Strattec Security Corporation reported a solid second quarter of fiscal 2025, achieving meaningful top-line momentum and notable margin and cash-flow improvements as part of a broader transformation plan. Revenue reached $129.9 million in Q2, up 9.6% year over year, driven by strength in higher-value content categories such as Power Access and engineered latches, while legacy keys/locksets declined. Gross profit rose to $17.2 million and gross margin expanded to 13.2%, aided by favorable FX and higher volumes, partially offset by higher labor costs and a one-time prior-year pricing recovery. Management emphasized ongoing cost-optimization initiatives, including a $1.2 million annualized savings program from Milwaukee operations and aggressive reduction of preproduction tooling balances (down $10.5 million since the start of the year).
Management also highlighted the strategic transformation underway—stabilizing the business, optimizing costs, and evaluating the product portfolio. The company reported $8.0 million of adjusted EBITDA for the quarter (6.1% adjusted EBITDA margin) and presented two non-GAAP measures to better illustrate ongoing profitability as investments in people, processes, and pricing actions unfold. Substantial cash generation continued, with $9.4 million of operating cash flow and free cash flow of approximately $8.5 million, contributing to a cash balance of $42.6 million at quarter-end. While near-term tariffs and macro headwinds present risks, Strattec remains focused on footprint optimization, pricing discipline, and commercial acceleration to support long-term value realization for shareholders.