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Good morning. I'm Kris Doyle, Vice President of Investor Relations and FP&A. Welcome to our earnings call for the fourth quarter of 2025. Before we begin this morning's call, I'd like to remind you that today's presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future performance and are subject to various risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed. Please refer to the page titled Forward-Looking Information in our earnings material for more detail. Presentation materials for today's call were posted this morning on the Investors section of Visteon's website. You can download them at investors.visteon.com if you haven't already done so. Joining us today are Sachin Lawande, President and Chief Executive Officer; and Jerome Rouquet, Senior Vice President and Chief Financial Officer. We scheduled the call for one hour, and we'll open the lines for questions after Sachin's and Jerome's prepared remarks. Please limit your participation to one question and one follow-up. Thank you again for joining us. Now I'll turn the call over to Sachin.

Thank you, Kris, and good morning, everyone. Overall, we delivered a strong performance in 2025 despite several industry challenges. Net sales for the year were $3.768 billion, coming in largely as we expected at the beginning of the year. From a product perspective, displays were a stand out with sales growing approximately 20% year-over-year, reflecting strong customer demand for larger and advanced displays as well as our execution capabilities. Growth over market was muted in 2025 because of 2 well-understood factors we've discussed throughout the year. First, battery management systems continued to be a headwind as EV demand in the U.S. was softer than originally anticipated. And second, in China, our results were impacted by ongoing shift in market dynamics, including the continued loss of share by global OEMs. These 2 factors negatively impacted GOM by about 7 percentage points. From a profitability standpoint, 2025 was a record year. Adjusted EBITDA reached $492 million or 13.1% of sales, representing the highest level in the company's history. We also generated very strong adjusted free cash flow, reflecting disciplined execution and continued focus on cost and capital efficiency. New business activity was another highlight of the year. We delivered a record $7.4 billion of new business wins, surpassing our prior peak. Finally, a strong balance sheet and cash generation continue to provide significant flexibility. During the year, we deployed more than $120 million towards M&A and shareholder returns while maintaining a strong net cash position. Turning to Page 3. Before I go deeper into our 2025 results, I want to take a step back and briefly update you on the strategic work underway to build Visteon's next phase of growth. While the majority of the benefits will come later, some of these initiatives are expected to show results in 2026. We are diversifying our customer base by expanding our presence with specification automakers that have historically been underrepresented at Visteon. In 2025, we secured another $500 million of new business with Toyota, building on the momentum from prior year, and launched new products with Toyota, Mahindra, Tata and Maruti Suzuki. We expect revenue from these OEMs to begin growing in 2026 and to ramp steadily over the next several years, making them an important driver of our future growth. At the same time, software-defined vehicles are now extending into other parts of the broader mobility ecosystem, particularly commercial vehicles and 2-wheelers. While we have served these adjacent markets in the past, the changes driven by these trends are making them significantly more attractive growth opportunities, while also helping us diversify our exposure. In 2025, nearly 15% of our new business wins came from 2-wheeler and commercial vehicle manufacturers compared to about 4% of our sales today. A particularly important milestone was winning the largest digital cluster program in the 2-wheeler industry, approximately $400 million in lifetime revenue with Honda. Launches for this program are scheduled to begin in 2027. Our manufacturing footprint and cost structure have long been a competitive advantage for Visteon. To further strengthen this advantage, we have increased vertical integration in manufacturing to simplify the supply chain and capture incremental value. In 2025, we accelerated the in-sourcing of the molding of metal brackets used for large displays using an advanced lightweight fixer molding process. We are the only Tier 1 supplier that has this capability in-house in the industry. We have also increased our optical bonding capacity in various plants. Finally, we began manufacturing automotive cameras to complement our in-house surround vision software, enabling a complete end-to-end solution. More broadly, investing in the business remains our top capital allocation priority. In 2025, we deployed approximately $180 million across CapEx and M&A to support new program launches, technology development and vertical integration initiatives. Advancing our technology portfolio and aligning it closely with market trends is a key element of our strategic priorities. Today, I would like to highlight 2 emerging product trends, in particular: advanced displays based on OLED technology and AI in the cockpit. In 2025, nearly 50% of our new business wins were for displays, surpassing 2024 record levels, and positioning this product for sustainable revenue growth. Importantly, we secured significant OLED display wins with luxury OEMs and establishing Visteon's leadership in this segment of the auto market. While TFT displays will represent the bulk of the automotive market for displays, OLED displays will have greater share in the luxury vehicles. AI technology is advancing at an extraordinary pace. Newer AI models deliver significantly higher intelligence with far fewer parameters, enabling AI to move from the cloud to device-based architectures, an essential shift for automotive applications. We are addressing this opportunity through 2 complementary offerings. First is our high-performance compute hardware, which provides the processing headroom and architectural flexibility required to run AI workloads in the vehicle. Early in 2025, we secured a win with Chery in China, and more recently, follow-on business with Geely, as they expand this architecture into the Lynk & Co brand, building on our

