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    VSH
    Earnings call· Jun 2026(Q2 FY26)

    VISHAY INTERTECHNOLOGY Q2 FY26 earnings call VSH

    Aug 5, 2026 Source

    Executive summary

    Vishay Intertechnology Q2 FY26 — Strong Demand and Capacity Expansion Drive Record Bookings and Margin Expansion

    Vishay Intertechnology delivered a strong Q2 FY26, surpassing revenue guidance and achieving record bookings, driven by robust demand across industrial, AI, automotive, and aerospace/defense end markets. The company's Vishay 3.0 strategy is proving effective, enabling market share gains and accelerated capacity expansion, including a new 12-inch fab in Germany. Management is focused on margin expansion through volume, pricing, and strategic capacity allocation, while navigating elevated tax rates and negative free cash flow due to significant capital investments.

    Highlights

    5

    • Adjusted revenue of $919 million exceeded the top end of guidance.

    • Book-to-bill for Q2 was 1.32, with record high bookings for resistors and inductors.

    • Total backlog grew 18% to $1.9 billion or 6.1 months.

    • Adjusted gross margin reached 22.6%, exceeding guidance and accelerating the 24% target by a quarter.

    • Adjusted EBITDA margin increased to 11.4% from 9.3% in Q1 FY26.

    Concerns

    3

    • GAAP effective tax rate remains elevated at 33.7% due to U.S. taxation of foreign earnings and repatriation taxes.

    • Expected negative free cash flow for FY26 due to significant capacity expansion plans.

    • Memory shortages and higher component prices have tempered demand in the consumer segment.

    Guidance & targets

    11
    CategoryTargetConfidence
    Adjusted Revenue
    $945 million - $975 million
    high materiality
    High
    Gross Margin
    24.0% plus or minus 50 basis points
    high materiality
    High
    Depreciation Expense
    $54 million
    medium materiality
    High
    Depreciation Expense
    $215 million
    medium materiality
    High
    SG&A Expenses
    $155 million plus or minus $3 million
    medium materiality
    High
    Interest Expense
    $7 million
    low materiality
    High
    Effective Tax Rate
    35% and 40%
    medium materiality
    High
    Capital Expenditure
    $400 million - $440 million
    high materiality
    High
    Free Cash Flow
    negative
    high materiality
    High
    12-inch Fab Production (non-automotive)
    mid-2027
    high materiality
    High
    Gross Margin
    30%
    high materiality
    High

    Segment performance

    10
    SegmentRevenueYoYQoQMargin
    Industrial
    Reflecting higher consumption primarily for smart grid, AI power, high-voltage DC projects, and factory automation. Bookings increased due to ability to serve growing POS through distribution. New programs launching in H2 FY26 and into FY27.
    		—+30.1%+16.2%—
    Automotive
    Reflecting ongoing demand as electronic content increases for driver assist and autonomous driving applications, plus further adoption of hybrid and EV platforms. Strong bookings in the Americas with customers providing 12-18 month forecasts.
    		—+10.1%+3.6%—
    Aerospace Defense
    Reflecting increasing consumption by U.S. defense contractors for funded programs, including missile replenishment. Increasing demand from OEM customers and EMS in Asia and Europe. Bookings sharply increased from distribution for resistors.
    		—+15.4%+4.2%—
    Healthcare
    Long-standing customers in the Americas ramping production and EMS customers in Asia seeing improving demand and supply assurance. Continuing to leverage the full Vishay portfolio in medical.
    		—+14.7%+7%—
    Other (Telecom, Computing, Consumer)
    Share gains and higher consumption drove volume increases for AI-related programs in Asia, higher demand for AI optical communication network switches, and 5G radio projects in Europe. Consumer segment demand tempered by memory shortages and higher component prices.
    		—+28.4%+11.3%—
    Distribution Channel
    Led revenue by channel, with gains in each region driven by broad-based consumption momentum and market share gains. Strong bookings, particularly for industrial power, AI-related applications, and aerospace defense, reflect continued demand momentum and need to replenish inventory.
    Share of total revenue: 58% (up from 55% in Q1)Distribution inventory: 18 weeks (down from 20 weeks last quarter)POS growth QoQ: +4.7%POS growth YoY: +20.5%
    		—+24.2%+15.6%—
    OEM Channel
    Reflecting solid demand related to smart grid and AI server power, as well as automotive and medical.
    		—+16.8%+1.7%—
    EMS Channel
    Reflecting industrial, aerospace defense, and automotive program ramps in all regions, plus strengthening demand in AI.
    		—+10.8%+3.2%—
    Asia Region
    Accounted for over half of the revenue increase from the first quarter due to increased consumption.
    		——+12.5%—
    Americas Region
    Increased consumption, with orders for passives reaching the highest level in more than 20 years and semis starting to accelerate as many customers move to volume production.
    Book-to-bill: 1.5
    		——+14.1%—

