Nordic Semiconductor Posts Strong Q3 Sales Amid Profitability Pressures

Nordic Semiconductor reported a mixed but resilient third quarter, with revenue and gross margins exceeding expectations while profitability lagged due to rising costs and currency headwinds. Shares of the Norwegian chipmaker slipped around 5% in early Oslo trading as investors digested the results.

Like-for-like (LFL) sales climbed 11% year-on-year to $179 million, about 1% above consensus, supported by a rebound in both the short- and long-range segments. Short-range sales rose 7% on an LFL basis, while long-range sales surged an impressive 296%, fueled by renewed demand from industrial and consumer markets. Gross margin improved to 51.9%, a 240-basis-point increase from the previous year, aided by a favorable product mix and contributions from Memfault.

Despite solid top-line growth, adjusted EBITDA came in at $18.3 million, missing expectations with a margin of 10.2%—around 290 basis points below consensus estimates from Kepler Cheuvreux. Analysts at Morgan Stanley and Kepler Cheuvreux attributed the weaker operating performance to higher operating expenses linked to recent acquisitions, adverse currency movements, and reduced R&D capitalization.

Free cash flow was negative at $13 million due to working-capital outflows and increased capital expenditures on technology investments, bringing net cash down to $210 million at the end of the quarter.

Looking ahead, Nordic Semiconductor guided fourth-quarter revenue between $155 million and $175 million, in line with market expectations, and projected gross margins to remain above 50%. Morgan Stanley’s Nigel van Putten described the quarter as showing “broad-based improvement,” while Kepler Cheuvreux’s Sébastien Sztabowicz called the outlook “reassuring” despite cost pressures that could push EBITDA margins into mid-single digits. The brokerage reaffirmed its Buy rating and NOK 185 target, highlighting a cyclical recovery and favorable risk-reward potential for long-term investors.