Vishay Precision Group, Inc. Q3 FY2025 earnings call

Management Statement and Operational Highlights

• Results and Trends: Q3 revenue $79.7M, up 6.1% QoQ and 5.3% YoY. Total bookings $79.7M, book-to-bill 1.0. Adjusted gross margin 40.5%, adjusted operating margin 6.2%. $9.2M adjusted EBITDA and $7.4M adjusted free cash flow.
• Strategic Priorities 2025: Generated ~$26M in business development orders, on track for $30M goal. Expect $5M annualized cost reductions by year-end. Expanded senior leadership with Chief Business and Product Officer and Chief Operating Officer.
• Humanoid Robots: Received $3.6M in orders YTD from two humanoid customers, with initial discussions with additional developers, optimistic about long-term potential.

Segment Performance

• Sensors Segment: Third quarter revenue increased 19.1% sequentially, driven by higher sales of precision resistors in Test and Measurement, AMS, and strain gages in General Industrial. Sensor bookings rose 13.5% sequentially, reaching the highest level in 12 quarters with a book-to-bill of 1.07.
• Weighing Solutions Segment: Third quarter sales decreased 6.4% sequentially due to lower sales in transportation, construction, and precision ag equipment. Orders were $24.5 million, 10% lower than Q2, with a book-to-bill of 0.89. Adjusted gross margin was 40.3%, a record.
• Measurement Systems Segment: Revenue increased 7.3% sequentially to $20.6 million. Orders of $21.4 million decreased 6.9% sequentially, with a book-to-bill of 1.04. Softness in DTS due to defense and space project delays, expected to continue into Q4 due to U.S. government shutdown.

Guidance

• Q4 2025: At constant Q3 2025 exchange rates, net revenues expected to be in range of $75M to $81M.
• Full Year 2025: Forecast operational tax rate ~28%, capital expenditures $10M.

Risks

• Tariffs: Successfully mitigated impact via price adjustments, but tariffs could affect demand.
• Foreign Exchange and Product Mix: Unfavorable FX and product mix impacted consolidated gross margin.
• Defense and Space Projects: Delays in defense projects due to U.S. government shutdown affecting Measurement Systems, expected to have hundreds of thousands of dollars impact in Q4.

Question and Answer

Q: Disconnect in Weighing Solutions business, book-to-bill below 1 but revenues held up. Is it a shorter cycle business?

A: Weighing Solutions relies on OEM (precision ag, construction) with slowdown due to interest rates, but general industrial is stable. European economy improving but seasonal effect in Q3.

Q: Sustainability of Weighing Solutions' record gross margin?

A: Sustainable due to continuous operational excellence initiatives like streamlining manufacturing to India.

Q: Year-to-date $26M business development orders, any additional humanoid orders in Q4?

A: $26M from various applications, humanoid is part, but hard to predict exact timing due to customer design changes.

Q: Impact of U.S. government shutdown on Measurement Systems?

A: Effect on DTS product line, expected to be hundreds of thousands of dollars impact in Q4.