GlobalFoundries (NASDAQ:GFS) reported fourth-quarter and full-year 2025 results that management said came in at or above the high end of its guidance ranges for revenue, gross margin, and earnings per share, highlighting mix improvements, cost discipline, and continued strength in communications infrastructure and data center demand.
Quarterly performance and profitability
Chief Executive Officer Tim Breen said the company delivered “strong results” in the fourth quarter, pointing to double-digit year-over-year growth for a fifth consecutive quarter in the communications, infrastructure, and data center end market. Breen added that disciplined execution and cost management helped GlobalFoundries expand gross margin by nearly 400 basis points year-over-year in the quarter.
Fourth-quarter gross margin was about 29%, up 300 basis points sequentially and 360 basis points year-over-year. Operating profit was $335 million for an operating margin of 18.3%. GlobalFoundries posted fourth-quarter net income of about $310 million and diluted EPS of $0.55 on a fully diluted share count of about 560 million shares.
Full-year 2025 results and end-market mix shift
For the full year, GlobalFoundries reported revenue of about $6.791 billion, up 1% year-over-year, with wafer shipments of roughly 2.3 million 300mm-equivalent units, a 10% increase from 2024. Utilization for 2025 was approximately 85%.
Franklin said gross margin for the year was 26.1%, up 80 basis points year-over-year, with operating profit of $1.066 billion and operating margin of 15.7%. Full-year net income was approximately $965 million with diluted EPS of $1.72, up 10% year-over-year.
By end market, management outlined the following dynamics:
- Smart mobile devices: 36% of Q4 revenue and 39% of full-year revenue. Q4 revenue declined 13% sequentially and 11% year-over-year; full-year revenue decreased 12% year-over-year, which Franklin attributed principally to “GF-initiated one-time pricing adjustments” with a small number of dual-sourced mobile customers. He said the company expects pricing has stabilized and expects the business to largely track the overall smartphone market in 2026.
- Automotive: 23% of Q4 revenue and 21% of full-year revenue. Q4 revenue rose 40% sequentially and 3% year-over-year, partly due to shipment timing. Full-year automotive revenue grew 17% year-over-year to a record $1.4 billion, and the company said it expects to sustain momentum in 2026.
- Home and industrial IoT: 17% of Q4 revenue and 18% of full-year revenue. Q4 revenue increased 17% sequentially but fell 15% year-over-year. Full-year revenue declined 6% year-over-year, driven by end-of-life of certain aerospace and defense products. Franklin said GlobalFoundries expects growth to return in 2026, skewed to the second half as new programs ramp.
- Communications infrastructure and data center: 12% of Q4 revenue and 11% for the full year. Q4 revenue increased 29% sequentially and 32% year-over-year. Full-year revenue grew 29% year-over-year, above the company’s prior expectation for low-20s% growth, driven by optical networking, silicon photonics, and satellite communications.
Franklin emphasized continued portfolio diversification, noting 2025 was the first full year in which more than 60% of total revenue came from markets other than smart mobile devices. He also said automotive and communications infrastructure/data center together represented a record one-third of total revenue in 2025.
Strategy updates: silicon photonics, physical AI, and geographic footprint
Breen framed GlobalFoundries’ strategy around technology differentiation, deeper customer partnerships, and a geographically diversified footprint. He said the company secured over 500 design wins in 2025, a record, and stated that over 95% were “sole-sourced” to GlobalFoundries.
On silicon photonics, Breen said GlobalFoundries acquired AMF and InfiniLink, which he expects to accelerate the roadmap and broaden the optical networking portfolio. Management said it doubled silicon photonics revenue within communications infrastructure and data center to over $200 million in 2025 and expects to nearly double it again in 2026. Breen said GlobalFoundries now believes it is on a path to reach a $1 billion run-rate for silicon photonics revenue by the end of 2028.
During Q&A, Breen described differentiation in silicon photonics as centered on process technology (including 200G-per-lane today with a roadmap to 400G and beyond), stronger enablement (PDKs, simulations, modeling, and ecosystem partnerships such as Corning for detachable fiber attach), and global manufacturing scale spanning Singapore and the U.S., including 300mm.
On “physical AI,” Breen said the MIPS acquisition expands GlobalFoundries’ capabilities through RISC-V processor IP, subsystems, and software. He also discussed the pending acquisition of Synopsys’ Processor IP Solutions business and its Arc portfolio, calling Arc complementary to MIPS. Breen said the combined offerings position the company to serve a global base of more than 300 active customers and described the longer-term opportunity as potentially an incremental billion-dollar business over time.
On geographic footprint, Breen cited a June 2025 commitment to invest $16 billion in the U.S. with plans to expand manufacturing and advanced packaging in New York and Vermont, and plans to invest EUR 1.1 billion to expand Dresden, targeting capacity of over 1 million wafers per year by the end of 2028. He also said design wins driven specifically by the company’s footprint were “worth well over $3 billion” in combined expected lifetime revenue.
Cash flow, capital allocation, and 2026 outlook
GlobalFoundries generated operating cash flow of $374 million in the fourth quarter and $1.731 billion for the year. Net capex (after proceeds from government grants) was $110 million in the quarter and about $574 million for full-year 2025. Adjusted free cash flow was $264 million in Q4 and $1.2 billion for the year, representing a 17% full-year margin, which Franklin called a company record. The company ended the quarter with about $4 billion in cash, cash equivalents, and marketable securities and $1.2 billion of total debt, plus an undrawn $1 billion revolving credit facility.
Franklin announced the board authorized a share repurchase program of up to $500 million, with repurchases intended to begin in the current quarter.
For first-quarter 2026, management guided to revenue of $1.625 billion ± $25 million, gross margin of about 27% ± 100 basis points, and diluted EPS of $0.35 ± $0.05. The company expects non-wafer revenue to be in the 10% to 12% range of revenue, reflecting contributions from IP-related acquisitions.
For full-year 2026, Franklin guided non-IFRS net capex to 15% to 20% of revenue, citing demand in “oversubscribed” corridors including silicon photonics, FDX, and SiGe, as well as establishing advanced packaging capabilities. He added that GlobalFoundries expects a full-year 2026 free cash flow margin of about 10% as the company invests while also receiving customer prepayments.
Leadership note
Breen noted that the call marked President and COO Niels Anderskouv’s final earnings call with the company, and Anderskouv thanked employees and said GlobalFoundries is “in a stronger position today than at any point in its history.”
About GlobalFoundries (NASDAQ:GFS)
GlobalFoundries, Inc (NASDAQ: GFS) is a leading contract semiconductor manufacturer that provides wafer fabrication and related services to semiconductor companies and systems manufacturers. The company operates as a pure-play foundry, producing integrated circuits across a range of process technologies for customers in markets such as automotive, communications, consumer electronics, industrial, and aerospace. Its service offering spans process development, manufacturing, test and packaging support, and design enablement including process design kits (PDKs) and intellectual property (IP) libraries to help customers bring designs to production.
GlobalFoundries focuses on a portfolio of differentiated and specialty process nodes, offering technologies for radio-frequency (RF) and wireless, analog and mixed-signal, power management, embedded non-volatile memory, and silicon-on-insulator (SOI) process families.
