July 25, 2025
Signify Posts Lowest Revenue Quarter Since Its 2016 IPO
Second quarter usually outpaces Q1, but not in this year. Optimism hangs on end-of-year uptick.
On July 25, interim CEO and CFO Željko Kosanović led Signify’s Q2 earnings call with a calm demeanor, but the numbers did the shouting. The company posted quarterly revenue of €1.418 billion ($1.66 billion) — the lowest since the Dutch lighting leader’s 2016 spin-off from Philips. That includes pandemic-crippled Q1 2020, which still came in higher at €1.427 billion.
This top-line low comes despite years of growth through acquisition. Two examples: in 2020, Signify absorbed Cooper Lighting Solutions (then a $1.7 billion USD business) and then Fluence (at $141 million) in 2022, adding substantial scale to its professional and horticultural portfolios. Yet even with those additions baked in, Q2 2025 marks a sobering milestone: all time revenue low for the nine-year old company.
In his dual-role appearance, Kosanović offered a wide-lens defense of strategy execution and cost discipline, even as the company contends with contracting top-line performance and an uncertain macro environment. “The momentum in our business continued through the second quarter,” he said, pointing to growth in connected and specialty lighting across regions and segments. But this momentum wasn’t enough to offset broader decline.
During intraday trading on July 25, shares of Signify N.V. (LIGHT.AS) on Euronext Amsterdam fell as much as 13%, dropping below €20.
Seasonality Reversed, Q4 Hope Persists
Signify’s second quarter traditionally outpaces the first — doing so in eight of the last ten years. Not in 2025. Q2 came in below Q1, breaking with precedent and highlighting what Kosanović called an “altered” seasonality pattern.
“Now this year, we expect a stronger pattern of seasonality in Q4,” he told analysts, citing building momentum in the professional business and “a stronger weight of the consumer business overall for Signify in Q4.” Despite a weaker-than-usual Q2, the company reaffirmed its full-year guidance, including mid to high single-digit EBITA margin and 7–8% free cash flow as a percentage of sales.
U.S. Business Strong, But No Tariff Pre-Buy
The North American professional segment stood out as a relative bright spot. Yet Kosanović cautioned that U.S. demand was not artificially boosted by pre-buying ahead of tariff increases.
“In general, what we saw, broadly speaking, [was] no positive pre-buy contribution,” he stated. “On the project side… neutral, but on the stock and flow, we've seen probably a bit more of wait and see and destocking, actually, in the second quarter.”
That clarity was a response to analyst curiosity about tariff-related behaviors. While many in the sector expected procurement teams to accelerate orders ahead of cost hikes, Signify saw the opposite. The decision to avoid building inventory suggests continued caution among U.S. distributors and specifiers.
Pricing, Margins, and Cost Flexibility
Despite 3% currency headwinds and soft topline results, margins held. Kosanović emphasized, “The price realization that we've achieved in Q2 was totally in line with our expectation… and we expect to be able to do so for the remainder of the year.”
Gross margins remained “robust,” thanks to what Kosanović called “the effect of price and cost management.” This stability is particularly meaningful in the U.S., where tariffs continue to inject volatility. Signify is managing through it by implementing price changes as planned, with “no really impact” on demand, especially in project-based sales.
When asked whether a fresh wave of cost restructuring might be on the horizon—similar to the €200 million program executed over the past 18 months — Kosanović was measured: “We will continue to do optimization of costs, but probably not in a major and certainly not in a major cost resizing program like the one that we have successfully deployed.”
Instead, Signify plans to make localized adjustments, potentially redeploying resources “in some cases where we do not have the right return or value creation line of sight.”
New CEO, New Chapter. But What Mandate?
Come September 1, As Tempelman takes over as CEO. His contract is signed. His month-long breather between jobs begins next week. But does he have a clear strategic mandate from Signify’s board?
Kosanović punted gently when asked, saying, “We are preparing, of course, and making sure that [it] is a very smooth transition and onboarding,” adding, “Stay tuned. Very, very soon…”
It was a diplomatic dodge, and perhaps the right move. Speculating publicly about board expectations ahead of a leadership handoff risks misinterpretation or internal churn. But the silence won’t last. Any board mandates may be obscured from public view, but the situation speaks volumes: sales are down, traditional segments are weakening, and expectations are rising.
Strategic Momentum in Connected and Specialty Lighting
One area that continues to shine is connected and specialty lighting, which now represents more than one-third of Signify’s total sales. “We've been growing across the board in connected,” Kosanović said, “and in some places… with strong double-digit [growth] despite a market environment that is not necessarily significantly improved.”
Consumer sales also grew 2.6% on a comparable basis, marking the third straight quarter of growth. EBITA margin in the consumer segment improved to 7.4%, aided by volume growth and efficiency. “We have a playbook and a model to be able to do that successfully,” Kosanović noted, especially heading into the seasonally strong fourth quarter.
Sustainability metrics also offered a bright spot. Circular revenues reached 37% — beating Signify’s 2025 target of 32% well ahead of schedule.
A Quarter That Sets the Stage
It’s rare that a company reports its lowest revenue quarter in nearly a decade while simultaneously reaffirming full-year guidance. But that paradox is the puzzle Tempelman inherits. Q3 may still be soft — “we anticipate a softer Q3 followed by stronger comparable sales growth in Q4” — but Signify is banking on backlog, connected growth, and end-of-year demand to salvage 2025.
As the lighting industry continues shifting toward intelligent systems and sustainability-driven portfolios, Signify’s ability to weather short-term pressures while maintaining long-term investments will be tested.
Tempelman arrives in September with investor support and boardroom backing. But after three CEOs in 2025, the company needs more than smooth transitions. It needs visible traction.
