GFS

Image source: The Motley Fool. Wednesday, Aug. 5, 2026 at 8:30 a.m. ET Head of Investor Relations - Eric Chow Chief Executive Officer - Timothy Breen Chief Financial Officer - Sam Franklin Operator: Thank you for standing by, and welcome to the GlobalFoundries Inc. Second Quarter Fiscal Year 2026 Financial Results. [Operator Instructions] As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Eric Chow, Head of Investor Relations. Please go ahead, sir. Eric Chow: Thank you, operator. Good morning, everyone, and welcome to GlobalFoundries' Second Quarter 2026 Earnings Call. On the call with me today are Tim Breen, CEO; and Sam Franklin, CFO. A short while ago, we released GF's second quarter 2026 financial results, which are available on our website at investors.gf.com, along with today's accompanying slide presentation. This call is being recorded, and a replay will be made available on our Investor Relations web page. During this call, we will present both IFRS and non-IFRS financial measures. The most directly comparable IFRS measures and reconciliations for non-IFRS measures are made available in today's press release and accompanying slides. Please note that these financial results are unaudited and subject to change. Certain statements on today's call may be deemed to be forward-looking statements. Such statements can be identified by terms such as believe, expect, intend, anticipate and may or by the use of the future tense. You should not place undue reliance on forward-looking statements. Actual results may differ materially from these forward-looking statements, and we do not undertake any obligation to update any forward-looking statements we make today. For more information about factors that may cause actual results to differ materially from forward-looking statements, please refer to the press release we issued today as well as risks and uncertainties described in our SEC filings, including in sections under the caption Risk Factors in our annual report on Form 20-F and in any current reports on Form 6-K furnished with the SEC. In terms of upcoming events, we will be participating in a fireside chat at the Goldman Sachs Communacopia & Technology Conference in San Francisco on September 8. We will begin today's call with Tim providing a summary update on the business environment and technologies, followed by Sam, who will provide details on our second quarter results and third quarter guidance. We will then open the call for questions with Tim and Sam. We request that you please limit your questions to one with one follow-up. I'll now turn the call over to Tim. Timothy Breen: Thank you, Eric, and welcome, everyone, to our second quarter 2026 earnings call. GF delivered strong results in the second quarter with revenue and non-IFRS profitability metrics at or above the high end of our guidance ranges. The team continued its rigorous execution, ramping critical technology corridors where we see accelerating customer demand and the opportunity to create and capture value. In particular, our comms infrastructure and data center end market delivered over 60% year-over-year growth in Q2, driven by continued demand for optical networking applications across our silicon photonics and silicon germanium platforms. This marked one of the fastest quarters of year-over-year revenue growth for an end market in our company history. We believe our value proposition has never been more in demand. Our differentiated technology portfolio and resilient global manufacturing footprint continue to strengthen our position with customers. We are seeing meaningful momentum as we execute our strategy and drive towards the long-term targets we shared at this year's Investor Day. Let me now update you on 3 key developments in the quarter that are accelerating our strategic path: one, Quantum Technology Solutions; two, optical networking and power opportunities in the AI data center; and three, IP, software, and custom silicon. Starting with Quantum, a paradigm shift that will define the next chapter of high-performance computing over the coming decade and beyond. In May, we launched Quantum Technology Solutions, a new dedicated team and set of capabilities within GF that will enable the quantum industry to move from prototypes to high-volume production. Just as CPUs, GPUs and AI ASICs define today's compute paradigm, we believe quantum processor units, or QPUs, will be an essential part of tomorrow's. Advanced semiconductor manufacturing built securely here in the U.S. will be essential for the scaling of this technology. Establishing the right production capability is now the critical enabler. The ability to manufacture and integrate complex quantum devices with consistency, yield and scale. This is precisely where GF wins. Our Quantum strategy is Qubit-Agnostic, meaning our manufacturing platforms are expected to support a broad range of leading modalities, including superconducting, trapped ion, photonic, topological and spin. Our proven platforms like FDX provide the cryogenic CMOS foundation, and we are extending our advanced packaging capabilities into the cryogenic regime to enable the 3D heterogeneous integration that these systems require. As highlighted in our recent announcements, we are working closely with 8 of the world's leading quantum computing players, including partnerships with PsiQuantum, Quantinuum and Quantum Motion as well as new endorsements from the quantum arms of large hyperscalers. Since launching just 3 months ago, we have already embarked on 4 new customer-specific quantum engagements with accelerating commercial momentum ahead. Advancing our quantum capabilities is anchored by an expected $375 million grant from the U.S. Department of Commerce to accelerate the research, development and build-out of quantum manufacturing capacity in the U.S. This critical partnership with the U.S. government underscores why Quantum is not only a business opportunity, but also a national priority. We are only in the early stages of the nascent quantum opportunity. Over the next 1 to 3 years, we expect to generate quantum-related revenue largely through engineering engagements with customers reported within our technology services revenue. As customer platforms qualify and move into volume production, we expect quantum-related revenue from manufacturing services to ramp towards the end of the decade. Ultimately, our early momentum and customer proof points in this emerging area perfectly encapsulate the outsized value GF provides a strongly differentiated technology, deep customer partnerships and a global secure manufacturing footprint. Let me turn to AI data center, where we continue to build momentum through new customer design wins and increasing engagement across the ecosystem. In the second quarter alone, we secured 7 new optical networking design wins with customers across both pluggable transceiver suppliers as well as major hyperscaler and networking players. Silicon photonics and silicon germanium each play critical roles in optical networking systems and combined with data center power represent 3 high-quality long-term secular growth drivers, which underscore our conviction in the ability to grow in the data center for years to come. I will walk through an update on each of these. For silicon photonics, let's start with pluggables, which contributes the vast majority of our silicon photonics revenue today. Thanks to our differentiated technology and advanced 300-millimeter photonics manufacturing footprint, we are actively engaged with 4 of the top 5 optical transceiver players. Given our strong capabilities and robust capacity ramp, we now expect our silicon photonics revenue as reported within the comms infrastructure and data center end market to more than double in 2026 compared with the year prior. Beyond just this year, we are progressing well on our multiyear road map to advance the enablement of modules delivering 1.6T, 3.2T and beyond. High-volume manufacturing of our 200-gig per lane technology is underway. We have already demonstrated 400-gig capability and solutions for even greater bandwidth are in development. In addition to our robust pluggable offerings today, we see significant customer interest in our SCALE platform, the industry's first OCI MSA compatible solution for near and co-packaged optics. We currently have 7 active engagements with leading companies on our SCALE platform and customer feedback on the merits of our technology and manufacturing capabilities has been very positive. We are already delivering tangible results for our customers today, having taped out a SCALE-related design win in Q2, and we expect to tape out another in Q3. Specifically for near-packaged optics, we see NPO as an important application and exciting opportunity ahead of the broader adoption of co-packaged solutions. Because near and co-packaged optics are built on a common photonic IC and because many components of GF SCALE solution support both near and co-packaged optics, our customers benefit from the same underlying platform. As a result, we expect GF to benefit from the silicon photonics opportunity regardless of the rate and pace of various form factor adoptions by our customers. As we increase investments into our silicon photonics capabilities, the importance of government partnerships continues to grow. Last week, GF entered into a letter of intent with the U.S. Department of Commerce for a $300 million award to accelerate the development of next-generation silicon photonics technologies in the U.S. The funding will support advanced optical materials, modulated technologies and packaging innovations that will enable next-generation near and co-packaged optics architectures, building directly on GF SCALE platform. The endorsement from our partners across the industry has reinforced our strategic conviction, including the world's top XPU providers, hyperscalers, AI connectivity leaders and ecosystem partners. We are pleased to take a central role in advancing optical innovation and development in the U.S. and believe this recognition validates the strategic importance of silicon photonics, the excellent relationship we enjoy with our partners and GF leadership in these technologies. Another driver of data center momentum is high-performance silicon germanium, which powers the analog and mixed signal electronics at the heart of optical interconnects for AI and cloud infrastructure. Our differentiated SiGe platform delivers the bandwidth, signal integrity and power efficiency required for increasingly demanding optical networking applications, making it strongly complementary to our silicon photonics portfolio. During the quarter, we secured multiple new SiGe TIA and driver design wins across networking customers. Demand for SiGe remains strong, and we are oversubscribed throughout 2027. We are actively expanding capacity in our Vermont facility to support this demand. We believe SiGe represents another key growth opportunity for GF. Combined with our leadership in silicon photonics, GF offers a uniquely differentiated set of technologies that help address the bandwidth, power efficiency and signal integrity requirements of next-generation AI systems. The momentum we are seeing today reinforces our belief that we will be a key leader in optical networking for years to come. The third strong opportunity we see in the AI data center relates to power. In July, we closed a strategic acquihire of the custom power team from Photon Technologies in Europe, bringing an experienced design team focused on integrated voltage regulators, or IVRs. Together with our BCD, GaN and integrated inductor capabilities, IVR further strengthens our road map depth in power technologies and expands our serviceable market in one of the fastest-growing opportunities within AI data centers. Our goal is to help enable a new power architecture for AI infrastructure, one that brings power conversion closer to the processor and addresses the increasing efficiency, power density, bandwidth, high current and transient response requirements of next-generation XPUs. As AI workloads continue to scale, XPUs are consuming more power than ever before, increasing the need for solutions that can reduce power losses and deliver higher performance within increasingly constrained thermal and physical footprints. Closed in Q2, this transaction brings new differentiated IVR technology specialized engineering talent and additional R&D capabilities that strongly complement our power portfolio, allowing us to capture a larger share of the growing power opportunity in AI data centers. Finally, moving to another key element of our long-term strategy, our IP, software, and custom silicon capabilities. In June, we completed our previously announced acquisition of Synopsys ARC processor IP Solutions business, an important milestone in advancing our strategy in physical AI and a notable step change in expanding GF's serviceable addressable market. As a recap, the strategic rationale is multifold. As AI increasingly moves beyond the data center into the physical world around us, it is transforming automotive, industrial automation, robotics and intelligent edge devices. In that context, customers are looking for partners that can help them navigate the growing complexity of software, compute architectures and semiconductor design. Together with MIPS, this