Sensata Technologies Holding plc (ST)

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations supplements should be read in conjunction with the discussion in Item 7: Management's Discussion and Analysis of Financial Condition and Results of Operations included in our 2025 Annual Report. The following discussion should also be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto (the "Financial Statements") included elsewhere in this Report. Amounts and percentages in the following discussions and tables have been calculated based on unrounded numbers. Accordingly, certain amounts may not appear to recalculate due to the effect of rounding.

Overview

Net revenue for the three months ended June 30, 2026 was $990.6 million, an increase of 5.0% on a reported basis compared to $943.4 million in the prior period. Excluding an increase of 1.1% attributed to changes in foreign currency exchange rates and a decrease of 0.5% related to the effect of disposals, net revenue increased 4.4% on an organic basis. Organic revenue growth (or decline), discussed throughout this Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations (this "MD&A"), is a financial measure not presented in accordance with U.S. GAAP. Refer to Non-GAAP Financial Measures included elsewhere in this MD&A for additional information regarding our use of organic revenue growth (or decline). Net revenue for the six months ended June 30, 2026 was $1,925.4 million, an increase of 3.8% on a reported basis compared to $1,854.6 million in the prior period. Excluding an increase of 1.6% attributed to changes in foreign currency exchange rates and a decrease of 2.1% related to the effect of disposals, net revenue increased 4.3% on an organic basis.

Operating income for the three months ended June 30, 2026 was $165.4 million (16.7% of net revenue), an increase of $27.3 million, or 19.8%, compared to operating income of $138.1 million (14.6% of net revenue) in the three months ended June 30, 2025. Operating income for the six months ended June 30, 2026 was $307.0 million (15.9% of net revenue), an increase of $46.7 million, or 18.0%, compared to operating income of $260.3 million (14.0% of net revenue) in the six months ended June 30, 2025. Refer to Results of Operations included elsewhere in this MD&A for additional discussion of our earnings results for the three and six months ended June 30, 2026 compared to the prior periods.

We generated $332.5 million of operating cash flows in the six months ended June 30, 2026, ending the quarter with $403.3 million in cash and cash equivalents. In addition to $401.1 million used to pay debt, in the six months ended June 30, 2026, we used cash of approximately $41.5 million for capital expenditures, $34.9 million for payment of dividends, and $25.1 million for share repurchases as part of our share repurchase plan.

23

Table of Contents

Results of Operations

The table below presents our historical results of operations, in millions of dollars and as a percentage of net revenue, for the three and six months ended June 30, 2026 compared to the three and six months ended June 30, 2025. We have derived the results of operations from the Financial Statements included elsewhere in this Report. Amounts and percentages in the table below have been calculated based on unrounded numbers. Accordingly, certain amounts may not appear to recalculate due to the effect of rounding.

Net Revenue

Net revenue for the three months ended June 30, 2026 increased 5.0% compared to the prior period. Net revenue increased 4.4% on an organic basis, which excludes an increase of 1.1% attributed to changes in foreign currency exchange rates and a decrease of 0.5% due primarily to the effects of discontinued product lines in 2025.

Net revenue for the six months ended June 30, 2026 increased 3.8% compared to the prior period. Net revenue increased 4.3% on an organic basis, which excludes an increase of 1.6% attributed to changes in foreign currency exchange rates and a decrease of 2.1% due primarily to the effects of the divestiture of the Magnetic Speed and Position Business ("MSP Business") in the first quarter of 2025. Refer to Note 16: Disposals of the Financial Statements, included elsewhere in this Report, for additional information on the sale of the MSP Business.

Automotive

Automotive net revenue for the three months ended June 30, 2026 increased 3.3% compared to the prior period. Excluding an increase of 1.5% attributed to changes in foreign currency exchange rates, Automotive net revenue increased 1.8% on an organic basis compared to the prior period, which was primarily due to content growth in our Automotive business segment.

Automotive net revenue for the six months ended June 30, 2026 increased 1.4% compared to the prior period. Excluding an increase of 2.0% attributed to changes in foreign currency exchange and a decrease of 2.0% due to the effects of a divestiture, Automotive net revenue increased 1.4% on an organic basis compared to the prior period, which was primarily due to content growth in our Automotive business segment.

