PR No: C3403C
STMicroelectronics Reports Q2 2026 Financial Results
- Q226 net revenues at
$3.49 billion - Gross margin at 34.8% (non-
U.S . GAAP1 gross margin at 35.2%) - Operating income at
$187 million (non-U.S . GAAP1 operating income at$269 million ) - Business outlook at mid-point: Q326 net revenues of
$3.70 billion and gross margin of 37.0%
ST reported second quarter net revenues of
- “Q2 net revenues came above the mid-point of our business outlook range, driven by higher revenues in CECP and Automotive. Gross margin was in line with the mid-point of our business outlook range.”
- “On a year-over-year basis, Q2 net revenues increased 26.0%. Q2 gross margin was 34.8%, operating margin was 5.4% and net income was
$222 million . On a non-U.S . GAAP1 basis gross margin was 35.2%, operating margin was 7.7% and net income was$291 million .” - “During the quarter demand increased further, with strong bookings in all end markets. We saw improved visibility and signs of tight supply in several product categories. Inventory in distribution is now below our standard target.”
- “Our third quarter business outlook, at the mid-point, is for net revenues of
$3.70 billion , increasing about 6.2% sequentially and about 16.2% year-over-year. Gross margin is expected to be about 37.0%, including about 70 basis points of unused capacity charges.” - “We anticipate a revenue growth acceleration in Q4, mainly driven by our engaged customer programs in AI datacenters and LEO satellite communication. We expect Q4 revenues to be above
$4 billion , this translates into a H2 vs H1 growth above our normal 15% seasonality.” - “Driven by continued strong demand in AI datacenters, we are raising our revenue ambition for datacenters. Revenues are now expected above
$1 billion in 2026 and, assuming the current dynamic continues and with the current engagements we have, well above$2 billion in 2027. This confirms ST’s strong position in the evolving AI datacenters.”
Quarterly Financial Summary
(US$ m, except per share data) | Q2 2026 | Q1 2026 | Q2 2025 | Q/Q | Y/Y |
| Net Revenues | 12.7% | 26.0% | |||
| Gross Profit | 16.3% | 31.1% | |||
| Gross Margin | 34.8% | 33.8% | 33.5% | 100bps | 130bps |
| Operating Income (Loss) | 165.5% | - | |||
| Operating Margin | 5.4% | 2.3% | -4.8% | 310bps | 1,020bps |
| Net Income (Loss) | 496.8% | - | |||
| Diluted Earnings Per Share | 500.0% | - | |||
| Non- (US$ m, except per share data) | Q2 2026 | Q1 2026 | Q2 2025 | Q/Q | Y/Y |
| Gross Profit | 16.4% | 32.7% | |||
| Gross Margin | 35.2% | 34.1% | 33.5% | 110bps | 170bps |
| Operating Income | 57.3% | 371.9% | |||
| Operating Margin | 7.7% | 5.5% | 2.1% | 220bps | 560bps |
| Net Income | 138.5% | 410.5% | |||
| Diluted Earnings Per Share | 138.5% | 416.7% |
Second Quarter 2026 Summary Review
| Net Revenues by Reportable Segment2(US$ m) | Q2 2026 | Q1 2026 | Q2 2025 | Q/Q | Y/Y |
| Analog products, MEMS and Sensors (AM&S) segment | 1,426 | 1,318 | 1,133 | 8.2% | 26.0% |
| Power and discrete products (P&D) segment | 464 | 389 | 447 | 19.2% | 3.7% |
| Subtotal: Analog, Power & Discrete, | 1,890 | 1,707 | 1,580 | 10.7% | 19.6% |
| Embedded Processing (EMP) segment | 1,147 | 975 | 847 | 17.7% | 35.5% |
| 445 | 409 | 336 | 8.6% | 32.0% | |
| Subtotal: Microcontrollers, Digital ICs and RF products (MDRF) | 1,592 | 1,384 | 1,183 | 15.0% | 34.5% |
| Others | 5 | 4 | 3 | - | - |
| Total Net Revenues | 12.7% | 26.0% |
Net revenues totaled
Gross profit totaled
Operating income increased from an operating loss of
By reportable segment, compared with the year-ago quarter:
In Analog, Power & Discrete,
Analog products, MEMS and Sensors (AM&S)2 segment:
- Revenue increased 26.0% mainly due to Imaging and MEMS and, to a lesser extent, Analog.
- Operating profit increased by 69.2% to
$144 million . Operating margin was 10.1% compared to 7.5%.
Power and Discrete products (P&D) segment:
- Revenue increased 3.7%.
- Operating result decreased from a loss of
$56 million to a loss of$99 million . Operating margin was -21.4% compared to -12.5%.
In Microcontrollers, Digital ICs and RF products (MDRF)
Embedded Processing (EMP) segment:
- Revenue increased 35.5% mainly due to General Purpose MCU and, to a lesser extent, Custom Processing and Connected Security.
- Operating profit increased by 97.8% to
$226 million . Operating margin was 19.7% compared to 13.5%.
- Revenue increased 32.0%.