Thank you, Sachin. Before getting into the details of the quarter and our outlook, I want to briefly step back and look at our financial performance over the past few years as it provides important context for how we have managed the business through a dynamic environment. Over this period, we have grown sales by more than $800 million or 28% despite our customer production declining by 13%. We have more than doubled adjusted EBITDA and expanded margins by over 500 basis points. Importantly, this margin progression has been steady and consistent, reflecting disciplined execution across pricing, cost structure and operational performance. We have also generated strong cash flows. Adjusted free cash flow totaled $1 billion over this period, with an average conversion rate of approximately 42%, driven by EBITDA growth and a sustained focus on working capital discipline and capital efficiency. While not shown on this slide, our return on invested capital remains in the high teens, well above our cost of capital and above our peer group, reflecting the quality of returns we are generating from our investments in the business. Taken together, these results demonstrate our ability to expand margins and generate cash even as volumes, mix and regional dynamics have shifted. Turning to Page 10. Sales for the fourth quarter were $948 million, coming in above our expectations, primarily driven by customer recoveries related to program shortfalls. In the quarter, sales benefited by $30 million related to a customer claim on an EV program in the U.S., of which a portion was used to settle supplier obligations. From a product perspective, displays continued to be the main growth driver year-over-year, while battery management systems were down following the expiration of the EV tax credit in the U.S. We also experienced several discrete headwinds in the quarter, including the Novelis fire impacting Ford and the cyberattack at JLR, both of which were known headwinds going into the quarter. There was no impact on volumes related to the potential Nexperia supply risk we referenced on the last call. Adjusted EBITDA for the quarter was $110 million, representing a margin of 11.6%, and came in slightly above the midpoint of our guidance. Onetime items in the quarter represented a modest headwind as elevated warranty expense and some costs associated with resourcing away from Nexperia more than offset the EBITDA benefit from the customer claim I mentioned previously. When excluding these onetime items, adjusted EBITDA margins were approximately 12.5% on a normalized basis, reflecting continued commercial discipline and underlying cost performance. Adjusted free cash flow was strong, coming in at $77 million, supported by robust EBITDA levels and continued discipline in working capital management and capital efficiency. During the quarter, we returned capital to shareholders through $50 million of share repurchases and $7 million through our quarterly dividend, which we initiated in the third quarter. Our net cash position was $472 million at the end of the quarter. Turning to Page 11. For the full year, sales were $3.768 billion, down $98 million or 3% year-over-year. Customer production was down 1% for the year, while currency was neutral. Pricing was a headwind of 4%. This includes our normal annual price reductions of 2%, which are consistent with historical levels as well as lower customer recoveries. The reduction in recoveries reflects the unwind of prior year semiconductor inflation. As these costs have decreased, the associated recoveries have declined as well. Excluding the impact of FX and pricing, we delivered 2% growth over market. This reflects strength from new launches, including Ford, Audi and Renault launches, growth with Toyota and higher engineering services revenue, offsetting headwinds from lower BMS volumes, lower sales in China and normal program roll-offs. In 2025, we delivered another record year for both adjusted EBITDA dollars and margins. Pricing and lower customer recoveries were offset through disciplined cost execution. We delivered end-to-end product cost improvements, including supplier cost reductions and vertical integration initiatives and drove productivity gains across engineering and SG&A. Throughout the year, we actively managed our cost structure in line with market conditions, enabling us to improve margins while continuing to invest in strategic growth initiatives. For the full year, the net impact from favorable one-timers, including elevated onetime commercial recoveries, was just under $30 million. Excluding these items, normalized adjusted EBITDA margins are in the mid-12% range for the full year. Before moving on to cash flow, I