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, exceeding the mid-point of guidance, driven by strong growth in communication equipment, computer and peripherals, and automotive segments.

• Gross margin was 34.8% (non-U.S. GAAP: 35.2%), in line with outlook; 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; distribution inventory dropped below target amid strong bookings and tight supply in several categories.

• Demand accelerated with book-to-bill close to two overall, especially in communication equipment and computer peripherals.

Financial highlights

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

• Q2 net income was $222 million (U.S. GAAP), compared to a net loss of $97 million a year ago; non-U.S. GAAP net income was $291 million.

• Net cash from operating activities was $502 million; net CapEx was $409 million.

• Free cash flow improved to $75 million from -$152 million in Q2 2025.

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

Outlook and guidance

• Q3 2026 net revenues expected at $3.70 billion, up 6.2% sequentially and 16.2% year-over-year; gross margin guided at 37%.

• Q4 revenues anticipated above $4 billion, with H2 vs H1 growth projected above normal 15% seasonality, driven by AI datacenters and LEO satellite communications.

• Data center revenue ambition raised to above $1 billion in 2026 and well above $2 billion in 2027.

• Net CapEx for 2026 expected at the high end of $2.0–$2.2 billion, reflecting accelerated investments in growth drivers.

• Sufficient financial resources projected for the next twelve months to meet business requirements.