Press Release: STMicroelectronics Reports Q2 2026 Financial Results
PR No: C3403C
STMicroelectronics Reports Q2 2026 Financial Results
-- Q226 net revenues at $3.49 billion -- Gross margin at 34.8% (non-U.S. GAAP1 gross margin at 35.2%) -- Operating income at $187 million (non-U.S. GAAP1 operating income at $269 million) -- Business outlook at mid-point: Q326 net revenues of $3.70 billion and gross margin of 37.0%
Geneva, July 23, 2026 -- STMicroelectronics N.V. ("ST") (NYSE: STM), a global semiconductor leader serving customers across the spectrum of electronics applications, reported U.S. GAAP financial results for the second quarter ended June 27, 2026. This press release also contains non-U.S. GAAP measures (see Appendix for additional information).
ST reported second quarter net revenues of $3.49 billion, gross margin of 34.8%, operating income of $187 million, and net income of $222 million or $0.24 diluted earnings per share (non-U.S. GAAP(1) gross margin of 35.2%, non-U.S. GAAP(1) operating income of $269 million, and non-U.S. GAAP(1) net income of $291 million or $0.31 diluted earnings per share).
Jean-Marc Chery, ST President & CEO, commented:
-- "Q2 net revenues came above the mid-point of our business outlook range, driven by higher revenues in CECP and Automotive. Gross margin was in line with the mid-point of our business outlook range." -- "On a year-over-year basis, Q2 net revenues increased 26.0%. Q2 gross margin was 34.8%, operating margin was 5.4% and net income was $222 million. On a non-U.S. GAAP1 basis gross margin was 35.2%, operating margin was 7.7% and net income was $291 million." -- "During the quarter demand increased further, with strong bookings in all end markets. We saw improved visibility and signs of tight supply in several product categories. Inventory in distribution is now below our standard target." -- "Our third quarter business outlook, at the mid-point, is for net revenues of $3.70 billion, increasing about 6.2% sequentially and about 16.2% year-over-year. Gross margin is expected to be about 37.0%, including about 70 basis points of unused capacity charges." -- "We anticipate a revenue growth acceleration in Q4, mainly driven by our engaged customer programs in AI datacenters and LEO satellite communication. We expect Q4 revenues to be above $4 billion, this translates into a H2 vs H1 growth above our normal 15% seasonality." -- "Driven by continued strong demand in AI datacenters, we are raising our revenue ambition for datacenters. Revenues are now expected above $1 billion in 2026 and, assuming the current dynamic continues and with the current engagements we have, well above $2 billion in 2027. This confirms ST's strong position in the evolving AI datacenters."
Quarterly Financial Summary
U.S. GAAP (US$ m, except per share data) Q2 2026 Q1 2026 Q2 2025 Q/Q Y/Y -------------------------------- ------- ------- ------- ------ -------- Net Revenues $3,487 $3,095 $2,766 12.7% 26.0% -------------------------------- ------- ------- ------- ------ -------- Gross Profit $1,215 $1,045 $926 16.3% 31.1% -------------------------------- ------- ------- ------- ------ -------- Gross Margin 34.8% 33.8% 33.5% 100bps 130bps -------------------------------- ------- ------- ------- ------ -------- Operating Income (Loss) $187 $70 $(133) 165.5% - -------------------------------- ------- ------- ------- ------ -------- Operating Margin 5.4% 2.3% -4.8% 310bps 1,020bps -------------------------------- ------- ------- ------- ------ -------- Net Income (Loss) $222 $37 $(97) 496.8% - -------------------------------- ------- ------- ------- ------ -------- Diluted Earnings Per Share $0.24 $0.04 $(0.11) 500.0% - -------------------------------- ------- ------- ------- ------ -------- Non-U.S. GAAP(1) (US$ m, except per share data) Q2 2026 Q1 2026 Q2 2025 Q/Q Y/Y -------------------------------- ------- ------- ------- ------ -------- Gross Profit $1,229 $1,056 $926 16.4% 32.7% -------------------------------- ------- ------- ------- ------ -------- Gross Margin 35.2% 34.1% 33.5% 110bps 170bps -------------------------------- ------- ------- ------- ------ -------- Operating Income $269 $171 $57 57.3% 371.9% -------------------------------- ------- ------- ------- ------ -------- Operating Margin 7.7% 5.5% 2.1% 220bps 560bps -------------------------------- ------- ------- ------- ------ -------- Net Income $291 $122 $57 138.5% 410.5% -------------------------------- ------- ------- ------- ------ -------- Diluted Earnings Per Share $0.31 $0.13 $0.06 138.5% 416.7% -------------------------------- ------- ------- ------- ------ --------
