STMicroelectronics (STM) Q3 2026 earnings summary

Executive summary

• Q3 revenue was $3.757B, up 17.9% YoY and 7.7% QoQ; gross margin was 37.3%, reported operating income $367M and net income $291M.

• Revenue exceeded the outlook midpoint as bookings, demand and visibility improved; demand exceeded supply across multiple markets.

Financial highlights

• Gross profit rose 32.2% YoY to $1.401B; gross margin increased 410 bps YoY and 250 bps QoQ, mainly from lower unused-capacity charges and better mix.

• Reported operating income was $367M, including $55M of impairment, restructuring and phase-out costs and $7M of NXP MEMS PPA effects; non-U.S. GAAP operating income was $429M.

• Net income was $291M versus $237M YoY; reported diluted EPS was $0.31 versus $0.26, while non-U.S. GAAP net income was $344M and EPS was $0.37.

• Net cash from operations was $1.020B; net CapEx was $643M and non-U.S. GAAP free cash flow was $351M versus $130M YoY.

• Non-U.S. GAAP OpEx was $972M, or 25.9% of revenue, below the July indication; reported OpEx was $979M.

Outlook and guidance

• Q4 revenue midpoint is $4.15B, up 10.5% QoQ and 24.7% YoY, with a ±350 bps range; gross margin is 39.0%, ±200 bps, including ~40 bps of unused-capacity charges.

• FY 2026 revenue is expected at ~$14.5B, up 22.8% YoY; gross margin is expected at 36.4% reported and 36.6% non-U.S. GAAP, up 270 bps on the latter basis versus FY 2025.

• Intermediate-model gross margin target is 44%–46%; manufacturing reshaping is expected to add >400 bps structurally by end-2027/early-2028, subject to fab shutdowns and customer qualification.

• AI data-center revenue is expected at ~$1.3B in 2026 and well above $2B in 2027; silicon photonics and MCU revenue are expected to grow in 2027, with BiCMOS contribution more visible in 2028.

• Q4 outlook assumes ~$1.14 per euro, including existing hedges, and excludes potential further changes to global trade tariffs; FY 2026 non-U.S. GAAP net OpEx is expected slightly above $3.8B.