want to highlight our voluntary decision to change the methodology used to calculate our valuation allowance on U.S. deferred tax assets. While there are 2 methodologies available that are acceptable under U.S. GAAP, the methodology we will be using going forward enhances transparency and reduces complexity while also aligning with industry norms. We have reflected this accounting change in our U.S. GAAP tax expense for the past 3 years in the 10-K. This change impacts the presentation of U.S. GAAP taxes, but does not affect cash taxes or underlying economics of the business. Additional details are included in the 10-K. Turning to Page 12. In 2025, we generated $292 million of adjusted free cash flow, reflecting continued strength in the underlying earnings profile of the business. Trade working capital was a source of cash for the year, driven by lower sales and inventory reductions. Cash taxes increased year-over-year due to increased profitability, the timing of tax payments and some level of discrete items. Interest was a net positive as income generated on our cash balances more than offset interest payments on debt. Other changes primarily reflect ongoing pension contributions and timing of cash flows. Capital expenditures were $133 million for the year or 3.5% of sales, illustrating the capital discipline of the company. This included continued investments in vertical integration as well as the purchase of land in India in the fourth quarter to support growth in this market. Taken together, our conversion ratio from EBITDA to adjusted free cash flow was nearly 60%. In total, we deployed approximately $275 million of capital, which included both organic and inorganic investments, a return of approximately $72 million of cash to shareholders through share repurchases and the initiation of a quarterly dividend. During the fourth quarter, we completed a $100 million pension derisking by transferring pension-related assets and liabilities to an insurance company. This transaction had a noncash impact to net income of negative $7 million. Also in the fourth quarter, S&P upgraded Visteon to Ba1, reflecting expanded margins, strong free cash flow generation, a conservative financial policy and sustainable demand for advanced cockpit technologies. Turning to Page 13. Turning to our 2026 outlook. Starting with sales, we expect revenue in the range of $3.625 billion to $3.825 billion. As Sachin discussed, we begin to see the benefits of our strategic growth initiatives in 2026, with more meaningful acceleration into 2027 and beyond, laying the foundation for sustainable annual top line growth beginning in 2027. At the same time, 2026 includes several discrete headwinds, including lower BMS sales and the discontinuation of certain programs at Ford, with both items largely behind us as we go into 2027. Our outlook is primarily based on the January S&P forecast. Customer-weighted production is expected to be down in the low single digits. Against this backdrop, we expect Visteon's growth over market to be in the low single digits. This is below our long-term expectations due to the discrete headwinds in 2026, but positions us for stronger growth going forward as those headwinds roll off and our strategic initiatives accelerate. Before moving to EBITDA, let me provide some additional perspective on the commercial dynamics embedded in our outlook, recognizing that this remains a dynamic area. There are several items that reduced sales year-over-year, including normal annual pricing to customers, lower customer recoveries related to semiconductor and supply chain disruptions from prior years as well as the nonrecurrence of certain commercial recoveries recognized in 2025. Partially offsetting these declines, we expect recoveries related to more recent semiconductor dynamics, including memory related costs. We also anticipate a modest tailwind from currency. On a net basis, we expect these various items to represent approximately a 2% headwind to sales year-over-year. Adjusted EBITDA is expected to be between $455 million to $495 million. At the midpoint of guidance, margins are 12.8%. As we have highlighted previously, our 2025 results included a net benefit of just under $30 million above our normal run rate. Of that amount, we expect about only $10 million to repeat in 2026, resulting in a $20 million year-over-year headwind. Excluding this factor, we expect adjusted EBITDA dollars to be roughly flat year-over-year despite lower sales, reflecting the underlying strength of the business and our continued operational focus. Compared to normalized margins of 12.5% in 2025, our guidance incorporates a 30 basis point improvement. Included in our guidance are ongoing