France · Delayed Price · Currency is EUR STMicroelectronics Earnings Call Transcripts
Fiscal Year 2026
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Q1 2026 saw $3.1B in revenue, strong YoY growth in most segments, and robust AI/data center momentum. Guidance for Q2 and full-year 2026 points to double-digit growth, improving gross margins, and continued strength in automotive, industrial, and AI infrastructure.
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Sensor revenues are targeted to grow at a mid-teens CAGR through 2028, driven by technology leadership in MEMS and imaging, a robust product roadmap, and strong positioning in high-growth markets like automotive and robotics. Intelligent sensors and in-house manufacturing underpin a competitive edge, with sensors comprising the largest share of value in emerging applications.
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AI data center growth is fueling a major inflection point in power and optical interconnect technologies, with revenue expected to exceed $1 billion in 2027. Strategic partnerships, capacity expansion, and leadership in silicon photonics and EICs position the company for accelerated growth beyond 2027.
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Guidance for the first half is confirmed with above-seasonal growth, and the second half is expected to be up 15% driven by automotive, industrial, and AI data center segments. AI data center revenues will exceed $500M this year and $1B next, supported by a major AWS contract.
Fiscal Year 2025
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Q4 2025 saw revenues and gross margin above guidance midpoint, with full year revenues down 11.1% due to automotive and industrial weakness. Inventory correction is nearly complete, and management expects organic growth and improving gross margin in 2026, supported by strong design wins and new product launches.
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Inventory corrections in automotive and industrial are largely complete, with sequential growth and improved visibility for 2026. Margin recovery is expected as manufacturing efficiency rises and new growth drivers—such as silicon photonics, AI power, and satellite—gain traction.
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Q3 saw strong growth in personal electronics, while automotive lagged due to a specific customer. New microcontroller and analog products will drive 2025 growth, with silicon photonics and regional diversification supporting long-term revenue. Manufacturing reshaping and cost reductions are set to boost profitability by 2027.
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Q3 2025 saw revenues of $3.19B, strong sequential growth in personal electronics and industrial, and continued inventory reduction. Q4 guidance points to further revenue and margin improvement, with CapEx plans trimmed and market recovery signs emerging.
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The acquisition of NXP's MEMS sensor business for up to $950 million will strengthen the company's position in automotive and industrial sensors, with minimal product overlap and immediate margin accretion. The deal accelerates growth, enhances R&D, and positions the company as a strong competitor to Bosch.
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Q2 2025 saw revenues of $2.77B and a 33.5% gross margin, with strong sequential growth in industrial and personal electronics offsetting automotive weakness. Q3 guidance points to 14.6% sequential revenue growth, with all segments except automotive returning to year-over-year growth.
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High-integration output drivers and digital input solutions enable compact, cost-effective industrial and robotics applications. Advanced servo and dual-motor driver modules support AGVs and robot arms, offering enhanced precision, flexibility, and reduced PCB size.
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Q1 2025 saw a 27.3% revenue decline and sharply lower margins, with automotive and industrial segments at a low point but sequential growth expected in Q2. The company is executing a major manufacturing reshaping program and maintains a strong financial position despite ongoing trade and inventory challenges.
Fiscal Year 2024
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Q4 and full year 2024 saw sharp revenue and margin declines due to weak industrial and automotive demand, high inventories, and unfavorable product mix. 2025 is expected to remain challenging, with Q1 as the low point and limited visibility for recovery, while cost-saving and manufacturing transformation programs are underway.
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Actionable targets set for $18B revenue and 22%-24% EBIT margin by 2027-2028, driven by analog, sensors, power electronics, and microcontrollers. Cost savings stem from manufacturing shifts and digitalization, while China and AI strategies support long-term growth. Margin structure aims for 44%-46% gross and 22%-24% operating margin at scale.
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Management reaffirmed its $20B+ revenue ambition by 2030, setting an intermediate target of $18B and 22%-24% operating margin by 2027-2028. Growth will be driven by leadership in automotive electrification, industrial automation, edge AI, and advanced manufacturing, with a strong focus on sustainability and operational efficiency.
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Q3 2024 revenues and margins declined sharply year-over-year, mainly due to industrial and automotive weakness, with net income down 68%. Guidance for Q4 and 2025 signals continued headwinds, but a major cost-saving and manufacturing transition program is underway.
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Q2 2024 saw revenues above guidance midpoint but significant year-over-year declines in revenue, margin, and net income due to weak industrial and automotive demand. Full-year guidance was revised down, with delayed industrial recovery and lower automotive growth expected.