THRM

Forward-Looking Statements This Quarterly Report on Form 10-Q (this “Report”) contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent our goals, beliefs, plans and expectations about our prospects for the future and other future events, such as: the expected light vehicle production in the Company’s key markets; the impact of macroeconomic and geopolitical conditions, the components of and our execution of our strategic plan, product and technology development and manufacturing footprint optimization restructuring plans; our operating performance; long-term consumer and technological trends in the automotive industry and our related market opportunity for our existing and new products and technologies; the competitive landscape; the impact of global tax reform legislation and other regulatory matters; the sufficiency of our cash balances and cash generated from operating, investing and financing activities for our future liquidity and capital resource needs; capital allocation strategies; our ability to finance sufficient working capital; and significant matters related to the Modine Transaction, including the expected closing timing and structure thereof, the ability of the parties to complete such transaction and planned actions to satisfy the closing conditions, the expected benefits thereof, the tax consequences thereof and the combined company’s plans, objectives, expectations and intentions, including integration activities. Reference is made in particular to forward-looking statements included in this “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations”. Such statements may be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “believe”, “estimate”, “anticipate”, “intend”, “continue”, or similar terms, variations of such terms or the negative of such terms. The forward-looking statements included in this Report are made as of the date hereof or as of the date specified herein and are based on management’s reasonable expectations and beliefs. In making these statements we rely on assumptions and analyses based on our experience and perception of historical trends, current conditions and expected future developments, third-party information and projections from sources that management believes to be reputable, as well as other factors we consider appropriate under the circumstances. Such statements are subject to a number of assumptions, risks, uncertainties and other factors, which are set forth in “Item 1A. Risk Factors” and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2025 and subsequent reports filed with the Securities and Exchange Commission, and which could cause actual results to differ materially from that described in the forward-looking statements. In addition, with reasonable frequency, we have entered into business combinations, acquisitions, divestitures, strategic investments and other significant transactions. Except as specifically noted for the Modine Transaction, such forward-looking statements do not include the potential impact of any such transactions that may be completed after the date hereof, each of which may present material risks to the Company’s future business and financial results. Except as required by law, we expressly disclaim any obligation or undertaking to update any forward-looking statements to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. The following discussion and analysis should be read in conjunction with, and is qualified in its entirety by, the consolidated condensed financial statements and related notes thereto included elsewhere in this Report and our consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2025. Overview Gentherm Incorporated is a global market leader of innovative thermal management and pneumatic comfort technologies. Our automotive products include Climate Control Seats (CCS®), Climate Control Interiors (CCI™), Lumbar and Massage Comfort Solutions, Valve Systems, and Climate and Comfort Electronics. We operate in locations aligned with our major customers’ product strategies to provide locally enhanced design, integration and production capabilities. Our medical products include patient temperature management systems that can be found in hospitals throughout the world. Our Automotive sales are driven by the number of light vehicles produced by the OEMs primarily in our key markets of North America, Europe, China, Japan and South Korea, which is ultimately dependent on consumer demand for automotive light vehicles, our product content per vehicle, and other factors that may limit or otherwise impact production by us, our supply chain and our customers. Historically, new vehicle demand and product content (i.e. vehicle features) have been driven by macroeconomic and other factors, such as interest rates, automotive manufacturer and dealer sales incentives, fuel prices, consumer confidence, employment levels, income growth trends and government incentives. Vehicle content has also been driven by trends in consumer preferences. We believe our diversified OEM customer base and geographic revenue base, along with our flexible cost structure, have well positioned us to withstand the impact of industry downturns and benefit from industry upturns in the ordinary course. Our industry is increasingly 25 Table of Contents progressing towards a focus on human comfort, health and wellness, which is evidenced by increasing adoption rates for comfort products. Gentherm is an independent partner that can cooperate with any combination of the vehicle OEMs and seat manufacturers globally, to create innovative and unique configurations that adapt to industry trends. IME Acquisition On July 1, 2026, the Company completed its acquisition of Innovative Medical Equipment, LLC (“IME”). IME, headquartered in Beachwood, Ohio, is a provider of the ThermaZone® thermal therapy device. ThermaZone is a non-opioid thermal therapy solution designed to support pain management and recovery through controlled hot-and-cold therapy. The Company acquired all of the membership