benefits from cost discipline, emerging savings from vertical integration and product costing initiatives. These are offset by increased investments in the business to support product development, including in AI and vertical integration. This outlook also incorporates an increase in memory cost, with a year-over-year cost increase representing approximately 2% of sales. We're in active discussions with our customers to pass along these costs, and we have incorporated in our guidance a modest amount of potential timing mismatch between cost incurred and customer recoveries. These discussions are ongoing. And given their sensitive nature, we will not be providing additional details at this time. Turning to cash flow. We expect adjusted free cash flow of approximately $170 million to $210 million, representing a conversion rate of approximately 40% at the midpoint. We currently anticipate working capital will be a slight use of cash as we increase inventory levels. Capital expenditures are expected to be approximately $150 million or about 4% of sales. This includes the build-out of a second manufacturing facility in India as well as support of upcoming program launches and continued investments in vertical integration. Overall, our '26 guidance reflects a business executing with discipline, maintaining margin expansion on a normalized basis, generating strong cash flow and continuing to invest in the growth initiatives that support the next phase of our top line growth. As usual, we're not providing formal quarterly guidance, but I did want to share some directional insight before moving on. We expect first quarter sales to be the lowest of the year, reflecting the industry production profile for 2026, continued depressed BMS volumes and launches that are weighted towards the back half of the year. From a profitability standpoint, Q1 EBITDA will be negatively impacted by lower volumes as well as higher memory costs, recognizing that not all customer recoveries agreements will be finalized by the end of the first quarter. Turning to Page 14. In 2026, we expect to have more than $0.5 billion of cash available to deploy. This amount represents a combination of cash on hand and cash that we expect to generate during the year. We will continue to be guided by the same disciplined capital allocation framework, prioritizing investment in the business while returning excess capital to shareholders. Starting with investments in the business, this remains our top priority. As discussed earlier, we expect to allocate approximately $150 million to capital expenditures in 2026, positioning the business for future growth and supporting vertical integration initiatives. In addition to CapEx, we continue to see meaningful opportunities for M&A. Our focus remains on expanding capabilities through engineering services, while also selectively evaluating opportunities to enhance our technology portfolio. While the ultimate level of investment will depend on how the transactions progress during the year, M&A deployment could be up to 2x our annual CapEx investment levels. As always, we will remain disciplined and prioritize strategic fit and financial returns. Even after funding these growth investments, we expect to maintain significant capacity to return capital to shareholders. First, we are increasing our quarterly dividend to $0.375 per share, representing an increase of 36%. This reflects our confidence in the durability of our cash flow and equates to approximately $40 million on an annual basis. In addition, we intend to remain active in share repurchases. At a minimum, we will offset dilution with the intent to be more opportunistic, depending on market conditions and the pace of M&A activity. At the end of 2025, we had $75 million remaining under our existing authorization, and we expect to revisit this level as the year progresses. To round out the cash flow picture, we have a modest amortization requirement on our debt facility, representing $18 million of cash outflow in 2026. Taken together, our capital allocation plan for 2026 reflects a balanced and flexible approach, continuing to invest in growth, returning capital to shareholders and maintaining balance sheet strength as the business continues to transition and scale. Turning to Page 15. Before we conclude, I want to highlight our upcoming Investor Day, which will be held on June 25 in New York City. We look forward to sharing more detail on our long-term outlook, including how the strategic initiatives we discussed today translate into growth and value creation over the coming years. We hope many of you will be able to join us. Thank you for your time today. I would like now to open the call for your questions.

