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STMicroelectronics Q2 2025 Financial Results July 24, 2025
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Some of the statements contained in this release that are not historical facts are statements of future expectations and other forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933 or Section 21E of the Securities Exchange Act of 1934, each as amended) that are based on management’s current views and assumptions, and are conditioned upon and also involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those anticipated by such statements due to, among other factors: • changes in global trade policies, including the adoption and expansion of tariffs and trade barriers, that could affect the macro-economic environment and may directly or indirectly adversely impact the demand for our products; • uncertain macro-economic and industry trends (such as inflation and fluctuations in supply chains), which may impact production capacity and end-market demand for our products; • customer demand that differs from projections which may require us to undertake transformation measures that may not be successful in realizing the expected benefits in full or at all; • the ability to design, manufacture and sell innovative products in a rapidly changing technological environment; • changes in economic, social, public health, labor, political, or infrastructure conditions in the locations where we, our customers, or our suppliers operate, including as a result of macro-economic or regional events, geopolitical and military conflicts, social unrest, labor actions, or terrorist activities; • unanticipated events or circumstances, which may impact our ability to execute our plans and/or meet the objectives of our R&D and manufacturing programs, which benefit from public funding; • financial difficulties with any of our major distributors or significant curtailment of purchases by key customers; • the loading, product mix, and manufacturing performance of our production facilities and/or our required volume to fulfill capacity reserved with suppliers or third-party manufacturing providers; • availability and costs of equipment, raw materials, utilities, third-party manufacturing services and technology, or other supplies required by our operations (including increasing costs resulting from inflation); • the functionalities and performance of our IT systems, which are subject to cybersecurity threats and which support our critical operational activities including manufacturing, finance and sales, and any breaches of our IT systems or those of our customers, suppliers, partners and providers of third-party licensed technology; • theft, loss, or misuse of personal data about our employees, customers, or other third parties, and breaches of data privacy legislation; • the impact of IP claims by our competitors or other third parties, and our ability to obtain required licenses on reasonable terms and conditions; • changes in our overall tax position as a result of changes in tax rules, new or revised legislation, the outcome of tax audits or changes in international tax treaties which may impact our results of operations as well as our ability to accurately estimate tax credits, benefits, deductions and provisions and to realize deferred tax assets; • variations in the foreign exchange markets and, more particularly, the U.S. dollar exchange rate as compared to the Euro and the other major currencies we use for our operations; • the outcome of ongoing litigation as well as the impact of any new litigation to which we may become a defendant; • product liability or warranty claims, claims based on epidemic or delivery failure, or other claims relating to our products, or recalls by our customers for products containing our parts; • natural events such as severe weather, earthquakes, tsunamis, volcano eruptions or other acts of nature, the effects of climate change, health risks and epidemics or pandemics in locations where we, our customers or our suppliers operate; • increased regulation and initiatives in our industry, including those concerning climate change and sustainability matters and our goal to become carbon neutral in all direct and indirect emissions (scopes 1 and 2), product transportation, business travel, and employee commuting emissions (our scope 3 focus), and to achieve our 100% renewable electricity sourcing goal by the end of 2027; • epidemics or pandemics, which may negatively impact the global economy in a significant manner for an extended period of time, and could also materially adversely affect our business and operating results; • industry changes resulting from vertical and horizontal consolidation among our suppliers, competitors, and customers; • the ability to successfully ramp up new programs that could be impacted by factors beyond our control, including the availability of critical third-party components