STMicroelectronics (STM) Q3 2025 earnings summary

Executive summary

• Q3 2025 revenues were $3.19 billion, slightly above the midpoint of guidance, with Personal Electronics outperforming, Automotive and Industrial segments in line, and all end-markets except Automotive returning to year-over-year growth.

• Gross margin was 33.2%, slightly below guidance due to product mix in Automotive and Industrial.

• Book-to-bill ratio was above one, with Automotive above parity and Industrial at parity.

• Inventory levels were reduced both on the balance sheet and in distribution, generating $130 million in free cash flow.

• Strategic acquisition of NXP's MEMS sensor business for up to $950 million is on track to close in H1 2026.

Financial highlights

• Q3 2025 net revenues: $3.19 billion, down 2.0% year-over-year, up 15.2% sequentially.

• Gross profit was $1.06 billion, down 13.7% year-over-year; gross margin fell 460 basis points due to lower manufacturing efficiencies and currency effects.

• Operating income was $180 million, including $37 million in impairments and restructuring; non-U.S. GAAP operating margin was 6.8%.

• Net income was $237 million, down from $351 million a year ago; non-U.S. GAAP net income was $267 million.

• Free cash flow was $130 million, with net CapEx at $401 million.

Outlook and guidance

• Q4 2025 revenue expected at $3.28 billion, up 2.9% sequentially; gross margin forecasted at 35%.

• Full-year 2025 revenue projected at $11.75 billion, with gross margin around 33.8% and 22.4% H2 vs. H1 growth.

• Net CapEx plan for 2025 reduced to slightly below $2 billion.

• Further sequential revenue improvement and gross margin increase expected in Q4, with continued inventory reduction.

• H2 2026 expected to see normalized inventory and growth in Silicon Carbide and MEMS segments.