Vishay Precision Group, Inc. Q4 FY2025 earnings call

Management Statement and Operational Highlights

• Q4 2025 marked the fifth consecutive quarter with a book to bill over one, led by Sensors. Fourth quarter revenues were $80.6 million, up 11% year over year and 1% sequentially.
• Gross margin in Q4 was impacted by $3 million of headwinds but expected to improve in Q1. Sensors are ramping production with backlog at a multiyear high.
• Business development initiatives, including humanoid robots and semiconductor equipment, generated $37.8 million in orders in 2025, exceeding the $30 million goal.
• In November, the company announced new organizational structures: office of the Chief Business and Product Officer (CBPO) and office of Chief Operating Officer (COO) to accelerate growth and improve operational efficiency.
• Delivered $4.5 million of targeted cost reductions in 2025.

Segment Performance

• Sensors: Fourth quarter revenue was 4% sequentially, up 18% year over year. Bookings rose 4% sequentially, 30% above year ago, resulting in a book to bill of 1.15. 2025 total sensors orders were up 18% compared to the first half. Fourth quarter revenue was $80.6 million, with Sensors contributing significantly.
• Weighing Solutions: Fourth quarter sales increased modestly from the prior quarter, growing 7.8% from the prior year. Orders were up 14.9% sequentially to $28.2 million, resulting in a book to bill of 1.02.
• Measurement Systems: Fourth quarter revenue was $22.4 million, up 9% sequentially and 6% from a year ago. Orders were $18.1 million, down 16% sequentially, with a book to bill of 0.81.

Guidance

• For 2026, net revenues are expected to be in the range of $74 million to $80 million, assuming constant fourth fiscal quarter 2025 exchange rate.
• Target to grow top line in the mid to high single digits in 2026, anticipating a stronger second half.
• Set a target of $45 million for 2026 from business development initiatives, a 20% increase from 2025.

Risks

• Encourage referring to SEC filings, especially the form 10-K for the year ended 12/31/2024 and other recent SEC filings for discussion of risks associated with operations.

Question and Answer

Q: I am curious about if to achieve the mid to high single-digit AM guide that you are putting out there, how biased is that towards the Sensors segment given the recent bookings profile?

A: Well, we are fairly optimistic regarding the recovery in the marketplace. While we are working on ramping up production for Sensors, we would expect to see higher revenues mainly in Sensors as of the second quarter. But overall, we are optimistic regarding the business environment and expect additional book to bill above one in the second quarter.

Q: What does the organizational strategic changes mean for the company's growth prospects overall? And could you touch on longer-term financial targets?

A: The organizational changes around the COO and CBPO are to develop a cross-divisional organization to standardize, unify, and improve processes. We are in the process of implementing changes starting to take effect in Q2. Regarding long-term targets, we have set internal goals for business development and expect to introduce a new model based on the new organization.

Q: Beyond humanoid robots, where are some verticals in your new business initiatives exceeding original expectations?

A: We have started a dialogue with what we call physical AI applications, which are autonomous logistics based on AI platforms, which some large manufacturers are looking at. This is an adjacent application to the humanoid but also based on AI.