acquisition bolsters GF's capabilities across RISC-V processor IP, software development tools and custom silicon design, enabling us to support customers from architecture and software through high-volume silicon production. We acquired a broad set of CPU, DSP, NPU and broader RISC-V technologies as well as a proven software development toolkit and application-specific processor design capabilities. With over 150 patents, 300 existing customers and 400 R&D engineers around the world, this acquisition meaningfully expands our ecosystem reach and depth. Importantly, we are already seeing significant strategic benefits from our acquisition. By combining MIPS and Synopsys ARC under one roof, we are engaging with more customers earlier in the design cycle, shaping application-specific compute architectures and creating deeper, longer-lasting customer partnerships. To accelerate customer enablement, we are increasing investment in a number of R&D initiatives. These are focused high-return programs that position us to capitalize on expanding opportunities while helping our customers innovate faster. Over time, we believe this creates a pathway to greater custom silicon opportunities and enabling physical AI customers to run their AI inference workloads on GF and MIPS-based processing platforms. In summary, we made meaningful progress across several strategic growth areas this quarter. We delivered a record quarter for design wins across both communications infrastructure and data center and smart mobile devices in differentiated areas such as display backplanes for AI glasses, PMICs for premium smartphones and smart power stage gate drivers for data center power. Our differentiated capabilities are helping customers solve increasingly complex challenges while positioning GF as a trusted technology partner. We are making critical investments and integrating strategic acquisitions that strengthen our competitive position, diversify our growth drivers and provide a durable foundation for long-term profitable growth. I am proud of the team's diligent execution this quarter and excited about the opportunities ahead. I'll now pass the call over to Sam for a deeper dive on second quarter 2026 financials. Sam Franklin: Thank you, Tim. For the remainder of the call, including guidance other than revenue, cash flow and net interest income, I will reference non-IFRS metrics. GF delivered strong results in the second quarter with revenue and non-IFRS gross margin exceeding the high end of our guidance ranges. Thanks to the efforts from our teams around the world to improve structural costs, raise manufacturing productivity and accelerate growth in value-accretive secular end markets, we grew our gross margin by nearly 500 basis points year-over-year. Not only did this represent a second quarter record, we delivered on our expectation to reach approximately 30% gross margin well before the end of 2026 driven by a richer mix of revenue, this quarter's results demonstrated a meaningful step towards our long-term objectives to achieve. Now on to the results. We delivered second quarter revenue of $1.786 billion, up 9% sequentially and 6% year-over-year. We shipped approximately 625,000 300-millimeter equivalent wafers in the quarter, up 8% sequentially and 8% from the prior year period. Revenue from manufacturing services accounted for approximately 89% of total revenue. Revenue from technology services, which includes revenue from IP, licensing, software, reticles, nonrecurring engineering, expedite fees and other items, accounted for approximately 11% of total revenue for the second quarter. Following the acquisitions of MIPS and the Synopsys IP business, we expect revenue contribution of approximately $100 million to $120 million towards our full year 2026 technology services revenue, up from our prior expectation of $60 million to $100 million as these acquisitions continue to drive new opportunities with our customers. In addition, driven by strong conversion of our design win pipeline and an expanding scope of partnerships with customers, we expect sustained momentum in our revenue contribution from technology services. As a result, we expect technology services revenue towards the high end of the 10% to 12% range of total revenue in 2026 with a gross margin profile significantly higher than our corporate targets. Let me now provide an update on our revenue and outlook by end market. Communications infrastructure and data center represented approximately 16% of second quarter total revenue. Revenue increased 20% sequentially and 62% year-over-year. This marked the seventh consecutive quarter of double-digit percentage year-over-year growth for communications infrastructure and data center and the fastest quarterly year-on-year growth since 2022. Within this end market, we saw strong customer demand for our silicon photonics and silicon germanium offerings. In both of these high-margin technologies, we're ramping capacity and making the necessary investments to unlock increases in demand indicated by our customers. Beyond optical networking, we saw strong double-digit year-over-year growth in applications across both wireless and -- Given the accelerating demand outlook from our customers, we now expect to achieve full year 2026 revenue growth in the range of 50% to 60% for our communications infrastructure and data center end market, up from our prior expectations of high 30s percentage year-over-year growth, which we believe is an early indication of the long-term growth opportunities ahead for GF in this end market. Beyond the growth opportunities across silicon photonics and SiGe outlined by Tim, we also closed a first-of-a-kind design win for smart power stage gate drivers on our BCD platform. We see this as just one notable step forward in the rapidly evolving market for data center power applications. Automotive represented approximately 19% of second quarter total revenue. Automotive revenue decreased 13% sequentially and 10% year-over-year, principally driven by customer-led shipment timings. However, for the full year, we continue to expect low double-digit percentage revenue growth for our automotive end market with a higher weighting towards the fourth quarter. As automotive semiconductor content continues to grow, we're encouraged by our design win momentum with customers and the long-term growth opportunities these present. In the second quarter, we secured a significant automotive power design win for 5-volt and 10-volt power management integrated circuits built on our BCD platform. In addition, we also taped out an ADAS radar built on our FDX platform for Bosch, a notable milestone and the culmination of years of close partnership. These highlights reflect the strong momentum we continue to see across automotive power, processing, sensing and safety applications. Smart mobile devices represented approximately 36% of second quarter total revenue. Revenue increased 15% sequentially and decreased 6% from the prior year period. As noted by peers and customers across the industry, 2026 smart mobile handset forecasts have reduced meaningfully over the last quarter, principally due to the continued impact from memory pricing and associated shortages. As a result, we currently expect smart mobile devices to decline by a low teens percentage year-over-year in 2026. Customer design win momentum for new generations of smart mobile devices continues to be positive. In the second quarter, we secured a notable design win on GF's BCD platform with MediaTek, further validating our expanding power platform. This marked GF's first-ever power management integrated circuit design win with our long-standing customer. In addition, we continue to strengthen our position with next-generation augmented reality wearables at a leading hyperscaler, winning a new design for microLED display backplanes. Finally, home and industrial IoT represented approximately 19% of second quarter total revenue. Revenue increased 30% sequentially and 10% year-over-year. In the second quarter, IoT revenue growth marked the fastest year-over-year growth since 2022, driven by a breadth of demand for applications across AI-enabled image processing, health care wearables and next-generation MCUs for edge AI compute. As inventory normalizes, customer demand signals improve and the next generation of production ramps commence in the second half of the year, we expect our revenue for the home and industrial IoT end market to grow in the range of 10% to 15% in 2026, up notably from our prior expectations for mid-single-digit percentage growth. In the second quarter, we secured 3 strategic chiplet design wins with Lockheed Martin on our FinFET and FDX platforms, creating a foundational aerospace and defense chiplet ecosystem that further extends GF leadership as a trusted U.S. foundry. We also expanded our relationship with Microchip with a meaningful design win on our FinFET platform, another notable proof point for the growth of our embedded compute and edge AI offerings. Moving now to other key financial performance metrics in the quarter. In the second quarter, we delivered gross profit of $534 million, which translates into approximately 29.9% gross margin, above the high end of the guidance range and up 470 basis points year-over-year. A richer mix of manufacturing and technology services revenue, structural improvements in manufacturing costs and improved utilization all contributed to favorable year-over-year margin expansion. R&D for the quarter was $144 million and SG&A was $92 million. Total operating expenses of $236 million were up 16% quarter-over-quarter and represented approximately 13% of total revenue. We delivered operating profit of $298 million for the quarter at an operating margin of 16.7%, above the midpoint of our guided range and up 140 basis points from the prior year period. Second quarter net interest income was $9 million. Other expense was $12 million, and we incurred tax expense of $39 million in the quarter. We delivered second quarter net income of approximately $256 million, an increase of approximately $22 million from the prior year period. Diluted earnings of $0.46 per share was at the high end of the guidance range based on a fully diluted share count of approximately 556 million shares. Let me now provide some key cash flow and balance sheet metrics. Cash flow from operations in the second quarter was $405 million. Second quarter CapEx, net of proceeds from government grants was $408 million or roughly 23% of revenue. Adjusted free cash flow for the quarter was negative $3 million as indicated in our prior quarter's guidance. At the end of the second quarter, our combined total of cash, cash equivalents and marketable securities stood at approximately $3.3 billion. Our total debt was $1.1 billion, and we also have a $1 billion revolving credit facility, which remains undrawn. On July 14, we paid GF's first-ever quarterly cash dividend of $0.12 per share, an important milestone that reflects both the progress we have made in strengthening the business and our confidence in its future cash generating capacity. Supported by a strong balance sheet and disciplined capital allocation framework, we remain committed to investing in profitable growth while returning excess cash to shareholders. As outlined at our Investor Day, our objective is to return up to 50% of trailing 12-month non-IFRS adjusted free cash flow after investments through a combination of dividends and share repurchases over time. Pursuant to this strategic objective, I'm pleased to announce that our Board of Directors approved a quarterly cash dividend of $0.12 per share payable on October 9, 2026, to shareholders of record as of September 23, 2026. In addition, approximately $100 million remains under the share repurchase authorization approved by our Board of Directors, and we expect to be flexible with the deployment of the remaining authorized amount. Next let me provide you with our outlook for the third quarter of 2026. We expect total GF revenue to be $1.885 billion, plus or minus $25 million. We expect gross margin to be approximately 30.5%, plus or minus 100 basis points, which at the midpoint reflects approximately 450 basis points of year-over-year expansion. Excluding share-based compensation, we expect total operating expenses to be $260 million, plus or minus $10 million. We expect operating margin in the range of 16.7%, plus or minus 170 basis points. At the midpoint of our guidance, we expect share-based compensation to be approximately $76 million, of which roughly $18 million is related to cost of goods sold. We expect net interest and other income for the quarter to be between $3 million and $11 million and income tax expense to be between $28 million and $52 million. Based on a fully diluted share count of approximately 556 million shares, we expect diluted earnings per share for the third quarter to be $0.51, plus or minus $0.05. Now let me provide an update on some broader financial drivers as we evolve the mix of our business and aim to deliver the growth model set out at our recent Investor Day. With respect to pricing, we're encouraged by the improving industry dynamics as well as the evolving mix of our business towards highly accretive technologies. In addition to these positive mix shifts in the second quarter, we implemented pricing increases