Revenue up 37% year-over-year, Record Gross Margin and Net Income
Vermont Business Magazine GlobalFoundries Inc (GF) (Nasdaq: GFS) today announced preliminary financial results for the first quarter ended March 31, 2022. GF operates a manufacturing plant that fabricates integrated circuits in Essex Junction, Vermont. GF is headquartered in Malta, NY.
Key First Quarter Financial Highlights
- Record revenue of $1.94 billion, up 37% year-over-year.
- Record gross margin of 24.2% and adjusted gross margin of 25.3%.
- Record operating margin of 11.6% and adjusted operating margin of 14.4%.
- Record net income of $178 million and adjusted net income of $232 million.
- Record adjusted EBITDA margin of 36.0%.
- Cash and cash equivalents of $3.26 billion.
“In the first quarter the GF team delivered on its commitments to customers and shareholders,” said GF CEO Dr. Thomas Caulfield. “We grew revenue 37% year-over-year, delivered record profitability and made significant progress towards our long-term financial model. Despite global supply chain challenges, the GF team continues to execute to plan, and we remain on track to deliver a strong year of growth and profitability.”
Recent Business Highlights:
- GF announced GF Fotonix™, its next-generation silicon photonics platform. GF is collaborating with industry leaders including Broadcom, Cisco Systems, Inc, Marvell and NVIDIA, along with breakthrough photonic leaders including Ayar Labs, Lightmatter, PsiQuantum, Ranovus and Xanadu, to deliver innovative, unique, feature-rich solutions to solve some of the biggest challenges facing data centers today.
- GF announced the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“HSR”), for Onsemi’s proposed acquisition of GF’s East Fishkill, NY site and fabrication facilities announced in 2019. The expiration of the HSR waiting period satisfies all of the necessary regulatory requirements and the transaction is on track to close at the end of 2022 as planned.
- GF announced the appointment of Bobby Yerramilli-Rao as an independent director of the company’s board of directors. Dr. Yerramilli-Rao is currently chief strategy officer and corporate vice president at Microsoft, where he is responsible for developing and driving growth-oriented strategies.
- As part of GF's celebration of Women's History Month and International Women's Day, GF hosted its 3rd GlobalWomen conference, celebrating the vital role of women in technology.
Unaudited Summary Quarterly Results (in millions USD, except per share amounts and wafer shipments)1
| Year-over-year | Sequential | ||||||||||||||||||||||
| Q1'21 | Q4'21 | Q1'22 | Q1'22 vs Q1'21 | Q1'22 vs Q4'21 | |||||||||||||||||||
| Net revenue | $ | 1,418 | $ | 1,847 | $ | 1,940 | $ | 522 | 37 | % | $ | 93 | 5 | % | |||||||||
| Gross profit | $ | 99 | $ | 384 | $ | 469 | $ | 370 | 374 | % | $ | 85 | 22 | % | |||||||||
| Gross margin | 7.0 | % | 20.8 | % | 24.2 | % | +1,720bps | +340bps | |||||||||||||||
| Adjusted gross profit1 | $ | 99 | $ | 397 | $ | 490 | $ | 391 | 395 | % | $ | 93 | 23 | % | |||||||||
| Adjusted gross margin | 7.0 | % | 21.5 | % | 25.3 | % | +1,830bps | +380bps | |||||||||||||||
