STMicroelectronics Q2 update highlights revenue beat, strong bookings, and rising AI infrastructure demand.
Stock Earnings Results
July 24, 2026
Table of Contents
July 23, 2026
STMicroelectronics N.V. (NYSE: STM) reported second-quarter 2026 results above expectations, supported by higher revenue, stronger margins, improved profitability, strong bookings, and rising demand tied to AI datacenters and LEO satellite communication.
STMicroelectronics is a global semiconductor company that designs and manufactures chips used in automotive, industrial, consumer, communications, computing, power management, sensors, microcontrollers, and connected devices.
The company reported non-U.S. GAAP diluted EPS of $0.31, above estimates of $0.26, representing a 19.2% earnings surprise. Revenue came in at $3.49 billion, above estimates of $3.45 billion, with revenue growth of 26.1%.
Net revenues increased 26.0% year-over-year to $3.49 billion.
GAAP gross margin improved to 34.8%, up 130 basis points from the prior-year quarter.
GAAP operating income was $187 million, compared with an operating loss of $133 million a year earlier.
GAAP net income was $222 million, or $0.24 per diluted share.
Non-U.S. GAAP net income was $291 million, or $0.31 per diluted share.
Non-U.S. GAAP operating margin was 7.7%, compared with 2.1% in the prior-year quarter.
Management said demand increased further during the quarter, with strong bookings across all end markets.
STMicroelectronics also said it saw improved visibility and signs of tight supply in several product categories.
Inventory in distribution is now below the company’s standard target.
The company said second-quarter revenue came in above the midpoint of its outlook range, driven by higher revenue in CECP and Automotive.
Analog products, MEMS and Sensors revenue increased 26.0%, mainly due to Imaging, MEMS, and Analog.
Operating profit in that segment increased 69.2% to $144 million.
Power and Discrete revenue increased 3.7%, though the segment still posted an operating loss.
Embedded Processing revenue increased 35.5%, helped by General Purpose MCU, Custom Processing, and Connected Security.
RF Optical Communications revenue increased 32.0%, with operating profit rising 56.3% to $94 million.
Net cash from operating activities was $502 million in the second quarter.
Free cash flow was positive at $75 million, compared with negative free cash flow of $152 million in the prior-year quarter.
Inventory was $3.19 billion at quarter-end, compared with $3.17 billion in the first quarter and $3.27 billion a year earlier.
Days sales of inventory improved to 126 days from 140 days in the first quarter and 166 days a year earlier.
STMicroelectronics ended the quarter with a net financial position of $2.01 billion and total liquidity of $6.03 billion.
For the third quarter, STMicroelectronics expects net revenues of about $3.70 billion.
That would represent sequential growth of about 6.2% and year-over-year growth of about 16.2%.
Gross margin is expected to be about 37.0%, including roughly 70 basis points of unused capacity charges.
Management also expects fourth-quarter revenue to exceed $4 billion, driven mainly by customer programs in AI datacenters and LEO satellite communication.
STMicroelectronics raised its revenue ambition for datacenters.
The company now expects datacenter revenue above $1 billion in 2026.
If current demand continues, management expects datacenter revenue well above $2 billion in 2027.
That outlook makes AI infrastructure one of the biggest growth signals in the quarter.
STMicroelectronics delivered a stronger semiconductor earnings report.
Revenue beat expectations, non-U.S. GAAP EPS topped estimates, margins improved, and the company returned to much stronger profitability compared with the prior-year loss. Management also pointed to better demand visibility, tighter supply, and rising AI datacenter revenue.
The key question is whether STMicroelectronics can convert that demand into sustained margin expansion while managing restructuring costs and supply constraints.
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