Q2 FY2026
Filed Aug 5, 2026GlobalFoundries Reports Second Quarter 2026 Financial Results
Revenue rose 6% year-over-year and 9% sequentially, while IFRS and Non-IFRS gross margins expanded. Non-IFRS operating profit, net income and diluted EPS increased year-over-year, although IFRS operating profit and net income declined year-over-year and adjusted free cash flow was $(3) million.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net revenueother | $1,786 million | 9% | 6% |
| Gross profitother | $505 million | 12% | 24% |
| Gross marginother | 28.3% | +70bps | +410bps |
| Non-IFRS gross profitnon-GAAP | $534 million | 13% | 26% |
| Non-IFRS gross marginnon-GAAP | 29.9% | +90bps | +470bps |
| Operating expensesother | $331 million | – | – |
| Research and developmentother | $174 million | – | – |
| Selling, general and administrativeother | $157 million | – | – |
| Operating profitother | $174 million | (3)% | (11)% |
| Operating marginother | 9.7% | (130)bps | (190)bps |
| Non-IFRS operating profitnon-GAAP | $298 million | 10% | 16% |
| Non-IFRS operating marginnon-GAAP | 16.7% | +10bps | +140bps |
| Net incomeother | $167 million | 61% | (27)% |
| Net income marginother | 9.4% | +300bps | (410)bps |
| Non-IFRS net incomenon-GAAP | $256 million | 13% | 9% |
| Non-IFRS net income marginnon-GAAP | 14.3% | +40bps | +40bps |
| Diluted EPSother | $0.30 | 67% | (27)% |
| Non-IFRS diluted EPSnon-GAAP | $0.46 | 15% | 10% |
| Non-IFRS adjusted EBITDAnon-GAAP | $587 million | 5% | —% |
| Non-IFRS adjusted EBITDA marginnon-GAAP | 32.9% | (140)bps | (180)bps |
| Cash from operating activitiesother | $405 million | (25)% | (6)% |
| Non-IFRS adjusted free cash flownon-GAAP | $(3) million | – | – |
| Non-IFRS adjusted free cash flow marginnon-GAAP | (0.2)% | – | – |
| Wafer shipments (300mm equivalent) (in thousands)other | 625 | 8% | 8% |
Third Quarter 2026 outlook
- Revenue$1,885 ± $25
- Gross marginIFRS 29.5% ± 100bps; Non-IFRS 30.5% ± 100bps
- Operating expensesIFRS $318 ± $10; Non-IFRS $260 ± $10
- NoteIFRS operating margin 12.7% ± 170bps
- NoteNon-IFRS operating margin 16.7% ± 170bps
- NoteIFRS diluted EPS $0.37 ± $0.05
- NoteNon-IFRS diluted EPS $0.51 ± $0.05
- NoteFully Diluted Share Count ~556
- NoteShare-based compensation: $18 million in cost of revenue and ~$58 in operating expenses
- NoteShare-based compensation impact to diluted EPS: ~$0.14
- NoteNet interest income (expense) and other income (expense): between $3 million and $11 million
- NoteIncome tax expense: between $28 million and $52 million
Capital returns
- On July 14 2026, GF paid its first-ever quarterly cash dividend of $0.12 per share.
- The Board of Directors approved a dividend of $0.12 per share payable on October 9, 2026 to shareholders of record as of September 23, 2026.
What drove it
- Revenue growth across strategic growth drivers, including Optical Networking within the AI data center.
- Wafer shipments (300mm equivalent) increased 8% year-over-year and 8% sequentially to 625 thousand.
- In July 2026, GF signed a letter of intent with the U.S. Department of Commerce for a $300 million award to accelerate U.S. silicon photonics leadership.
- In July 2026, GF completed the acquisition of Photeon Technologies' integrated voltage regulator business.
- In June 2026, GF completed the acquisition of Synopsys’ ARC Processor IP Solutions business.
- In May 2026, GF launched Quantum Technology Solutions, accelerated by an expected $375 million grant by the U.S. Department of Commerce pursuant to a letter of intent.
Concerns
- IFRS operating profit declined 11% year-over-year to $174 million and IFRS operating margin declined (190)bps to 9.7%.
- IFRS net income and diluted EPS each declined 27% year-over-year to $167 million and $0.30, respectively.
- Non-IFRS adjusted EBITDA margin declined (180)bps year-over-year to 32.9%.
- Cash from operating activities declined 6% year-over-year and 25% sequentially to $405 million.
- Non-IFRS adjusted free cash flow was $(3) million, compared with $277 million in June 30, 2025 and $233 million in March 31, 2026.
- Purchases of property, plant and equipment and intangible assets increased to $(411) million from $(159) million in June 30, 2025, while acquisitions, net of cash acquired, were $(440) million.
What to watch
- Third Quarter 2026 net revenue guidance of $1,885 ± $25.
- Third Quarter 2026 IFRS gross margin guidance of 29.5% ± 100bps and Non-IFRS gross margin guidance of 30.5% ± 100bps.
- Third Quarter 2026 IFRS operating margin guidance of 12.7% ± 170bps and Non-IFRS operating margin guidance of 16.7% ± 170bps.
- Third Quarter 2026 IFRS diluted EPS guidance of $0.37 ± $0.05 and Non-IFRS diluted EPS guidance of $0.51 ± $0.05.
- Execution of the expected $300 million silicon photonics award and the expected $375 million quantum grant, both pursuant to letters of intent.
