STMicroelectronics NV, a global semiconductor company, announced its financial results for the quarter ending June 28, 2025. The report includes both U.S. GAAP and adjusted (non-GAAP) figures. For the second quarter, STMicroelectronics posted net revenues of $2.77 billion, a gross margin of 33.5%, an operating loss of $133 million, and a net loss of $97 million, or -$0.11 per diluted share. Adjusted figures showed operating income of $57 million and net income of $57 million, or $0.06 per diluted share.
Jean-Marc Chery, President and CEO, highlighted that second-quarter revenues exceeded the middle of the company’s forecast, mainly supported by strong performances in Personal Electronics and Industrial sectors, although the Automotive segment slightly missed expectations. The gross margin aligned with the predicted range. Compared to the previous year, revenues dropped by 14.4%, while the adjusted operating margin fell sharply from 11.6% to 2.1%, and adjusted net income decreased significantly from $353 million to $57 million.
For the first half of 2025, overall revenues were down 21.1% compared to the same period in 2024, with declines observed across all business segments. The adjusted operating margin stood at 1.3%, and the adjusted net income for the period totaled $120 million. In terms of bookings during the second quarter, the Industrial segment maintained a book-to-bill ratio above one, indicating strong demand, whereas the Automotive segment’s bookings were lower than shipments. Bookings increased sequentially overall, suggesting improving order momentum.
Looking forward to the third quarter, the company expects net revenues to reach approximately $3.17 billion, representing a 14.6% increase from the previous quarter but a 2.5% decrease compared to the same quarter last year. Gross margin is anticipated to be around 33.5%, though some margin pressure is expected due to currency fluctuations and restructuring costs tied to the ongoing manufacturing reshaping program. Despite these challenges, the company remains focused on supporting customers, accelerating new product launches, and managing its manufacturing footprint amid uncertain macroeconomic conditions.
The company’s net revenues for the quarter were $2.77 billion, down 14.4% year-over-year. Sales to original equipment manufacturers (OEMs) declined 15.3%, and distributor sales fell 12.0%. Sequentially, revenues rose by 9.9%, beating the midpoint of guidance by 220 basis points. Gross profit came in at $926 million, a 28.5% decrease compared to the prior year. The gross margin of 33.5% slightly exceeded guidance by 10 basis points but was 660 basis points lower than last year, largely due to changes in product mix, lower manufacturing efficiency, and higher unused capacity charges.
Operating income swung from a profit of $375 million in the prior year to a loss of $133 million this quarter. The operating margin dropped to -4.8% from 11.6% year-over-year. This loss included $190 million in impairment and restructuring expenses linked to the company’s manufacturing transformation efforts. Excluding these charges, the adjusted operating income was $57 million. Within the business segments, the Analog, MEMS, and Sensors group saw revenues decline by 15.2%, primarily due to lower analog product sales. Operating profit in this segment fell by 55.9% to $85 million, with the margin slipping to 7.5% from 14.5%. The Power and Discrete segment experienced a 22.2% revenue decline, with operating profit turning into a $56 million loss compared to a $61 million gain a year earlier.
In the Microcontrollers, Digital ICs, and RF products group, Embedded Processing revenues decreased by 6.5%, mostly due to custom processing products. Operating profit in this segment declined by 8.7% to $114 million, with a margin of 13.5%, slightly down from 13.8% the previous year. The RF and Optical Communications segment saw revenues fall 17.9%, with operating profit dropping 37.2% to $60 million and margin decreasing to 17.9% from 23.4%. Overall, the company reported a net loss of $97 million, or -$0.11 per share, compared to a net profit of $353 million, or $0.38 per share, in the same quarter of the previous year. Adjusted net income was $57 million, or $0.06 per share.
Operating cash flow totaled $354 million, down from $702 million a year earlier. Capital expenditures were $465 million, reduced from $528 million the previous year. Free cash flow was negative $152 million, compared with positive $159 million previously. Inventory increased to $3.27 billion from $2.81 billion a year ago, with days sales of inventory rising to 166 days from 130 days. The company returned $81 million to shareholders in dividends and repurchased $92 million of shares under its ongoing buyback program. As of June 28, 2025, STMicroelectronics had a net financial position of $2.67 billion, with total liquidity of $5.63 billion and financial debt of $2.96 billion.
The company held its 2025 Annual General Meeting in Amsterdam on May 28, where shareholders approved all proposals. Looking ahead to the third quarter, management projects net revenues of about $3.17 billion, a sequential rise of 14.6% with a margin of error of plus or minus 350 basis points. The expected gross margin is approximately 33.5%, plus or minus 200 basis points. These projections assume an exchange rate near $1.14 to €1.00 and account for current hedging arrangements. The quarter will end on September 27, 2025, and the outlook does not factor in any potential future changes to global trade tariffs.
STMicroelectronics employs around 50,000 people and supports over 200,000 customers across multiple industries. The company focuses on products that improve energy efficiency, mobility, and connectivity. ST is working toward full carbon neutrality in its operations and aims to use 100% renewable electricity by 2027.
