STMicroelectronics NV Earnings - Q3 2025 Analysis & Highlights
Key Takeaways
Byline: The STMicroelectronics Q3 2025 Earnings Call discussed key financial results, including revenue, gross margin, and earnings per share, with a focus on business segment performance in automotive, industrial, personal electronics, and communication equipment. The call also covered capital allocation, industry trends, growth opportunities, and financial guidance for Q4 2025 and beyond. Management addressed the impact of market dynamics, inventory management, capacity utilization, and strategic initiatives on the company's performance and outlook.
Key Financial Results
Q3 2025 revenues were reported at $3.19 billion, $17 million above the midpoint of the business outlook range.
Gross margin was 33.2%, slightly below the midpoint of the business outlook range.
Diluted earnings per share were $0.29, excluding impairment, restructuring charges, and other related phase-out costs.
Free cash flow was a positive $130 million.
Net income was $237 million, with diluted earnings per share at $0.26.
Excluding non-recurring items, non-US GAAP net income was $267 million and diluted earning per share was $0.29.
Business Segment Results
Automotive revenues grew about 10% sequentially, driven by all regions except Americas.
Industrial revenues increased by about 8% sequentially and 13% year-over-year.
Personal Electronics revenues were up 40% sequentially.
Communication Equipment and Computer Peripherals revenues were up 4% sequentially.
Analog products, MEMS and Sensor was up at 7.0%, mainly due to Imaging.
Power and Discrete products decreased 34.3%.
Embedded Processing revenues grew 8.7%, mainly due to General Purpose MCU.
RF & Optical Communication declined 3.4%.
Capital Allocation
Net CapEx was $401 million in Q3 2025, compared to $565 million in Q3 2024.
Cash dividends paid to stockholders in the third quarter totaled $81 million.
Share buybacks of $91 million were executed.
Net financial position remained solid at $2.61 billion as of the end of September 2025.
The company repaid $750 million for the first tranche of its 2020 convertible bond fully in cash.
Net CapEx plan reduced to slightly below $2 billion for full-year 2025.
Industry Trends and Dynamics
All end markets, except Automotive, are now back to year-on-year growth.
Car electrification is a key strategy, with wins in silicon and silicon carbide devices for electrical vehicle applications.
Increased demand for photonics ICs prototypes in the 300-millimeter wafer fab.
Low Earth orbit satellites business is well-positioned for steady growth.
Competitive Landscape
Acquisition of NXP's MEMS sensor business for up to $950 million in cash to expand MEMS sensor technology and product portfolio.
New license agreement with Metalenz to produce advanced metasurface optics.
Leading position in the low-orbit satellite broadband market.
Macroeconomic Environment
The business outlook does not include any impact for potential further changes to global trade tariffs compared to the current situation.
Growth Opportunities and Strategies
Strategy for car electrification with silicon and silicon carbide devices.
Microcontroller product road map execution for car digitalization.
Expanding the use of industrial sensors in robotics.
Working closely with NVIDIA on a new architecture for 800-volt DC AI data center.
Leading the STARLight consortium to develop high-speed optical solutions for data centers, AI, telecommunication, and automotive.
Strengthening free cash flow generation.
Financial Guidance and Outlook
Q4 2025 revenues are expected at $3.28 billion, an increase of 2.9% sequentially, plus or minus 350 basis points.
Gross margin is expected to be about 35%, plus or minus 200 basis points, including about 290 basis points of unused capacity charges.
Full-year 2025 revenues are expected to be about $11.75 billion.
Gross margin for the full year is expected to be about 33.8%.
Expect to grow mid-single digits in the fourth quarter compared to the third quarter in Automotive.
Expect to grow revenues low single-digit sequentially in Q4 in Industrial.