[Operator Instructions] Your first question is from the line of Luke Junk with Baird.

Maybe just to start with -- Sachin, hoping you could just dig into the DRAM exposure a little bit more relative to the product portfolio? And maybe just to scale that 2% impact to guidance, both across the portfolio and then kind of what that represents from a cost standpoint? And then maybe qualitatively, if you could also just speak to the supplier side of this and your ability to get in front of this? And I'm just curious, from a timing standpoint, were you working on this relatively earlier versus when this became more known in financial markets?

Sure, sure. So in terms of the use of memory, Luke, as you can imagine, we use memory chips in virtually all of our products. And we use different types of memories. They have DRAM for sure, but different types of DRAMs, but also flash memory. Now the memory supply and that landscape looks different than the logic chips that we have had issues with in the past. As you probably know, almost 90-plus percent of the market is made up of essentially 3 suppliers between Samsung, Hynix and Micron. And we work with all of them, and we have a long-standing relationship with these suppliers and a very strategic one. We started to work with them towards the end of last year. As you might know, the memory industry typically plans for about a 10% growth in demand each year. But towards the second half, I would say, more in the third quarter of last year, the demand signals from the rest of the industry, not automotive, but consumer electronics, our data centers, et cetera, indicated that the demand in 2026 was going to be closer to about 50% and not the traditional 10% or so thereabouts that the industry was accustomed to. So the main fallout of all of that is that the supplies will be tight for everybody in all the industries, right? And automotive will also have the same situation. So what we are doing in response to that, and we started on this journey last year itself, and I believe earlier than many in the industry. We started to work with our suppliers to secure the capacity for the full year. So that's something that we have already made a lot of progress with. And we should be, I would say, in a better position than most to be able to get those capacity reservations secured. Now even with that, where we see gaps, we are developing alternate pin-to-pin compatible drop-in replacements, similar to what we did with the logic chip shortages. And also evaluating new suppliers. There are some new suppliers, not many, but some that are emerging, mostly in China. And we started engaging with them late last year and have already secured some supply from these emerging suppliers. So net-net, if I look at our full year demand for this year, we should largely be able to cover customer demand. There may be some timing impacts that we have to manage. Even that, I think as we work with our suppliers, we should be able to largely mitigate. Now on the cost side, as Jerome mentioned, we have an increase in cost in this memory chips on account of our historical relationship with the suppliers and the early engagement that we have. I believe we will be in a good position to have a good cost despite the increase, which we will expect to recover from our customers similar to the last semiconductor crisis. So now to answer your other question about specifically how much is it? We would rather not provide any breakdown of our bill of materials, mainly for competitive reasons. The increase, as Jerome mentioned, represents about 2% of our sales. That's probably as much as we can share for now.

Got it. I really appreciate the color there, Sachin. For my follow-up, I just want to dig into the kind of the weighting of revenue this year. So I very much appreciate the comment about first quarter sales and the impacts there. Just want to think about weighting in the first half versus the second half this year as well, given the impacts from Ford and BMS which seem pretty immediate stepping into the year versus your launch cadence picking up into the back half. And then maybe if you could just walk at a high level into 2027 as well as some of these transient headwinds seems like they should drop out and that launch cadence maybe should more fully read through.

Luke, I'll start, and then I'll hand over to Sachin for '27. So for '26, we have -- as we had anticipated, we have a second half, which is going to be slightly better than the first half of the year. And that's really due to the launches that we have that are more backloaded towards the end of the year. And we've got that in China. We've got that with our key strategic initiatives, including Toyota that will really ramp up in Q3 and in some cases, for Toyota in Q4. So overall, we've got about a 3% improvement in the second half versus the first half when IHS was, I think, close to 2%. So we're doing slightly better than the market in the second half versus the first half. Related to Q1, we do think that Q1 will be the lowest quarter of the year on the back of 2 things. The first one is the fact that IHS as well is guiding towards a decline year-over-year of about 3% to 4%. So we'll have this reflected, obviously, in our sales. And we do see as well at this point, pretty low level of BMS sales as we are going into the first quarter. So that will obviously impact our Q1 sales, which will be, as I said, the lowest of the year.

Thanks, Jerome. Before I get into the 2027 topic, I would like to just briefly touch upon our performance in 2025 and our outlook for '26 because I think the dynamics there have a significant bearing on how we think about 2027. So if you think about 2025, we had 2 major headwinds, one was China and the other was BMS. Combined, represented about 7 percentage points of headwinds. And we were able to offset that through new product launches, mainly in North America and Europe in '25. And if you were to exclude those headwinds and the one-timers, that represents about 7 percentage points of growth over market. Now when you look at 2026, especially in the walk that we have provided for our sales, we have BMS again as a headwind. Perhaps we might be a little more conservative than, for sure, S&P Poor's outlook. But nonetheless, we have BMS and we have the discontinued vehicles at Ford that we mentioned earlier, but China is no longer a headwind. Now offsetting these, there are also new product launches, mainly in Europe and in Asia, particularly in China. However, most of the high-value launches are in the second half of this year, as we have discussed. And that's what is muting our growth over market in 2026 to about 5 percentage points. Now as we go into 2027, although we won't provide specific financial targets on this call here today, by the way, we will do that in much fulsome treatment in our Investor Day in June. What I can say is that we expect a top line sales growth since the headwinds, both China and BMS, would largely be behind us as well as this discontinued vehicles topic. And the growth that we will have from the new product launches, especially high-performance compute systems in China as well as displays and other products, and the progress we are making in the adjacent markets and our strategic initiatives, should bring us back to our mid- to high single-digit growth over market in 2027 and drive top line growth. So I hope that gives a much sort of broader context on our current performance as well as what we're expecting in 2027.

Your next question is from the line of Shreyas Patil with Wolfe Capital.

Maybe just a quick clarification on your commentary around memory. So is your memory exposure equivalent to 2% of revenues? Or are you expecting an increase in memory cost that is equal to 2% of sales?