in partnership with our customers across several technology corridors. Following the satisfactory conclusion of these customer conversations, we expect the pricing adjustments to be reflected in revenue commencing in 2027. The magnitude of these pricing increases varies by end market and technology and contemplates the differentiated value we provide, the ongoing supply and demand dynamics and the inflationary absorption across our industry in recent years. Conversations with our customers have been very constructive, and we'll continue to assess pricing for 2027 through the second half of 2026. With respect to operating expenses, consistent with the strategic updates we set out at our Investor Day in May, we believe that R&D will rise as a percentage of revenue as we integrate recent acquisitions and accelerate our R&D capabilities to support key growth opportunities. We've strengthened our portfolio capabilities through the acquisitions of the Synopsys ARC IP business in June as well as the IVR business from Photon Technologies in early July, adding critical R&D, IP and engineering resources. Following these acquisitions, we now expect quarterly operating expenses in the second half of 2026 to be consistent with our third quarter guidance as we accelerate critical R&D investments while ramping talent and capabilities intended to support key growth opportunities across the AI data center, physical AI, quantum computing and advanced packaging. These timely and necessary investments are targeted to accelerate our technology road map, deepen our customer engagements and expand future growth opportunities in the years ahead. Moving now to tax, where we expect an effective tax rate in the mid-teens percentage range for the full year of 2026, principally due to the expected geographical mix of wafers shipped in the second half of this year. Finally, for the full year 2026, we continue to expect an adjusted free cash flow margin of approximately 10%. In conclusion, I'd like to thank our global teams for their continued commitment and diligent execution towards our strategic goals. GF drove another quarter of meaningful year-over-year margin expansion and achieved new second quarter records across a range of growth and profitability metrics. Our strategic initiatives and investments executed over the last year are demonstrating good momentum across the end markets that we serve and the continued mix shift in our business is driving improved diversification across our end market portfolio. Looking ahead, we intend to continue executing towards a richer mix of business, targeting continued structural cost improvements and improved manufacturing productivity, all of which we believe are forming a strong foundation for increasing shareholder value in the years ahead. With that, let's open the call to Q&A. Operator? Operator: And our first question comes from the line of Chris Caso from Wolfe Research. Christopher Caso: I guess the first question is about the comms data center growth and some of the capacity expansion that's occurring in that segment. And I know while it's growing strongly, you're capacity constrained. Can you help us with to the extent you can, timing and magnitude of that capacity expansion? When does the additional capacity come online? And I did also notice that you received, I think it was a $300 million CHIPS Act grant for the silicon photonics expansion. Can you speak to how that helps to defray some of the net CapEx for that? Timothy Breen: Yes. Thank you, Chris. So I'll kick us off on that. So in terms of capacity, as you say, demand has been strengthening across basically all data center applications. We're feeling that very strongly in the optical networking space that particularly pulls on silicon photonics and silicon germanium. But we're also seeing it in other parts of the business starting to pick up, including areas like power. So our strategy will be to add capacity in those areas. One advantage for us is we're building that capacity out within our existing fab footprint, and we have, let's say, ample fab footprint today to ramp capacity relatively quickly. By the way, one of the contributors to us upping our full year view about our CID end market is actually our confidence about bringing that capacity on and driving factory level productivity improvements to be able to get basically wafers out through the back half of this year and even further into 2027. So we feel good about the ability to meet that growth with additional capacity expansion. Maybe I'll turn to the $300 million partnership with the U.S. government. We couldn't be more excited about this. I think it's really important to bear in mind that the shift to optical networking is very much a secular shift, and we see this only at the very early innings of penetrating the data center. We've spoken in the past about 70% of data center links being optical by 2030. I think every piece of evidence today points to that being perhaps even conservative relative to what's happening, including the penetration, not just to scale out, but also scale-up networking. And so look, we're very excited about the prospects of optical networking and within that silicon photonics. But a lot of what that will require is higher performance technologies in the future. And so what we announced really has 3 components: continuous innovation at the PIC level, right, so improved modulated technology so we can go to 400-gig per lane and beyond. New materials. At some point, we will introduce new materials into the system. Think about barium titanate, thin film lithium niobate, think about indium phosphide, all areas of technological innovation to produce higher-performing systems and more integrated systems going forward. And then the last piece, which is extraordinarily important, particularly for near and co-packaged optics is packaging. And so being able to build those integrated optical engines for both those applications using our SCALE solution also requires continued capability and capacity. So that partnership allows us to accelerate that, and we're very grateful to have the U.S. government as a strong, let's say, partner in our corner supporting that innovation happen right here in the U.S. Sam Franklin: Do you have a follow-up question? Christopher Caso: I do. A follow-up, I'll ask on gross margins. And can you speak to what's the driver of the gross margin expansion as you go into the third quarter in terms of utilization mix and pricing and perhaps give us some color on the trajectory of gross margins into next year, particularly in light of some of your comments with regard to pricing? Sam Franklin: Yes, very happy to, Chris. And look, I will start by saying that we're very encouraged by the continued progression and expansion in our gross margins. And I think it's a continued reflection of the progress that we've seen during the course of this year. We had almost 500 basis points of margin expansion in the second quarter. We had over 500 basis points of margin expansion in the first quarter. And as I said in my prepared remarks, if you take the midpoint of our inferred guide, that implies about another 450 basis points of margin expansion. So this is really playing to the thesis and the levers that we discussed at our Investor Day just a couple of months ago now. And frankly, it's falling through on a relatively healthy basis when you look at the revenue. Take revenue a year ago and compare it to the same period this year, about $100 million of revenue growth. Look at that adjusted gross profit and you see about $100 million of gross profit falling through as well. So we're very encouraged by that relative fall-through to the underlying gross margins as it relates to our revenue growth. And you sort of touched on it a little bit in your question, Chris. Mix has been a big and continues to be a big driver of that. And the way to think about mix is twofold. It's mix from a manufacturing services point of view, and it's mix from a technology services point of view as well. Both of those have been encouraging tailwinds for us, particularly when you look at the relative strength and growth within some of those end markets, which I touched on around comms infra and data center being highly accretive to those targets. You take our technology services revenue up a little under $40 million year-over-year. That's about a point of benefit that comes through there. So the combination of the mix across manufacturing and technology services has been encouraging. We expect that to continue. As I said previously, productivity within our manufacturing sites and driving structural cost improvements has been a big driver as well. Utilization, we were in the second quarter sort of high 80s from a utilization point of view. So we still feel we've got a good amount of our existing capacity to be able to grow into and see positive margin movements over time. And frankly, all of that is against some of the benefits we had in the year ago period. We had things like liquidated damages in early 2025, which have fallen out. So again, it sort of reflects the strong growth we've seen from a margin point of view. We bumped up on that 30% target margin that we said we were looking to solve for at the exit of 2026 in our second quarter, we're above that in the third quarter guidance. So expectation now for the full year is that we should be at about 30 points of gross margin for the full year rather than just that exit target that we had at the beginning of the year. I hope that helps, Chris. Operator: And our next question comes from the line of Krish Sankar from TD Cowen. Sreekrishnan Sankarnarayanan: Congrats on nice results. I just wanted to first follow up on the silicon photonics CID year-over-year growth, almost doubling from your prior outlook. I'm just kind of curious what changed in the last 3 months that the outlook has been revised almost materially higher? And any color you can give on your PIC solutions compared to your two competing foundries? Then I had a quick follow-up on Quantum, too. Timothy Breen: Yes. Great. Thank you very much, Krish. Look, photonics remains a very strong driver for us. I think every customer meeting is all about what more can we do, how much faster can we go. There is clearly strong demand today. And by the way, in a market like this, we don't just validate that demand with our direct customers. We spend time throughout the ecosystem, including with the big hyperscalers, and you've seen many of them are supporting a lot of what we're doing here in the U.S. and around the world. So we're validating the demand, and we believe it's very real today and durable going forward. That's giving us confidence to continue to invest. We'll increase our investments in photonics capacity. And as I mentioned earlier, there's nothing our factories love more than being challenged to get more output literally every single week. We're calling in from Malta, New York, right now, and the factory is hard at work producing more wafers every day for these oversold corridors. So I think very strong conviction about continuing to grow silicon photonics. But yet, we're still at the very beginning of this and that those growth targets we set for kind of end of '28 and through 2030, I'd say today, we are very much on track and potentially ahead of those targets in terms of our silicon photonics growth. Sreekrishnan Sankarnarayanan: Got it. Very helpful, Tim. And then a quick follow-up on Quantum. You recently got a $375 million grant. Can you talk a little bit about the opportunity set there? And where are we in the Quantum commercialization curve? And have you seen more interest or share gains given IonQ just recently closed acquisition of SkyWater? Timothy Breen: Yes. So thank you for that question. I mean Quantum is extremely exciting, and there's a few reasons behind that. I think one is talking to now basically all the players in the sector, everyone is facing the same kind of transition. This is not a, can I prove it in a lab discussion? This is can I scale to high-volume manufacturing. And so the conversations we have and in our announcement, we had both dedicated quantum players, but also hyperscalers and others comment and support that initiative. The conversations are similar because it's all about transitioning to that high-volume scale and cracking different problems that they've proven at lab scale, but need to prove now as they transition to high volume. Since that announcement, we've launched 4 significant new engagements with some -- a subset of the players that are supporting us in that announcement, and we see that ramp continuing. Those engagements have some common features. For example, some of the stuff we're doing around cryogenic CMOS for readout ICs for different modalities. That's very exciting because it builds on existing platforms that we have. But also there are those who have very specific requirements. And that's where also I'm quite excited about the technology benefits of us investing in Quantum. And so I'll give you an example, a couple of -- actually more than 2, 3 or 4 players are doing things linked to the photonics side in their quantum solution. That has excellent read across for us in our long-term silicon photonics road map. So think of that as very synergetic with what we're doing in that space. And so Quantum is actually reinvigorating