STMicroelectronics has announced its financial results for the first quarter of 2025, reflecting both the challenges of a shifting market and the company’s strategic transformation efforts.
This memo summarizes STMicroelectronics’ Q1 2025 financial results, as announced. While revenues were down 27.3% year-over-year to $2.52 billion, aligning with expectations, this reflects a challenging market environment impacting the Automotive and Industrial sectors. Despite this overall decline, the book-to-bill ratio improved in these key sectors, indicating stronger future order intake. The company reported a net income of $56 million (an 89.1% decrease YoY) and a gross margin of 33.4%. Positively, free cash flow turned positive at $30 million, and the net financial position remains strong at $3.08 billion.
Segment performance varied, with significant year-over-year declines across all segments (APMS down 28%, P&D down 37.1%, EMP down 29.1%, and RF&OC down 19.2%). The Power and Discrete Products segment notably experienced a negative operating margin.
Looking ahead, ST projects Q2 2025 net revenues of approximately $2.71 billion (a 7.7% sequential increase), with the gross margin remaining steady at around 33.4%. The company is continuing its strategic restructuring program, targeting significant cost savings by 2027 and maintaining its CapEx target to support manufacturing reshaping initiatives. CEO Jean-Marc Chery characterized Q1 2025 as the bottom of the cycle, emphasizing the company’s focus on innovation, efficiency, and cost control to navigate current market uncertainties. The improved book-to-bill ratio and positive free cash flow offer some cause for optimism.
Key Highlights:
CEO Jean-Marc Chery acknowledged that while Q1 revenues aligned with expectations, the decline was mainly attributed to lower performance in the Automotive and Industrial sectors, partially offset by stronger results in Personal Electronics.
Despite the decline, ST’s book-to-bill ratio improved, particularly within Automotive and Industrial, signaling stronger order intake compared to shipments.
Looking Ahead:
Strategic Initiatives: STMicroelectronics is pushing forward with its company-wide restructuring program, aiming to reshape its manufacturing footprint and resize its global cost base. The program targets annual cost savings in the high triple-digit million-dollar range by the end of 2027.
Chery emphasized that ST views Q1 2025 as the bottom of the cycle and is focused on innovation, manufacturing efficiency, and cost control to navigate the uncertain global environment.
Segment Performance:
Financial Strength:
Original – STMicroelectronics
