SUSS cuts profit margin guidance despite strong Q2 revenue

SUSS lowered its full-year gross profit margin guidance to 37-39% (from 39-41%) and EBIT margin to 13-15% (from 15-17%), despite reporting preliminary Q2 revenue of €143.2 million, which exceeded analyst expectations. The company maintained its full-year revenue forecast, implying a significant 16% half-over-half decline in the second half of 2025. This reduced profitability outlook stems from one-off production costs, inventory revaluation, increased R&D, and anticipated continued weakness in its HBM and CoWoS segments extending into 2026.

Analysis

SUSS presents a challenging investment case, with a preliminary second-quarter revenue beat overshadowed by a significant reduction in full-year profitability guidance. While Q2 revenue of €143.2 million surpassed analyst expectations of €114 million, the company lowered its gross profit margin outlook to 37-39% from 39-41% and its EBIT margin forecast to 13-15% from 15-17%. This downgrade is attributed to a combination of factors, including one-off costs tied to UV scanner production in Taiwan, an inventory revaluation from a discontinued project, increased R&D spending, and a less favorable product mix. Critically, the maintained full-year revenue forecast of €470-510 million implies a substantial 16% half-over-half and 12% year-over-year revenue decline in the second half of 2025. This negative outlook is further compounded by the company's exposure to the HBM and CoWoS segments, where market weakness is now anticipated to extend through the second half of 2025 and into 2026.

Key Decisions for Investors

• Investors should prioritize the lowered full-year margin guidance and the implied sharp revenue decline in the second half over the single-quarter revenue beat.
• The company's significant exposure to the HBM and CoWoS segments represents a key risk, as the article indicates weakness in these markets is expected to persist into 2026.
• It is prudent to scrutinize the nature of the one-off costs and inventory writedowns to assess whether they are truly transient or indicative of deeper operational challenges before adjusting positions.