Vishay Intertechnology Q4 Earnings Call Highlights

Core Insights - Vishay Intertechnology reported a strong fourth quarter with a revenue of $801 million, slightly above guidance and up 1.3% sequentially, driven by broad-based growth in industrial power and AI-related applications [4][7][10] - The company experienced a backlog increase of nearly 14% to $1.3 billion, with a book-to-bill ratio of 1.2, indicating strong demand across various segments [1][7] - Management highlighted the visibility of its "Vishay 3.0" initiatives, with orders reaching a three-year high across most product technologies, reflecting improved customer engagement [2][5] Financial Performance - Revenue for Q4 was $801 million, up 1.3% from the previous quarter and 12% year-over-year, primarily driven by volume increases and favorable foreign currency impacts [10][11] - Gross profit was reported at $157 million, resulting in a gross margin of 19.6%, slightly above guidance, despite pressures from elevated material costs [11] - SG&A expenses increased to $142 million, attributed to higher compensation, R&D spending, and legal costs [12] Market Trends - Demand in the automotive sector saw a sequential revenue decline of 3.4%, while Asia automotive revenue increased, indicating regional variations in market performance [8] - Industrial power revenue rose 3.2%, supported by higher shipments related to smart grid infrastructure projects and new industrial programs [8] - By channel, OEM revenue increased by 1.1%, EMS revenue rose by 1.4%, and distribution revenue also increased by 1.4%, with Asia being the largest contributor [9] Capital Expenditure and Future Outlook - Vishay expects capital expenditures to peak in 2026 at $400–440 million, primarily for 12-inch fab investments, while anticipating negative free cash flow due to expansion plans [6][19] - The company plans to return at least 70% of free cash flow to shareholders when available, despite the expected negative cash flow in 2026 [18] - Management guided for Q1 2026 revenue between $800 million and $830 million, with expectations of lower Asia revenue due to Lunar New Year timing [15] Product and Technology Developments - The company highlighted progress in product development, including the release of new silicon carbide MOSFETs aimed at industrial and automotive applications [19] - Management noted ongoing discussions for smart grid infrastructure projects expected to enter production in 2026, indicating a focus on long-term growth opportunities [8][19] Industry Growth and Pricing Strategy - Management maintained that industry growth remains in the mid- to high-single-digit range, with Vishay aiming to outperform this growth [20] - The company implemented price increases tied to rising metals costs starting in Q4, with further actions under evaluation to address pricing pressures [20]