GlobalFoundries Q4 Earnings: Revenue And EPS Beat, Margins Shrink, Revenue Outlook Disappoints Street

GlobalFoundries Inc GFS reported a fiscal fourth-quarter 2024 revenue decline of 1% year-on-year to $1.830 billion, beating the analyst consensus estimate of $1.829 billion.

The contract chipmaker’s adjusted EPS of 46 cents beat the analyst consensus estimate of 44 cents. The stock price declined after the report.

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Smart mobile device revenue declined 4% from a year ago to $738 million.

Communications infrastructure & data center revenue grew 18% Y/Y to $170 million. Home and industrial IOT revenue decreased 13% Y/Y to $355 million. Automotive revenue rose 30% Y/Y to $414 million. Non wafer revenue slid 31% Y/Y to $153 million.

Margins: The adjusted gross margin declined by 360 bps to 25.4%, and the adjusted operating margin decreased by 510 bps to 15.6% due to pricing pressure. The adjusted EBITDA margin declined by 560 bps Y/Y to 36.1%. 

As of December 31, 2024, GlobalFoundries generated $457 million in operating cash flow and held $4.2 billion in cash and equivalents.

CEO Dr. Thomas Caulfield noted adjusted guidance estimates during the quarter. He also highlighted 2024’s unique challenges for the industry, despite which it delivered over $1 billion of adjusted free cash flow. Caulfield expressed optimism over strong design win momentum across its end markets and product portfolio.

The company recorded a $935 million impairment charge related to legacy investments in production capacity at its Malta, New York facility. The company announced its plans to develop a center for advanced packaging and test capabilities at its Malta, New York facility to help meet the growing demand for U.S.-made essential chips used in AI, automotive, aerospace and defense, and communications applications.

Outlook: GlobalFoundries expects first-quarter revenue of $1.55 billion—$1.60 billion versus the $1.66 billion estimate. The company expects adjusted EPS of $0.24-$0.34 versus the $0.32 estimate.

GlobalFoundries stock lost over 32% in value in the last 12 months. In the third quarter of 2024, the company held a 5% market share in the global foundry business, backed by demand in the Internet of Things and communications infrastructure markets.

Price Action: GFS stock is down 7.23% at $35.01 premarket at the last check on Tuesday.

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Photo Courtesy Of GlobalFoundries