STMicroelectronics 2025 Q3 Financial Results:
- Q3 net revenues $3.19 billion; gross margin 33.2%; operating income of $180 million, including $37 million related to impairment, restructuring charges and other related phase-out costs; net income of $237 million
- Business outlook at mid-point: Q4 net revenues of $3.28 billion and gross margin of 35.0%
STMicroelectronics N.V. (“ST”) (NYSE: STM), a global semiconductor leader serving customers across the spectrum of electronics applications, reported U.S. GAAP financial results for the third quarter ended September 27, 2025. This press release also contains non-U.S. GAAP measures (see Appendix for additional information).
ST reported third quarter net revenues of $3.19 billion, gross margin of 33.2%, operating income of $180 million, and net income of $237 million or $0.26 diluted earnings per share (non-U.S. GAAP operating income of $217 million, and non-U.S. GAAP net income of $267 million or $0.29 diluted earnings per share).
Jean-Marc Chery, ST President & CEO, commented:
- “Q3 net revenues came slightly above the mid-point of our business outlook range, with higher revenues in Personal Electronics, while Automotive and Industrial performed as anticipated, and CECP was broadly in line with expectations. Gross margin was slightly below the mid-point of our business outlook range mainly due to product mix within Automotive and Industrial.“
- “On a year-over-year basis, Q3 net revenues decreased 2.0%, non-U.S. GAAP operating margin decreased to 6.8% from 11.7% and non-U.S. GAAP net income decreased to $267 million from $351 million.”
- “In the third quarter, our book-to-bill ratio was above one, with Automotive above parity and Industrial at parity.”
- “Our fourth quarter business outlook, at the mid-point, is for net revenues of $3.28 billion, increasing sequentially by 2.9%, gross margin is expected to be about 35.0%; including about 290 basis points of unused capacity charges.“
- “The mid-point of this outlook translates into full year 2025 revenues of about $11.75 billion. This represents a 22.4% growth in the second half compared to the first half, confirming signs of market recovery. Gross margin is expected to be about 33.8%.”
- To optimize our investments in response to the current market conditions, we have reduced our Net Capex plan, now slightly below $2 billion for FY25.”
- “Our strategic priorities remain clear: accelerating innovation; executing our company-wide program to reshape our manufacturing footprint and resize our global cost base, which remains on schedule to deliver the targeted savings; and strengthening free cash flow generation.”
Quarterly Financial Summary
| U.S. GAAP(US$ m, except per share data) | Q3 2025 | Q2 2025 | Q3 2024 | Q/Q | Y/Y |
| Net Revenues | $3,187 | $2,766 | $3,251 | 15.2% | -2.0% |
| Gross Profit | $1,059 | $926 | $1,228 | 14.3% | -13.7% |
| Gross Margin | 33.2% | 33.5% | 37.8% | -30 bps | -460 bps |
| Operating Income (Loss) | $180 | $(133) | $381 | – | -52.9% |
| Operating Margin | 5.6% | -4.8% | 11.7% | 1,040 bps | -610 bps |
| Net Income (Loss) | $237 | $(97) | $351 | – | -32.3% |
| Diluted Earnings Per Share | $0.26 | $(0.11) | $0.37 | – | -29.7% |
| Non-U.S. GAAP1(US$ m, except per share data) | Q3 2025 | Q2 2025 | Q3 2024 | Q/Q | Y/Y |
| Operating Income | $217 | $57 | $381 | 278.8% | -43.2% |
| Operating Margin | 6.8% | 2.1% | 11.7% | 470 bps | -490 bps |
| Net Income | $267 | $57 | $351 | 369.1% | -23.9% |
| Diluted Earnings Per Share | $0.29 | $0.06 | $0.37 | 383.3% | -21.6% |
Third Quarter 2025 Summary Review
Reminder: on January 1, 2025, we made some adjustments to our segment reporting. Prior year comparative periods have been adjusted accordingly. See Appendix for more detail.
| Net Revenues by Reportable Segment2(US$ m) | Q3 2025 | Q2 2025 | Q3 2024 | Q/Q | Y/Y |
| Analog products, MEMS and Sensors (AM&S) segment | 1,434 | 1,133 | 1,340 | 26.6% | 7.0% |
| Power and discrete products (P&D) segment | 429 | 447 | 652 | -4.3% | -34.3% |
| Subtotal: Analog, Power & Discrete, MEMS and Sensors (APMS) Product Group | 1,863 | 1,580 | 1,992 | 17.9% | -6.5% |
| Embedded Processing (EMP) segment | 976 | 847 | 898 | 15.3% | 8.7% |
| RF & Optical Communications (RF&OC) segment | 345 | 336 | 357 | 2.4% | -3.4% |
| Subtotal: Microcontrollers, Digital ICs and RF products (MDRF) Product Group | 1,321 | 1,183 | 1,255 | 11.6% | 5.3% |
| Others | 3 | 3 | 4 | – | – |
| Total Net Revenues | $3,187 | $2,766 | $3,251 | 15.2% | -2.0% |
Net revenues totaled $3.19 billion, representing a year-over-year decrease of 2.0%. Year-over-year net sales to OEMs and Distribution decreased 5.1% and increased 7.6%, respectively. On a sequential basis, net revenues increased 15.2%, 60 basis points better than the mid-point of ST’s guidance.