    Operational metrics

    30
    Adjusted Revenue
    $919 million+9.5% QoQ, +21% YoY
    Q2 FY26

    Exceeded guidance range. Favorable foreign currency, mainly from the euro, provided an additional 1% benefit.

    GAAP Revenue
    $889 million
    Q2 FY26

    Includes $30 million for tariff refunds recognized as reductions of net revenues and cost of products sold.

    Tariff Refunds
    $30 million
    Q2 FY26

    Recognized in Q2 FY26 GAAP results, excluded from adjusted revenue. Not allocated to segment, end market, sales channel or region.

    Adjusted Gross Margin
    22.6%up from 22.0% in Q1 FY26
    Q2 FY26

    Exceeded guidance. Higher volumes and improved pricing conditions drove margin expansion, offsetting ongoing metals, materials, and logistic cost pressures.

    GAAP Gross Margin
    23.3%
    Q2 FY26

    Reported GAAP gross margin.

    Depreciation Expense
    $53 millionrelatively flat with Q1 FY26
    Q2 FY26

    Q2 FY26 depreciation expense.

    SG&A Expenses
    $154 millionflat versus Q1 FY26
    Q2 FY26

    Within guidance. The company continues to invest in R&D and customer-facing activities.

    GAAP Operating Margin
    6%
    Q2 FY26

    Reported GAAP operating margin.

    Adjusted Operating Margin
    5.8%compared to 2.6% in Q1 FY26 and 1.4% in Q2 FY25
    Q2 FY26

    Improved significantly year-over-year and sequentially.

    Adjusted EBITDA
    $105 million
    Q2 FY26

    Reported adjusted EBITDA.

    Adjusted EBITDA Margin
    11.4%up from 9.3% in Q1 FY26
    Q2 FY26

    Improved sequentially.

    GAAP Effective Tax Rate
    33.7%
    Q2 FY26

    Came in below guidance range as pretax earnings exceeded expectations. Remains elevated due to U.S. taxation of foreign earnings and repatriation taxes.

    GAAP EPS
    $0.19compared to $0.05 in Q1 FY26
    Q2 FY26

    Reported GAAP earnings per share.

    Adjusted EPS
    $0.19compared to $0.05 in Q1 FY26 and an adjusted loss of $0.07 in Q2 FY25
    Q2 FY26

    Reported adjusted earnings per share.

    Cash Conversion Cycle
    110 daysimproved from 116 days in Q1 FY26
    Q2 FY26

    Improved due to increased sales volume and disciplined working capital management.

    DSO
    38 daysimproved from 41 days in Q1 FY26
    Q2 FY26

    Primarily due to higher revenues and the impact of the securitization program.

    Inventory Days Outstanding
    102 days
    Q2 FY26

    Improved due to increased sales volume.

    Total Inventory
    $807 millionincreased slightly
    Q2 FY26

    Mainly due to building safety stock in raw materials and WIP, and to support increasing backlog.

    Capital Expenditure
    $95 million
    Q2 FY26

    Includes approximately $66 million for the new 12-inch wafer fab in Germany. Cash continues to be deployed for capacity expansion projects.

    Capital Intensity
    10.5%decrease from 11.3% in prior year
    TTM

    Trailing 12-month capital intensity.

