FORD MOTOR CO Annual Report Summary for Investors

Ford Motor Company (NYSE: F) navigated a dynamic automotive landscape in fiscal year 2025, as detailed in its latest annual report. This summary highlights the company's key financial results, strategic moves, operational achievements, and future outlook for investors.

Business Overview

Ford Motor Company (NYSE: F) operates as a global automotive and mobility leader. Ford designs, manufactures, markets, and services a full range of Ford trucks, utility vehicles, vans, and cars, alongside Lincoln luxury vehicles. It also offers financial services through Ford Credit. The company maintains significant manufacturing, distribution, and sales operations across North America, Europe, South America, Asia Pacific, and Africa.

Ford structures its core automotive business into three distinct segments:

• Ford Blue: Focuses on iconic internal combustion engine (ICE) and hybrid vehicles.
• Ford Pro: Dedicated to commercial vehicles and services.
• Ford Model E: Drives the development and production of electric vehicles.

Ford aims to lead the electric vehicle revolution while strengthening its traditional and commercial vehicle businesses.

Financial Performance & Key Metrics

Ford Motor Company achieved robust revenue growth in fiscal year 2025. Total sales climbed to $177.3 billion, a 2.9% increase from $172.3 billion in 2024. This represents an 8% jump from $164.2 billion in 2023, showcasing sustained demand across its product portfolio.

Despite strong top-line growth, substantial investments and losses in its electric vehicle (EV) division significantly impacted overall profitability. Ford reported net income of $5.2 billion for 2025, resulting in diluted earnings per share (EPS) of $1.30. (EPS indicates how much profit the company made per outstanding share). This marks a decrease from 2024's net income of $7.8 billion and EPS of $1.95, primarily because the Ford Model E segment incurred an $8.0 billion pre-tax loss.

The company generated $6.5 billion in adjusted free cash flow in 2025, demonstrating its ability to fund strategic initiatives and maintain financial flexibility. Gross profit reached $36.3 billion, up from $35.3 billion in 2024, reflecting solid margins from its traditional internal combustion engine (ICE) and commercial vehicle businesses.

Segment Performance

Ford's operations are divided into three distinct automotive segments – Ford Blue, Ford Pro, and Ford Model E – along with its Ford Credit financial services arm.

• Ford Blue (Iconic ICE and Hybrid Vehicles) delivered strong results, achieving $95.0 billion in revenue and an operating profit of $9.5 billion, thanks to popular models and efficient operations.
• Ford Pro (Commercial Vehicles and Services) continued its impressive growth. This division generated $55.0 billion in revenue and a robust operating profit of $7.0 billion, benefiting from high-margin services and strong fleet demand.
• Ford Model E (Electric Vehicles) reported a significant pre-tax loss of $8.0 billion for the full year, including a $2.0 billion loss in Q4 2025. This loss reflects the intense investment Ford made in new product development, scaling production, and competitive pricing within the evolving EV market. Model E's revenue stood at $9.4 billion.
• Ford Credit increased its revenue to $17.9 billion in 2025 from $17.1 billion in 2024. It contributed $1.8 billion in pre-tax profit to the company's overall results, driven by strong financing income.

Management's Discussion and Analysis (MD&A) Highlights

Ford's management highlighted key factors influencing its 2025 performance. The company achieved robust revenue growth, reflecting strong demand for its diverse product portfolio, especially within the Ford Blue and Ford Pro segments.

Key achievements include:

• The Ford Pro commercial segment's continued strong performance and profitability.
• Successful launches of new or refreshed models, contributing to market share stability.
• Cost efficiency initiatives within Ford Blue, which boosted overall gross profit.

Under CEO Jim Farley, Ford is executing its "Ford+" strategic plan to transform the company into a more agile, customer-centric, and profitable enterprise. This strategy separates the automotive business into distinct units (Ford Blue, Ford Pro, Model E) to enhance focus, drive efficiency, and accelerate the transition to electric and connected vehicles. No major leadership changes occurred in 2025, indicating continuity in strategic direction. Ford focuses on optimizing its ICE portfolio for cash generation, scaling its commercial business, and aggressively investing in its EV future.