interests in IME for $34.0 million, net of cash and debt, and subject to customary adjustments related to IME’s net working capital as of the closing date. The purchase price may be increased after closing by up to $1.0 million upon the achievement of a specified performance milestone. The transaction was funded through a combination of the Company’s existing cash balances and borrowings under the Revolving Credit Facility, as defined below. Modine Transaction On January 29, 2026, the Company, entered into definitive agreements to combine the Performance Technologies business (“Performance Technologies”) of Modine Manufacturing Company, a Wisconsin corporation (“Modine”), with Gentherm (the “Modine Transaction”). The Modine Transaction is structured as a Reverse Morris Trust transaction, where a wholly owned subsidiary of Modine (“SpinCo”), owning Performance Technologies, will be spun off to Modine shareholders (the “Distribution”) and simultaneously merged with a wholly owned subsidiary of the Company (the “Merger”). The transaction was valued at approximately $1,000.0 million as of the date of signing, based on specified assumptions. Shareholders of the Company immediately prior to the Merger are expected to own approximately 60.0% of the combined company and Modine shareholders are expected to own approximately 40.0% of the combined company, on a fully diluted basis, without taking into account any overlapping shareholder ownership and subject to adjustment. Prior to and as a condition of, the Distribution, Modine will receive a cash distribution from SpinCo of $210.0 million subject to adjustment for cash, working capital and indebtedness of SpinCo, and subject to decrease if additional shares of Common Stock will be issued to Modine shareholders to support the intended tax-free treatment of the Distribution to Modine shareholders for U.S. federal income tax purposes (the “SpinCo Cash Distribution”). The transaction is expected to close by early fourth quarter of 2026, subject to various closing conditions, including specified approvals by the Company’s shareholders, a customary IRS tax ruling and the satisfaction of other customary closing conditions. The Merger Agreement contains specified termination rights for the Company and Modine, including a right allowing the Company or Modine to terminate the Merger Agreement if the Merger has not been consummated on or prior to March 31, 2027 (which date may be extended to June 30, 2027 in the event that required regulatory approvals have not been received). Additionally, the Merger Agreement requires the Company to pay Modine a termination fee of $45.0 million if the Merger Agreement is terminated under certain circumstances. In connection with the Merger Agreement, the Company, SpinCo and a financial institution executed a 364-day bridge loan facility commitment letter, pursuant to which such financial institution committed (i) to provide bridge financing of $290.0 million to fund dividends, fees and expenses related to the transactions contemplated by the Merger Agreement (“Bridge Facility”) and (ii) to the Company a backstop of the Company’s credit agreement (“Backstop Commitment”). On February 24, 2026, the Company amended its credit agreement to permit the Modine Transaction, which terminated the Backstop Commitment. On June 29, 2026, SpinCo replaced the Bridge Facility with permanent financing by entering into a credit agreement, providing for a delayed-draw term loan facility with aggregate commitments of up to $250.0 million (the "Senior Credit Facility"). Borrowings under the Senior Credit Facility are expected to be funded on the closing date of the Modine Transaction and used to fund the SpinCo Cash Distribution and to pay certain other amounts required under the Merger Agreement. During the three and six months ended June 30, 2026, the Company incurred $2.1 million and $5.1 million, respectively, of fees associated with the Bridge Facility, Backstop Commitment and Senior Credit Facility. Such fees are recorded in Selling, general and administrative expenses. 26 Table of Contents Recent Trends Tariffs and Global Trade Environment Since March 2025, the U.S. government has periodically announced additional significant tariffs on various goods imported to the U.S. and other countries have periodically announced reciprocal tariffs on goods imported to such countries, including goods used by or manufactured by us. There has been significant uncertainty resulting from the implementation, termination and/or conditional pause of these additional tariffs. In February 2026, the Supreme Court of the U.S. issued a ruling striking down certain tariffs previously imposed under the International Emergency Economic Powers Act (“IEEPA”). During the second quarter of 2026, we submitted claims for refunds of IEEPA tariffs previously paid. Refunds received through June 30, 2026 were not material. The U.S. presidential administration subsequently invoked additional tariffs under other laws resulting in a rapidly changing tariff environment. At this time we cannot reasonably estimate the total financial impact of this ruling. Further, it is reasonably possible that new or additional tariffs will be periodically announced in the future given the current global trade environment. We continue to monitor and evaluate the direct and indirect impacts of these tariffs and heightened global trade disputes. Our business model of manufacturing by regions for the regions limit the global impact of certain trade restrictions and tariffs. Further, the majority of our supply components are not currently subject to the additional tariffs or are compliant with exceptions, and we believe that we can generally mitigate the direct impact of any such tariffs currently in effect by directly or indirectly passing the additional costs through to customers. We are taking and will continue to take additional actions to mitigate any direct and indirect impacts. For the six months ended June 30, 2026, the additional tariffs did