Yes. What we have mentioned, that 2% is specifically regarding the increase in the cost that we anticipate this year.

Okay. And then maybe looking at the bridge, the revenue bridge that you provided earlier, you're pointing to your traditional customers driving about 2 points of top line growth, that's about $75 million. Just curious what you're seeing in terms of launch activity broadly this year amongst those OEMs. From some of the other suppliers that have reported, it does seem like '26 is a somewhat lighter year for launch activity, particularly in North America and Europe. Is that similar to what you're seeing? And would that be a contributing positive if you're thinking about 2027?

Yes. So Shreyas, I think we are seeing a little bit of a different perspective than some of our other peers perhaps. We have a significant amount of launch activity in Europe related to displays. As you might remember, we have won a high level of displays business. A lot of it has come from Europe in the past couple of years, and that's turning into revenue, especially in the second half of this year. We are also seeing, I would say, roughly about 20 launches in China. And so what has happened in China is after sort of a reset with many of our international OEMs, not just the domestic OEMs, they have been launching new vehicles to compete in that highly competitive market. And this seems to be the year, again, second half, this seems to be the year that they're introducing new vehicles. And I think the timing also might actually work out very well. If you have seen even the early numbers from January in China, the market seems to be tilting in favor of more higher-priced vehicles with all of the changes with respect to policies and pricing, et cetera, that have happened in that market. And we think that might actually help our global customers, but also our domestic customers like Geely, they have some high-performance compute launches that we discussed earlier with domestic OEMs, and they go into the more premium flagship vehicle models. So we do see a very healthy launch activity this year. And we -- that really signals again this SDV trend now complemented by this AI trend starting to really drive some momentum.

Okay. Great. And maybe just one last one on the M&A pipeline, you mentioned, I think it's about $300 million or so. Maybe you could just unpack how -- what's kind of in that pipeline or the size of the companies that you're looking at? And maybe the -- how should we think about the time line for when you could execute on those deals?

Yes. Let me start, and I'll hand over to Sachin as well. So we've not really given a number. The chart may indicate that it could be as much as twice the amount of CapEx that we have for '26, but we'll see how it goes. We are quite ambitious in 2026, given the pipeline that we have. And the criteria that we've got in mind for M&A remain the same as the ones that we've talked about in the past. The first one is that we want to have M&A that are bolt-on by design. And that -- by that we mean we want to look at fairly small acquisitions so that we can tuck them in our existing business pretty quickly. The second criteria is that we want to have technology/capability accretive to what we're doing today, augmenting essentially the platform that we have from a software standpoint. And that includes as well engineering services. And as you know, we've already done 2 acquisitions, and we are considering as well further. And then the third criteria that we've always considered as well is the fact that we want to have, as much as possible, these businesses being margin accretive from day 1. So that we don't get a return that is going to be in 5 or even 10 years. So kind of these 3 criteria that we've selected in the past and that we are still continuing to apply as we look at this pipeline of acquisition for 2026.

And maybe just to add to what Jerome has said, without necessarily getting into any specifics about the sizes of the companies, et cetera, that we are looking at. One thing to keep in mind, Shreyas, is if you look at our journey of integrating more and more of the ECUs, we have gone from integrating the cluster and the IBI into CDC. Now the HPC integrates even more ECUs, including body control gateways plus additional rear-seat entertainment, passenger side entertainment as well. And now with the regulations in ADAS, in particular in Europe, which is also expected to follow in China, we see that ADAS is going to be more of a table stakes almost features and something that we can look forward to in integration in one of our future products. So we continue to look for opportunities where we can bring in those technology elements in-house and allow us to take cost out and integrate more of the content in our systems. So that should give you some sense of the kind of companies we're looking at, none of which are the big transactions. As Jerome mentioned, we prefer to focus on technology capabilities so that we can then integrate it in a better manner within our systems.

Your next question is from the line of Itay Michaeli with TD Cowen.

Great. Just a first question, just going back to the Slide 7 and the revenue bridge. On the 2% headwind from discontinued vehicles, I'm curious whether you have content in some of the competing vehicles to the vehicles that are being discontinued? And whether there's an assumption for some pickup of revenue there? Or are you kind of more assuming that, that headwind does not get recovered or recoup by other competing vehicles that you might have content on?

