Soitec loses 34 percent of revenue and the share still rises 14 percent

The French maker of semiconductor materials Soitec generated revenue of 592 million euros in financial year 2026, 34 percent less than a year earlier. Adjusted for currency and portfolio changes the fall is 30 percent.

The share nevertheless rose more than 14 percent after the figures, to its highest level since August 2023.

The reason lies with a different measure. Free cash flow was 63 million euros. Analysts had expected only six million euros.

Revenue also came in above the estimate of 584.1 million euros. The margin on earnings before interest, tax, depreciation and amortisation reached 25.4 percent.

The short version

• Revenue in financial year 2026 was 592 million euros and therefore 34 percent below the previous year.
• The share rose more than 14 percent after the figures, because free cash flow at 63 million euros was far above the expectation of six million.
• Revenue from the substrate material for optical components passed 100 million dollars and therefore earlier than expected.

Two businesses run against each other

The figures fall into opposing areas. The business with mobile communications collapsed 41 percent to 309 million euros. The area of vehicles and industry fell 44 percent to 69 million euros.

The area for artificial intelligence by contrast grew eight percent to 214 million euros. Stripping out a declining sub business with image sensors, growth was 19 percent.

As the cause of the falls the company names an inventory correction at customers. They had built up stocks in earlier years which they are now working through before ordering again. On top of that come a shrinking market for mobile phones and weak demand from the vehicle industry.

Such corrections end once the stocks are worked off. That is exactly what the market is betting on.

Photonics passes 100 million dollars earlier than planned

The growth driver is a special substrate material for optical components. Revenue from it passed the mark of 100 million dollars in financial year 2026 and therefore earlier than originally expected.

These components are used in fast optical transmission modules and in a newer design in which optical parts sit directly next to the computing chip. The latter counts as one of the key techniques for the further build out of data centres.

The background is a physical problem. The faster processors compute, the more data has to be moved between them. Electrical lines hit limits there on speed and power consumption. Optical connections get around that but need special substrate materials.

Soitec supplies exactly that basis. Volumes for industry qualification have already been delivered, in preparation for the expected start of series production.

Taken together the two product lines for photonics and for low power logic chips grew 25 percent.

The balance sheet improves clearly

Net debt fell to 56 million euros, after 94 million euros a year earlier. The ratio to earnings before interest, tax, depreciation and amortisation is 0.4.

Cash stood at 562 million euros on 31 March.

The company has therefore used a year of sharply falling revenue to improve its financial position. Management points to targeted measures to restore cash flow and to tight management of working capital.

A warning for the current year

For the first quarter of financial year 2027 Soitec expects revenue growth of around 15 percent against the year before, adjusted for currency and portfolio.

On earnings the outlook by contrast is cautious. The company expects a burden from low utilisation of manufacturing, currency effects and lower subsidies.

That combination is typical for materials makers. The plants are expensive and run with high fixed costs. If utilisation falls, unit costs rise regardless of how demand develops.

Morgan Stanley described the guidance as better than feared but pointed out that the timing is likely to be the main driver. The investment case remains tied to the medium term prospects in the photonics business.

For the substrate materials used in high frequency filters in mobile phones, a long term agreement with the American supplier Skyworks supports planning certainty.

On 1 April 2026 Laurent Rémont took over the leadership of the company.

Frequently asked questions

Why does the share rise despite the collapse in revenue

The reason lies with a different measure. Free cash flow was 63 million euros, while analysts had expected only six million euros. Revenue also came in above the estimate of 584.1 million euros.

What sits behind the collapse in revenue

As the cause the company names an inventory correction at customers who had built up stocks in earlier years. On top of that come a shrinking market for mobile phones and weak demand from the vehicle industry. Such corrections end once the stocks are worked off.

Why do photonics matter

The faster processors compute, the more data has to be moved between them. Electrical lines hit limits on speed and power consumption. Optical connections get around that but need special substrate materials, and Soitec supplies exactly that basis.

This analysis is for information only and is not investment advice.