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Introduction & Market Context
GlobalFoundries Inc. (NASDAQ:GFS) presented its second quarter 2025 financial results on August 5, 2025, revealing solid performance that exceeded analyst expectations despite facing headwinds in its mobile segment. The semiconductor manufacturer reported revenue of $1.69 billion, slightly above the anticipated $1.68 billion, and non-IFRS earnings per share of $0.42, surpassing the forecasted $0.36.
Despite these positive results, GlobalFoundries’ stock fell 9.25% during the trading session, closing at $33.62, down from the previous close of $36.18. This decline places the stock closer to its 52-week low of $29.77 than its high of $47.69, reflecting broader market concerns about the semiconductor sector despite the company’s solid operational performance.
Quarterly Performance Highlights
GlobalFoundries delivered year-over-year growth in the second quarter, with revenue increasing 3% to $1.69 billion. The company maintained a non-IFRS gross margin of 25.2%, flat compared to the same period last year, while non-IFRS earnings per share grew 11% to $0.42.
As shown in the following financial results summary:
The company highlighted several achievements during the quarter, including results that topped non-IFRS guided midpoints, with adjusted EPS exceeding the high end of the range. GlobalFoundries also generated a robust adjusted free cash flow margin of approximately 16% in the quarter.
The following slide details these key highlights:
Wafer shipments reached 581,000 300mm equivalent wafers in Q2, representing a 12% increase year-over-year and a 7% increase quarter-over-quarter, demonstrating the company’s growing production capacity and demand.
End Market Performance
GlobalFoundries’ performance varied significantly across its end markets, with automotive showing exceptional strength while smart mobile devices declined. The company’s revenue mix is gradually shifting toward higher-growth segments, particularly automotive.
The following chart provides a detailed breakdown of revenue by end market:
The automotive segment delivered outstanding results, with revenue of $368 million, up 36% year-over-year and 19% quarter-over-quarter. This growth was driven by increased design win traction across GlobalFoundries’ portfolio of diversified applications, with the company securing designs with 25 unique customers in the second quarter alone.
As illustrated in the automotive segment performance:
Conversely, the Smart Mobile Devices segment, which remains GlobalFoundries’ largest revenue contributor at 40% of total revenue, experienced a 10% year-over-year decline to $683 million. Despite this overall decline, the segment showed sequential improvement with a 17% increase from the previous quarter.
The following slide details the Smart Mobile Devices segment performance:
The Communications Infrastructure and Datacenter segment grew 11% year-over-year to $171 million, while Home and Industrial IoT increased 2% to $300 million. These results reflect GlobalFoundries’ ongoing diversification efforts across multiple end markets.
The changing revenue mix is clearly visible in the following year-over-year comparison:
Strategic Initiatives
GlobalFoundries announced several strategic initiatives aimed at strengthening its market position and expanding its capabilities. The company secured Continental as a foundry partner, supporting Continental’s newly established Advanced Electronics & Semiconductor Solutions organization.
As detailed in the following partnership announcement:
The company also announced the acquisition of MIPS, which will expand GlobalFoundries’ portfolio with cutting-edge RISC-V processor IP and software tools for real-time computing in autonomous mobility, industrial automation, data center, and AI applications.
The following slide outlines the strategic rationale for the MIPS acquisition:
Additionally, GlobalFoundries is establishing a China-for-China footprint through a definitive agreement with a local Chinese foundry. This strategy aims to ensure that GlobalFoundries customers benefit from the combination of the company’s automotive-grade process technologies with reliable domestic supply in China.
The China strategy is illustrated in the following slide:
Financial Details and Outlook
GlobalFoundries maintains a strong financial position with $3.9 billion in cash, cash equivalents, and marketable securities at the end of Q2 2025. The company generated $762 million in cash flow from operations year-to-date through Q2, with capital expenditures of $325 million (10% of revenue) and adjusted free cash flow of $442 million (14% of revenue).
For the third quarter of 2025, GlobalFoundries provided the following guidance:
The company expects Q3 2025 revenue of $1.675 billion (±$25 million) and non-IFRS gross margin of 25.5% (±100bps). Non-IFRS operating margin is projected at 14.2% (±180bps), with non-IFRS diluted EPS of $0.38 (±$0.05).
GlobalFoundries remains on track to generate over $1 billion of adjusted free cash flow in 2025, demonstrating its ability to maintain profitability while investing in strategic growth initiatives. Despite the positive operational performance and financial outlook, investors appear concerned about broader semiconductor industry challenges, as reflected in the stock’s decline following the earnings release.
The comprehensive financial summary below provides additional context on the company’s performance:
As GlobalFoundries continues to execute its strategy of diversifying revenue streams and expanding into high-growth markets like automotive and communications infrastructure, the company’s ability to navigate the shifting semiconductor landscape will be crucial for long-term success.
Full presentation:
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