STMicroelectronics (STMN) Q3 2026 Earnings Report
MX:STMN Q3 2026 EPS Results
- Actual EPS
- MXN 6.95
- Consensus EPS
- MXN 7.22
- Beat/Miss
- Missed by -MXN 0.26
- One Year Ago EPS
- MXN 5.45
MX:STMN Q3 2026 Revenue Results
- Actual Revenue
- MXN 70.52B
- Expected Revenue
- MXN 69.82B
- Beat/Miss
- Beat by +MXN 694.88M
- YoY Revenue Growth
- +18.25%
Earnings Announcement Details
- Quarter
- Q3 2026
- Date
- 10/29/2026
- Time
- Before Open
- Conference Call
- Thursday, October 29, 2026
STMicroelectronics's next earnings date is estimated for January 28, 2027, based on past reporting schedules.
Q3 2026 Earnings Call Audio
Q3 2026 Earnings Slide Deck
Q3 2026 Earnings Call Summary
The call was strongly positive overall. ST reported revenue growth across most end markets, record or accelerating demand in AI datacenters and low Earth orbit satellite communications, strong bookings and backlog visibility, improved gross margin, higher cash flow, and a substantial 2026 revenue outlook. The main challenges were year-over-year weakness in Personal Electronics, negative Power & Discrete operating margin, manufacturing-transition charges, input-cost inflation, expected operating-expense increases, capacity constraints, and continued softness in consumer markets. Management nevertheless presented these issues alongside specific margin-improvement, cost-savings, capacity-expansion, and growth initiatives.
ST expects Q4 2026 revenues of $4.15 billion, plus/minus 350 basis points at the midpoint, up 10.5% sequentially and 24.7% year-over-year, with gross margin at about 39%, plus/minus 200 basis points, including about 40 basis points of unused capacity charges; the 2026 midpoint implies revenues of about $14.5 billion, up 22.8% year-over-year, gross margin of about 36.4% and non-U.S. GAAP gross margin of about 36.6%, an improvement of 270 basis points versus fiscal year 2025. Q4 non-U.S. GAAP net OpEx is expected at about $1.035 billion and full-year 2026 slightly above $3.8 billion; ST expects 44% to 46% gross margin in its intermediate financial model, more than 400 basis points of structural gross margin improvement toward the end of 2027 or in early 2028, and 2027 cost savings of $100 million, $120 million benefit, although OpEx is expected to go up. AI datacenter revenue is expected to be about $1.3 billion in 2026 and well above doubling this number in 2027, with microcontroller revenue growing 2x and silicon photonics reaching tens of percent of the complete revenue consideration; silicon photonics capacity is expected to increase by 4x year-on-year, actually a little bit more than 4x. For Q1, ST expects to be at least at the current consensus for gross margin and revenue with 86 days, automotive is expected to grow slightly above 10% for full-year 2026, Power Discrete growth in Q4 will be well above 20% -- 25%, and silicon carbide is expected to grow about 20% this year and deliver another year of significant growth next year.
- Q3 Revenue and Gross Margin Beat OutlookThird-quarter net revenues were $3.76 billion, above the midpoint of the business outlook range, mainly due to higher revenue in Communication Equipment and Computer Peripheral driven by AI datacenter, low Earth orbit satellite communications, and personal electronics. Gross margin was 37.3%, also above the midpoint of the outlook range, and non-U.S. GAAP diluted EPS was $0.37.
- Strong Bookings and Demand VisibilityBookings increased sequentially, with overall book-to-bill well above 2. Book-to-bill was well above 1 in all end markets and well above 3 in Communication Equipment and Computer Peripheral and Industrial. Management said visibility improved, demand continued to outpace supply across multiple product categories, and backlog was well above $20 billion, representing about five quarters of revenue based on the Q4 midpoint.
- Industrial Recovery AcceleratedIndustrial revenue increased 12% sequentially and 40% year-over-year, mainly driven by general-purpose microcontrollers, analog products, and power-conversion products. The broad-based industrial recovery continued, distribution inventory declined further and remained below the standard target, and the company reported design wins across industrial automation, robotics, power systems, building automation, power tools, and home appliances.
- Automotive Revenue Growth and Design WinsAutomotive revenue was stable sequentially and increased 5% year-over-year in Q3. ST reported design wins with OEMs and Tier 1 suppliers across microcontrollers, Power & Discrete, and other product families for hybrid, electric, and internal-combustion vehicles, including onboard charging, powertrain, active suspension, and a first award for 48-volt electromechanical braking.
- Automotive MEMS and In-Cabin Monitoring ProgressThe automotive MEMS business progressed through the integration of NXP's MEMS sensor business, with customer awards in telematics, cockpit control, and tire-pressure monitoring. ST also reported another design win for in-cabin monitoring and introduced an automotive infrared image sensor intended to extend driver and occupant monitoring across more vehicle models.
- AI Datacenter and LEO Satellite Growth DriversCommunication Equipment and Computer Peripheral revenue increased 14% sequentially and 64% year-over-year, mainly reflecting growth in AI datacenter and low Earth orbit satellite communications. ST expects about $1.3 billion of AI datacenter revenue in 2026 and has an ambition of well above $2 billion in 2027, with further growth beyond.
- AI Datacenter Product MomentumAI datacenter demand remained strong for silicon photonic ICs, electronic ICs, microcontrollers, and power solutions. Management said microcontroller revenue in datacenters will grow 2x year-over-year, silicon photonics will become a significant contribution next year, and BiCMOS revenue effects are expected to be mainly visible from 2028 onward.
- Low Earth Orbit Satellite MomentumManagement expects next year's low Earth orbit satellite revenue to be the same as or better than this year's record level, with additional customers ramping. ST said it is working to release capacity to capture demand and expects to be capacity-gated rather than demand-gated next year.
