Soitec stock sinks 27% on 2025 guidance cut, big Q3 revenue miss

Published 06/02/2025, 10:12
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Investing.com -- Soitec (EPA:SOIT) lowered its 2025 sales forecast on Wednesday, citing delays in customer deliveries due to deteriorating conditions in the automotive and consumer markets.

The French semiconductor materials supplier now expects revenue to decline by a high-single-digit percentage year-on-year at constant exchange rates and on a comparable business basis. Previously, it had anticipated stable full-year sales.

Soitec also adjusted its earnings outlook, forecasting an EBITDA margin of 32% to 34% for the year, down from the earlier estimate of around 35%.

The company’s shares crumbled more than 27% in Paris trading Thursday.

"Despite seasonal restocking in the second half of the fiscal year, customers continue to optimize RF-SOI inventory levels based on seasonality and market conditions, which will keep driving fluctuations over the next few quarters," CEO Pierre Barnabé said in a statement. He added that the automotive and industrial division remains affected by a weak auto market.

Given the uncertainty in end markets, Barnabé noted that it is too soon to provide detailed guidance for 2026. However, Soitec currently expects only “limited growth” next year based on existing market conditions.

For the third quarter, the company reported a 10% drop in quarterly revenue at constant exchange rates and perimeter to €226 million ($236 million), down from €240 million a year earlier, and well below the consensus estimate of €250.57 million.

Mobile Communications revenue, which makes up 55% of the group, exceeded consensus by 10%. However, this was outweighed by significant shortfalls in Auto & Industrial, down 33% compared to consensus, and Edge and Cloud AI, which missed by 42%.

Bernstein analysts estimate that consensus may lower its fiscal year 2025 (FY25) revenue forecasts by approximately 4% and FY26 revenue by 10% after the disappointing print, though currency effects from a weaker euro against the dollar could provide some offset. They also anticipate FY25 EPS cuts of around 15% and reductions of 20% or more for FY26.

“Against this bleak backdrop, we expect Soitec shares to drop back to pre-1H levels (around -15%), with at least some short cover and a sense of fully de-risked FY26 estimates acting as an offset to the impact of Soitec’s warning in tomorrow’s action,” they added.

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