They beat the guide by $9M and generated $1M of real operating cash on $839M of revenue after stripping the securitization.
Thesis: Book-to-bill 1.34 and pricing turning positive (+1.5% ASP in Q2, more in Q3) mean operating leverage starts now while capacity is already built and Newport just reached gross profit neutral. The offset is that actual cash conversion was $1M on $839M of revenue, FCF is negative again for 2026, and roughly half of the $400-440M capex buys capacity that does not run until mid-2027. Top line is real; the cash flow and backlog-quality questions are also real.
Verdict: HOLD — Conviction: MEDIUM
Catalyst: Q2 print shows the 1.5% ASP lift landing on volume growth with gross margin through 22%; Newport automotive audits (2 in Q2) convert to program approvals; SK Key Foundry releases 2 AI products to production in Q3.
Key Risk: Safety stock in the $1.6B backlog unwinds as distribution inventory draws down (22 to 20 weeks while Vishay deliberately built to 26), rolling book-to-bill below 1.0 while capex keeps cash draining toward the $250M drawn revolver.
The Tell: CFO McConnell cut Newport P&L disclosure at the exact quarter the fab hit gross profit neutral: 'the Newport results themselves now are commingled... we are going to stop giving specific guidance on the Newport impact and talk in generalities.' Transparency dropped on the asset that consumes half the capex, at the moment it turned positive.
Friction Level: MODERATE_FRICTION — Backlog composition and pricing durability. Bull reads $1.6B backlog and announced price increases as a fortress; bear reads it as safety stock and channel restock with ASPs still down 1% and metals costs rising into the Q2 guide.
2026Q1 · May 13, 2026
4 of 5 readings agreed4 HOLD · 1 LONGRead the full call
Orders At 1.34, Cash Conversion At One Percent
Book-to-bill 1.34 and pricing turning positive (+1.5% ASP in Q2, more in Q3) mean operating leverage starts now while capacity is already built and Newport just reached gross profit neutral. The offset is that actual cash conversion was $1M on $839M of revenue, FCF is negative again for 2026, and roughly half of the $400-440M capex buys capacity that does not run until mid-2027. Top line is real; the cash flow and backlog-quality questions are also real.
CFO McConnell cut Newport P&L disclosure at the exact quarter the fab hit gross profit neutral: 'the Newport results themselves now are commingled... we are going to stop giving specific guidance on the Newport impact and talk in generalities.' Transparency dropped on the asset that consumes half the capex, at the moment it turned positive.
Revenue $839M vs $800-830M guide, up 17.3% YoY on 14% volume, all end markets/channels/regions growing, Q2 guided to $875-905M with GM 22% +/-50bps above the 21% printed.
B2B 1.34 total, 1.47 semis, 1.40 A&D Americas; backlog +21% to $1.6B or 5.7 months of cover with customers placing one-year forecast orders.
Management explicitly says customers are building safety stock for AI and automotive. Safety stock is the first category to reverse when end demand normalizes, and B2B rolls over fast after that.
ASPs fell 1% in Q1 despite 1.34 B2B. Announced price increases only contribute ~1.5% ASP in Q2 while metals costs rise, and management says material costs and ASPs 'pretty much cancel each other out' in the guide.
AI data center revenue under $100M last year on a ~$3.4B run rate; CEO says 'well above that' in 2026 but refuses to quantify. Roughly 12% of revenue even at 2x.
Q1 growth credited to capacity investments that are not yet online. The 12-inch German fab produces mid-2027; current growth came from subcontractors and distributor SKU expansion.
+65
CONFIDENT"Direct answers with specifics: reaffirmed 2028 targets outright, quantified Q2 ASP lift at 1.5%, named Q3 SK Key Foundry production releases, four Newport audits completed. One exception: CFO Newport disclosure cut."
Full transcript with specific B2B (1.34 total, 1.47 semis, 1.40 A&D Americas), backlog math ($1.6B / 5.7 months), cash detail, and named catalysts. Gaps: AI revenue unquantified beyond 'well above $100M', Newport P&L no longer broken out.