and performance of subcontractors in line with our expectations; and • individual customer use of certain products, which may differ from the anticipated uses of such products and result in differences in performance, including energy consumption, may lead to a failure to achieve our disclosed emission-reduction goals, adverse legal action or additional research costs. Such forward-looking statements are subject to various risks and uncertainties, which may cause actual results and performance of our business to differ materially and adversely from the forward-looking statements. Certain forward-looking statements can be identified by the use of forward-looking terminology, such as “believes”, “expects”, “may”, “are expected to”, “should”, “would be”, “seeks” or “anticipates” or similar expressions or the negative thereof or other variations thereof or comparable terminology, or by discussions of strategy, plans or intentions. Some of these risk factors are set forth and are discussed in more detail in “Item 3. Key Information — Risk Factors” included in our Annual Report on Form 20-F for the year ended December 31, 2024 as filed with the Securities and Exchange Commission (“SEC”) on February 27, 2025. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this press release as anticipated, believed or expected. We do not intend, and do not assume any obligation, to update any industry information or forward-looking statements set forth in this release to reflect subsequent events or circumstances. Unfavorable changes in the above or other factors listed under “Item 3. Key Information — Risk Factors” from time to time in our Securities and Exchange Commission (“SEC”) filings, could have a material adverse effect on our business and/or financial condition. Forward looking information 2
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Highlights 3*Non-U.S. GAAP measure. See Appendix for additional information explaining why the Company believes these measures are important. • Net revenues of $2.77B came above the mid-point of our business outlook range, driven by higher revenues in Personal Electronics and Industrial, while Automotive was slightly below expectations. • Gross margin of 33.5% was in line with the mid-point of our business outlook range. • Y/Y Q2 net revenues decreased 14.4%, non-U.S. GAAP operating margin* decreased to 2.1% from 11.6% and non-U.S. GAAP net income* decreased to $57M from $353M. Q2 2025 • In Q225, our book-to-bill ratio remained above one for Industrial, while Automotive was below parity. Bookings continued to increase sequentially. • Outlook at the mid-point is for net revenues of $3.17B, decreasing 2.5% Y/Y and increasing 14.6% Q/Q. • Gross margin is expected to be about 33.5%; including about 340 bps of unused capacity charges. On a sequential basis, our Q3 gross margin will be negatively impacted by about 140 bps, mainly from currency effect and, to a lesser extent, the start of non-recurring cost related to our manufacturing reshaping program. Q3 2025 • Net revenues decreased 21.1% Y/Y , with a decrease in all reportable segments. • Non-U.S. GAAP operating margin* was 1.3% and non-U.S. GAAP net income* was $120M. H1 2025 • While we expect Q3 revenues to show a solid sequential growth enabling a continued Y/Y improvement, we are still operating amid an uncertain macroeconomic environment. Given these external factors, our priorities remain supporting our customers, accelerating new product introductions, and executing our company-wide program to reshape our manufacturing footprint and resize our global cost base.
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Q2 2025 Revenues dynamic Analog, Power & Discrete, MEMS and Sensors (APMS) Microcontrollers, Digital ICs and RF products (MDRF) % by reportable segments Others Analog products, MEMS and Sensors (AM&S) Power and discrete products (P&D) Embedded Processing (EMP) RF & Optical Communications (RF&OC) 41% 16% 31% 12% 0.1% Automotive Industrial Personal electronics Communications equipment & computer peripherals % by end market 40% 22% 23% 15% -24%Y/Y -8%Y/Y - ~5%Y/Y - ~5%Y/Y -15.2%Y/Y -22.2%Y/Y -6.5%Y/Y -17.9%Y/Y +14% Q/Q +15% Q/Q +3% Q/Q +6% Q/Q +5.9% Q/Q +12.9% Q/Q +14.1% Q/Q +10.1%Q/Q 4
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% by shipment location % by customer type Q2 2025 Revenues 5 62%20% 18% Americas EMEA Asia Pacific 46% 26% 28% Top 10 OEMs Other OEMs Distribution % by region of origin 32% 26% 42% Americas EMEA Asia Pacific
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Q2 2025 Financial highlights 6 30% 34% 38% 42% Q224 Q125 Q225 2.0 2.5 3.0 3.5 Q224 Q125 Q225 0% 5% 10% 15% Q224 Q125 Q225 0 100 200 300 400 Q224 Q125 Q225 Revenues = $2.77B Non-U.S. GAAP Operating Margin* = 2.1% Gross Margin = 33.5% Non-U.S. GAAP Net Income* = $57M -14.4% Y/Y *Non-U.S. GAAP measure. See Appendix for additional information explaining why the Company believes these measures are important.
