Globalfoundries 2025 Q1 Earnings Strong Performance with Net Income Up 57%

Globalfoundries reported its fiscal 2025 Q1 earnings on May 6th, 2025. The company delivered financial results that exceeded expectations, with net income rising 57% year-over-year to $211 million and EPS reaching $0.38, surpassing analyst forecasts. Looking ahead, Globalfoundries has adjusted its guidance for the second quarter, projecting revenue between $1.425 billion and $1.925 billion, with EPS expected to be in the range of $0.31 to $0.41, indicating stable demand despite industry challenges.

Revenue

Globalfoundries reported revenue of $1.58 billion in Q1 2025, reflecting a 2.3% increase from the previous year. The wafer segment contributed $1.40 billion, while non-wafer revenue amounted to $188 million.

Earnings/Net Income

Globalfoundries's EPS rose 58.3% to $0.38 in 2025 Q1 from $0.24 in 2024 Q1, marking continued earnings growth. Meanwhile, the company's profitability strengthened with net income of $211 million in 2025 Q1, marking 57.5% growth from $134 million in 2024 Q1. The EPS and net income figures indicate a positive earnings momentum.

Price Action

The stock price of Globalfoundries has dropped 3.03% during the latest trading day, has edged up 0.75% during the most recent full trading week, and has edged up 1.57% month-to-date.

Post-Earnings Price Action Review

The strategy of purchasing Globalfoundries shares following a quarter with declining revenue and holding for 30 days has historically delivered a 16.78% return over the past five years, outperforming a benchmark return of 15.51%. The strategy demonstrated a maximum drawdown of -14.42%, a Sharpe ratio of 0.29, and volatility of 15.77%. It effectively balanced risk while providing conservative returns, making it appealing for investors seeking stability in a volatile market. The strategy's track record indicates a well-managed risk approach, aligning with investors who prioritize steady growth over high volatility.

CEO Commentary

Thomas Caulfield, CEO of GlobalFoundries, expressed optimism about the company's performance, noting that "our dedicated employees helped to deliver solid financial results at the high end of our guidance ranges." He highlighted growth in automotive and IoT markets, emphasizing the company's track record of generating meaningful free cash flow and focusing on "free cash flow generation as an important objective." Caulfield acknowledged challenges from geopolitical tensions and trade uncertainties but reinforced that "the secular tailwinds supporting long-term demand for essential chip technologies remain firmly intact." He concluded that GlobalFoundries is well positioned for future growth through its strategic investments and diversified global footprint.

Guidance

GlobalFoundries expects total revenue for Q2 2025 to be approximately $1.675 billion, with a gross margin target of around 25%. The company anticipates diluted earnings per share (EPS) of $0.36. Capital expenditures (CapEx) for the quarter are anticipated to be roughly 10% of revenue, maintaining a focus on controlling costs while enabling long-term growth opportunities. The non-IFRS effective tax rate for 2025 is projected to be in the high-teens percentage range, indicating a stable outlook for fiscal performance amid ongoing market dynamics.

Additional News

Recently, GlobalFoundries has been exploring merger possibilities with Taiwan's UMC to bolster the U.S. semiconductor industry. This strategic move aims to strengthen its position in the global market. Additionally, the company announced changes in its executive leadership, with Tim Breen taking over as CEO, succeeding Thomas Caulfield. This transition is expected to drive new growth initiatives and operational efficiencies. Moreover, GlobalFoundries is considering a substantial stock buyback program, reflecting its strong cash position and commitment to returning value to shareholders. These developments highlight the company's proactive approach in navigating industry changes and enhancing shareholder value.