a number of our long-term technology road maps even further and faster than otherwise it would be happening. So that's very positive. As Sam mentioned in the prepared remarks, we'll see the financial profile of Quantum in our technology services revenue this year and definitely into next year. Think of it more medium term as a kind of call option on the scale to high-volume module manufacturing. Too early to call exactly when those ramps will happen. But clearly, that is the objective of these players that are engaging with us is develop and crack the solutions and then scale them to high volume together. Operator: And our next question comes from the line of Karl Ackerman from BNP Paribas. Karl Ackerman: Two, if I may. Tim, you spoke about the 3 pillars of growth, including Photonics, Quantum, IP and custom silicon. But could you speak to the revenue and OpEx contribution of the ARC and Photon Technologies IVR team in the September outlook? And also, if you zoom out, could you double-click on the rationale for these deals and maybe any early customer design engagements you've seen to date? Timothy Breen: Yes. So let's -- I'll talk about rationale, and then I'll let Sam comment on how we're thinking about revenue for this year. So we've been very focused in our acquisition strategy on identifying capabilities that our customers value, and that links to our manufacturing road map, but also links to what they tell us around gaps that the industry today is not meeting. So let me take kind of the MIPS and Synopsys story first, and I'll come back to Photon, both very exciting in their own ways. Customer feedback on MIPS and then ARC has been excellent. I spent a lot of time personally with customers, especially since we've closed the ARC deal. And by the way, with that came 300 customers. Some of those were not GF customers before. So it gives us also new customers to engage with on those road maps. And these are very strategic discussions because these are about future architectures for their processor solutions. How can they add AI at the edge? How can they do on-device inference in the automotive space, the industrial space, the robotics space. And so it's bringing some really interesting discussions to bear. And it allows us as GF to engage much earlier in that design conversation than we would if it was just a conversation about manufacturing capacity and manufacturing process technology. It has another benefit, which is that it's also giving us very, very early input into our manufacturing road map. And so now you have this, let's say, symbiosis internally that we have an internal customer for what we're doing that is actually challenging us to push performance of next-generation technologies, particularly in our CMOS business to the next level. So you're thinking about how do you do lower power inference at the edge and so on. So I'd say early, of course, for both of these, but very encouraging. We've talked about some of the early wins and partnerships in spaces like defense with Lockheed Martin in automotive with players like Infineon, but there are many, many more in the pipeline. So very encouraging for our IP software and custom silicon strategy. To talk briefly about IVR and Photon, we've had the chance to work with the Photon team for many years now as the IVR category has started to become more and more important. The way you should think about that is IVR is to power, what CPO is to photonics, right? Think about how do you build a much more wafer-level integrated solution to deliver power closer to the chip and to be able to do things that today exist in much more kind of traditional power modules, much more like the industrial and automotive power modules of today. This is moving to a much more kind of, let's say, wafer level solution that is higher and higher performance. That is essential for next-generation data center power, given how hungry these XPUs, GPUs, CPUs are all for power. Photon team, very engaged with a number of our existing customers. So it's a very natural transition to bring that team on board, accelerate those engagements. And again, early feedback from the likes of existing kind of fabless and IDMs, but also hyperscalers who are engaged there, very, very positive bringing that capability into GF. Sam Franklin: And Karl, maybe if I just jump on the second part of your question as it relates to some of the financial profile. And for all the reasons that Tim outlined, these investments are incremental, they're strategic. And actually, in the case of the MIPS acquisition as well as the ARC IP business from Synopsys, they are revenue generative from day 1. At the outset of this year, we expected that we'd be seeing about $60 million to $100 million of incremental revenue through from that MIPS acquisition during the course of 2026. That remains the expectation. But what's changed over the course of the last quarter is that we closed the acquisition of the Synopsys ARC IP business. So the midpoint of that range, as you can kind of infer from my prepared remarks, has moved up from $60 million to $100 million to $100 million to $120 million, call it, $30 million of revenue growth. Our expectation in terms of the skew of that incremental revenue from that recent acquisition is sort of 1/3, 2/3 skewed from third quarter and fourth quarter perspective. As it relates to the R&D and the fall-through ultimately through to EPS, look, these are R&D-intensive businesses. They're also highly accretive from a gross margin point of view. Overall, we expect that the increase in OpEx and particularly the acceleration from an R&D point of view to largely be covered by that incremental revenue we see coming through from both of those acquisitions. So we feel quite good about it from that perspective. Karl Ackerman: Very clear. For my follow-up, if I may, could you discuss what portion of those 7 customers on your SCALE platform are working on NPO or near-packaged optics -- and I guess how should we think about the timing of your NPO opportunity? Timothy Breen: Yes. Maybe just to take a step back, and I think there's obviously a year ago, the industry wasn't talking a lot about NPO -- now it's talking a lot about it. I think the reason is that you see a comfort level for a number of players moving from, let's say, traditional pluggable infrastructure to NPO, and that's because they have synergies in terms of things like the SerDes. So the system is, let's say, a smaller transition versus moving to the full co-package optics. We think both those form factors as well as pluggables will continue to exist in the data center. Obviously, as you get more into scale-up networking, that's where you need to move to smaller form factors like NPO and CPO and to really address all of those linkages within a scale-up network. So we think all of those will continue to exist. Scale supports NPO and CPO. So a lot of the dimensions that go into putting a SCALE solution together, an EIC bonded to a PIC with a micro-optic with a fiber attached unit are necessary for both NPO and for CPO. Fundamentally, the mechanical difference is that the NPO is bonded to the board, whereas the CPO sits within the package, right? And there are differences, therefore, to, let's say, more the things like the SerDes architecture, as I mentioned, but less to the mechanics of how things are done. So look, we see very good momentum on NPO. I'd say the scale engagements we have cut across both. And actually, I'd say even many of the customers are doing both because they have both an NPO that they're ramping sooner and a CPO that they're ramping a little bit later. We still maintain the view that '27 we will see the beginning of NPO ramp and '28, we'll see the beginning of CPO ramp, and that's been quite consistent over the last few quarters. Operator: And our next question comes from the line of Mehdi Hosseini from Susquehanna International Group. Mehdi Hosseini: I also have a couple of follow-ups on comm infrastructure. Tim, can you help me understand what is the contribution of SiGe into your overall optical revenue mix? And as we migrate to NPO and assuming the PIC itself becomes a catalyst, to what extent should I expect some synergy between the SiPho and SiGe? And I do have a follow-up. Timothy Breen: Yes, it's a great question. And let me talk about SiGe just for a little bit since you picked it out. Just to wind the clock back, right, how do we have such an important position in SiGe? IBM Microelectronics, I think, is on record for inventing SiGe. IBM Microelectronics is part of GF today. And so we've had team members building SiGe solutions for a long time now. And so that's always been an important part of our portfolio. What you're seeing in SiGe is that the acceleration is driven by, let's say, 2 trends happening at the same time. One is the shift to optical networking means you are moving more data through a different kind of link. But as you push to higher and higher bandwidth, what you could do previously in CMOS at, say, 50 gig per lane, 100 gig per lane at 200 gig per lane and definitely at 400 gig per lane, you cannot do. And so what we're seeing is people are breaking out those TIAs, those transimpedance amplifiers and also incrementally also breaking out the drivers and doing them in high-performance analog solutions like SiGe. And so in a way, what we're seeing in our SiGe business is actually growth driven by both the switch to optical, but also the increased bandwidth requirements within those optical solutions. That's driving significant growth within the space. Just to give you a dimension, our SiGe business is actually larger than our silicon photonics business today. So it's actually a meaningful part of our data center business overall. And like silicon photonics has very strong growth trajectories because it serves the same underlying trend and perhaps with even that multiplier effect playing out even more so as we're expanding the performance of those pluggable technologies. You'll also find high-performance analog solutions in near and co-packaged optics as well. So those will also have components of those depending on the architecture. Our SiGe solutions, we build them today in Burlington, Vermont. We're expanding capacity there. That's part of what is also increasing our output within '26 and definitely into '27. But we're also qualifying 300-millimeter SiGe in Singapore, which will bring additional capacity, the economics of 300-millimeter, which obviously is very good, but also higher performance. And so as you move to new platforms, you improve your fT, your fMAX performance. And so we think we can continue that great tradition started by IBM of leading the industry in terms of our SiGe solutions for the market. Mehdi Hosseini: Okay. Great. I feel like we can spend an hour just focusing on optical, but I'm going to move on. Within the comm infrastructure, there's also satellite comm and SpaceX had their first quarterly call last night. So help us understand, right now, we're just focused on a transceiver and optical solution. But I see there's also a synergy. So what kind of a substrate is used for satellite comm? And remind us on Analyst Day, how satellite comm could also drive double-digit growth here. Hopefully, I'm in line with my assumptions. Timothy Breen: Yes. So SATCOM, look, continues to be a strong growth business for us. And the reasons for that, I think, are fairly clear. The transition to LEO deployment really driven by SpaceX originally and a couple of other players now ramping as well. It's very clear to see. And as a consumer, once you take a flight and you Starlink on the flight, you kind of don't want to go back to how it used to be. So I think it's clear why those solutions are taking effect. Remember, you're beaming a signal 300 miles into space, a signal that normally would have gone 2 or 3 miles to a base station or a cell tower. And so you need higher performance RF, you need beam forming, you need other kind of wireless technologies -- these are very core strength areas for GF. Some of those technologies are in SOI today. Some of them have SOI-like characteristics but are done without SOI as well. And we're seeing more and more trajectory of new RF technologies playing into SATCOM going forward. Even areas like RF GaN, we think will play a very important role in SATCOM going forward because you're not just increasing the number of units deployed, but you're talking about faster and faster bandwidth. And by the way, this is not just for consumers, you're hearing about industrial deployment, corporate deployment and so on. And there, I say, when you put data centers in space, you're going to need a lot more bandwidth to bring that capability back to Earth for people to use. So I think very strong secular driver of growth for us. Obviously, we're starting from a relatively small base compared to other markets, given this is relatively new, but we definitely see it growing very well long term. Operator: And our next question comes from the line of Timothy Arcuri from UBS. Timothy Arcuri: So Sam, I had a multipart question. So the segment guidance implies like December is up sort of in the 10% range. So my question is, a, is that right? And then can you give us any sense for September of how the guidance shakes out by segment, even if you just give qualitative comments on that? Sam Franklin: