Ford’s Record Revenue and Challenges in Q3 2025

Ford Motor Company ((F)) has held its Q3 earnings call. Read on for the main highlights of the call.

Ford Motor Company recently held its third-quarter 2025 earnings call, revealing a strong financial performance marked by record revenue and significant cost improvements. The sentiment was largely positive, with robust growth in Ford Pro and software subscriptions. However, challenges such as the Novelis fire and ongoing losses in the Model e division were acknowledged, alongside some relief from positive tariff developments.

Record Revenue Achieved

Ford reported a record $50.5 billion in revenue for the third quarter of 2025, showcasing the company’s robust financial health and market presence. This achievement underscores Ford’s ability to capitalize on its strategic initiatives and market demand.

Strong Ford Pro Performance

Ford Pro demonstrated impressive growth, with an 11% increase in revenue and an EBIT of $2 billion, maintaining a strong double-digit margin. This performance highlights Ford Pro’s pivotal role in the company’s overall success and its contribution to Ford’s bottom line.

Significant Cost Improvements

The company achieved $1 billion in cost improvements this year, excluding tariff impacts. This reflects Ford’s ongoing efforts to streamline operations and enhance efficiency, contributing to its financial resilience.

Increase in Software Subscribers

Ford Pro’s paid subscriptions grew by 8%, reaching 818,000 subscribers. This growth in software subscriptions indicates Ford’s successful expansion into digital services, providing a steady revenue stream.

Positive Tariff Developments

Recent policy changes have allowed Ford to offset $1 billion in tariffs, reducing the tariff headwind from $2 billion to $1 billion for 2025. This development offers some financial relief and supports Ford’s cost management strategies.

Strong Cash Flow

Ford reported an adjusted free cash flow of $4.3 billion in the third quarter, with $5.7 billion year-to-date. This strong cash flow position enhances Ford’s financial flexibility and ability to invest in future growth.

Novelis Fire Impact

The Novelis fire in Oswego, New York, is expected to result in a $1.5 billion to $2 billion EBIT headwind and a $2 billion to $3 billion free cash flow headwind in Q4 2025. This incident poses a significant challenge to Ford’s short-term financial outlook.

Model e Losses

Model e reported a year-to-date loss of $3.6 billion, driven by $3 billion losses from first-generation products and investments in next-gen vehicles. These losses highlight the challenges Ford faces in its electric vehicle segment.

Ongoing Tariff Costs

Despite recent improvements, tariff impacts remain a $1 billion net headwind for 2025. This ongoing challenge underscores the complexities of operating in a global trade environment.

Potential Chip Supply Disruption

Concerns about potential production losses in Q4 due to the Nexperia chip impact, which is an industry-wide issue, were discussed. This potential disruption could affect Ford’s production capabilities and market supply.

Forward-Looking Guidance

Looking ahead, Ford revised its full-year adjusted EBIT guidance to between $6 billion and $6.5 billion, reflecting adjustments for the Novelis fire and a $1 billion net headwind from tariffs. The company also expects adjusted free cash flow to be between $2 billion and $3 billion for 2025. Ford remains committed to cost improvements, planning a $1 billion cost reduction in 2025, excluding tariffs, with further improvements anticipated in 2026.

In conclusion, Ford’s third-quarter earnings call highlighted a strong financial performance with record revenue and significant cost improvements. While challenges such as the Novelis fire and Model e losses remain, positive developments in tariff offsets and strong cash flow provide a solid foundation for future growth. Investors will be keenly watching Ford’s strategic moves and market conditions as the company navigates these challenges.