GLOBALFOUNDRIES (GFS) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue reached $1.739 billion, at the high end of guidance, up 7% sequentially but down 6% year-over-year, with strong free cash flow and net income of $178 million.

• Gross margin was 23.8% (non-IFRS 24.7%), and non-IFRS diluted EPS was $0.41, above guidance; net income dropped 29% year-over-year but rose 15% sequentially.

• Design win momentum continued, with 90% of year-to-date wins being sole-source, including a key partnership with NXP on the 22FDX platform.

• Strategic collaborations were announced with NXP and Finwave Semiconductor to expand technology offerings and manufacturing footprint.

• The company is executing on its strategy to diversify technology, end markets, and customer base, with ongoing capacity transfers to the Malta, NY fab.

Financial highlights

• Q3 revenue of $1.739 billion, up 7% sequentially but down 6% year-over-year; gross profit was $429 million (24.7% margin), and operating profit was $236 million (13.6% margin non-IFRS, 10.6% IFRS).

• Net income for Q3 was $178 million (IFRS), with diluted EPS of $0.32; non-IFRS net income was $229 million, EPS $0.41.

• Cash flow from operations was $375 million; adjusted free cash flow was $216 million; CapEx was $162 million (9% of revenue).

• Cash, cash equivalents, and marketable securities totaled $4.3 billion at quarter end.

• Wafer shipments were 549,000, down 5% year-over-year but up 6% sequentially.

Outlook and guidance

• Q4 2024 revenue expected between $1.8 and $1.85 billion, with non-wafer revenue at ~10%.

• Gross profit guidance for Q4 is $432–481 million (25% margin midpoint); non-IFRS operating margin at 14.6%.

• Q4 net income expected between $216–281 million; non-IFRS diluted EPS $0.39–$0.51 on 555 million shares.

• Full-year 2024 CapEx guidance remains at ~$700 million; adjusted free cash flow expected to approach 3x 2023 levels.

• Management expects a threefold year-over-year increase in non-IFRS adjusted free cash flow by year-end.