Semiconductor manufacturer Vishay Intertechnology (NYSE:VSH) fell short of the market’s revenue expectations in Q1 CY2025, with sales falling 4.2% year on year to $715.2 million. On the other hand, next quarter’s outlook exceeded expectations with revenue guided to $760 million at the midpoint, or 0.8% above analysts’ estimates. Its non-GAAP loss of $0.03 per share was in line with analysts’ consensus estimates.

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Vishay Intertechnology (VSH) Q1 CY2025 Highlights:

Revenue: $715.2 million vs analyst estimates of $719.2 million (4.2% year-on-year decline, 0.6% miss) Adjusted EPS: -$0.03 vs analyst estimates of -$0.02 (in line) Adjusted EBITDA: $54.46 million vs analyst estimates of $51.18 million (7.6% margin, 6.4% beat) Revenue Guidance for Q2 CY2025 is $760 million at the midpoint, roughly in line with what analysts were expecting Operating Margin: 0.1%, down from 5.7% in the same quarter last year Free Cash Flow was -$45.47 million, down from $27.88 million in the same quarter last year Inventory Days Outstanding: 112, up from 110 in the previous quarter Market Capitalization: $1.82 billion

“Market signals, which continued from the fourth quarter, indicate that much of the channel inventory that overhung the market has normalized. We executed well during the first quarter on our strategic levers to drive faster revenue growth and improve profitability. We are prepared to navigate evolving tariff policies and any demand uncertainties, staying in close contact with our customers to assure them of reliable supply and making adjustments to our spending as necessary,” said Joel Smejkal, president and CEO.

Company Overview

Named after the founder's ancestral village in present-day Lithuania, Vishay Intertechnology (NYSE:VSH) manufactures simple chips and electronic components that are building blocks of virtually all types of electronic devices.

Sales Growth

A company’s long-term sales performance is one signal of its overall quality. Any business can have short-term success, but a top-tier one grows for years. Unfortunately, Vishay Intertechnology’s 2.8% annualized revenue growth over the last five years was sluggish. This was below our standards and is a rough starting point for our analysis. Semiconductors are a cyclical industry, and long-term investors should be prepared for periods of high growth followed by periods of revenue contractions.Vishay Intertechnology Quarterly Revenue

Long-term growth is the most important, but short-term results matter for semiconductors because the rapid pace of technological innovation (Moore's Law) could make yesterday's hit product obsolete today. Vishay Intertechnology’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 9.1% annually.

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Vishay Intertechnology Year-On-Year Revenue Growth

This quarter, Vishay Intertechnology missed Wall Street’s estimates and reported a rather uninspiring 4.2% year-on-year revenue decline, generating $715.2 million of revenue. Adding to the miss, the drop in sales could mean that the current downcycle is deepening. Company management is currently guiding for a 2.5% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 7.3% over the next 12 months. Although this projection implies its newer products and services will spur better top-line performance, it is still below the sector average.

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Product Demand & Outstanding Inventory

Days Inventory Outstanding (DIO) is an important metric for chipmakers, as it reflects a business’ capital intensity and the cyclical nature of semiconductor supply and demand. In a tight supply environment, inventories tend to be stable, allowing chipmakers to exert pricing power. Steadily increasing DIO can be a warning sign that demand is weak, and if inventories continue to rise, the company may have to downsize production.

This quarter, Vishay Intertechnology’s DIO came in at 112, which is 18 days above its five-year average, suggesting that the company’s inventory has grown to higher levels than we’ve seen in the past.Vishay Intertechnology Inventory Days Outstanding

Key Takeaways from Vishay Intertechnology’s Q1 Results

It was good to see Vishay Intertechnology provide revenue guidance for next quarter that slightly beat analysts’ expectations. On the other hand, its EPS missed significantly and its revenue fell slightly short of Wall Street’s estimates. Overall, this quarter could have been better. The stock traded down 1.3% to $13.25 immediately after reporting.

Vishay Intertechnology underperformed this quarter, but does that create an opportunity to invest right now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.

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