STMicroelectronics (STM) Q4 2025 earnings summary

Executive summary

• Q4 2025 revenues reached $3.33 billion, up 0.2% year-over-year and above guidance midpoint, driven by Personal Electronics and Communication Equipment, while Automotive lagged expectations.

• Full year 2025 net revenues declined 11.1% to $11.8 billion, mainly due to sharp drops in Automotive and Industrial segments, partially offset by growth in Personal Electronics and CECP.

• Gross margin for Q4 was 35.2%, and for the full year 33.9%, both down year-over-year due to lower manufacturing efficiencies and negative currency effects.

• Q4 marked a return to year-over-year growth, with inventory normalization and positive free cash flow.

• Strategic focus remains on innovation, manufacturing footprint reshaping, cost base resizing, and free cash flow generation.

Financial highlights

• Q4 gross profit was $1.17 billion, down 6.5% year-over-year; gross margin decreased 250 basis points year-over-year but improved 200 basis points sequentially.

• Q4 net loss was $30 million, including $163 million in one-time non-cash tax expenses; non-GAAP net income was $100 million.

• Full year 2025 operating income was $175 million, down from $1.68 billion in 2024; non-GAAP operating margin was 4.7%.

• Free cash flow for 2025 was $265 million, with net CapEx at $1.79 billion.

• Cash dividends paid totaled $321 million, and share buybacks reached $367 million in 2025.

Outlook and guidance

• Q1 2026 revenues expected at $3.04 billion, down 8.7% sequentially; gross margin forecasted at 33.7%.

• Net CapEx for 2026 planned at $2.0–$2.2 billion, focused on growth drivers like Cloud Optical Interconnect.

• Management expects organic growth in 2026, with inventory correction largely completed by end of Q2.

• Gross margin is expected to improve throughout 2026, with Q1 seen as the low point.