Thanks everyone for being here. Welcome to the 2026 JP Morgan Auto Conference, and welcome to the new 270 Park building. We hope you enjoy the views, the food, and maybe even learn something over the next couple of days. Very pleased to start the conference with Kevin Clark, Aptiv CEO and Chair. Thanks, Kevin, for being here. No, Rajat, thanks for having us. It's a pleasure. Great. Maybe I'll just start off with a high-level question. Now that the spinoff is completed, you have a full quarter of new Aptiv behind you. What are two or three things you want investors to understand about Aptiv today, and a few years out, how do you want them to define it? Sure. Thanks everybody for joining us this morning. As you take a step back and you look at Aptiv and how we're positioned and how we think about the business and how we describe it, is we have advanced hardware solutions, that includes sensors, advanced compute, interconnect sort of solutions, a software tech stack. Those solutions enable, effectively, things to sense, think, act, and then we say optimize. And that matches our product portfolio. It's what we enable and have enabled in the automotive space for a very long period of time. And it's increasingly what we're working to enable across other industries as well, in spaces like the aerospace and defense sort of sectors, and other markets, and thus broader industrial markets. Unique set of assets, an opportunity to take those assets across multiple markets, and enable our customers to do what they're looking to do. Great. So maybe we'll just go into the recent results and some of the commentary there. You did take down the second half or full-year guide by $300 million- Yep. at the midpoint. Split roughly $150 million on the customer schedule changes, $100 million on the launch and ramp delays, and then $50 million of just enterprise software timing. Could you walk us through which of those three you have the least visibility on? And how much additional conservatism have you layered in beyond what the schedules themselves imply? So maybe I'll start with a little bit of context on each one of those. As Varun walked investors through on our earnings call. The first piece relates to just ongoing weakness in the China market. China retail sales first quarter, second quarter, and I think even from reports earlier either today or yesterday, retail sales are down 20%. So it is a weak market. We saw weakness in schedules on platforms with local China OEMs where we have a considerable amount of business. We also saw a reduction in the schedules on programs that we'd been launching starting last year into this year. So the slope of those launch curves are actually down. So that's a big piece, China. The second piece is actually exports from European OEMs into China, more specifically in and around the German luxury OEMs. We saw in July significant takedown in schedules relative to back half of the year on some of their platforms that they're manufacturing in Europe and exporting into China, just given the weakness in the overall market there. The second piece relates to the European market. There is a program that we're launching now for a large European OEM, where that launch was delayed by a quarter, effectively. So push out of the launch, so it impacted us in the quarter. There was an expectation that we had that as a part of the award of the program and the launch of the program, we were actually going to pick up incremental car lines in brands that that particular OEM manufactures, which we unfortunately did not have that opportunity. The last thing, that OEM decided to just stay with the existing system that they had. That's what happened there. The last piece relates really to software and services and enterprise software. We sell cloud platform software to enterprise customers. It's just a lumpier business, and as we looked at the funnel, we saw some shifting there in the quarter. Those were the big drivers. When you talk about visibility, China is clearly the most dynamic market. I'd say we have visibility, but it is volatile. Where in North America and Europe, where we tend to get EDIs get locked in typically 30 days prior to production. In China, it's a shorter period of time, maybe it's two weeks, and just given the dynamics in the market, we saw more fluctuation near term than what we normally even would see in the China market. Do you think those forecasts, is there a way to size or how much conservatism is in those numbers right now in the fresh guidance? Yeah. What's changed in the forecasting process? Yeah. Given the dynamics in China and what we've seen from a schedule standpoint, obviously we've overlaid incremental conservatism there. As it relates to what we're seeing in Europe and what we're seeing with select OEMs that operate in North America, we've put additional conservatism in related to actions that they could be taking that we don't see in schedules at this point in time. I think we have a very reasonable dose of conservatism built into the revised outlook. Understood. Maybe just spending a second on the forward curve into 2027. You have a 4%-7% revenue CAGR framework. Clearly the industry has been a little choppy, unpredictable, and you're starting at the lower end. You're in 2026, but exiting 4Q at a pretty healthy clip based on the guidance in the mid-single- digit at the midpoint. Are you able to provide any early puts and takes for 2027? You obviously have a couple of key launches in Europe. You have BYD. Should investors expect a continued