Q3 FY2026
Filed Nov 4, 2026Q3 2026 consolidated revenue from continuing operations was within guidance, while gross profit margin fell below guidance due primarily to unfavorable foreign exchange movements.
Revenue declined both sequentially and year-over-year, gross profit margin fell below the guided range, operating and continuing-operation losses widened, and Q4 guidance calls for further sequential revenue and margin pressure.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Q3 2026 net salesGAAP | $43.98M | −1.6% | −4.3% |
| Q3 2026 gross profitGAAP | $6.18M | – | – |
| Q3 2026 gross profit marginGAAP | 14.0% | −5.3 pp | −4.6 pp |
| Q3 2026 selling, general and administrative expensesGAAP | $8.78M | – | – |
| Q3 2026 research and development expensesGAAP | $8.36M | – | – |
| Q3 2026 early termination and other chargesGAAP | $1.92M | – | – |
| Q3 2026 total operating expensesGAAP | $19.06M | – | – |
| Q3 2026 operating lossGAAP | −$12.88M | −29.1% | −11.6% |
| Q3 2026 interest incomeGAAP | $893K | – | – |
| Q3 2026 interest expenseGAAP | −$317K | – | – |
| Q3 2026 foreign currency gain (loss), netGAAP | $1.81M | – | – |
| Q3 2026 other income, netGAAP | $2.08M | – | – |
| Q3 2026 loss from continuing operations before income tax expense (benefit), netGAAP | −$8.41M | – | – |
| Q3 2026 income tax expense (benefit), netGAAP | $4.87M | – | – |
| Q3 2026 loss from continuing operationsGAAP | −$13.29M | −74.8% | −25.2% |
| Q3 2026 income (loss) from discontinued operations, net of taxGAAP | $743K | – | – |
| Q3 2026 net lossGAAP | −$12.54M | – | – |
| Q3 2026 basic loss per common share from continuing operationsGAAP | $(0.36) | −71.4% | −24.1% |
| Q3 2026 diluted loss per common share from continuing operationsGAAP | $(0.36) | −71.4% | −24.1% |
| Q3 2026 total basic loss per common shareGAAP | $(0.34) | – | – |
| Q3 2026 total diluted loss per common shareGAAP | $(0.34) | – | – |
| Q3 2026 adjusted operating loss from continuing operationsnon-GAAP | −$8.59M | −23.2% | −15.8% |
| Q3 2026 adjusted EBITDA from continuing operationsnon-GAAP | −$3.50M | +17.1% | +11.8% |
| Q3 2026 adjusted loss from continuing operationsnon-GAAP | −$10.73M | −119.0% | NM |
| Q3 2026 adjusted loss from continuing operations per common share, dilutednon-GAAP | $(0.29) | −123.1% | NM |
| Q3 2026 net cash used in operating activitiesGAAP | −$18.21M | – | – |
| Q3 2026 purchase of property, plant and equipmentGAAP | −$2.32M | – | – |
| Nine months ended September 30, 2026 net salesGAAP | $134.9M | – | – |
| Nine months ended September 30, 2026 gross profitGAAP | $22.02M | – | – |
| Nine months ended September 30, 2026 gross profit as a percentage of net salesGAAP | 16.3% | – | – |
| Nine months ended September 30, 2026 operating lossGAAP | −$30.03M | – | – |
| Nine months ended September 30, 2026 loss from continuing operationsGAAP | −$25.58M | – | – |
| Nine months ended September 30, 2026 net lossGAAP | −$22.00M | – | – |
| Nine months ended September 30, 2026 net cash used in operating activitiesGAAP | −$21.15M | – | – |
| Nine months ended September 30, 2026 purchase of property, plant and equipmentGAAP | −$7.57M | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Power Analog SolutionsNot separately stated. | $39.64M | −2.3% | −4.6% |
| Power ICNot separately stated. | $4.34M | +5.1% | −1.3% |
Q4 2026 outlook
- Revenue$41.0 million to $45.0 million
- Gross margin10% to 12%
- NoteRevenue guidance reflects the typical seasonal softness in the fourth quarter.
- NoteThe sequential gross profit margin decline is primarily due to lower utilization resulting from a power shutdown in the fab due to a substation upgrade and appreciation of Korean Won.
- NoteAt the midpoint, revenue guidance represents a decrease of 2.2% sequentially and an increase of 6.0% year-over-year.
Capital returns
- Acquisition of treasury stock for the nine months ended September 30, 2026: $(201) thousand.
What drove it
- Q3 consolidated revenue from continuing operations was within the guidance range of $41.5 million to $45.5 million.
- Q3 consolidated gross profit margin was below the guidance range of 17.0% to 19.0%, primarily due to unfavorable foreign exchange movements.
- Magnachip launched 15 new sixth-generation E6 Super-Junction MOSFETs targeting TVs, notebook adapters, PC power supplies and other consumer and industrial power applications.
- The Company announced a $5 million strategic equity investment by Navitas Semiconductor.
- Q3 early termination and other charges included $601 thousand in tax-related charges and $1,320 thousand of costs associated with the electrical substation upgrade in the Gumi fabrication facility.