| Operating profit (loss) | $ | (95 | ) | $ | 87 | $ | 225 | $ | 320 | 337 | % | $ | 138 | 159 | % | ||||||||
| Operating margin | (6.7)% | 4.7 | % | 11.6 | % | +1,830bps | +690bps | ||||||||||||||||
| Adjusted operating profit (loss)1 | $ | (95 | ) | $ | 142 | $ | 279 | $ | 374 | 394 | % | $ | 137 | 96 | % | ||||||||
| Adjusted operating margin | (6.7)% | 7.7 | % | 14.4 | % | +2,110bps | +670bps | ||||||||||||||||
| Net income (loss) | $ | (127 | ) | $ | 43 | $ | 178 | $ | 305 | 240 | % | $ | 135 | 314 | % | ||||||||
| Net income (loss) margin | (9.0)% | 2.3 | % | 9.2 | % | +1,820bps | +690bps | ||||||||||||||||
| Adjusted net income (loss)1 | $ | (127 | ) | $ | 98 | $ | 232 | $ | 359 | 283 | % | $ | 134 | 137 | % | ||||||||
| Adjusted net income (loss) margin | (9.0)% | 5.3 | % | 12.0 | % | +2,100bps | +670bps | ||||||||||||||||
| Diluted (loss) earnings per share ("EPS") | $ | (0.25 | ) | $ | 0.08 | $ | 0.33 | $ | 0.58 | 232 | % | $ | 0.25 | 301 | % | ||||||||
| Adjusted diluted EPS1 | $ | (0.25 | ) | $ | 0.18 | $ | 0.42 | $ | 0.67 | 268 | % | $ | 0.24 | 133 | % | ||||||||
| Adjusted EBITDA1 | $ | 294 | $ | 584 | $ | 698 | $ | 404 | 137 | % | $ | 114 | 20 | % | |||||||||
| Adjusted EBITDA margin | 20.7 | % | 31.6 | % | 36.0 | % | +1,530bps | +440bps | |||||||||||||||
| Cash from operations | $ | 148 | $ | 1,148 | $ | 845 | $ | 697 | 471 | % | $ | (303 | ) | (26)% | |||||||||
| Wafer shipments (300MM Equivalent) (in thousands) | 548 | 622 | 625 | 77 | 14 | % | 3 | 0.5 | % | ||||||||||||||
1Adjusted gross profit, adjusted operating profit (loss), adjusted net income (loss), adjusted diluted EPS, and adjusted EBITDA are adjusted non-IFRS metrics; please see the reconciliation of IFRS to adjusted non-IFRS metrics in the section "Unaudited Reconciliation of IFRS to Adjusted non-IFRS" below.
Summary of Second Quarter 2022 Outlook (unaudited, in millions USD except per share amounts)1
| IFRS | Share-based compensation | Non-IFRS Adjusted | |||||
| Net revenue | $1,955 - $1,985 | — | — | ||||
| Gross Profit | $470 - $504 | $27 - $33 | $503 - $531 | ||||
| Gross Margin (mid-point) | 24.7% | 26.2% | |||||
| Operating Profit | $206 - $251 | $54 - $66 | $272 - $305 | ||||
| Operating Margin (mid-point) | 11.6% | 14.6% | |||||
| Net Income | $169 - $211 | $54 - $66 | $235 - $265 | ||||
| Net Income Margin (mid-point) | 9.6% | 12.7% | |||||
| Diluted EPS | $0.31 - $0.38 | $0.43 - $0.48 | |||||
| Adjusted EBITDA | — | — | $705 - $745 | ||||
| Adj. EBITDA Margin (mid-point) | 36.8% | ||||||
1The guidance provided above contains forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995, and is subject to the safe harbors created therein. The guidance includes management’s beliefs and assumptions and is based on information currently available. GF has not provided a reconciliation of its Second Fiscal Quarter outlook for adjusted Non-IFRS EBITDA and related Margin because estimates of all of the reconciling items cannot be provided without unreasonable efforts. Certain factors that are materially significant to GF’s ability to estimate these items cannot be reasonably predicted.
