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VI

VISHAY INTERTECHNOLOGY INC (VSH)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 revenue was $790.6M, up 4% q/q and 8% y/y; gross margin held at 19.5% despite metals and FX headwinds; GAAP EPS was -$0.06 and adjusted EPS $0.04. Book-to-bill was 0.97 and backlog stood at 4.4 months .
  • Versus consensus, revenue modestly beat and EPS was in line: Q3 revenue $790.6M vs $779.8M estimate; adjusted EPS $0.04 vs $0.0417 estimate. Q4 consensus sits near guidance: revenue est. ~$790.5M and EPS est. $0.02* .
  • Q4 2025 guidance: revenue $790M ±$20M and gross margin 19.5% ±50 bps, with Newport dragging 150–175 bps; depreciation ~$55M; SG&A $138M ±$2M; tax expense $4–8M .
  • Catalysts and stock narrative: improving orders (October book-to-bill run-rate 1.15), AI server/power designs expanding, automotive OEM audits and site approvals, and a plan to make Newport margin-neutral by end of Q1—offset by elevated metals costs and FX; management signaled dividend maintenance while buybacks are unlikely near term due to US liquidity .

What Went Well and What Went Wrong

What Went Well

  • Sequential and y/y growth: revenue +4% q/q to $791M and +8% y/y; most segments grew, driven by volume and modest FX tailwind .
  • Strategic wins in AI, smart grid, and automotive: “alignment with high growth markets including smart grid infrastructure, AI related power requirements, automotive and aerospace/defense” and expanding design-ins across MOSFETs, diodes, capacitors, inductors and resistors .
  • Operational readiness and capacity: heavy investments enabled quick-turn deliveries; distribution inventory stable at ~23 weeks, POS/POA stable, and more SKUs added with inductors expansion (La Laguna) .
    • Quote: “We can reliably satisfy quick-turn demand while still maintaining competitive lead times… well-positioned to capture the early stages of upturns” — CEO Joel Smejkal .

What Went Wrong

  • Metals and FX pressure: combined impact north of 50 bps; metals (gold, silver) strength and FX (shekel, TWD) weighed on margins, keeping gross margin flat q/q .
  • Book-to-bill slightly sub-1.0: Q3 total 0.97 (0.96 semis; 0.98 passives), with Asia distribution orders soft after Q2 tariff-related pull-ins .
  • Free cash flow negative as capex remains elevated: FCF -$24.3M in Q3; capex driven by capacity expansions (Newport, Mexico), with continued net borrowing in the US .

Financial Results

Headline P&L and Margins (oldest → newest)

MetricQ3 2024Q2 2025Q3 2025
Revenue ($USD Millions)$735.353 $762.250 $790.640
Gross Margin %20.5% 19.5% 19.5% (incl. ~150 bps Newport drag)
Operating Margin %-2.5% 2.9% 2.4%
GAAP Diluted EPS ($)-$0.14 $0.01 -$0.06
Adjusted EPS ($)$0.08 -$0.07 $0.04
Adjusted EBITDA Margin %9.7% 8.3% 9.6%

Channels and Order Flow (q/q change Q2 → Q3)

ChannelQ2 → Q3 Change
OEM Revenue+6% q/q
EMS Revenue-7% q/q
Distribution Revenue+4% q/q
Book-to-Bill (Total)1.02 → 0.97
Book-to-Bill (Semis/Passives)0.98/1.06 → 0.96/0.98

Operating and Cash KPIs

KPIQ2 2025Q3 2025
Backlog (months)4.6 4.4
Net Cash from Ops ($MM)-$8.791 $27.639
Free Cash Flow ($MM)-$73.174 -$24.325
Capex ($MM)$64.598 $52.324
Cash & Equivalents ($MM)$473.860 $443.858

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($MM)Q4 2025—$790 ± $20 Initiated
Gross Margin %Q4 2025—19.5% ± 50 bps; Newport drag ~150–175 bps Initiated
Depreciation ($MM)Q4 2025—~$55; FY 2025 ~$212 Initiated
SG&A ($MM)Q4 2025—$138 ± $2 Initiated
Tax Expense ($MM)Q4 2025—$4–$8 (mix dependent) Initiated
DividendOngoing$0.10/qtr paid Maintain dividend; buybacks opportunistic given US liquidity Maintained

