PR No: C3419C
STMicroelectronics Reports Q3 2026 Financial Results
-- Q326 net revenues at $3.76 billion
-- Gross margin at 37.3%
-- Operating income at $367 million (non-U.S. GAAP1 operating income at $429
million)
-- Business outlook at mid-point: Q426 net revenues of $4.15 billion and
gross margin of 39.0%
Geneva, October 29, 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 third quarter ended September 26, 2026. This press release also contains non-U.S. GAAP measures (see Appendix for additional information).
ST reported third quarter net revenues of $3.76 billion, gross margin of 37.3%, operating income of $367 million, and net income of $291 million or $0.31 diluted earnings per share (non-U.S. GAAP(1) operating income of $429 million, and non-U.S. GAAP(1) net income of $344 million or $0.37 diluted earnings per share).
Jean-Marc Chery, ST President & CEO, commented:
-- "Q3 net revenues came above the mid-point of our business outlook range,
driven by higher revenues in CECP and Personal Electronics. Gross margin
was above the mid-point of our business outlook range."
-- "On a year-over-year basis, Q3 net revenues increased 17.9%. Q3 gross
margin was 37.3%, operating margin was 9.8% and net income was $291
million. On a non-U.S. GAAP1 basis operating margin was 11.4% and net
income was $344 million."
-- "During the quarter, demand increased further supported by strong
bookings and improving visibility, while inventory in distribution
continued to track below our standard target. Together, these indicators
confirm the continued ongoing recovery and secular growth across the
markets we serve."
-- "Our fourth quarter business outlook, at the mid-point, is for net
revenues of $4.15 billion, increasing about 10.5% sequentially and about
24.7% year-over-year. Gross margin is expected to be about 39.0%,
including about 40 basis points of unused capacity charges."
-- "The mid-point of this outlook translates into full year 2026 revenues of
about $14.5 billion, representing a 22.8% year-over-year increase. Beyond
the cyclical recovery across our end markets, the year-over-year growth
is supported by ST's company specific growth drivers, including AI
datacenters and LEO satellite communication. Gross margin is expected to
be about 36.4%, non-U.S. GAAP1 gross margin is expected to be about 36.6%,
representing an improvement of 270 basis points versus FY25."
-- "In an environment where demand remains well above supply, we continue to
expand capacity aligned with ST's strategic roadmap. We remain focused on
improving profitability consistent with our intermediate financial model.
This is driven by our company-specific growth drivers and the execution
of our company-wide program to reshape our manufacturing footprint and
resize our global cost base."
Quarterly Financial Summary
U.S. GAAP (US$ m, except per share data) Q3 2026 Q2 2026 Q3 2025 Q/Q Y/Y -------------------------------- ------- ------- ------- ------- ------- Net Revenues $3,757 $3,487 $3,187 7.7% 17.9% -------------------------------- ------- ------- ------- ------- ------- Gross Profit $1,401 $1,215 $1,059 15.3% 32.2% -------------------------------- ------- ------- ------- ------- ------- Gross Margin 37.3% 34.8% 33.2% 250 bps 410 bps -------------------------------- ------- ------- ------- ------- ------- Operating Income $367 $187 $180 96.4% 104.5% -------------------------------- ------- ------- ------- ------- ------- Operating Margin 9.8% 5.4% 5.6% 440 bps 420 bps -------------------------------- ------- ------- ------- ------- ------- Net Income $291 $222 $237 31.2% 22.8% -------------------------------- ------- ------- ------- ------- ------- Diluted Earnings Per Share $0.31 $0.24 $0.26 29.2% 19.2% -------------------------------- ------- ------- ------- ------- ------- Non-U.S. GAAP(1) (US$ m, except per share data) Q3 2026 Q2 2026 Q3 2025 Q/Q Y/Y -------------------------------- ------- ------- ------- ------- ------- Gross Profit $1,401 $1,229 $1,059 14.0% 32.2% -------------------------------- ------- ------- ------- ------- ------- Gross Margin 37.3% 35.2% 33.2% 210 bps 410 bps -------------------------------- ------- ------- ------- ------- ------- Operating Income $429 $269 $217 59.3% 98.0% -------------------------------- ------- ------- ------- ------- ------- Operating Margin 11.4% 7.7% 6.8% 370 bps 460 bps -------------------------------- ------- ------- ------- ------- ------- Net Income $344 $291 $267 17.9% 28.7% -------------------------------- ------- ------- ------- ------- ------- Diluted Earnings Per Share $0.37 $0.31 $0.29 19.4% 27.6% -------------------------------- ------- ------- ------- ------- -------