Yes. Happy to, Tim. And look, you're right in terms of your overall inference. We said that certainly for the remaining part of this year, just given some of the dynamics around mobile, we think that's sort of down low teens for the full year. Meanwhile, automotive, despite having a slight softer in 2Q, that was really a function of some of the customer shipment timing. Our expectation is that comes back in the second half. So sort of low double-digit growth on auto is very consistent with what we've been guiding throughout this year. IoT has actually been an interesting update from our perspective. And what we're seeing is that where there has been some softness in smart mobile, some of those customers within mobile have actually reallocated their demand into IoT, a lot of commonality between some of those connectivity applications that you see between the 2. So that's what's driving the pickup in IoT to sort of the 10% to 15% level that I indicated year-over-year. And then obviously, we spent quite a bit of time on comms infra and data center. So I won't reiterate that, but that's really the change quarter-on-quarter, that movement to kind of 50% to 60% year-over-year growth. So you can sort of infer from that, Tim, what that means for third quarter into fourth quarter. I think your math is about right in terms of that implied pickup into the fourth quarter. And then, look, as it relates to some of the dynamics within 3Q and 4Q, it's largely consistent with, I think, what we're expecting to see from a trend perspective and what I just outlined on the end market split as well. Timothy Breen: And maybe, Tim, if I can just add, if we zoom out for a second and think about kind of are we seeing more and more traction in those end markets? I think we haven't spoken a lot about design wins across the board, but we continue to see record design win momentum entering into 2026. versus '25. So again, that traction remains really strong. I think the other thing that's very important, we've worked very hard to make our manufacturing footprint as flexible as possible because there are always going to be perturbations between different end markets in terms of timing. You see obviously a very strong story in the data center. You see mobile is obviously going in a different direction given the memory shortage. We've been able to reuse capacity very well this year to enable us to capture some of those upsides given the flexibility of our manufacturing footprint. Timothy Arcuri: Great. And then just as a quick follow-up. So on SiPho, we do hear about some competitors are getting aggressive in going after that business as well. And the customer base is fairly concentrated. So how to think about that? Like can customers multisource across different suppliers? How feasible is that? Timothy Breen: Yes. I think, look, the fact that there's competition is a sign that there's strong support for this secular trend, and I think that's not a bad thing from our point of view. What I can say is customers are also coming to us and saying, I don't have enough secured, I need to secure more and how can I help? And some of that is also mitigating geopolitical risk that they see as well. And look, our strategy in any platform is try to work as broadly as we can across the industry so that we're not betting on the success of player A over player B, but we're mitigated if different people win different sockets. Actually, we have more than 40 customers today in SiPho, and that, of course, includes some early-stage companies, but some of those early-stage companies are really doing great things in terms of ramping new solutions. So I don't think we have a customer concentration concern at this stage, and you're going to see even new entrants. Look at all of the, let's say, I would say, smaller fabless companies that historically were saying copper will last for a long time. All of them to a T have done a photonic strategy, made a photonics acquisition, and they're entering into that space quite aggressively. So I don't think we have a customer concentration concern. And I just think we have durable demand. And like I mentioned earlier, our conversations with the hyperscalers are very helpful to vet what they see kind of as an end consumer of those applications. And again, that reinforces the durability of the demand. Operator: And our next question comes from the line of C.J. Muse from Cantor Fitzgerald. Christopher Muse: I guess first question on CID. Implicit in your guide is roughly an exit rate of $350 million for this segment. And so curious, based on what you see today in terms of design wins, how do you see kind of the growth into calendar '27? I know you don't want to give specific guidance, but should we be thinking about very strong growth off of that kind of new level? Or is there kind of a digested period? Sam Franklin: Yes. Happy to take that, C.J. And look, I think you're kind of getting to the right rough numbers going out of this year. The commentary that we provided as part of our Investor Day and Analyst Day a couple of months ago still stands as we see the opportunities for comms infra and data center. Obviously, it's expected to come in stronger during 2026, but there was a good reason we indicated that 30-plus percentage year-over-year growth that we're targeting through our long-term model. The plus is sort of ties into what Tim said earlier around some of the growth that we're seeing in demand, the increases that we're making to support that demand into our capacity and just the continued ramp in customer expansion as well. So look, I would still stand by our long-term model that we shared a couple of months back in terms of that 30-plus point percentage growth going into 2027 and beyond. Timothy Breen: CJ, if I could. Demand is clearly very strong. And so the question is more about the rate and pace of manufacturing productivity and capacity expansion. That's obviously a conversation we continue to have with customers. One of the advantages for us is that we can meaningfully inflect our capacity within our existing fab footprint. We don't need to build other fabs and some of our other players in the industry are building other fabs, which obviously is a longer lead time to bring that capacity online. So we're bringing within our 4 walls. And just to give you a sense, if we think of our long-term plan, just take for Photonics, we could 10x our photonics capacity within our current 4 walls plan on a global basis. And so we have a lot of flexibility about when we do that based on the demand and the partnerships we have with customers. Christopher Muse: Very helpful. And then a follow-up on gross margins. It sounds like the story here in calendar '26 is really all about mix. And so curious, given your commentary around selective price increases and how you're going to continue to look at that into calendar '27, how are you thinking about the prioritization of drivers between kind of mix, pricing and utilization? And is there a framework for us to think about incremental gross margins from here? Sam Franklin: Yes. Look, maybe I'll start with the mix point, CJ, because it remains the single biggest driver. And in actual fact, we're still at some of the early innings of those mix shifts that we talked about from a capacity point of view. Clearly, the demand has been pulling through well during the course of 2026. But when you think about the CapEx that we indicated for this year, that sort of 15% to 20% range, my expectation is that we'll be up to the higher end of that range. One of the single biggest drivers just to support incremental investments into capacity to meet that growing demand. Now as you'd expect, the time lag between when you incur those CapEx dollars to when you install a tool, qualify it, ramp it, there's a lag to be able to then support that demand. My point being is that mix will continue to be a significant driver as we outlook within the model over the course of the next couple of years. And then really the 2 to 3 other factors I'd point to. One, yes, utilization, but somewhat impacted. If you think about where things are at from a cycle point of view, we've still got about 10 points of utilization to be able to grow into just with our installed capacity today. So that's one dynamic. And then the other is really around continued improvements from a cost and a productivity point of view. We have been focusing maniacally on our structural cost improvements. We've seen that come through in terms of our relative cash cost per mask layer. It's an area of continued focus for the teams as well. So really across that range of metrics is where we see the opportunity to continue expanding margin and get towards that 40% exit run rate that we indicated in the 2028 time frame. Then beyond that, to Tim's earlier comments, is where we expect to see continued ramps in custom silicon and activities under our IP, software, custom silicon business as well as the increased ramp from co-packaged optics and the broader silicon photonics offerings as well. So that's how we think about it over the next couple of years around some of those margin ramp drivers. Operator: This does conclude the question-and-answer session of today's program. I'd like to hand the program back to Eric Chow for any further remarks. Eric Chow: Thank you, Jonathan. Thank you, everyone, for joining today. We're very glad to see you, and we will see you at the Goldman Sachs Conference on September 8. Thank you. Operator: Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day. Before you buy stock in Globalfoundries, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Globalfoundries wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. 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Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management is pivoting from technology development to commercial execution, driven by the urgent need to solve AI interconnect bottlenecks where copper reaches practical limits. The company expanded its pipeline to five Stage 3 customers, including a new Fortune Global 500 partner focused on scale-across transceivers using coherent modulation. Strategic positioning centers on Perkinamine electro-optic polymers, designed to enhance existing silicon photonics platforms without requiring entirely new manufacturing systems. Foundry engagement has matured to four active partners, including GlobalFoundries and Tower Semiconductor, to provide customers with manufacturing flexibility and supply chain redundancy. Performance attribution for the quarter reflects a deliberate shift toward engineering prototypes and back-end-of-line processing rather than just lab-based requirements gathering. Operational growth is being managed through a 25% sequential increase in headcount, specifically targeting manufacturing scale-up, test engineering, and commercial development. Management expects the fourth quarter of 2026 to be a critical technical window as foundry-built devices are tested against specific customer requirements. A new commercial agreement is currently being negotiated with the lead customer, targeting the commencement of volume production in the second half of 2027. The company is preparing for a dedicated run with a fourth unnamed foundry partner, with a tape-out expected later in 2026. Operational readiness for the 2027 ramp includes expanding Perkinamine production in Denver through new equipment commissioning and increased batch sizes. Future revenue growth is dependent on moving programs from prototype runs to qualification and ultimately into volume manufacturing agreements. The company maintains $95.9 million in cash and marketable securities, which management believes provides sufficient flexibility for the current organic growth strategy. Research and development expenses increased to $3.9 million from $2.6 million year-over-year, reflecting intensified investment in device reliability and integration. Deferred revenue of approximately $100,000 is tied to specific milestones under an existing joint development agreement. Capital expenditures of $1.5 million were primarily directed toward production readiness and strengthening IT infrastructure to support future commercial scale. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Foundries are facing pressure from high demand, the transition to 300-millimeter wafers, and the integration of novel materials like electro-optic polymers. Lightwave Logic is currently performing back-end-of-line (BEOL) processing in-house but is working with a lead customer to outsource this for high-volume production. Management declined to provide specific dollar values, noting that agreements will include material pricing, licensing fees, and royalties. Long-term value is tied to the customers' ability to win market share with hyperscalers and AI networking companies. The transition depends on the results of ongoing foundry wafer runs, which increase customer confidence in specific manufacturing paths. Management has intentionally focused technical resources on lead customers to ensure execution on the most advanced programs. Management acknowledged fierce competition but highlighted Perkinamine's unique combination of ultra-fast bandwidth, compact size, and low power. The material is being tested across all three critical AI networking architectures: scale-up, scale-out, and scale-across.

