STMicroelectronics Reports 2023 Second Quarter Financial Results

  • Q2 net revenues $4.33 billion; gross margin 49.0%; operating margin 26.5%; net income $1.00 billion
  • H1 net revenues $8.57 billion; gross margin 49.3%; operating margin 27.4%; net income $2.05 billion
  • Business outlook at mid-point: Q3 net revenues of $4.38 billion and gross margin of 47.5%

STMicroelectronics a global semiconductor leader serving customers across the spectrum of electronics applications, reported U.S. GAAP financial results for the second quarter ended July 1, 2023. This press release also contains non-U.S. GAAP measures (see Appendix for additional information).

ST reported second quarter net revenues of $4.33 billion, gross margin of 49.0%, operating margin of 26.5%, and net income of $1.00 billion or $1.06 diluted earnings per share.

Jean-Marc Chery, STMicroelectronics President & CEO, commented:

“Q2 net revenues of $4.33 billion came in above the midpoint of our business outlook range, and Q2 gross margin of 49.0% was in line with guidance.” 

“Q2 net revenues increased 12.7% year-over-year. The revenue performance continued to be driven by growth in Automotive and Industrial, partially offset by lower revenues in Personal Electronics.”

“On a year-over-year basis, gross margin increased to 49.0% from 47.4%, operating margin increased to 26.5% from 26.2% and net income increased 15.5% to $1.00 billion.”

“First half net revenues increased 16.1% year-over-year, driven by growth in all product sub-groups except the Analog and MEMS sub-groups. Operating margin was 27.4% and net income was $2.05 billion.”

·”Our third quarter business outlook, at the mid-point, is for net revenues of $4.38 billion, increasing year-over-year by 1.2% and increasing sequentially by 1.1%; gross margin is expected to be about 47.5%.”

“We will drive the Company based on a plan for FY23 revenues of $17.4 billion, plus or minus $150 million, and a gross margin exceeding 48.0%.”

Quarterly Financial Summary (U.S. GAAP)

(US$ m, except per share data)Q2 2023Q1 2023Q2 2022Q/QY/Y
Net Revenues$4,326$4,247$3,8371.9%12.7%
Gross Profit$2,119$2,110$1,8190.5%16.5%
Gross Margin49.0%49.7%47.4%-70 bps160 bps
Operating Income$1,146$1,201$1,004-4.5%14.2%
Operating Margin26.5%28.3%26.2%-180 bps30 bps
Net Income$1,001$1,044$867-4.1%15.5%
Diluted Earnings Per Share$1.06$1.10$0.92-3.6%15.2%
Q2 2023Q1 2023Q2 2022Q/QY/Y
Automotive and Discrete Group (ADG)1,9551,8071,4548.2%34.4%
Analog, MEMS and Sensors Group (AMS)9401,0681,115-11.9%-15.7%
Microcontrollers and Digital ICs Group (MDG)1,4271,3681,2634.3%13.0%

Total Net Revenues4,3264,2473,8371.9%12.7%

Net revenues totaled $4.33 billion, representing a year-over-year increase of 12.7%. On a year-over-year basis, ADG and MDG revenues increased 34.4% and 13.0%, respectively, while AMS decreased 15.7%. Year-over-year net sales to OEMs and Distribution increased 9.8% and 18.3%, respectively. On a sequential basis, net revenues increased 1.9%, 110 basis points better than the mid-point of the Company’s guidance. ADG and MDG both reported an increase in net revenues on a sequential basis, while AMS decreased, as expected.

Gross profit totaled $2.12 billion, representing a year-over-year increase of 16.5%. Gross margin of 49.0% increased 160 basis points year-over-year, mainly due to product mix, favorable pricing, positive currency effects, net of hedging, partially offset by higher manufacturing costs.

Operating income increased 14.2% to $1.15 billion, compared to $1.00 billion in the year-ago quarter. In the second quarter 2023, net operating expenses included negative non-recurring non-cash items amounting to $34 million. The Company’s operating margin increased 30 basis points on a year-over-year basis to 26.5% of net revenues, compared to 26.2% in the 2022 second quarter.

By product group, compared with the year-ago quarter:

Automotive and Discrete Group (ADG):

·       Revenue increased for both Automotive and Power Discrete.

·       Operating profit increased by 73.8% to $624 million. Operating margin was 31.9% compared to 24.7%.

Analog, MEMS and Sensors Group (AMS):

·       Revenue decreased in Analog, in Imaging and in MEMS.

·       Operating profit decreased by 48.3% to $139 million. Operating margin was 14.8% compared to 24.1%.

Microcontrollers and Digital ICs Group (MDG):

·       Revenue increased for both Microcontrollers and RF Communications.

·       Operating profit increased by 19.0% to $505 million. Operating margin was 35.4% compared to 33.6%.

Net income and diluted earnings per share increased to $1.00 billion and $1.06 respectively, compared to $0.87 billion and $0.92 respectively, in the year-ago quarter.

Cash Flow and Balance Sheet Highlights

    Trailing 12 Months
(US$ m)Q2 2023Q1 2023Q2 2022Q2 2023Q2 2022TTM Change
Net cash from operating activities1,3111,3201,0565,8323,77754.4%
Free cash flow (non-U.S. GAAP)[1]2092062301,6941,04662.0%

Net cash from operating activities was $1.31 billion in the second quarter compared to $1.06 billion in the year-ago quarter.

Capital expenditure payments, net of proceeds from sales, capital grants and other contributions, were $1.07 billion in the second quarter. In the year-ago period, capital expenditures, net, were $0.81 billion.

Free cash flow(non-U.S. GAAP) was $209 million compared to $230 million in the year-ago quarter.

Inventory at the end of the second quarter was $3.05 billion, compared to $2.31 billion in the year-ago quarter. Days sales of inventory at quarter-end was 126 days compared to 104 days in the year-ago quarter.

In the second quarter, the Company paid cash dividends to its stockholders totaling $50 million and executed a $86 million share buy-back as part of its current share repurchase program.

ST’s net financial position (non-U.S. GAAP) was $1.91 billion as of July 1, 2023, compared to $1.86 billion as of April 1, 2023 and reflected total liquidity of $4.56 billion and total financial debt of $2.65 billion

Further information can be found at