Oct 27, 2026 earnings call — Strong Q3 results and data center growth
Sensata reported Q3 revenue of $1.004 billion, beating guidance and including a $24 million termination payment from a cancelled EV program.
Revenue $1.0B (est $1.0B) · EPS $1.13 (est $0.96) · Next-quarter revenue outlook $0.9B–$1.0B
Key quotes
"Together, these businesses generated $27 million of revenue in 2025, and we expect $48 million of revenue in 2026, representing annual growth of 76%."
"The quarter included a $24 million termination payment from a customer in connection with the cancellation of an electric vehicle program."
"New motor business wins reached a record this year, doubling our pace of wins from last year and approximately triple our typical annual win rate from 2 years prior."
Analyst Q&A 8
Why revenue may be flat into Q1
Q (Mark Delaney · Goldman Sachs): Analyst asked why management expects flattish revenue into Q1 and what is driving the outlook for Q4 and early next year.
A: Management said the Q1 softness is seasonal and comes from the global auto production outlook moving from Q4 into Q1. They pointed to a roughly 2 million vehicle unit step down called by third parties and said this is an automotive seasonality issue, not a statement about other segments like data center.
"So despite some of the weakness that we're seeing regionally in the China market, it still is the seasonally strongest market in China, and we still expect a sequential step down in Q1 connected to the holiday in the first quarter." — Andrew Lynch (CFO)
China auto exports and impact
Q (Joseph Giordano · TD Cowen): Analyst asked whether China automotive exports are displacing local production elsewhere and how big a headwind that is.
A: Management said they see challenges in China but are not concerned it will derail overall automotive growth because the company is outgrowing the market in every other region. They noted China is shifting toward Chinese OEMs and exports favor Chinese OEMs, domestic China market is down about 25%, pricing is under pressure, and they are competing on value and winning in other China areas like battery suppliers.
"And then if you exclude exports, the domestic market is down roughly 25%." — Stephan Von Schuckmann (CEO)
Data center growth and Dynapower update
Q (William Stein · Truist): Analyst asked about expected growth in data center beyond 2026 and for an update on Dynapower since acquisition.
A: Management said the data center market is growing and their existing product wins grew from $27 million to $48 million, and larger opportunities from hyperscaler awards and new architectures lie ahead. On Dynapower, they said they refocused it on data center power and clean energy, that Dynapower is not included in the $48 million, and they expect much larger opportunity starting mid-2027.
"So Dynapower is not included in the $48 million that we have in components wins." — Stephan Von Schuckmann (CEO)
Inflation effects and margin impact
Q (Joseph Spak · UBS): Analyst asked how inflation in electronics and boards is affecting margins, and how pricing and recovery work.
A: Management said inflation is managed systematically and margins are protected, with Q4 expected to be no different; memory is not a big issue but boards and electronics are, so they use internal cost actions, supplier collaboration and pricing to protect margins. They added the cost drivers shifted during the year but the key point is it is not dropping through to margins because they either design costs out or pass them through in price.
"I think the more important point is that it's not dropping through in our margins." — Andrew Lynch (CFO)
China share and auto outgrowth
Q (Guy Drummond Hardwick · Barclays): Analyst asked about the company's exposure to China auto and whether they should benefit as China production falls.
A: Management said China is about 1/4 of their revenue. They explained outgrowth reflects both in-market performance in China and the global mix impact of China production, and when you net those effects with growth in other regions they net to outgrowth.
"So China is about 1/4 of our revenue." — Andrew Lynch (CFO)
Aerospace and defense growth details
Q (Victor Santiago · Evercore): Analyst asked why aerospace and defense grew about 4% which seemed weaker than the high single-digit market growth cited.
A: Management said aerospace and defense grew mid-singles in the quarter, which is roughly in line with the market, and that the broader segment strength was driven by truck market recovery in North America. They also said aerospace outgrowth can be lumpy quarter-to-quarter based on prior-year mix and shipset values per aircraft.
"I think we grew mid-singles in the quarter in aerospace and defense specifically." — Andrew Lynch (CFO)
One-time payment and data center timing
Q (Shreyas Patil · Wolfe): Analyst asked whether the reported auto outgrowth included the $24 million one-time payment and when the 7 data center awards will start contributing and what the run rate could be by end of 2027.
A: Management said the quarter still showed about 0.5% of auto outgrowth after adjusting for the one-time item. Regarding the data center awards, they said many awards are tied to high-voltage architectures and revenue starts around mid-2027 and then gradually grows; they said it is too early to give exact run-rate numbers but expect high growth.
"the start of revenue, depending on the build-out timing of these individual new architectures is mid of next year" — Stephan Von Schuckmann (CEO)
EV program terminations and Q4 guide change
Q (Wamsi Mohan · BofA): Analyst asked if there are other EV programs under review that could lead to more termination payments and why the Q4 guide changed versus prior quarter.
A: Management said they do not expect any reoccurrence of termination payments. They also said the Q4 guidance change reflects two factors: stronger-than-expected outperformance in Q3 which raised the base, and a downward revision in China, and those two net to the current guide.
"We don't expect any reoccurrence in that dimension." — Stephan Von Schuckmann (CEO)