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LITTELFUSE INC /DE (LFUS)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 beat on both revenue and adjusted EPS: revenue $554.3M (+3.5% YoY) and adjusted EPS $2.19 (+24% YoY) vs S&P Global consensus of $538.6M and $1.81, respectively; strength came from Electronics recovery and robust Industrial growth, while Transportation margins expanded despite softer volumes . Q1 consensus: Revenue $538.6M*, EPS $1.81*.
  • Adjusted operating margin expanded 320 bps YoY to 14.2% and adjusted EBITDA margin reached 20.1%, reflecting operational execution and conversion on growth .
  • Management guided Q2 2025 revenue to $565–$595M and adjusted EPS to $2.10–$2.40 with a 23–25% adjusted tax rate, and indicated tariff mitigation actions should make tariffs immaterial to Q2 earnings; book-to-bill >1 across all segments entering Q2 .
  • Narrative catalysts: Data center and renewables design-win momentum; tariff mitigation and “local-for-local” footprint; healthy cash generation (OCF $65.8M; FCF $42.7M) and low leverage (1.3x) support strategic M&A and buybacks/dividends .

What Went Well and What Went Wrong

  • What Went Well
    • Electronics segment returned to growth (+5.5% sales; 15.2% operating margin, +220 bps YoY), with passive products +13% organically and strong sequential leverage on volumes .
    • Industrial segment accelerated (+15.3% sales; 15.3% operating margin, +880 bps YoY) on renewables, data center and HVAC demand and favorable pricing .
    • Management highlighted new design wins in data center power distribution and megawatt-capable power semis; “we are leaders in developing smart solutions that enable safe and efficient electrical energy transfer” .
  • What Went Wrong
    • Transportation sales declined (-5.0% YoY) on softer passenger car (−6% organically) and CV (−2% organically), particularly Europe/North America mix, though margins improved to 11.7% .
    • Higher restructuring/other charges ($9.0M) and elevated FX loss (+$4.8M) weighed on GAAP EPS ($1.75 vs $1.93 YoY) despite stronger adjusted profitability .
    • Management flagged second-half demand uncertainty (auto and personal electronics) despite strong Q2 backlog; tariff/macro backdrop remains fluid .

Financial Results

Headline metrics across recent quarters

MetricQ3 2024Q4 2024Q1 2025
Revenue ($M)$567.4 $529.5 $554.3
GAAP Diluted EPS ($)$2.32 $(1.57) $1.75
Adjusted Diluted EPS ($)$2.71 $2.04 $2.19
Operating Margin (%)15.5% (6.9%) 12.7%
Adjusted Operating Margin (%)15.9% 12.0% 14.2%
Adjusted EBITDA Margin (%)21.7% 18.1% 20.1%

Q1 2025 actual vs S&P Global consensus

MetricConsensusActual
Revenue ($M)$538.6*$554.3
Adjusted EPS ($)$1.81*$2.19

Values marked with * retrieved from S&P Global.

Segment performance (Q1 YoY)

SegmentNet Sales ($M) Q1-24Net Sales ($M) Q1-25YoY %Operating Income ($M) Q1-24Operating Income ($M) Q1-25Operating Margin Q1-24Operating Margin Q1-25
Electronics$291.1 $307.2 5.5% $37.8 $46.8 13.0% 15.2%
Transportation$170.4 $161.9 (5.0%) $16.2 $18.9 9.5% 11.7%
Industrial$73.9 $85.2 15.3% $4.8 $13.1 6.5% 15.3%
Total$535.4 $554.3 3.5% $55.0 $70.2 10.3% 12.7%

KPIs and cash/leverage

KPIQ1 2024Q1 2025
Operating Cash Flow ($M)$57.1 $65.8
Free Cash Flow ($M)$41.6 $42.7
Cash & Equivalents ($M)$724.9 (Q4-24) $618.7 (Q1-25)
Net Debt ($M)$557.0 (Q4-24) $634.4 (Q1-25)
Consolidated Net Leverage1.2x (Q4-24) 1.3x (Q1-25)

Non-GAAP adjustments: Q1 included $9.0M restructuring/impairment, ($0.5M) purchase accounting step-up reversal, and $4.8M non-operating FX loss; total EPS adjustment +$0.44 to arrive at adjusted EPS $2.19 .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Sales ($M)Q2 2025N/A$565–$595 New
Adjusted Diluted EPS ($)Q2 2025N/A$2.10–$2.40 New
Adjusted Effective Tax RateQ2 2025N/A23%–25% New
Dividend per shareQ2 2025$0.70 (paid Mar 6, 2025) $0.70 (payable Jun 5; record May 22) Maintained
Boardman capacity-sharing sales impactFY 2025~2% sales; EPS neutral ~2% sales; EPS neutral Maintained
FX/commodities tailwindFY 2025N/A~+1% sales; +$0.40 EPS at current rates Provided
Amortization expenseFY 2025N/A~$58M Provided
Interest expense (gross)FY 2025N/A~$35M, ~2/3 offset by interest income Provided
CapexFY 2025N/A$90–$95M Provided
Full-year tax rateFY 2025N/A23%–25% Provided

