STMicroelectronics reports 26% increase in Q2 net revenues
The company’s third quarter business outlook, at the mid-point, is for net revenues of USD 3.70 billion, increasing about 6.2% sequentially and about 16.2% year-over-year.
STMicroelectronics has reported net revenues (U.S. GAAP) for the second quarter ended 27 June 2026 of USD 3.49 billion, gross margin of 34.8%, operating income of USD 187 million, and net income of USD 222 million or USD 0.24 diluted earnings per share (non-U.S. GAAP gross margin of 35.2%, non-U.S. GAAP operating income of USD 269 million, and non-U.S. GAAP net income of USD 291 million or USD 0.31 diluted earnings per share).
Net revenues represented a year-over-year increase of 26.0%, the company said.
“Q2 net revenues came above the mid-point of our business outlook range, driven by higher revenues in CECP and Automotive. Gross margin was in line with the mid-point of our business outlook range,” said Jean-Marc Chery, ST President and CEO. “During the quarter demand increased further, with strong bookings in all end markets. We saw improved visibility and signs of tight supply in several product categories. Inventory in distribution is now below our standard target.”
The company’s third quarter business outlook, at the mid-point, is for net revenues of USD 3.70 billion, increasing about 6.2% sequentially and about 16.2% year-over-year. Gross margin is expected to be about 37.0%, including about 70 basis points of unused capacity charges, Chery said.
“We expect Q4 revenues to be above USD 4 billion, this translates into a H2 vs H1 growth above our normal 15% seasonality,” Chery said. “Driven by continued strong demand in AI datacenters, we are raising our revenue ambition for datacenters. Revenues are now expected above USD 1 billion in 2026 and, assuming the current dynamic continues and with the current engagements we have, well above USD 2 billion in 2027. This confirms ST’s strong position in the evolving AI datacenters.”
Year-over-year net sales to OEMs and Distribution increased 23.3% and 33.1%, respectively. On a sequential basis, net revenues increased 12.7%, 110 basis points better than the mid-point of ST’s guidance, the company said.
Gross profit totaled USD 1.22 billion, representing a year-over-year increase of 31.1%. Gross margin of 34.8%, increased 130 basis points year-over-year, mainly due to lower unused capacity charges and better product mix. Non-U.S. GAAP gross margin was 35.2%, in line with the mid-point of ST’s guidance.
Operating income increased from an operating loss of USD 133 million in the year-ago quarter to an operating income of USD 187 million. ST’s operating margin increased on a year-over-year basis to 5.4% of net revenues, compared to negative 4.8% operating margin in the second quarter of 2025. Operating income included USD 58 million impairment, restructuring charges and other related phase-out costs for the quarter, mainly reflecting charges related to the execution of the previously announced company-wide program to reshape our manufacturing footprint and resize our global cost base and $24 million
PPA effects from the acquisition of NXP’s MEMS sensor business. Excluding these items, non-U.S. GAAP Operating income stood at USD 269 million in the second quarter (or 7.7% non-U.S. GAAP operating margin), the company said.