Second Quarter 2026 Summary Review
Net Revenues by Reportable Segment(2) Q2 Q1 Q2 (US$ m) 2026 2026 2025 Q/Q Y/Y -------------------------------------------- -------- -------- -------- ------- ------- Analog products, MEMS and Sensors (AM&S) segment 1,426 1,318 1,133 8.2% 26.0% -------------------------------------------- -------- -------- -------- ------- ------- Power and discrete products (P&D) segment 464 389 447 19.2% 3.7% -------------------------------------------- -------- -------- -------- ------- ------- Subtotal: Analog, Power & Discrete, MEMS and Sensors (APMS) Product Group 1,890 1,707 1,580 10.7% 19.6% -------------------------------------------- -------- -------- -------- ------- ------- Embedded Processing (EMP) segment 1,147 975 847 17.7% 35.5% -------------------------------------------- -------- -------- -------- ------- ------- RF Optical Communications (RFOC) segment 445 409 336 8.6% 32.0% -------------------------------------------- -------- -------- -------- ------- ------- Subtotal: Microcontrollers, Digital ICs and RF products (MDRF) Product Group 1,592 1,384 1,183 15.0% 34.5% -------------------------------------------- -------- -------- -------- ------- ------- Others 5 4 3 - - -------------------------------------------- -------- -------- -------- ------- ------- Total Net Revenues $3,487 $3,095 $2,766 12.7% 26.0% -------------------------------------------- -------- -------- -------- ------- -------
Net revenues totaled $3.49 billion, representing a year-over-year increase of 26.0%. Year-over-year net sales to OEMs and Distribution increased 23.3% and 33.1%, respectively. On a sequential basis, net revenues increased 12.7%, 110 basis points better than the mid-point of ST's guidance.
Gross profit totaled $1.22 billion, representing a year-over-year increase of 31.1%. Gross margin of 34.8%, increased 130 basis points year-over-year, mainly due to lower unused capacity charges and better product mix. Non-U.S. GAAP(1) gross margin was 35.2%, in line with the mid-point of ST's guidance.
Operating income increased from an operating loss of $133 million in the year-ago quarter to an operating income of $187 million. ST's operating margin increased on a year-over-year basis to 5.4% of net revenues, compared to negative 4.8% operating margin in the second quarter of 2025. Operating income included $58 million impairment, restructuring charges and other related phase-out costs for the quarter, mainly reflecting charges related to the execution of the previously announced company-wide program to reshape our manufacturing footprint and resize our global cost base and $24 million PPA effects from the acquisition of NXP's MEMS sensor business. Excluding these items, non-U.S. GAAP(1) Operating income stood at $269 million in the second quarter (or 7.7% non-U.S. GAAP(1) operating margin).
By reportable segment, compared with the year-ago quarter:
In Analog, Power & Discrete, MEMS and Sensors (APMS) Product Group:
Analog products, MEMS and Sensors (AM&S)(2) segment:
-- Revenue increased 26.0% mainly due to Imaging and MEMS and, to a lesser extent, Analog. -- Operating profit increased by 69.2% to $144 million. Operating margin was 10.1% compared to 7.5%.
Power and Discrete products (P&D) segment:
-- Revenue increased 3.7%. -- Operating result decreased from a loss of $56 million to a loss of $99 million. Operating margin was -21.4% compared to -12.5%.
In Microcontrollers, Digital ICs and RF products (MDRF) Product Group:
Embedded Processing (EMP) segment:
-- Revenue increased 35.5% mainly due to General Purpose MCU and, to a lesser extent, Custom Processing and Connected Security. -- Operating profit increased by 97.8% to $226 million. Operating margin was 19.7% compared to 13.5%.