Industrials

Industrials net revenue for the three months ended June 30, 2026 increased 2.9% compared to the prior period. Excluding an increase of 0.9% attributed to changes in foreign currency exchange and a decrease of 2.2% due to the effect of discontinued product lines, Industrials net revenue grew 4.2% on an organic basis compared to the prior period, which primarily reflects content growth in our Industrials business segment.

Industrials net revenue for the six months ended June 30, 2026 increased 0.7% compared to the prior period. Excluding an increase of 1.1% attributed to changes in foreign currency exchange and a decline of 2.6% due to the effect of divestitures,

24

Table of Contents

Industrials net revenue grew 2.2% on an organic basis compared to the prior period, which primarily reflects content growth in our Industrials business segment.

Aerospace, Defense, and Commercial Equipment

Aerospace, Defense, and Commercial Equipment net revenue for the three months ended June 30, 2026 increased 11.5% compared to the prior period. Excluding an increase of 0.6% attributed to changes in foreign currency exchange rates, Aerospace, Defense, and Commercial Equipment net revenue grew 10.9% on an organic basis due to growth in our commercial equipment and aerospace business and product mix in the markets we serve.

Aerospace, Defense, and Commercial Equipment net revenue for the six months ended June 30, 2026 increased 13.1% compared to the prior period. Excluding an increase of 1.2% attributed to changes in foreign currency exchange rates and a decline of 1.8% due to the effects of a divestiture, Aerospace, Defense, and Commercial Equipment net revenue grew 13.7% on an organic basis due to growth in our commercial equipment and aerospace business and product mix in the markets we serve.

Operating Costs and Expenses

Operating costs and expenses for the three and six months ended June 30, 2026 and 2025 are presented, in millions of dollars and as a percentage of net revenue, in the following table. Amounts and percentages in the table below have been calculated based on unrounded numbers. Accordingly, certain amounts may not appear to recalculate due to the effect of rounding.

Cost of revenue

For the three months ended June 30, 2026, cost of revenue as a percentage of net revenue decreased from the prior period, primarily due to organic revenue growth, partially offset by the net impacts of inflation on material and logistics costs and tariffs.

For the six months ended June 30, 2026, cost of revenue as a percentage of net revenue decreased from the prior period, primarily due to the favorable effects of the MSP divestiture in the first quarter of 2025 and organic revenue growth, partially offset by the net impacts of inflation on material and logistics costs and tariffs.

Research and development expense

For the three and six months ended June 30, 2026, research and development expense did not fluctuate materially from the prior period.

Selling, general and administrative expense

For the three and six months ended June 30, 2026, selling, general and administrative expense did not fluctuate materially from the prior period.

25

Table of Contents

Amortization of intangible assets

For the three and six months ended June 30, 2026, amortization of intangible assets decreased from the prior period, primarily due to the effect of amortization of intangible assets in accordance with their expected economic benefit, which generally results in acceleration of amortization expense in the early years of the life of an intangible asset.

Restructuring and other charges, net

In the three and six months ended June 30, 2026, restructuri

[Excerpt truncated for page length; source filing is linked above.]

ITEM 7.     MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis is intended to help the reader understand our business, financial condition, results of operations, and liquidity and capital resources. You should read the following discussion in conjunction with Item 1: Business and our Financial Statements, each included elsewhere in this Annual Report on Form 10-K (this "Report").

The statements in this discussion regarding industry outlook, our expectations regarding our future performance, liquidity and capital resources, and other non-historical statements are forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties including, but not limited to, the risks and uncertainties described in Item 1A: Risk Factors included elsewhere in this Report. Our actual results may differ materially from those contained in or implied by any forward-looking statements.

Overview

We innovate on behalf of our broad array of customers, solving some of their most difficult engineering challenges by providing sensors and sensor-rich solutions, electrical protection components and systems, and other products. Solving these mission-critical challenges enables us to deliver differentiated value for both our customers and shareholders, while also investing in our growth opportunities and our people. Refer to Item 1: Business included in this Report for additional discussion on our business.