- Cash flow and capital expenditure following $(411) million of purchases of property, plant and equipment and intangible assets and $(440) million of acquisitions, net of cash acquired.
Balance sheet and cash flow
- Cash and cash equivalents as of June 30, 2026: $1,087 million; December 31, 2025: $1,809 million.
- Marketable securities as of June 30, 2026: $1,270 million current and $946 million non-current; December 31, 2025: $1,241 million current and $939 million non-current.
- Ending cash, cash equivalents and marketable securities: $3.3 billion.
- Inventories as of June 30, 2026: $1,622 million; December 31, 2025: $1,577 million.
- Property, plant and equipment, net as of June 30, 2026: $7,098 million; December 31, 2025: $7,223 million.
- Total assets as of June 30, 2026: $16,888 million; December 31, 2025: $17,141 million.
- Current portion of long-term debt as of June 30, 2026: $98 million; December 31, 2025: $86 million.
- Non-current portion of long-term debt as of June 30, 2026: $1,024 million; December 31, 2025: $1,065 million.
- Total liabilities as of June 30, 2026: $5,014 million; December 31, 2025: $5,158 million.
- Net cash provided by operating activities: $405 million; June 30, 2025: $431 million.
- Purchases of property, plant and equipment and intangible assets: $(411) million; June 30, 2025: $(159) million.
- Acquisitions, net of cash acquired: $(440) million; June 30, 2025: —.
- Net cash used in investing activities: $(1,119) million; June 30, 2025: $(207) million.
- Proceeds (repayment) of debt, net: $(45) million; June 30, 2025: $(36) million.
- Net cash used in financing activities: $(48) million; June 30, 2025: $(35) million.
- Net change in cash and cash equivalents: $(762) million; June 30, 2025: $194 million.
- Non-IFRS total capital expenditures net of proceeds from government grants: $(408) million; March 31, 2026: $(309) million; June 30, 2025: $(154) million.
Analysis
GlobalFoundries reported Q2 2026 net revenue of $1,786 million, up 6% year-over-year and 9% sequentially. Gross profit increased 24% year-over-year to $505 million, and IFRS gross margin expanded to 28.3% from 24.2%. The company also reported 625 thousand 300mm-equivalent wafer shipments, up 8% year-over-year and 8% sequentially. Management said revenue and Non-IFRS gross margin exceeded the high end of its guidance ranges and identified Optical Networking within AI data centers as a strategic growth driver.
Profitability improved on a Non-IFRS basis. Non-IFRS gross margin reached 29.9%, up +470bps year-over-year, while Non-IFRS operating profit rose 16% to $298 million and Non-IFRS diluted EPS rose 10% to $0.46. IFRS results were less favorable below gross profit: operating expenses were $331 million versus $212 million in the prior-year quarter, IFRS operating profit declined 11% to $174 million, and IFRS net income declined 27% to $167 million. The reconciliation includes $86 million of share-based compensation, $7 million of structural optimization, $31 million of amortization of acquired intangibles and other acquisition related charges, and $(20) million from revaluation and gain on sale of equity investments.
Cash generation weakened as investment increased. Net cash provided by operating activities was $405 million, down from $431 million in the prior-year quarter and $542 million in the prior quarter. Purchases of property, plant and equipment and intangible assets were $(411) million, and acquisitions, net of cash acquired, were $(440) million. Consequently, Non-IFRS adjusted free cash flow was $(3) million, compared with $277 million in the prior-year quarter. Cash and cash equivalents were $1,087 million at June 30, 2026, and the company reported ending cash, cash equivalents and marketable securities of $3.3 billion.
The company began returning capital through its first-ever quarterly cash dividend of $0.12 per share paid on July 14 2026, with another $0.12 per share dividend approved for payment on October 9, 2026. Strategic activity included the completed acquisitions of Photeon Technologies' integrated voltage regulator business and Synopsys’ ARC Processor IP Solutions business. GF also cited letters of intent for a $300 million U.S. Department of Commerce award related to silicon photonics and an expected $375 million grant for Quantum Technology Solutions.
For Q3 2026, GF guided to net revenue of $1,885 ± $25, IFRS gross margin of 29.5% ± 100bps and Non-IFRS gross margin of 30.5% ± 100bps. It guided to IFRS operating expenses of $318 ± $10, IFRS operating margin of 12.7% ± 170bps, and IFRS diluted EPS of $0.37 ± $0.05. The corresponding Non-IFRS guidance is operating expenses of $260 ± $10, operating margin of 16.7% ± 170bps and diluted EPS of $0.51 ± $0.05. The guide points to higher revenue and gross margin than Q2, while cash flow conversion, acquisition integration and the delivery of anticipated government funding remain key reported items to monitor.
Management, verbatim
GF delivered strong results in the second quarter, with revenue and Non-IFRS gross margin exceeding the high end of our guidance ranges,
Tim Breen, CEO of GlobalFoundries
We continue to see strong momentum, accelerating customer demand, and revenue growth across our strategic growth drivers, including Optical Networking within the AI data center, where our differentiated silicon photonics and silicon germanium technologies are driving meaningful value for our customers.
Tim Breen, CEO of GlobalFoundries
Not in the filing
stated, not guessed- Segment revenue and segment growth metrics were not reported.
- Prior-quarter IFRS operating expenses were not reported on an operating-expenses line.
- GAAP free cash flow was not reported.
- Share repurchases were not reported.
- A Q3 2026 tax-rate guidance figure was not reported.
- Previous-release outlook was not provided, so comparison with prior guidance is unavailable.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.