GLOBALFOUNDRIES (GFS) Q3 2026 earnings summary

Executive summary

• Q3 revenue was $1.899B, up 13% YoY and 6% QoQ; record non-IFRS gross margin reached 31.4%, up 540 bps YoY.

• Revenue and non-IFRS profitability were above guidance midpoints, with growth led by AI-related applications, optical networking, automotive, and IoT.

• More than two-thirds of revenue came from outside smart mobile devices, a record; silicon photonics is expected to reach a $1B annualized run rate exiting 2027, a year ahead of prior expectations.

Financial highlights

• Non-IFRS gross profit was $597M and operating profit was $340M, up 36% and 31% YoY, respectively; non-IFRS operating margin was 17.9%.

• IFRS operating profit was $230M; IFRS net loss was $270M versus net income of $249M a year earlier, while non-IFRS net income was $298M versus $232M.

• Non-IFRS diluted EPS was $0.53, up 29% YoY; adjusted EBITDA was $647M with a 34.1% margin.

• Cash from operations was $341M and adjusted free cash flow was $136M, with a 7.2% margin; Q3 free cash flow benefited from ~$150M of customer prepayments and government grants.

Outlook and guidance

• Q4 revenue guidance is $2.000B ± $25M; non-IFRS gross margin 31.5% ± 100 bps, operating margin 19.8% ± 170 bps, and diluted EPS $0.59 ± $0.05.

• Q4 IFRS gross margin is guided to 30.7% ± 100 bps, IFRS operating margin to 16.4% ± 170 bps, and IFRS diluted EPS to $0.47 ± $0.05; fully diluted share count is ~575M.

• For 2026, communications infrastructure and data center revenue is expected to grow 60%-70%, automotive low double digits, and home and industrial IoT 10%-15%; smart mobile devices are expected to decline low teens YoY.

• 2026 adjusted free cash flow margin is expected at ~10%, with net CapEx at 15%-20% of revenue; non-IFRS effective tax rate remains expected in the mid-teens.

• 2027 net CapEx is expected at ~$4B, roughly one-third supported by customer prepayments; gross margin targets remain 35% exiting 2027 and 40% exiting 2028.