RF Optical Communications (RFOC) segment:
-- Revenue increased 32.0%. -- Operating profit increased by 56.3% to $94 million. Operating margin was 21.2% compared to 17.9%.
Net income and diluted Earnings Per Share increased to $222 million and $0.24 respectively, compared to a net loss of $97 million and a negative $0.11 respectively in the year-ago quarter. In the second quarter of 2026 non-U.S. GAAP(1) Net income stood at $291 million and non-U.S. GAAP(1) diluted Earnings Per Share stood at $0.31.
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Press Release: STMicroelectronics Reports Q2 2026 -2-
Cash Flow and Balance Sheet Highlights
Trailing 12 Months
------------- -------- ---------- -------- -------------------------------
Q2 Q2 Q2 TTM
(US$ m) 2026 Q1 2026 2025 2026 Q2 2025 Change
------------- -------- ---------- -------- -------- --------- ----------
Net cash
from
operating
activities 502 534 354 2,259 2,332 -3.1%
------------- -------- ---------- -------- -------- --------- ----------
Free cash
flow
(non-U.S.
GAAP(1) ) 75 (723)(2) (152) (261) 142 -283.8%
------------- -------- ---------- -------- -------- --------- ----------
Net cash from operating activities was $502 million in the second quarter, after approximately $44 million outflow related to restructuring, compared to $354 million in the year-ago quarter.
Net Capex (non-U.S. GAAP(1) ), was $409 million in the second quarter compared to $465 million in the year-ago quarter.
Free cash flow (non-U.S. GAAP(1) ) was positive at $75 million in the second quarter compared to negative $152 million in the year-ago quarter.
Inventory at the end of the second quarter was $3.19 billion, compared to $3.17 billion in the previous quarter and $3.27 billion in the year-ago quarter. Days sales of inventory at quarter-end was 126 days, compared to 140 days for the previous quarter and 166 days for the year-ago quarter.
In the second quarter, ST paid cash dividends to its stockholders totaling $75 million.
ST's net financial position (non-U.S. GAAP(3) ) remained strong at $2.01 billion as of June 27, 2026, compared to $2.00 billion as of March 28, 2026, and reflected total liquidity of $6.03 billion and total financial debt of $4.02 billion. Adjusted net financial position (non-U.S. GAAP(1) ), taking into consideration the effect on total liquidity of advances from capital grants for which capital expenditures have not been incurred yet, stood at $1.70 billion as of June 27, 2026.
During the quarter, ST issued a new $1.5 billion dual-tranche senior unsecured convertible bond (Tranche A and Tranche B for $750 million each) due 2031 and 2033 and announced the early redemption of its $750 million convertible bond due in 2027.
Corporate developments
On May 27, 2026, STMicroelectronics held its 2026 Annual General Meeting of Shareholders in Amsterdam, the Netherlands. All proposed resolutions were approved by the Shareholders.
Business Outlook
ST's guidance, at the mid-point, for the 2026 third quarter is:
-- Net revenues are expected to be $3.70 billion, an increase of 6.2% sequentially, plus or minus 350 basis points. -- Gross margin of 37.0%, plus or minus 200 basis points. -- This outlook is based on an assumed effective currency exchange rate of approximately $1.14 = EUR1.00 for the 2026 third quarter and includes the impact of existing hedging contracts. -- The third quarter will close on September 26, 2026.
This business outlook does not include any impact of potential further changes to global trade tariffs compared to the current situation.
Conference Call and Webcast Information
ST will conduct a conference call with analysts, investors and reporters to discuss its second quarter 2026 financial results and current business outlook today at 9:30 a.m. Central European Time (CET) / 3:30 a.m. U.S. Eastern Time (ET). A live webcast (listen-only mode) of the conference call will be accessible at ST's website, https://investors.st.com, and will be available for replay until August 7, 2026.
Use of Supplemental Non-U.S. GAAP Financial Information
This press release contains supplemental non-U.S. GAAP financial information.