Yes. I think -- yes, the answer is yes. We have content in a sort of a very broad cross-section of vehicles at that OEM. But at least as yet, we are not necessarily seeing the benefit. Now that doesn't mean it may not happen, it could. Still early in the year, and we don't have full visibility into the OEM's plans. Given the fairly significant volume of vehicles that those represented, we do expect that they would try to fill that hole with some other vehicles, which, if that were to happen, then we would, I guess, benefit from it. Since we have -- we are not seeing that as yet, we have not included that in our outlook. And if it does happen, then it might provide some tailwind.

And I would add, Sachin, that we've used broadly IHS, in fact, for this discontinued vehicle, but as well just for overall forward volume going into '26.

Got it. It's very helpful. And just as a second question. Strong bookings in 2025, that's great to see. Sachin, I was hoping if you had a target to share for bookings in 2026. And then if you kind of look at the last few years' average booking, it does seem to support maybe a mid- to high single-digit revenue growth algorithm for the company in the medium term? I think I heard you say, Sachin, to an earlier question, that you may even get to that level as early as next year. Just hoping you can kind of talk a little bit about the implications of bookings of the company's growth in the medium term.

Yes. Very good question. And if you think about the 2025 performance in particular, the 2 things I would like to highlight. One, our displays, which we did really well. And across the board, if you look at our displacements, they were spread over Europe, North America and also Asia. And those programs typically have a shorter lead time in terms of development and launch than the corporate electronics programs because fundamentally, with more software, it takes longer to launch those systems. So that's one factor. The other thing is that about 15% of our wins were on 2-wheelers and commercial vehicles. And 2-wheelers, in particular, also have a fairly short time to market. So that's really the reason why we feel that the inflection of these wins turning into revenue and contributing to our growth over market will be fairly earlier than traditional or historical sort of averages in terms of time. And in terms of just the outlook for this year, in particular for new business wins, the pipeline of new opportunities is pretty robust. I'm very happy to see that given this environment where a lot of the customers that we have, especially outside of China, are still in some sort of form or the other in terms of trying to get their portfolio adjusted, we still see a very robust pipeline, again, led by displays, but also more for few domain controllers and a emerging opportunity, which is very exciting, is this AI dedicated ECUs for AI to bring AI into cockpits without necessarily rearchitecting the whole vehicle. This is starting in China, and we are very excited and optimistic about it, and has the potential to come across into other regions fairly quickly.

Your next question is from the line of Tom Narayan with RBC Capital Markets.

This is [indiscernible] on for Tom. On the last call, I think you guys mentioned a roughly 20% volume reduction for BMS in 2026. And it looks like that number has since jumped up to 50%. So it sounds like you guys are still anticipating BMS to show some recovery in 2027. But is there anything you can give us on your longer-term planning around BMS? And where you think it could get to maybe as a percentage of revenue?

Yes, absolutely. So let me give you this -- the way we think about BMS. So especially in the U.S., first of all, I will start by saying that it's very difficult to forecast what EVs will do this year, in particular, first full year without the incentives, but we can look at Q4 as one data point, not necessarily sufficient, but at least that's what we have in front of us. So even with the pull ahead that occurred due to the expiry of the incentive, we saw a market penetration of about just over 5% of EVs in the U.S. in Q4. Now as we think about 2026, we do believe it will start very soft, in the sense that Q1 is probably going to be the low point of EV sales in the U.S. for continuing from the effects of the pull ahead in last year. And then Q2 onwards, slowly recover. Now the question is to what level? Now what we have assumed in our outlook is a very conservative number. We have assumed a roughly 3% penetration of EVs with our customers. I mentioned Q4 was over 5%; for the full year, it was over 7%. So it feels like our 3% is fairly conservative. S&P has a 30% lower 2026 than 2025. And if you look at our numbers, it's closer to 50% drop year-over-year. So there could be some upside if we are found to be too conservative here, but given everything, we felt it would be prudent to be a bit more on the conservative side. Now if you think about 2027 and going forward, with the improvements that we see in the cost of EVs and continuing our focus on those by or customers, in particular, GM, we believe that the market should recover modestly from the lows of 2026. We'll wait for a little longer to understand exactly what that would look like, but we believe it will be a very modest improvement and a steady growth from there.

Okay. Got you. I guess on a slightly higher level, it looks like you guys have a pretty strong growth over market in Europe in 2025. I was wondering if you could give us a sense of whether you see any opportunities to capture additional business wins, especially from the Chinese domestic exporting to Europe?

