Highlights:
- Q4 net revenues $3.32 billion; gross margin 37.7%; operating margin 11.1%; net income $341 million
- FY net revenues $13.27 billion; gross margin 39.3%; operating margin 12.6%; net income $1.56 billion
- Business outlook at mid-point: Q1 net revenues of $2.51 billion and gross margin of 33.8%
- Start of the company-wide program to resize global cost base*
STMicroelectronics N.V., a global semiconductor leader serving customers across the spectrum of electronics applications, reported U.S. GAAP financial results for the fourth quarter ended December 31, 2024. This press release also contains non-U.S. GAAP measures (see Appendix for additional information).
ST reported fourth quarter net revenues of $3.32 billion, gross margin of 37.7%, operating margin of 11.1%, and net income of $341 million or $0.37 diluted earnings per share.
Jean-Marc Chery, ST President & CEO, commented:
- “FY24 revenues decreased 23.2% to $13.27 billion. Operating margin was 12.6% compared to 26.7% in FY23 and net income decreased 63.0% to $1.56 billion. We invested $2.53 billion in Net Capex (non-U.S. GAAP) while delivering free cash flow (non-U.S. GAAP) of $288 million.”
- “Q4 net revenues were in line with the mid-point of our business outlook range driven by higher revenues in Personal Electronics offset by lower revenues in Industrial, while Automotive and CECP were as expected. Q4 gross margin of 37.7% was broadly in line with the mid-point of our business outlook range.”
- “Our book-to-bill ratio remained below 1 in Q4 as we continued to face a delayed recovery and inventory correction in Industrial and a slowdown in Automotive, both particularly in Europe.”
- “Our first quarter business outlook, at the mid-point, is for net revenues of $2.51 billion, decreasing year-over-year by 27.6% and decreasing sequentially by 24.4%; gross margin is expected to be about 33.8%, impacted by about 500 basis points of unused capacity charges.”
- “For 2025, we plan to invest between $2.0 to $2.3 billion in Net Capex (non-U.S. GAAP).”
Quarterly Financial Summary (U.S. GAAP)
| (US$ m, except per share data) | Q4 2024 | Q3 2024 | Q4 2023 | Q/Q | Y/Y |
| Net Revenues | $3,321 | $3,251 | $4,282 | 2.2% | -22.4% |
| Gross Profit | $1,253 | $1,228 | $1,949 | 2.1% | -35.7% |
| Gross Margin | 37.7% | 37.8% | 45.5% | -10 bps | -780 bps |
| Operating Income | $369 | $381 | $1,023 | -3.3% | -64.0% |
| Operating Margin | 11.1% | 11.7% | 23.9% | -60 bps | -1,280 bps |
| Net Income | $341 | $351 | $1,076 | -2.6% | -68.3% |
| Diluted Earnings Per Share | $0.37 | $0.37 | $1.14 | 0% | -67.5% |
* For each of the concerned countries, the start of the program will take place in accordance with applicable regulations.
Annual Financial Summary (U.S. GAAP)
| (US$ m, except earnings per share data) | FY2024 | FY2023 | Y/Y |
| Net Revenues | $13,269 | $17,286 | -23.2% |
| Gross Profit | $5,220 | $8,287 | -37.0% |
| Gross Margin | 39.3% | 47.9% | -860 bps |
| Operating Income | $1,676 | $4,611 | -63.7% |
| Operating Margin | 12.6% | 26.7% | -1,410 bps |
| Net Income | $1,557 | $4,211 | -63.0% |
| Diluted Earnings Per Share | $1.66 | $4.46 | -62.8% |
Fourth Quarter 2024 Summary Review
Reminder: On January 10, 2024, ST announced a new organization which implied a change in segment reporting starting Q1 2024. Prior year comparative periods have been adjusted accordingly. See Appendix for more detail.
| Net Revenues by Reportable Segment (US$ m) | Q4 2024 | Q3 2024 | Q4 2023 | Q/Q | Y/Y |
| Analog products, MEMS and Sensors (AM&S) segment | 1,198 | 1,185 | 1,418 | 1.1% | -15.5% |
| Power and discrete products (P&D) segment | 752 | 807 | 965 | -6.8% | -22.1% |
| Subtotal: Analog, Power & Discrete, MEMS and Sensors (APMS) Product Group | 1,950 | 1,992 | 2,383 | -2.1% | -18.2% |
| Microcontrollers (MCU) segment | 887 | 829 | 1,272 | 7.0% | -30.2% |
| Digital ICs and RF Products (D&RF) segment | 481 | 426 | 623 | 13.0% | -22.8% |
| Subtotal: Microcontrollers, Digital ICs and RF products (MDRF) Product Group | 1,368 | 1,255 | 1,895 | 9.0% | -27.8% |
| Others | 3 | 4 | 4 | – | – |
| Total Net Revenues | $3,321 | $3,251 | $4,282 | 2.2% | -22.4% |
Net revenues totaled $3.32 billion, representing a year-over-year decrease of 22.4%. Year-over-year net sales to OEMs and Distribution decreased 19.8% and 28.7%, respectively. On a sequential basis, net revenues increased 2.2%, in line with the mid-point of ST’s guidance.
Gross profit totaled $1.25 billion, representing a year-over-year decrease of 35.7%. Gross margin of 37.7%, 30 basis points below the mid-point of ST’s guidance, decreased 780 basis points year-over-year, mainly due to product mix and, to a lesser extent, to sales price and higher unused capacity charges.
