ST(STM) - 2025 Q2 - Quarterly Report

FORM 6-K Filing Information STMicroelectronics N.V. filed a Form 6-K report in July 2025, announcing its Q2 2025 financial results Report of Foreign Private Issuer Details This document is a Form 6-K report filed by STMicroelectronics N.V. for July 2025, announcing its 2025 Second Quarter Financial Results - STMicroelectronics N.V. filed a Form 6-K report for July 2025[2] - The enclosure is a press release dated July 24, 2025, announcing the company's 2025 Second Quarter Financial Results[3] 2025 Second Quarter Financial Results Overview STMicroelectronics reported Q2 2025 net revenues of $2.77 billion, with a net loss of $97 million, impacted by significant impairment and restructuring charges Executive Summary of Q2 2025 Performance STMicroelectronics reported Q2 2025 net revenues of $2.77 billion, a gross margin of 33.5%, and a U.S. GAAP operating loss of $133 million, leading to a net loss of $97 million or -$0.11 diluted EPS. The results include significant impairment and restructuring charges - Q2 net revenues were $2.77 billion, gross margin 33.5%, operating loss $133 million, and net loss $97 million[5][6] - The operating loss included $190 million related to impairment, restructuring charges, and other related phase-out costs[6] - H1 net revenues were $5.28 billion, with a gross margin of 33.5% and a net loss of $41 million[6] U.S. GAAP Financial Highlights Under U.S. GAAP, STMicroelectronics experienced a significant year-over-year decline in Q2 2025, with net revenues decreasing by 14.4% and a shift from operating income to a substantial operating loss, primarily due to impairment and restructuring charges Q2 2025 U.S. GAAP Financial Summary | U.S. GAAP (US$ m, except per share data) | Q2 2025 | Q1 2025 | Q2 2024 | Q/Q | Y/Y | | :-------------------------------------- | :------ | :------ | :------ | :---- | :---- | | Net Revenues | $2,766 | $2,517 | $3,232 | 9.9% | -14.4% | | Gross Profit | $926 | $841 | $1,296 | 10.2% | -28.5% | | Gross Margin | 33.5% | 33.4% | 40.1% | +10 bps | -660 bps | | Operating Income (Loss) | $(133) | $3 | $375 | - | - | | Operating Margin | -4.8% | 0.1% | 11.6% | -490 bps | -1,640 bps | | Net Income (Loss) | $(97) | $56 | $353 | - | - | | Diluted Earnings Per Share | $(0.11) | $0.06 | $0.38 | - | - | - Net revenues decreased 14.4% year-over-year, while gross margin decreased 660 basis points to 33.5%[5] - Operating income shifted from $375 million in Q2 2024 to a loss of $133 million in Q2 2025, primarily due to $190 million in impairment and restructuring charges[5][11] Non-U.S. GAAP Financial Highlights Excluding specific charges, non-U.S. GAAP operating income for Q2 2025 was $57 million, with a net income of $57 million or $0.06 diluted EPS, representing a significant year-over-year decline but a sequential improvement Q2 2025 Non-U.S. GAAP Financial Summary | Non-U.S. GAAP (US$ m, except per share data) | Q2 2025 | Q1 2025 | Q2 2024 | Q/Q | Y/Y | | :------------------------------------------- | :------ | :------ | :------ | :----- | :----- | | Operating Income | $57 | $11 | $375 | 429.6% | -84.7% | | Operating Margin | 2.1% | 0.4% | 11.6% | 170 bps | -950 bps | | Net Income | $57 | $63 | $353 | -9.1% | -83.9% | | Diluted Earnings Per Share | $0.06 | $0.07 | $0.38 | -14.3% | -84.2% | - Non-U.S. GAAP operating income was $57 million, a 429.6% sequential increase but an 84.7% year-over-year decrease[7] - Non-U.S. GAAP net income decreased 83.9% year-over-year to $57 million[7] CEO Commentary and Business Outlook The CEO noted Q2 net revenues exceeded expectations, driven by Personal Electronics and Industrial, despite Automotive being slightly below. The company anticipates solid sequential growth in Q3, while acknowledging an uncertain macroeconomic environment and focusing on customer support, new product introductions, and manufacturing footprint reshaping - Q2 net revenues exceeded the mid-point of the business