Vishay Intertechnology (VSH -14.05%), a leading global manufacturer of discrete semiconductors and passive electronic components, released results for Q2 FY2025 on August 6, 2025. The crucial headlines in the release highlighted a small year-over-year revenue increase (GAAP) compared to Q2 FY2024, with GAAP revenues reached $762.3 million—just above analyst estimates. However, GAAP profitability fell well short of expectations. Non-GAAP loss per share was $(0.07) versus the $0.03 consensus, and both gross and operating margins (GAAP) dropped from the prior year. Overall, the quarter marked a modest revenue rebound, but Ongoing margin pressures and negative free cash flow (non-GAAP) indicated that financial recovery remains a work in progress.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $(0.07) | N/A | $0.17 | (141.2%) |
| Revenue (GAAP) | $762.3 million | N/A | $741.2 million | 2.8% |
| Gross Margin | 19.5% | 22.0% | (2.5 pp) | |
| Operating Margin | 2.9% | 5.1% | (2.2 pp) | |
| Free Cash (Non-GAAP) | $(73.2 million) | $(86.8 million) | -15.6% |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Business Overview and Focus Areas
Vishay Intertechnology designs, manufactures, and supplies a broad array of electronic components that are essential for devices in automotive, industrial, consumer electronics, and computing. Its two main product groups are discrete semiconductors, which manage electronic signals, and passive components, which include resistors, capacitors, inductors, and related products used to control power and signal flow in circuits.
The company's growth strategy relies on several pillars: deep investments in research and development to drive product innovation, a history of expanding its business through targeted acquisitions, and the active management of a global supply chain. These strengths are complemented by a focus on expanding its market presence, especially with leading customers, and maintaining financial flexibility to fund both ongoing operations and strategic capacity expansion.
Quarter in Detail: Financial and Operational Highlights
The second quarter saw a slight rise in GAAP revenue to $762.3 million, narrowly beating analyst projections on a GAAP basis. Growth was spread across semiconductors, passives, end markets, and regions, supported by a rebound in demand from the industrial and intelligent infrastructure sectors. Management noted a 7% sequential revenue increase, attributing it to emerging market signals and broad-based demand through both distribution channels and direct sales to manufacturers.
Despite the revenue increase, GAAP profitability was under pressure. The company reported a non-GAAP loss per share of $(0.07), below the expected $0.03 GAAP profit, and down sharply from Q2 2024's $0.17 adjusted (non-GAAP) earnings per share. The reported gross margin, which measures revenue remaining after covering direct costs, came in at 19.5% (GAAP). This marked a 2.5 percentage-point drop from the same quarter last year, driven by the ongoing integration of the Newport wafer fabrication facility. Newport alone reduced the gross margin by approximately 160 basis points during the quarter and is expected to reduce margin by between 160 and 185 basis points in Q3, with management targeting break-even operations from that facility only by the first half of 2026.
The drop in operating margin (GAAP) to 2.9% from 5.1% in Q2 2024 reflected cost headwinds. Adjusted EBITDA, another measure of profit before interest, taxes, depreciation, and certain non-operating expenses, was $63.5 million, down from $88.4 million in Q2 2024. Meanwhile, ongoing investments in technology and capacity drove negative free cash flow (non-GAAP) of $(73.2) million—but still firmly in the red.
Within the product portfolio, sales of both discrete semiconductors—such as MOSFETs (transistors used for switching and amplifying signals)—and passive components like capacitors and resistors saw growth. AI (artificial intelligence)-related component shipments continued to ramp, more than doubling sales from the previous quarter (Q1 2025 vs Q4 2024), especially into server and computing platforms. Industrial and automotive clients also contributed to the rebound. The company introduced eight new silicon carbide (SiC) products, including new planar MOSFETs, with additional launches promised for later in the year.
Global supply chain resilience remained a focus, as Vishay's distributed manufacturing network allowed it to quickly adapt to tariff shifts and shifting customer needs. Backlog rose to 4.6 months of revenue cover at the end of the quarter, while the book-to-bill ratio (new orders divided by billed shipments, with values above 1.0 signaling potential growth) stood at 1.02—indicating ongoing demand strength. Passives recorded a book-to-bill ratio of 1.06, with semiconductors book-to-bill was 0.98. Distribution revenues benefited from nearly 50,000 SKUs added to inventory, helping to reduce channel inventory weeks and position the company for market share gains.
On the financial side, Cash and cash equivalents (GAAP) decreased to $473.9 million as of June 28, 2025, from $590.3 million as of December 31, 2024, reflecting negative free cash flow. Long-term debt stood at $914.5 million. The company maintained its dividend policy, declaring a $0.10 per share quarterly dividend, unchanged from prior quarters.
Looking Forward: Guidance and Key Watch Points
For the third quarter, management provided revenue guidance in the range of $775 million, plus or minus $20 million for Q3, which would mark modest sequential growth. Gross margin (GAAP) is expected at 19.7%, plus or minus 0.5 percentage points for Q3—similar to Q2 levels and again weighed down by Newport integration for up to 185 basis points in Q3. No earnings per share guidance was provided for upcoming quarters.
Vishay Intertechnology does not anticipate a near-term turnaround in free cash flow, and management expects negative free cash flow (non-GAAP) for FY2025, due to continued investments in expanding production capacity and ramping up new technologies. Management emphasized monitoring gross margin recovery. The company continues to return capital to shareholders through the steady quarterly dividend of $0.10 per share.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
