Key First Quarter Financial Highlights
- Revenue of
$1,841 million . - Gross margin of 28.0% and adjusted gross margin(1) of 28.5%.
- Operating margin of 15.8% and adjusted operating margin(1) of 17.7%.
- Net income of
$254 million and adjusted net income(1) of$290 million . - Adjusted EBITDA(1) of
$655 million . - Cash, cash equivalents and marketable securities of
$3,232 million .
"In the first quarter, amidst a continued uncertain macroeconomic and cyclical backdrop, GF delivered solid results that are consistent with the guidance we provided in our February earnings release," said Dr.
Recent Business Highlights
- GF announced a
Strategic University Partnership agreement withGeorgia Tech. This agreement spans a broad range of research activities, including leadership capabilities in advanced packaging, silicon photonics and workforce development initiatives. GF and Amkor Technology, Inc. formed a strategic partnership to establish the first at-scale back-end facility inEurope . GF transferred its 300mm Bump and Sort lines from itsDresden site inGermany to Amkor’s operations inPorto, Portugal .- The
European Commission approved the award of direct grant funding to GF and STMicroelectronics to support the construction and operation of a new 300mm manufacturing facility inCrolles, France . The funds are being made available under the European Chips Act and the project will enable the development of a large-scale manufacturing site inEurope for high performance chips, to address current and future key European markets from automotive to industrial, 5G/6G roll-out, security, defense, and space industries.
(1) Adjusted gross profit, adjusted operating income, adjusted net income, adjusted EBITDA and related margins are Non-IFRS measures. See “Adjusted Financial Measures (Non-IFRS)” for a detailed reconciliation of Non-IFRS measures to the most directly comparable IFRS measure and “Non-IFRS Financial Measures” 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)
Year-over-year | Sequential | |||||||||||||||||||||||
Q1'23 | Q4'22 | Q1'22 | Q1'23 vs Q1'22 | Q1'23 vs Q4'22 | ||||||||||||||||||||
Net revenue | $ | 1,841 | $ | 2,101 | $ | 1,940 | $ | (99 | ) | (5 | )% | $ | (260 | ) | (12 | )% | ||||||||
Gross profit | 515 | 622 | 469 | $ | 46 | 10 | % | $ | (107 | ) | (17 | )% | ||||||||||||
Gross margin | 28.0 | % | 29.6 | % | 24.2 | % | +380bps | (160)bps | ||||||||||||||||
Adjusted gross profit(1) | $ | 525 | $ | 633 | $ | 490 | $ | 35 | 7 | % | $ | (108 | ) | (17 | )% | |||||||||
Adjusted gross margin (1) | 28.5 | % | 30.1 | % | 25.3 | % | +320bps | (160)bps | ||||||||||||||||
Operating profit | $ | 290 | $ | 288 | $ | 225 | $ | 65 | 29 | % | $ | 2 | 1 | % | ||||||||||
Operating margin | 15.8 | % | 13.7 | % | 11.6 | % | +420bps | +210bps | ||||||||||||||||
Adjusted operating profit(1) | $ | 326 | $ | 425 | $ | 279 | $ | 47 | 17 | % | $ | (99 | ) | (23 | )% | |||||||||
Adjusted operating margin (1) | 17.7 | % | 20.2 | % | 14.4 | % | +330bps | (250)bps | ||||||||||||||||
Net income(2) | $ | 254 | $ | 668 | $ | 178 | $ | 76 | 43 | % | $ | (414 | ) | (62 | )% | |||||||||
Net income margin | 13.8 | % | 31.8 | % | 9.2 | % | +460bps | (1,800)bps | ||||||||||||||||
Adjusted net income(1)(2)(3) | $ | 290 | $ | 800 | $ | 232 | $ | 58 | 25 | % | $ | (510 | ) | (64 | )% | |||||||||
Adjusted net income margin (1) | 15.8 | % | 38.1 | % | 12.0 | % | +380bps | (2,230)bps | ||||||||||||||||
Diluted earnings per share ("EPS") | $ | 0.46 | $ | 1.21 | $ | 0.33 | $ | 0.13 | 39 | % | $ | (0.75 | ) | (62 | )% | |||||||||
Adjusted diluted earnings per share(1) | $ | 0.52 | $ | 1.44 | $ | 0.42 | $ | 0.10 | 24 | % | $ | (0.92 | ) | (64 | )% | |||||||||
Adjusted EBITDA(1)(4) | $ | 655 | $ | 821 | $ | 698 | $ | (43 | ) | (6 | )% | $ | (166 | ) | (20 | )% | ||||||||
Adjusted EBITDA margin (1) | 35.6 | % | 39.1 | % | 36.0 | % | (40)bps | (350)bps | ||||||||||||||||
Cash from operations | $ | 479 | $ | 491 | $ | 845 | $ | (366 | ) | (43 | $ | (12 | ) | (2 | )% | |||||||||
Wafer shipments (300mm equivalent) (in thousands) | 511 | 580 | 625 | (114 | ) | (18 | )% | (69 | ) | (12 | )% | |||||||||||||
(1) Adjusted gross profit, adjusted operating profit, adjusted net income, adjusted diluted earnings per share, adjusted EBITDA, and related margins are adjusted Non-IFRS metrics; see the reconciliation of IFRS to adjusted Non-IFRS metrics in the section "Unaudited Reconciliation of IFRS to Adjusted Non-IFRS" below.