outlook, driven by Personal Electronics and Industrial, with Automotive slightly below expectations[6] - Book-to-bill ratio remained above one for Industrial in Q2, while Automotive was below parity, and bookings continued to increase sequentially[6] - Priorities include supporting customers, accelerating new product introductions, and executing a company-wide program to reshape manufacturing footprint and resize the global cost base amidst an uncertain macroeconomic environment[6] Detailed Financial Review - Q2 2025 This section provides a detailed review of Q2 2025 financial performance, including net revenues by segment, gross profit, operating income, and net earnings analysis Net Revenues by Reportable Segment Total net revenues for Q2 2025 were $2.77 billion, a 14.4% year-over-year decrease but a 9.9% sequential increase. All product groups, APMS and MDRF, experienced year-over-year revenue declines, with P&D showing the largest decrease Net Revenues by Reportable Segment (US$ m) | Net Revenues by Reportable Segment (US$ m) | Q2 2025 | Q1 2025 | Q2 2024 | Q/Q | Y/Y | | :----------------------------------------- | :------ | :------ | :------ | :---- | :----- | | Analog products, MEMS and Sensors (AM&S) | 1,133 | 1,069 | 1,336 | 5.9% | -15.2% | | Power and discrete products (P&D) | 447 | 397 | 576 | 12.9% | -22.2% | | Subtotal: APMS Product Group | 1,580 | 1,466 | 1,912 | 7.8% | -17.4% | | Embedded Processing (EMP) | 847 | 742 | 906 | 14.1% | -6.5% | | RF & Optical Communications (RF&OC) | 336 | 306 | 410 | 10.1% | -17.9% | | Subtotal: MDRF Product Group | 1,183 | 1,048 | 1,316 | 13.0% | -10.1% | | Others | 3 | 3 | 4 | - | - | | Total Net Revenues | $2,766 | $2,517 | $3,232 | 9.9% | -14.4% | - Net sales to OEMs and Distribution decreased 15.3% and 12.0% year-over-year, respectively[9] Analog, Power & Discrete, MEMS and Sensors (APMS) Product Group The APMS Product Group's revenue decreased 17.4% year-over-year to $1.58 billion. The P&D segment saw the largest revenue decline of 22.2% and shifted to an operating loss of $56 million - APMS Product Group revenue decreased 17.4% year-over-year[9] - Analog products, MEMS and Sensors (AM&S) segment revenue decreased 15.2%, with operating profit down 55.9% to $85 million[9][13] - Power and Discrete products (P&D) segment revenue decreased 22.2%, resulting in an operating loss of $56 million compared to a $61 million profit in the prior year[9][12] Microcontrollers, Digital ICs and RF products (MDRF) Product Group The MDRF Product Group's revenue decreased 10.1% year-over-year to $1.18 billion. The RF & Optical Communications segment experienced a 17.9% revenue decrease and a 37.2% drop in operating profit - MDRF Product Group revenue decreased 10.1% year-over-year[9] - Embedded Processing (EMP) segment revenue decreased 6.5%, mainly due to Custom Processing, with operating profit down 8.7% to $114 million[9][21] - RF & Optical Communications (RF&OC) segment revenue decreased 17.9%, with operating profit decreasing 37.2% to $60 million[9][21] Gross Profit and Margin Analysis Gross profit for Q2 2025 was $926 million, a 28.5% year-over-year decrease. The gross margin of 33.5% decreased by 660 basis points year-over-year, primarily due to product mix, lower manufacturing efficiencies, and higher unused capacity charges - Gross profit totaled $926 million, a 28.5% decrease year-over-year[10] - Gross margin was 33.5%, a 660 basis point decrease year-over-year[10] - The decrease in gross margin was mainly due to product mix, lower manufacturing efficiencies, and higher unused capacity charges[10] Operating Income (Loss) Analysis STMicroelectronics reported an operating loss of $133 million in Q2 2025, a significant decline from an operating income of $375 million in the prior-year quarter. This loss includes $190 million in impairment and restructuring charges - Operating income decreased from $375 million in Q2 2024 to an operating loss of $133 