not have a material impact on our results of operations, financial position, and cash flows. Global Conditions The global automotive light vehicle industry is impacted by a number of factors, including global and regional economic conditions. At times in recent years, the global economy has experienced significant volatility, inflationary pressures and supply chain disruptions, which have a widespread adverse effect on the global automotive industry. These macroeconomic conditions have resulted in fluctuating demand and production disruptions, facility closures, labor shortages, work stoppages, and increased prices of inputs to our products. Rising costs of materials, labor, equipment and other inputs used to manufacture and sell our products, including freight and logistics costs, have adversely impacted, and may in the future adversely impact, operating costs and operating results. We continue to employ measures to mitigate the impact of cost increases through identification of sourcing and manufacturing efficiencies where possible, and commercial negotiations with our customers. However, we have been unable to fully mitigate or pass through the increases in our operating costs, which may continue in the future. We are exposed to foreign currency risk due to the translation and remeasurement of the results of certain international operations into U.S. Dollars as part of the consolidation process. Therefore, fluctuations in foreign currency exchange rates can create volatility in the results of operations and may adversely affect our financial condition. We have a global manufacturing footprint that enables us to serve our customers in the regions they operate and shift production between regions to remain competitive. There have been various ongoing geopolitical conflicts, such as the current conflicts between Russia and Ukraine and in the Middle East and heightened tensions in the Red Sea and in the South China Sea. These conflicts have interrupted ocean freight shipping and if prolonged or intensified, could have a substantial adverse effect on our financial results. Further, it is reasonably possible that certain political pressures, such as changes to international trade agreements, increases in tariffs, import quotas or other trade restrictions or actions, including export controls and other retaliatory responses to such actions, could continue to affect the operations of our suppliers and OEM customers, resulting in reduced automotive production in certain regions or shifts in the mix of production to higher cost regions. See “—Tariffs and Global Trade Environment” above for further information on the impact of tariffs and the global trade environment. We, like other manufacturers, have a high proportion of fixed structural costs, and therefore relatively small changes in industry vehicle production can have a substantial effect on our financial results. Light Vehicle Production Volumes Our sales are driven by the number of vehicles produced by the automotive manufacturers, which is ultimately dependent on consumer demand for automotive vehicles, our content per vehicle, and other factors that may limit or otherwise impact production by us, our supply chain and our customers. According to the forecasting firm S&P Global Mobility (July 2026 release), global light 27 Table of Contents vehicle production in the three and six months ended June 30, 2026, in the Company’s key markets of North America, Europe, China, Japan and South Korea, as compared to the three and six months ended June 30, 2025, are shown below (in millions of units): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 % Change 2026 2025 % Change North America 3.9 4.0 (0.2 )% 7.7 7.7 (0.7 )% Europe 4.4 4.5 (1.2 )% 8.8 8.8 (0.3 )% Greater China 7.5 7.8 (3.2 )% 14.2 14.9 (5.3 )% Japan / South Korea 3.1 3.0 1.6 % 6.2 6.1 1.8 % Total light vehicle production volume in key markets 19.0 19.2 (1.3 )% 36.8 37.6 (2.0 )% The S&P Global Mobility (July 2026 release) forecasted light vehicle production volume in the Company’s key markets for full year 2026 to decrease to 75.5 million units, a 2.6% decrease from full year 2025 light vehicle production volumes. Forecasted light vehicle production volumes are a component of the data we use in forecasting future business. However, these forecasts generally are updated monthly, and future forecasts have been and may continue to be significantly different from period to period due to changes in macroeconomic and geopolitical conditions or matters specific to the automotive industry. Further, due to differences in regional product mix at our manufacturing facilities, as well as material production schedules from our customers for our products on specific vehicle programs, our future forecasted results do not directly correlate with the global and/or regional light vehicle production forecasts of S&P Global Mobility or other third-party sources. New Business Awards We believe that innovation is an important element to gaining market acceptance of our products and strengthening our market position. During the second quarter of 2026, we secured automotive new business awards totaling $690 million. Automotive new business awards represent the aggregate projected lifetime revenue of new awards provided by our customers to Gentherm in the applicable period, with the value based on the price and volume projections received from each customer as of the award date. Although automotive new business awards are not firm customer orders, we believe that automotive new business awards are an indicator of future revenue. Automotive new business awards are not projections of revenue or future business as of June 30, 2026, the date of this Report or any other date. Customer projections regularly change over time, and we do not update our calculation of any automotive new business award after the date initially communicated. Automotive new business awards in the second quarter of 2026 also do not reflect, in particular, the impact of macroeconomic and