Never miss an important update on your stock portfolio and cut through the noise. Over 7 million investors trust Simply Wall St to stay informed where it matters for FREE. GlobalFoundries (NasdaqGS:GFS) reported second quarter revenue above Wall Street estimates, supported by demand tied to AI chips. The company outlined plans to accelerate next generation silicon photonics R&D under the CHIPS Act, backed by a significant award and collaboration with the U.S. Department of Commerce. Management highlighted the role of silicon photonics in future AI and data center infrastructure as part of this U.S. focused manufacturing and research push. Consider reviewing other chip and infrastructure stocks that could also benefit from expanding AI compute demand through 56 AI infrastructure stocks GLOBALFOUNDRIES sits among the larger dedicated foundry players that supply chips to a wide range of designers rather than selling branded devices to end users. For investors tracking the stock, the share price of $49.46 comes after a mixed recent run, with the stock up 34.1% year to date and 53.4% over the past year, but down over both the past month and the past three years. We've flagged 0 risks for GLOBALFOUNDRIES. See which could impact your investment. For investors, this update strengthens the core GLOBALFOUNDRIES story as an AI infrastructure supplier rather than a branded chip vendor. Revenue of US$1,786 million, above Wall Street expectations and higher than the US$1,688 million reported a year ago, shows that AI related demand is feeding into the foundry’s top line. The US$300 million CHIPS R&D award and partnership with the U.S. Department of Commerce also fit the existing thesis around U.S. anchored manufacturing and specialty technologies like silicon photonics. The unresolved issue is profitability. Net income of US$167 million and diluted EPS of US$0.30 are lower than the US$228 million and US$0.41 reported a year earlier, so execution on margins still needs watching. From here, the key marker is whether GLOBALFOUNDRIES can move EPS back onto a firmer footing. The third quarter 2026 guidance of US$1,885 million in net revenue and diluted EPS of US$0.37, plus or minus US$0.05, gives a clear near term test of whether AI demand and CHIPS backed projects are starting to translate into more resilient earnings rather than just higher revenue. For the full picture including more risks and rewards, check out the complete GLOBALFOUNDRIES analysis. Alternatively, you can check out the community page for GLOBALFOUNDRIES to see how other investors believe this latest news will impact the company's narrative. Do you think there's more to the story for GLOBALFOUNDRIES? Head over to our Community to see what others are saying! This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include GFS. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

GlobalFoundries Inc. GFS used its second-quarter 2026 earnings call to emphasize accelerating optical networking demand, broader AI data center opportunities and improving profitability through a richer business mix. The company’s second-quarter non-IFRS earnings of 46 cents per share topped the Zacks Consensus Estimate of 44 cents. Revenues of $1.79 billion also beat the $1.76 billion estimate. The call centered on capacity, technology investments and growth beyond traditional foundry services. GlobalFoundries Inc. price-consensus-eps-surprise-chart | GlobalFoundries Inc. Quote Communications infrastructure and data center revenues rose more than 60% year over year, driven by silicon photonics and silicon germanium demand. GlobalFoundries now expects 2026 revenue growth of 50% to 60% for that end market, up from its prior high-30% outlook. The business represented about 16% of second-quarter revenues, with customer demand supporting further investment in high-margin technology corridors. The company secured seven optical networking design wins during the quarter and now expects silicon photonics revenues to more than double in 2026. Asked by a Wolfe Research analyst about expansion timing, chief executive Tim Breen said capacity can be added within existing fabs, allowing GlobalFoundries to increase output without constructing another facility. A TD Cowen analyst pressed management on the sharp outlook increase. Breen said validation across customers and hyperscalers strengthened confidence, while manufacturing productivity improvements should support higher shipments through 2027. Non-IFRS gross margin reached 29.9%, up 470 basis points year over year, as technology services, stronger manufacturing mix, cost improvements and utilization supported profitability. GlobalFoundries now expects full-year gross margin of about 30%, rather than merely reaching that level exiting 2026. During the Q&A, chief financial officer Sam Franklin told a Cantor Fitzgerald analyst that mix remains the largest margin driver. He also cited roughly 10 percentage points of available utilization, structural cost reductions and pricing increases scheduled to begin affecting revenues in 2027. Breen said the completed acquisition of Synopsys’ ARC Processor IP Solutions business deepens the company’s RISC-V, software and custom silicon capabilities. Franklin said MIPS and ARC are expected to contribute $100 million to $120 million to 2026 technology services revenue, above the prior $60 million to $100 million range. Breen also highlighted the acquired integrated voltage regulator team as a way to move power conversion closer to AI processors. He said the capability complements GlobalFoundries’ BCD, GaN and integrated inductor portfolio. Franklin said automotive revenues fell 10% year over year because of customer shipment timing, but management maintained its low-double-digit 2026 growth outlook with greater fourth-quarter weighting. Smart mobile device revenues declined 6%, and Franklin now expects a low-teens full-year decrease as handset forecasts weakened amid memory pricing and shortages. Home and industrial IoT improved 10% year over year. Franklin raised the 2026 growth outlook to 10% to 15%, citing normalized inventory, better demand signals and new production ramps. Franklin guided third-quarter revenues to $1.885 billion, plus or minus $25 million, with non-IFRS gross margin of 30.5%, plus or minus 100 basis points. He projected non-IFRS earnings of 51 cents per share, plus or minus 5 cents, and said second-half operating expenses should remain near the third-quarter level as R&D investment rises. Franklin also reaffirmed an adjusted free cash flow margin of about 10% for 2026. The board approved another 12-cent quarterly dividend, while roughly $100 million remains under the share repurchase authorization. Breen’s tone remained confident on optical networking, quantum manufacturing and physical AI, but he repeatedly tied growth to the pace of capacity additions and factory productivity. Franklin framed the next phase around mix improvement, disciplined investment and cost execution, with higher-value technologies carrying more weight in revenue and margins. GFS currently carries a Zacks Rank #3 (Hold), a less favorable designation than the Zacks Rank #1 (Strong Buy) or 2 (Buy) ratings that pair most strongly with A or B Style Scores. Its Momentum Score of A is favorable, while Value and Growth Scores of C are middle-tier readings. You can see the complete list of today’s Zacks #1 Rank stocks here. The VGM Score of B reflects a favorable combined profile across value, growth and momentum, though the overall signal remains balanced alongside the Hold rank. The Zacks Rank can change as analyst estimates are revised following the just-reported results. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report GlobalFoundries Inc. (GFS) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Interested in Cirrus Logic, Inc.? Here are five stocks we like better. Record quarterly performance: Cirrus Logic reported fiscal Q1 revenue of $460 million, up 13% year over year, with record June-quarter GAAP EPS of $1.47 and non-GAAP EPS of $1.84. Smartphone component sales drove growth, though anticipated pricing reductions pressured margins. Positive pipeline, mixed PC outlook: Demand remains strong for smartphone audio products and high-performance mixed-signal solutions, while customer interest is building for Cirrus Logic’s low-power AI-PC voice codec. However, the company lowered current-year PC expectations due to platform supply constraints, component shortages and delayed product launches. Solid guidance and balance sheet: Fiscal Q2 revenue is expected at $510 million to $570 million, with a temporary gross-margin benefit from favorable GlobalFoundries wafer pricing. Cirrus Logic ended the quarter with $1.2 billion in cash, no debt and continued share repurchases, while reserving capacity with GlobalFoundries for 2027 and 2028. Cirrus Logic's 52-Week High is More Than an Apple Story Cirrus Logic (NASDAQ:CRUS) reported record fiscal first-quarter revenue of $460 million for the June quarter, up 2% sequentially and 13% from a year earlier, driven by higher component sales into smartphones. The company posted GAAP earnings per share of $1.47 and non-GAAP earnings per share of $1.84, also a record for a June quarter. Chief Financial Officer Jeff Woolard said revenue landed at the midpoint of the company’s guidance range. He said sales growth from smartphone components was partly offset year over year by previously anticipated pricing reductions. → SpaceX’s First Earnings Report Could Decide Whether Shorts or Bulls Have Control Cirrus Logic Upgraded After Q3 Earnings Beat—More Gains Ahead? Non-GAAP gross profit totaled $242.1 million, producing a non-GAAP gross margin of 52.7%. Woolard said gross margin declined sequentially because of anticipated pricing reductions, partly offset by cost reductions. Compared with the prior year, gross margin increased slightly due primarily to favorable product mix, although higher freight and supply-chain costs partially offset that benefit. Non-GAAP operating expenses were $135.4 million, up $9.3 million sequentially and $15.9 million year over year. Woolard attributed the increases mainly to employee-related costs and continued research-and-development investment, along with higher variable compensation, product-development and professional expenses. Non-GAAP operating income was $106.7 million, or 23.2% of revenue. → 3 Drone Stocks That Should Soar After the Summer Slump 4 Reasons GlobalFoundries Could Be a Big Winner After Recent Lows For fiscal second-quarter 2027, Cirrus Logic forecast revenue of $510 million to $570 million. The company expects GAAP gross margin of 52% to 54% and non-GAAP operating expenses of $140 million to $146 million. Its full-year non-GAAP effective tax rate is projected at 16% to 18%. Woolard said the September-quarter gross margin should receive a temporary benefit from wafers bought under prior GlobalFoundries agreements at favorable prices. He said that inventory tranche is expected to largely sell through during the quarter, after which margins should normalize. → The Bitcoin Comeback May Already Be Underway—2 ETFs for Exposure Management said the company’s quarterly seasonality is tighter than in prior years. Woolard noted that the June-quarter results were significantly higher than historical averages for the period and that the company expects less variation among quarters than it has historically experienced. Management said demand remained strong for its custom-boosted amplifiers and smart codecs used in smartphones. The products have benefited from a strong product cycle at Cirrus Logic’s largest customer, and the company expects them to continue shipping across multiple future product generations. The company also highlighted its high-performance mixed-signal, or HPMS, opportunities in camera, battery and power applications. Management said it is developing the next generation of camera controllers with its largest customer and remains on schedule with a smart power IC for 3D sensing discussed on the prior earnings call. During the question-and-answer session, management said the HPMS opportunity pipeline was “as good as we can remember.” It cited a camera roadmap, power products that have been delivered to customers, and active programs spanning phone and non-phone applications. One power product is now shipping in tablets, while another is intended for an accessory product that has not yet reached the market, according to management. Woolard said Cirrus Logic continues to maintain its long-term gross-margin outlook despite industry discussion around higher supply-chain input costs. He said many costs now appearing in financial results were agreed upon previously, while the company will continue pursuing cost reductions and targeted price increases when warranted. Cirrus Logic said the PC market remains its largest near-term growth opportunity outside smartphones, though it reduced its expectations for the business for the current fiscal year. Management cited constrained supply of a key industry platform, memory and component shortages, associated pricing pressure, and delays in new PC model introductions by original equipment manufacturers. Management characterized the issues as timing-related rather than fundamental changes to the company’s competitive standing or customer engagement. Delayed new models matter because they generally carry higher content per system and, in some cases, higher expected volumes, the company said. The company reported strong customer interest in a low-power smart codec designed for AI-enabled PCs. The device can perform wake-word detection, noise reduction and audio buffering independently, which management said can reduce power use and latency relative to relying on a PC’s CPU or NPU for always-on voice functions. Cirrus Logic advanced discussions with multiple customers on designs expected to arrive next calendar year. Several customers are also expected to ship PCs later this year based on NVIDIA’s RTX Spark platform containing Cirrus Logic amplifiers and codecs, management said. In general markets, Cirrus Logic said it taped out a new family of high-performance analog front-end components for smart meters and expects to begin sampling them in the September quarter. The products are intended to provide higher-accuracy voltage and current measurements, power-quality analysis and fault detection for residential, commercial and industrial uses. Management said it is targeting a calendar 2028 market launch for the smart-meter products and is exploring related applications including energy storage, data-center DC metrology, EV charging and grid monitoring. The company did not provide a market-size estimate. Cirrus Logic ended the quarter with $1.2 billion in cash and investments and no debt. It generated $64.1 million in operating cash flow, spent $15.5 million on capital expenditures, and repurchased $34.5 million of stock during the quarter. After the quarter ended, it repurchased an additional $50.5 million of shares under a Rule 10b5-1 plan. Woolard said the company’s capital priorities remain funding organic growth opportunities first, pursuing acquisitions second and share repurchases third. He said Cirrus Logic was not considering a dividend in the near term. The company also signed a capacity reservation and wafer supply agreement with GlobalFoundries covering dedicated capacity and pricing for calendar years 2027 and 2028. Cirrus Logic, Inc, headquartered in Austin, Texas, is a fabless semiconductor company specializing in high-precision analog and mixed-signal processing solutions. The firm develops low-power, high-performance audio, voice, and power management integrated circuits, serving prominent consumer electronics OEMs. Its semiconductor devices are designed to enhance audio quality, battery life, and system integration in mobile phones, tablets, wireless headsets and other portable devices. The company's product portfolio includes digital-to-analog converters (DACs), analog-to-digital converters (ADCs), audio codecs, power management ICs, voice processors and integrated amplifiers. