Melexis Issues Weak H1-26 Guidance on Auto Demand

Q4 Earnings Miss and Cautious Outlook

Semiconductor firm Melexis announced Q4-2025 earnings that fell short of analyst expectations and issued a weak sales forecast for the first half of 2026. The guidance reflects growing caution surrounding demand in the global automotive sector.

Performance Overview and Projections

The company reported Q4-2025 revenue of €215 million and earnings per share of €0.56, both missing consensus estimates. Looking ahead, Melexis anticipates that sales for the first half of 2026 will remain flat year-over-year, approximately 6% below Jefferies' forecast. The company projects an H1-26 gross margin of around 40% and an operating margin of about 17%.

Economic and Market Impact

The conservative outlook is primarily attributed to cautious and uneven automotive demand. Additional pressures include annual pricing agreements, the Chinese New Year, and recent changes to electric vehicle purchase incentives. To mitigate these challenges, Melexis is strengthening its strategic focus on the Chinese and Indian markets.

Summary and Analyst View

Despite the weak first-half guidance, Melexis expects sales to grow in the second half of 2026. Analysts attribute the current softness largely to the Chinese automotive market, which is projected to normalize as the year progresses. The company's performance will be closely watched for signs of recovery in automotive semiconductor demand.

FAQ

Q: Why did Melexis issue a weak forecast for H1-2026?
A: The weak forecast is due to cautious automotive demand, annual pricing agreements, and recent changes in electric vehicle regulations.

Q: How is Melexis responding to the market challenges?
A: The company is increasing its strategic focus on the Chinese and Indian markets to drive future growth.

Source: Investing.com