    Quarterly Dividend
    $13.6 million
    Q2 FY26

    Stockholder returns for the quarter.

    Public Stock Offering Proceeds
    $830 million
    Q2 FY26

    Net cash received from public stock offering of 17.25 million shares of common stock.

    Global Cash and Short-Term Investment Balance
    $1.3 billion
    Q2 FY26

    Balance at the end of the quarter.

    Revolver Outstanding
    $238 million
    Q2 FY26

    Outstanding balance on revolver at quarter end, repaid in July using proceeds from stock offering.

    Accessible Revolver Capacity
    $423 million
    Q2 FY26

    Accessible at current EBITDA level. Increased to approximately $661 million after repayment of credit facility in July.

    Distribution Inventory
    18 weeksdecreased from 20 weeks last quarter
    Q2 FY26

    Overall distribution inventory at quarter end.

    Distribution POS Growth
    +4.7%QoQ
    Q2 FY26

    Point-of-sale increased with growth in all regions.

    Distribution POS Growth
    +20.5%YoY
    Q2 FY26

    Point-of-sale increased with growth in all regions.

    Price Increases
    1/3
    Q2 FY26

    About 1/3 of running part numbers have announced price increases, which began in Q4 FY25 and continued through Q1 and Q2 FY26.

    Customer Count
    overall increase
    Q2 FY26

    Succeeding at regaining customers and adding new high-margin growth customers.

    Industry KPIs

    8
    MetricValueDetails
    Orders book to bill1.32
    Segment revenue growth$919 millionUSD
    Design wins product cycle ramps—
    Order visibility backlog policy6.1 months
    Supply demand imbalance lead times—
    Capacity expansion internal sourcing—
    End market revenue mix organic growth—
    Operating margin incremental leverage5.8%%

    Orderbook & backlog

    3
    Total Book-to-bill1.32Q2 FY26

    Semis: 1.23; Passives: 1.40

    Total Backlog$1.9 billionQ2 FY26

    +18%

    Represents 6.1 months of backlog. Record high bookings for resistors and inductors.

    Americas Book-to-bill1.5Q2 FY26

    Product announcements

    2
    ProductTypeDetails
    Silicon Carbide Strategy and GaN Developmentroadmap
    New Application Design Winsmilestone

    Capital programs

    3
    12-inch wafer fab in Germanyunderway
    Period spend: ~$200M-$220M
    Spent to date: $66 million (Q2 FY26)
    Funding: Proceeds from equity raise

    Benefit: Economies of a 12-inch wafer

    About half of the FY26 CapEx ($400M-$440M) is earmarked for this fab. All equipment has been assembled, with installation planned for Q3 FY26. Engineering wafers expected to run toward the end of the year.

    Polymer Capacitor Production Expansionunderway
    Funding: Proceeds from equity raise

    Benefit: Support more AI and automotive applications

    Increasing capacity at current locations and starting an expansion at a new site in La Laguna, Mexico.

    Dedicated Vishay Back-end Capacityunderway
    Funding: Proceeds from equity raise

    Benefit: Reduce dependency on multiple outside subcontractors and avoid subcontractor margin

    An initiative to have more dedicated Vishay back-end capacity to support front-end wafer investments.

    Risks & headwinds

    5
    Elevated GAAP Effective Tax RateNear-term

    33.7% in Q2 FY26, guided 35%-40% for Q3 FY26

    Mitigation: Expects rate to become more predictable and in range of historical average as earnings grow.

    Negative Free Cash FlowFY26

    Negative for FY26

    Mitigation: Due to significant capacity expansion plans, which are strategic investments for future growth.

    Consumer Segment Demand TemperingQ2 FY26

    Impacted by memory shortages and higher component prices

    Geopolitical TensionsOngoing

    Remaining

    Mitigation: Customers are concerned about product availability and assurance of supply, leading to longer order visibility.

    Newport Fab Customer Program ApprovalsOngoing

    Taking a little time

    Mitigation: Working closely with customers to get Tier 1 customer programs approved to increase utilization.