- Silicon Photonics Ramp and Capacity ExpansionThe silicon photonics ramp is proceeding as planned, with customers reportedly achieving electro-optical yields that set a new bar for the industry. ST said it is likely the only at-scale 12-inch silicon photonics player currently shipping, expects steep growth next year, and plans to increase capacity by 4x year-over-year, with the actual increase expected to be slightly higher than 4x.
- Personal Electronics Better Than Expected SequentiallyPersonal Electronics revenue was better than expected, increasing 12% sequentially. ST reported design wins in secure solutions, MEMS, imaging sensors, and microcontrollers across smartphones, gaming headsets, earbuds, and smart rings, and said Q3 strength reflected customer demand rather than a specific pull-in.
- Improved Profitability and Cash FlowQ3 gross profit was $1.40 billion, up 32.2% year-over-year, while gross margin increased 410 basis points year-over-year and 250 basis points sequentially, mainly due to lower unused-capacity charges and better product mix. Net income rose to $291 million from $237 million, diluted EPS increased to $0.31 from $0.26, and non-U.S. GAAP operating income was $429 million.
- Operating Cash Flow and Free Cash Flow ExpansionNet cash from operating activities increased to $1.02 billion from $549 million in the year-ago quarter. Free cash flow was positive at $351 million, compared with positive free cash flow of $130 million in Q3 2025.
- Inventory Metrics Remained ControlledQuarter-end inventory was $3.25 billion, compared with $3.19 billion in Q2 2026 and $3.17 billion in Q3 2025. Days sales of inventory were 126 days, unchanged sequentially and better than the 135 days reported in the year-ago quarter. Distribution inventory continued to track below ST's standard target.
- Strong Financial Position and Shareholder ReturnsST maintained a solid net financial position of $2.11 billion, with total liquidity of $5.31 billion and total financial debt of $3.21 billion. The company paid $83 million in cash dividends and executed a $91 million share buyback during Q3.
- Q4 and Full-Year 2026 Revenue Growth OutlookST expects Q4 2026 revenue of $4.15 billion, plus or minus 350 basis points at the midpoint, representing 10.5% sequential growth and 24.7% year-over-year growth. The midpoint implies full-year 2026 revenue of about $14.5 billion, up 22.8% year-over-year.
- Full-Year Gross Margin Improvement OutlookFull-year 2026 gross margin is expected to be about 36.4%, with non-U.S. GAAP gross margin about 36.6%, an improvement of 270 basis points versus fiscal 2025. ST remains committed to its intermediate financial model target of 44% to 46% gross margin once the manufacturing reshaping plan is completed.
- Manufacturing Reshaping Expected to Improve MarginsST expects more than 400 basis points of structural gross-margin improvement from reshaping its manufacturing footprint. The benefit is expected to materialize as a step function toward the end of 2027 or in early 2028, subject to legacy-fab shutdowns and customer qualification timing.
- Cost Discipline and Planned SavingsQ3 non-U.S. GAAP operating expenses were $972 million, better than the July indication, reflecting continuing cost discipline. Management expects 2027 cost-savings programs to provide a benefit in the range of $100 million to $120 million and said the expense-to-sales ratio should improve despite some operating-expense increase.
- Expansion in Robotics, Physical AI, and Embedded ProcessingST demonstrated an integrated robotics development path with NVIDIA, covering digital twin to deployed application using inertial sensors, microcontrollers, and imaging solutions. The company launched a miniature 6-axis motion sensor with a machine-learning core and continues to expand its STM32 offering through new products and software innovations.
- Expected Growth in Automotive and Silicon CarbideManagement expects automotive to contribute to company growth in 2027, driven by European electromobility and socket wins in internal-combustion and hybrid vehicles. Silicon carbide revenue is expected to grow about 20% in 2026 and achieve another year of significant growth in 2027, supported by electric vehicles, datacenter power supplies, industrial power conversion, and the transition to 8-inch wafers.
- Organizational Changes to Support GrowthST announced organizational changes effective January 1, 2027, with implementation expected to be completed by the end of March 2027. The changes are intended to improve coordination across strategy, technology, and product road maps and accelerate innovation and time to market. Jean-Marc Chery also accepted a proposal for reappointment as Chairman of the Managing Board and President and CEO for an additional year, subject to shareholder approval at the 2027 annual meeting.
MX:STMN Earnings History
| Report Date | Fiscal Quarter | Forecast / EPS | Last Year's EPS | EPS YoY Change | Press Release |
|---|---|---|---|---|---|
| Jan 28, 2027 | 2026 (Q4) | 10.37- | 2.07 | ― | ― |
| Oct 29, 2026 | 2026 (Q3) | 7.226.95 | 5.45 | 27.59% (+1.50) | |
| Jul 23, 2026 | 2026 (Q2) | 4.985.83 | 1.13 | 416.67% (+4.70) | |
| Apr 23, 2026 | 2026 (Q1) | 3.272.44 | 1.32 | 85.71% (+1.13) | |
| Jan 29, 2026 | 2025 (Q4) | 5.192.07 | 6.95 | -70.27% (-4.89) | |
| Oct 23, 2025 | 2025 (Q3) | 4.215.45 | 6.95 | -21.62% (-1.50) | |
| Jul 24, 2025 | 2025 (Q2) | 1.751.13 | 7.14 | -84.21% (-6.01) | |
| Apr 24, 2025 | 2025 (Q1) | 0.771.32 | 10.15 | -87.04% (-8.83) | |
| Jan 30, 2025 | 2024 (Q4) | 6.586.95 | 21.42 | -67.54% (-14.47) | |
| Oct 31, 2024 | 2024 (Q3) | 5.946.95 | 21.8 | -68.10% (-14.85) |
The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.
