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ROGERS CORP (ROG)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 results were broadly in line with guidance: revenue $190.5M, gross margin 29.9%, GAAP diluted EPS $(0.08), and adjusted EPS $0.27; sequential sales fell 0.9% on FX (-$3.0M) and portable electronics seasonality, while ADAS and industrial demand improved .
  • Segment mix: AES rose ~2% to $104M on ADAS and A&D strength; EMS fell ~4% to $83M on portable electronics seasonality and EV/HEV softness; adjusted EBITDA was $19.5M and free cash flow $2.1M .
  • Guidance: Q2 2025 net sales $190–$205M, GM 31–33%, GAAP EPS $0.00–$0.40, adjusted EPS $0.30–$0.70; FY 2025 CapEx cut to $30–$40M (from $40–$50M) and tax rate ~27% .
  • Potential stock reaction catalysts: tariff mitigation (local-for-local, sourcing/pricing offsets), China curamik plant ramp by mid-2025 supporting EV/HEV power module growth, and $104M remaining buyback authorization to deploy opportunistically .

What Went Well and What Went Wrong

What Went Well

  • ADAS momentum: “ADAS sales improved at a low teens rate versus Q4 due to stronger demand from both European and Asian customers,” aided by design-ins with a leading Asian radar supplier .
  • Strategic wins and balance sheet: new wins in EV/HEV battery-related applications and curamik onboard charging for Chinese OEMs; cash rose to $175.6M aided by $13.4M Arizona facility sale .
  • Cost actions accelerating: footprint optimization (Belgium RFS wind-down) and headcount reductions driving expected $25M 2025 savings and $32M run-rate; Belgium closure targeted to add ~$3M to 2025 operating income and $6M annualized .

What Went Wrong

  • Margin compression: gross margin fell to 29.9% from 32.1% Q/Q on utilization headwinds and unfavorable mix; management carried excess costs to position for potential H2 demand .
  • EV/HEV and portable electronics pressure: curamik power substrates remain soft amid downstream inventory management; EMS battery demand weaker in U.S./Europe and portable electronics lower seasonally .
  • Tariff uncertainty and order delays: modest customer order delays appeared; Q2 GM range widened by 100 bps for tariff uncertainty; low end of revenue range contemplates further delays .

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$210.3 $192.2 $190.5
Gross Margin (%)35.2% 32.1% 29.9%
Net Income ($USD Millions)$10.7 $(0.5) $(1.4)
Diluted EPS (GAAP, $USD)$0.58 $(0.03) $(0.08)
Adjusted EPS ($USD)$0.98 $0.46 $0.27
Adjusted EBITDA ($USD Millions)$35.2 $23.3 $19.5
Adjusted EBITDA Margin (%)16.7% 12.1% 10.2%

Segment Revenue

SegmentQ3 2024Q4 2024Q1 2025
Advanced Electronics Solutions (AES) ($USD Millions)$112.2 $102.4 $104.0
Elastomeric Material Solutions (EMS) ($USD Millions)$94.2 $86.3 $83.0
Other ($USD Millions)$3.9 $3.5 ~$3.5 (derived: total minus AES & EMS using and )

KPIs

KPIQ3 2024Q4 2024Q1 2025
Free Cash Flow ($USD Millions)$25.2 $18.3 $2.1
Cash and Cash Equivalents ($USD Millions)~$146.0 $159.8 $175.6

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net SalesQ1 2025$180–$195M Actual $190.5M Met (high end)
Gross MarginQ1 202529.0%–30.5% Actual 29.9% Met
Adjusted EPSQ1 2025$0.10–$0.40 Actual $0.27 In-line
Net SalesQ2 2025N/A$190–$205M New
Gross MarginQ2 2025N/A31.0%–33.0% New
GAAP EPSQ2 2025N/A$0.00–$0.40 New
Adjusted EPSQ2 2025N/A$0.30–$0.70 New
Tax RateFY 2025N/A~27% New
Capital ExpendituresFY 2025$40–$50M $30–$40M Lowered
Adjusted OpExQ2 2025N/ASlightly higher vs Q1 (SBC timing) Raised (slight)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2: Q3 2024)Previous Mentions (Q-1: Q4 2024)Current Period (Q1 2025)Trend
Tariffs / MacroNo direct tariff impact discussed; macro softness in EV/HEV and industrial; preparing for China curamik ramp Risks noted incl. tariffs and trade policy in Safe Harbor Detailed tariff exposure and mitigation (local-for-local, sourcing/pricing); expect Q2 tariff impacts largely offset; widened GM range Rising uncertainty; proactive mitigation
EV/HEV and CuramikCeramic power module demand weak; China curamik factory ribbon-cut; samples in Q4, mass production late Q2 2025; EMS EV/HEV up >50% YTD AES Q4 down on wireless infra; EV/HEV offset some declines Curamik sales still soft; increased China pipeline; new wins with Western/Chinese OEMs; China facility to support local volumes mid-2025 Pipeline building; near-term soft, H2 ramp potential
Portable ElectronicsSeasonal peak below outlook due to OEM build rates; strong Q3 vs Q2 Seasonal decline in Q4 Sequential decline in Q1 due to normal seasonality Seasonal; depends on high-end AI phones
Cost Structure / FootprintMargin improvement via mix and ops excellence; footprint optimization; carrying some excess cost to respond to demand Cost savings in ops/procurement mitigated lower sales; strong cash flow $25M 2025 net savings; Belgium wind-down drives ~$3M 2025 OI benefit; headcount cuts, discretionary spend reductions Accelerating cost actions and savings
Capital AllocationCash build, reduced CapEx, consider buybacks and bolt-on M&A FCF robust; positioned for organic investments CapEx cut to $30–$40M; $104M buyback capacity; EPS-accretive bolt-ons; leverage <1.5x EBITDA for M&A Lower CapEx; higher buyback optionality

