Vishay Intertechnology Inc (NYSE:VSH)

Q2 2026 Vishay Intertechnology Inc Earnings Call Transcript

Aug 5, 2026 / 01:00 PM GMT

Release Date Price: $33.18 (-14.59%)

Transcript 10-Q8-K

Key Points

Positve

Vishay Intertechnology Inc (VSH) reported record Q2 2026 adjusted revenue of $919 million, exceeding the top end of guidance, with strong 20.5% year-over-year growth and 9.5% sequential growth.
The company achieved a record-high book-to-bill ratio of 1.32 in Q2, with total backlog growing 18% to $1.9 billion (6.1 months), driven by strong demand across all segments.
Gross margin expansion is ahead of schedule, with Q3 2026 guidance of 24.0% (plus or minus 50 bps) achieved one quarter earlier than the original goal of exiting the year at that level.
Demand is broad-based and accelerating, particularly in industrial (up 30.1% YoY), AI-related applications, and aerospace/defense, with customers placing orders beyond 52 weeks to secure supply.
The company is successfully executing its Vishay 3.0 strategy, gaining market share in both semis and passives, with distribution POS up 20.5% YoY and inventory levels decreasing to 18 weeks, indicating healthy consumption.
Vishay Intertechnology Inc (VSH) raised $830 million through a public stock offering, providing ample resources to accelerate capacity expansion, R&D, and M&A initiatives across both semis and passives in parallel.
The company is making solid progress on strategic capacity investments, including the 12-inch fab in Germany (on track for mid-2027 production) and ramping foundry partnerships in Korea and China to support AI demand.
Adjusted operating margin improved significantly to 5.8% in Q2 from 2.6% in Q1 and 1.4% in the prior year, reflecting improved pricing and volume leverage.
Cash conversion cycle improved to 110 days from 116 days in Q1, with operating cash flow of $105 million and free cash flow turning positive at $10 million.
The company is seeing successful price increase implementation, with about a third of part numbers announced for increases, contributing to a 2% ASP improvement in Q2.

Negative

Vishay Intertechnology Inc (VSH) continues to face elevated effective tax rates (33.7% in Q2, expected 35-40% in Q3) due to US taxation of foreign earnings and repatriation taxes, which disproportionately impacts profitability.
The company expects negative free cash flow for full-year 2026 due to heavy capacity expansion plans, despite generating positive free cash flow in Q2.
Gross margin remains relatively low at 22.6% (adjusted) in Q2, still far from the 30% long-term target, with ongoing metals, materials, and logistics cost pressures partially offsetting volume and pricing gains.
The company faces ongoing challenges with the Newport Fab automotive qualifications, with customer program approvals taking longer than expected, delaying full utilization of that facility.
Memory shortages and higher component prices are tempering demand strength in the consumer segment, creating some headwinds in that market.
The company's heavy reliance on outside subcontractors for back-end capacity remains a concern, though initiatives are underway to reduce this dependency.
Despite strong demand, the company acknowledges that customers are concerned about product availability and supply assurance, leading to potential risks of order cancellations if lead times normalize.
The company's capital intensity remains high at 10.5% (trailing 12 months), and while expected to decrease, absolute CapEx spending of $400-440 million in 2026 limits near-term shareholder returns.
The company did not repurchase any shares in Q2, and with negative free cash flow expected for the year, stockholder returns are limited to the quarterly dividend of $13.6 million.
The effective tax rate is expected to remain elevated in Q3 (35-40%), which will continue to pressure net income and EPS despite improving operational performance.

Refinitiv StreetEvents Event Transcript
E D I T E D V E R S I O N

VSH.N - Vishay Intertechnology Inc
Q2 2026 Vishay Intertechnology Inc Earnings Call
Aug 05, 2026 / 01:00PM GMT

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Presentation
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Unidentified_1 [1]
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Thank you, Olivia.

Good morning and welcome to Viha Intertechnologies, second quarter, 2026 earnings conference call.

I am joined today by Jules Mal, our President and Chief Executive Officer and by Dave McConnell, our Chief Financial Officer.

This morning we reported results for our second quarter 2026.

A copy of our earnings release is available in the investor relations section of our website at tliche.com.

The call is being broadcast live over the web and can be accessed through our website.

In addition, today's call is being recorded and will be available via replay on our website.

During the call, we will refer to a slide presentation which we also

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