STMicroelectronics (STM) Q2 2025 earnings summary

Executive summary

• Q2 2025 revenues reached $2.77 billion, down 14.4% year-over-year but above the midpoint of guidance, driven by strong performance in personal electronics and industrial, while automotive lagged.

• Gross margin was 33.5%, in line with guidance, but down 660 bps year-over-year due to product mix and manufacturing efficiency challenges.

• Q2 net loss was $97 million, with operating loss including $190 million in impairment and restructuring charges.

• Book-to-bill ratio remained above one for Industrial, with sequential booking increases, while Automotive was below parity.

• Sustainability efforts were recognized globally, ranking 25th Most Sustainable Company and 1st in electronics hardware.

Financial highlights

• Q2 2025 net revenues were $2.77B, gross profit $926M, operating loss $133M, and net loss $97M; non-U.S. GAAP net income was $57M.

• Gross margin was 33.5%, down from 38.7% year-over-year; operating margin (non-U.S. GAAP) was 2.1%.

• Free cash flow was negative $152 million in Q2, compared to positive $159 million a year ago.

• Net financial position was $2.67 billion as of June 28, 2025; total liquidity $5.63 billion; total financial debt $2.96 billion.

• Days sales of inventory at quarter-end was 166 days, up from 130 days a year ago.

Outlook and guidance

• Q3 2025 revenues expected at $3.17 billion, up 14.6% sequentially but down 2.5% year-over-year; gross margin expected at 33.5%, impacted by currency and manufacturing reshaping costs.

• Q4 revenues anticipated to grow sequentially, with potential for year-over-year growth if booking trends continue.

• Full-year 2025 net CAPEX plan remains $2–2.3 billion, focused on manufacturing reshaping and carbon neutrality programs.

• Annual cost savings of $800 million targeted by 2027 through cost base resizing and manufacturing reshaping.

• Guidance assumes an effective exchange rate of $1.14 = €1.00 and includes existing hedging contracts.