million in Q2 2025[11] - Operating margin decreased 1,640 basis points year-over-year to -4.8%[11] - The operating loss included $190 million for impairment, restructuring charges, and other related phase-out costs, associated with manufacturing footprint reshaping and cost base resizing[11] Net Earnings and Diluted Earnings Per Share Net earnings and diluted EPS for Q2 2025 turned negative, reporting a loss of $97 million and -$0.11 respectively, a substantial decrease from positive figures in the year-ago quarter - Net Earnings decreased to a negative $97 million, compared to a positive $353 million in Q2 2024[14] - Diluted Earnings Per Share decreased to a negative $0.11, compared to a positive $0.38 in Q2 2024[14] - Non-U.S. GAAP Net income and diluted EPS stood at $57 million and $0.06, respectively[14] Cash Flow and Balance Sheet This section highlights the company's cash flow performance and balance sheet position, including inventory levels and net financial position Cash Flow Highlights Net cash from operating activities decreased significantly year-over-year to $354 million. Free cash flow was negative at $152 million in Q2 2025, compared to positive $159 million in the prior-year quarter Cash Flow Summary (US$ m) | (US$ m) | Q2 2025 | Q1 2025 | Q2 2024 | Trailing 12 Months Q2 2025 | Trailing 12 Months Q2 2024 | TTM Change | | :---------------------------- | :------ | :------ | :------ | :------------------------- | :------------------------- | :--------- | | Net cash from operating activities | 354 | 574 | 702 | 2,332 | 4,922 | -52.6% | | Free cash flow (non-U.S. GAAP) | (152) | 30 | 159 | 142 | 1,384 | -89.7% | - Net Capex (non-U.S. GAAP) was $465 million in Q2 2025, down from $528 million in Q2 2024[16] Balance Sheet and Financial Position Inventory increased to $3.27 billion, with days sales of inventory at 166 days. The net financial position remained strong at $2.67 billion, though it decreased from the previous quarter - Inventory at quarter-end was $3.27 billion, up from $3.01 billion in the previous quarter and $2.81 billion in the year-ago quarter[17] - Days sales of inventory increased to 166 days from 130 days in the year-ago quarter[17] - ST's net financial position (non-U.S. GAAP) was $2.67 billion as of June 28, 2025, reflecting total liquidity of $5.63 billion and total financial debt of $2.96 billion[18] Corporate Information This section covers corporate developments, Q3 2025 business outlook, conference call details, forward-looking statements, and company overview Corporate Developments STMicroelectronics held its 2025 Annual General Meeting of Shareholders on May 28, 2025, where all proposed resolutions were approved - All proposed resolutions were approved by shareholders at the 2025 Annual General Meeting on May 28, 2025[19] Business Outlook (Q3 2025 Guidance) For Q3 2025, STMicroelectronics expects net revenues of $3.17 billion, representing a 14.6% sequential increase, and a gross margin of approximately 33.5%, including about 340 basis points of unused capacity charges - Q3 2025 net revenues are expected to be $3.17 billion, an increase of 14.6% sequentially[22] - Gross margin for Q3 2025 is expected to be about 33.5%, including approximately 340 basis points of unused capacity charges[22] - Q3 gross margin will be negatively impacted by about 140 basis points sequentially, mainly from currency effects and non-recurring costs related to manufacturing reshaping[6] Conference Call and Webcast Information STMicroelectronics held a conference call and webcast on July 24, 2025, to discuss its Q2 2025 financial results and business outlook, with a replay available until August 8, 2025 - A conference call and live webcast were held on July 24, 2025, at 9:30 a.m. CET to discuss Q2 2025 financial results and business outlook[23] - The webcast replay is accessible at https://investors.st.com and will be available until August 8, 2025[23] Forward-looking Information