Slides
Page 1
STMicroelectronics Q3 2025 Financial Results October 23, 2025
Page 2
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 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 SEC filings, could have a material adverse effect on our business and/or financial condition. Forward looking information 2
Page 3
Highlights 3*Non-U.S. GAAP measure. See Appendix for additional information explaining why the Company believes these measures are important. Net revenues came slightly above the mid-point of our business outlook range, with higher revenues in Personal Electronics, while Automotive and Industrial performed as anticipated, and CECP was broadly in line with expectations. All end-markets but Automotive are now back to year-on-year growth. Gross margin slightly below the mid-point of our business outlook range mainly due to product mix within Automotive and Industrial. Y/Y Q3 net revenues decreased 2.0%, non-U.S. GAAP* operating margin decreased to 6.8% from 11.7% and non-U.S. GAAP* net income decreased to $267M from $351M. During Q3 we managed to work down inventories both in our BS and in distribution and we generated a positive $130M FCF. Q3 2025 In Q3, our book-to-bill ratio was above one, with Automotive above parity and Industrial at parity. Outlook at the mid-point is for net revenues of $3.28B, increasing 2.9% Q/Q. Gross margin is expected to be about 35.0%; including about 290 bps of unused capacity charges. Q4 2025 Our strategic priorities remain clear: accelerating innovation; executing our company-wide program to reshape our manufacturing footprint and resize our global cost base, which remains on schedule to deliver the targeted savings; and strengthening free cash flow generation. The mid-point of Q4 outlook translates into FY25 revenues of about $11.75B. This represents a 22.4% growth in H2 vs H1, confirming signs of market recovery. Gross margin is expected to be about 33.8%.” To optimize our investments in response to the current market conditions, FY25 Net Capex plan reduced is now slightly below $2B. FY 2025
Page 4
Automotive 4 Car digitalization Car electrification Smart power Automotive sensors
Page 5
Acquisition of NXP’s MEMS sensor business 5 Definitive transaction agreement for the acquisition of NXP’s MEMS sensor business for a purchase price of up to $950M in cash Subject to customary closing conditions, including regulatory approvals – on track to close in H1 2026 Complements and expands ST current leading MEMS sensors technology and product portfolio
Page 6
Industrial 6
Page 7
Personal electronics 7
Page 8
New license agreement with Metalenz 8 Broadens our capability to produce advanced metasurface optics, leveraging ST’s 300mm semiconductor and optics manufacturing Enables new opportunities from smartphone applications like biometrics, LIDAR and camera assist, to robotics, gesture recognition, and object detection
Page 9
Communications Equipment and Computer Peripherals AI data centers 9 Cooperation with Nvidia for 800V DC AI data centers completed full-power testing on a prototype GaN-based solution, successfully demonstrating over 98% energy conversion efficiency
Page 10
Communications Equipment and Computer Peripherals Low earth orbit satellites 10 Panel level packaging (PLP) manufacturing BiCMOS technologies
Page 11
Q3 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) 45% 13% 31% 11% 0.1% Automotive Industrial Personal electronics Communications equipment & computer peripherals % by end market 39% 21% 27% 13% -17%Y/Y +13%Y/Y +11%Y/Y +7%Y/Y +7.0%Y/Y -34.3%Y/Y +8.7%Y/Y -3.4%Y/Y +10% Q/Q +8% Q/Q +40% Q/Q +4% Q/Q +26.6% Q/Q -4.3% Q/Q +15.3% Q/Q +2.4%Q/Q 11
Page 12
Q3 2025 Financial highlights 12 30% 35% 40% Q324 Q225 Q325 2.0 2.5 3.0 3.5 Q324 Q225 Q325 0% 5% 10% 15% Q324 Q225 Q325 0 100 200 300 400 Q324 Q225 Q325 Revenues = $3.19B Non-U.S. GAAP Operating Margin* = 6.8% Gross Margin = 33.2% Non-U.S. GAAP Net Income* = $267M -2.0% Y/Y *Non-U.S. GAAP measure. See Appendix for additional information explaining why the Company believes these measures are important.
Page 13
Q3 2025 Financial flexibility 13 0 200 400 600 800 Q324 Q424 Q125 Q225 Q325 Net Cash From Operating Activities = $549M 10% 15% 20% 25% 30% 0 200 400 600 800 Q324 Q424 Q125 Q225 Q325 Capex / sales (%) Net Capex* = $401M -200 -100 0 100 200 Q324 Q424 Q125 Q225 Q325 Free Cash Flow* = $130M *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 Q325. In Q325 we repurchased shares totaling $91M.
Page 14
Solid capital structure 14 *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 $2.82B as of Sep 28, 2024, $2.31B as of Jun 28, 2025, and $2.27B as of Sep 27, 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 BBB+ with Stable Outlook from S&P and Baa1 with Stable Outlook from Moody’s. $6.30B $5.63B $4.78B $3.12B $2.96B $2.17B$3.18B $2.67B $2.61B Q324* Q225* Q325* Liquidity Debt Net Financial Position**
Page 15
Q4 2025 Outlook 15 Q425 will close on December 31, 2025. This outlook is based on an assumed effective currency exchange rate of approximately $1.15 = €1.00 for Q425 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 Q425 outlook, at the mid-point, is for net revenues of $3.28B, increasing Q/Q by 2.9%, plus or minus 350 bps. Gross Margin Gross margin is expected to be about 35%, +/- 200 bps, incl. about 290 bps of unused capacity charges.
Page 16
FY 2025 16 The mid-point of Q4 outlook translates into FY25 revenues of about $11.75B. This represents a 22.4% growth in the second half compared to the first half, confirming signs of market recovery. Gross margin for the full year is expected to be about 33.8%. To optimize our investments in the current market conditions, we have reduced our Net Capex plan, now slightly below $2B for FY25 compared to a $2B to $2.3B range previously.
Page 17
Takeaways 17 In Q4 we expect to report further Q/Q revenue improvement, with revenues now broadly stabilized on a Y/Y basis, as well as an increased gross margin, while continuing to decrease inventories in distribution. In a context marked by signs of market recovery, our strategic priorities remain clear: • accelerating innovation; • executing our company-wide program to reshape our manufacturing footprint and resize our global cost base, which remains on schedule to deliver the targeted savings; • and strengthening free cash flow generation. We are on the right path to improving our gross margin in the medium-term through the reduction of unused capacity charges, the reshaping of our manufacturing footprint and product mix improvement.
Page 18
Question & answer session
Page 19
www.st.com/trademarks www.st.com/trademarks © STMicroelectronics - All rights reserved. ST logo is a trademark or a registered trademark of STMicroelectronics International NV or its affiliates in the EU and/or other countries. For additional information about ST trademarks, please refer to www.st.com/trademarks. All other product or service names are the property of their respective owners.