GLOBALFOUNDRIES (GFS) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached $1.632 billion, exceeding the midpoint of guidance, with strong operational execution and customer engagement.

• Net income for Q2 was $155 million, with Non-IFRS net income at $211 million and diluted EPS at $0.28 (Non-IFRS: $0.38), reflecting solid profitability.

• Sequential revenue growth was achieved, confirming Q1 as the low point for 2024, with continued improvement expected in Q3.

• Recent acquisitions and collaborations, including Tagore Technology's GaN business and a partnership with BAE Systems, support strategic growth and technology leadership.

• Automotive and smart mobile devices segments showed strong performance, while IoT remained challenged by elevated inventories.

Financial highlights

• Q2 revenue was $1.632 billion, up 5% sequentially but down 12% year-over-year due to lower shipments and utilization.

• Non-IFRS gross margin was 25.2%, above guidance midpoint, with $66 million in customer volume adjustment revenue.

• Non-IFRS diluted EPS was $0.38, above the high end of guidance; Non-IFRS Adjusted EBITDA was $610 million, margin 37.4%.

• Net income for Q2 was $155 million, down $86 million year-over-year.

• Adjusted free cash flow exceeded $500 million in H1, with $302 million in Q2.

• CapEx for Q2 was $101 million (6% of revenue); cash and equivalents stood at $4.145 billion.

Outlook and guidance

• Q3 2024 revenue expected between $1.7–$1.75 billion, with non-wafer revenue at ~11%.

• Non-IFRS gross margin guidance for Q3 is 24.0%; operating margin 11.9%; net income margin 10.7%.

• Q3 net income expected between $155–$214 million; EPS $0.28–$0.38.

• CapEx for full year 2024 maintained at ~$700 million; utilization to remain in low-to-mid 70s%.

• Sequential revenue growth expected each quarter in 2024, with automotive as a key growth driver.