VSH Q2 Earnings Beat on Volume Growth, Revenues Rise Y/Y

VSH Gains From Broad-Based Demand

Adjusted revenues increased 9.5% sequentially and 20.5% year over year. Volume rose 7% from the prior quarter and 18% from a year earlier, while average selling prices improved 2% in both comparisons. Favorable currency movements added 1% to year-over-year growth.

Management cited stronger demand across product technologies, end markets, channels and regions. Customers also provided longer order visibility as lead times stretched and supply assurance concerns increased. Total backlog rose 18% to $1.9 billion.

Vishay’s Industrial Business Leads Growth

Industrial revenues climbed 16.2% sequentially and 30.1% year over year, accounting for more than half of the quarter’s revenue increase. Demand was supported by smart grid, artificial intelligence power, high-voltage direct-current projects and factory automation.

Automotive revenues advanced 3.6% from the prior quarter and 10.1% from the year-ago period. Aerospace and defense sales increased 4.2% sequentially and 15.4% year over year, while healthcare revenues grew 7% and 14.7%, respectively. Other end-market revenues rose 11.3% sequentially and 28.4% year over year.

VSH Sees Strength Across Sales Channels

Distribution revenues jumped 15.6% sequentially and 24.2% year over year, lifting the channel’s share of total revenues to 58% from 55% in the first quarter. Point-of-sale activity rose 4.7% sequentially and 20.5% year over year, while distributor inventory declined to 18 weeks from 20 weeks.

OEM revenues improved 1.7% from the prior quarter and 16.8% from a year earlier. EMS revenues increased 3.2% sequentially and 10.8% year over year, reflecting program ramp-ups in industrial, aerospace and defense, automotive and AI applications.

Vishay’s Segment Results Show Wider Momentum

Resistors remained the largest segment, with revenues of $215 million, up from $203.7 million in the first quarter and $194.8 million a year earlier. MOSFET revenues were $188.9 million, while Diodes generated $187 million. Optoelectronic Components contributed $70.1 million.

Capacitor revenues reached $153.4 million, and Inductors produced $104.2 million. Inductors posted the highest gross margin at 31.1%. Book-to-bill was strongest in Resistors at 1.43, followed by Inductors at 1.42.

VSH Expands Margins on Volume and Pricing

Gross profit rose to $207.4 million from $148.7 million a year ago. GAAP gross margin expanded 380 basis points to 23.3%, while adjusted gross margin was 22.6%. Higher volumes and improved pricing helped offset metals, materials and logistics cost pressures.

Selling, G&A expenses increased to $153.9 million from $126.6 million. Operating margin improved to 6% from 2.9%, while adjusted operating margin reached 5.8%. Adjusted EBITDA margin increased to 11.4% from 8.3% in the prior-year quarter.

Vishay Builds Cash While Funding Capacity

Operating cash flow was $105.4 million compared with an outflow of $8.8 million a year earlier. Capital expenditures totaled $95.2 million, including about $66 million for the new 12-inch wafer fab in Germany. Free cash flow was $10.3 million versus negative $73.2 million.

Cash and cash equivalents totaled $1.30 billion at quarter-end. Inventories increased to $807.1 million as the company built safety stock and supported higher backlog. Vishay also completed a public stock offering that generated $830 million in net proceeds.

VSH Issues Third-Quarter Guidance

For the third quarter of 2026, Vishay expects revenues between $945 million and $975 million. At the midpoint, the outlook implies growth of 4.5% sequentially and 21.4% year over year.

Gross margin is projected at 24%, plus or minus 50 basis points. SG&A expenses are expected at $155 million, plus or minus $3 million, while interest expense is forecast at about $7 million. The company maintained its 2026 capital spending plan of $400 million to $440 million.

VSH’s Zacks Rank and Stocks to Consider

Vishay currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Zacks Computer and Technology sector are Lumentum LITE, Applied Materials AMAT and Analog Devices ADI, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of Lumentum have surged 123% year to date. The Zacks Consensus Estimate for LITE’s fiscal 2026 earnings is pegged at $8.19 per share, up by 5 cents over the past 30 days, indicating an increase of 297.6% year over year.

Shares of Applied Materials have jumped 107.9% year to date. The Zacks Consensus Estimate for AMAT’s fiscal 2026 earnings is pegged at $12.14 per share, up by 3 cents over the past 30 days, implying a rise of 28.9% year over year.

Analog Devices shares have rallied 39.2% year to date. The Zacks Consensus Estimate for ADI’s fiscal 2026 earnings is pegged at $12.42 per share, up by 10 cents over the past 30 days, calling for a rise of 33.9% year over year.

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