GlobalFoundries' Q4 2024 Earnings: A Mixed Bag and a Look Ahead
Wednesday, Feb 12, 2025 12:37 am ET
5min read GlobalFoundries Inc. (GF) recently announced its preliminary financial results for the fourth quarter and fiscal year ended December 31, 2024, offering a mixed bag of performance indicators and strategic updates. The company's earnings call provided insights into its operational excellence, design win momentum, and long-term manufacturing technology roadmap, which investors should consider when evaluating the company's prospects.
Key financial highlights for the fourth quarter include:
* Revenue of $1.830 billion, with a gross margin of 24.5% and Non-IFRS gross margin of 25.4%.
* Operating margin of (38.3)% and Non-IFRS operating margin of 15.6%.
* Net loss of $729 million and Non-IFRS net income of $256 million.
* Diluted loss per share of $1.32 and Non-IFRS diluted earnings per share of $0.46.
* Non-IFRS adjusted EBITDA of $661 million.
* Ending cash, cash equivalents, and marketable securities of $4.2 billion.
* Net cash provided by operating activities of $457 million and Non-IFRS adjusted free cash flow of $328 million.
For the full year 2024, GF reported:
* Revenue of $6.750 billion, with a gross margin of 24.5% and Non-IFRS gross margin of 25.3%.
* Net loss of $262 million and Non-IFRS net income of $870 million.
* Diluted loss per share of $0.48 and Non-IFRS diluted earnings per share of $1.56.
* Non-IFRS adjusted EBITDA of $2.475 billion.
* Year to date net cash provided by operating activities of $1.722 billion and Non-IFRS adjusted free cash flow of $1.107 billion.
GF's President and CEO, Dr. Thomas Caulfield, highlighted the company's solid financial results, exceeding the Non-IFRS midpoint of the guidance ranges provided in the November earnings release. Despite facing unique challenges in the industry, GF generated over $1 billion of Non-IFRS adjusted free cash flow in 2024, demonstrating its ability to generate cash and position itself for growth in 2025.
In the fourth quarter 2024, GF recorded a $935 million impairment charge on the long-lived assets relating to legacy investments in production capacity at its facility in Malta, New York. This action was pursuant to the diversification of its long-term manufacturing technology platform roadmap in Malta, which is consistent with the Company's previously communicated technology transfer strategy needed to meet expected long-term customer demand. This impairment charge is not expected to be a recurring event and better enables management and investors to make more meaningful comparisons of fourth quarter 2024 results against prior periods.
Recent business highlights include:
* GF announced a first-of-its-kind center for advanced packaging and test capabilities, to be developed at its Malta, New York facility. Supported by grants from New York State and the U.S. Department of Commerce, GF's Advanced Packaging and Photonics Center will help meet the growing demand for U.S.-made essential chips used in AI, automotive, aerospace and defense, and communications applications.
* IDEMIA and GF announced a partnership to deliver next-generation smart card technology with improved data retention, low read latency, and enhanced power efficiency, saving customers cost and time. This multi-year collaboration will be 100% manufactured and tested in Europe on GF's 28ESF3 platform, ensuring trusted providence.
* Lightmatter announced that it will use GF's Fotonix™ fabrication platform to develop the industry's most robust and scalable AI interconnect solution. By integrating electronics and photonics into a single CMOS wafer, GF's unique solution will enable the speed and efficiency needed for future AI data centers.
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Investors should consider GF's strong design win momentum, operational excellence, and strategic initiatives when evaluating the company's long-term prospects. Despite the impairment charge in Q4 2024, GF's focus on meeting customer demands and adapting to market trends positions it well for future growth. As the global semiconductor market continues to grow, GF's commitment to investing in advanced technologies and meeting customer demands can lead to increased revenue and market share, further strengthening its competitive position.