    What to watch in Q3 FY26

    5

    Newport Fab Utilization

    Through end of year
    CurrentAutomotive audits ongoing, 9 of 10 completed
    TargetIncreased utilization as more programs are approved

    Why it matters

    Increased utilization of Newport fab is key to carrying costs and improving gross margin, and opening capacity in Itzehoe 8-inch fab.

    We're expecting to see more and more programs approved every month through the end of the year. By having those programs approved in Newport, we're able to open capacity in the Itzehoe 8-inch fab, which is going to help us.

    Q&A highlights

    7

    Inquired about current fab utilization, the percentage of manufacturing at foundries, expected wafer per month capacity for Newport and the new Germany fab, and the timeline for increased capacity.

    Joel explained that foundries in Korea and China are coming online in Q3 FY26 to increase AI wafer capacity. For the Newport fab, automotive audits are nearing completion, which will increase utilization as programs are approved. The Germany 12-inch fab is on track for mid-2027 non-automotive production, but specific wafer counts were not disclosed, though good progress is being made.

    “The 12-inch fab, we talk about first qualifying the nonautomotive commercial parts so we can run the fab much faster than Newport was started. That is still on target for mid-'27. As far as wafer counts, we're not ready to share that at this time. We are making good progress with the fabs and capacity.”

    asked by Ruplu Bhattacharya · answered by Joel Smejkal

    2 min read6 chapters

    Detailed Narrative

    01

    Vishay 3.0 Strategy Success

    The Vishay 3.0 strategy is credited for the strong Q2 FY26 performance, with adjusted revenues growing faster over the past five quarters. This initiative focuses on agility, serving a broader customer base, and regaining high-margin customers, which has led to an overall increase in customer count and enhanced design-in and quoting activity. The company emphasizes a proactive, business-minded approach to capitalize on market opportunities.

    02

    Accelerating Demand Dynamics and Backlog Growth

    Vishay is experiencing strengthening demand across all product technologies, end markets, business channels, and regions. Customers are placing orders with longer visibility, some extending beyond 52 weeks, to secure supply amidst stretching lead times, rising pricing, and geopolitical tensions. This has resulted in a Q2 book-to-bill ratio of 1.32 and an 18% growth in total backlog to $1.9 billion, representing 6.1 months of coverage.

    03

    AI-Driven Growth and Product Focus

    Demand related to AI applications is accelerating significantly, particularly for industrial power, AI power, high-voltage DC projects, and AI optical communication network switches. Vishay is increasing its part count on new AI power management solutions and is actively pushing to become a larger player in the AI market. The company is ramping up production at foundries to support AI wafer demand and expanding polymer capacitor capacity for AI and automotive applications.

    04

    Strategic Capacity Expansion Initiatives

    Vishay plans to invest between $400 million and $440 million in CapEx in 2026, with approximately half dedicated to the new 12-inch wafer fab in Germany. This fab is on track for installation completion in Q3 FY26 and aims to start non-automotive production by mid-2027. Additionally, the company is ramping production at several foundries in Korea and China for AI-related applications and expanding polymer capacitor production by year-end, including a new site in La Laguna, Mexico.

    05

    Gross Margin Progression and Levers

    The company has accelerated its goal of achieving a 24% quarterly gross margin by one quarter, now expecting it in Q3 FY26, and maintains a long-term target of 30%. This progression is driven by multiple strategic levers including increased volume, rising average selling prices (ASPs), proactive channel management to prioritize higher-margin customers, annual cost savings targets, maximizing Newport fab utilization, and optimizing factory footprints.

    06

    Capital Allocation and Equity Raise Impact

    Proceeds from a recent public stock offering, which generated $830 million net cash, will be used to accelerate growth plans, allowing parallel investments in both semiconductor and passive technologies. The company ended the quarter with $1.3 billion in global cash and short-term investments and increased its accessible revolver capacity to $661 million after repaying outstanding balances in July, positioning it to support aggressive growth initiatives.

    AI-generated summary of the company’s earnings call. Not investment advice.