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Cirrus Logic Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

GlobalFoundries Inc. (GFS) came out with quarterly earnings of $0.46 per share, beating the Zacks Consensus Estimate of $0.44 per share. This compares to earnings of $0.42 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +4.55%. A quarter ago, it was expected that this company would post earnings of $0.35 per share when it actually produced earnings of $0.4, delivering a surprise of +14.29%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. GlobalFoundries, which belongs to the Zacks Electronics - Semiconductors industry, posted revenues of $1.79 billion for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 1.42%. This compares to year-ago revenues of $1.69 billion. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. GlobalFoundries shares have added about 49% since the beginning of the year versus the S&P 500's gain of 13%. While GlobalFoundries has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for GlobalFoundries was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.50 on $1.87 billion in revenues for the coming quarter and $1.89 on $7.28 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Electronics - Semiconductors is currently in the top 20% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Broadcom Inc. (AVGO), is yet to report results for the quarter ended July 2026. This chipmaker is expected to post quarterly earnings of $3.22 per share in its upcoming report, which represents a year-over-year change of +90.5%. The consensus EPS estimate for the quarter has been revised 0.3% lower over the last 30 days to the current level. Broadcom Inc.'s revenues are expected to be $29.47 billion, up 84.7% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report GlobalFoundries Inc. (GFS) : Free Stock Analysis Report Broadcom Inc. (AVGO) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Interested in GlobalFoundries Inc.? Here are five stocks we like better. Strong quarterly performance: GlobalFoundries reported Q2 fiscal 2026 revenue of $1.786 billion, up 9% sequentially and 6% year over year, while non-IFRS gross margin expanded to 29.9%. Data-center growth outlook raised: Communications infrastructure and data-center revenue jumped 62% year over year, driven by silicon photonics and silicon-germanium demand. The company now expects this segment to grow 50%–60% in 2026, with silicon photonics revenue more than doubling. Mixed end markets and positive guidance: Automotive and smart-mobile revenue weakened, but home and industrial IoT improved; GlobalFoundries raised its IoT outlook and expects Q3 revenue of $1.885 billion, with EPS of $0.51 plus or minus $0.05. Micron's $250 Billion Bet Could Reshape the AI Memory Race GlobalFoundries (NASDAQ:GFS) reported second-quarter fiscal 2026 revenue of $1.786 billion, up 9% sequentially and 6% from a year earlier, as demand for communications infrastructure and data-center applications helped drive growth and margin expansion. Chief Executive Officer Tim Breen said revenue and non-IFRS profitability measures were at or above the high end of the company’s guidance ranges. The company shipped about 625,000 300-millimeter equivalent wafers, up 8% both sequentially and year over year. → SpaceX’s First Earnings Report Could Decide Whether Shorts or Bulls Have Control Quantum Computing's Commercial Breakout Has Arrived Manufacturing services represented about 89% of quarterly revenue, while technology services—including IP, licensing, software, reticles, non-recurring engineering and other items—accounted for about 11%. Chief Financial Officer Sam Franklin said GlobalFoundries generated gross profit of $534 million, translating to a non-IFRS gross margin of about 29.9%, an increase of 470 basis points from the prior-year period. The company attributed the improvement to a richer revenue mix, manufacturing cost improvements and higher utilization. → 3 Drone Stocks That Should Soar After the Summer Slump Quantum Stocks Just Got a Lifeline—Who Benefits Most? Operating profit was $298 million, or a 16.7% operating margin, while net income totaled approximately $256 million. Diluted earnings were $0.46 per share, based on about 556 million fully diluted shares. Communications infrastructure and data center represented approximately 16% of second-quarter revenue. Revenue in that end market rose 20% sequentially and 62% year over year, fueled by demand for silicon photonics and silicon-germanium products used in optical networking. → The Bitcoin Comeback May Already Be Underway—2 ETFs for Exposure GlobalFoundries increased its full-year 2026 outlook for the segment and now expects communications infrastructure and data-center revenue to grow 50% to 60% from a year earlier, compared with its previous expectation for growth in the high-30% range. Breen said silicon photonics revenue is now expected to more than double in 2026. The company is engaged with four of the five largest optical transceiver suppliers, he said, and is expanding capacity within its existing manufacturing footprint. GlobalFoundries also said it is oversubscribed for silicon-germanium capacity through 2027 and is expanding output at its Vermont facility. During the quarter, the company secured seven optical-networking design wins across transceiver suppliers, hyperscalers and networking companies. It also taped out a SCALE-platform design win related to near-packaged or co-packaged optics and expects another tape-out in the third quarter. Automotive revenue, representing about 19% of quarterly sales, declined 13% sequentially and 10% year over year, principally due to customer shipment timing. Nevertheless, GlobalFoundries maintained its expectation for low-double-digit automotive revenue growth for the full year, with greater weighting toward the fourth quarter. Smart mobile devices accounted for about 36% of revenue. Sales rose 15% sequentially but fell 6% year over year. Franklin said handset forecasts have been reduced due to memory pricing and shortages, and GlobalFoundries now expects smart-mobile revenue to decline by a low-teens percentage rate in 2026. Home and industrial IoT, which represented about 19% of revenue, increased 30% sequentially and 10% year over year. The company raised its full-year growth outlook for the segment to 10% to 15%, from a prior expectation for mid-single-digit growth. GlobalFoundries completed its acquisition of Synopsys’ ARC Processor IP Solutions business in June and acquired the custom power team from Photeon Technologies in July. Breen said the ARC acquisition, combined with MIPS, expands the company’s processor IP, software-development tools and custom-silicon capabilities for automotive, industrial, robotics and edge-AI applications. Franklin said MIPS and the ARC IP acquisition are expected to contribute $100 million to $120 million in technology-services revenue in 2026, up from the company’s prior estimate of $60 million to $100 million. He said these businesses are R&D-intensive but carry gross margins above GlobalFoundries’ corporate targets. The company also highlighted quantum computing as a longer-term opportunity. Breen said GlobalFoundries’ Quantum Technology Solutions organization has initiated four customer-specific engagements since its launch in May. The company expects quantum-related revenue over the next one to three years to be primarily engineering work reported within technology services, with manufacturing-services revenue potentially ramping closer to the end of the decade as customer platforms reach volume production. GlobalFoundries cited an expected $375 million U.S. Department of Commerce grant for quantum manufacturing capacity and a separate letter of intent for a $300 million Commerce Department award supporting next-generation silicon-photonics development, including materials, modulators and packaging. For the third quarter, GlobalFoundries forecast revenue of $1.885 billion, plus or minus $25 million. It expects non-IFRS gross margin of approximately 30.5%, plus or minus 100 basis points, operating expenses excluding share-based compensation of $260 million, plus or minus $10 million, and diluted earnings per share of $0.51, plus or minus $0.05. The company said it implemented pricing increases across several technology corridors during the second quarter, with the adjustments expected to begin affecting revenue in 2027. It plans to continue assessing pricing through the second half of 2026. Cash flow from operations was $405 million in the second quarter, while capital expenditures net of government-grant proceeds totaled $408 million. Adjusted free cash flow was negative $3 million. GlobalFoundries ended the quarter with approximately $3.3 billion in cash equivalents and marketable securities and $1.1 billion in debt. The company paid its first quarterly cash dividend of $0.12 per share on July 14 and announced another $0.12-per-share quarterly dividend payable Oct. 9 to shareholders of record on Sept. 23. GlobalFoundries also had approximately $100 million remaining under its share-repurchase authorization. GlobalFoundries, Inc (NASDAQ: GFS) is a leading contract semiconductor manufacturer that provides wafer fabrication and related services to semiconductor companies and systems manufacturers. The company operates as a pure-play foundry, producing integrated circuits across a range of process technologies for customers in markets such as automotive, communications, consumer electronics, industrial, and aerospace. Its service offering spans process development, manufacturing, test and packaging support, and design enablement including process design kits (PDKs) and intellectual property (IP) libraries to help customers bring designs to production. GlobalFoundries focuses on a portfolio of differentiated and specialty process nodes, offering technologies for radio-frequency (RF) and wireless, analog and mixed-signal, power management, embedded non-volatile memory, and silicon-on-insulator (SOI) process families. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "GlobalFoundries Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

For the quarter ended June 2026, GlobalFoundries Inc. (GFS) reported revenue of $1.79 billion, up 5.8% over the same period last year. EPS came in at $0.46, compared to $0.42 in the year-ago quarter. The reported revenue represents a surprise of +1.42% over the Zacks Consensus Estimate of $1.76 billion. With the consensus EPS estimate being $0.44, the EPS surprise was +4.55%. While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health. As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately. Here is how GlobalFoundries performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: Wafer shipment volume: 625 versus the three-analyst average estimate of 605. Net revenue- End Markets- Smart Mobile Devices: $644 million compared to the $619.34 million average estimate based on four analysts. The reported number represents a change of -5.7% year over year. Net revenue- End Markets- Automotive: $333 million compared to the $385.69 million average estimate based on four analysts. The reported number represents a change of -9.5% year over year. Net revenue- End Markets- Home and Industrial IoT: $331 million compared to the $292.35 million average estimate based on four analysts. The reported number represents a change of +10.3% year over year. Net revenue- End Markets- Communications Infrastructure & Datacenter: $277 million versus $252.83 million estimated by four analysts on average. Compared to the year-ago quarter, this number represents a +62% change. View all Key Company Metrics for GlobalFoundries here>>> Shares of GlobalFoundries have returned -21% over the past month versus the Zacks S&P 500 composite's +3.5% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report GlobalFoundries Inc. (GFS) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