Unaudited Consolidated Statements of Operations
| Three Months Ended | ||||||||
| (in millions USD, except for per share amounts) | March 31, 2021 | March 31, 2022 | ||||||
| Net revenue | $ | 1,418 | $ | 1,940 | ||||
| Cost of sales | 1,319 | 1,471 | ||||||
| Gross profit | 99 | 469 | ||||||
| Operating expenses: | ||||||||
| Research and development | 103 | 128 | ||||||
| Sales, marketing, general and administrative | 91 | 116 | ||||||
| Total operating expenses | 194 | 244 | ||||||
| Operating profit (loss) | (95 | ) | 225 | |||||
| Finance expense, net | (28 | ) | (28 | ) | ||||
| Other income | 7 | 10 | ||||||
| Income tax expense | (11 | ) | (29 | ) | ||||
| Net income (loss) | $ | (127 | ) | $ | 178 | |||
| Attributable to: | ||||||||
| Shareholders of GlobalFoundries | (126 | ) | $ | 179 | ||||
| Non-controlling interest | (1 | ) | (1 | ) | ||||
| Earnings (loss) per share: | ||||||||
| Basic | $ | (0.25 | ) | $ | 0.34 | |||
| Diluted | $ | (0.25 | ) | $ | 0.33 | |||
| Shares used in earnings (loss) per share calculation | ||||||||
| Basic | 500 | 532 | ||||||
| Diluted | 500 | 549 | ||||||
Unaudited Consolidated Statements of Financial Position
| (in millions USD) | December 31, 20211 | March 31, 20222 | ||||||
| Assets: | ||||||||
| Cash and cash equivalents | $ | 2,939 | $ | 3,264 | ||||
| Receivables, prepayments and other | 1,231 | 1,210 | ||||||
| Inventories | 1,121 | 1,185 | ||||||
| Current assets | 5,291 | 5,659 | ||||||
| Deferred tax assets | 353 | 337 | ||||||
| Property, plant, and equipment, net | 8,713 | 9,173 | ||||||
| Other assets | 671 | 733 | ||||||
| Noncurrent assets | 9,737 | 10,243 | ||||||
| Total assets | $ | 15,028 | $ | 15,902 | ||||
| Liabilities and equity: | ||||||||
| Current portion of long-term debt | $ | 297 | $ | 281 | ||||
| Other current liabilities | 2,866 | 3,039 | ||||||
| Current liabilities | 3,163 | 3,320 | ||||||
| Noncurrent portion of long-term debt | 1,716 | 1,830 | ||||||
| Other liabilities | 2,116 | 2,413 | ||||||
| Noncurrent liabilities | 3,832 | 4,243 | ||||||
| Shareholders' equity: | ||||||||
| Common stock/additional paid-in capital | 23,498 | 23,551 | ||||||
| Accumulated deficit | (15,469 | ) | (15,290 | ) | ||||
| Accumulated other comprehensive income (loss) | (54 | ) | 21 | |||||
| Non-controlling interest | 58 | 57 | ||||||
| Total liabilities and equity | $ | 15,028 | $ | 15,902 | ||||
1Audited annual statement of consolidated financial position
2Unaudited interim statement of consolidated financial position
Unaudited Consolidated Statements of Cash Flows
| Three Months Ended | ||||||||
| (in millions USD) | March 31, 2021 | March 31, 2022 | ||||||
| Cash flows from operating activities: | ||||||||
| Net income (loss) | $ | (127 | ) | $ | 178 | |||
| Depreciation and amortization | 377 | 408 | ||||||
| Finance expense, net | 8 | 9 | ||||||
| Deferred income taxes | 15 | 19 | ||||||
| Other non-cash operating activities | (30 | ) | 42 | |||||
| Net change in working capital | (95 | ) | 189 | |||||
| Net cash provided by operating activities | 148 | 845 | ||||||
| Cash flows from investing activities: | ||||||||
| Purchases of property, plant, equipment, and intangible assets | (302 | ) | (643 | ) | ||||
| Other investing activities | 45 | 4 | ||||||
| Net cash used in investing activities | (257 | ) | (639 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Repayments of shareholder loan | (126 | ) | — | |||||
| Proceeds (repayment) of debt, net | (75 | ) | 107 | |||||
| Other financing activities | 39 | 11 | ||||||
| Net cash (used in) provided by financing activities | (162 | ) | 118 | |||||
| Effect of exchange rate changes | (2 | ) | 1 | |||||
| Net change in cash and cash equivalents | (273 | ) | 325 | |||||
| Cash and cash equivalents at the beginning of the period | 908 | 2,939 | ||||||
| Cash and cash equivalents at the end of the period | $ | 635 | $ | 3,264 | ||||
Unaudited Reconciliation of IFRS to Adjusted Non-IFRS
| Three Months Ended | ||||||||||
| (in millions USD) | March 31, 2021 | December 31, 2021 | March 31, 2022 | |||||||
| Gross profit | $ | 99 | $ | 384 | $ | 469 | ||||
| Share based compensation | — | $ | 13 | $ | 21 | |||||
| Adjusted gross profit | $ | 99 | $ | 397 | $ | 490 | ||||
| Operating profit (loss) | $ | (95 | ) | $ | 87 | $ | 225 | |||
| Share based compensation | — | $ | 55 | $ | 54 | |||||
| Adjusted operating profit (loss) | $ | (95 | ) | $ | 142 | $ | 279 | |||
| Net income (loss) | $ | (127 | ) | $ | 43 | $ | 178 | |||
| Share based compensation | — | $ | 55 | $ | 54 | |||||
