STMicroelectronics (STM) Q4 2025 earnings summary

Executive summary

• Q4 2025 net revenues reached $3.33 billion, up 0.2% year-over-year and above guidance midpoint, driven by Personal Electronics and CECP, while Automotive lagged expectations.

• FY25 net revenues declined 11.1% to $11.80 billion, mainly due to sharp drops in Automotive and Industrial, partially offset by growth in Personal Electronics and CECP.

• Q4 marked a return to year-over-year growth, with inventory levels normalizing and positive free cash flow generated.

• Gross margin for Q4 was 35.2%, above guidance midpoint; full year gross margin fell to 33.9% from 39.3% in 2024.

• Strategic focus remains on innovation, manufacturing footprint reshaping, cost base resizing, and free cash flow generation.

Financial highlights

• Q4 gross profit was $1.17 billion, down 6.5% year-over-year; gross margin decreased 250 bps year-over-year but improved 200 bps sequentially.

• Q4 net loss was $30 million, including $163 million in one-time tax expenses; non-GAAP net income was $100 million.

• FY25 operating income was $175 million (vs. $1.68 billion in 2024), including $376 million in one-time charges; non-GAAP operating margin was 4.7%.

• FY25 free cash flow was $265 million, with net CapEx at $1.79 billion and net cash from operating activities at $2.15 billion.

• Net financial position at year-end was $2.79 billion, with total liquidity of $4.92 billion.

Outlook and guidance

• Q1 2026 net revenues expected at $3.04 billion, down 8.7% sequentially, with gross margin at 33.7%.

• FY26 net CapEx planned between $2.0 billion and $2.2 billion, focused on growth drivers like Cloud Optical Interconnect.

• Management expects organic growth in 2026, with inventory correction largely completed by end of Q2.

• Gross margin is expected to improve throughout 2026, with Q1 seen as the low point.