acceleration? How is the forward visibility looking like? I'm not going to give 2027 guidance. I'll give maybe a bit of a framework on puts and takes. What are we watching very closely? We're watching the China market, right? China market down significantly, certainly more than anyone had expected coming into the year. It's difficult to envision a scenario where the China market has two years where retail sales are declining somewhere between 15% and 20%, depending upon which third-party resource that you talk to. That translates into vehicle production in China declining somewhere between 5% and 6%. A portion of that weak retail market has been offset with exports out of China. When you look at the China OEMs, to give you some context, three years ago, they were exporting roughly 2 million vehicles out of China to Europe and elsewhere. This year, they'll export north of 6 million units. That's become a bigger piece of the production base. If you look at what they've done the last couple of months in the aggregate exports out of China, the run rate is closer to an 8 million-10 million unit sort of run rate. I think there's a question of how long does that continue or does the EU enable that? That's something that we're watching very closely. We're talking to our customers as well as to EU officials in the member states. That's something that we need to watch in terms of that overall dynamic, and our view is a lot of that will play out in the coming quarters. We'll get visibility of that. We're worried a bit about Europe. We're worried about a couple of the European OEMs in terms of how they're positioned from a cost structure standpoint. All of you are familiar with the industry operating, can insert the names, I'm sure, in terms of those that have talked about production reductions over the longer term. We'll see how that plays out. On the flip side, we've had very strong bookings the last few years. We have a number of programs that are launching, so very excited about that. Great bookings last year. Very strong bookings year- to- date this year in high-growth areas. I would say we're more positive about the progress we're making in adjacent markets, in and around aerospace and defense, in and around broader diversified industrials, in and around energy storage and robotics and drones. That's an area that we see positive momentum. We're working through all that, and we'll come back with updated guidance. I'd say the most important thing is really the vehicle production and what the outlook is for 2027. Anything on North America that you want to touch on? Yeah. North America market has been solid. It's been solid for us. Our expectations is that it's a s itting here today, if you look at IHS outlook for North America production, I think it's up 1 point or so next year, up more than that this year, but we see continued relatively strong demand. Got it. Maybe just one more question on this topic, and we can revisit it later if we have time. Just on the export dynamic from China, the 8 million-10 million units run rate, can you help us understand how much exposure you have there today to those exports and relative to what's in the bookings mix and- Yeah. how that will ultimately translate into your export exposure in a couple of years or so? Yeah. We've made, again, maybe a little more context than you need. If you go back a few years ago, roughly 50% of our revenues with multinationals, 50% with the China local OEMs. We've been very focused on getting closer to overall production mix. We've made a lot of progress there. Sitting today, two-thirds of our revenues in China are with the local China OEMs, most of that with the top 5. We've been intentionally very focused on top 5 - 10 OEMs. With respect to where most of our content sits, most of it sits with domestic platforms, local OEM platforms that are exported out of China, or maybe I should start with total export platform revenues as a percent of our total China revenues is about 10% of what we do. I think today, if you look at production mix, what's produced, what's exported, it's closer to 20%-25% of production is today exported. Now we can discuss whether that's a bit inflated given the market dynamic right now, but that's where we sit. Bookings over the last couple of years have been very strong as it relates to export platforms, especially the last 18 months. We've seen a 30% increase from a growth rate standpoint in those bookings, and they're with players like BYD, like Geely, like Chery, those that are very focused on export markets. Well-positioned, but it's going to take a little bit of time for that to flow into revenue. Got it. As those, if we end up seeing, I would say, more mandates from the EU to ask these Chinese OEMs to localize production. Obviously, it's going to impact the European OEMs' share in the region, but how does that net impact look for Aptiv? Can you participate a lot in those localized production- Yes. decisions? So, listen, near term, we have a mix issue on platforms. A lot of that was focused on being with the right OEMs versus how do we have a balance between export mix and local mix. That's getting addressed. We've been working with players like BYD, like Chery, like others, actually across our two businesses in terms of how do we help them from a supply chain standpoint, how do we help them from a manufacturing standpoint as they look at South America or launch in South America, as they're launching production in Europe. It's an opportunity for us, right, given capabilities in China, and