STMicroelectronics Reports 2025 Second Quarter Financial Results

Core Insights - STMicroelectronics reported a net revenue of $2.77 billion for Q2 2025, reflecting a 14.4% year-over-year decline and a 9.9% increase from Q1 2025 [3][4][5] - The company experienced a gross margin of 33.5%, which is a decrease of 660 basis points year-over-year but slightly improved from Q1 2025 [3][9] - Operating loss for the quarter was $133 million, significantly down from an operating income of $375 million in Q2 2024, primarily due to $190 million in impairment and restructuring charges [3][10][12] Financial Performance - Q2 2025 net revenues were $2.77 billion, down from $3.23 billion in Q2 2024, with a gross profit of $926 million, a decrease of 28.5% year-over-year [3][9] - The operating margin fell to -4.8% from 11.6% in the same quarter last year, while net loss was $97 million compared to a profit of $353 million in Q2 2024 [3][10][12] - Non-U.S. GAAP operating income was $57 million, down from $375 million year-over-year, with a non-U.S. GAAP net income of $57 million compared to $353 million in Q2 2024 [6][12] Segment Performance - The Analog, Power & Discrete, MEMS and Sensors (APMS) Product Group saw a revenue decrease of 17.4% year-over-year, while the Embedded Processing (EMP) segment's revenue decreased by 6.5% [8][11] - The Automotive segment's performance was slightly below expectations, while Personal Electronics and Industrial segments drove higher revenues [5][11] - The book-to-bill ratio remained above one for Industrial, indicating a positive trend in bookings, while Automotive was below parity [5] Cash Flow and Balance Sheet - Net cash from operating activities was $354 million, down 52.6% from $702 million in Q2 2024, with free cash flow reported at negative $152 million [13][14] - Inventory levels increased to $3.27 billion from $2.81 billion year-over-year, with days sales of inventory at 166 days [15] - The net financial position stood at $2.67 billion, reflecting total liquidity of $5.63 billion and total financial debt of $2.96 billion [16] Business Outlook - For Q3 2025, the company expects net revenues of $3.17 billion, a sequential increase of 14.6% but a year-over-year decrease of 2.5%, with a gross margin forecasted at 33.5% [4][19] - The outlook includes potential impacts from unused capacity charges and currency effects, indicating a cautious approach amid macroeconomic uncertainties [5][19]