ended June 30, 2026, other, net represented a net gain of $0.4 million, an unfavorable impact on

Current wording

For the nine months ended September 30, 2026, other, net represented a net gain of $6.6 million, an unfavorable impact on

Previous wording

earnings of $2.6 million compared to a net gain of $3.1 million in the prior period. This unfavorable impact was primarily due to losses on the remeasurement of net monetary assets and a lower gain on commodity forward contracts in the current year, partially offset by the gain on debt financing transactions in the current period.

Current wording

earnings of $3.3 million compared to a net gain of $9.9 million in the prior period. This unfavorable impact was primarily due to a lower gain on commodity forward contracts in the current year, partially offset by the gain on debt financing transactions and gain on equity investments in the current period.

Previous wording

The following tables present reconciliations of certain financial measures calculated in accordance with U.S. GAAP to the related non-GAAP financial measures for the six months ended June 30, 2026 and 2025.

Current wording

The following tables present reconciliations of certain financial measures calculated in accordance with U.S. GAAP to the related non-GAAP financial measures for the nine months ended September 30, 2026 and 2025.

Previous wording

(a) The following table presents the components of our restructuring related and other non-GAAP adjustment to net income for the three and six months ended June 30, 2026 and 2025 (amounts have been calculated based on unrounded numbers, accordingly, certain amounts may not appear to recalculate due to the effect of rounding):

Current wording

(a) The following table presents the components of our restructuring related and other non-GAAP adjustment to net income for the three and nine months ended September 30, 2026 and 2025 (amounts have been calculated based on unrounded numbers; accordingly, certain amounts may not appear to recalculate due to the effect of rounding):

Previous wording

(b) The following table presents the components of our financing and other transaction costs non-GAAP adjustment to net income for the three and six months ended June 30, 2026 and 2025 (amounts have been calculated based on unrounded numbers, accordingly, certain amounts may not appear to recalculate due to the effect of rounding):

Current wording

(b) The following table presents the components of our financing and other transaction costs non-GAAP adjustment to net income for the three and nine months ended September 30, 2026 and 2025 (amounts have been calculated based on unrounded numbers; accordingly, certain amounts may not appear to recalculate due to the effect of rounding):

Previous wording

i. Primarily includes losses or gains related to the divestiture of a business, costs incurred, including for legal, accounting, and other professional services, that are directly related to an acquisition, divestiture, or other transaction. In the six months ended June 30, 2025, this line includes costs and losses associated with the disposition of the MSP Business. Refer to Note 16: Disposals for further information on this transaction.

Current wording

i. Primarily includes losses or gains related to the divestiture of a business, costs incurred, including for legal, accounting, and other professional services, that are directly related to an acquisition, divestiture, or other transaction. In the nine months ended September 30, 2025, this line includes costs and losses associated with the disposition of the MSP Business. Refer to Note 16: Disposals for further information on this transaction.

Previous wording

The following table provides a reconciliation of net income in accordance with U.S. GAAP to adjusted EBITDA.

Current wording

The following table provides a reconciliation of net income/(loss) in accordance with U.S. GAAP to adjusted EBITDA.

Previous wording

The table below summarizes our primary sources and uses of cash for the six months ended June 30, 2026 and 2025. We have derived these summarized statements of cash flows from the Financial Statements included elsewhere in this Report. Amounts in the table below have been calculated based on unrounded numbers. Accordingly, certain amounts may not appear to recalculate due to the effect of rounding.

Current wording

The table below summarizes our primary sources and uses of cash for the nine months ended September 30, 2026 and 2025. We have derived these summarized statements of cash flows from the Financial Statements included elsewhere in this Report. Amounts in the table below have been calculated based on unrounded numbers. Accordingly, certain amounts may not appear to recalculate due to the effect of rounding.

Previous wording

Operating activities. Net cash provided by operating activities for the six months ended June 30, 2026 increased compared to the corresponding period of the prior year, primarily due to higher cash provided by earnings and favorable changes in working capital.

