GlobalFoundries Navigates Weak Outlook As Mobile Device Revenue Declines

GlobalFoundries (NASDAQ:GFS) stock dropped after it reported fiscal second-quarter 2025 results on Tuesday.

The company's quarterly revenue growth of 3% year-on-year (Y/Y) to $1.69 billion, topping the analyst consensus estimate of $1.68 billion.

The contract chipmaker's adjusted EPS of 42 cents beat the analyst consensus estimate of 35 cents. 

Also Read: GlobalFoundries Commits $16 Billion To US Chip Expansion As AI Drives Demand

Smart mobile device revenue declined 10% from a year ago to $683 million.

Communications infrastructure & data center revenue grew 11% Y/Y to $171 million.

Home and industrial IOT revenue increased 2% Y/Y to $300 million.

Automotive revenue rose 36% Y/Y to $368 million. Non-wafer revenue grew 10% Y/Y to $166 million.

The adjusted gross margin remained flat Y/Y at 25.2%. The adjusted operating margin increased by 130 bps to 13.4%. The adjusted EBITDA margin rose by 230 bps Y/Y to 15.3%. 

As of June 30, 2025, GlobalFoundries generated $431 million in operating cash flow and held $3.9 billion in cash and equivalents.

CEO Tim Breen noted that continued momentum in the Automotive and Communications Infrastructure and Datacenter segments drove double-digit year-over-year revenue growth for both businesses. While GF awaits a recovery in consumer-driven markets, Breen emphasized the company's progress in strengthening its long-term customer value through the planned acquisition of MIPS and the establishment of a China-for-China foundry partnership.

Outlook

GlobalFoundries expects third-quarter revenue of $1.650 billion-$1.700 billion (prior $1.425 billion-$1.925 billion) versus the $1.774 billion analyst consensus estimate. The company expects adjusted EPS of $0.33-$0.43 (prior $0.31-$0.41) versus the $0.41 analyst consensus estimate.

GlobalFoundries stock dropped 16% year-to-date due to the broader market downturn and a lack of significant exposure to the booming AI sector.

Price Action: GFS stock is trading lower by 7.21% to $33.57 premarket at last check Tuesday.

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