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Soitec: Soitec's H1 '26 Earnings: A Mixed Bag with Strategic Progress

Soitec's H1 '26 financial performance was marked by a revenue decline of 29% year-over-year to EUR 231 million, primarily due to organic factors. The EBITDA margin stood at 34.1%, impacted by the reduced revenue base and a temporary inventory increase. The net result was a loss of EUR 67 million, largely due to non-recurring items such as a SmartSiC impairment and a one-off non-cash foreign exchange conversion loss. The actual EPS came out at '-1.13', significantly below estimates of '0.31'. Operating cash flow was EUR 26 million, while free cash flow was negative at EUR 31 million.

SOI.PA

EUR 155.85

7.71%

A-Score: 2.5/10

Publication date: November 20, 2025

Full Report

Author: Analystock.ai

📋 Highlights
  • Revenue Decline: Soitec's H1 '26 revenue fell 29% YoY to EUR 231 million, driven by inventory correction and sector-specific challenges.
  • EBITDA Margin Compression: Margin dipped to 34.1% due to a smaller revenue base and inventory build, impacting operating cash flow to EUR 26 million.
  • Sequential Q2 Recovery: Q2 revenue surged 47% sequentially, with Edge and Cloud AI divisions rising 34% YoY (excluding Imager-SOI phase-out).
  • Balance Sheet Strength: EUR 483 million in cash and EUR 145 million net debt, with CapEx reduced to EUR 140 million (down from EUR 230 million in FY '25).
  • Gross Margin Headwinds: H2 margins face 300 bps pressure from lower fab loading and FX effects, with 95% of EUR/USD exposure hedged at ~1.10.

Operational Highlights and Outlook

The company's Edge and Cloud AI divisions showed strong momentum, with revenue reaching EUR 96 million, flat organically year-over-year but up 34% excluding the anticipated Imager-SOI phase-out. Soitec expects Q3 '26 to see organic growth in the mid- to high single-digit range sequentially. For the full year, the company anticipates continued weakness in RF-SOI and automotive, contrasted with strong growth in Edge and Cloud AI. As Albin Jacquemont noted, the company targets a working capital requirement level of 30-40% of revenue, indicating potential for cash generation.

Balance Sheet and Cash Flow

Soitec's balance sheet remains robust, with EUR 483 million in cash and investments and EUR 145 million in net debt, offering flexibility to support strategic priorities. The company aims to achieve positive free cash flow by the end of the fiscal year. CapEx is expected to be around EUR 140 million, down from EUR 150 million previously and significantly lower than the EUR 230 million spent in fiscal year '25. The 'Free Cash Flow Yield (%)' is 3.49%, indicating a relatively attractive cash generation profile.

Valuation and Future Prospects

Given the current 'P/S Ratio' of 0.93 and 'EV/EBITDA' of 3.56, Soitec's valuation appears reasonable, considering the challenges it faces. Analysts estimate next year's revenue growth at -32.9%, reflecting the ongoing industry adjustments. Despite the near-term challenges, Soitec's growth potential remains intact in an addressable market expected to expand at a double-digit pace. The company's focus on cash generation, selective investments, and cost reduction initiatives are positive steps towards navigating the current landscape.

Strategic Developments

Soitec has made significant strategic moves, including the termination of its license agreement with GlobalWafers and an impairment against its SmartSiC assets. While SmartSiC's prospects were reviewed downwards, the company still sees great technical capabilities and an excellent roadmap. The ongoing inventory destocking is expected to continue into 2026, with the goal of reaching pre-COVID inventory levels. Pierre Barnabé noted that despite fierce competition from Chinese monoSiC players, Soitec maintains its market share due to its premium product and innovation.

Soitec's A-Score