GLOBALFOUNDRIES Inc.

Third-quarter revenue was $1.899 billion, up 6% sequentially and 13% year over year. Gross profit was $597 million, and gross margin was 31.4%, up 540 basis points year over year. Operating profit was $340 million, with operating margin of 17.9%; net income was about $298 million, and diluted EPS was $0.53. Cash flow from operations was $341 million; CapEx, net of government grants, was $205 million; adjusted free cash flow was $136 million; cash and marketable securities were about $3.2 billion; debt was $1.1 billion. For Q4, GF guided to revenue of $2 billion, plus or minus $25 million, gross margin of about 31.5%, plus or minus 100 basis points, and diluted EPS of $0.59, plus or minus $0.05. For 2026, it still expects smart mobile devices to decline by a low-teens percentage year over year, automotive to grow low double digits, home and industrial IoT to grow 10%-15%, technology services to be about 12% of revenue, free cash flow margin of about 10%, and net CapEx of about 15%-20% of revenue. Looking to 2027, management now expects about $4 billion of net CapEx, with about one-third supported by customer prepayments and additional offsets from tax credits and government grants.

Tim Breen framed the quarter as proof that GF’s strategy is working: the company is moving into higher-value applications, winning new customer and government partnerships, and broadening beyond smart mobile. He emphasized record growth in communications infrastructure and data center, strong traction in silicon photonics, SiGe, advanced packaging, and custom silicon, and said GF is ahead of the strategic and financial targets set at Investor Day. His tone was confident and constructive, with repeated comments that the business is becoming more diversified, more durable, and more profitable.

Sam Franklin highlighted that Q3 gross margin reached a company record at 31.4%, up 540 basis points year over year, with operating margin at 17.9% and EPS of $0.53 at the high end of guidance. He pointed to mix shift, improving utilization, and rising technology-services revenue as key margin drivers, and said blended ASPs were up about 2.5% sequentially and almost 5% year over year, the first such improvement since 2023. On capital allocation, he cited $341 million of operating cash flow, $136 million of adjusted free cash flow, $3.2 billion of cash and marketable securities, $1.1 billion of debt, an undrawn $1.5 billion revolver, a $0.12 dividend, $100 million of share repurchases, and 2027 net CapEx of about $4 billion, with roughly one-third expected to be supported by customer prepayments.

Analysts focused on how much the new partnerships and pricing improve the path to the company’s 35% and 40% gross margin targets, and management said there was no change to those goals but more confidence in reaching them. Questions also centered on 2027 capacity, especially silicon photonics, SiGe, and interposer supply; management said those areas are effectively booked through 2027, increasingly booked through 2028, and that customers are seeking capacity assurance into 2029 and beyond. Other topics included utilization, mobile inventory, and whether optical transceiver overbuilding or automotive capacity crunches are risks; management said utilization still has room to improve, mobile inventories do not look problematic at GF’s high-end exposure, and the optical transition is still early with demand remaining very strong.