Concerns
- Net sales declined −1.6% sequentially and −4.3% year-over-year.
- Consolidated gross profit margin declined to 14.0% from 19.3% in Q2 2026 and 18.6% in Q3 2025.
- Q4 2026 gross profit margin guidance of 10% to 12% is below Q3 2026's 14.0%.
- Q4 revenue guidance reflects typical seasonal softness, while management cited headwinds on legacy products, foreign exchange volatility and the impact of the recently completed electrical substation upgrade.
- Q3 loss from continuing operations widened to $(13,286) thousand from $(7,601) thousand in Q2 2026 and $(10,609) thousand in Q3 2025.
- Inventories, net increased to $40,444 thousand at September 30, 2026 from $34,151 thousand at December 31, 2025.
What to watch
- Q4 2026 consolidated revenue within the guided range of $41.0 million to $45.0 million.
- Q4 2026 consolidated gross profit margin within the guided range of 10% to 12%.
- The effect of lower utilization from the Gumi fabrication facility power shutdown and the electrical substation upgrade.
- Foreign exchange volatility and the appreciation of Korean Won.
- Execution of the new-generation power semiconductor roadmap, including product development and ramp into volume production.
- Development of the partnership with Navitas Semiconductor and the announced $5 million strategic equity investment.
Balance sheet and cash flow
- Cash and cash equivalents were $86,911 thousand as of September 30, 2026, compared with $103,756 thousand as of December 31, 2025.
- Inventories, net were $40,444 thousand as of September 30, 2026, compared with $34,151 thousand as of December 31, 2025.
- Current portion of long-term borrowings was $29,998 thousand as of September 30, 2026; long-term borrowings were $17,112 thousand.
- Total assets were $343,790 thousand and total liabilities were $98,374 thousand as of September 30, 2026.
- Q3 2026 net cash used in operating activities was $(18,206) thousand, net cash provided by investing activities was $4,172 thousand, and net cash provided by financing activities was $4,713 thousand.
- Nine-month 2026 net cash used in operating activities was $(21,152) thousand, net cash used in investing activities was $(2,716) thousand, and net cash provided by financing activities was $4,295 thousand.
Analysis
Magnachip reported Q3 2026 net sales of $43,978 thousand, down −1.6% sequentially and −4.3% year-over-year. Power Analog Solutions revenue was $39,636 thousand, down on both comparisons, while Power IC revenue was $4,342 thousand, up +5.1% sequentially but down −1.3% year-over-year. Consolidated revenue from continuing operations was within the company’s $41.5 million to $45.5 million guidance range, but demand conditions remained pressured by legacy-product headwinds cited for the coming quarter.
Profitability deteriorated materially. Gross profit was $6,177 thousand and gross profit margin was 14.0%, compared with 19.3% in Q2 2026 and 18.6% in Q3 2025. Management attributed the margin miss versus its 17.0% to 19.0% guided range primarily to unfavorable foreign exchange movements. PAS gross profit margin fell to 10.7% from 17.2% sequentially, whereas PIC gross profit margin improved to 45.0% from 40.9%.
The lower gross profit and higher operating expense base widened the GAAP operating loss to $(12,880) thousand. Loss from continuing operations was $(13,286) thousand, versus $(7,601) thousand in Q2 2026, while net loss was $(12,543) thousand. The quarter included $1,921 thousand of early termination and other charges, comprising $601 thousand of tax-related charges and $1,320 thousand related to the Gumi electrical substation upgrade. Adjusted EBITDA improved sequentially to $(3,496) thousand from $(4,219) thousand, although adjusted operating loss widened to $(8,593) thousand.
Liquidity ended the quarter at $86,911 thousand of cash and cash equivalents, versus $103,756 thousand at December 31, 2025. Q3 operating cash flow was $(18,206) thousand and Q3 purchases of property, plant and equipment were $(2,322) thousand. Total borrowings were split between $29,998 thousand of current portion of long-term borrowings and $17,112 thousand of long-term borrowings. Inventories increased to $40,444 thousand from $34,151 thousand at year-end 2025.
For Q4 2026, Magnachip guided consolidated revenue from continuing operations to $41.0 million to $45.0 million and consolidated gross profit margin to 10% to 12%. The outlook incorporates typical seasonal revenue softness and points to further sequential margin pressure from lower fab utilization during the substation-upgrade-related power shutdown and appreciation of Korean Won. Management is continuing to invest in new-generation products, including 15 E6 Super-Junction MOSFET launches, while pursuing the Navitas Semiconductor partnership and strategic equity investment.
Management, verbatim
While headwinds to our near-term financial performance remain, I am encouraged by the progress we are making in transforming Magnachip.
Chae Lee, Chief Executive Officer
Third quarter revenue was within our guidance range, although gross profit margin was below our expectations, primarily due to unfavorable foreign exchange movements.
Shinyoung Park, Chief Financial Officer
Not in the filing
stated, not guessed- Previous-quarter outlook was not provided; therefore, no comparison of Q3 actual results against prior guidance is included.
- Free cash flow was not reported.
- Dividend information was not reported.
- Q4 2026 operating expense guidance was not reported.
- Q4 2026 tax-rate guidance was not reported.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.