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DATE
Wednesday, July 30, 2025 at 9:00 a.m. ET
CALL PARTICIPANTS
- President and Chief Executive Officer — Gregory N. Henderson
- Executive Vice President and Chief Financial Officer — Abhishek Khandelwal
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TAKEAWAYS
- Revenue — $613 million, reflecting 10% total growth and 6% organic growth for the quarter.
- Adjusted EBITDA Margin — 21.4%, up 280 basis points compared to the previous year.
- Adjusted Diluted Earnings — $2.85 per share, up 45%, exceeding the high end of prior guidance.
- Book-to-Bill Ratio — Remained above 1, with bookings at the highest run rate since the first half of 2022.
- Electronics Segment Sales — Up 10%, with 4% organic and a 4% contribution from the Dortmund acquisition; passive product sales grew 14% organically, while semiconductor products declined 5%.
- Electronics Segment Adjusted EBITDA Margin — 21.6%, flat year over year due to offsetting lower power semiconductor volumes.
- Transportation Segment Sales — Increased 6%, including 4% organic growth; passenger car up 3% organic and commercial vehicle up 5% organic despite “ongoing soft end market conditions.”
- Transportation Segment Adjusted EBITDA Margin — 20.5%, up 610 basis points, reflecting operational improvements.
- Industrial Segment Sales — Grew 17% organically, driven by grid storage, renewable, data center, industrial safety, and HVAC applications.
- Industrial Segment Adjusted EBITDA Margin — 22.1%, up 610 basis points with margin performance attributed to volume leverage and operational execution.
- Operating Cash Flow — $82 million generated in the quarter, resulting in $73 million of free cash flow.
- Year-to-Date Free Cash Flow — $115 million, marking a 114% conversion rate.
- Cash and Leverage — Ended the quarter with $685 million in cash and a net debt-to-EBITDA leverage ratio of 1.1x.
- Shareholder Return — $17 million returned through the cash dividend during the quarter.
- Q3 Guidance: Sales — Projected between $610 million and $630 million, implying 6% organic growth at the midpoint and 2% from the Dortmund acquisition.
- Q3 Guidance: EPS — Estimated in the $2.65 to $2.85 range, incorporating a 38% flow-through at the midpoint.
- Stock and Variable Compensation Impact — Third quarter EPS expected to include a $0.31 unfavorable effect from stock and variable compensation.
- FX and Commodity Impact on Q3 EPS — An $0.08 EPS headwind compared to the prior year based on current rates.
- Full-year 2025 Guidance: Dortmund Acquisition — Anticipated to contribute 2% to total sales growth and remain EPS-neutral.
- Full-year 2025 Guidance: FX/Commodities — Projected 1% sales tailwind and a $0.14 EPS benefit.
- Full-year 2025 Guidance: Tax Rate Estimate — Expected in the 23%-25% range for the year.
- Capital Expenditures — Planned 2025 spend between $90 million and $95 million.
SUMMARY
Littelfuse (LFUS +3.90%) delivered double-digit quarterly revenue growth with marked organic and acquisition-driven contributions, and significant margin expansion supported by operating leverage and segment-specific execution. Cash generation and free cash flow conversion were strong, enhancing balance sheet flexibility and enabling ongoing shareholder returns despite noted compensation and FX headwinds in upcoming quarters. Management highlighted “double-digit growth” in its new business opportunity pipeline, secured design wins in data centers and the renewable grid ecosystem, and set explicit Q3 and full-year guidance, including segment-by-segment outlooks and capital spending plans.
- Abhishek Khandelwal described a $0.15 benefit or tailwind in Q2 from tariff timing that will reverse as a headwind in Q3.
- Management reported above-1 book-to-bill and bookings at the highest run rate since the first half of 2022, suggesting robust order momentum.
- Operational improvements were credited for a 610-basis-point adjusted EBITDA margin increase in both the Transportation and Industrial segments.
- Gregory N. Henderson stated, “data center is materially important to Littelfuse, but I also think it’s going to be more important as time goes on,” signaling the strategic importance of this vertical to future results.
- The pipeline of new business opportunities was said to be “up double digits” so far this year, pointing to future growth prospects.
- Leadership confirmed plans to present detailed multiyear growth targets, including both organic and inorganic elements, in February 2026.
INDUSTRY GLOSSARY
- Book-to-bill ratio: A measure comparing the value of orders received (bookings) to revenue billed in the same period; a ratio above 1 indicates future growth potential.
- Operating leverage: The effect of fixed costs spreading over increasing sales, leading to amplified changes in profit margins due to sales growth.
- Flow-through: The percentage of incremental revenue that converts to operating income or, as guided here, EBITDA or EPS.
- Passive products: Electrical components, such as fuses and resistors, that do not require power to operate and are typically used for protection and filtering functions.
- Power semiconductor: Semiconductor devices designed for switching or controlling high-voltage and high-current power in electronic systems.
Full Conference Call Transcript
Gregory N. Henderson: Thank you, David, and thank you to everyone for joining us today. I want to start this morning with highlights of our second quarter and then provide an update on the progress we’re making on our strategic priorities. We’re in the early process of capitalizing on our numerous growth and operational enhancement opportunities. An important milestone in this process was the hiring of our new CFO, Abhi Khandelwal, for the quarter. Abhi joins us from IDEX Corporation, and he brings more than 2 decades of financial and operational leadership. He has significant experience in driving strategic growth, both organic and acquisitions as well as in scaling operations. Abhi has already had a significant impact in his first month at Littelfuse.
