07-08-2025
u-Blox Holding AG (UBLXF) (H1 2025) Earnings Call Highlights: Strong Revenue Growth Amidst ...
Revenue Growth: 32% year-over-year increase in H1 2025.
Cash EBIT Margin: Positive at 2.4%, up 30 percentage points from the previous year.
Free Cash Flow: CHF5.4 million generated in H1 2025.
Gross Margin: 58.2%, a 6 percentage point increase year-over-year.
Net Working Capital: Reduced to CHF33 million, representing 14% of revenue.
Net Cash Position: CHF101 million at the end of H1 2025.
Locate Business Revenue: Grew 32% year-on-year to CHF106.7 million.
Short-range Business Revenue: Increased by 24% to CHF16.7 million.
Automotive Business Revenue: Grew 40% year-on-year to CHF52.1 million.
Industrial Segment Revenue: Increased by 30% to CHF68.1 million.
SG&A Expenses: Reduced by 18% to CHF23.4 million.
Cash R&D Spending: CHF44.9 million, down from CHF47.8 million the previous year.
Warning! GuruFocus has detected 5 Warning Signs with UBLXF.
Release Date: August 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
u-Blox Holding AG (UBLXF) reported a strong revenue growth of 32% year-over-year, driven by recovery in the Automotive and Industrial sectors.
The company's cash EBIT margin turned positive at 2.4%, a significant improvement from the previous year.
u-Blox generated CHF5.4 million in free cash flow, highlighting effective cost management and working capital improvements.
The divestment of the Cellular business allows u-Blox to focus on its core business areas, enhancing technological leadership and growth potential.
The company has reduced its operational expenses significantly, with a 30% reduction in OpEx and a streamlined workforce, enhancing agility and capital efficiency.
Negative Points
Geopolitical volatility and slower-than-expected recovery in key markets are leading to cautious ordering behaviors from customers.
Despite improvements, the R&D expenditure as a percentage of sales remains high compared to industry standards.
The company's consumer and other applications segment continued to decline, with revenue down 27% year-over-year.
The short-term visibility remains limited due to ongoing geopolitical uncertainties impacting ordering patterns.
The divestment of the Cellular business resulted in a negative free cash flow of CHF12 million from discontinued operations.
Q & A Highlights
Q: What are the key drivers for the potential upside in gross margin, particularly for the GNSS business? A: Camila Japur, CFO, explained that the company expects to continue growing, which should lead to a higher operating level on revenue, thereby strengthening the gross margin. However, specific details on operating leverage at the COGS level were not disclosed.
Q: Is there any potential for further savings in R&D expenses, given that they are high as a percentage of sales compared to industry averages? A: Camila Japur noted that while the R&D ratio is high, the focus is on increasing revenue rather than significantly reducing R&D. The company aims to maintain its technology leadership and expects the R&D percentage to align with market standards as revenue grows.
Q: Can you provide more details on the orders that have doubled for ADAS and Robotics, and how material these are? A: Stephan Zizala, CEO, highlighted that while absolute revenues for Autonomous Driving are still low, there has been a significant increase in order entry, indicating strong future growth potential. However, specific figures were not disclosed.
Q: What is the current gross margin for the Short-range business, and is there any upside potential? A: Camila Japur confirmed that the Short-range business currently has a gross margin of around 30%, with the higher margin potential primarily coming from the GNSS business.
Q: How does u-Blox plan to manage its cost base and maintain profitability in the face of geopolitical volatility and cautious customer ordering behaviors? A: Stephan Zizala stated that the company has made significant cost base adjustments over the past year, improving flexibility and resilience. They maintain a strict cost focus while continuing to invest in innovation to support growth in core markets.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