We believe regulatory requirements for safer vehicles, higher fuel efficiency, and lower emissions, as well as customer demand for operator productivity and convenience, drive the need for advancements in powertrain management, efficiency, safety, and operator controls. These advancements lead to sensor growth rates that we expect to exceed underlying production growth in many of our key end markets, which we expect will continue to offer us significant growth opportunities.

Fiscal year 2025 highlights

In fiscal year 2025, we reduced our total gross debt by $354.0 million. These repayments brought our gross outstanding indebtedness at December 31, 2025 to $2.9 billion, representing a net leverage ratio of 2.7x, compared to gross indebtedness of $3.2 billion as of December 31, 2024 (representing a net leverage ratio of 3.0x). Net leverage ratio, discussed throughout this Item 7: Management's Discussion and Analysis of Financial Condition and Results of Operations (this "MD&A"), is a financial measure not presented in accordance with U.S. generally accepted accounting principles ("GAAP"). Refer to Non-GAAP Financial Measures included elsewhere in this MD&A for additional information related to our use of net leverage ratio.

Fiscal year 2025 financial summary

Our consolidated revenue decreased 5.8% in fiscal year 2025 from the prior year. Excluding an increase of 0.6% attributed to changes in foreign currency exchange rates and a decrease of 6.5% due to the effect of divestitures, net revenue increased 0.1% on an organic basis. Organic revenue growth (or decline), discussed throughout this MD&A, is a financial measure not presented in accordance with U.S. GAAP. Refer to Non-GAAP Financial Measures included elsewhere in this MD&A for additional information related to our use of organic revenue growth (or decline). Organic revenue growth was primarily driven by content growth in our Industrials business segment.

Operating income for fiscal year 2025 increased $88.2 million, or 59.1%, to $237.5 million (6.4% of net revenue) compared to $149.3 million (3.8% of net revenue) in the prior year. This increase was primarily driven by $98.5 million of lower net restructuring and other charges, and a $65.5 million decrease in intangible asset amortization charges, partially offset by lower revenue and a $75.6 million increase in goodwill impairment charges in the current period. Refer to Results of Operations included elsewhere in this MD&A for additional discussion of our operating results for the year ended December 31, 2025.

We generated $621.5 million of operating cash flows in fiscal year 2025, ending the year with $573.0 million in cash. In addition to $352.2 million of cash used to pay debt, in fiscal year 2025, we used cash of approximately $120.6 million for share repurchases and $70.4 million for payment of dividends. In fiscal year 2026, we will continue to execute our capital allocation strategy that is currently designed to reduce our leverage and return capital to shareholders through our dividend and opportunistic share repurchases. This strategy reduces risk in our capital structure, lowers interest expense, and improves net income and earnings per share. We expect improving free cash flow (net cash provided by operating activities less capital

29

Table of Contents

expenditures) to further reduce our net leverage ratio, and over time, we believe higher profitability will naturally allow net leverage to decline and returns on invested capital to improve. Refer to Non-GAAP Financial Measures included elsewhere in this MD&A for additional information related to our use of free cash flow.

Factors Affecting Our Operating Results

The following discussion describes components of the consolidated statements of operations as well as factors that impact those components. Refer to Note 2: Significant Accounting Policies of our Financial Statements included elsewhere in this Report, and Critical Accounting Policies and Estimates included elsewhere in this MD&A for additional information related to the accounting policies and estimates made related to these components. Refer to Results of Operations included elsewhere in this MD&A for discussion of the actual impact on our financial statements of these factors.

Net revenue

We derive a significant portion of our revenue from sales into the automotive end market, and conditions in the automotive industry can have a significant impact on the amount of revenue that we recognize. Outside of the automotive industry, we sell our products and solutions to end-users in a wide range of industries, end markets, and geographic regions, and the drivers of demand for these products and solutions vary considerably and are influenced by industry, market, or geographic conditions. Changes in demand for these products and solutions could impact our revenue materially. Our overall net revenue is impacted by various factors, which we characterize as "organic" or "inorganic." Inorganic factors include fluctuations in foreign currency exchange rates and the net effect of acquisitions and divestitures. Organic factors include fluctuations in overall economic activity within the industries, end markets, and geographic regions in which we operate, which we term market growth. For more information about revenue risks relating to our business, refer to Item 1A: Risk Factors included elsewhere in this Report.