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Revenues 7 Q325 Outlook for net revenues of $3.17B Up Q/Q by about 14.6% (+/- 350 bps) Down Y/Y by about 2.5% at mid-point Q225 Revenues = $2.77B Q225 revenues down 14.4% Y/Y • AM&S declined 15.2%, P&D 22.2%, EMP 6.5% and RF&OC 17.9%, • By end market, Automotive declined 24%, Industrial 8%, Personal Electronics 5% and CECP 5%, • Revenues to OEMs and Distribution decreased 15.3% and 12.0%, respectively. Q225 revenues up 9.9% Q/Q • 220 bps better than the mid-point of the Company’s guidance, • AM&S up 5.9%, P&D 12.9%, EMP 14.1% and RF&OC 10.1%, • By end market, Q/Q Automotive was up 14%, Industrial 15%, Personal Electronics 3% and CECP 6%. 0.00 1.50 3.00 4.50 Q224 Q324 Q424 Q125 Q225 Q325E Guidance - At mid-pointActual
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Gross margin 8 Q325 Gross Margin Outlook About 33.5% (+/- 200 bps) Q225 Gross Margin = 33.5% Q225 Gross Margin • Down 660 bps Y/Y , mainly due to product mix, lower manufacturing efficiencies and, to a lesser extent, higher unused capacity charges, • Up 10 bps Q/Q, • 10 bps above the mid-point of ST’s guidance. 0% 10% 20% 30% 40% 50% Q224 Q324 Q424 Q125 Q225 Q325E Guidance - At mid-pointActual
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Net operating expenses* 9 Q225 Net Operating Expenses = $869M Q225 Combined SG&A and R&D at $934M • 33.8% of revenues. Q225 Net Operating Expenses at $869M • 31.4% of revenues. * Net operating expenses: R&D + SG&A + Other expenses ( - Other income). They exclude Impairment, restructuring charges and other related phase-out costs. 20% 25% 30% 35% -100 100 300 500 700 900 1100 Q224 Q324 Q424 Q125 Q225 SG&A R&D OIE, net Net OPEX % Q325 Net Operating Expenses expected at about $860M
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Q2 2025 Reportable segments results 10 Revenues = $1,133M Operating Margin = 7.5% Analog products, MEMS and Sensors (AM&S) -20% 0% 20% 40% -100 300 700 1,100 1,500 Q224 Q324 Q424 Q125 Q225 Revenue (US$M) Operating Margin (%) Revenues = $847M Operating Margin = 13.5% Embedded Processing (EMP) -20% 0% 20% 40% -100 300 700 1,100 1,500 Q224 Q324 Q424 Q125 Q225 Revenue (US$M) Operating Margin (%) Revenues = $447M Operating Margin = -12.5% Power and discrete products (P&D) -20% 0% 20% 40% -100 300 700 1,100 1,500 Q224 Q324 Q424 Q125 Q225 Revenue (US$M) Operating Margin (%) Revenues = $336M Operating Margin = 17.9% RF & Optical Communications (RF&OC) -20% 0% 20% 40% -100 300 700 1,100 1,500 Q224 Q324 Q424 Q125 Q225 Revenue (US$M) Operating Margin (%)
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Q2 2025 Financial flexibility 11 0 200 400 600 800 1,000 1,200 Q224 Q324 Q424 Q125 Q225 Net Cash From Operating Activities = $354M 10% 15% 20% 25% 30% 0 200 400 600 800 1,000 1,200 Q224 Q324 Q424 Q125 Q225 Capex / sales (%) Net Capex* = $465M -200 -100 0 100 200 Q224 Q324 Q424 Q125 Q225 Free Cash Flow* = -$152M *Non-U.S. GAAP measure. See Appendix for additional information explaining why the Company believes these measures are important. Cash dividends paid to stockholders totaled $81M in Q225. In Q225 we repurchased shares totaling $92M.
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Solid capital structure 12 *Adjusted net financial position, taking into consideration the effect on total liquidity of advances from capital grants for which capital expenditures have not been incurred yet, stood at $2.80B as of June 29, 2024, $2.71B as of March 29, 2025, and $2.31B as of June 28, 2025. **Non-U.S. GAAP measure. See Appendix for additional information explaining why the Company believes these measures are important. ST is in a very solid position from a capital, liquidity and balance sheet perspective. ST credit rating is now BBB+ with Stable Outlook from S&P and Baa1 with Stable Outlook from Moody’s. $6.29B $5.96B $5.63B $3.09B $2.88B $2.96B $3.20B $3.08B $2.67B Q224* Q125* Q225* Liquidity Debt Net Financial Position**
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Automotive 13 Car digitalization Car electrification Smart power Automotive sensors
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Industrial 14 Power & Energy Embedded processing STM32 Ecosystem ~1.5 million unique users on a 12-month rolling basis
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Personal electronics Communications equipment & computer peripherals 15
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Sustainability 16 CDP Leadership Band In the CDP leadership band for climate change management (A) and water management (A-) TIME World’s Most Sustainable Companies Ranked 25th most sustainable company globally and 1st in Electronics, Hardware and Equipment category.
