STMicroelectronics NV Q1 FY2025 earnings call

• Business Dynamics: Automotive Q1 expected to be low point, book-to-bill above 1, saw lower revenues across geographies, with car electrification wins; Car digitalization saw traction with automotive microcontrollers; Industrial Q1 low point, book-to-bill above 1, orders up; Embedded Processing STM32 microcontrollers gained traction, software ecosystem grew; Personal Electronics slightly better than expected; Corporate development on manufacturing footprint reshaping; Issued first annual integrated report for sustainability.

In the first quarter, by reportable segments: Analog products, MEMS and Sensor was down 23.9% year-over-year; Power and discrete products decreased 37.1%; Embedded Processing revenues declined 29.1%; RF and optical communication declined 19.2%. By end market: Automotive declined by about 39%, Industrial by about 32%, Personal Electronics by about 11%, and Communication Equipment and Computer Peripheral increased by about 1%. Sequentially, revenue decreased 20.7% in AMS, 34.1% in power discrete, 26% in EMP, and 16.5% in RF and OC. By end market sequentially: Automotive declined by about 34%, Industrial by about 18%, Personal Electronics by about 17%, and Communication Equipment and Computer Peripheral by about 40%.

• Q2 2025 revenues expected at $2.71 billion ±350 basis points, midpoint down 16.2% year-over-year and up 7.7% sequentially. - Gross margin expected to be about 33.4% ±200 basis points, impacted by ~420 basis points of unused capacity charges. - Full year 2025 revenues not guided due to economic and market uncertainty. - Net CapEx plan for 2025 remains between $2 billion and $2.3 billion to execute manufacturing footprint reshaping.

• Trade and tariff uncertainty creating uncertainty in car production levels and EV volumes. - Inventory levels at 167 days, which could impact gross margin. - Potential impact of retaliatory tariffs on semiconductor sales to China affecting business.

Q: Francois Bouvignies asked about tariff pulling and inventory impact on gross margin.

A: Jean-Marc Chery said no specific tariff pulling for Q2, Lorenzo Grandi discussed inventory reduction plan.

Q: Janardan Menon inquired about industrial recovery difference vs TI.

A: Jean-Marc Chery noted industrial positive trends but slower inventory reduction.

Q: Joshua Buchalter asked about channel inventory.

A: Lorenzo Grandi said some inventory reduction in Asia but still excess in EMEA and Americas.

Q: Stephane Houri questioned automotive market and CapEx.

A: Jean-Marc Chery commented on automotive revenue outlook and CapEx plan.

Q: Sandeep Deshpande asked about retaliatory tariffs and auto share.

A: Jean-Marc Chery and Marco Cassis responded on tariff impact and auto share stability