MALTA, N.Y., Aug. 05, 2026 (GLOBE NEWSWIRE) -- GLOBALFOUNDRIES Inc. (GF) (Nasdaq: GFS) today announced preliminary financial results for the second quarter ended June 30, 2026. Key Second Quarter Financial Highlights Revenue of $1.786 billion Gross margin of 28.3% and Non-IFRS gross margin(1) of 29.9% Operating margin of 9.7% and Non-IFRS operating margin(1) of 16.7% Net income of $167 million and Non-IFRS net income(1) of $256 million Diluted earnings per share of $0.30 and Non-IFRS diluted earnings per share(1) of $0.46 Non-IFRS adjusted EBITDA(1) of $587 million Ending cash, cash equivalents and marketable securities of $3.3 billion Net cash provided by operating activities of $405 million and Non-IFRS adjusted free cash flow(1) of $(3) million "GF delivered strong results in the second quarter, with revenue and Non-IFRS gross margin exceeding the high end of our guidance ranges,” said 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." Recent Business Highlights 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. Under the LOI, the Department’s CHIPS Research and Development Office is expected to award GF $300 million to advance next-generation optical materials, wafer technologies and advanced packaging, reinforcing U.S. leadership in a technology essential to AI infrastructure. In July 2026, GF completed the acquisition of Photeon Technologies' integrated voltage regulator (IVR) business, adding differentiated IVR technology, specialized engineering talent, and expanded R&D capabilities. The acquisition complements GF's existing BCD, GaN and integrated inductor technologies and expands the company's capabilities in power delivery solutions for AI data center applications. In June 2026, GF completed its previously-announced acquisition of Synopsys’ ARC Processor IP Solutions business, which together with MIPS brings together RISC-V processor IP, software tools, custom design and advanced manufacturing into a single offering. This acquisition further enables GF as a leader in RISC-V IP solutions and establishes the Company as a holistic technology partner, offering customers a software-to-silicon capability for Physical AI and beyond. In May 2026, GF launched Quantum Technology Solutions (QTS), building upon over a decade of sustained investment in cryogenic CMOS, advanced packaging and materials science. Accelerated by an expected $375 million grant by the U.S. Department of Commerce, pursuant to a letter of intent, and supported by several of the leading quantum companies in the world, GF plans to manufacture at scale the complete hardware solutions that will power real-world quantum computing of the future. Dividend PaymentOn July 14 2026, GF paid its first-ever quarterly cash dividend of $0.12 per share. In addition, the Board of Directors has approved a dividend of $0.12 per share payable on October 9, 2026 to shareholders of record as of September 23, 2026. (1) See “Reconciliation of IFRS to Non-IFRS" for a detailed reconciliation of Non-IFRS financial measures to the most directly comparable IFRS measure. See "Financial Measures (Non-IFRS)" for further discussion on these Non-IFRS measures and why we believe they are useful. (1)  See "Financial Measures (Non-IFRS)" for further discussion on this Non-IFRS measure and why we believe it is useful. (1)  See "Financial Measures (Non-IFRS)" for further discussion on this Non-IFRS measure and why we believe it is useful. GLOBALFOUNDRIES Inc. Financial Measures (Non-IFRS) In addition to the financial information presented in accordance with International Financial Reporting Standards ("IFRS"), this press release includes the following Non-IFRS financial measures: Non-IFRS gross profit, Non-IFRS operating profit, Non-IFRS operating expense, Non-IFRS net income, Non-IFRS selling, general and administrative, Non-IFRS research and development, Non-IFRS other income (expense), Non-IFRS income tax benefit (expense), Non-IFRS diluted earnings per share (“EPS”), Non-IFRS adjusted EBITDA, Non-IFRS adjusted free cash flow, Non-IFRS total capital expenditures net of proceeds from government grants, and any related margins. We define each of Non-IFRS gross profit, Non-IFRS selling, general and administrative, Non-IFRS research and development, Non-IFRS operating profit, Non-IFRS other income (expense), Non-IFRS income tax benefit (expense) and Non-IFRS net income as gross profit, selling, general and administrative, research and development, operating profit, other income (expense), income tax benefit (expense), and net income (loss), respectively, adjusted for share-based compensation, structural optimization, amortization of acquired intangibles and other acquisition related charges, impairment charges, revaluation of equity investments, restructuring charges, litigation claims, tax matters, and any associated income tax effects. We define Non-IFRS operating expense as Non-IFRS gross profit minus Non-IFRS operating profit. We define Non-IFRS diluted EPS as Non-IFRS net income divided by the diluted shares outstanding. We define Non-IFRS adjusted free cash flow as cash flow provided by (used in) operating activities less purchases of property, plant and equipment and intangible assets plus proceeds from government grants related to capital expenditures. We define Non-IFRS total capital expenditures net of proceeds from government grant as purchases of property, plant and equipment and intangible assets less proceeds of government grants. We define Non-IFRS adjusted EBITDA as net income adjusted for the impact of finance expense, finance income, income tax expense (benefit), depreciation and amortization, share-based compensation, restructuring charges, impairment charges, revaluation of equity investments, structural optimization, litigation claims and acquisition related charges. We define each of Non-IFRS gross margin, Non-IFRS operating margin, Non-IFRS net income margin, Non-IFRS adjusted free cash flow margin and Non-IFRS adjusted EBITDA margin as Non-IFRS gross profit, Non-IFRS operating profit, Non-IFRS net income, Non-IFRS adjusted free cash flow and Non-IFRS adjusted EBITDA, respectively, divided by net revenue. Any adjustments described above that are zero for a given period are excluded from the “Reconciliation of IFRS to Non-IFRS” table. See "Reconciliation of IFRS to Non-IFRS" section for a detailed reconciliation of Non-IFRS financial measures to the most directly comparable IFRS measure. We believe that in addition to our results determined in accordance with IFRS, these Non-IFRS financial measures provide useful information to both management and investors in measuring our financial performance and highlight trends in our business that may not otherwise be apparent when relying solely on IFRS measures. These Non-IFRS financial measures provide supplemental information regarding our operating performance that excludes certain gains, losses and non-cash charges that occur relatively infrequently and/or that we consider to be unrelated to our core operations. Management believes that Non-IFRS adjusted free cash flow as a Non-IFRS measure is helpful to investors as it provides insights into the nature and amount of cash the Company generates in the period. Non-IFRS financial information is presented for supplemental informational purposes only and should not be considered in isolation or as a substitute for financial information presented in accordance with IFRS. Our presentation of Non-IFRS measures should not be construed as an inference that our future results will be unaffected by unusual or nonrecurring items. Other companies in our industry may calculate these measures differently, which may limit their usefulness as comparative measures. Conference Call and Webcast Information GF will host a conference call with the financial community on Wednesday, August 5, 2026 at 8:30 a.m. U.S. Eastern Time (ET) to review the second quarter 2026 results in detail. Interested parties may join the scheduled conference call by registering at https://edge.media-server.com/mmc/p/osibvq84/. The call will be webcast and can be accessed from the GF Investor Relations website https://investors.gf.com. A replay of the call will be available on the GF Investor Relations website within 24 hours of the actual call. GF uses its Investor Relations website at https://investors.gf.com as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD. Accordingly, investors should monitor this website, in addition to following GF's press releases, Securities and Exchange Commission (SEC) filings, public conference calls and webcasts. About GlobalFoundries GlobalFoundries (GF) is a leading manufacturer of essential semiconductors, enabling AI at scale from the cloud to the physical world. Through deep partnerships with customers, GF delivers differentiated, power‑efficient and high‑performance solutions for automotive, aerospace and defense, data center, smart mobile devices, internet of things and other high‑growth markets. With global manufacturing operations across the U.S., Europe and Asia, GF is a trusted and holistic technology partner for customers around the world. GF’s talented, global team remains focused every day on security, longevity and sustainability. For more information, visit www.gf.com. © 2026 GlobalFoundries Inc. GF®, GlobalFoundries®, the GF logos and other GF marks are trademarks of GlobalFoundries Inc. or its subsidiaries. All other trademarks are the property of their respective owners. Forward-looking Statements and Third Party Data This press release includes “forward-looking statements” that reflect our current expectations and views of future events. These forward-looking statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995 and include but are not limited to, statements regarding our financial outlook, future guidance, product development, business strategy and plans, and market trends, opportunities and positioning. These statements are based on current expectations, assumptions, estimates, forecasts, projections and limited information available at the time they are made. Words such as “expect,” “anticipate,” “should,” “believe,” “hope,” “target,” “project,” “goals,” “estimate,” “potential,” “predict,” “may,” “will,” “might,” “could,” “intend,” “shall,” "outlook," "on track" and variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking statements are subject to a broad variety of risks and uncertainties, both known and unknown. Any inaccuracy in our assumptions and estimates could affect the realization of the expectations or forecasts in these forward-looking statements. For example, our business could be impacted by geopolitical conditions such as the ongoing political and trade tensions with China and the continuation of conflicts in the Middle East and Ukraine; ongoing political developments in the United States, and in particular, any political and policy-related changes that may impact our industry and the market generally, such as the imposition of trade controls, tariffs and counter-tariffs between the United States and its trade partners and new legislation; the market for our products may develop or recover more slowly than expected or than it has in the past; we may fail to achieve the full benefits of our strategic optimization efforts; our operating results may fluctuate more than expected; there may be significant fluctuations in our results of operations and cash flows related to our revenue recognition or otherwise; a network or data security incident that allows unauthorized access to our network or data or our customers’ data could result in a system disruption, loss of data or damage our reputation; we could experience interruptions or performance problems associated with our technology, including a service outage; global economic conditions could deteriorate, including due to rising inflation and any potential recession; the expected benefits of our announced partnerships may fail to materialize; and we may fail to achieve the anticipated results or benefits from funding received (including awards under the U.S. CHIPS and Science Act and New York State Green CHIPS) and our expected results and planned or further expansions and operations may not proceed as planned if funding we expect to receive is delayed or withheld for any reason. It is not possible for us to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results or outcomes to differ materially from those contained in any forward-looking statements we may make. Moreover, we operate in a competitive and rapidly changing market, and new risks may emerge from time to time. You should not rely upon forward-looking statements as predictions of future events. These statements are based on our historical performance and on our current plans, estimates and projections in light of information currently available to us, and therefore you should not place undue reliance on them. Although we believe that the expectations reflected in our statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances described in the forward-looking statements will be achieved or occur. Moreover, neither we, nor any other person, assumes responsibility for the accuracy and completeness of these statements. Recipients are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date such statements are made and should not be construed as statements of fact. Except to the extent required by federal securities laws, we undertake no obligation to update any information or any forward-looking statements as a result of new information, subsequent events or any other circumstances after the date hereof, or to reflect the occurrence of unanticipated events. For a discussion of potential risks and uncertainties, please refer to the risk factors and cautionary statements in our 2025 Annual Report on Form 20-F, current reports on Form 6-K and other reports filed with the Securities and Exchange Commission (SEC). Copies of our SEC filings are available on our Investor Relations website, investors.gf.com, or from the SEC website, www.sec.gov. For further information, please contact: Investor [email protected]