(2) Includes the gain on sale of our EFK business in
(3) Beginning in Q4 2022, the Company has 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.
(4) Beginning in Q3 2022, the Company has 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
Summary of Second Quarter 2023 Outlook (unaudited in millions USD, except per share amounts)(1)
IFRS | Share-based compensation | Non-IFRS Adjusted | |||
Net revenue | — | — | |||
Gross Profit | |||||
Gross Margin (mid-point) | 27.1% | 28.0% | |||
Operating Profit | |||||
Operating Margin (mid-point) | 14.3% | 16.8% | |||
Net Income | |||||
Net Income Margin (mid-point) | 12.7% | 15.2% | |||
Diluted EPS | |||||
(1) The guidance provided above contains forward-looking statements as defined in the
Unaudited Consolidated Statements of Operations
Three Months Ended | |||||||
(in millions USD except for per share amounts) | |||||||
Net revenue | $ | 1,841 | $ | 1,940 | |||
Cost of revenue | 1,326 | 1,471 | |||||
Gross profit | $ | 515 | $ | 469 | |||
Operating expenses: | |||||||
Research and development | 109 | 128 | |||||
Sales, marketing, general and administrative | 111 | 116 | |||||
Restructuring charges | 5 | — | |||||
Total operating expenses | $ | 225 | $ | 244 | |||
Operating profit | $ | 290 | $ | 225 | |||
Finance expense, net | 1 | (28 | ) | ||||
Other income (expense) | (14 | ) | 10 | ||||
Income tax expense | (23 | ) | (29 | ) | |||
Net income | $ | 254 | $ | 178 | |||
Attributable to: | |||||||
Shareholders of | 254 | 179 | |||||
Non-controlling interest | — | (1 | ) | ||||
Earnings per share : | |||||||
Basic | $ | 0.46 | $ | 0.34 | |||
Diluted | $ | 0.46 | $ | 0.33 | |||
Shares used in earnings per share calculation: | |||||||
Basic | 550 | 532 | |||||
Diluted | 555 | 549 | |||||
Unaudited Consolidated Statements of Financial Position
(in millions USD) | ||||||||
Assets: | ||||||||
Cash and cash equivalents | $ | 2,256 | $ | 2,352 | ||||
Receivables, prepayments and other | 1,296 | 1,487 | ||||||
Marketable securities | 653 | 622 | ||||||
Inventories | 1,423 | 1,339 | ||||||
Current assets | $ | 5,628 | $ | 5,800 | ||||
Deferred tax assets | $ | 271 | $ | 292 | ||||
Property, plant, and equipment, net | 10,829 | 10,596 | ||||||
Marketable securities | 323 | 372 | ||||||
Other assets | 764 | 781 | ||||||
Non-current assets | $ | 12,187 | $ | 12,041 | ||||
Total assets | $ | 17,815 | $ | 17,841 | ||||
Liabilities and equity: | ||||||||
Current portion of long-term debt | $ | 205 | $ | 223 | ||||
Other current liabilities | 2,690 | 3,136 | ||||||
Current liabilities | $ | 2,895 | $ | 3,359 | ||||
Non-current portion of long-term debt | $ | 2,310 | $ | 2,288 | ||||
Other liabilities | 2,303 | 2,234 | ||||||
Non-current liabilities | $ | 4,613 | $ | 4,522 | ||||
Shareholders' equity: | ||||||||
Common stock/additional paid-in capital | $ | 23,927 | $ | 23,842 | ||||
Accumulated deficit | (13,767 | ) | (14,021 | ) | ||||
Accumulated other comprehensive income | 100 | 92 | ||||||
Non-controlling interest | 47 | 47 | ||||||
Total liabilities and equity | $ | 17,815 | $ | 17,841 | ||||
Unaudited Consolidated Statements of Cash Flows
Three Months Ended | |||||||
(in millions USD) | |||||||
Cash flows from operating activities: | |||||||
Net income | $ | 254 | $ | 178 | |||
Depreciation and amortization | 343 | 408 | |||||
Finance expense, net and other(1) | 7 | 9 | |||||
