STMicroelectronics Reports 26% Revenue Growth in Q2, Beats Sequential Guidance
The Netherlands-based chipmaker posted $3.5 billion in quarterly revenue and turned to operating profit as restructuring costs declined sharply from year-ago levels.
Revenue Exceeds Forecast Amid Automotive, Industrial Strength
STMicroelectronics N.V. reported second-quarter net revenues of $3,487 million, up 26.0% year-over-year and 12.7% sequentially, according to its 6-K filing dated July 30, 2026. The sequential increase came in "110 basis points better than the mid-point of our business outlook range, driven by higher revenues in CECP and Automotive" (6-K filing, 2026-07-30).
All four reportable segments posted double-digit year-over-year growth. Embedded Processing led with a 35.5% increase, followed by RF Optical Communications at 32.0%, Analog products, MEMS and Sensors at 26.0%, and Power and discrete products at 3.7% (6-K filing, 2026-07-30).
Gross Margin Expands on Reduced Idle Capacity
Gross margin reached 34.8% in the quarter, up 100 basis points sequentially and 130 basis points year-over-year, "mainly due to lower unused capacity charges and better product mix" (6-K filing, 2026-07-30). Excluding $14 million in purchase price allocation effects from the MEMS sensor business acquisition, non-U.S. GAAP gross margin stood at 35.2%, in line with the company's guidance midpoint.
The Netherlands-based semiconductor manufacturer, which operates "state-of-the-art manufacturing facilities" and serves "more than 200,000 customers," returned to operating profitability with operating income of $187 million, or 5.4% of revenues (6-K filing, 2026-07-30). This compares to an operating loss of $133 million in the year-ago quarter.
Restructuring Charges Decline Sharply
Impairment and restructuring charges totaled $58 million in the second quarter, down significantly from $190 million in Q2 2025, when the company launched "a company-wide program aimed to reshape our manufacturing footprint by accelerating the wafer fab capacity to 300mm silicon (Agrate, Italy and Crolles, France) and 200mm silicon carbide (Italy and Singapore)" (6-K filing, 2026-07-30).
The current quarter's restructuring costs included $26 million for labor-related expenses and $10 million for non-labor costs, plus $22 million in phase-out costs (6-K filing, 2026-07-30).
Cash Flow Turns Positive
Free cash flow—a non-U.S. GAAP measure—was positive at $75 million in the second quarter, compared to negative $723 million in Q1 2026 and negative $152 million in the year-ago period (6-K filing, 2026-07-30). Net cash from operating activities amounted to $502 million, while net capital expenditures totaled $409 million.
Operating expenses rose to $995 million from $949 million sequentially and $934 million year-over-year, "mainly due to calendar impact, net of vacation and cost of labor" on a sequential basis (6-K filing, 2026-07-30).
Guidance and Manufacturing Ramp
For the third quarter ending September 26, STMicroelectronics expects revenue to increase approximately 6.7% sequentially, plus or minus 350 basis points, with U.S. GAAP gross margin of approximately 37.0%, plus or minus 200 basis points (6-K filing, 2026-07-30). The outlook assumes an effective currency exchange rate of $1.14 per euro.
The company noted that "in the second quarter of 2026, we started our manufacturing activities and entered into the ramp-up phase of the new 200mm silicon carbide manufacturing in Catania, Italy and the new 200mm silicon carbide device manufacturing Sanan ST joint venture in Chongqing, China" (6-K filing, 2026-07-30).
MarginX data shows the company has a cash dividend of $0.09 scheduled for September 21, 2026.
This article was generated by MarginX from the 6-K filing on 2026-07-30. It is not investment advice.