ROGERS CORP (ROG)·Q3 2025 Earnings Summary

Executive Summary

• Rogers delivered an across-the-board beat: revenue $216.0M (+6.5% q/q; +2.7% y/y) versus S&P consensus $207.5M, Adjusted EPS $0.90 versus $0.69, and Adjusted EBITDA $37.2M versus $30.5M; gross margin improved 190 bps q/q to 33.5%. The upside was driven by stronger portable electronics, industrial, A&D, mix, and cost actions. *
• Q4 guide implies seasonal step-down: sales $190–$205M, GM% 30–32%, GAAP EPS $0.00–$0.40, Adjusted EPS $0.40–$0.80; CFO also guided Adjusted EBITDA margin to 13.5–16.5% (~+300 bps y/y at mid).
• Execution themes: China ceramic facility began production late Q3 (minor Q3 impact; ~80 bps headwind to Q4 GM%), Germany curamik restructuring on track (target $13M annual run-rate savings by late 2026), and lead times reduced “by as much as 60%.”
• Capital allocation turning more shareholder-friendly: $10M buybacks in Q3 with intent to exceed that in Q4; ~$66M remains on authorization; full-year capex held at $30–$40M.

What Went Well and What Went Wrong

• What Went Well

  • Outperformed guidance/consensus on sales, Adjusted EPS, and Adjusted EBITDA; GM% expanded q/q on volume, mix, and manufacturing cost reductions. “Sales, gross margins, and adjusted EPS … exceeded street consensus.”
  • Demand strength in portable electronics, industrial, and A&D; AES +5.2% q/q; EMS +8.7% q/q.
  • Strategic execution: China ceramic facility started production; organizational changes improved speed and reduced lead times “by as much as 60%.”

• What Went Wrong

  • EV/HEV remains a drag y/y; management cautious on the pace of recovery; ADAS down q/q with lower light-vehicle production.
  • Q4 guide implies sequential step-down (seasonality, inventory management) and ~80 bps GM headwind from China ramp; gross margin midpoint ~110 bps below prior year.
  • Restructuring/impairment still flowing through P&L (Q2 contained large goodwill impairment; Q3 included $7.1M restructuring).

Financial Results

Overall results (chronological: oldest → newest)

Consensus vs actual

• Values with asterisks retrieved from S&P Global.

Segment and end-market details

• Segment q/q change (Q3 vs Q2): AES +5.2%; EMS +8.7%.
• End-market mix (YTD share) and Q3 dynamics: Industrial 28% (up across all regions); A&D 16% (led by N. America commercial aero; defense steady); e‑mobility 14% (flat q/q, strength in power substrates); ADAS 9% (down with lower auto production); Portable Electronics 9% (double-digit q/q); Renewables 5% (flat); Wireless Infra 5% (rebounded).

KPIs and capital

Non-GAAP adjustments (EPS)

Guidance Changes

Notes:

• CFO indicated ~80 bps GM headwind in Q4 from China ceramic ramp; ~110 bps lower GM y/y at midpoint.
• Q4 midpoint implies ~3% y/y sales growth and ~9% q/q decline (seasonality, inventory).

Earnings Call Themes & Trends

Management Commentary

• “Third quarter results were at the upper end of guidance due to improved end-market demand and good execution on cost improvement initiatives.” – Ali El‑Haj, Interim President & CEO.
• “We have started production in the new ceramic facility in China… positioned to compete effectively.” – Ali El‑Haj.
• “Q3 adjusted EBITDA was $37.2 million, or 17.2% of sales… gross margin increased 190 basis points to 33.5% due to higher volumes, favorable product mix, and reductions in manufacturing costs.” – Laura Russell, CFO.
• “We expect adjusted EBITDA margin between 13.5% and 16.5% [in Q4], a roughly 300 basis point improvement versus the prior year at the midpoint.” – Laura Russell.
• “We already are seeing results with significantly reduced lead times, some by as much as 60%, while reducing inventories and improving working capital.” – Ali El‑Haj.
• On buybacks: “It’s been somewhat opportunistic… an indication of our belief in [the] potential… we would likely do a little more than [Q3’s $10M] in the fourth quarter.” – Laura Russell.

Q&A Highlights

• Demand and mix: Management confident in Q4 range absent macro change; strongest trends in industrial and A&D; EV recovery still the main uncertainty.
• Gross margin trajectory: ~80 bps Q4 headwind from China ramp should dissipate as customer qualifications complete through 2026; utilization and mix key to sustained expansion.
• Cost savings: $25M 2025 savings (70% OpEx), ~$32M run-rate in 2026; curamik Germany restructuring adds $13M COGS savings annualized as program completes by late 2026.
• Pricing: Premium where value supports it; otherwise focus on cost structure to compete.
• Capital returns: Opportunistic repurchases to optimize returns; M&A only if it meets strict return criteria; Q4 buybacks expected to exceed $10M.

Estimates Context

• Q3 2025: Rogers beat across revenue ($216.0M vs $207.5M*), Adjusted EPS ($0.90 vs $0.693*), and EBITDA ($37.2M vs $30.5M*). Drivers: higher volumes, favorable mix, cost reductions, and lower OpEx. *

• Trend: Q2 2025 saw a GAAP EPS loss due to $71.8M impairment; Adjusted EPS ($0.34) missed a $0.50* consensus, while revenue beat ($202.8M vs $198.8M*). *

• Q4 2025 setup: Guide revenue $190–$205M vs consensus $196.5M*; Adjusted EPS $0.40–$0.80 vs consensus $0.60*. Mix and seasonality temper q/q, but margins expected to be ~300 bps better y/y at midpoint. *

• Values with asterisks retrieved from S&P Global.

Key Takeaways for Investors

• Beat-and-raise narrative on profitability: Q3 beat on revenue, EPS, EBITDA; Q4 guide implies y/y margin expansion despite seasonality—supporting estimate revisions higher for profitability. *
• Execution catalysts: China ceramic ramp (near-term GM headwind, medium-term share/cost benefits), Germany restructuring ($13M run-rate COGS savings), and operating model changes (lead-time cuts).
• Mix tailwinds: Portable electronics seasonality and industrial/A&D strength continue to offset EV/HEV softness; watch for Western EV recovery and China qualification milestones through 2026.
• Capital returns: Increased buybacks (Q4 planned > Q3’s $10M) with capex restraint ($30–$40M) underpin FCF support and potential EPS leverage.
• Risk monitor: Tariff regime shifts (assumed unchanged in Q4), EV pricing pressure, timing of customer qualifications in China, and restructuring execution.
• Governance backdrop: Board Chair transition and constructive engagement with Starboard Value underscore focus on value creation and operational improvement.
• Near-term trading setup: Positive print (beats) versus a seasonal Q4 guide with clear cost/margin levers; watch updates on China ramp cadence and any signs of EV stabilization as stock catalysts.

Additional references:

• Q3 2025 8‑K 2.02 and press release (full financials and guidance).
• Q3 earnings slides (end-market mix, EBITDA bridge, guidance detail).
• Prior quarters for trend (Q1 and Q2 2025 8‑K and calls).