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Introduction & Market Context
Inficon Holding (SWX:IFCN) presented its Q1 2025 earnings results on April 24, showing modest sales growth amid significant regional disparities. The Swiss vacuum instrumentation and process control company reported a 2.6% year-over-year increase in sales, primarily driven by its semiconductor segment, while facing headwinds in its European and American markets.
The company’s stock, which experienced a 6.42% drop following its Q4 2024 earnings despite record operating income, has been trading at CHF 83.60 as of April 23, 2025, significantly below its 52-week high of CHF 150.80.
Quarterly Performance Highlights
Inficon reported Q1 2025 sales of $158.3 million, representing a 2.6% increase compared to Q1 2024, but a sequential decrease from Q4 2024’s $177.5 million. The company maintained a solid operating margin of 20.2%, slightly improving from 18.5% in the same period last year.
As shown in the following financial highlights chart, the company achieved several positive metrics despite challenging market conditions:
Notably, Inficon’s book-to-bill ratio remained above 1, indicating healthy future demand. The company’s gross margin improved by 165 basis points to 49.4%, while operating income increased by 1.8% to $31.9 million. However, net income decreased slightly by 2.7% to $24.9 million compared to the same quarter last year.
Segment Analysis
Inficon’s performance varied significantly across its four business segments, with semiconductor leading the growth while security and energy experienced substantial declines.
The Semiconductor & Vacuum Coating segment, which represents the largest portion of Inficon’s business, delivered an impressive 18% year-over-year growth in Q1 2025, reaching $76.9 million in sales. The company maintains a #1 position in process control and #2 position for pressure measurement in this segment.
The following chart illustrates the quarterly performance across all segments:
The Refrigeration, Air Conditioning & Automotive segment showed modest growth of 3% year-over-year and 6% quarter-over-quarter, with sales of $33.8 million in Q1 2025. Inficon maintains a #1 position in both the RAC and Battery markets within this segment.
The General Vacuum segment, while declining 13% year-over-year, showed signs of recovery with a 7% sequential increase from Q4 2024, reaching $40.0 million in Q1 2025.
The Security & Energy segment faced the most significant challenges, with sales dropping 27% year-over-year and 4% quarter-over-quarter to $7.5 million in Q1 2025.
Regional Performance
Inficon’s global sales distribution revealed stark regional disparities, with Asia driving growth while Europe and the Americas experienced double-digit declines. The following world map and sales breakdown illustrates this regional divergence:
Asia, which now represents 53% of Inficon’s total sales, grew by an impressive 27.9% year-over-year to approximately $85 million in Q1 2025. This strong performance was offset by significant declines in Europe (-12.8% to $36 million) and the Americas (-19.8% to $37 million), each now representing 23% of total sales.
This regional imbalance highlights Inficon’s increasing dependence on Asian markets, particularly in the semiconductor sector, while facing challenges in its traditional Western markets.
Financial Details
Inficon’s detailed financial performance shows mixed results across key metrics. While gross profit and operating income improved, the company increased its spending on R&D and SG&A, and experienced a decline in cash flow.
The following chart details the company’s gross profit, R&D costs, SG&A expenses, and operating income:
R&D spending increased by 13.7% to $13.8 million (8.7% of sales), reflecting Inficon’s continued investment in innovation despite market uncertainties. SG&A expenses rose by 7.8% to $32.5 million, outpacing sales growth.
The company’s balance sheet remains strong with an equity ratio of 74.1% (an improvement of 4 percentage points) and net cash of $87.3 million (an increase of $33.3 million). However, operating cash flow decreased to $18.1 million, down $4.4 million from the same period last year.
Forward-Looking Statements
Inficon provided guidance for the full year 2025, projecting sales between $660-710 million and an operating income margin of approximately 20%. This guidance suggests relatively flat to modest growth compared to 2024’s $671 million in sales.
The following chart illustrates Inficon’s historical performance and 2025 guidance:
Management noted increased uncertainty and risk due to trade tensions, cautioning that under certain scenarios, the 2025 operating income margin could temporarily be impacted by up to 2 percentage points.
The outlook varies by segment, with semiconductor expected to see continued recovery, RAC/Automotive projected for flat to modest growth, General Vacuum anticipated to remain flat or grow slightly, and Security & Energy forecasted to decrease in 2025.
CEO Oliver Wyrsch characterized Q1 as a "solid first quarter" with a "positive order trend," but emphasized the "increased risks and uncertainty due to trade tensions." The company continues to invest in R&D and manufacturing capacity, with full-year CAPEX expectations of $25-30 million depending on market conditions.
As Inficon navigates these mixed market conditions, its ability to leverage its strong position in the recovering semiconductor sector while managing challenges in other segments will be crucial for meeting its 2025 guidance.
Full presentation:
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