STMicroelectronics has announced its financial results for the first quarter of 2025, reflecting both the challenges of a shifting market and the company’s strategic transformation efforts.

Key Highlights:

  • Net Revenues: $2.52 billion, down 27.3% year-over-year
  • Gross Margin: 33.4%
  • Operating Income: $3 million
  • Net Income: $56 million, representing an 89.1% drop compared to Q1 2024

CEO Jean-Marc Chery acknowledged that while Q1 revenues aligned with expectations, the decline was mainly attributed to lower performance in the Automotive and Industrial sectors, partially offset by stronger results in Personal Electronics.

Despite the decline, ST’s book-to-bill ratio improved, particularly within Automotive and Industrial, signaling stronger order intake compared to shipments.

Looking Ahead:

  • ST expects Q2 2025 net revenues of approximately $2.71 billion, a sequential growth of 7.7%.
  • Gross margin is forecasted to remain steady at around 33.4%, impacted by unused capacity charges.
  • The company is maintaining its 2025 net CapEx target between $2.0 billion and $2.3 billion to support its manufacturing reshaping initiatives.

Strategic Initiatives: STMicroelectronics is pushing forward with its company-wide restructuring program, aiming to reshape its manufacturing footprint and resize its global cost base. The program targets annual cost savings in the high triple-digit million-dollar range by the end of 2027.

Chery emphasized that ST views Q1 2025 as the bottom of the cycle and is focused on innovation, manufacturing efficiency, and cost control to navigate the uncertain global environment.

Segment Performance:

  • Analog, Power & Discrete, MEMS and Sensors (APMS): Revenues down 28% YoY
  • Power and Discrete Products (P&D): Revenues fell 37.1% YoY, operating margin turned negative
  • Embedded Processing (EMP): Revenues declined 29.1% YoY
  • RF & Optical Communications (RF&OC): Revenues down 19.2% YoY

Financial Strength:

  • Free cash flow turned positive at $30 million, compared to a negative $134 million a year ago.
  • Net financial position remained robust at $3.08 billion.

Original – STMicroelectronics