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ROGERS CORP (ROG)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered sequential improvement with net sales $202.8M (+6.5% q/q), gross margin 31.6% (+170 bps q/q), and adjusted EPS $0.34, all in-line with guidance, while GAAP EPS was heavily impacted by non-cash impairment and restructuring charges .
  • Versus Wall Street consensus (S&P Global), revenue was a beat ($202.8M vs $198.8M*), but adjusted/normalized EPS was a miss ($0.34 vs $0.50*); gross margin was essentially in-line (31.6% vs 31.65%*) — driven by favorable FX and stronger industrial/portable/A&D/ADAS but offset by Belgium write-off and underutilization in Germany .
  • Management announced additional cost actions in AES curamik® to rebalance capacity (Europe-to-China), targeting >$13M annual run-rate savings with $12–$20M restructuring charges; these savings are incremental to the prior $32M program, with the full $13M not expected until Q4 2026 .
  • Q3 2025 guidance calls for modest sales growth ($200–$215M) and margin uplift (31.5–33.5%), with adjusted EPS $0.50–$0.90; capex for 2025 reaffirmed at $30–$40M, and share repurchases remain a capital priority, with $76M remaining authorization .

What Went Well and What Went Wrong

  • What Went Well
    • Sales growth across most end-markets; AES +4.6% q/q and EMS +8.2% q/q; FX added $3.6M to net sales .
    • Sequential margin improvement to 31.6% and adjusted EBITDA to $23.9M (11.8% margin), helped by higher sales and favorable mix .
    • Strategic pivot: “rebalancing our capacity between Europe and China… ramping up manufacturing capabilities in China” to strengthen curamik’s competitiveness and unlock local-for-local advantages .
    • Quote: “Sales, gross margin and adjusted earnings per share were all within our guidance ranges for the quarter” — Interim CEO Ali El‑Haj .
  • What Went Wrong
    • GAAP net loss of $(73.6)M due to $71.8M non-cash goodwill impairment and $4.3M restructuring expenses tied to curamik® outlook reset .
    • Gross margin below guidance midpoint due to a material write-off related to Belgium facility cessation and underutilization at curamik Germany .
    • Normalized/adjusted EPS missed S&P consensus ($0.34 vs $0.50*), reflecting mix, under-absorption and restructuring drag despite sequential improvements .

Financial Results

MetricQ2 2024Q4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$214.2 $192.2 $190.5 $202.8
GAAP Diluted EPS ($)$0.44 $(0.03) $(0.08) $(4.00)
Adjusted EPS ($)$0.69 $0.46 $0.27 $0.34
Gross Margin (%)34.1% 32.1% 29.9% 31.6%
Adjusted EBITDA ($USD Millions)$31.9 $23.3 $19.5 $23.9
Net Cash from Operations ($USD Millions)$22.9 $33.7 $11.7 $13.7
Free Cash Flow ($USD Millions)$8.8 $18.3 $2.1 $5.6

Q2 2025 actuals vs S&P Global consensus:

MetricQ1 2025 ActualQ1 2025 Consensus*Q2 2025 ActualQ2 2025 Consensus*
Revenue ($USD Millions)$190.5 $186.33*$202.8 $198.75*
Primary/Normalized EPS ($)$0.27 $0.253*$0.34 $0.50*
Gross Margin (%)29.9% 29.65%*31.6% 31.65%*
  • Values retrieved from S&P Global.

Segment dynamics and KPIs:

ItemQ2 2025q/q Change/Notes
AES net salesNot disclosed ($)+4.6% q/q; stronger industrial, ADAS, A&D; lower wireless infrastructure
EMS net salesNot disclosed ($)+8.2% q/q; stronger industrial, portable electronics, A&D
FX impact on sales+$3.6MFavorable vs prior quarter
Share repurchases$28.1MExecuted in Q2; ending cash $157.2M
Capex$8.1MQ2 spending

Non‑GAAP adjustments (Q2 2025):

  • Total adjustments to EPS: $4.33 (Restructuring/impairment $4.14; intangible amortization $0.15; valuation allowance $0.21; tax impacts $(0.16)) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Sales ($M)Q3 2025N/A$200–$215 New
Gross Margin (%)Q3 2025N/A31.5%–33.5% New
GAAP EPS ($)Q3 2025N/A$0.00–$0.40 (includes severance and EU restructuring) New
Adjusted EPS ($)Q3 2025N/A$0.50–$0.90 New
Capex ($M)FY 2025$40–$50 (Q4’24) $30–$40 (Q1/Q2 reaffirmed) Lowered
Tax Rate (%)FY 2025~27% (Q1 call) ~30% (Q2 call) Raised

