MALTA, New York, Aug. 08, 2023 (GLOBE NEWSWIRE) — GlobalFoundries Inc. (GF) (Nasdaq: GFS) today announced preliminary financial results for the second quarter ended June 30, 2023.

Key Second Quarter Financial Highlights

  • Revenue of $1,845 million.
  • Gross margin of 28.8% and adjusted gross margin(1) of 29.6%.
  • Operating margin of 14.9% and adjusted operating margin(1) of 18.3%.
  • Net income of $237 million and adjusted net income(1) of $297 million.
  • Adjusted EBITDA(1) of $668 million.
  • Cash, cash equivalents and marketable securities of $3.3 billion.

“In the second quarter, GF delivered financial results at the upper end of the guidance ranges we provided in our May earnings release” said Dr. Thomas Caulfield, president and CEO of GF. “Despite the cyclical headwinds impacting our industry and continued macroeconomic uncertainty, we delivered consistent financial performance and generated $146 million of free cash flow in the quarter, as GF’s global teams diligently managed costs, while driving differentiated solutions to meet our customers’ needs, across several critical growth markets.”

Recent Business Highlights

  • GF and Lockheed Martin announced a strategic collaboration to advance U.S. semiconductor manufacturing and innovation and to increase the security, reliability and resilience of domestic supply chains for national security systems.

  • The U.S. Department of Defense accredited GF’s advanced manufacturing facility in Malta, New York, as a Category 1A Trusted Supplier with the ability to manufacture secure semiconductors for a range of critical aerospace and defense applications.

(1) Adjusted gross profit, adjusted operating profit, adjusted net income, adjusted EBITDA and related margins are Non-IFRS measures. See “Unaudited Reconciliation of IFRS to Non-IFRS” for a detailed reconciliation of Non-IFRS measures to the most directly comparable IFRS measure. See “Financial Measures (Non-IFRS)” for a discussion of why we believe these Non-IFRS measures are useful.