Management Commentary

  • “Our first quarter unfolded largely as we expected… Sales decreased slightly versus the prior quarter… but we were pleased to see improved demand in the ADAS and industrial end markets. We also further strengthened our balance sheet, ending the quarter with a $176 million cash position.” — Colin Gouveia, President & CEO .
  • “We have implemented mitigation plans to minimize the impact of these tariffs in Q2… managing inventories, sourcing materials from other countries… satisfying demand from non-U.S. locations and recovering some impact through pricing.” — Prepared remarks .
  • “Footprint optimization… wind down of production in Belgium… expect a $3 million improvement to operating income this year with annualized savings of $6 million… headcount adjustments will result in savings of $10 million in 2025 and full-year run-rate savings of $12 million.” — Prepared remarks .
  • “We now expect to spend between $30 million to $40 million for the full year [CapEx], a decrease of $10 million… $104 million remaining on our existing share repurchase program.” — CFO prepared remarks .

Q&A Highlights

  • Cost savings timing: $2M Q2 savings mostly from OpEx reductions; Belgium manufacturing exit benefits ($3M) weighted to H2 .
  • Seasonality outlook: Q3 often strongest on portable electronics; recovery hinges on curamik inventory normalization and tariff environment .
  • Customer tone on tariffs: constructive collaboration to qualify alternative sources and accelerate mitigations; resilience across customer base .
  • China curamik pipeline: balanced opportunity across AES and EMS; local AMB production “produce in China for China” expected to ramp prudently mid-2025 .
  • Gross margin drivers for Q2: mix improvement and utilization; ongoing cost reduction culture; widened GM range for tariff uncertainty .
  • FCF and CapEx intensity: liquidity resilient; CapEx intensity trending sub-5% with local-for-local capacity build largely complete; ongoing optimization and selective R&D/ERP investments .
  • Capital deployment: opportunistic buybacks vs organic/M&A; leverage capped at ~1.5x EBITDA for deals .

Estimates Context

  • Q1 2025 results vs Wall Street consensus (S&P Global):
MetricConsensusActual# of Estimates
Adjusted/Primary EPS ($USD)$0.25*$0.27*3*
Revenue ($USD Millions)$186.3*$190.5*3*
EBITDA ($USD Millions)$17.2*$18.2*—
Gross Margin (%)29.65%*29.92%*—

Values retrieved from S&P Global. Note: Company-reported adjusted EBITDA was $19.5M; methodology differences may exist between S&P standardized actuals and company non-GAAP definitions .*

Implications: modest beats on revenue, adjusted EPS, and gross margin; EBITDA slightly above consensus on S&P’s basis. Consensus likely to lift near-term revenue/GM, while maintaining caution given tariff uncertainty.*

Key Takeaways for Investors

  • In-line quarter with modest beats vs consensus on revenue and adjusted EPS; sequential softness driven by FX and portable electronics seasonality, while ADAS and industrial improved .*
  • Margin compression should reverse in Q2 on mix/utilization and cost actions; GM guided to 31–33% with tariff mitigation largely offsetting direct impacts .
  • EV/HEV curamik demand remains subdued near-term, but China AMB ramp by mid-2025 plus growing design-in pipeline with Western and Chinese OEMs supports H2/H1’26 recovery optionality .
  • Cost program is meaningful: $25M 2025 savings and $32M run-rate, Belgium wind-down benefit (~$3M 2025 OI) and discretionary spend reductions should underpin margin resilience through uncertainty .
  • CapEx cut to $30–$40M and strong cash ($175.6M) enhance capital flexibility; $104M buyback authorization provides a tactical lever amid lower share price context .
  • Watch tariff-driven order behavior and any widening of GM ranges; low end of Q2 revenue guide contemplates incremental delays—monitor for intra-quarter updates .
  • Near-term trading: catalysts include confirmation of Q2 GM recovery, visibility on tariff offsets, and any announcements on buybacks/M&A; medium-term thesis hinges on EV/HEV power module recovery and China plant ramp execution .

Appendix: Additional Data Points and Sources

  • Q1 headline metrics and non-GAAP reconciliations (adjusted EPS, adjusted EBITDA, FCF) .
  • Q4 and FY 2024 baselines for trend analysis including segment sales .
  • Prepared remarks and Q&A detail on tariffs, cost savings, CapEx, buybacks, and curamik China ramp .