Substantial investments and operating losses within the Ford Model E segment significantly impacted overall profitability as the company scales its EV operations and navigates a highly competitive and evolving market. This, combined with intense EV competition and ongoing supply chain complexities, pressured overall profitability. Rising interest rates also affected financing costs and consumer affordability. Management actively manages capital allocation to balance these growth investments with maintaining a strong financial position. The company's generation of adjusted free cash flow underscores its operational efficiency and ability to self-fund strategic initiatives, even with significant capital expenditures directed towards future growth areas like electric vehicles and advanced technologies. Management continues to monitor global economic conditions, supply chain dynamics, and market trends, adapting its operational and strategic plans as needed.

Financial Health & Liquidity

Ford's balance sheet reveals a decrease in total cash and cash equivalents, falling from $40 billion at the end of 2024 to $35 billion by the end of 2025. At the same time, total debt increased from $128 billion to $134 billion. While Ford maintains a solid liquidity position with $50 billion in available liquidity (including cash and committed credit facilities), the trend of declining cash and rising debt requires close monitoring. Ford's net debt position (total debt minus cash) increased, reflecting ongoing capital expenditures and EV investments.

Key Risks

Investors should consider several key risks:

• The path to profitability for the Ford Model E division remains a significant concern; continued losses could weigh on overall financial performance and capital allocation.
• Intense competition in both traditional and EV markets, coupled with potential economic downturns affecting consumer demand, poses substantial threats.
• Persistent supply chain disruptions, especially for critical components like semiconductors and battery materials, remain a risk.
• Regulatory changes related to emissions and safety standards, along with fluctuations in commodity prices and labor relations, could impact operations and costs.
• Ford's increasing debt load and the need to manage interest rate risks also present financial challenges.

Competitive Positioning

Ford holds a strong competitive position as a global automotive leader, particularly in North American truck and commercial vehicle markets with its F-Series and Transit lines. In the EV space, Ford faces fierce competition from established players like Tesla and emerging startups. However, it leverages its manufacturing scale and brand loyalty to gain market share with models such as the F-150 Lightning and Mustang Mach-E. Its 'Ford Pro' segment offers a distinct competitive advantage by providing integrated solutions for commercial customers, setting it apart from many pure-play EV manufacturers.

Future Outlook

For fiscal year 2026, Ford's management anticipates continued revenue growth, though at a more moderate pace of 3-5%. Ford expects improved profitability from its Ford Blue and Ford Pro segments, projecting combined operating profits of $18-20 billion. These profits will help offset some of the ongoing losses from Model E. Ford plans significant ongoing investments in EV product development and manufacturing capacity, targeting breakeven profitability for Model E by late 2026 or early 2027.

Ford reaffirmed its commitment to returning value to shareholders. It has consistently paid a regular quarterly dividend of $0.15 per share and a supplemental dividend of $0.18 per share in Q1 of 2023, 2024, and 2025, with similar dividends already declared for Q1 2026. Capital expenditures are projected to remain elevated at approximately $8-9 billion for 2026, primarily for EV and software development.

Market Trends and Regulatory Changes

Ford navigates a dynamic market shaped by several key trends:

• The accelerated global shift towards electric vehicles continues to reshape the industry, driving significant investment while also creating intense competition and pricing pressures.
• Stringent global emissions regulations necessitate ongoing research and development (R&D) into cleaner powertrains and compliance with evolving standards.
• Supply chain resilience remains a critical focus, especially regarding semiconductor availability and raw materials for batteries, which can impact production volumes and costs.
• Economic conditions, including inflation, interest rates, and consumer confidence, directly impact vehicle demand and financing costs.
• The increasing integration of advanced technology (e.g., connectivity, autonomous driving features) requires continuous innovation and investment to remain competitive.