and Risk Factors The report includes forward-looking statements based on management's current views, which are subject to various known and unknown risks and uncertainties. These risks, detailed in the Annual Report on Form 20-F, could cause actual results to differ materially from expectations - Statements in the release that are not historical facts are forward-looking and based on management's current views and assumptions[27] - Known and unknown risks and uncertainties could cause actual results, performance, or events to differ materially from anticipated outcomes[27][29] - Key risk factors include changes in global trade policies, uncertain macro-economic and industry trends, customer demand variations, and the ability to design innovative products[28] About STMicroelectronics STMicroelectronics is a global semiconductor leader with 50,000 employees, serving over 200,000 customers. The company focuses on smarter mobility, efficient power management, and cloud-connected autonomous things, with a goal to be carbon neutral by the end of 2027 - STMicroelectronics is an integrated device manufacturer with 50,000 employees, serving over 200,000 customers and thousands of partners[32] - The company's technologies enable smarter mobility, more efficient power and energy management, and wide-scale deployment of cloud-connected autonomous things[32] - ST aims to be carbon neutral in all direct and indirect emissions (scopes 1 and 2) and achieve 100% renewable electricity sourcing by the end of 2027[32] Consolidated Financial Statements (U.S. GAAP) This section presents the unaudited U.S. GAAP consolidated statements of income, balance sheets, and selected cash flow data for Q2 and H1 2025 Consolidated Statements of Income (Three months ended June 28, 2025) For the three months ended June 28, 2025, STMicroelectronics reported net revenues of $2,766 million, a gross profit of $926 million, and an operating loss of $133 million, leading to a net loss attributable to parent company stockholders of $97 million Consolidated Statements of Income (Q2 2025 vs Q2 2024) | (in millions of U.S. dollars, except per share data ($)) | June 28, 2025 (Unaudited) | June 29, 2024 (Unaudited) | | :----------------------------------------------------- | :------------------------ | :------------------------ | | NET REVENUES | 2,766 | 3,232 | | GROSS PROFIT | 926 | 1,296 | | OPERATING INCOME (LOSS) | (133) | 375 | | NET INCOME (LOSS) ATTRIBUTABLE TO PARENT COMPANY STOCKHOLDERS | (97) | 353 | | DILUTED EARNINGS PER SHARE | (0.11) | 0.38 | - Impairment, restructuring charges and other related phase-out costs amounted to $190 million in Q2 2025, compared to zero in Q2 2024[34] Consolidated Statements of Income (Six months ended June 28, 2025) For the six months ended June 28, 2025, net revenues were $5,283 million, gross profit was $1,767 million, and the company reported an operating loss of $130 million, resulting in a net loss attributable to parent company stockholders of $41 million Consolidated Statements of Income (H1 2025 vs H1 2024) | (in millions of U.S. dollars, except per share data ($)) | June 28, 2025 (Unaudited) | June 29, 2024 (Unaudited) | | :----------------------------------------------------- | :------------------------ | :------------------------ | | NET REVENUES | 5,283 | 6,697 | | GROSS PROFIT | 1,767 | 2,739 | | OPERATING INCOME (LOSS) | (130) | 925 | | NET INCOME (LOSS) ATTRIBUTABLE TO PARENT COMPANY STOCKHOLDERS | (41) | 865 | | DILUTED EARNINGS PER SHARE | (0.05) | 0.92 | - Impairment, restructuring charges and other related phase-out costs for H1 2025 totaled $198 million[35] Consolidated Balance Sheets As of June 28, 2025, total assets were $25,463 million, with total liabilities of $7,479 million. Total equity stood at $17,984 million, including $17,748 million attributable to parent company stockholders Consolidated Balance Sheets (US$ m) | In millions of U.S. dollars | June 28, 2025 (Unaudited) | March 29, 2025 (Unaudited) | December 31, 2024 (Audited) | | :-------------------------- | :------------------------ | :------------------------- | :-------------------------- | | Total assets | 25,463 | 24,923 | 24,743 | | Total liabilities | 7,479 | 6,964 | 7,064 | | Total equity | 17,984 | 17,959 | 17,679 | | Cash and cash equivalents | 1,616 | 1,781 | 2,282 | | Inventories | 3,273 | 3,014 | 2,794 | - Current assets totaled $11,521 million, while current liabilities were $4,204 million[36] Selected Cash Flow Data In Q2 2025, net cash from operating activities was $354 million, while net cash used in investing activities was $332 million and net cash used in financing activities was $191 million, resulting in a net cash decrease of $165 million Selected Cash Flow Data (US$ m) | Cash Flow Data (in US$ millions) | Q2 2025 | Q1 2025 | Q2 2024 | | :------------------------------- | :------ | :------ | :------ | | Net Cash from operating activities | 354 | 574 | 702 | | Net Cash used in investing activities | (332) | (796) | (628) | | Net Cash used in financing activities | (191) | (282) | (112) | | Net Cash decrease | (165) | (501) | (41) | - Depreciation & amortization was $464 million in Q2 2025, and net payment for Capital expenditures was $481 million[37] Appendix - Supplemental Information This appendix provides supplemental financial information, including changes to reportable segments, channel data, and non-U.S. GAAP reconciliations Changes to Reportable Segments Effective January 1, 2025, STMicroelectronics adjusted its segment reporting within its two Product Groups (APMS and MDRF) to optimize resources and implement synergies. This involved transferring VIPower products and reorganizing Microcontroller and Digital ICs into new Embedded Processing and RF & Optical Communications segments - Segment reporting adjustments were made effective January 1, 2025, to implement synergies and optimize resources[39] - VIPower products were transferred from Power and Discrete products (P&D) to Analog products, MEMS and Sensors (AM&S) segment[42] - New segments include 'Embedded Processing' (EMP) for microcontrollers and Custom Processing, and 'RF & Optical Communications' (RF&OC) for former D&RF and some RF ASICs[42] Supplemental Financial Data by Segment and Channel Supplemental data shows that in Q2 2025, OEM channel accounted for 72% of net revenues, and Distribution for 28%. The 'Others' category operating loss significantly increased to $(336) million, primarily due to $190 million in impairment and restructuring charges and $103 million in unused capacity charges Net Revenues By Market Channel (%) | Net Revenues By Market Channel (%) | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | | :--------------------------------- | :------ | :------ | :------ | :------ | :------ | | Total OEM | 72% | 71% | 73% | 76% | 73% | | Distribution | 28% | 29% | 27% | 24% | 27% | - Operating loss for 'Others' was $(336) million in Q2 2025, compared to $(101) million in Q2 2024[44] Key Components of 'Others' Operating Loss (US$ m) | (US$ m) | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | | :---------------------------------------------- | :------ | :------ | :------ | :------ | :------ | | Unused capacity charges | 103 | 123 | 118 | 104 | 84 | | Impairment, restructuring charges and other related phase-out costs | 190 | 8 | - | - | - | Non-U.S. GAAP Financial Measures Reconciliation and Explanation The appendix provides reconciliations of non-U.S. GAAP financial measures to U.S. GAAP, including operating income, net earnings, EPS, net financial position, adjusted net financial position, net capex, and free cash flow. These measures are presented to offer a clearer understanding of ongoing operations by excluding specific non-recurring items - Non-U.S. GAAP measures are unaudited and not prepared in accordance with U.S. GAAP, serving as supplemental information for better period-to-period