STMicroelectronics N.V. Form 6-K Summary
Business Context and Reporting Period
This filing covers the unaudited interim results for the three months ended March 28, 2026 (Q1 2026). STMicroelectronics is a global integrated device manufacturer focusing on analog, power, embedded processing, and RF optical communications. The company is executing a company-wide program to reshape its manufacturing footprint, accelerating capacity to 300mm silicon and 200mm silicon carbide while resizing its global cost base.
Key Financial Metrics
| Metric (in millions, except per share) | Q1 2026 | Q4 2025 | Q1 2025 |
|---|---|---|---|
| Net Revenues | $3,095 | $3,329 | $2,517 |
| Gross Profit | $1,045 | $1,172 | $841 |
| Gross Margin | 33.8% | 35.2% | 33.4% |
| Operating Income | $70 | $125 | $3 |
| Operating Margin | 2.3% | 3.8% | 0.1% |
| Net Income (Parent) | $37 | ($30) | $56 |
| Diluted EPS | $0.04 | ($0.03) | $0.06 |
| Operating Cash Flow | $534 | N/A | $574 |
| Free Cash Flow (Non-GAAP) | ($723) | $257 | $30 |
| Net Financial Position | $2,002 | $2,789 | $3,082 |
Material Changes vs. Prior Periods
- Revenue: Q1 2026 revenues decreased 7.0% sequentially but increased 23.0% year-over-year (YoY). Excluding the NXP MEMS sensor acquisition, revenue grew 21.4% YoY. Growth was driven by higher volumes and prices in AM&S, EMP, and RFOC segments, offset by a decline in Power & Discrete (P&D).
- Profitability: GAAP operating income dropped 43.8% sequentially to $70 million, primarily due to $71 million in impairment, restructuring, and phase-out costs, and $30 million in Purchase Price Allocation (PPA) effects from the NXP acquisition. Non-U.S. GAAP operating income was $171 million, down 35.7% sequentially but up 1,454.5% YoY.
- Cash Flow: Free cash flow turned negative ($723 million) due to an $895 million cash outflow for the NXP MEMS sensor business acquisition. Operating cash flow remained positive at $534 million.
- Segment Performance:
- AM&S: Revenue down 9.1% sequentially, up 23.2% YoY.
- P&D: Revenue down 5.4% sequentially, down 1.8% YoY; reported an operating loss of $84 million.
- EMP: Revenue down 4.0% sequentially, up 31.3% YoY.
- RFOC: Revenue down 9.0% sequentially, up 33.9% YoY.
Guidance, Outlook, and Risks
- Q2 2026 Outlook: Management expects sequential revenue growth of approximately 11.6% (+/- 350 bps). U.S. GAAP gross margin is expected to be ~34.8% (+/- 200 bps), and Non-U.S. GAAP gross margin ~35.2% (+/- 200 bps).
- Capital Investment: 2026 Net Capex is projected between $2.0 billion and $2.2 billion, focusing on 200mm SiC facilities in Italy and China, and 300mm wafer fab evolution in France and Italy.
- Dividends: The company proposed a cash dividend of $0.36 per share for 2026, payable in quarterly installments of $0.09.
- Risks: Key risks include global trade tariffs, macroeconomic uncertainty, customer demand volatility, supply chain constraints, and currency fluctuations (Euro vs. USD). The company faces ongoing legal proceedings, including a securities class action lawsuit and a patent infringement case with Purdue University (potential loss estimated at $32 million).
Investor Verification Checklist
- Acquisition Integration: Verify the progress of the NXP MEMS sensor business integration and the realization of expected synergies.
- Restructuring Execution: Monitor the execution of the manufacturing footprint reshaping program and the associated $71 million in Q1 charges to ensure cost base resizing targets are met.
- Power & Discrete Segment: Assess the turnaround strategy for the P&D segment, which reported an operating loss of $84 million and declining revenues.
- Cash Flow Sustainability: Evaluate the impact of the $895 million acquisition outflow on liquidity and the ability to fund the $2.0–$2.2 billion 2026 Capex plan.
- Legal Contingencies: Review updates on the Purdue University patent verdict and the securities class action lawsuit for potential financial impact.