STMicroelectronics (STM) investor relations material

Executive summary

• Q2 2026 net revenues reached $3.49 billion, up 26.0% year-over-year and 12.7% sequentially, surpassing the midpoint of guidance, driven by strong growth in communication equipment, computer peripherals, and automotive segments.

• Gross margin was 34.8% (non-U.S. GAAP: 35.2%), in line with guidance; operating margin was 5.4% (non-U.S. GAAP: 7.7%); net income was $222 million (non-U.S. GAAP: $291 million).

• Free cash flow was $75 million; net cash from operating activities was $502 million; net CapEx was $409 million.

• Demand accelerated with strong bookings and a book-to-bill ratio close to 2 overall, especially in communication equipment and computer peripherals; distribution inventory fell below target.

• Integration of NXP MEMS Sensors business is strengthening the automotive sensor portfolio.

Financial highlights

• Gross profit for Q2 was $1.22 billion, up 31.1% year-over-year; gross margin increased 130 basis points year-over-year to 34.8%.

• Q2 operating income was $187 million, including $58 million in restructuring and impairment charges; non-U.S. GAAP operating income was $269 million (7.7% margin).

• Net income was $222 million, compared to a net loss of $97 million in Q2 2025; non-U.S. GAAP net income was $291 million.

• Net financial position (non-U.S. GAAP) stood at $2.01 billion, with total liquidity of $6.03 billion and total financial debt of $4.02 billion.

• Days sales of inventory at quarter-end was 126 days, down from 166 days a year ago.

Outlook and guidance

• Q3 2026 net revenues expected at $3.70 billion (±350 bps), up 6.2% sequentially and 16.2% year-over-year; gross margin forecasted at 37.0%.

• Q4 revenues projected above $4 billion, with H2 growth above normal 15% seasonality, driven by AI datacenters and satellite communication.

• Datacenter revenues projected above $1 billion in 2026 and well above $2 billion in 2027.

• Full-year 2026 non-U.S. GAAP net OpEx expected slightly above $3.8 billion.

• Personal Electronics growth expected to be below normal seasonality in Q3, moderating sequential growth.