Third Quarter 2026 Summary Review
Net Revenues by Reportable Segment(2) (US$ m) Q3 2026 Q2 2026 Q3 2025 Q/Q Y/Y --------------------------- --------- --------- --------- ------- ------- Analog products, MEMS and Sensors (AM&S) segment 1,560 1,426 1,434 9.4% 8.8% --------------------------- --------- --------- --------- ------- ------- Power and discrete products (P&D) segment 477 464 429 2.8% 11.3% --------------------------- --------- --------- --------- ------- ------- Subtotal: Analog, Power & Discrete, MEMS and Sensors (APMS) Product Group 2,037 1,890 1,863 7.7% 9.4% --------------------------- --------- --------- --------- ------- ------- Embedded Processing (EMP) segment 1,212 1,147 976 5.7% 24.1% --------------------------- --------- --------- --------- ------- ------- RF Optical Communications (RFOC) segment 504 445 345 13.4% 46.2% --------------------------- --------- --------- --------- ------- ------- Subtotal: Microcontrollers, Digital ICs and RF products (MDRF) Product Group 1,716 1,592 1,321 7.8% 29.9% --------------------------- --------- --------- --------- ------- ------- Others 4 5 3 - - --------------------------- --------- --------- --------- ------- ------- Total Net Revenues $3,757 $3,487 $3,187 7.7% 17.9% --------------------------- --------- --------- --------- ------- -------
Net revenues totaled $3.76 billion, representing a year-over-year increase of 17.9%. Year-over-year net sales to OEMs and Distribution increased 10.2% and 38.8%, respectively. On a sequential basis, net revenues increased 7.7%, 150 basis points better than the mid-point of ST's guidance.
Gross profit totaled $1.40 billion, representing a year-over-year increase of 32.2%. Gross margin of 37.3%, increased 410 basis points year-over-year, mainly due to lower unused capacity charges and better product mix.
Operating income increased from $180 million in the year-ago quarter to $367 million. ST's operating margin increased on a year-over-year basis to 9.8% of net revenues, compared to 5.6% in the third quarter of 2025. Operating income included $55 million impairment, restructuring charges and other related phase-out costs for the quarter, mainly reflecting charges related to the execution of our company-wide program to reshape our manufacturing footprint and resize our global cost base and $7 million purchase price allocation $(PPA)$ effects from the acquisition of NXP's MEMS sensor business. Excluding these items, non-U.S. GAAP(1) Operating income stood at $429 million in the third quarter (or 11.4% 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 8.8% mainly due to MEMS and, to a lesser extent, Analog
and Imaging.
-- Operating profit decreased by 0.6% to $219 million. Operating margin was
14.1% compared to 15.4%.
Power and Discrete products (P&D) segment:
-- Revenue increased 11.3%.
-- Operating results decreased from a loss of $67 million to a loss of $81
million. Operating margin was -17.1% compared to -15.6%.
In Microcontrollers, Digital ICs and RF products (MDRF) Product Group:
Embedded Processing (EMP) segment:
-- Revenue increased 24.1% mainly due to General Purpose MCU.
-- Operating profit increased by 74.2% to $280 million. Operating margin was
23.1% compared to 16.5%.
RF Optical Communications (RFOC) segment:
-- Revenue increased 46.2%.
-- Operating profit increased by 131.2% to $132 million. Operating margin
was 26.2% compared to 16.6%.
Net income and diluted Earnings Per Share increased to $291 million and $0.31 respectively, compared to $237 million and $0.26 respectively in the year-ago quarter. In the third quarter of 2026 non-U.S. GAAP(1) Net income stood at $344 million and non-U.S. GAAP(1) diluted Earnings Per Share stood at $0.37.
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