Electronic component provider Littelfuse (NASDAQ: LFUS) reported Q1 CY2025 results topping the market’s revenue expectations, with sales up 3.5% year on year to $554.3 million. Guidance for next quarter’s revenue was better than expected at $580 million at the midpoint, 1% above analysts’ estimates. Its non-GAAP profit of $2.19 per share was 21.1% above analysts’ consensus estimates.
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Littelfuse (LFUS) Q1 CY2025 Highlights:
- Revenue: $554.3 million vs analyst estimates of $542.2 million (3.5% year-on-year growth, 2.2% beat)
- Adjusted EPS: $2.19 vs analyst estimates of $1.81 (21.1% beat)
- Adjusted EBITDA: $111.5 million vs analyst estimates of $97.65 million (20.1% margin, 14.2% beat)
- Revenue Guidance for Q2 CY2025 is $580 million at the midpoint, above analyst estimates of $574.3 million
- Adjusted EPS guidance for Q2 CY2025 is $2.25 at the midpoint, above analyst estimates of $2.18
- Operating Margin: 12.7%, up from 10.3% in the same quarter last year
- Free Cash Flow Margin: 7.7%, similar to the same quarter last year
- Market Capitalization: $5.38 billion
StockStory’s Take
Littelfuse’s first quarter was driven by operational improvements and growth in key end markets, despite ongoing macroeconomic uncertainty and trade policy changes. CEO Greg Henderson, on his inaugural call, highlighted strong performance in the industrial segment, with data center and grid storage solutions delivering meaningful design wins. The electronics segment saw sequential growth in passive products, while transportation managed margin expansion even as demand remained soft. Henderson emphasized, “We delivered key data center design wins for circuit protection and power distribution solutions…as our end markets are moving to higher power and higher energy density.”
Looking ahead, management’s guidance factors in continued supply chain flexibility and active tariff mitigation strategies. CFO Meenal Sethna noted that tariff headwinds are being managed through diversified manufacturing and pricing adjustments, stating, “We do not expect tariffs to have a material impact to our second quarter earnings.” Forward guidance also reflects a strong backlog and book-to-bill ratio above 1.0, although management remains cautious about demand risk in the second half, especially in automotive and personal electronics.
Key Insights from Management’s Remarks
With a new CEO at the helm, Littelfuse’s management provided detailed insight into product and end-market trends that shaped the quarter’s outcome and informed the outlook.
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Industrial Segment Growth: The industrial segment benefited from robust demand in renewables, data center, and HVAC (heating, ventilation, and air conditioning) applications, resulting in significant margin expansion. Management attributed this to “strong conversion on volume growth” and ongoing favorable pricing.
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Data Center and Grid Storage Wins: Littelfuse secured notable design wins in data center circuit protection and grid storage applications, leveraging its expertise in high-speed fuses and power semiconductors. CEO Greg Henderson explained that the shift to higher voltage and current architectures in these markets increases demand for Littelfuse’s safety and protection solutions.
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Electronics Segment Recovery: The electronics segment saw sequential improvement, particularly in passive products, which benefited from end-demand recovery and improved channel orders. Semiconductor products remained soft, offset by better demand for protection products.
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Transportation Margin Initiatives: Although the transportation segment experienced continued demand softness, especially in passenger cars, management successfully expanded margins through pricing actions, cost reduction, and portfolio optimization, including pruning less profitable auto sensor offerings.
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Tariff and Supply Chain Adaptation: Management outlined a flexible operating model, diversifying manufacturing closer to customers and working with partners to mitigate tariff impacts. Actions include adjusting sourcing, logistics, and implementing targeted pricing changes, which management believes will minimize near-term tariff effects.
Drivers of Future Performance
Management’s outlook for the next quarter and beyond centers on maintaining margin improvements, navigating global trade uncertainty, and capturing growth in electrification and data center markets.
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End-Market Electrification Trends: Littelfuse expects ongoing investment in electrification—such as data centers, grid storage, and renewables—to drive higher content opportunities and expand addressable markets for its protection and sensing products.
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Operational Flexibility and Tariff Response: The company is deploying a diversified manufacturing footprint and supply chain strategy to respond to shifting tariff environments, aiming to protect profitability through local-for-local production and agile pricing.
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Strategic Acquisitions and Portfolio Optimization: Management intends to pursue disciplined acquisitions and further collaborate across business units to deliver integrated solutions. This includes leveraging best practices to enhance both growth potential and long-term margin expansion.
Top Analyst Questions
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Luke Junk (Baird): Asked how Littelfuse is mitigating tariff impacts across geographies. Management detailed supply chain diversification and customer-specific pricing strategies, reiterating that tariffs are not expected to materially affect near-term earnings.
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Luke Junk (Baird): Inquired about the sequential improvement in electronics margins. CFO Meenal Sethna attributed gains to organic volume growth and ongoing cost controls, rather than any extraordinary items.
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Luke Junk (Baird): Sought clarity on the scale of data center exposure and AI-related opportunities. CEO Greg Henderson described growing data center content, particularly as customers adopt higher-voltage architectures, calling it a “significant change and big content opportunity.”
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Christopher Glynn (Oppenheimer): Asked about the power semiconductor business outlook. Management acknowledged continued softness but emphasized long-term differentiation in high-voltage, high-current applications and ongoing strategy work.
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David Silver (CL King): Queried changes in long-term customer collaboration due to trade policy uncertainty. CEO Henderson reported no major shifts in strategic R&D partnerships, with customers maintaining focus on long-term growth trends despite short-term trade anxieties.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will monitor (1) whether Littelfuse can sustain momentum in data center and grid storage design wins; (2) the effectiveness of its supply chain and tariff mitigation strategies in protecting margins; and (3) the pace of recovery in end markets like transportation and electronics semiconductors. Additional attention will be given to the incoming CFO transition and updates on the company’s evolving growth strategy.
Littelfuse currently trades at a forward P/E ratio of 22.3×. At this valuation, is it a buy or sell post earnings? Find out in our free research report.
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