Benchmark Electronics Q1 2025: Contradictions in Tariff Impact, Medical Growth, and Industrial Performance

Tariff uncertainty impact on customer behavior, expectations for medical segment growth, medical segment recovery expectations, industrial segment performance, medical segment performance and expectations are the key contradictions discussed in Benchmark Electronics' latest 2025Q1 earnings call.



Revenue and Market Uncertainty:
- Benchmark Electronics reported a revenue of $632 million for Q1 2025, marking a 4% sequential decrease and a 6% year-over-year decline.
- The decrease in revenue was influenced by market uncertainty, particularly concerning tariffs, and temporary customer decisions amidst global executive orders.

Semi-Cap and A&D Sector Performance:
- The Semi-Cap sector grew 18% year-over-year in Q1, while the A&D sector increased 15% year-over-year.
- The semi-cap growth was driven by share gains and new program wins, although challenges arise from restrictions on sales to China and domestic demand for fab equipment. The A&D sector benefited from defense programs and strength in military-related products.

Medical Sector Challenges:
- The Medical sector experienced a 12% decline in revenue compared to the prior quarter, with continued demand softness.
- This was due to the channel inventory burn-off and customer delays in new program ramps, though improvements are expected in the second half as inventory normalizes.

AC&C Revenue Decline:
- AC&C revenue decreased 12% quarter-over-quarter, driven by timing-related weaknesses in HPC and communications businesses.
- The decline is expected to be challenged through 2025, but the company anticipates growth could return as early as Q4, supported by new product introductions and solid booking strength.