Gross profit totaled $1.06 billion, representing a year-over-year decrease of 13.7%. Gross margin of 33.2%, 30 basis points below the mid-point of ST’s guidance, decreased 460 basis points year-over-year, mainly due to lower manufacturing efficiencies, negative currency effect, lower level of capacity reservation fees and, to a lesser extent, the combination of sale price and product mix.
Operating income decreased from $381 million in the year-ago quarter to $180 million. ST’s operating margin decreased 610 basis points on a year-over-year basis to 5.6% of net revenues, compared to 11.7% in the third quarter of 2024. Operating income included $37 million impairment, restructuring charges and other related phase-out costs for the quarter, reflecting impairment of assets and restructuring charges predominantly associated with the previously announced company-wide program to reshape our manufacturing footprint and resize our global cost base. Excluding these items, non-U.S. GAAP Operating income stood at $217 million in the third quarter.
By reportable segment, 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 increased 7.0% mainly due to Imaging.
- Operating profit increased by 2.1% to $221 million. Operating margin was 15.4% compared to 16.1%.
Power and Discrete products (P&D) segment:
- Revenue decreased 34.3%.
- Operating profit decreased from $80 million to an operating loss of $67 million. Operating margin was -15.6% compared to 12.2%.
In Microcontrollers, Digital ICs and RF products (MDRF) Product Group:
Embedded Processing (EMP) segment:
- Revenue increased 8.7% mainly due to General Purpose MCU.
- Operating profit increased by 9.4% to $161 million. Operating margin was 16.5% compared to 16.4%.
RF & Optical Communications (RF&OC) segment:
- Revenue decreased 3.4%.
- Operating profit decreased by 31.6% to $57 million. Operating margin was 16.6% compared to 23.4%.
Net Earnings and diluted Earnings Per Share decreased to $237 million and $0.26 respectively, compared to $351 million and $0.37 respectively in the year-ago quarter. Non-U.S. GAAP1 Net income and diluted Earnings Per Share, stood at $267 million and $0.29 respectively in the third quarter of 2025.
Cash Flow and Balance Sheet Highlights
| Trailing 12 Months | ||||||
| (US$ m) | Q3 2025 | Q2 2025 | Q3 2024 | Q3 2025 | Q3 2024 | TTM Change |
| Net cash from operating activities | 549 | 354 | 723 | 2,158 | 3,764 | -42.7% |
| Free cash flow (non-U.S. GAAP1) | 130 | (152) | 136 | 136 | 813 | -83.3% |
Net cash from operating activities was $549 million in the third quarter compared to $723 million in the year-ago quarter.
Net Capex (non-U.S. GAAP1), was $401 million in the third quarter compared to $565 million in the year-ago quarter.
Free cash flow (non-U.S. GAAP1) was positive $130 million in the third quarter, compared to positive $136 million in the year-ago quarter.
Inventory at the end of the third quarter was $3.17 billion, compared to $3.27 billion in the previous quarter and $2.88 billion in the year-ago quarter. Days sales of inventory at quarter-end was 135 days, compared to 166 days for the previous quarter and 130 days for the year-ago quarter.
In the third quarter, ST paid cash dividends to its stockholders totaling $81 million and executed a $91 million share buy-back, as part of its current share repurchase program.
ST’s net financial position (non-U.S. GAAP) remained strong at $2.61 billion as of September 27, 2025, compared to $2.67 billion as of June 28, 2025, and reflected total liquidity of $4.78 billion and total financial debt of $2.17 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 $2.27 billion as of September 27, 2025.
Corporate developments
On July 24, 2025, ST entered into a definitive transaction agreement for the acquisition of NXP’s MEMS sensor business for a purchase price of up to $950 million in cash, including $900 million upfront and $50 million subject to the achievement of technical milestones. The transaction which will be financed with existing liquidity is subject to customary closing conditions, including regulatory approvals, and is expected to close in H1 2026.
Business Outlook
ST’s guidance, at the mid-point, for the 2025 fourth quarter is:
- Net revenues are expected to be $3.28 billion, an increase of 2.9% sequentially, plus or minus 350 basis points.
- Gross margin of 35.0%, plus or minus 200 basis points.
- This outlook is based on an assumed effective currency exchange rate of approximately $1.15 = €1.00 for the 2025 fourth quarter and includes the impact of existing hedging contracts.
- The fourth quarter will close on December 31, 2025.
This business outlook does not include any impact of potential further changes to global trade tariffs compared to the current situation.
Conference Call and Webcast Information
ST will conduct a conference call with analysts, investors and reporters to discuss its third quarter 2025 financial results and current business outlook today at 9:30 a.m. Central European Time (CET) / 3:30 a.m. U.S. Eastern Time (ET). 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 November 7, 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.
For more information visit www.st.com.