geopolitical challenges on future business. Revenues resulting from automotive new business awards also are subject to additional risks and uncertainties that are included in this Report or incorporated by reference in “Forward-Looking Statements” above. Stock Repurchase Program In June 2024, the Board of Directors (the “Board”) authorized a stock repurchase program (the “2024 Stock Repurchase Program”) to commence upon expiration of the Company’s prior stock repurchase program on June 30, 2024. Under the 2024 Stock Repurchase Program, the Company was authorized to repurchase up to $150.0 million of its issued and outstanding Common Stock over a three-year period, expiring June 30, 2027. In July 2026, the Board terminated the 2024 Stock Repurchase Program and authorized a new stock repurchase program (the “2026 Stock Repurchase Program”), pursuant to which the Company is authorized to repurchase up to $400.0 million of its issued and outstanding Common Stock over a three-year period, expiring July 27, 2029. At the time of termination, the 2024 Stock Repurchase Program had $110.1 million of share repurchase authorization remaining. Repurchases may be made, from time to time, in amounts and at prices the Company deems appropriate, subject to market conditions, applicable legal requirements, debt covenants and other contractual restrictions and other considerations. During the three and six months ended June 30, 2026, the Company did not repurchase any shares. During the three and six months ended June 30, 2025, the Company repurchased $10.0 million under the 2024 Stock Repurchase Program with an average price paid per share of $26.24. 28 Table of Contents Reportable Segments The Company has two reportable segments for financial reporting purposes: Automotive and Medical. See Note 15, “Segment Reporting,” to the consolidated condensed financial statements included in this Report for a description of our reportable segments as well as their proportional contribution to the Company’s reported product revenues, significant segment expenses, operating income, and depreciation and amortization. Consolidated Results of Operations The results of operations for the three and six months ended June 30, 2026 and 2025, in thousands, were as follows: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 Favorable / (Unfavorable) 2026 2025 Favorable / (Unfavorable) Product revenues $ 416,166 $ 375,090 $ 41,076 $ 809,872 $ 728,944 $ 80,928 Cost of sales 319,739 285,328 (34,411 ) 616,218 552,717 (63,501 ) Gross margin 96,427 89,762 6,665 193,654 176,227 17,427 Operating expenses: Net research and development expenses 24,069 22,558 (1,511 ) 48,015 46,774 (1,241 ) Selling, general and administrative expenses 55,705 41,087 (14,618 ) 111,010 79,565 (31,445 ) Restructuring expenses, net 5,964 2,108 (3,856 ) 12,655 6,622 (6,033 ) Loss on sale of land and building, net — — — — 2,196 2,196 Total operating expenses 85,738 65,753 (19,985 ) 171,680 135,157 (36,523 ) Operating income 10,689 24,009 (13,320 ) 21,974 41,070 (19,096 ) Interest expense, net (3,290 ) (4,043 ) 753 (5,923 ) (7,598 ) 1,675 Foreign currency loss (237 ) (17,432 ) 17,195 (1,297 ) (27,730 ) 26,433 Other income (loss) 162 — 162 184 (1,124 ) 1,308 Earnings before income tax 7,324 2,534 4,790 14,938 4,618 10,320 Income tax expense 2,904 2,057 (847 ) 6,300 4,269 (2,031 ) Net income $ 4,420 $ 477 $ 3,943 $ 8,638 $ 349 $ 8,289 Product revenues by product category, in thousands, for the three and six months ended June 30, 2026 and 2025, were as follows: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 $ Change % Change 2026 2025 $ Change % Change Climate Control Seats $ 217,465 $ 200,020 $ 17,445 8.7 % $ 424,053 $ 391,173 $ 32,880 8.4 % Lumbar and Massage Comfort Solutions 72,588 52,530 20,058 38.2 % 134,849 97,843 37,006 37.8 % Climate Control Interiors 52,538 49,585 2,953 6.0 % 103,302 94,926 8,376 8.8 % Climate and Comfort Electronics 8,746 5,906 2,840 48.1 % 17,906 13,621 4,285 31.5 % Automotive Climate and Comfort Solutions 351,337 308,041 43,296 14.1 % 680,110 597,563 82,547 13.8 % Valve Systems 25,102 25,143 (41) (0.2)% 51,675 48,316 3,359 7.0 % Other Automotive 28,376 30,668 (2,292) (7.5)% 55,196 59,847 (4,651) (7.8)% Subtotal Automotive segment 404,815 363,852 40,963 11.3 % 786,981 705,726 81,255 11.5 % Medical segment 11,351 11,238 113 1.0 % 22,891 23,218 (327) (1.4)% Total Company $ 416,166 $ 375,090 $ 41,076 11.0 % 809,872 728,944 80,928 11.1 % 29 Table of Contents Product Revenues Below is a summary of our product revenues, in thousands, for the three months ended June 30, 2026 and 2025: Three Months Ended June 30, Variance Due To: 2026 2025 Favorable / (Unfavorable) Automotive Volume FX Pricing / Other Total Product revenues $ 416,166 $ 375,090 $ 41,076 $ 40,179 $ 5,298 $ (4,401 ) $ 41,076 Product revenues for the three months ended June 30, 2026 increased 11.0% as compared to the three months ended June 30, 2025. The increase in product revenues is due to favorable automotive volumes and favorable foreign currency impacts primarily attributable to the Chinese Renminbi and the Euro, partially offset by unfavorable pricing and unfavorable currency impacts primarily attributable to the Korean Won. Below is a summary of our product revenues, in thousands, for the six months ended June 30, 2026 and 2025: Six Months Ended June 30, Variance Due To: 2026 2025 Favorable / (Unfavorable) Automotive Volume FX Pricing / Other Total Product revenues $ 809,872 $ 728,944 $ 80,928 $ 67,459 $ 19,592 $ (6,123 ) $ 80,928 Product revenues for the six months ended June 30, 2026 increased 11.1% as compared to the six months ended June 30, 2025. The increase in product revenues is due to favorable automotive volumes and favorable foreign currency impacts primarily attributable to the Euro and the Chinese Renminbi, partially offset by unfavorable pricing and unfavorable currency impacts primarily attributable to the Korean Won. Cost of Sales Below is a summary of our cost of sales and gross margin, in thousands, for the