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- **Revenue Beat**: Q3 $3.19B (+40% QoQ in PE, +10% QoQ in Automotive) vs. guidance. FY2025 $11.75B (+22.4% H2/H1).
- **Gross Margin Recovery**: Q4 35.0% (vs. Q3 33.2%), targeting 33.8% full year. 2026 headwinds from $150-200M capacity fee decline.
- **Strategic Wins**: NVIDIA 800V DC AI data center, MEMS sensor acquisition, 98% efficient GaN prototypes.
- **Cash Flow Strength**: $130M free cash flow, $4.78B liquidity, $2.61B net cash.
- **Risk Management**: 2026 unused capacity charges to decline as fabs close by end-2027.

**【CEO Summary Section】**
- Q3 2025 revenue of $3.19 billion exceeded midpoint of guidance, driven by 40% sequential growth in Personal Electronics and 10% sequential growth in Automotive. 
- Automotive book-to-bill above parity, with wins in EV silicon carbide, eFuses, and MEMS sensors. Industrial revenue up 8% sequentially, with inventory reduction in distribution.
- Acquired NXP's MEMS sensor business for $950M, expanding leadership in sensors for automotive, industrial, and consumer applications.
- AI data center wins with NVIDIA for 800V DC solutions, achieving 98% energy efficiency in GaN prototypes. Photonics ICs expected to become a near-term revenue driver.

**【CFO Financial Commentary】**
- Gross profit $1.06B (-13.7% YoY), gross margin 33.2% (-460bps YoY) due to product mix, currency, and lower capacity fees.
- Operating expenses $842M (stable YoY), with $130M free cash flow and $3.17B inventory (-$100M QoQ). 
- FY2025 guidance: $11.75B revenue (+22.4% H2/H1), 33.8% gross margin. Net CapEx reduced to <$2B vs. prior $2-2.3B range.
- Q4 2025 outlook: $3.28B revenue (+2.9% QoQ), 35.0% gross margin (including 290bps unused capacity charges).

**【Q&A Highlights】**
- **Revenue Seasonality**: Q4 below historical +7% QoQ due to 17% YoY decline in Automotive (capacity fees, one large EV customer). Industrial inventory reduction limits POP growth.
- **Gross Margin Sustainability**: Q4 improvement driven by manufacturing efficiency; 2026 margin headwinds include $150-200M decline in capacity fees and pricing renegotiations. Unused capacity charges to decline as fabs close by end-2027.
- **Power & Discrete Challenges**: -15.6% segment margin due to low utilization; 2026 recovery driven by 8-inch silicon carbide transition, China/Europe EV growth, and inventory normalization.
- **Inventory Management**: Days sales of inventory 135 days (vs. 166Q2, 130 YoY). Q1 2026 POP expected to align with POS in H2 2026.
- **CapEx Update**: FY2025 CapEx <$2B to align with demand; 200mm to 300mm conversion costs impacting gross margin through 2026.


STMicroelectronics N.V. (STM) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

STM

STM fundamentals

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