GlobalFoundries (NASDAQ: GFS) revenue rises 13% but a U.S. share charge drives a loss

What happened

GlobalFoundries Inc. (NASDAQ: GFS) grew third-quarter revenue to $1.9 billion, but a non-cash charge turned its IFRS result into a $270 million loss.

In September, the company issued 9.9 million ordinary shares to the U.S. government. That produced a $441 million charge in non-operating expense. The release names it as the primary driver of the loss. Non-IFRS net income, which adjusts for that charge and other items, was $298 million, or $0.53 a share. The IFRS loss was $0.49 a share.

Key numbers

Metric	Latest	Change	Source
Net revenue	$1.9 billion	from $1.69 billion, +13%	SEC 6-K, Exhibit 99.1
Gross margin (IFRS)	30.1%	from 24.8%, +5.3 percentage points	SEC 6-K, Exhibit 99.1
Non-IFRS adjusted EBITDA	$647 million	from $573 million, +13%	SEC 6-K, Exhibit 99.1
Net income (loss), IFRS	-$270 million	from $249 million, -208%	SEC 6-K, Exhibit 99.1
Non-IFRS net income	$298 million	from $232 million, +28%	SEC 6-K, Exhibit 99.1
Net cash from operating activities	$341 million	from $595 million, -43%	SEC 6-K, Exhibit 99.1

Read more: GlobalFoundries (GFS) company research

Where operations improved

Revenue rose 13% from $1.69 billion in the third quarter of 2025. It rose 6% from $1.79 billion in the second quarter of 2026, a gain of $113 million. Wafer shipments, measured in 300mm equivalents, reached 647 thousand, up 7% from a year earlier.

Margins widened faster than sales. IFRS gross margin was 30.1%, up from 24.8% a year earlier. Non-IFRS gross margin was 31.4%, up from 26.0%. CEO Tim Breen tied the record non-IFRS gross margin to a richer mix of business across high-value AI applications.

The gain thinned further down the income statement. Gross profit rose to $571 million from $419 million. Operating profit rose only to $230 million from $195 million, because operating expenses climbed from $224 million a year earlier. IFRS operating margin was 12.1% against 11.6% a year earlier. Non-IFRS operating margin was 17.9% against 15.4%.

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Cash flow lagged earnings

Net cash from operating activities fell to $341 million from $595 million a year earlier. A $272 million working-capital outflow weighed on it. The year-earlier quarter had a $16 million inflow.

Non-IFRS adjusted free cash flow dropped to $136 million from $451 million. It improved from negative $3 million in the second quarter. Purchases of property, plant, equipment and intangibles rose to $301 million from $189 million. Government grants offset $96 million of that spending.

Ending cash, cash equivalents and marketable securities were $3.2 billion. During the quarter, the company repurchased $100 million of shares and paid $66 million in dividends.

New fab and customer commitments

In October, GF was selected as technology provider and operator for two new fabs at its Malta, New York site. A U.S.-Japan initiative will provide up to $21 billion in funding. That is a ceiling, and GF will be paid through management and technology fees over the life of the project. An initial investment of about $10 billion will speed up a new 300mm fab already under construction, with capacity expected online in 2029.

GF also agreed to a multi-year, $2 billion manufacturing agreement with TSMC for U.S.-made silicon interposers. Volume production is expected to ramp in the first half of 2028. GF amended its CHIPS and Science Act award to move $955 million of incentives toward investments in Malta and Burlington, Vermont.

In September, GF expanded its Marvell agreement for silicon germanium capacity in Burlington. It also signed a long-term deal with Monolithic Power Systems to deploy that company's process technology at its Singapore 300mm fab. Volume production is planned for early 2027.

Why it matters

OptimistFi has argued that GlobalFoundries creates value if its specialty niche turns a revenue trough into profitable utilization without mature-node pricing collapsing. Higher revenue, rising shipments and wider gross margins point the way that view needs. The quarter strengthens it.

The caveat is that reported earnings can swing on non-operating items. The company expects more non-cash charges from additional share issuances to the U.S. government. It left them out of its outlook because timing and amount are uncertain. Weaker operating cash flow than a year earlier is a second check on how much of the margin gain reaches cash.

What's next

For the fourth quarter, GF guides to revenue of $2 billion. It expects IFRS gross margin of 30.7% and non-IFRS gross margin of 31.5%. Operating margin is guided at 16.4% IFRS and 19.8% non-IFRS. Diluted EPS guidance is $0.47 IFRS and $0.59 non-IFRS on 575 million diluted shares.

The next quarterly report will show whether revenue reaches that level and whether margins hold near those figures. A miss on gross margin would weaken the case. A hit would back the quarter's improvement.

The board approved a dividend of $0.12 per share on Oct. 27, payable Jan. 14, 2027 to shareholders of record on Dec. 22, 2026.

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