Key Highlights

  • Non-IFRS diluted EPS of USD 0.53 topped the USD 0.51 estimate, at the high end of guidance.
  • Revenue grew 13% year over year to USD 1.899 billion, slightly above the USD 1.89 billion estimate.
  • Communications infrastructure and Data Center Revenue jumped 81% year over year, and non-IFRS gross Margin reached a record 31.4%.
  • Fourth quarter revenue is guided to USD 2.0 billion, plus or minus USD 25 million, with EPS of USD 0.59.

GlobalFoundries (NASDAQ:GFS) reported third quarter revenue of USD 1.899 billion, up 6% sequentially and 13% from a year earlier, above the USD 1.89 billion estimate. Non-IFRS diluted EPS of USD 0.53 beat the USD 0.51 estimate, based on about 558 million diluted shares. The company said revenue and profit metrics landed at the high end of its guidance ranges, and that more than two thirds of revenue came from outside smart mobile devices for the first time.

End Markets and Technology Mix

Communications infrastructure and data center made up about 17% of revenue, rising 14% sequentially and 81% from a year earlier on optical networking Demand across silicon photonics and silicon germanium. Automotive was 19% of revenue, up 20% year over year, and home and industrial IoT was 20%, up 49%. Smart mobile devices fell to 32% of revenue, down 19% from the prior year.

CEO Tim Breen said the company is working with more than 50 silicon photonics customers, including seven of the top ten optical transceiver suppliers. Silicon photonics revenue is guided to about USD 500 million in 2026, with an annualized run rate near USD 1 billion targeted by the end of 2027, a year earlier than previously stated.

Profitability, Cash and Government Equity

Non-IFRS Gross Profit was USD 597 million, a record 31.4% margin, up 540 basis points year over year. Operating expenses were USD 257 million. Operating profit was USD 340 million, a 17.9% margin, up 250 basis points, and Net Income was about USD 298 million.

Operating cash flow was USD 341 million, net Capital Expenditure was USD 205 million and adjusted free cash flow was USD 136 million, which included about USD 150 million of customer prepayments and government grants. Cash and marketable securities were about USD 3.2 billion against USD 1.1 billion of debt, with a USD 1.5 billion revolver undrawn. The company repurchased USD 100 million of shares.

GlobalFoundries agreed with the US Department of Commerce to reallocate USD 955 million of its CHIPS and Science Act award toward Malta, New York, and Burlington, Vermont, and to issue 4% Equity to the US government, bringing government ownership to about 7% once all agreements close. It also signed a five-year, USD 2 billion Manufacturing agreement with TSMC for US-made silicon interposers, with Volume ramping at Malta in the first half of 2028.

Fourth Quarter and 2026 Guidance

For the fourth quarter, GlobalFoundries guided to revenue of USD 2.0 billion, plus or minus USD 25 million, gross margin of 31.5%, plus or minus 100 basis points, and Operating Margin of 19.8%, plus or minus 170 basis points. Diluted EPS is guided to USD 0.59, plus or minus USD 0.05, on about 575 million shares, rising to about 600 million shares from 2027.

For 2026, the company projects communications infrastructure and data center growth of 60% to 70%, low double-digit automotive growth, a low-teens decline in smart mobile devices and 10% to 15% growth in home and industrial IoT. Net capital expenditure is guided to 15% to 20% of revenue with a free cash flow margin near 10%, and 2027 net capital expenditure is projected near USD 4 billion, about one third supported by customer prepayments.

Quarter in Numbers

Third quarter revenue of USD 1.899 billion compares with a fourth quarter guide of USD 2.0 billion, while gross margin of 31.4% compares with a guided 31.5% and a 40% exit target for the fourth quarter of 2028. Third quarter EPS of USD 0.53 compares with the USD 0.59 guide.