relationships, given capabilities and understanding of the regulatory requirements, the supply chain, the NCAP standards and other items as you think about other markets. So it presents an an incremental opportunity. We feel like we're well-positioned. I would say the top five China OEMs are very serious about expanding outside of China from a manufacturing standpoint. Europe hasn't resolved the whole requirement with respect to localized content that you're referring to. Our view is that gets resolved in the third or fourth quarter. It seems member states as well as the EU governing body are more aligned than what they've been in terms of what needs to happen and how it needs to get addressed. So that should present an opportunity for us. Understood. Moving to some of the ADAS and software discussion, it's one topic that I have been spending a lot of time on the last few months. Enterprise software revenue slipped a bit out of this year on just on timing. The underlying run rate seems like is still unchanged, and you're moving into more larger deals. Could you give us a sense of what visibility looks like in that pipeline and when you think software gets back to the mid-teens growth that you've targeted? Just generally how lumpy we should expect the quarter- Yeah. to be this? On the enterprise size, it can be lumpy. The embedded solutions, that's a market that tends to grow at 5%-10%, and I'm including automotive and non-automotive. Our software business has a very big position in the A&D space as an example. That's higher growth. That's selling RTOS solutions, Linux solutions, as well as hypervisor solutions for mission-critical applications. On the enterprise side, it's really taking what the business has historically done in the telecommunication space, which deals with effectively distributed server networks and enables overlay software that enables greater connectivity, greater management of those systems. So in addition to telco, retail networks, areas like that where you have multiple points or edges, and you need to distribute software and collect data and consolidate that data at an enterprise level is principally where we play. It's a big opportunity. It's a newer opportunity. As you said, it tends to be a lumpier sort of larger contracting cycle. So that's something that we'll try to give as much visibility to investors as we possibly can. We operate off a funnel, as you can imagine, in terms of who are the customers, what are the opportunities. As time plays out, obviously, we get more visibility and greater understanding to the timing. Understood. Moving to the automotive, just the ADAS software side. You said bulk of the 2026 Gen 6 ADAS bookings carry both your hardware and software. That several OEMs who attempt to broad-based in-house software have come back to suppliers. Could you shed some light on where that trend is strongest by either region or any customer categories? Yeah. I'm not sure I could break it down by region. I should start with, listen, our strategy in our business is how do we enable our customers to do what they want and what they need. We very much have an open architected approach. We build platforms. We try to sell full system solutions. They're designed to be more cost-effective, but they're also designed to be flexible. Some customers don't want a full system solution. They want a part of a solution. The byproduct of developing full system solutions is, in our view, each part or each component, whether it's hardware or software, tends to be optimized. We're very focused on performance and cost. Our customers are under pressure. We understand that. We want to give them cost-effective solutions. We have customers who buy the full platform solution, from the advanced compute to the sensor suite, to our full software stack, including the RTOS or middleware. That's the case in China, it's the case in Europe, it's the case with U.S. We have others who buy parts, and it may be the bulk of our hardware and software suite, but there's a part of the software stack that they want to do. Maybe there are certain features that they want integrated into their solution. We have customers that we do that for. We have other customers who have invested in developing internal capabilities, and they're looking at an optimized sensor suite. It may be the camera solution, the radar solution, could be the sensor fusion as a part of that. That's what we try to bring. As it relates to OEMs that make decisions in reverse course, I think it's natural, given content growth in the car, especially as it relates to software, that our customers have an interest in controlling more of that. I think that's natural. I think it's natural. Given the size of that space, there's an opportunity for them to do that. Some have done that reasonably successfully. Some have had a very difficult time doing it, and you've read about them in the newspaper. Yeah. Again, we're here to enable. Our view is just given the size of our business across regions, across OEMs, across platforms, that intuitively we should be delivering more higher-performing, more cost-effective solutions than anyone developing things internally. Sometimes our OEM customers, they'll make decisions that are different from what we'd recommend. Again, we're there to enable them in their decision-making, whatever decision they made. If they stub their toe, we're here to support them in whatever way we can. I would say, typically they ask that question, across virtually all the OEMs that we're delivering solutions