GLOBALFOUNDRIES Inc. Q1 FY2026 earnings call

Tim Breen mentioned GS delivered strong first quarter with non-IFRS profitability metrics at or above guidance ranges, strong growth in automotive, comms infrastructure and data center. Discussed progress on three-pillar strategy: unique technology roadmap with leadership in optical networking, customer partnerships and commercial engagement with increased design wins, and diversified manufacturing footprint providing supply chain resilience. Sam Franklin updated financials, revenue categorization changes, first quarter financial results including revenue, gross margin, operating margin, cash flow, balance sheet metrics, and second quarter guidance

First quarter revenue was $1.634 billion, down 11% sequentially and up 3.1% year over year. Revenue from manufacturing services accounted for approximately 87% of total revenue. Revenue from technology services accounted for approximately 13% of total revenue for the first quarter. Communications infrastructure and data center represented approximately 14% of first quarter total revenue and increased 2% sequentially and 32% year-over-year. Automotive represented approximately 23% of first quarter total revenue, decreased 11% sequentially of a strong fourth quarter and increased 24% year over year, expected to deliver low double-digit growth in 2026. Smart mobile devices represented approximately 34% of first quarter total revenue, declined 15% sequentially and 5% from the prior year period, expected to slightly outperform the overall smartphone market in 2026 with a high single-digit percentage decline. Home and industrial IoT represented approximately 16% of first quarter total revenue, decreased 16% sequentially and 22% year over year, expected to be a growth year in 2026 with mid single digit percentage year over year growth beyond

Expect total GF revenue in second quarter 2026 to be $1.76 billion, plus or minus 25 million. Gross margin expected to be approximately 28.5%, plus or minus 100 basis points. Operating margin in the range of 15.7% plus or minus 180 basis points. Diluted earnings per share expected to be $0.43, plus or minus $0.05. Full year 2026 non-IFRS net capex expected to be in the range of 15% to 20% of revenue, adjusted free cash flow margin expected to be approximately 10% with skew towards second half

Discussed factors that may cause actual results to differ from forward-looking statements, including risks and uncertainties described in SEC filings, and the impact of events like the conflict in the Middle East on supply chain and incremental costs

Includes questions from Harlan Sir from J.P. Morgan, Vivek Arya from Bank of America Securities, CJ Muse from Cantor Fitzgerald, Chris Shanker from T.D. Cowan, Matthew Bryson from web Bush securities, Ross Seymour from Deutsche Bank, with corresponding answers from Tim Breen and Sam Franklin