Operating income decreased 64.0% to $369 million, compared to $1.02 billion in the year-ago quarter. ST’s operating margin decreased 1,280 basis points on a year-over-year basis to 11.1% of net revenues, compared to 23.9% in the fourth quarter of 2023.
By reportable segment1, compared with the year-ago quarter:
In Analog, Power & Discrete, MEMS and Sensors (APMS) Product Group:
Analog products, MEMS and Sensors (AM&S) segment:
- Revenue decreased 15.5% mainly due to decreases in Analog and in Imaging.
- Operating profit decreased by 41.2% to $176 million. Operating margin was 14.7% compared to 21.1%.
Power and Discrete products (P&D) segment:
- Revenue decreased 22.1%.
- Operating profit decreased by 63.7% to $89 million. Operating margin was 11.9% compared to 25.4%.
In Microcontrollers, Digital ICs and RF products (MDRF) Product Group:
Microcontrollers (MCU) segment:
- Revenue decreased 30.2% mainly due to a decrease in GP MCU.
- Operating profit decreased by 66.4% to $127 million. Operating margin was 14.3% compared to 29.8%.
Digital ICs and RF products (D&RF) segment:
- Revenue decreased 22.8% mainly due to a decrease in ADAS (automotive ADAS and infotainment).
- Operating profit decreased by 33.2% to $149 million. Operating margin was 31.0% compared to 35.7%.
Net income and diluted Earnings Per Share decreased to $341 million and $0.37 respectively compared to $1.08 billion and $1.14 respectively in the year-ago quarter. As a reminder, the fourth quarter 2023 net income included a one-time non-cash income tax benefit of $191 million.
Cash Flow and Balance Sheet Highlights
| Trailing 12 Months | ||||||
| (US$ m) | Q4 2024 | Q3 2024 | Q4 2023 | Q4 2024 | Q4 2023 | TTM Change |
| Net cash from operating activities | 681 | 723 | 1,480 | 2,965 | 5,992 | -50.5% |
| Free cash flow (non-U.S. GAAP)2 | 128 | 136 | 652 | 288 | 1,774 | -83.8% |
Net cash from operating activities was $681 million in the fourth quarter compared to $1.48 billion in the year-ago quarter. For the full-year 2024, net cash from operating activities decreased 50.5% to $2.97 billion, which represents 22.3% of total revenues.
Net Capex (non-U.S. GAAP), were $470 million in the fourth quarter and $2.53 billion for the full year 2024. In the respective year-ago periods, net capital expenditures were $798 million and $4.11 billion.
Free cash flow (non-U.S. GAAP) was $128 million and $288 million in the fourth quarter and full year 2024, respectively, compared to $652 million and $1.77 billion in the year-ago respective periods.
Inventory at the end of the fourth quarter was $2.79 billion, compared to $2.88 billion in the previous quarter and $2.70 billion in the year-ago quarter. Days sales of inventory at quarter-end was 122 days, compared to 130 days in the previous quarter, and 104 days in the year-ago quarter.
In the fourth quarter, ST paid cash dividends to its stockholders totaling $88 million and executed a $92 million share buy-back, as part of its current share repurchase program.
ST’s net financial position (non-U.S. GAAP) was $3.23 billion as of December 31, 2024, compared to $3.18 billion as of September 28, 2024 and reflected total liquidity of $6.18 billion and total financial debt of $2.95 billion. Adjusted net financial position (non-U.S. GAAP), taking into consideration the effect on total liquidity of advances from capital grants for which capital expenditures have not been incurred yet, stood at $2.85 billion as of December 31, 2024.
Corporate developments
In Q4, we announced the launch of a new company-wide program to reshape our manufacturing footprint accelerating our wafer fab capacity to 300mm Silicon (Agrate and Crolles) and 200mm Silicon Carbide (Catania) and resizing our global cost base.
This program should result in strengthening our capability to grow our revenues with an improved operating efficiency resulting in annual cost savings in the high triple-digit million-dollar range exiting 2027. Specifically in terms of operating expenses (SG&A and R&D), ST expects annual cost savings totaling $300 to 360 million, exiting 2027, compared to the cost base of 2024.
Business Outlook
ST’s guidance, at the mid-point, for the 2025 first quarter is:
- Net revenues are expected to be $2.51 billion, a decrease of 24.4% sequentially, plus or minus 350 basis points.
- Gross margin of 33.8%, plus or minus 200 basis points.
- This outlook is based on an assumed effective currency exchange rate of approximately $1.06 = €1.00 for the 2025 first quarter and includes the impact of existing hedging contracts.
- The first quarter will close on March 29, 2025.
Conference Call and Webcast Information
A live webcast (listen-only mode) of the conference call will be accessible at ST’s website, https://investors.st.com, and will be available for replay until February 14, 2025.
Use of Supplemental Non-U.S. GAAP Financial Information
This press release contains supplemental non-U.S. GAAP financial information.
Readers are cautioned that these measures are unaudited and not prepared in accordance with U.S. GAAP and should not be considered as a substitute for U.S. GAAP financial measures. In addition, such non-U.S. GAAP financial measures may not be comparable to similarly titled information from other companies. To compensate for these limitations, the supplemental non-U.S. GAAP financial information should not be read in isolation, but only in conjunction with ST’s consolidated financial statements prepared in accordance with U.S. GAAP.
See the Appendix of this press release for a reconciliation of ST’s non-U.S. GAAP financial measures to their corresponding U.S. GAAP financial measures.
For more information visit www.st.com.