three months ended June 30, 2026 and 2025: Three Months Ended June 30, Variance Due To: 2026 2025 Favorable / (Unfavorable) Automotive Volume Operational Performance FX Other Total Cost of sales $ 319,739 $ 285,328 $ (34,411 ) $ (29,935 ) $ 6,584 $ (4,953 ) $ (6,107 ) $ (34,411 ) Gross margin 96,427 89,762 6,665 10,244 6,584 345 (10,508 ) 6,665 Gross margin - Percentage of product revenues 23.2 % 23.9 % Cost of sales for the three months ended June 30, 2026 increased 12.1% as compared to the three months ended June 30, 2025. The increase in cost of sales is primarily due to higher automotive volumes, unfavorable foreign currency impacts primarily attributable to the Chinese Renminbi, Mexican Peso, Czech Koruna and the Euro, specific-cause warranty provisions related to products shipped in prior periods and higher labor costs, partially offset by material purchasing savings. Below is a summary of our cost of sales and gross margin, in thousands, for the six months ended June 30, 2026 and 2025: Six Months Ended June 30, Variance Due To: 2026 2025 Favorable / (Unfavorable) Automotive Volume Operational Performance FX Other Total Cost of sales $ 616,218 $ 552,717 $ (63,501 ) $ (50,019 ) $ 15,840 $ (15,593 ) $ (13,729 ) $ (63,501 ) Gross margin 193,654 176,227 17,427 17,440 15,840 3,999 (19,852 ) 17,427 Gross margin - Percentage of product revenues 23.9 % 24.2 % Cost of sales for the six months ended June 30, 2026 increased 11.5% as compared to the six months ended June 30, 2025. The increase in cost of sales is primarily due to higher automotive volumes, unfavorable foreign currency impacts primarily attributable to the Mexican Peso, Euro, Chinese Renminbi and the Czech Koruna, specific-cause warranty provisions related to products shipped in prior periods and higher labor costs, partially offset by material purchasing savings. 30 Table of Contents Net Research and Development Expenses Below is a summary of our net research and development expenses, in thousands, for the three months ended June 30, 2026 and 2025: Three Months Ended June 30, 2026 2025 Favorable / (Unfavorable) Research and development expenses $ 29,977 $ 29,601 $ (376 ) Reimbursed research and development expenses (5,908 ) (7,043 ) (1,135 ) Net research and development expenses $ 24,069 $ 22,558 $ (1,511 ) Percentage of product revenues 5.8 % 6.0 % Net research and development expenses for the three months ended June 30, 2026 increased 6.7% as compared to the three months ended June 30, 2025. The increase in net research and development expenses is primarily related to unfavorable foreign currency impacts primarily attributable to the Chinese Renminbi and the Euro and lower customer reimbursements. Below is a summary of our net research and development expenses, in thousands, for the six months ended June 30, 2026 and 2025: Six Months Ended June 30, 2026 2025 Favorable / (Unfavorable) Research and development expenses $ 60,413 $ 59,108 $ (1,305 ) Reimbursed research and development expenses (12,398 ) (12,334 ) 64 Net research and development expenses $ 48,015 $ 46,774 $ (1,241 ) Percentage of product revenues 5.9 % 6.4 % Net research and development expenses for the six months ended June 30, 2026 increased 2.7% as compared to the six months ended June 30, 2025. The increase in net research and development expenses is primarily related to unfavorable foreign currency impacts primarily attributable to the Euro and the Chinese Renminbi. Selling, General and Administrative Expenses Below is a summary of our selling, general and administrative expenses, in thousands, for the three months ended June 30, 2026 and 2025: Three Months Ended June 30, 2026 2025 Favorable / (Unfavorable) Selling, general and administrative expenses $ 55,705 $ 41,087 $ (14,618 ) Percentage of product revenues 13.4 % 11.0 % Selling, general and administrative expenses for the three months ended June 30, 2026 increased 35.6% as compared to the three months ended June 30, 2025. Merger and acquisition expenses, primarily related to the Modine Transaction, were $12.9 million for the three months ended June 30, 2026. The remaining increase in selling, general and administrative expenses is primarily related to higher expenses for information technology and unfavorable foreign currency impacts primarily attributable to the Mexican Peso, Euro and the Chinese Renminbi. Below is a summary of our selling, general and administrative expenses, in thousands, for the six months ended June 30, 2026 and 2025: Six Months Ended June 30, 2026 2025 Favorable / (Unfavorable) Selling, general and administrative expenses $ 111,010 $ 79,565 $ (31,445 ) Percentage of product revenues 13.7 % 10.9 % 31 Table of Contents Selling, general and administrative expenses for the six months ended June 30, 2026 increased 39.5% as compared to the six months ended June 30, 2025. Merger and acquisition expenses, primarily related to the Modine Transaction, were $27.7 million for the six months ended June 30, 2026. The remaining increase in selling, general and administrative expenses is primarily related to higher expenses for information technology and utilities and unfavorable foreign currency impacts primarily attributable to the Mexican Peso, Euro and the Chinese Renminbi. Restructuring Expenses, net Below is a summary of our restructuring expenses, net, in thousands, for the three months ended June 30, 2026 and 2025: Three Months Ended June 30, 2026 2025 Favorable / (Unfavorable) Restructuring expenses, net $ 5,964 $ 2,108 $ (3,856 ) During the three months ended June 30, 2026, the Company recognized expenses of $4.4 million for employee separation costs and $1.6 million for other costs. During the three months ended June 30, 2025, the Company recognized expenses of $1.5 million for employee separation costs and $0.7 million for other costs. Below is a summary of our restructuring expenses, net, in thousands, for the six months ended June 30, 2026 and 2025: Six Months Ended June 30, 2026 2025 Favorable / (Unfavorable) Restructuring expenses, net $ 12,655 $ 6,622 $ (6,033 ) During the six months ended June 30, 2026, the Company recognized expenses of $9.9 million for employee separation costs and $2.8 million for other costs. During the six months ended June 30, 2025, the Company recognized expenses of $5.7 million for employee separation costs and $1.0 million for other costs. See Note 3, “Restructuring,” to the consolidated condensed financial statements included in this Report for additional information. Loss on Sale of Land and Building, net Below is a summary of our loss on sale of land and building, net, in thousands, for the six months ended June 30, 2026 and 2025: Six Months Ended June 30, 2026 2025 Favorable / (Unfavorable) Loss on sale of land and building, net $ — $ 2,196 $ 2,196 Loss on sale of land and building, net for the six months ended June 30, 2025 is primarily related to the sale of our former headquarters building in Northville, Michigan in January 2025. Interest Expense, net Below is a summary of our interest expense, net, in thousands, for the three months ended June 30, 2026 and 2025: Three Months Ended June 30, 2026 2025 Favorable / (Unfavorable) Interest expense, net $ (3,290 ) $ (4,043 ) $ 753 32 Table of Contents Interest expense, net for the three months ended June 30, 2026 decreased 18.6% as compared to the three months ended June 30, 2025. The decrease in interest expense, net is primarily related to a lower interest rate on the Revolving Credit Facility during the three-month period and the impact of a change in fair value of interest rate swap in the prior year period. Below is a summary of our interest expense, net, in thousands, for the six months ended June 30, 2026 and 2025: Six Months Ended June 30, 2026 2025 Favorable / (Unfavorable) Interest expense, net $ (5,923 ) $ (7,598 ) $ 1,675 Interest expense, net for the six months ended June 30, 2026 decreased 22.0% as compared to the six months ended June 30, 2025. The decrease in interest expense, net is primarily related to a lower interest rate on the Revolving Credit Facility during the six-month period and the impact of a change in fair value of interest rate swap in the prior year period. Foreign Currency Loss Below is a summary of our foreign currency loss, in thousands, for the three months ended June 30, 2026 and 2025: Three Months Ended June 30, 2026 2025 Favorable / (Unfavorable) Foreign currency loss $ (237 ) $ (17,432 ) $ 17,195 Foreign currency loss for the three months ended June 30, 2026 included net realized foreign currency loss of $0.8 million and net unrealized foreign currency gain of $0.6 million. Foreign currency loss for the three months ended June 30, 2025 included net realized foreign currency gain of $1.4 million and net unrealized foreign currency loss of $18.9 million. The unrealized foreign currency loss is primarily related to a non-current intercompany U.S. dollar receivable at one of our foreign subsidiaries. Below is a summary of our foreign currency loss, in thousands, for the six months ended June 30, 2026 and 2025: Six Months Ended June 30, 2026 2025 Favorable / (Unfavorable) Foreign currency loss $ (1,297 ) $ (27,730 ) $ 26,433 Foreign currency loss for the six months ended June 30, 2026 included net realized foreign currency loss of $1.1 million and net unrealized foreign currency loss of $0.2 million. Foreign currency loss for the six months ended June 30, 2025 included net realized foreign currency gain of $0.7 million and net unrealized foreign currency loss of $28.5 million. The unrealized foreign currency loss is primarily related to a non-current intercompany U.S. dollar receivable at one of our foreign subsidiaries. Other Income (Loss) Below is a summary of our other income, in thousands, for the three months ended June 30, 2026 and 2025: Three Months Ended June 30, 2026 2025 Favorable / (Unfavorable) Other income $ 162 $ — $ 162 Other income for the three months ended June 30, 2026 increased as compared to other income for the three months ended June 30, 2025, due to income from an equity investment. 33 Table of Contents Below is a summary of our other income (loss), in thousands, for the six months ended June 30, 2026 and 2025: Six Months Ended June 30, 2026 2025 Favorable / (Unfavorable) Other income (loss) $ 184 $ (1,124 ) $ 1,308 Other income for the six months ended June 30, 2026 increased as compared to other loss for the six months ended June 30, 2025, primarily due to a fair value adjustment of an equity investment in the prior year period. Income Tax Expense Below is a summary of our income tax expense, in thousands, for the three months ended June 30, 2026 and 2025: Three Months Ended June 30, 2026 2025 Favorable / (Unfavorable) Income tax expense $ 2,904 $ 2,057 $ (847 ) Income tax expense was $2.9 million for the three months ended June 30, 2026 on earnings before income tax of $7.3 million, representing an effective tax rate of 39.7%. The effective tax rate differed from the U.S. Federal statutory rate of 21.0% primarily due to the impact of income taxes on foreign earnings taxed at rates varying from the U.S. Federal statutory rate and the unfavorable impact of transactions costs incurred in connection with the Modine Transaction. Income tax expense was $2.1 million for the three months ended June 30, 2025 on earnings before income tax of $2.5 million, representing an effective tax rate of 81.2%. The effective tax rate differed from the U.S. Federal statutory rate of 21.0% primarily due to the impact of income taxes on foreign earnings taxed at rates varying from the U.S. Federal statutory rate and the unfavorable impact of global intangible low-tax income (“GILTI”). Below is a summary of our income tax expense, in thousands, for the six months ended June 30, 2026 and 2025: Six Months Ended June 30, 2026 2025 Favorable / (Unfavorable) Income tax expense $ 6,300 $ 4,269 $ (2,031 ) Income tax expense was $6.3 million for the six months ended June 30, 2026 on earnings before income tax of $14.9 million, representing an effective tax rate of 42.2%. The effective tax rate differed from the U.S. Federal statutory rate of 21.0% primarily due to the impact of income taxes on foreign earnings taxed at rates varying from the U.S. Federal statutory rate and the unfavorable impact of transactions costs incurred in connection with the Modine Transaction. Income tax expense was $4.3 million for the six months ended June 30, 2025 on earnings before income tax of $4.6 million, representing an effective tax rate of 92.4%. The effective tax rate differed from the U.S. Federal statutory rate of 21.0% primarily due to the unfavorable impact of GILTI, unfavorable tax effects of equity vesting and a valuation allowance established in the U.S. related to a capital loss carryforward. 