to in our Intelligent Systems business, we're selling more software today than we did a year ago or two years ago. Part of that is more software is going into the car. Part of that is our customers are looking for ways to enhance an existing system without having to go through the old model in our industry, which was rip and replace. That is what we are trying to drive and what we are trying to enable. Within that stack, are there one or two areas where the OEMs are looking to control more? Is it more on the perception planning side? Is it more on the middleware side? Does that change the economics for you if they are focused on one particular area? It really varies. I do not see a lot who are, for example, focused on developing. They have to have their own middleware when you think about what middleware actually enables in the strategic requirement from an OEM standpoint. I think you see some OEMs now, as you look at large language models, as you look at AI, are there certain things that they could be doing or should be doing as it relates to those sorts of new developments. So I would say that would tend to be, whether it is internal or it is with external partners, as you think about applications like using end-to-end or developing end-to-end ADAS systems using AI and large language models. Some are doing that. Some are doing that with partners. We are developing our own end-to-end solution that our view is, will be more cost-effective. I think when you look at that market today, it is maybe 10% of the total ADAS market, as an example. It is a very costly portion of the overall market. So for us right now, in terms of near-term monetization, it is less of a priority, but it is important to have the capability. It is important also for us to work with those OEMs so that we validate our perception system, whether it is vision or it is radar, our camera systems, our sensor fusion, because you think of those sorts of systems, their given cost, they are 2x-3x the number of perception devices, cameras, radars, things like that. So it is an incremental content opportunity for us. It is a mix of hardware as well as software. Understood. That's clear. Maybe I'll just pause for a second here to see if anyone in the audience has any questions. I think there's one there. You can just use the mic. Kevin, how are you doing? Just on the M&A front and what you're kind of seeing or not seeing, how does the landscape look for some deals to perhaps grow the non-auto side? I think you made it pretty clear on the last call that capital allocation will go to buy back the stock if you don't see anything, but just curious on how you're thinking about that and what the landscape looks like? Yeah. Listen, as people know, historically, we've been active M&A-wise. Listen, there's a recognition of where our multiple sits today and our view of the fact that our stock is significantly undervalued. Our focus is on repurchasing stock. As we communicated on our earnings call, effectively 100% of free cash flow, a little less, will be used to repurchase stock this year. We made a commitment on a go-forward basis to at least deploy 50% of free cash flow to repurchasing stock. I would say that's the biggest priority from a capital. Just the M&A funnel by virtue of how we've operated historically, we have visibility to a lot that's out there. Our priority at this point in time doesn't sit in the M&A area. Thank you. Great. Any other questions? Maybe just a last point on the ADAS side. Can you talk us through your relationship with NVIDIA? We get this question a lot. Are they a partner? Are they a competitor? They're doing their own thing around the architectures and the software side of things. Just curious how that relationship, where do you see that progressing? Yeah. I want to go back and just respond also just to the question, if I can. I promise I will answer the question he asked. Listen, we do have a small funnel of very small transactions. If you read our Q, we announced we acquired a company in the interconnect space, which is our priority, has been our priority from an M&A standpoint. Purchase price was roughly GBP 20 million, so it augmented our product portfolio. I would call that less M&A. It is basically, you could argue from an organic standpoint, it is just accelerating the build-out of our product portfolio in A&D. I think you could see us continue to do very small deals like that. We partner with NVIDIA across multiple markets, on the industrial side. We have a great relationship there. We are working with them on the automotive side as well. Again, I guess, in certain aspects, you could consider them other areas we compete, but there are also areas where they enable, we enable. Bless you. We want to enable our customers to do through an NVIDIA solution, if that is through a Wayve sort of solution. Those are places that we have relationships and players that we are working with. Understood. Moving to the non-auto side, just following up on that question. You have these robotics partnerships that you have announced. One of them is converted to a commercial award. In drones, you have booked your first award, worth $500 million of lifetime revenue. Can you walk us through how the $300 million annualized revenue ambition builds from here? What is the content per unit and just volume assumptions that are underneath those targets? Yeah. On our earnings call, we talked about two recent commercial awards, one on the robotics side, one on the drone side. A view that based on our commercial