Yes. And we do see a lot of positives from the Chinese OEMs activity in Europe, not just with them directly, but also with European OEMs who are responding to the competitive threat by essentially uplifting the capabilities in the pockets. Now we also have been able to win business in Europe, the Chinese OEMs, and we expect to be able to do more of that as we go forward. So to us, Europe represents an interesting data point where the growth of the Chinese OEMs sales actually helps the business in terms of driving more content in the cockpit. So we expect to see that dynamic not just limited to Europe, but in other regions, where you see higher activity of the China OEMs. And to your point, we do anticipate Europe to also contribute more in terms of new business opportunities this year as well.

Your next question is from Joe Spak with UBS.

I guess I wanted to go back to better understand some of the memory commentary. And I know you're going to be -- you're talking about being limited here in what you're going to say. But in the overall bridge, you're talking about recoveries, pricing FX being a 2% year-over-year headwind. Now you have the old recoveries, right, that is probably lower year-over-year as you sort of indicated from the original semiconductor challenges. Price is sort of minus 2. FX looks like it's probably a positive. So I guess, to get to that overall minus 2, and if I take in the context your -- the increase is about 2% of sales, it looks like you're assuming very little in terms of actual recoveries on memory, is that about right? And maybe just a comment on sourcing here? Because it sounds like you're doing a lot of work. I know a lot of the automakers are doing work as well, and there's some directed buys. So who's really responsible for what?

Yes. Let me take the first question, Joe. So the buckets that you described are the right ones. We've got -- in this 2% annual pricing, we've got what I would call the legacy or the reduction in recoveries related to the prior chip shortage that are coming down. And then we've got, on the positive side, recoveries for the new memory tensions that are going on as well as some modest FX. Maybe just to be very clear on the memory, we are -- we've baked in our assumptions that we will be recovering the majority of these costs. And when I said the majority is that we are fully intending to recover everything, but there will be some level of timing that we've accounted for between the cost incurred and the customer recoveries and we'll, as I mentioned, we'll see that in Q1, and it's probably going to be as well a sharing effect all the way to 'till the end of the year on that topic. But these are the full buckets, and we are absolutely intending to recover the memory cost increases through our customers.

And to your other question, Joe, the OEMs activities are more related to understanding the situation and engaging with the suppliers. I do not believe that they have direct sourcing, at least not with us. So in our case, we do [ virtually ] all of the sourcing of memories directly ourselves.

Okay. But I guess if the guidance also sort of assumes that you are recovering it all just with some timing mismatches, then I mean it's also rough numbers. Is that fair to sort of say that's like a 20 to 30 basis point hit to your margins this year?

We've not given any specifics. It's embedded in this 2%. So I would take that 2% as kind of the essential piece of the work. As I said -- in fact, if you decompose maybe these buckets, if you think about it, annual pricing as well as, let's say, legacy semiconductor recoveries will be fully offset by the efficiencies that we are generating in the business, will be offsetting the memory cost increases to the majority. We'll have some level of leakage, but nothing major. And then you have in that bucket as well, as I said, the FX, which is a pretty similar number. Overall, when we look at our business, and that's pretty valid, in fact, for the last 2 years, and it will be still valid as well for '26, the dilution of recoveries has an impact of about 0.5 percentage point on recoveries, so -- on EBITDA, sorry. So that's kind of the dilution that you see over the years coming from that bucket.

Okay. Maybe just one quick one, just to follow up on the capital deployment and the M&A. And I know those are [ gradiated ] bars, and you said the M&A could be twice the CapEx or $300 million. But if I look at M&A to buyback, that's like a 2:1 ratio. And if you add up CapEx, the dividend, the debt, like it looks like there's about $300 million total left there. So I guess I'm just wondering like if -- and I know there's ranges here, but if the M&A outlay goes up to that $300 million, does that mean there's little left for buyback?

Yes, the slide shows, in fact, that buyback would be in the $100-plus million. Our priority is going to be really focusing on obviously investing in the business with the CapEx as well as focusing on these acquisitions. Obviously, the excess is going to go to dividend and as well as share buybacks, but we do want to remain opportunistic in terms of the buyback. So that's really the key point as well. And we'll update you as we go throughout the year.

This concludes our earnings call for the fourth quarter and full year of 2025. Thank you for participating in today's call and your ongoing interest in Visteon. Thank you.