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Q3 2025 Outlook 17 Q325 will close on September 27, 2025. This outlook is based on an assumed effective currency exchange rate of approximately $1.14 = €1.00 for Q325 and includes the impact of existing hedging contracts. This business outlook does not include any impact for potential further changes to global trade tariffs compared to current situation. Net Revenues Q325 outlook, at the mid-point, is for net revenues of $3.17B, decreasing Y/Y by 2.5% and increasing Q/Q by 14.6%, plus or minus 350 bps. Gross Margin Gross margin is expected to be about 33.5%, +/- 200 bps, incl. about 340 bps of unused capacity charges. Q/Q, our Q3 gross margin will be negatively impacted by about 140 bps, mainly from currency effect and, to a lesser extent, the start of non-recurring cost related to our manufacturing reshaping program.
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Takeaways 18 We expect Q3 revenues to show solid sequential growth driven by a cyclical recovery and our engaged customer programs. This will enable a continued year-over-year improvement. Our priorities remain supporting our customers to design-in our products, accelerating new product introductions, and executing our company-wide program to reshape our manufacturing footprint and resize our global cost base. Finally, I confirm we are executing our plan to deliver annual cost savings in the high triple-digit million-dollar range exiting 2027.
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Appendix
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Historical financial performance 20 Effective Exchange Rate €/$ 1.09 1.08 1.08 1.08 1.09 1.08 1.06 1.09 1.08 U.S. GAAP US$M, except EPS Q124 Q224 H124 Q324 Q424 FY24 Q125 Q225 H125 Net Revenues 3,465 3,232 6,697 3,251 3,321 13,269 2,517 2,766 5,283 Gross Margin 41.7% 40.1% 40.9% 37.8% 37.7% 39.3% 33.4% 33.5% 33.5% Operating Income Operating Margin 551 15.9% 375 11.6% 925 13.8% 381 11.7% 369 11.1% 1,676 12.6% 3 0.1% (133) -4.8% (130) -2.5% Net Income 513 353 865 351 341 1,557 56 (97) (41) EPS Diluted ($/share) 0.54 0.38 0.92 0.37 0.37 1.66 0.06 (0.11) (0.05) 20 *Non-U.S. GAAP measure. See Appendix for additional information explaining why the Company believes these measures are important. **Adjusted net financial position, taking into consideration the effect on total liquidity of advances from capital grants for which capital expenditures have not been incurred yet, stood at $2,775M as of March 30, 2024, at $2,797M as of June 29, 2024, at $2,815M as of September 28, 2024, at$2,846M as of December 31, 2024, $2,705M as of March 29, 2025 and $2,311M as of June 28, 2025. Non-U.S. GAAP* US$M, except EPS Q124 Q224 H124 Q324 Q424 FY24 Q125 Q225 H125 Operating Income Operating Margin 551 15.9% 375 11.6% 925 13.8% 381 11.7% 369 11.1% 1,676 12.6% 11 0.4% 57 2.1% 68 1.3% Net Income 513 353 865 351 341 1,557 63 57 120 EPS Diluted ($/share) 0.54 0.38 0.92 0.37 0.37 1.66 0.07 0.06 0.13 Free Cash Flow (134) 159 24 136 128 288 30 (152) (122) Net Financial Position 3,126** 3,199** 3,199** 3,181** 3,231** 3,231** 3,082** 2,672** 2,672**
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Appendix 21 • Net financial position and Adjusted Net Financial Position (non-U.S. GAAP measure): represents the difference between our total liquidity and our total financial debt. Our total liquidity includes cash and cash equivalents, restricted cash, if any, short-term deposits, and marketable securities, and our total financial debt includes short-term debt and long-term debt, as reported in our Consolidated Balance Sheets. ST also presents adjusted net financial position as a non-U.S. GAAP measure, to take into consideration the effect on total liquidity of advances received on capital grants for which capital expenditures have not been incurred yet. ST believes its Net Financial Position and Adjusted Net Financial Position provide useful information for investors and management because they give evidence of our global position either in terms of net indebtedness or net cash by measuring our capital resources based on cash and cash equivalents, restricted cash, if any, short-term deposits and marketable securities and the total level of our financial debt. Our definitions of Net Financial Position and Adjusted Net Financial Position may differ from definitions