Aptiv Q3 2025: Revenue Grows, But $648M Write-Down Wipes Out Profits

Aptiv PLC, a major global supplier of vehicle technology, recently released its financial results for the third quarter of 2025. A dive into the company's latest 10-Q filing reveals a quarter of solid top-line growth that was ultimately overshadowed by a significant write-down, leading to a substantial net loss. Let's break down the numbers to understand what drove the results.

For the three months ending September 30, 2025, Aptiv reported a net loss of $352 million, a sharp downturn from the $368 million net income recorded in the same period last year. This occurred despite revenues climbing to $5.2 billion, up from $4.9 billion a year ago.

Here is a flow diagram that visualizes the company's income statement for the quarter, showing how revenue was distributed across various costs and expenses.

In the diagram above, the "Unallocated" lines under Total Revenue and Cost of Revenue represent inter-segment eliminations. These are accounting adjustments to remove transactions between Aptiv's different business divisions, ensuring that only sales to external customers are counted in the final consolidated numbers.

A Massive Impairment Charge

The primary driver behind the swing to a net loss was a one-time, non-cash goodwill impairment charge of $648 million. In simple terms, a goodwill impairment is an accounting measure where a company writes down the value of intangible assets, like brand reputation or customer relations, that were acquired in a past merger or acquisition. This typically happens when the acquired entity is no longer expected to generate the cash flows that were anticipated at the time of purchase.

This entire impairment charge was attributed to the Advanced Safety and User Experience segment, which develops safety systems, software, and computing platforms for vehicles. This significant write-down suggests a lowered future earnings outlook for assets within this critical, high-tech division.

Revenue Grows, But So Do Expenses

While the impairment was the headline item, other parts of the income statement also warrant attention.

• Revenue Growth: All three of Aptiv's business segments contributed to the 7% year-over-year revenue increase. The Electrical Distribution Systems division, which handles the vehicle's "nervous system," saw sales jump to nearly $2.3 billion from $2.0 billion.
• Rising Costs: Gross profit improved to $1.02 billion, with a gross margin of 19.5%, up slightly from 18.6% last year. However, this gain was erased by higher operating costs. Selling, general, and administrative (SG&A) expenses rose significantly, climbing 31% to $433 million from $331 million in the prior year.

Segment Performance Tells the Story

Looking at the performance of Aptiv's divisions before the impairment charge provides a clearer picture of the underlying business:

• Electrical Distribution Systems: This segment was a strong performer, with adjusted operating income growing to $192 million from $125 million last year.
• Engineered Components Group: This division, which produces connectors and other components, also saw healthy results, with adjusted operating income increasing to $298 million.
• Advanced Safety and User Experience: This segment showed signs of pressure even before the impairment. While revenue was relatively flat, its adjusted operating income declined to $164 million from $196 million in the same quarter last year.

In conclusion, Aptiv's third quarter presents a mixed picture. The company continues to successfully grow its revenue in a dynamic automotive market. However, the substantial goodwill impairment within its key Advanced Safety and User Experience segment is a significant concern that erased all profits for the quarter. Investors will be closely watching for a rebound in this segment and a better handle on rising operating expenses to ensure Aptiv can convert its top-line growth into sustainable profitability.