34 Table of Contents Liquidity and Capital Resources Overview Our primary sources of liquidity and capital resources are cash flows from operations and borrowings available under our Credit Agreement (defined below). Our cash requirements consist principally of working capital, capital expenditures, research and development, operating lease payments, income tax payments and general corporate purposes. We generally reinvest available cash flows from operations into our business, while opportunistically utilizing our authorized stock repurchase program. Further, we continuously evaluate acquisition and investment opportunities that will enhance our business strategies. As of June 30, 2026, the Company had $213.2 million of cash and cash equivalents and $289.1 million of availability under our Credit Agreement. We may issue debt or equity securities, which may provide an additional source of liquidity. However, there can be no assurance equity or debt financing will be available to us when we need it or, if available, the terms will be satisfactory to us and not dilutive to our then-current shareholders. We continue to expect to be able to move funds between different countries to manage our global liquidity needs without material adverse tax implications, subject to current monetary policies and the terms of the Credit Agreement. We utilize a combination of strategies, including dividends, cash pooling arrangements, intercompany loan repayments and other distributions and advances to provide the funds necessary to meet our global liquidity needs. There are no significant restrictions on the ability of our subsidiaries to pay dividends or make other distributions to Gentherm Incorporated. As of June 30, 2026, the Company’s cash and cash equivalents held by our non-U.S. subsidiaries totaled $165.6 million. If additional non-U.S. cash was needed for our U.S. operations, we may be required to accrue and pay withholding if we were to distribute such funds from non-U.S. subsidiaries to the U.S.; however, based on our current liquidity needs and strategies, we do not anticipate a need to accrue and pay such additional amounts. We currently believe that our cash and cash equivalents, borrowings available under the Credit Agreement and cash flows from operations will be adequate to meet anticipated cash requirements for at least the next twelve months and the foreseeable future. Cash and Cash Flows The following table represents our cash and cash equivalents, in thousands: Six Months Ended June 30, 2026 2025 Cash and cash equivalents at beginning of period $ 160,833 $ 134,134 Net cash provided by operating activities 2,272 31,701 Net cash used in investing activities (14,383 ) (19,829 ) Net cash provided by (used in) financing activities 65,865 (22,329 ) Foreign currency effect on cash and cash equivalents (1,414 ) 4,620 Cash and cash equivalents at end of period $ 213,173 $ 128,297 Cash Flows From Operating Activities Net cash provided by operating activities totaled $2.3 million during the six months ended June 30, 2026 primarily reflecting net income of $8.6 million, $40.3 million for non-cash charges for depreciation, amortization, stock based compensation, loss on disposition of property and equipment, provisions for inventory and other non-cash items, including unrealized foreign currency (gain) loss, $16.2 million related to changes in accounts payable, and $8.3 million related to changes in net other assets and liabilities, partially offset by $58.1 million related to changes in accounts receivable, net, $8.6 million for non-cash deferred income taxes, and $4.4 million related to changes in inventory. Cash Flows From Investing Activities Net cash used in investing activities was $14.4 million during the six months ended June 30, 2026, primarily reflecting purchases of property and equipment of $14.2 million and investments in technology companies of $0.2 million. 35 Table of Contents Cash Flows From Financing Activities Net cash provided by financing activities was $65.9 million during the six months ended June 30, 2026, reflecting the borrowing of debt of $142.0 million partially offset by $71.1 million of debt repayments, $2.7 million paid for financing new loans and $2.3 million paid for employee taxes related to the net settlement of restricted stock units that vested during the year. Debt The following table summarizes the Company’s debt, in thousands, as of June 30, 2026 and December 31, 2025: June 30, 2026 December 31, 2025 Interest Rate Principal Balance Interest Rate Principal Balance Revolving Credit Facility (U.S. Dollar denominations) 4.76 % $ 260,000 4.95 % $ 189,000 Finance leases 10.55 % 13,258 3.34 % 73 Total debt 273,258 189,073 Less: current maturities (868 ) (73 ) Long-term debt, less current maturities $ 272,390 $ 189,000 Credit Agreement Gentherm, together with certain of its subsidiaries, maintain a revolving credit note (the “Revolving Credit Facility”) under its Third Amended and Restated Credit Agreement with a consortium of lenders and Bank of America, N.A. as administrative agent (as amended by the Second Amendment described below, the “Credit Agreement”). The Credit Agreement was entered into on June 29, 2026 and amends and restates in its entirety the Second Amended and Restated Credit Agreement