Note: Q3 2025 guidance (set on Aug 6) was $775M ±$20M revenue; actual revenue came in above midpoint at $790.6M .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
AI/data center power and server projectsInitial volumes doubled q/q; broad portfolio design-ins; reference designs, CMs engagement Ongoing demand; Asia-led distribution orders; expanding design-ins across MOSFETs, diodes, inductors, capacitors Improving
Tariffs and pass-throughSystems since 2018; tariff adders pass-through; ~30 bps gross margin math impact Continues; tariff adders increase revenue without affecting gross profit; limited broader impacts Stable/manageable
Metals/FX headwindsMetals costs and FX baked into Q2 guidance Combined impact north of 50 bps; metals (gold/silver) up; FX in shekel/TWD hurting P&L Headwind persists
Newport (fab) impact~175–200 bps drag expected Q2; target margin-neutral H1’26 (pushing to Q1) ~150 bps drag in Q3; plan for margin-neutral by end of Q1 (lifting ~150 bps) Improving
AutomotiveQ1 seasonality/ASPs; increasing electronic content +7% q/q; audits/site approvals in UK/MX; crossing part numbers amid Nexperia restrictions Improving
Smart grid industrialWins/programs in Europe/Asia/US; HV DC capacitors as leading indicator Continued shipments; industrial demand improving; smart grid projects drive orders Improving
Capital returns/liquidityDividend plus opportunistic buybacks; US revolver draw Dividend maintained; buybacks unlikely near term given US liquidity; $189M revolver outstanding Conservative

Management Commentary

  • “Our third quarter revenue growth demonstrates Vishay’s alignment with high growth markets including smart grid infrastructure, AI related power requirements, automotive and aerospace/defense…” — Joel Smejkal, CEO .
  • “Book-to-bill for October is at a run rate of 1.15… orders up 19% y/y… customers still not planning ahead; >50% short-term orders in Asia.” — CEO .
  • “Combining the metals and the FX impact, we’re looking probably north of 50 basis points… gold YTD +48%, silver +59%… we’re putting steps in place to pass metal increases on to customers.” — CFO .
  • “Newport… reducing MOSFET segment gross margin by ~720 bps… plan to get Newport to margin neutral by end of Q1.” — CFO/CEO .
  • “For Q4, revenues are expected to be $790M ±$20M and gross margin 19.5% ±50 bps… SG&A $138M ±$2M; tax expense $4M–$8M.” — CFO .

Q&A Highlights

  • Automotive/Nexperia restrictions: Management is crossing part numbers and supporting “line down” avoidance; did not include potential upside in Q4 guide due to dynamic shortages .
  • Margins drivers: Metals, FX, and operations kept gross margin flat q/q; heading into negotiation season, plan to pass metals costs where possible .
  • Outlook vs consensus: CEO views 2026 consensus (revenue +7%, margin expansion) as reasonable given five aligned end markets and Newport margin-neutral plan (+150 bps) plus efficiency initiatives .
  • Capital allocation: Dividend maintained; buybacks on hold given US liquidity and Newport funding; $280M revolver capacity accessible .
  • Seasonality: Q4 is a 12-week quarter with holiday closures; watching Chinese New Year timing; October book-to-bill 1.15 sets up for a better Q1 if sustained .

Estimates Context

MetricQ3 2025 Consensus*Q3 2025 ActualQ4 2025 Consensus*Company Guidance (Q4)
Revenue ($USD)$779.8M*$790.6M $790.5M*$790M ± $20M
Primary EPS ($)$0.0417*$0.04 $0.02*—

Notes:

  • Q3 revenue was modestly above consensus (~$10.8M; ~1.4%); adjusted EPS was in line. Management’s Q4 revenue guidance brackets consensus and implies margin stability including Newport drag .
  • Primary EPS - # of estimates: 2; Revenue - # of estimates: 2*.

Values marked with an asterisk (*) were retrieved from S&P Global.

Key Takeaways for Investors

  • Setup for H1 margin lift: If Newport reaches margin-neutral by end of Q1, gross margin could lift by ~150 bps from Q4 levels, with additional upside from cost reductions and metal pass-throughs .
  • Demand breadth improving: Automotive (+7% q/q), AI server/power, and smart grid projects are driving orders; October book-to-bill at 1.15 suggests near-term acceleration if sustained .
  • Manageable tariff dynamics: Tariff adders flow through revenue with ~0 gross profit impact; guidance embeds elevated input costs, limiting margin surprises from tariffs .
  • Cash/FCF profile: FCF remains negative due to capacity investments; expect dividend maintenance but limited buybacks in near term given US liquidity and revolver usage .
  • Metals/FX are key watch items: Elevated gold/silver and FX in shekel/TWD are the primary margin headwinds to monitor into Q4/Q1 .
  • Channel and geographic mix: Asia distribution is the primary growth lever tied to AI; OEM and industrial in Americas/Europe improving; EMS down q/q but intake highest in three years .
  • Tactical positioning: Near-term trading likely sensitive to updates on October/November order momentum, metals pricing trends, and tangible progress toward Newport margin-neutral; medium-term thesis centers on multi-end-market recovery, silicon carbide roadmap, and cross-selling breadth .

Appendix: Additional Relevant Press Releases (context to Q3 narrative)

  • Inductor/FCD portfolio expansion: “more than 2000 new SKUs… IHLP® shipping from La Laguna,” supporting distribution breadth and quick-turn fulfillment .
  • Space-grade planar transformers: Broadening AMS portfolio with 150W planar devices, indicating aerospace/defense product momentum .