Readers are cautioned that these measures are unaudited and not prepared in accordance with U.S. GAAP and should not be considered as a substitute for U.S. GAAP financial measures. In addition, such non-U.S. GAAP financial measures may not be comparable to similarly titled information from other companies. To compensate for these limitations, the supplemental non-U.S. GAAP financial information should not be read in isolation, but only in conjunction with ST's consolidated financial statements prepared in accordance with U.S. GAAP.
See the Appendix of this press release for a reconciliation of ST's non-U.S. GAAP financial measures to their corresponding U.S. GAAP financial measures.
Forward-looking Information
Some of the statements contained in this release that are not historical facts are statements of future expectations and other forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933 or Section 21E of the Securities Exchange Act of 1934, each as amended) that are based on management's current views and assumptions, and are conditioned upon and also involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those anticipated by such statements due to, among other factors:
-- changes in global trade policies, including the continuation, adoption and expansion of tariffs and trade barriers and sanctions, that are affecting and could further affect the macro-economic environment and are adversely impacting and could further adversely impact the demand for our products; -- uncertain macro-economic and industry trends (such as inflation and fluctuations in supply chains), which are impacting and may further impact production capacity and end-market demand for our products; -- customer demand that differs from projections which may require us to undertake transformation measures that may not be successful in realizing the expected benefits in full or at all; -- the ability to design, manufacture and sell innovative products in a rapidly changing technological environment; -- changes in economic, social, public health, labor, political, or infrastructure conditions in the locations where we, our customers, or our suppliers operate, including as a result of macro-economic or regional events, geopolitical and military conflicts, social unrest, labor actions, or terrorist activities; -- unanticipated events or circumstances, which may impact our ability to execute our plans and/or meet the objectives of our research and development and manufacturing programs, which benefit from public funding; -- financial difficulties with any of our major distributors or significant curtailment of purchases by key customers; -- the loading, product mix, and manufacturing performance of our production facilities and/or our required volume to fulfill capacity reserved with suppliers or third-party manufacturing providers; -- availability and costs of equipment, raw materials, utilities, third-party manufacturing services and technology, or other supplies required by our operations (including increasing costs resulting from inflation); -- the functionalities and performance of our IT systems, which are subject to cybersecurity threats and which support our critical operational activities including manufacturing, finance and sales, and any breaches of our IT systems or those of our customers, suppliers, partners and providers of third-party licensed technology; -- theft, loss, or misuse of personal data about our employees, customers, or other third parties, and breaches of data privacy legislation; -- the impact of intellectual property claims by our competitors or other third parties, and our ability to obtain required licenses on reasonable terms and conditions; -- changes in our overall tax position as a result of changes in tax rules, new or revised legislation, the outcome of tax audits or changes in international tax treaties which may impact our results of operations as well as our ability to accurately estimate tax credits, benefits, deductions and provisions and to realize deferred tax assets; -- variations in the foreign exchange markets and, more particularly, the U.S. dollar exchange rate as compared to the Euro and the other major currencies we use for our operations; -- the outcome of ongoing litigation as well as the impact of any new litigation to which we may become a defendant; -- product liability or warranty claims, claims based on epidemic or delivery failure, or other claims relating to our products, or recalls by our customers for products containing our parts; -- natural events such as severe weather, earthquakes, tsunamis, volcano eruptions or other acts of nature, the effects of climate change, health risks and epidemics or pandemics in locations where we, our customers or our suppliers operate; -- increased regulation and initiatives in our industry, including those concerning climate change and sustainability matters and our goal to become carbon neutral in all direct and indirect emissions (scopes 1 and 2), product transportation, business travel, and employee commuting emissions (our scope 3 focus), and to achieve our 100% renewable electricity sourcing goal by the end of 2027; -- epidemics or pandemics, which may negatively impact the global economy in a significant manner for an extended period of time, and could also materially adversely affect our business and operating results; -- industry changes resulting from vertical and horizontal consolidation among our suppliers, competitors, and customers; -- the ability to successfully ramp up new programs that could be impacted by factors beyond our control, including the availability of critical
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