Soitec S.A.

Soitec reported H1 FY26 revenue of EUR 231 million, down 29% organic year over year. EBITDA margin was 34.1%, while operating cash flow was EUR 26 million and free cash flow was minus EUR 31 million under the updated definition. Net result was minus EUR 67 million, including a EUR 41 million SmartSiC impairment and a EUR 17 million noncash FX conversion loss; excluding nonrecurring items, current net income was broadly stable at minus EUR 2 million. Gross margin declined 490 bps year over year, driven by Dolphin Design disposal, lower fab loading, and unfavorable mix/price. For the balance of the year, management expects Q3 organic revenue growth in the mid- to high single-digit range sequentially, continued RF-SOI undershipment, persistent automotive weakness, and strong momentum in Edge and Cloud AI; FY26 CapEx is now targeted at around EUR 140 million, and the company is focused on achieving positive free cash flow under the new definition by year-end.

Pierre Barnabé emphasized discipline, cash generation, and inventory cleanup as the core priorities for FY26, saying the company is focusing on what it can control while making “deliberate sometimes tough” actions on production and working capital. He framed the new client- and product-centric organization as a way to expand into new SOI and beyond-SOI markets, while highlighting AI, Photonics-SOI, FD-SOI, and incubators in advanced computing and memory as key growth options. His tone was cautiously optimistic: he repeatedly stressed prudence and said Soitec should emerge stronger and ready for its rebound.

Albin Jacquemont focused on balance-sheet discipline, inventory reduction, and cost control. He said cash and investments were EUR 483 million pro forma for the OCEANE repayment, with net debt of EUR 145 million and leverage at 0.5x EBITDA; available liquidity post-repayment was EUR 603 million. He also said gross margin will be hit in H2 by significantly lower fab loading, which should cause a sequential decline in gross profit, EBIT and EBITDA, and that H2 fab loading will be much lower than in H2 FY25. He added that OpEx was down EUR 5 million in H1 and should be down for the full year, with cost savings expected to be significant, though he did not quantify a 2027 run-rate.

Analysts focused on margin pressure, SmartSiC write-downs, inventory destocking, fab loading, pricing, and the GlobalWafers situation. Management said H2 will see significantly lower fab loading and therefore underutilization costs, implying sequential declines in gross profit, EBIT and EBITDA; on SmartSiC, they said they still expect some business, but the impairment reflects revised prospects amid more competition from Chinese monoSiC players. On inventories, Pierre said customer inventories were around 2.3 million equivalent 8-inch wafers versus 2.5 million in July, and management expects continued depletion through FY26 and beyond. On pricing, Pierre said overall pricing pressure is low single-digit and limited, partly offset by richer mix and higher-value products.