I look forward to continuing our partnership as we focus on scaling our business for long-term growth, enhanced profitability and best-in-class shareholder returns. In the second quarter, we demonstrated broad-based strength across our businesses, delivering revenue growth of 10% relative to the prior year. Our performance reflects our leadership position in safe and efficient electrical energy transfer, the ongoing meaningful technology evolutions in front of us and the fact that our customers deeply value our trusted and essential capabilities. Across our segments, we observed continued momentum in the second quarter. Our Electronics segment benefited from improved demand for passive electronics and protection products.
In our Transportation segment, we delivered broad-based growth, while our strong Industrial segment performance reflects our unique market and customer positioning. Our end markets continue to move to higher power and higher energy density, and we are leveraging our market leadership and unique product portfolio to help our customers solve increasingly complex challenges. Supporting this, our second quarter book-to-bill again tracked above 1, while our bookings exited the quarter at the highest run rate since the first half of 2022. We expect our solid growth performance to continue into the third quarter. Our second quarter earnings results also exceeded the high end of our prior guidance range, reflecting strong execution.
Abhi will discuss specific results in more detail shortly, but I want to thank our teams for their hard work and dedication. With that, I wanted to update everyone on the specific progress we’re making on each of our strategic priorities that I highlighted last quarter. Our first strategic priority is to enhance our focus to better capitalize on future growth opportunities. Our teams are sharpening their focus on higher voltage and higher energy density applications as our customers are pushing for higher power next-gen solutions. This evolution is leading to complex safety and efficiency challenges, and our products are increasingly important to solving these challenges at the architecture level.
Importantly, this transition is happening across all of our end markets, and we are seeing the benefits of our heightened focus on these expanding opportunities real time. Let me provide you with an example in enterprise computing, where the industry is transitioning from 5-volt to higher power 48- volt capabilities for single cable combined power connectivity interfaces. This evolution requires more advanced and unique safety and protection solutions while meeting the increasingly demanding data rate and electromagnetic compatibility requirements. In the second quarter, we worked with a market leader to develop a next-gen semiconductor protection solution. Our solution supports higher power and data rates at faster charging speeds and will begin shipping in the third quarter.
Broadly, our heightened focus on the secular trends across our end markets will continue to drive expanded new business opportunities. We are seeing meaningful traction in our pipeline and year-to-date, our new business opportunity funnel is up double digits. Our second strategic priority is to provide more complete solutions for a broader set of our customers. Customers deeply value our capabilities and our scale is a significant advantage. Yet we can further harness our unique and market-leading product portfolio to help more of our customers solve complex challenges around safe and efficient power transfer. To support this opportunity, we are further aligning our technology capabilities and our sales structure to better serve our customers with our full product portfolio.
We are also leveraging our collaborative product development, engineering and testing processes to better support our broad customers as they drive ongoing product innovations. As an example, last quarter, we discussed the meaningful role we play in data center advancements. We are seeing an accelerating pipeline of opportunity as we have been expanding our go-to-market strategy. I’m pleased to announce several new data center design wins in the second quarter with market leaders ranging from a global digital infrastructure provider to a leading compute platform player. Our second quarter wins range from liquid cooling to on the board and power distribution applications and position us well for continued strong data center sales growth.
Last quarter, we also discussed our opportunities in the rapidly growing grid storage market. Today, I wanted to discuss the broader sustainable grid ecosystem where we are building momentum globally. In the second quarter, we won a design with a leading player in green hydrogen, where we will provide high-speed, high-voltage industrial fuses. Our solution enables pairing to the grid and plays a critical role in reliable renewable energy transfer. We also work with a solar supplier to develop a next-gen micro-inverter. Our solution enables compatibility with higher power solar panels and improved battery integration.
Broadly, we observed strong renewables and grid storage sales growth in the second quarter, and we see continued momentum as these markets transition to higher power solutions. Turning to our third strategic priority. We see an opportunity to drive further operational excellence while enhancing long-term profitability as we grow. We can better leverage areas of best-in-class operating practices and apply those across our businesses. We can also further optimize our operating structure to support our growth opportunities and enhance long-term performance. In the second quarter, we established a new global operations team that will focus on driving best-in-class operational capabilities across our global sites.
Led by this team, we are in the process of establishing and driving best practices with a heightened emphasis on safety, quality, delivery, cost and inventory. While this is a long journey, we have begun applying this enhanced focus to some of our North American factories. We saw early benefits of these efforts in the quarter, reflected in our second quarter transportation operational performance. Taking a step back, we delivered a strong second quarter, and we are well positioned to drive continued growth into the third quarter. We are seeing the benefits of our flexible operating model and global footprint that is closely aligned to our customers and their supply chains.
We will continue to work closely with our customers and partners through an evolving environment to deliver on the meaningful opportunities in front of us. Finally, while we have made significant progress to date, we remain focused on our strategic priorities as we aim to position and ultimately scale our company with the goal of delivering long-term best-in-class performance. With that, I will hand the call over to Abhi.
Abhishek Khandelwal: Thank you, Greg, and to everyone joining us.
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