Rogers' Q1 2025: Unpacking Contradictions in Customer Sentiment, M&A Strategy, and Market Performance

Customer sentiment and market resilience, M&A strategy and appetite, China expansion and local production, EV/HEV market performance and growth opportunities, ADAS business growth and market conditions are the key contradictions discussed in Rogers' latest 2025Q1 earnings call.



Financial Performance and Earnings:
- Rogers Corporation reported sales of $191 million for Q1 2025, slightly lower than the previous quarter, primarily due to foreign exchange rate changes and normal seasonality in the portable electronics end market.
- Adjusted earnings per share (EPS) were $0.27, down from $0.46 in Q4, mainly due to lower gross margin, although partially offset by lower adjusted operating expenses.
- The company's adjusted gross margin was 29.9%, down by 220 basis points from the fourth quarter, primarily due to utilization headwinds and unfavorable product mix impacting manufacturing effectiveness.

Cost Management and Efficiency Initiatives:
- Rogers implemented significant cost improvements with expectations of saving $25 million in 2025, driven by restructuring efforts, footprint optimization, and reducing operating expenses, with full-year run-rate savings of $32 million.
- These actions included closing manufacturing facilities, consolidating RFS facilities, and reducing headcount, which are expected to improve the company's cost structure and competitiveness in the current environment.

Market Conditions and Tariff Impact:
- The company experienced a mixed performance across its end markets, with ADAS and Industrial markets showing growth while EV/HEV and portable electronics declined.
- Rogers faces tariff exposure from shipping materials from the U.S. to China, resulting in mitigation plans to offset these impacts, including managing inventory, sourcing materials from other countries, and potential pricing actions.

Design Wins and Product Development:
- Rogers secured new design wins in key areas, including silicone technology for inverters in industrial, renewable energy, and EV/HEV markets, and polyurethane and silicone materials for battery-related applications.
- The company is preparing for increased production in China with a new facility, aiming to support local curamik volumes and strengthen its position in the Chinese market.