Vishay's record quarter and 12% surge leave the stock $2.94 below its $30.16 note conversion price
A record quarter and a 12 percent surge carry the stock from $27.22 toward the $30.16 conversion price of its $750 million 2030 notes, and the same 8-K publishes the share count each level above that trigger will mint.
Vincent Jiang · 3 min read
Vishay Intertechnology−5.40% — Vishay Intertechnology, down 5.40 percent today, the Malvern, Pennsylvania maker of the least glamorous parts on an AI server board, resistors, capacitors and the power MOSFET transistors that switch current, filed the best quarter in its history on November 4 and watched the stock surge 12 percent in early trading 14.
Revenue hit $978.9 million, above the top of the company's own $945–975 million guide and the Street's $963.55 million; diluted EPS of $0.37 beat consensus of $0.28 by nine cents 13. A week ago the setup looked the other way: the stock sat 28 percent under its high with 11.67 percent short interest, and the whole print hinged on a 24 percent gross margin guide 5.
The margin promise is being kept
Gross margin came in at 25.5 percent against that 24 percent guide, up from 23.3 percent in the second quarter and 19.5 percent a year ago; operating margin reached 9.4 percent from 2.4 percent 1. Orders back the recovery: book-to-bill of 1.29 and a backlog of 6.6 months 1. Q4 is guided to $990 million of revenue, plus or minus $15 million, with gross margin rising again to 26.0 percent 1. The same quarter last year carried a net loss of $7.9 million 1.
Revenue has risen six quarters running to a record $978.9 million
- Revenue ($M)
- Estimate
Data
| Revenue ($M) | |
|---|---|
| Q3 '24 | $735.4M |
| Q4 '24 | $714.7M |
| Q1 '25 | $715.2M |
| Q2 '25 | $762.3M |
| Q3 '25 | $790.6M |
| Q4 '25 | $800.9M |
| Q1 '26 | $839.2M |
| Q2 '26 | $888.6M |
| Q3 '26 | $978.9M |
| Q4 '26 guide (estimate) | $990M |
Vishay's gross margin has climbed past the 24% guide
Gross margin has climbed to a record 25.5 percent, and the Q4 guide keeps rising
- Gross margin (%)
- Estimate
Data
| Gross margin (%) | |
|---|---|
| Q1 '25 | 19% |
| Q2 '25 | 19.5% |
| Q3 '25 | 19.5% |
| Q4 '25 | 19.6% |
| Q1 '26 | 21% |
| Q2 '26 | 23.3% |
| Q3 '26 | 25.5% |
| Q4 '26 guide (estimate) | 26% |
Every leg higher mints shares
The number the wire skipped sits in the same 8-K, in an unusual Item 7.01 laying out how fourth-quarter diluted EPS will be computed 2. The company's $750 million of convertible notes due 2030 convert at $30.16, and the stock closed November 3 at $27.22, $2.94 below that trigger 23.
Below a $30.16 average price, the notes add nothing and diluted shares run about 157 million; at a $35 average, 161 million; at $40, 164 million; at $50, 168 million; at $60, 171 million 2. The principal itself must be repaid in cash; only the value above the strike can settle in stock 2.
And the basic count has already grown from 135.7 million weighted shares a year ago to about 153 million outstanding, mostly through June's $830 million share sale that funds a roughly €1 billion, 300mm power-chip fab at Itzehoe in Schleswig-Holstein, Germany, of which German taxpayers are paying €215 million 26.
Vishay's own table: 157 million diluted shares below $30.16, 171 million at $60
Above the $30.16 conversion price, each leg higher adds millions of shares
Data
| Projected diluted shares (millions) | |
|---|---|
| < $30.16 | 157M |
| $35 avg | 161M |
| $40 avg | 164M |
| $50 avg | 168M |
| $60 avg | 171M |
Who pays for the turnaround
"Vishay 3.0" is CEO Joel Smejkal, president and CEO, the name for his plan to lift margins and add capacity; the record quarter shows it working 1. But at a $40 average next quarter, the company's own formula computes EPS on roughly 7 percent more shares than exist today 2.
Shareholders and a German subsidy have paid for the recovery so far; the rally from here, above $30.16, pays noteholders too 1. Whether Smejkal's margin promise outruns the share-creation machine is the trade, and the fourth-quarter print, with 26 percent margin guided, is the next reading 1.
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