| Adjusted net income (loss) | $ | (127 | ) | $ | 98 | $ | 232 | |||
| Diluted EPS | $ | (0.25 | ) | $ | 0.08 | $ | 0.33 | |||
| Share based compensation | $ | — | $ | 0.10 | $ | 0.09 | ||||
| Adjusted diluted EPS | $ | (0.25 | ) | $ | 0.18 | $ | 0.42 | |||
Unaudited Reconciliation of Net Income (Loss) to Adjusted EBITDA
| Three Months Ended | ||||||||||
| (in millions USD) | March 31, 2021 | December 31, 2021 | March 31, 2022 | |||||||
| Net income (loss) for the period | $ | (127 | ) | $ | 43 | $ | 178 | |||
| Adjustments: | ||||||||||
| Depreciation and amortization | $ | 377 | $ | 419 | $ | 408 | ||||
| Finance expense | $ | 29 | $ | 28 | $ | 29 | ||||
| Income tax expense (benefit) | $ | 10 | $ | 26 | $ | 29 | ||||
| Share based compensation | — | $ | 55 | $ | 54 | |||||
| Restructuring and corporate severance programs | $ | 5 | $ | 5 | — | |||||
| (Gains)/Losses on transactions, legal settlements and transaction expenses | — | $ | 8 | — | ||||||
| Adjusted EBITDA | $ | 294 | $ | 584 | $ | 698 | ||||
Adjusted Financial Measures (Non-IFRS)
In addition to the financial information presented in accordance with IFRS, this press release includes the following adjusted non-IFRS metrics: adjusted gross profit (loss), adjusted operating profit (loss), adjusted net income (loss), adjusted diluted EPS and adjusted EBITDA. We define adjusted gross profit (loss) as gross profit (loss) adjusted for share-based compensation expense. We define adjusted operating profit (loss) as profit (loss) from operations adjusted for share-based compensation expense. We define adjusted net income (loss) as net income (loss) adjusted for share-based compensation expense. We define adjusted diluted EPS as adjusted net income (loss) divided by the dilutive shares. We define adjusted EBITDA as net income (loss), excluding the impact of finance expense, income tax expense, depreciation, amortization, share-based compensation expense, transaction gains and associated expenses, restructuring charges and litigation settlements.
We believe that in addition to our results determined in accordance with IFRS, these adjusted non-IFRS measures provide useful information to both management and investors in measuring our financial performance and highlight trends in our business that may not otherwise be apparent when relying solely on IFRS measures. These adjusted non-IFRS financial measures provide supplemental information regarding our operating performance that excludes certain gains, losses and non-cash charges that occur relatively infrequently and/or that we consider to be unrelated to our core operations. For further information regarding these non-IFRS measures, please refer to "Unaudited Reconciliation of IFRS to Adjusted Non-IFRS" table above.
Adjusted non-IFRS financial information is presented for supplemental informational purposes only and should not be considered in isolation or as a substitute for financial information presented in accordance with IFRS. Our presentation of adjusted non-IFRS measures should not be construed as an inference that our future results will be unaffected by unusual or nonrecurring items. Other companies in our industry may calculate these measures differently, which may limit their usefulness as a comparative measure.
Conference Call and Webcast Information
GF will host a conference call with the financial community on Tuesday, May 10, 2022 at 4:30 p.m. U.S. Eastern Time (ET) to review the First Quarter 2022 results in detail. Interested parties may join the scheduled conference call by dialing the following numbers:
Within the U.S.: 1-877-788-0411
Outside the U.S.: 1-615-489-8522
Participant Passcode: 8265345
The call will be webcast and can be accessed from the GF Investor Relations website https://investors.gf.com. A replay of the call will be available on the GF Investor Relations website within 24 hours of the actual call.
About GlobalFoundries
GlobalFoundries® (GF®) is one of the world’s leading semiconductor manufacturers. GF is redefining innovation and semiconductor manufacturing by developing and delivering feature-rich process technology solutions that provide leadership performance in pervasive high growth markets. GF offers a unique mix of design, development and fabrication services. With a talented and diverse workforce and an at-scale manufacturing footprint spanning the U.S., Europe and Asia, GF is a trusted technology source to its worldwide customers. For more information, visit www.gf.com.
MALTA, N.Y., May 10, 2022 (GLOBE NEWSWIRE) -- GlobalFoundries Inc