STMicroelectronics: Return to Growth in Q4, Yet Profitability Remains Under Pressure
On January 29, 2026, STMicroelectronics released its Q4 and FY 2025 results, marking a return to annual revenue growth, albeit in a context of significant operational profitability deterioration. The company highlights a gradual improvement in business dynamics, while acknowledging that the industrial cycle remains unfavorable across several key segments.
Q4 2025 Financial Performance
In the fourth quarter of 2025, STMicroelectronics posted revenues of $3.33 billion, up 0.2% year-over-year and 4.5% from the third quarter. This performance exceeds the midpoint of the previously communicated guidance by the group. According to management, this growth is primarily driven by the Personal Electronics activities, and to a lesser extent, by the RF & Optical Communications and Embedded Processing segments, while the automotive sector performed below expectations. For the full year 2025, the revenue amounted to $11.8 billion, down 11.1% from 2024, highlighting the persistent impact of the semiconductor cycle slowdown, particularly in the industrial and power components sectors.
Gross Margin and Operating Income
The gross margin for the fourth quarter stood at 35.2%, down 250 basis points year-over-year, despite a sequential improvement due to a more favorable product mix. GAAP operating income plummeted to $125 million from $369 million a year earlier, pushing the operating margin down to 3.8% from 11.1% in the fourth quarter of 2024. This decline primarily reflects a decrease in industrial efficiency, linked to an insufficient level of production capacity utilization, as well as restructuring and industrial reorganization expenses. In the fourth quarter alone, these exceptional items amounted to $141 million. Excluding these non-recurring items, the non-GAAP operating income reached $266 million, confirming that the business remains profitable, albeit at a profitability level significantly below the group's historical standards.
Net Loss and Segment Analysis
STMicroelectronics reported a net loss of $30 million in the fourth quarter, corresponding to a per-share result of -$0.03. This loss is primarily due to restructuring charges and non-recurring tax effects, which had a significant impact on the reported results. On an adjusted (non-GAAP) basis, the net income was $100 million, translating to earnings per share of $0.11. Segment analysis reveals highly differentiated developments. The Analog, MEMS, and sensors activities recorded an annual growth of 7.5%, with a stable operating margin around 16%, particularly supported by imaging. Conversely, the Power & Discrete segment was heavily penalized by the industrial cycle, with a revenue decline of 31.6% and a negative operating margin of -30.2%. However, the RF & Optical Communications and Embedded Processing segments exhibited solid growth, with margins exceeding 19%, confirming their role as partial performance drivers in a still constrained environment.