Management also stated Q2 tariffs are not expected to be material to earnings due to mitigation actions (footprint, sourcing/logistics, pricing) .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3’24, Q4’24)Current Period (Q1’25)Trend
AI/Data center exposureLimited explicit mention in PR; focus on execution and soft markets . Q4 PR emphasized positioning for 2025 earnings expansion .Delivered design wins for circuit protection and power distribution; megawatt power semis for transfer switches; HVAC demand tied to data centers Increasing strategic focus and content opportunity
Tariffs/Supply chainNot highlighted in Q3/Q4 PRs .Active mitigation; local-for-local manufacturing; expect no material Q2 EPS impact from tariffs; pricing actions as needed Manageable; mitigation playbook in place
Electronics segmentQ3: −11.6% YoY; Q4: electronics pressured (impairments were elsewhere) .Return to growth (+5.5% YoY); passive +13% org; protection improved; strong operating leverage Recovering
TransportationQ3: −3.2% YoY; Q4: margins improved YoY .Sales −5% YoY; margins up to 11.7%; initiatives on pricing/footprint and best-practice transfer Margins improving amid soft demand
IndustrialQ3: +6.6% YoY .+15.3% YoY; renewables, data centers, HVAC; strong price contribution Accelerating growth/margins
Capital allocation & leadershipQ4: strong cash conversion; 2025 earnings expansion; dividend maintained .$45M returned (dividends + buybacks); CFO transition plan announced Apr 9; M&A remains key strategic pillar Continued returns; leadership transition underway

Management Commentary

  • Strategic positioning: “We are leaders in developing smart solutions that enable safe and efficient electrical energy transfer… As our end markets are moving to higher power and higher energy density, our customers are facing increasingly complex safety and efficiency challenges.”
  • Data center momentum: “We delivered key data center design wins for circuit protection and power distribution solutions and for megawatt capable power semiconductor devices for use in… transfer switches.”
  • Orders/backlog: “We observed improved book-to-bill across all our businesses, with total [Littelfuse] book-to-bill tracking above 1… we entered the second quarter with momentum and a strong backlog.”
  • Profitability: “Adjusted operating margin finished at 14.2% and adjusted EBITDA margins were 20.1%… expanded 320 bps versus prior year… reflecting strong operational performance and conversion on sales growth.”
  • Tariffs: “Based on our actions and current policies enacted, we do not expect tariffs to have a material impact to our second quarter earnings.”

Q&A Highlights

  • Tariffs mitigation & pricing: Company is leveraging flexible footprint (local-for-local), sourcing/logistics shifts, and pricing (list or surcharges depending on customer) to offset tariffs; ~15% of sales sourced from China (largest tariff exposure in Electronics), ~60% from Mexico with >90% under USMCA, minimizing tariff effects .
  • Electronics margin bridge: Strong sequential leverage driven by volume growth in passive and protection products; no unusual items sequentially Q4→Q1 beyond cost discipline .
  • AI/data center exposure: Higher voltage/current architectures increase the complexity and importance of protection—expanding content opportunity; active engagements with leaders in the space and growing HVAC tie-ins .
  • Transportation margins: Sustainability supported by pricing, footprint optimization/rooftop reduction (esp. CV), pruning, and best-practice transfer; FX tailwind partly offset by commodity costs .
  • Book-to-bill and 2H risk: Strong Q1 book-to-bill continued into Q2 guide; management monitoring 2H demand risk, especially auto and personal electronics .

Estimates Context

  • Q1 2025 vs consensus: Revenue $554.3M beat vs $538.6M*; adjusted EPS $2.19 beat vs $1.81*; drivers were Electronics recovery, strong Industrial growth, and operational execution (mix, pricing, and cost actions) .
  • Q2 2025 guidance vs consensus at the time: Sales $565–$595M vs $572.2M*; adjusted EPS $2.10–$2.40 vs $2.332*—effectively in-line; management expects tariffs immaterial to Q2 earnings .
  • FY 2025 context: Consensus EPS $10.54* and revenue ~$2.376B*; management reiterated ~2% sales uplift from Boardman capacity sharing (EPS neutral) and ~+1% sales/+$0.40 EPS tailwind from FX/commodities at current rates .

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Q1 was a clean beat on revenue and adjusted EPS with substantial YoY margin expansion; Industrial and Electronics are the growth/margin engines near term .
  • Electronics is inflecting, aided by passive recovery and protection strength; expect continued leverage if order momentum holds .
  • Transportation volumes remain soft, but margin initiatives are working; upside levered to eventual auto/CV demand stabilization .
  • Data center and renewables are emerging secular drivers with rising content opportunity for protection and power semis—watch for incremental design-win disclosures .
  • Tariff headwinds appear manageable given footprint/sourcing/logistics flexibility and pricing actions; near-term EPS impact guided as immaterial .
  • Strong cash generation and low leverage support continued dividends, opportunistic buybacks, and M&A aligned to higher power/energy-density solutions .
  • Near-term setup: Q2 guidance in-line; monitor 2H demand risk (auto/personal electronics) vs. execution on margin initiatives and secular growth in data center/renewables .