The PWR Holdings Ltd (ASX: PWH) share price is sinking on Friday morning.

At the time of writing, the automotive cooling products provider's shares have dropped more than 14% to $7.11

This follows the release of the company's full year results after market close yesterday.

PWR Holdings' revenue declines and dividend sliced

• Revenue: $130.1 million, down 6.7% year on year.
• Operating Earnings (EBITDA): $25.5 million, down 43.7%; EBITDA margin 19.6% vs 32.4% in FY24.
• Net Profit After Tax (NPAT): $9.8 million, down 60.6%.
• Earnings per share (EPS): 9.71 cents, down 60.5%.
• Cash conversion: 136% (vs 86% in FY24).
• Net debt: $8.1 million; $25m undrawn facilities.
• Dividend: 2 cents fully franked (same as interim); bringing the total FY25 dividends to 4 cents, down 71.4% on FY24

What moved inside the business

FY25 was framed as a transition year: revenue landed within earlier guidance; profit metrics contracted due to mix and investment; and cash generation remained strong. The company advanced its capacity build‑out and accreditations while continuing to grow in A&D and maintaining momentum in Motorsport, offset by a softer Aftermarket and the step‑down in OEM following completed programs.

• Aerospace & Defence (A&D): Revenue up 28% year on year, supported by more "approved supplier" relationships. PWR notes A&D revenue has grown from $0.6m in FY20 to $26.9m in FY25.
  
• Motorsport: Revenue is up 4%, and demand is strong for emerging technologies such as micro matrix heat exchangers and cold plates.
  
• OEM: Down on the prior year following completion of two high‑value programs. Aftermarket softened amid a global decline and a deliberate pricing reset in early CY25 to improve margins.

Outlook and management commentary

In the announcement, PWR Holdings says it is targeting margin improvement over three to five years as volumes rise and productivity benefits flow. For FY26, a modest group margin improvement is expected, partly offset by approximately $6.1 million in expenditures for the new HQ, US tariffs (~$1.5m), US cyber accreditation (~$0.8m), and a CEO search (~$0.5m).

Acting CEO Matthew Bryson summed up the year as follows:

Our PWR DNA was on full display over the past year, with a tremendous effort put in by all to transition to our new headquarters whilst delivering a revenue result within our guidance range. This sets us up for a positive 2026 year where we look forward to leveraging the increased capability and capacity we have across the globe to deliver great outcomes for our customers. The team are busy working with our F1 customers for 2026 regulation changes and continuing to expand our relationships in the Aerospace and Defence arena and we look forward to commercialising our latest product developments.