Q2 print shows the 1.5% ASP lift landing on volume growth with gross margin through 22%; Newport automotive audits (2 in Q2) convert to program approvals; SK Key Foundry releases 2 AI products to production in Q3.
Safety stock in the $1.6B backlog unwinds as distribution inventory draws down (22 to 20 weeks while Vishay deliberately built to 26), rolling book-to-bill below 1.0 while capex keeps cash draining toward the $250M drawn revolver.
“For the first quarter, we are reporting revenue of $839 million above our guidance range of $800 million to $830 million 4.8% higher than the fourth quarter, and 17.3% higher than last year's first quarter.”
“For the 2026, revenues are expected to be between $875 million and $905 million”
Changed less than 88% of calls
Wording compared with the Feb 4, 2026 call, ranked among 97 calls reporting on Q1 2026. A measure of how much the story moved, not a signal about the stock.
Figures are extracted from the transcripts and checked in code: every quote appears word for word. Language change is computed from word frequencies, with no model involved. Descriptive only: none of this feeds the verdict.
Revenue $839M beat the top of guide, up 17.3% YoY on 14% volume with ASPs only down 1%. B2B 1.34 total and 1.47 semis, backlog +21% to $1.6B. Newport exited at gross profit neutral after three years of capex, so incremental MOSFET revenue drops through nearly cost-free once Q2 audits and program approvals land. Pricing turned: announced in Q4, 1.5% ASP effective Q2, more in Q3, with metals already in the 22% GM guide. A&D Americas B2B 1.40 with munitions replenishment just starting. Capex peaks this year at $400-440M, capital intensity already rolling from 11.3% to 10.1%. 2028 targets ($5.5B, 31% GM, $5+ EPS) reaffirmed outright.
Real operating cash was about $1M on $839M of revenue; the $64M headline includes $63M of receivables securitization, a financing item. Capex $111M, FCF negative $47M, and CFO confirms another negative FCF year with $480M cash and $250M already drawn. ASPs fell 1% into a 1.34 B2B, which means no pricing power; the Q2 guide nets price against rising metals exactly. Backlog is partly safety stock and channel inventory Vishay deliberately stuffed to 26 weeks, now drawing down to 20 while POS grows. Capacity that anchors the thesis runs mid-2027. AI is under $100M on a $3.4B run rate. Newport disclosure just disappeared.
Backlog Quality
Management says customers are building safety stock for AI, automotive, and industrial. $1.6B backlog at 5.7 months includes cancellable buffer orders, and distribution inventory drew from 22 to 20 weeks as Vishay's own 26-week placement begins consuming.
Zero Pricing Power Despite Constraints
ASP down 1% in Q1 despite 1.34 B2B. Price increases only worth ~1.5% in Q2 and management states material costs and ASPs 'pretty much cancel each other out' in the 22% GM guide.
Inventory Divergence
Vishay built buffer stock (inventory $791M, raw materials and WIP up on rising metals) while distributor inventory draws down. Company inventory up against channel drawdown is a book-to-bill rollover setup.
Say/Do Gap
Growth attributed to capacity investments that are not producing yet. German 12-inch fab targets mid-2027 production; Newport needs two more audits plus customer program approval. Q1 growth came from subcontractors and SKU expansion.
AI Label Without Substance
Under $100M AI revenue on a ~$3.4B run rate last year; 'well above that' in 2026 with no number given. Does not justify the capex intensity profile on its own.
HOLD, medium conviction. The top line and order book are real and a short fights 17.3% YoY growth plus incoming price increases, but $1M of real operating cash, a negative FCF year ahead with capex peaking at $440M, and backlog loaded with safety stock make this a knife-catch on any B2B rollover. I want to own it, but only after one print proves two things: the 1.5% ASP lands with metals neutral, and book-to-bill holds above 1.1 without channel restock. Add on Newport program approval news, not before.