Introduction & Market Context
Nordic Semiconductor (OB:OL:NOD) reported a strong start to 2025, with first-quarter revenue more than doubling year-over-year as the company continues to expand its product portfolio beyond its core Bluetooth Low Energy business into satellite communications and power management solutions.
The semiconductor company presented its Q1 2025 results on April 29, highlighting a significant recovery from the inventory adjustments that affected the industry in early 2024, while maintaining its market leadership position in Bluetooth Low Energy technology.
Quarterly Performance Highlights
Nordic Semiconductor delivered USD 155 million in revenue for Q1 2025, representing a 108% increase compared to Q1 2024. The company attributed this substantial growth to healthy underlying demand and positive impact from orders from large customers, following the inventory adjustments that suppressed results in early 2024.
As shown in the following chart of quarterly revenue development, the company has maintained strong performance over the past several quarters after recovering from the downturn in Q1 2024:
Gross margin for the quarter stood at 49.5%, a 1.5 percentage point improvement from 48.0% in Q1 2024. The company reported EBITDA of USD 14.7 million, a significant turnaround from the negative USD 22.8 million in the same period last year.
Detailed Financial Analysis
Nordic’s revenue growth was primarily driven by its short-range wireless technology segment, which generated USD 146 million in Q1 2025, a 112% year-over-year increase. The long-range segment contributed USD 8 million, nearly doubling from the previous year.
The following breakdown illustrates the company’s revenue by technology segment over the past five quarters:
By market segment, Nordic saw strong momentum across both consumer and industrial/healthcare sectors. Consumer electronics remained the largest contributor at USD 111 million (up from USD 54 million in Q1 2024), while industrial and healthcare applications grew to USD 60 million (from USD 17 million). This diversification across market segments provides some resilience against sector-specific fluctuations.
The revenue distribution across key markets is illustrated in this chart:
The company’s operating model showed significant improvement, with all key metrics trending positively compared to the previous year. R&D expenses remained relatively stable, while the substantial revenue increase drove improved profitability metrics.
The detailed breakdown of Nordic’s operating model performance is shown below:
Cash management has been a focus area for Nordic, with operating cash flow of USD 34.9 million in Q1 2025. The company reduced its net working capital to 26% of trailing twelve-month revenue and maintained tight capital expenditure control, with capex at just 1.1% of revenue.
The following chart illustrates Nordic’s cash position and cash flow components for Q1 2025:
Strategic Initiatives
Nordic Semiconductor continues to maintain its dominant position in the Bluetooth Low Energy market, with a 34% share of end-product certifications—four times that of the nearest competitor. This leadership position provides a strong foundation for the company’s expansion into adjacent markets.
The company’s competitive positioning in the Bluetooth LE market is clearly illustrated in this chart:
A key strategic initiative is Nordic’s expansion into satellite communications with its nRF9151 product, targeting remote infrastructure and globally roaming products. The technology supports both cellular and non-terrestrial networks, including LEO and GEO satellites, with customer support expected to begin in the second half of 2025.
To accelerate adoption of its satellite communication technology, Nordic has established strategic partnerships with Deutsche Telekom (OTC:DTEGY) for seamless connectivity, Skylo for commercial satellite certification, and Keysight for live NTN demonstrations.
Nordic is also executing a comprehensive product portfolio renewal across all its technology segments. The company launched its first nRF54 products in late 2024 and plans to introduce 2-4 new nRF54 product families on 22nm process technology annually. In early 2025, Nordic launched the nPM2100 power management IC for applications with non-rechargeable batteries, further expanding its addressable market.
The company’s product portfolio renewal strategy is outlined in this slide:
Forward-Looking Statements
For Q2 2025, Nordic Semiconductor provided revenue guidance of USD 145-165 million, representing 13-29% year-over-year growth and -6% to +6% quarter-over-quarter change. The company expects gross margin to remain stable at approximately 50%.
Looking further ahead, Nordic maintained its long-term ambitions to deliver average annual revenue growth above 20% through the decade and to achieve its target operating model profitability of approximately 25% EBITDA within five years.
The company acknowledged increased macroeconomic uncertainty but noted it has been well-positioned to capitalize on the gradual market recovery. Nordic is developing a diversified supply chain in response to trade policy changes, though management indicated it’s too early to conclude on potential indirect effects of these changes.
Nordic’s focus on cash spending discipline, combined with its product portfolio expansion and market leadership position, provides a foundation for sustainable growth despite the uncertain macroeconomic environment. The company’s ability to maintain strong relationships with key customers while regaining traction in the broader market will be crucial for achieving its ambitious long-term growth targets.
Full presentation:
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