Deferred income taxes | 22 | 19 | |||||
Other non-cash operating activities | 27 | 42 | |||||
Net change in working capital | (174 | ) | 189 | ||||
Net cash provided by operating activities | $ | 479 | $ | 845 | |||
Cash flows from investing activities: | |||||||
Purchases of property, plant, equipment, and intangible assets | $ | (853 | ) | $ | (643 | ) | |
Other investing activities | 267 | 4 | |||||
Net cash used in investing activities | $ | (586 | ) | $ | (639 | ) | |
Cash flows from financing activities: | |||||||
Proceeds from issuance of equity instruments and other | $ | 37 | $ | — | |||
Proceeds (repayment) of debt, net | (30 | ) | 107 | ||||
Other financing activities | 3 | 11 | |||||
Net cash provided by financing activities | $ | 10 | $ | 118 | |||
Effect of exchange rate changes | 1 | 1 | |||||
Net change in cash and cash equivalents | $ | (96 | ) | $ | 325 | ||
Cash and cash equivalents at the beginning of the period | 2,352 | 2,939 | |||||
Cash and cash equivalents at the end of the period | $ | 2,256 | $ | 3,264 | |||
(1) Finance expense, net and other has been adjusted to include interest and taxes paid that were previously included in "Other non-cash operating activities." Prior period amounts have been adjusted accordingly. | |||||||
Unaudited Reconciliation of IFRS to Adjusted Non-IFRS
Three Months Ended | ||||||||||||
(in millions USD) | ||||||||||||
Gross profit | $ | 515 | $ | 622 | $ | 469 | ||||||
Gross profit margin | 28.0 | % | 29.6 | % | 24.2 | % | ||||||
Share based compensation | $ | 10 | $ | 11 | $ | 21 | ||||||
Adjusted gross profit (1) | $ | 525 | $ | 633 | $ | 490 | ||||||
Adjusted gross margin(1) | 28.5 | % | 30.1 | % | 25.3 | % | ||||||
Operating profit | $ | 290 | $ | 288 | $ | 225 | ||||||
Operating profit margin | 15.8 | % | 13.7 | % | 11.6 | % | ||||||
Share based compensation | $ | 31 | $ | 43 | $ | 54 | ||||||
Restructuring charges(2) | $ | 5 | 94 | — | ||||||||
Adjusted operating profit(1) | $ | 326 | $ | 425 | $ | 279 | ||||||
Adjusted operating profit margin(1) | 17.7 | % | 20.2 | % | 14.4 | % | ||||||
Net income(3) | $ | 254 | $ | 668 | $ | 178 | ||||||
Net income margin | 13.8 | % | 31.8 | % | 9.2 | % | ||||||
Share based compensation | $ | 31 | $ | 43 | $ | 54 | ||||||
Restructuring charges(2) | $ | 5 | 94 | — | ||||||||
Income tax effect(4) | $ | — | $ | (5 | ) | $ | — | |||||
Adjusted net income (1)(5) | $ | 290 | $ | 800 | $ | 232 | ||||||
Adjusted net income margin(1) | 15.8 | % | 38.1 | % | 12.0 | % | ||||||
Diluted earnings per share | $ | 0.46 | $ | 1.21 | $ | 0.33 | ||||||
Share based compensation | $ | 0.05 | $ | 0.07 | $ | 0.09 | ||||||
Restructuring charges(2) | $ | 0.01 | 0.17 | — | ||||||||
Income tax effect | $ | — | (0.01 | ) | — | |||||||
Adjusted diluted earnings per share(1) | $ | 0.52 | $ | 1.44 | $ | 0.42 | ||||||
(1) Adjusted gross profit, adjusted operating income, adjusted net income, adjusted EBITDA, adjusted diluted earnings per share and related margins are Non-IFRS measures. See “Adjusted Financial Measures (Non-IFRS)” for a detailed reconciliation of Non-IFRS measures to the most directly comparable IFRS measure and “Non-IFRS Financial Measures” for a discussion of why we believe these Non-IFRS measures are useful.
(2) Includes
(3) Includes the gain on sale of our EFK business in
(4) Relates to restructuring charges since Q4 2022.