dated June 10, 2022, by and among Gentherm, certain of its direct and indirect subsidiaries, the lenders party thereto and the Agent. The Credit Agreement has a maximum borrowing capacity of $550 million and matures on June 29, 2031. The Credit Agreement contains covenants, that, among other things, (i) prohibit or limit the ability to incur additional indebtedness, create liens, pay dividends, make certain types of investments, enter into certain types of transactions with affiliates, prepay other indebtedness, sell assets or enter into certain other transactions outside the ordinary course of business, and (ii) require that Gentherm maintain a minimum Consolidated Interest Coverage Ratio and a maximum Consolidated Net Leverage Ratio (based on consolidated EBITDA for the applicable trailing four fiscal quarters) as of the end of any fiscal quarter. The Credit Agreement also contains customary events of default. As of June 30, 2026, the Company was in compliance with the terms of the Credit Agreement. Modine Transaction In connection with the Merger Agreement, Gentherm, SpinCo and a financial institution executed a 364-day bridge loan facility commitment letter, pursuant to which such financial institution committed to provide the Bridge Facility and the Backstop Commitment. On February 24, 2026, the Company amended its credit agreement to permit the Modine Transaction, which terminated the Backstop Commitment. On June 29, 2026, SpinCo replaced the Bridge Facility with permanent financing by entering into a credit agreement, providing for a delayed-draw term loan facility with aggregate commitments of up to $250.0 million (the "Senior Credit Facility"). Borrowings under the Senior Credit Facility are expected to be funded on the closing date of the Modine Transaction and used to fund the SpinCo Cash Distribution and to pay certain other amounts required under the Merger Agreement. If the Modine Transaction is consummated, any indebtedness incurred by SpinCo will become indebtedness of a wholly owned subsidiary of the Company. Material Cash Requirements In February 2026, we committed to a restructuring plan to realign our operating model and organizational structure to deliver on key financial and operational priorities. We expect to incur cash restructuring costs of between $9.0 million and $9.5 million for employee separation costs. 36 Table of Contents In July 2025, we committed to a restructuring plan to further optimize our manufacturing footprint by realigning our global manufacturing capacity. We expect to incur cash restructuring costs of between $3 million and $4 million for employee separation and retention costs and $1 million of other transition costs primarily for machinery and equipment move and set up costs. Additionally, we expect to incur capital expenditures of between $1 million and $2 million. In February 2025, we committed to a restructuring plan to further optimize our manufacturing footprint by realigning our manufacturing capacity in Europe. We expect to incur cash restructuring costs of between $4 million and $6 million for employee separation and retention costs and between $2 million and $3 million of other transition costs primarily for machinery and equipment move and set up costs. Additionally, we expect to incur capital expenditures of between $1 million and $2 million. See Note 3, “Restructuring,” to the consolidated condensed financial statements included in this Report for additional information regarding these plans. Except as described above and the requirements for the Modine Transaction and the acquisition of IME described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Report, there have been no material changes in our cash requirements since December 31, 2025, the end of fiscal year 2025. See Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2025 for additional information regarding our material cash requirements. Effects of Inflation The automotive component supply industry has historically been subject to inflationary pressures with respect to materials and labor. At times in recent years, the automotive industry has experienced significant volatility in the costs of certain materials and components, labor and transportation. Rising costs of materials, labor, equipment and other inputs used to manufacture and sell our products, including freight and logistics costs, have adversely impacted, and may in the future adversely impact, operating costs and operating results. The impact of tariffs and geopolitical conflicts could add to these inflationary pressures. Although the Company has developed and implemented strategies to mitigate the impact of higher material component costs and transportation costs through sourcing and manufacturing efficiencies where possible, these strategies together with commercial negotiations with Gentherm's customers and suppliers have not fully offset to date and may not fully offset our future cost increases. Such inflationary cost increase may increase the cash required to fund our operations by a material amount. Critical Accounting Estimates The discussion and analysis of our financial condition and results of operations are based upon our consolidated condensed financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. For discussion of our significant accounting policies, see Note 2, “Summary of Significant Accounting Policies,” to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025. There have been no significant changes in our critical accounting policies or critical accounting estimates during the three months ended June 30, 2026. We are not presently aware of any events or circumstances that would require us to update our estimates, assumptions or revise the carrying value of our assets or liabilities. Our estimates may change, however, as new events occur and additional information is obtained. As a result, actual results may differ significantly from our estimates, and any such differences may be material to our financial statements. 37 Table of Contents