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Jun 30
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Philips Q2 2025 Earnings Report
Philips reported modest sales growth and margin expansion in Q2 2025.
Key Takeaways
Philips achieved 1% sales growth and improved profitability in Q2 2025, driven by strong order intake and AI-powered innovations. The company raised its full-year margin and cash flow outlook while maintaining sales growth guidance.
Revenue grew 1% year-over-year to €4.3 billion.
Net income reached €400 million, reflecting strong operational performance.
Free cash flow increased to €230 million, driven by productivity initiatives.
Order intake rose 6%, fueled by innovation and stronger fundamentals.
Philips
Philips
Forward Guidance
Philips raised its full-year adjusted EBITA margin and free cash flow outlook while maintaining comparable sales growth expectations.
Positive Outlook
- Adjusted EBITA margin outlook increased to 11.3%-11.8%.
- Tariff impact significantly mitigated to €150-200 million from prior estimate.
- Free cash flow outlook raised to €0.2B–€0.4B.
- Strong order intake supports continued sales momentum.
- Ongoing productivity improvements are tracking ahead of targets.
Challenges Ahead
- Q3 2025 EBITA margin expected to be lower than 2024 due to tariff phasing.
- Connected Care and Diagnosis & Treatment segments saw a 1% sales decline.
- China impacted Personal Health sales despite overall growth.
- No disclosure of non-GAAP EPS limits earnings clarity.
- Tariff environment remains dynamic and uncertain.