(5) Reflects change to adjusted net income definition discussed in more detail elsewhere in this release.
Unaudited Reconciliation of Net Income to Adjusted EBITDA
Three Months Ended | ||||||||||||
(in millions USD) | ||||||||||||
Net income for the period | $ | 254 | $ | 668 | $ | 178 | ||||||
Depreciation and amortization | 343 | 409 | 408 | |||||||||
Finance expense | 31 | 28 | 29 | |||||||||
Finance income | (32 | ) | (26 | ) | NA | |||||||
Income tax expense | 23 | 8 | 29 | |||||||||
Share based compensation | 31 | 43 | 54 | |||||||||
Restructuring charges(1) | 5 | 94 | — | |||||||||
Gains on transactions, legal settlements and transaction expenses(2) | — | (403 | ) | — | ||||||||
Adjusted EBITDA(3)(4) | $ | 655 | $ | 821 | $ | 698 | ||||||
Adjusted EBITDA margin(4) | 35.6 | % | 39.1 | % | 36.0 | % | ||||||
(1) Includes
(2) Activity for the three months ended
(3) Reflects change to adjusted EBITDA definition discussed in more detail elsewhere in this release.
(4) Adjusted EBITDA and related margin are Non-IFRS measures. See “Adjusted Financial Measures (Non-IFRS)” for a detailed reconciliation of Non-IFRS measures to the most directly comparable IFRS measure and “Non-IFRS Financial Measures” for a discussion of why we believe these Non-IFRS measures are useful.
Adjusted Financial Measures (Non-IFRS)
In addition to the financial information presented in accordance with IFRS, this press release includes the following adjusted Non-IFRS metrics: adjusted gross profit, adjusted operating profit, adjusted net income, adjusted diluted earnings per share and adjusted EBITDA. We define adjusted gross profit as gross profit adjusted for share-based compensation expense. We define adjusted operating profit as profit from operations adjusted for share-based compensation expense and restructuring charges. We define adjusted net income as net income adjusted for share-based compensation expense, restructuring charges and the associated tax impact. We define adjusted diluted EPS as adjusted net income divided by the dilutive shares. We define adjusted EBITDA 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 settlements.
We believe that in addition to our results determined in accordance with IFRS, these adjusted Non-IFRS measures provide useful information to both management and investors in measuring our financial performance and highlight trends in our business that may not otherwise be apparent when relying solely on IFRS measures. These adjusted Non-IFRS financial measures provide supplemental information regarding our operating performance that excludes certain gains, losses and non-cash charges that occur relatively infrequently and/or that we consider to be unrelated to our core operations. For further information regarding these Non-IFRS measures, please refer to "Unaudited Reconciliation of IFRS to Adjusted Non-IFRS" table above.
Adjusted Non-IFRS financial information is presented for supplemental informational purposes only and should not be considered in isolation or as a substitute for financial information presented in accordance with IFRS. Our presentation of adjusted Non-IFRS measures should not be construed as an inference that our future results will be unaffected by unusual or nonrecurring items. Other companies in our industry may calculate these measures differently, which may limit their usefulness as a comparative measure.
Conference Call and Webcast Information
GF will host a conference call with the financial community on
The call will be webcast and can be accessed from the GF Investor Relations website https://investors.gf.com. A replay of the call will be available on the GF Investor Relations website within 24 hours of the actual call.
About
GlobalFoundries® (GF®) is one of the world’s leading semiconductor manufacturers. GF is redefining innovation and semiconductor manufacturing by developing and delivering feature-rich process technology solutions that provide leadership performance in pervasive high growth markets. GF offers a unique mix of design, development and fabrication services. With a talented and diverse workforce and an at-scale manufacturing footprint spanning the
Forward-looking Statements
This press release includes “forward-looking statements” that reflect our current expectations and views of future events. These forward-looking statements are made under the "safe harbor" provisions of the
Although we believe that the expectations reflected in our statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances described in the forward-looking statements will be achieved or occur. Moreover, neither we, nor any other person, assumes responsibility for the accuracy and completeness of these statements. Recipients are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date such statements are made and should not be construed as statements of fact. Except to the extent required by federal securities laws, we undertake no obligation to update any information or any forward-looking statements as a result of new information, subsequent events, or any other circumstances after the date hereof, or to reflect the occurrence of unanticipated events. For a discussion of potential risks and uncertainties, please refer to the risk factors and cautionary statements in our 2022 Annual Report on Form 20-F, current reports on Form 6-K and other reports filed with the
For further information, please contact:
Investor Relations
ir@gf.com
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