January 29, 2026 STMicroelectronics Q4 & FY 2025 Financial Results Forward looking information • 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 ...

Core Insights - STMicroelectronics reported a net revenue of $3.33 billion for Q4 2025, reflecting a slight year-over-year increase of 0.2% and a sequential increase of 4.5% [3][4][7] - The company experienced a gross margin of 35.2%, which is a decrease of 250 basis points year-over-year but an improvement of 20 basis points compared to the previous quarter [4][10] - Operating income fell significantly to $125 million, down 66% year-over-year, largely due to $141 million in impairment and restructuring charges [3][11][12] - The net loss for the quarter was $30 million, translating to a diluted loss per share of $0.03, compared to a profit of $341 million and earnings per share of $0.37 in Q4 2024 [3][14] Financial Performance - Q4 2025 net revenues were $3.33 billion, with a gross profit of $1.17 billion, resulting in a gross margin of 35.2% [4][10] - The operating income for Q4 2025 was $125 million, with an operating margin of 3.8%, down from 11.1% in Q4 2024 [4][11] - For FY 2025, net revenues totaled $11.80 billion, a decrease of 11.1% from the previous year, with an operating income of $175 million [6][7] Segment Performance - The Analog products, MEMS and Sensors (AM&S) segment reported revenues of $1.45 billion, a 7.5% increase year-over-year [9][12] - The Power and Discrete products (P&D) segment saw a significant revenue decline of 31.6% year-over-year, totaling $412 million [9][12] - The Embedded Processing (EMP) segment generated $1.02 billion in revenue, a slight increase of 1.2% year-over-year [9][12] Cash Flow and Financial Position - Net cash from operating activities for Q4 2025 was $674 million, a decrease from $681 million in Q4 2024 [16][17] - Free cash flow for Q4 2025 was reported at $257 million, compared to $128 million in the same quarter last year [17][18] - The net financial position as of December 31, 2025, was $2.79 billion, reflecting total liquidity of $4.92 billion and total financial debt of $2.13 billion [19][62] Business Outlook - For Q1 2026, STMicroelectronics expects net revenues of approximately $3.04 billion, a sequential decrease of 8.7% [7][22] - The gross margin for Q1 2026 is projected to be around 33.7%, including about 220 basis points of unused capacity charges [7][22] - The company plans to invest between $2.0 to $2.2 billion in net capital expenditures for 2026 [7][21]

Group 1: NOR Flash Market Insights - NOR Flash pricing remains stable and is expected to achieve structural growth, differentiating itself from DRAM and NAND by being less affected by storage cycle fluctuations [1] - Market demand is shifting towards higher density SPI NOR products suitable for automotive, industrial, and true wireless stereo (TWS) applications, driven by larger firmware capacity and over-the-air (OTA) upgrade needs [1] - Despite stable shipment volumes, the increase in product density and the transition to 55-40nm processes will continue to drive value growth, with NOR Flash expected to maintain revenue growth momentum through 2026 [1] Group 2: MEMS and Sensors Market Trends - The demand for low-power, high-precision, and compact MEMS and sensors is increasing due to the expansion of IoT and AI, with smart sensors becoming a mainstream trend [7] - The automotive sector will benefit significantly from the synergy of electrification, connectivity, and digitalization, with advanced driver-assistance systems (ADAS) expected to be a key driver of sensor demand by 2026 [7] - In the consumer electronics sector, there is a notable decline in the shipment volumes of products like headphones and wearables, impacting overall revenue expectations, while the demand for high-integrated, high-value MEMS microphones is increasing [7] Group 3: Power Semiconductor Market Forecast - Silicon-based semiconductors are gradually weakening in market performance due to challenges in key application areas like automotive and industrial, while wide-bandgap semiconductors are showing strong growth and are expected to contribute over 20% of total revenue by 2026 [11] - Silicon carbide (SiC) continues to expand in electric vehicle power systems, maintaining strong demand despite a slight slowdown in year-on-year growth, while gallium nitride (GaN) is anticipated to become a core growth driver as data centers seek efficient power solutions [11] - The automotive sector has surpassed industrial applications to become the largest single market for power semiconductors globally, with sales expected to increase long-term due to electrification, despite a slight decline in 2024 [17]

Core Insights - STMicroelectronics reported a significant decline in financial performance for Q1 2025, with net revenues of $2.52 billion, a decrease of 27.3% year-over-year and 24.2% quarter-over-quarter [3][5][6] - The gross margin fell to 33.4%, down 830 basis points from the previous year, primarily due to product mix and higher unused capacity charges [3][8] - Operating income plummeted to $3 million, a 99.5% decrease compared to the same quarter last year, resulting in an operating margin of only 0.1% [3][9] Financial Performance - **Net Revenues**: $2,517 million in Q1 2025, down from $3,321 million in Q4 2024 and $3,465 million in Q1 2024 [3][7] - **Gross Profit**: $841 million, a decrease of 41.7% year-over-year [8] - **Operating Income**: $3 million, down from $551 million in Q1 2024 [9] - **Net Income**: $56 million, an 89.1% decline from $513 million in the previous year [3][9] - **Diluted Earnings Per Share**: $0.06, compared to $0.54 in Q1 2024 [3][9] Segment Performance - **Analog, Power & Discrete, MEMS and Sensors (APMS)**: Net revenues of $1,466 million, down 28.0% year-over-year [7] - **Embedded Processing (EMP)**: Net revenues of $742 million, a decrease of 29.1% year-over-year [7] - **RF & Optical Communications (RF&OC)**: Net revenues of $306 million, down 19.2% year-over-year [7] Business Outlook - The company anticipates Q2 2025 net revenues of $2.71 billion, representing a sequential increase of 7.7% but a year-over-year decrease of 16.2% [5][21] - Gross margin is expected to remain around 33.4%, impacted by unused capacity charges [6][21] - The company is on track with a program to reshape its manufacturing footprint and aims for annual cost savings in the high triple-digit million-dollar range by the end of 2027 [5][17] Cash Flow and Financial Position - **Net Cash from Operating Activities**: $574 million, down 51.5% from $859 million in Q1 2024 [13] - **Free Cash Flow**: Positive at $30 million, compared to negative $134 million in the previous year [14] - **Net Capex**: $530 million in Q1 2025, down from $967 million in Q1 2024 [14] - **Inventory**: Increased to $3.01 billion, with days sales of inventory at 167 days [15] Corporate Developments - The company has made adjustments to its segment reporting effective January 1, 2025, to optimize resources and implement synergies [4][43] - STMicroelectronics is focused on innovation and cost management to enhance competitiveness in a challenging market environment [6][17]