awards to date, based on those areas where we are close to commercial awards, an outlook that a few years out from where we sit today, we should have roughly $300 million in those two. What we are selling in those markets is basically a slight augmentation of our existing product portfolio. So it is high-speed cable assemblies and interconnects. It is perception systems, so camera or radar solutions. It is advanced compute. That is consistent in the robotics space and the drone space. Application is different, the technology is somewhat different, but that is the area that we are selling. Our focus on the drone side is on a tradable drone. Average price of a tradable drone is, call it $50,000, maybe $60,000. Content per unit is about $5,000, so significant content. That's in the areas that we play. Content per unit in the robotic space is actually very similar. Robotic space, we're focused on AMRs, principally. We're doing work and are close to commercial agreements with a couple of the players in the humanoid space. We think that's an opportunity. We just think from a volume standpoint, that's further out in terms of developing some of the technology required to make those really useful tools. On the drone side, that's an area where when you think about ADAS autonomy, when you think about perception systems compute, when you think about our natural skill set in terms of industrializing solution and driving down costs of bills and material, it's just what we do every day in our traditional market. On top of it, we have a global supply chain. It's with global visibility that's regionally executed. Given the customers in that particular space, certainty of supply, where products come from, a fairly nascent industry where focus to date has been more on development of the technology and producing of the product versus how do you optimize and industrialize. We bring a lot of incremental value in addition to the underlying technology. We're working with several players in that space. I'd say the biggest near-term revenue opportunity, given there isn't a big population of players will be there. I'm confident of that. The opportunities are both Europe and U.S.-based. Again, it's a mix of our perception systems and our advanced compute. Got it. Just one more on non-auto, just energy storage and data center. $50 million today. You've described it as ramping up much faster than automotive, obviously, smaller base over the next three years. Could you walk us through where you win against some of the incumbents in the space? How should we think about the capital intensity of ramping that up? In those particular spaces, on the energy storage side, we've had relationships with a large U.S. OEM that's global, and is one of the leading EV manufacturers on the energy storage area for quite some time. That has been by and large, taking our interconnect product portfolio, high voltage interconnect product portfolio, and that's the content that we add. The place that we sit is really on power, right? It's where our strongest capabilities are. So we have those learnings. Over the last year, we've been very focused on how do we take our capabilities and how do we explore opportunities outside of what our OEMs are, automotive OEMs, are doing with respect to some of their more recent initiatives. So we're working with them, but how do we go beyond and how are we dealing with the infrastructure players, the data center players, others? We have gained, again, a lot of traction. It is by and large with our existing product portfolio, some modifications. It is not investing in machinery and equipment, it is not investment in additional capacity. It is really investment in slightly different go-to-market experience and capabilities, some marketing activities. It is a fairly low capital way of diversifying our revenues in markets that are higher margin, driving incremental revenue, and incremental growth opportunities. Got it. Maybe you have a minute left. Just wanted to follow up on the portfolio question earlier. I felt like the commentary in your deck this time was a little more deliberate in terms of potential portfolio pruning opportunities. I am curious if there has been a change in thinking there, and how should we think about how the portfolio evolves? Yeah, it was not intended to be a change in thinking. Listen, we have done over the last roughly decade, we have done two spins, I think three divestitures. So we are actively always trying to evaluate where the market is, where we sit, and where growth opportunities are. I would call it a reminder, in light of where market dynamics are, that that is something that we continue to do. That we continue to do, and continue to focus on, hey, where are the areas that we can work to drive value creation? We are having challenges right now as it relates to market and market mix. We view it as a big opportunity to buy back stock, which is the question about capital allocation. That is where our focus is certainly in the near term, and then commitments in terms of our view and over the medium term. We will continue to look at the portfolio and how do we continue to strengthen in automotive, outside of automotive, based on the asset base that we have, and to the extent we can do some very small bolt-on acquisitions to bring into the mix to accelerate or build out our product areas and areas where we have existing business. Those are things that we will. Understood. Great. That is all the time we have. Thanks, Kevin. Thanks. Thanks, everyone, for listening.