Current wording

Operating activities. Net cash provided by operating activities for the nine months ended September 30, 2026 increased compared to the corresponding period of the prior year, primarily due to higher cash provided by earnings and favorable changes in working capital.

Previous wording

Investing activities. Net cash used in investing activities for the six months ended June 30, 2026 was $35.9 million compared to cash used of $33.6 million for the corresponding period of the prior year. This change was primarily due to proceeds received for the sale of the MSP Business in the first quarter of 2025, partially offset by higher capital expenditures in the prior period. For fiscal year 2026, we anticipate additions to PP&E and capitalized software of up to approximately $125.0 million, which we expect to fund with cash flows from operations.

Current wording

Investing activities. Net cash used in investing activities for the nine months ended September 30, 2026 was $62.7 million compared to $44.4 million of cash used in the corresponding period of the prior year. This change was primarily due to proceeds received for the sale of the MSP Business in the first quarter of 2025, partially offset by higher capital expenditures in the prior period. For fiscal year 2026, we anticipate additions to PP&E and capitalized software of up to approximately $125.0 million, which we expect to fund with cash flows from operations.

Previous wording

Financing activities. Net cash used in financing activities for the six months ended June 30, 2026 was $468.5 million compared to cash used in financing activities of $160.8 million in the corresponding period of the prior year. This change was primarily due the settlement of our cash tender offer in the second quarter of 2026, partially offset by a higher amount of cash paid to repurchase ordinary shares in the prior year.

Current wording

Financing activities. Net cash used in financing activities for the nine months ended September 30, 2026 was $518.4 million compared to cash used in financing activities of $181.0 million in the corresponding period of the prior year. This change was primarily due to the settlement of our cash tender offer in the second quarter of 2026 and open market repurchases of debt in the current quarter, partially offset by a higher amount of cash paid to repurchase ordinary shares in the prior year.

Previous wording

As of June 30, 2026, we had $2.5 billion in gross indebtedness, which includes finance lease obligations and excludes debt discounts, premiums, and deferred financing costs.

Current wording

As of September 30, 2026, we had $2.4 billion in gross indebtedness, which includes finance lease obligations and excludes debt discounts, premiums, and deferred financing costs.

Previous wording

The Credit Agreement provides that if our senior secured net leverage ratio exceeds a specified level, we are required to use a portion of our excess cash flow, as defined in the Credit Agreement, generated by operating, investing, or financing activities to prepay some or all of the outstanding borrowings under the Senior Secured Credit Facilities. The Credit Agreement also requires mandatory prepayments of the outstanding borrowings under the Senior Secured Credit Facilities upon certain asset dispositions and casualty events, in each case subject to certain reinvestment rights, and upon the incurrence of certain indebtedness (excluding any permitted indebtedness). These provisions were not triggered during the six months ended June 30, 2026.

Current wording

The Credit Agreement provides that if our senior secured net leverage ratio exceeds a specified level, we are required to use a portion of our excess cash flow, as defined in the Credit Agreement, generated by operating, investing, or financing activities to prepay some or all of the outstanding borrowings under the Senior Secured Credit Facilities. The Credit Agreement also requires mandatory prepayments of the outstanding borrowings under the Senior Secured Credit Facilities upon certain asset dispositions and casualty events, in each case subject to certain reinvestment rights, and upon the incurrence of certain indebtedness (excluding any permitted indebtedness). These provisions were not triggered during the nine months ended September 30, 2026.

Previous wording

From time to time, our Board of Directors has authorized various share repurchase programs, which may be modified or terminated by our Board at any time. We currently have authorization for the September 2023 Program, under which approximately $257.3 million remained available as of June 30, 2026. In the six months ended June 30, 2026, and 2025, we repurchased 0.7 million and 4.2 million ordinary shares under the September 2023 Program.

Current wording

From time to time, our Board of Directors has authorized various share repurchase programs, which may be modified or terminated by our Board at any time. We currently have authorization for the September 2023 Program, under which approximately $257.3 million remained available as of September 30, 2026. In the nine months ended September 30, 2026, and 2025, we repurchased 0.7 million and 4.2 million ordinary shares under the September 2023 Program.