STMicroelectronics reported fourth-quarter net revenues of $3.33 billion, up 4.5% sequentially and flat year-over-year. Gross margin improved to 35.2%, a 200-basis-point sequential gain, driven by a more favorable product mix in Personal Electronics and Industrial, offsetting softer Automotive results. U.S. GAAP operating income was $125 million, down from $180 million in Q3, reflecting $141 million in impairment and restructuring charges. Non-U.S. GAAP operating income reached $266 million, although down 27.8% year-over-year, yielding an 8.0% operating margin. The quarter closed with a net loss of $30 million, or –$0.03 per share, versus a $237 million net income in Q3, while non-U.S. GAAP net income was $100 million, or $0.11 per share.

The Analog, Power & Discrete, MEMS and Sensors group generated $1.86 billion in sales, nearly flat sequentially but down 4.6% year-over-year. Within this, Imaging-led Analog revenues rose 7.5% year-over-year, while Power & Discrete fell 31.6%, resulting in a $124 million operating loss in the latter. The Microcontrollers, Digital ICs & RF group recorded $1.46 billion, up 10.8% sequentially and 7.0% year-over-year. Embedded Processing grew 1.2% and delivered $195 million in operating profit, while RF & Optical Communications surged 22.9%, contributing $105 million of operating profit.

Operating cash flow for Q4 was $674 million, roughly flat year-over-year, while non-U.S. GAAP free cash flow reached $257 million. Net capital expenditures totaled $395 million for the quarter and $1.79 billion full-year, down from $2.53 billion in 2024. Inventories stood at $3.14 billion, equivalent to 130 days of sales. The company ended the quarter with a net cash position of $2.79 billion and total liquidity of $4.92 billion against $2.13 billion of financial debt. During Q4, STM returned $179 million to shareholders through dividends and share buybacks.

For Q1 2026, ST forecasts mid-point net revenues of $3.04 billion, an 8.7% sequential decline but better than historical seasonality, and a gross margin of 33.7%, including 220 basis points of unused capacity charges. Management reiterated that stabilization in automotive and industrial markets will be gradual and volatile, with stronger data center demand supporting recovery. Capex for 2026 is planned at $2.0–2.2 billion as STM continues to reshape manufacturing footprint and drive free cash flow expansion.