comparisons and trend analysis[25][46][47] Non-U.S. GAAP Operating Income, Net Earnings and EPS Non-U.S. GAAP operating income, net earnings, and EPS exclude impairment, restructuring charges, and other related phase-out costs to provide a view of ongoing operational performance. For Q2 2025, non-U.S. GAAP operating income was $57 million and net earnings were $57 million - Non-U.S. GAAP measures exclude impairment, restructuring charges, and other related phase-out costs to enhance understanding of ongoing operations[48] Q2 2025 U.S. GAAP to Non-U.S. GAAP Reconciliation | Q2 2025 (US$ m, except per share data) | Gross Profit | Operating Income (Loss) | Net Earnings | Corresponding Diluted EPS | | :------------------------------------- | :----------- | :---------------------- | :----------- | :------------------------ | | U.S. GAAP | 926 | (133) | (97) | (0.11) | | Impairment, restructuring charges and other related phase-out costs | - | 190 | 190 | | | Estimated income tax effect | - | - | (36) | | | Non-U.S. GAAP | 926 | 57 | 57 | 0.06 | Net Financial Position and Adjusted Net Financial Position Net Financial Position, a non-U.S. GAAP measure, represents total liquidity minus total financial debt. As of June 28, 2025, the Net Financial Position was $2.67 billion, and the Adjusted Net Financial Position (considering capital grant advances) was $2.31 billion - Net Financial Position measures capital resources based on cash, short-term deposits, marketable securities, and total financial debt[51][52] Net Financial Position (non-U.S. GAAP) (US$ m) | (US$ m) | Jun 28, 2025 | Mar 29, 2025 | Dec 31, 2024 | | :---------------------------------------- | :----------- | :----------- | :----------- | | Total liquidity | 5,629 | 5,959 | 6,184 | | Total financial debt | (2,957) | (2,877) | (2,953) | | Net Financial Position (non-U.S. GAAP) | 2,672 | 3,082 | 3,231 | | Advances received on capital grants | (361) | (377) | (385) | | Adjusted Net Financial Position (non-U.S. GAAP) | 2,311 | 2,705 | 2,846 | Net Capex and Free Cash Flow Net Capex, a non-U.S. GAAP measure, adjusts capital expenditures for proceeds from asset sales and capital grants. Free Cash Flow, also non-U.S. GAAP, measures cash generation from operating and investing activities. In Q2 2025, Net Capex was $(465) million, and Free Cash Flow was $(152) million - Net Capex considers the effect of advances from capital grants received on prior periods allocated to property, plant and equipment[55][57] Net Capex (non-U.S. GAAP) (US$ m) | (US$ m) | Q2 2025 | Q1 2025 | Q4 2024 | | :-------------------------------------------------------------------- | :------ | :------ | :------ | | Payment for purchase of tangible assets, as reported | (574) | (587) | (584) | | Proceeds from sale of tangible assets, as reported | 4 | 2 | - | | Proceeds from capital grants and other contributions, as reported | 89 | 47 | 83 | | Advances from capital grants allocated to property, plant and equipment | 16 | 8 | 31 | | Net Capex (non-U.S. GAAP) | (465) | (530) | (470) | Free Cash Flow (non-U.S. GAAP) (US$ m) | (US$ m) | Q2 2025 | Q1 2025 | Q4 2024 | | :------------------------------------------------------ | :------ | :------ | :------ | | Net cash from operating activities | 354 | 574 | 681 | | Net Capex | (465) | (530) | (470) | | Payment for purchase of intangible assets, net of proceeds from sale | (41) | (14) | (32) | | Payment for purchase of financial assets, net of proceeds from sale | - | - | (51) | | Free Cash Flow (non-U.S. GAAP) | (152) | 30 | 128 | Signatures This section contains the official signatures for the Form 6-K report, confirming its authorization and filing Report Signatures The report was signed on July 24, 2025, by Lorenzo Grandi, President and Chief Financial Officer of STMicroelectronics N.V., as duly authorized - The report was signed by Lorenzo Grandi, President and Chief Financial Officer of STMicroelectronics N.V., on July 24, 2025[64]