used by other companies, and therefore, comparability may be limited. • Net Capex and Free Cash Flow (non-U.S. GAAP measure):. ST presents Net Capex as a non-U.S. GAAP measure, which is reported as part of our Free Cash Flow (non-U.S. GAAP measure), to take into consideration the effect of advances from capital grants received on prior periods allocated to property, plant and equipment in the reporting period. Net Capex, a non-U.S. GAAP measure, is defined as (i) Payment for purchase of tangible assets, as reported plus (ii) Proceeds from sale of tangible assets, as reported plus (iii) Proceeds from capital grants and other contributions, as reported plus (iv) Advances from capital grants allocated to property, plant and equipment in the reporting period. ST believes Net Capex provides useful information for investors and management because annual capital expenditures budget includes the effect of capital grants. Our definition of Net Capex may differ from definitions used by other companies. Free Cash Flow, which is a non-U.S. GAAP measure, is defined as (i) net cash from operating activities plus (ii) Net Capex plus (iii) payment for purchase (and proceeds from sale) of intangible and financial assets and (iv) net cash paid for business acquisitions, if any. ST believes Free Cash Flow provides useful information for investors and management because it measures our capacity to generate cash from our operating and investing activities to sustain our operations. Free Cash Flow reconciles with the total cash flow and the net cash increase (decrease) by including the payment for purchases of (and proceeds from matured) marketable securities and net investment in (and proceeds from) short-term deposits, the net cash from (used in) financing activities and the effect of changes in exchange rates, and by excluding the advances from capital grants received on prior periods allocated to property, plant and equipment in the reporting period. Our definition of Free Cash Flow may differ from definitions used by other companies. • Net revenues of Others: include revenues from sales assembly services and other revenues. Operating income (loss) of Others include items such as unused capacity charges, including incidents leading to power outage, impairment, restructuring charges and other related phase-out costs, management reorganization costs, start- up costs, and other unallocated income (expenses) such as: strategic or special research and development programs, certain corporate-level operating expenses, patent claims and litigations, and other costs that are not allocated to reportable segments, as well as operating earnings of other products. Others includes: US$M Q124 Q224 H124 Q324 Q424 FY24 Q125 Q225 H125 Unused Capacity Charges 63 84 147 104 118 370 123 103 226 Impairment, restructuring charges and other related phase-out costs - - - - - - 8 190 198
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Historical Revenues and Operating Margin by Product Groups and Reportable Segments 22 Embedded Processing (EMP) Revenue Operating Margin 1,047 22.2% 906 13.8% 898 16.4% 1,002 18.1% 3,853 17.8% 742 8.9% 847 13.5% RF & Optical Communications (RF&OC) Revenue Operating Margin 378 27.4% 410 23.4% 357 23.4% 366 25.9% 1,511 25.0% 306 13.9% 336 17.9% Microcontrollers, Digital ICs and RF products (MDRF) Revenue Operating Margin 1,425 23.6% 1,316 16.8% 1,255 18.3% 1,368 20.2% 5,364 19.8% 1,048 10.4% 1,183 14.8% Q124 Q224 Q324 Q424 FY24 Q125 Q225 Analog products, MEMS and Sensors (AM&S) Revenue Operating Margin 1,406 17.5% 1,336 14.5% 1,340 16.1% 1,348 16.3% 5,429 16.1% 1,069 7.7% 1,133 7.5% Power and discrete products (P&D) Revenue Operating Margin 631 12.1% 576 10.6% 652 12.2% 602 7.5% 2,461 10.6% 397 -6.9% 447 -12.5% Analog, Power & Discrete, MEMS and Sensors (APMS) Revenue Operating Margin 2,037 15.8% 1,912 13.3% 1,992 14.9% 1,950 13.6% 7,890 14.4% 1,466 3.7% 1,580 1.9% US$M
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FY 2024 Reportable segment revenues by end market 23 44% 13% 35% 8% Automotive Industrial Personal electronics Communications equipment & computer peripherals 42% 30% 21% 7% 64% 29% 6% 1% 31% 6% 1% 62% Analog products, MEMS and Sensors (AM&S) Embedded Processing (EMP) Power and discrete products (P&D) RF & Optical Communications (RF&OC)
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