GLOBALFOUNDRIES Inc.

Second quarter revenue was $1.786 billion, up 9% sequentially and 6% year over year. Gross profit was $534 million, representing 29.9% gross margin, up 470 basis points year over year. Operating profit was $298 million with a 16.7% operating margin; diluted EPS was $0.46 per share, and net income was approximately $256 million, up about $22 million year over year. Cash flow from operations was $405 million, CapEx net of government grants was $408 million, and adjusted free cash flow was negative $3 million. For Q3 2026, GF guided to revenue of $1.885 billion plus or minus $25 million, gross margin of about 30.5% plus or minus 100 basis points, operating EPS of $0.51 plus or minus $0.05, and operating expenses of $260 million plus or minus $10 million. Full-year 2026 guidance included communications infrastructure and data center revenue growth of 50% to 60%, home and industrial IoT growth of 10% to 15%, smart mobile devices down low teens, automotive up low double digits, an adjusted free cash flow margin of about 10%, and technology services revenue of about $100 million to $120 million from the MIPS and Synopsys ARC deals.

Tim Breen framed the quarter as evidence that GF’s technology and manufacturing strategy is gaining traction, with strong execution across secular growth areas. He emphasized three strategic drivers: quantum, optical networking and power for the AI data center, and IP/software/custom silicon. His tone was confident and upbeat, but grounded in customer demand, capacity expansion inside existing fabs, and long-term road maps rather than short-term hype.

Sam Franklin said Q2 gross margin exceeded guidance at 29.9%, up nearly 500 basis points year over year, helped by richer mix, structural cost improvements, and better utilization. He noted Q2 manufacturing services accounted for about 89% of revenue, technology services about 11%, and that the ARC acquisition lifted expected full-year technology services contribution to about $100 million to $120 million. He also highlighted a strong balance sheet with about $3.3 billion in cash and marketable securities, $1.1 billion of debt, an undrawn $1 billion revolver, a new $0.12 quarterly dividend payable October 9, 2026, and roughly $100 million still under the share repurchase authorization.

Analysts focused heavily on comms/data center capacity, silicon photonics growth, gross margin trajectory, quantum commercialization, and the impact of the ARC and Photon IVR acquisitions. Management said capacity will be added within the existing fab footprint and that higher productivity should help support growth, while also confirming the $300 million U.S. government photonics award is aimed at accelerating next-generation materials, modulator technology, and packaging. On quantum, Tim Breen said the business is still early but has already led to 4 new engagements and should show up in technology services revenue this year and next; on photonics competition and customer concentration, he said demand is durable, GF has more than 40 SiPho customers, and multisourcing is not a concern at this stage.