$GFS earnings report

GlobalFoundries reported Q3 2026 net revenue of $1,899, up $211 13 % from Q3 2025 and $113 6 % from Q2 2026. Wafer shipments were 647 thousand 300mm equivalents, up 45 7 % year over year and 22 4 % sequentially. Management attributed the period to a richer mix in high-value AI applications and cited record year-over-year revenue growth in Communications Infrastructure and Data Center, plus strong growth in Automotive and Home and Industrial IoT.

Profitability improved materially at the gross-profit and operating-profit levels. IFRS gross margin was 30.1 %, up +530bps year over year and +180bps sequentially, while Non-IFRS gross margin was 31.4 %, up +540bps and +150bps, respectively. IFRS operating profit was $230 and Non-IFRS operating profit was $340. Non-IFRS adjusted EBITDA reached $647, with a 34.1 % margin.

The IFRS bottom line diverged from operating performance. The company reported net income (loss) of $ (270) and diluted EPS of $ (0.49), while Non-IFRS net income was $298 and Non-IFRS diluted EPS was $0.53. The company stated that issuing 9.9 million ordinary shares to the USG resulted in a $441 million non-cash charge recorded in non-operating expense and was the primary driver of the IFRS net loss. Cash generation was lower than both comparison periods, with net cash provided by operating activities of $341 and Non-IFRS adjusted free cash flow of $136.

Capital allocation included $ (100) of share repurchases and (66) of cash dividends paid during the quarter. The Board approved a $0.12 per share dividend payable on January 14, 2027. GF ended the period with $3.2 billion of cash, cash equivalents and marketable securities. The company also disclosed expanded manufacturing and government-partnership activity, including a $2 billion agreement with TSMC and a $955 million reallocation of incentives under its existing CHIPS and Science Act award.

For Q4 2026, GF guided to net revenue of $2,000 ± $25, IFRS gross margin of 30.7% ± 100bps, IFRS operating expenses of $287 ± $10, and IFRS diluted EPS of $0.47 ± $0.05. Non-IFRS guidance calls for gross margin of 31.5% ± 100bps, operating expenses of $235 ± $10, operating margin of 19.8% ± 170bps and diluted EPS of $0.59 ± $0.05. The guidance excludes the impact of expected non-cash charges for additional common share issuances to the USG because timing and amount are uncertain.

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.