A maker of automatic-dimming rearview mirrors for global automakers, Gentex fills most of the world's new cars with mirrors that darken automatically against headlight glare. Founder Fred Bauer launched the company in 1974 in Zeeland, Michigan, building smoke detectors before inventing the first auto-dimming mirror in 1982. Today it also makes dimmable aircraft windows, Klipsch and Onkyo premium audio, and iris-recognition biometric systems.
Gentex Q2 gross margin hit 37.0% on $18M in tariff refunds, but core mirror shipments fell 10%.
A one-time tariff refund reshaped Gentex's second quarter. slipped 1% to $651.3 million as a 10% drop in core auto-dimming mirror shipments was mostly offset by growth in acquired businesses, while rose 2.8 points to 37.0% on $18 million in IEEPA tariff reimbursements. The core business is still shrinking, but the balance sheet is generating record cash.
Key takeaways
expanded 2.8 points to 37.0%, driven primarily by $18 million in IEEPA tariff reimbursements recorded as a reduction in cost of goods sold, along with favorable product mix.
Consolidated fell 1% to $651.3 million, as a 3% decline in Automotive sales to $560.2 million — reflecting a 10% drop in mirror unit shipments — was partly offset by growth in the Premium Audio and Other segments.
rose 19.3% to $141.3 million, and widened 3.7 points to 21.7%, helped by the tariff refunds and a $7.1 million decline in operating expenses to $99.7 million.
Section summaries
Management's Discussion and Analysis
Q2 2026 net income rose 19% to $114.7M on tariff refunds and favorable mix, offsetting a 1% sales decline and higher other losses.
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Consolidated fell 1% to $651.3M as a 3% drop in Automotive sales to $560.2M, driven by a 10% decline in mirror unit shipments, was partly offset by growth in Premium Audio and Other segments.
rose 19.4% to $114.7 million, and increased 25.6% to $0.54, though other loss widened to $4.5 million on a $9.4 million technology investment and higher .
for the first half of 2026 reached a record $321.7 million, and rose 22.5% to $165.4 million for the quarter, supporting , modest share repurchases, and dividends.
Full-year 2026 was updated: raised to 34.5%–35.5%, operating expense guidance lowered to $405–$415 million, and reduced to $115–$125 million.
What changed
The $18 million IEEPA tariff reimbursement recorded in Q2 partially resolves the $15 million in tariff costs capitalized in that was flagged as uncertain to recover in Q1 2026.
Core auto-dimming mirror unit shipments fell 10%, accelerating from the 6% decline in Q1 2026 and marking a fifth consecutive quarter of volume erosion, despite a 3% drop in global light vehicle production.
Operating expenses fell to $99.7 million from $106.8 million a year ago, largely due to the absence of the prior-year's $9.3 million in combined acquisition-related and severance expenses, while adjusted operating expenses were nearly flat.
The company repurchased only $5.9 million in shares during Q2, a sharp slowdown from the $315.5 million full-year 2025 pace, as cash and equivalents rebounded to $233.4 million from $164.8 million at the end of Q1.
What to watch
Whether the company reaches a tariff agreement with China-market customers that allows production and sales to resume, and whether any further tariff costs are recovered or written off.
The trajectory of core auto-dimming mirror unit shipments in Q3 2026, to gauge whether the 10% Q2 decline marks an acceleration of volume erosion or begins to stabilize.
Whether consolidated can hold near the raised 34.5%–35.5% full-year , given that the Q2 result included an $18 million one-time tariff refund that will not repeat.
The pace of cash generation relative to capital allocation, after share repurchases slowed to $5.9 million in Q2, to see whether the record translates into resumed buybacks or further balance sheet strengthening.
expanded 280 to 37.0%, primarily due to $18M in IEEPA tariff reimbursements recorded as a reduction in cost of goods sold and favorable product mix.
decreased $7.1M to $99.7M, largely due to the absence of prior-year severance costs, while adjusted operating expenses rose slightly to $99.3M.
Other loss widened to $4.5M from $3.0M, driven by a $9.4M on a technology investment and a $2.9M increase in .
for the first half of 2026 was a record $321.7M, supporting $36.2M in , $5.9M in share repurchases, and payments.
Full-year 2026 was updated: raised to 34.5%-35.5%, operating expense guidance lowered to $405-$415M, and reduced to $115-$125M.
Quantitative and Qualitative Disclosures About Market Risk
The Company sees no material current impact from interest rate, commodity, or foreign exchange risks on its financial condition, operations, or cash flows.
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Interest rate risk arises mainly from the available-for-sale investment-grade debt portfolio, but management does not view it as currently material.
Fixed-rate short-term borrowings and no outstanding balance at June 30, 2026, limit sensitivity.
Commodity price risk stems from raw material purchases for manufacturing, with limited ability to pass higher costs to customers via contracts.
The Company does not use commodity derivatives to hedge raw material price exposure.
Less than 10% of revenues were non-U.S. dollar denominated in the first half of 2026, and no were outstanding at quarter-end.
Management assesses foreign exchange risk, including translation of international results, as not currently material.
Information regarding legal proceedings appears in Part I – Item 3, Legal Proceedings, of the Company’s report on Form 10-K for the fiscal year ended December 31, 2025.
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Information regarding legal proceedings appears in Part I – Item 3, Legal Proceedings, of the Company’s report on Form 10-K for the fiscal year ended December 31, 2025.
Information regarding risk factors appears in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part I – Item 2 of this Form 10-Q and in Part I – Item 1A – Risk Factors of the Company’s report on Form 10-K for the fiscal year ended December…
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Information regarding risk factors appears in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part I – Item 2 of this Form 10-Q and in Part I – Item 1A – Risk Factors of the Company’s report on Form 10-K for the fiscal year ended December 31, 2025. There have been no material changes to the risk factors previously disclosed in the Company’s report on Form 10-K for the year ended December 31, 2025, except to the extent described in Part I – Item 2 and Item 3 of this Form 10-Q, and otherwise herein.