Littelfuse, Inc. Q2 FY2025 earnings call

Management Statement and Operational Highlights

• Highlights: Second quarter revenue was $613 million, up 10% total and 6% organic. Adjusted EBITDA margin was 21.4%, up 280 basis points. Adjusted diluted earnings were $2.85, up 45% and exceeded guidance. Hired new CFO Abhi Khandelwal.
• Strategic Priorities:
  • Enhance focus on higher voltage/higher energy density: Working on opportunities like enterprise computing semiconductor protection solution shipping in Q3.
  • Provide more complete solutions: Aligning technology and sales structure, e.g., new data center design wins and grid storage/green hydrogen wins.
  • Drive operational excellence: Established global operations team focusing on safety, quality, etc., with early benefits seen in Transportation.

Segment Performance

• Electronics Products: Sales were up 10% versus the prior year and up 4% organically. Dortmund acquisition contributed 4%, while FX contributed 1 point to growth. Passive products were up 14% organically, but semiconductor products declined 5% (soft power semiconductor demand offset by protection products). Adjusted EBITDA margin was 21.6%, flat versus the prior year.
• Transportation Products: Segment sales increased 6% as organic sales increased 4% for the quarter, while FX contributed 2 points to growth. Passenger car sales increased 3% organic, and commercial vehicle sales increased 5% organic. Adjusted EBITDA margin was 20.5%, up 610 basis points.
• Industrial Products: Segment sales grew 17% organically. Benefited from strong grid storage, renewable, data center, industrial safety, and HVAC growth. Adjusted EBITDA margin was 22.1%, up 610 basis points.

Guidance

• Third Quarter: Expected sales in range of $610M-$630M (6% organic, 2% from Dortmund). EPS range $2.65-$2.85, 38% flow-through at midpoint, impact from stock/variable comp and prior year items.
• Full Year 2025: Expect 2% total sales growth from Dortmund, 1% tailwind from FX/commodities, tax rate 23%-25%, cap ex $90M-$95M.

Risks

• No specific risks detailed beyond general forward-looking statement disclaimers.

Q: Luke Junk of Baird asked about margin upside in Transportation and Industrial, tariff timing impacts, etc.

A: Greg and Abhi responded discussing operational leverage, strategic focus, and tariff timing details.

Q: Christopher Glynn of Oppenheimer asked about passenger vehicle share gains.

A: Greg responded discussing market exposure and diversification efforts.

Q: Saree Boroditsky of Jefferies asked about growth opportunities, competitive environment in higher voltage solutions.

A: Greg responded discussing technology differentiation and market position.

Q: David Williams of Benchmark asked about power semi segment orders and end demand inflection.

A: Greg and Abhi responded discussing order improvements and end market visibility