Cost of revenue

We manufacture most of our products, subcontracting only a limited number to third parties. As such, our cost of revenue consists principally of production materials costs and employee costs. Our remaining cost of revenue primarily consists of: gains and losses on certain foreign currency forward contracts that are designated as cash flow hedges; costs to import raw materials, such as tariffs; depreciation of fixed assets used in the manufacturing process; and other general manufacturing expenses.

Research and development expense

Research and development ("R&D") expense consists of costs related to product design and development. Our development expense is typically associated with engineering core technology platforms to specific applications and engineering major upgrades that improve the functionality or reduce the cost of existing products. Costs related to modifications of existing products for use by new and existing customers in familiar applications are presented in cost of revenue and are not included in R&D expense.

Selling, general and administrative expense

Selling, general and administrative ("SG&A") expense consists of all expenditures incurred in connection with the sale and marketing of our products, as well as administrative overhead costs, including: salary and benefit costs for sales and marketing personnel and administrative staff; share-based compensation expense; charges related to the use and maintenance of administrative offices, including depreciation expense; other administrative costs, including expenses relating to information systems, human resources, and legal, finance, and accounting services; other selling and marketing related costs, such as expenses incurred in connection with travel and communications; and transaction costs associated with acquisitions.

Depreciation expense

Depreciation expense includes depreciation of property, plant and equipment, which includes assets held under finance lease and amortization of leasehold improvements. Depreciation expense is included in either cost of revenue or SG&A expense depending on the use of the asset as a manufacturing or administrative asset.

Amortization expense

Acquisition-related definite-lived intangible assets are amortized on an economic-benefit basis, according to the useful lives of the assets, or on a straight-line basis if a pattern of economic benefits cannot be reliably determined.

30

Table of Contents

Restructuring and other charges, net

Restructuring charges consist of severance, outplacement, other separation benefits, and facility and other exit costs. These charges may be incurred as part of an announced restructuring plan or may be individual charges recognized related to acquired businesses or the termination of a limited number of employees that do not represent the initiation of a larger restructuring plan.

Restructuring and other charges, net also includes the gain or loss, net of transaction costs, from the sale of businesses, expense incurred from acquisition-related compensation arrangements, and other operating income or expense that is not presented elsewhere in operating income.

Interest expense

Interest expense relates to interest owed on our gross outstanding indebtedness, and varies according to the balances of, and the interest rates assigned to, this indebtedness.

Interest income

Interest income relates to interest earned on our cash and cash equivalent accounts, and varies according to the balances in, and the interest rates provided by, these accounts.

Other, net

Other, net primarily includes gains and losses associated with the remeasurement of monetary assets and liabilities denominated in a currency that is not the functional currency, changes in the fair value of derivative financial instruments not designated as cash flow hedges, mark-to-market gains and losses on investments, net (gains) or losses on debt financing transactions, and net periodic benefit cost, excluding service cost.

Refer to Note 6: Other, Net of our Financial Statements included elsewhere in this Report for additional information related to the components of other, net. Refer to Item 7A: Quantitative and Qualitative Disclosures About Market Risk included elsewhere in this Report for additional information related to our exposure to potential changes in foreign currency exchange rates and commodity prices. Refer to Note 14: Debt of our Financial Statements included elsewhere in this Report for additional information related to our debt financing transactions.

Provision for (or benefit from) income taxes

The provision for (or benefit from) income taxes reflects taxes on our earnings in the various jurisdictions in which we operate and can vary significantly from period to period. Our income tax provision (or benefit) consists of current tax expense (or benefit), which represents taxes payable based on taxable income for the period, and deferred tax expense (or benefit), which results from changes in deferred tax assets and li

[Excerpt truncated for page length; the complete text is on the linked full-MD&A page.]