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
EV/HEV & curamik®2024 demand deceleration; inventory destocking; China ramp planned Rebalance capacity to China; EU downsizing; >$13M run-rate savings; China AMB design win Structural shift to China; EU footprint reduction
Supply chain & tariffsLocal-for-local mitigates; Q2 tariffs largely offset planned Tariff impact “relatively small” in Q2; mitigation ongoing Managed impact; monitoring
Industrial & A&DWeak industrial; A&D double-digit y/y growth in 2024 Industrial strongest performer; A&D higher in both segments Industrial recovery; sustained A&D strength
Portable electronicsSeasonal peak Q3; softer Q4 Double-digit q/q increase; seasonal pattern expected Seasonal normalization
R&D/product launchesNew ADAS laminates; PORON innovations; ERP rollout New materials; faster development cycles emphasized Accelerate execution
Cost actions$25M 2025 savings; $32M run-rate exiting 2025 +$13M incremental by Q4 2026; total ~$45M cumulative Larger program; longer timeline
Capital allocationNo debt; capex decelerating; buybacks opportunistic $28.1M buybacks Q2; ~$76M authorization remaining; 2025 capex $30–$40 Shareholder returns prioritized

Management Commentary

  • “Looking ahead to the third quarter we expect further improvement… from slightly higher sales and cost reduction measures” — Ali El‑Haj, Interim CEO .
  • “We are rebalancing our capacity between Europe and China… ramping up manufacturing capabilities in China and reducing capacity in our European operations” — Ali El‑Haj .
  • “Q2 gross margin was 31.6%… below the midpoint… due to [a] material write-off related to our Belgium facility… and underutilization at our curamik Germany factory” — Laura Russell, CFO .
  • “We anticipate share repurchases in Q3 to be in a similar range to the second quarter… ~$76M remaining” — Laura Russell .

Q&A Highlights

  • Execution focus: CEO aims to cut lead times by 50–60% and accelerate new product development to win programs faster .
  • Cost savings trajectory: Cumulative savings of ~$45M (prior $32M plus new $13M) with the incremental $13M manifesting primarily starting Q4 2026 .
  • Margin drivers: Expansion hinges on volume/utilization, mix optimization, and ongoing restructuring benefits; Q3 guide embeds operational tailwinds .
  • Capital returns: Buybacks to continue opportunistically; liquidity remains strong .

Estimates Context

  • Q2 2025 revenue beat: $202.8M actual vs $198.8M consensus* (benefited from industrial, portable electronics, A&D, ADAS, and $3.6M FX tailwind) .
  • Q2 2025 normalized/adjusted EPS miss: $0.34 actual vs $0.50 consensus* (mix underperformance, Belgium write-off, underutilization at curamik Germany) .
  • Gross margin largely in-line: 31.6% actual vs 31.65% consensus* .
  • Note: All consensus values from S&P Global.*

Key Takeaways for Investors

  • Near-term setup: Expect modest top-line growth and margin uptick in Q3; watch for delivery against adjusted EPS $0.50–$0.90 and gross margin 31.5–33.5% — management flagged operational levers and cost actions as primary drivers .
  • Structural pivot in curamik®: Capacity shift to China and European downsizing should improve competitiveness; savings >$13M annual run-rate but largely back-end loaded (Q4 2026) — important for medium-term margin trajectory .
  • Watch mix and utilization: Belgium closure and German underutilization were Q2 headwinds; sustained volume recovery is key to absorbing fixed costs and expanding margins .
  • Capital returns and liquidity: Ongoing buybacks ($28.1M in Q2; ~$76M remaining) and reduced 2025 capex ($30–$40M) support FCF resilience and shareholder returns .
  • Tariff sensitivity manageable: Local-for-local footprint and mitigation actions kept Q2 impact small; policy shifts remain a risk, but management plans to offset .
  • Execution is the narrative: New interim CEO emphasizes speed of execution and product cadence; monitor lead-time reduction and design-win conversion in data center/ADAS/EV/industrial .
  • Trading lens: Revenue beat vs miss on adjusted EPS suggests the stock’s reaction will hinge on confidence in Q3 margin delivery and visibility on curamik restructuring cadence; updates on China ramp and EU consultation milestones are potential catalysts .