Vishay Intertechnology (NYSE:VSH) executives pointed to improving demand, rising backlog, and increasing customer engagement as key themes in the company’s fiscal fourth quarter 2025 earnings call, while outlining a capital spending peak in 2026 tied largely to its 12-inch fab investments.
Fourth-quarter revenue edges higher as orders reach multi-year highs
For the fourth quarter, Vishay reported revenue of $801 million, slightly above the midpoint of its $790 million guidance range and up 1.3% from the prior quarter. Management said the sequential increase was driven by “a growing broad-based business in industrial power and AI-related power applications,” with growth in all channels led by distribution. Asia was cited as the primary driver of revenue growth.
Management highlighted the visibility of its “Vishay 3.0” initiatives in orders and customer engagement. Smejkal said fourth-quarter orders were at a three-year high across all main product technologies except capacitors (which reached their three-year high in the second quarter of 2025). Orders by channel (OEM, distribution, and EMS) were also described as three-year highs, and management said improvements in lead times have helped build a more consistent EMS business.
Backlog builds and book-to-bill strengthens
After gradually building backlog over the first nine months of 2025, Smejkal said fourth-quarter backlog grew nearly 14%, with both semiconductors and passives contributing. Vishay ended the quarter with a book-to-bill ratio of 1.2, up from a previously discussed run rate of 1.15 at the end of October. Segment-level book-to-bill ratios were 1.27 for semiconductors and 1.13 for passives.
Backlog at quarter end totaled $1.3 billion, which management characterized as 4.9 months of coverage. Executives attributed the momentum to improving market demand, inventory replenishment, and market share gains.
End-market and channel trends: industrial power and AI-related demand stand out
Management walked through end-market performance and drivers:
- Automotive: Revenue fell 3.4% sequentially, which management attributed largely to lower pull rates during holiday weeks in the Americas and Europe. Asia automotive revenue increased in what management called a seasonally strong quarter. Smejkal said automotive design activity continues around rising electronic content, including traction inverters, onboard chargers, ADAS, power steering, and infotainment.
- Industrial power: Revenue rose 3.2%, helped by higher shipments of high-voltage DC power capacitors tied to smart grid infrastructure projects, channel replenishment, and strengthening demand for building security power requirements and new industrial programs ramping. Vishay said it won another smart grid infrastructure project in the Americas, expected to enter production in the first half of 2026, and discussions continue on projects extending through 2032.
- Aerospace, defense, and markets: Revenue slipped 1.2%, reflecting the impact of a U.S. government shutdown on billings and delayed project timing in Europe. Orders increased, particularly for capacitors, as funding is approved for military programs and in anticipation of production ramps in 2026.
- Healthcare: Revenue was flat sequentially, with fluctuations tied to customer program milestones. Europe posted its strongest quarter in three years on demand for hearing aids, implantables, and diagnostic equipment. Management said it is seeing opportunities emerging in wearables, including heart rate and oxygen monitoring applications.
- Other: Revenue grew 10.6% versus the third quarter, which management linked primarily to customers ramping production for new products supporting AI power management applications and extended component lead times across the industry.
By channel, Vishay said OEM revenue increased 1.1%, EMS revenue rose 1.4%, and distribution revenue increased 1.4%, with Asia again cited as the largest contributor. Distribution inventory fell to 22 weeks from 23 weeks in the prior quarter, and point-of-sale (POS) rose 3% mainly due to year-end demand in Asia.
Profitability: volume benefits offset by material costs and Newport drag
CFO Dave McConnell said fourth-quarter revenue exceeded guidance midpoint and was up 1% sequentially, driven by a 2% increase in volume partly offset by a modest decline in average selling prices. Year over year, revenue increased 12%, driven mainly by volume, with favorable foreign currency (primarily the euro) contributing an additional 3% benefit and average selling prices down 1% (including tariff factors).
Gross profit was $157 million for a gross margin of 19.6%, modestly above guidance midpoint and the third quarter. McConnell said higher volumes helped offset continued pressure from elevated metals and material costs, while the negative impact from the Newport fab was approximately 100 basis points at the consolidated margin level. Depreciation was $54 million, flat sequentially.
SG&A expenses were $142 million, up from $135 million in the third quarter and above the midpoint of guidance. McConnell attributed the increase primarily to higher compensation costs, higher R&D spending, and legal costs and fees related to accounts receivable securitization transactions. GAAP operating margin was 1.8%, compared with 2.4% in the prior quarter. GAAP EPS was $0.01, compared with a loss of $0.06 in the third quarter.
Cash flow, capital spending, and 2026 outlook
Vishay’s cash conversion cycle improved to 125 days from 130 days, which management attributed partly to working capital discipline. The company also securitized certain non-U.S. accounts receivable to help fund 12-inch wafer fab equipment purchases, contributing to a decline in days sales outstanding to 48 days from 53 days. Inventory decreased to $759 million and inventory days improved to 107 days.
Operating cash flow in the quarter was $149 million, including $62 million from receivables securitization. Capital expenditures were $95 million in the quarter, including $75 million for capacity expansion projects. Full-year 2025 CapEx was $273 million, below guidance due to delayed delivery of some 12-inch fab equipment into the first quarter of 2026.
For the first quarter of 2026, the company guided revenue of $800 million to $830 million, noting Asia revenue is expected to be lower due to Lunar New Year timing, with the Americas and Europe expected to make up the difference. Gross margin guidance was 19.9% ± 50 basis points, including tariff impacts and continued higher input costs. Newport’s drag was expected to be 50 to 75 basis points, and management said it expects Newport to exit the first quarter gross profit neutral and be accretive thereafter.
McConnell guided SG&A to $153 million ± $2 million in the first quarter, reflecting higher incentive and stock compensation accruals for 2026 and a full quarter of securitization-related fees, with the company expecting to hold SG&A at the first-quarter level through 2026.
On capital allocation, management reiterated its policy of returning at least 70% of free cash flow to shareholders through dividends and repurchases, but noted it expects negative free cash flow in 2026 due to capacity expansion plans. The company paid a $13.6 million quarterly dividend and did not repurchase shares in the quarter.
Looking to 2026, Smejkal said the company expects capital spending of $400 million to $440 million, with a bit more than half allocated to the 12-inch fab. He described 2026 as the peak year of the five-year capacity expansion plan, with spending expected to decline in the second half. Management also highlighted product and technology progress, including the release of eight Gen 2 1200V planar silicon carbide MOSFETs for industrial use and the release of its first trench silicon carbide Gen 3 1200V MOSFET aimed at industrial and automotive applications.
During Q&A, management maintained its view that industry growth remains in the mid- to high-single-digit range, while stating Vishay is pushing to outperform. Executives also discussed annual contract negotiations, noting the resulting price decreases were “much less than what was historical,” and said the company implemented price increases tied to metals costs beginning in the fourth quarter, with additional actions under evaluation.
About Vishay Intertechnology (NYSE:VSH)
Vishay Intertechnology, Inc is a global manufacturer of discrete semiconductors and passive electronic components, serving a wide range of industries including industrial, automotive, computing, consumer electronics, telecommunications, medical, and military/aerospace markets. The company’s portfolio encompasses resistors, capacitors, inductors, sensors, diodes, rectifiers, MOSFETs and a variety of integrated circuit solutions. Vishay’s components are used in power management, signal conditioning, circuit protection and sensing applications, supporting both standard and custom designs for original equipment manufacturers worldwide.
Originally founded in 1962 by Dr.