Unaudited Summary Quarterly Results (in millions USD, except per share amounts and wafer shipments)</u ></strong >
Year-over-year Sequential
Q2’23 Q1’23 Q2’22 Q2’23 vs Q2’22 Q2’23 vs Q1’23
Net revenue $1,845 $1,841 $1,993 $(148)(7)% $4 —%
Gross profit 532 515 538 $(6)(1)% $17 3%
Gross margin 28.8% 28.0% 27.0% +180bps +80bps
Adjusted gross profit(1) $546 $525 $559 $(13)(2)% $21 4%
Adjusted gross margin (1) 29.6% 28.5% 28.0% +160bps +110bps
Operating profit $275 $290 $297 $(22)(7)% $(15)(5)%
Operating margin 14.9% 15.8% 14.9% 0bps (90)bps
Adjusted operating profit(1) $338 $326 $350 $(12)(3)% $12 4%
Adjusted operating margin (1) 18.3% 17.7% 17.6% +70bps +60bps
Net income $237 $254 $264 $(27)(10)% $(17)(7)%
Net income margin 12.8% 13.8% 13.2% (40)bps (100)bps
Adjusted net income(1)(2) $297 $290 $317 $(20)(6)% $7 2%
Adjusted net income margin (1) 16.1% 15.8% 15.9% +20bps +30bps
Diluted earnings per share (“EPS”) $0.43 $0.46 $0.48 $(0.05)(10)% $(0.03)(7)%
Adjusted diluted earnings per share</strong >(1) $0.53 $0.52 $0.58 $(0.05)(9)% $0.01 2%
Adjusted EBITDA(1)(3) $668 $655 $784 $(116)(15)% $13 2%
Adjusted EBITDA margin (1) 36.2% 35.6% 39.3% (310)bps +60bps
Cash from operations $546 $479 $609 $(63)(10)% $67 14%
Wafer shipments (300mm equivalent) (in thousands) 573 511 630 (57)(9)% 62 12%
(1) Adjusted gross profit, adjusted operating profit, adjusted net income, adjusted diluted earnings per share, adjusted EBITDA, and related margins are all Non-IFRS measures. See “Unaudited Reconciliation of IFRS to Non-IFRS” section for a detailed reconciliation of Non-IFRS measures to the most directly comparable IFRS measure. See “Financial Measures (Non-IFRS)” for a discussion of why we believe these Non-IFRS metrics are useful.
(2) Beginning in Q4 2022, the Company revised its definition of adjusted net income to include an adjustment for restructuring charges and the associated tax impact. The change was made due to a restructuring undertaken in Q4 2022. The Company believes the revised definition provides management and investors with more useful information to evaluate the operations of our business. Adjusted net income is now defined as net income adjusted for share-based compensation expense, restructuring charges and the associated tax impact.
(3) Beginning in Q3 2022, the Company revised its definition of adjusted EBITDA to include an adjustment for finance income. The change was made due to the Company making an investment during Q2 2022 of approximately $1.0 billion in marketable securities. The Company believes the revised definition provides management and investors more useful information to evaluate the operations of our business. Adjusted EBITDA is now defined as net income, adjusted for the impact of finance expense, finance income, income tax expense, depreciation, amortization, share-based compensation expense, divestiture gains and associated expenses, restructuring charges, labor optimization initiatives and litigation settlement.
Summary of Third Quarter 2023 Outlook (unaudited in millions USD, except per share amounts)</u ></strong >(1)
IFRS Share-based compensation Non-IFRS Adjusted(2)
Net revenue$1,825 – $1,870 — —
Gross Profit$485 – $527 $15- $17 $502 – $542
Gross Margin(3)</sup > (mid-point) 27.4% 28.3%
Operating Profit$227 – $287 $40 – $50 $277 – $327
Operating Margin(3) (mid-point)13.9% 16.3%
Net Income$204 – $262 $40 – $50 $254 – $302
Net Income Margin(3)</sup > (mid-point) 12.6% 15.0%
Diluted EPS$0.37 – $0.47 $0.46 – $0.54
(1) The guidance provided above contains forward-looking statements as defined in the U.S. Private Securities Litigation Act of 1995, and is subject to the safe harbors created therein. The guidance includes management’s beliefs and assumptions and is based on information currently available. GF has not provided a reconciliation of its Second Fiscal Quarter outlook for adjusted Non-IFRS EBITDA and related margin because estimates of all of the reconciling items cannot be provided without unreasonable efforts. Certain factors that are materially significant to GF’s ability to estimate these items are out of its control and/or cannot be reasonably predicted.
(2) Adjusted gross profit, adjusted operating profit, adjusted net income, and adjusted diluted EPS are non-IFRS metrics and, for purposes of the Outlook only, are defined as gross profit, operating profit, net income, and EPS before share-based compensation expense, respectively.
(3) Adjusted margins are non-IFRS metrics and for purposes of the Outlook only, are defined as adjusted gross profit, adjusted operating profit and adjusted net income, each divided by net revenue (using the definitions of adjusted gross profit, adjusted operating profit, and adjusted net income, in footnote (2) above, as appropriate).
Unaudited Consolidated Statements of Operations
Three Months Ended
(in millions USD except for per share amounts) June 30, 2023 June 30, 2022
Net revenue $1,845 $1,993
Cost of revenue 1,313 1,455
Gross profit $532 $538
Operating expenses:
Research and development 106 120
Sales, marketing, general and administrative 132 121
Restructuring charges 19 —
Total operating expenses $257 $241
Operating profit $275 $297
Finance income (expense), net — (19)
Other income (expense) (10) 16
Income tax expense (28) (30)
Net income $237 $264
Attributable to:
Shareholders of GlobalFoundries 240 264
Non-controlling interest (3) —
Earnings per share :
Basic $0.43 $0.49
Diluted $0.43 $0.48
Shares used in earnings per share calculation:
Basic 552 535
Diluted 556 550
Unaudited Consolidated Statements of Financial Position</strong >
(in millions USD) June 30, 2023 December 31, 2022
Assets:
Cash and cash equivalents $1,832 $2,352
Receivables, prepayments and other 1,232 1,487
Marketable securities 955 622
Inventories 1,504 1,339
Current assets $5,523 $5,800
Deferred tax assets $245 $292
Property, plant, and equipment, net 10,789 10,596
Marketable securities 516 372
Other assets 742 781
Non-current assets $12,292 $12,041
Total assets $17,815 $17,841
Liabilities and equity:
Current portion of long-term debt $221 $223
Other current liabilities 2,569 3,136
Current liabilities $2,790 $3,359
Non-current portion of long-term debt $2,208 $2,288
Other liabilities 2,243 2,234
Non-current liabilities $4,451 $4,522
Shareholders’ equity:
Common stock/additional paid-in capital $23,979 $23,842
Accumulated deficit (13,527) (14,021)
Accumulated other comprehensive income 77 92
Non-controlling interest 45 47
Total liabilities and equity $17,815 $17,841