- Operating profit increased by 56.3% to
$94 million . Operating margin was 21.2% compared to 17.9%.
Net income and diluted Earnings Per Share increased to
Cash Flow and Balance Sheet Highlights
| Trailing 12 Months | ||||||
| (US$ m) | Q2 2026 | Q1 2026 | Q2 2025 | Q2 2026 | Q2 2025 | TTM Change |
| Net cash from operating activities | 502 | 534 | 354 | 2,259 | 2,332 | -3.1% |
| Free cash flow (non- | 75 | (723)2 | (152) | (261) | 142 | -283.8% |
Net cash from operating activities was
Net Capex (non-
Free cash flow (non-
Inventory at the end of the second quarter was
In the second quarter, ST paid cash dividends to its stockholders totaling
ST’s net financial position (non-
During the quarter, ST issued a new
Corporate developments
On
Business Outlook
ST’s guidance, at the mid-point, for the 2026 third quarter is:
- Net revenues are expected to be
$3.70 billion , an increase of 6.2% sequentially, plus or minus 350 basis points. - Gross margin of 37.0%, plus or minus 200 basis points.
- This outlook is based on an assumed effective currency exchange rate of approximately
$1.14 = €1.00 for the 2026 third quarter and includes the impact of existing hedging contracts. - The third quarter will close on
September 26, 2026 .
This business outlook does not include any impact of potential further changes to global trade tariffs compared to the current situation.
Conference Call and Webcast Information
ST will conduct a conference call with analysts, investors and reporters to discuss its second quarter 2026 financial results and current business outlook today at
Use of Supplemental Non-
This press release contains supplemental non-
Readers are cautioned that these measures are unaudited and not prepared in accordance with
See the Appendix of this press release for a reconciliation of ST’s non-
Forward-looking Information
Some of the statements contained in this release that are not historical facts are statements of future expectations and other forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933 or Section 21E of the Securities Exchange Act of 1934, each as amended) that are based on management’s current views and assumptions, and are conditioned upon and also involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those anticipated by such statements due to, among other factors:
- changes in global trade policies, including the continuation, adoption and expansion of tariffs and trade barriers and sanctions, that are affecting and could further affect the macro-economic environment and are adversely impacting and could further adversely impact the demand for our products;
- uncertain macro-economic and industry trends (such as inflation and fluctuations in supply chains), which are impacting and may further impact production capacity and end-market demand for our products;
- customer demand that differs from projections which may require us to undertake transformation measures that may not be successful in realizing the expected benefits in full or at all;
- the ability to design, manufacture and sell innovative products in a rapidly changing technological environment;
- changes in economic, social, public health, labor, political, or infrastructure conditions in the locations where we, our customers, or our suppliers operate, including as a result of macro-economic or regional events, geopolitical and military conflicts, social unrest, labor actions, or terrorist activities;
- unanticipated events or circumstances, which may impact our ability to execute our plans and/or meet the objectives of our research and development and manufacturing programs, which benefit from public funding;
- financial difficulties with any of our major distributors or significant curtailment of purchases by key customers;
- the loading, product mix, and manufacturing performance of our production facilities and/or our required volume to fulfill capacity reserved with suppliers or third-party manufacturing providers;
- availability and costs of equipment, raw materials, utilities, third-party manufacturing services and technology, or other supplies required by our operations (including increasing costs resulting from inflation);
- the functionalities and performance of our IT systems, which are subject to cybersecurity threats and which support our critical operational activities including manufacturing, finance and sales, and any breaches of our IT systems or those of our customers, suppliers, partners and providers of third-party licensed technology;
- theft, loss, or misuse of personal data about our employees, customers, or other third parties, and breaches of data privacy legislation;
- the impact of intellectual property claims by our competitors or other third parties, and our ability to obtain required licenses on reasonable terms and conditions;
- changes in our overall tax position as a result of changes in tax rules, new or revised legislation, the outcome of tax audits or changes in international tax treaties which may impact our results of operations as well as our ability to accurately estimate tax credits, benefits, deductions and provisions and to realize deferred tax assets;
- variations in the foreign exchange markets and, more particularly, the
U.S . dollar exchange rate as compared to the Euro and the other major currencies we use for our operations; - the outcome of ongoing litigation as well as the impact of any new litigation to which we may become a defendant;
- product liability or warranty claims, claims based on epidemic or delivery failure, or other claims relating to our products, or recalls by our customers for products containing our parts;
- natural events such as severe weather, earthquakes, tsunamis, volcano eruptions or other acts of nature, the effects of climate change, health risks and epidemics or pandemics in locations where we, our customers or our suppliers operate;
- increased regulation and initiatives in our industry, including those concerning climate change and sustainability matters and our goal to become carbon neutral in all direct and indirect emissions (scopes 1 and 2), product transportation, business travel, and employee commuting emissions (our scope 3 focus), and to achieve our 100% renewable electricity sourcing goal by the end of 2027;
- epidemics or pandemics, which may negatively impact the global economy in a significant manner for an extended period of time, and could also materially adversely affect our business and operating results;
- industry changes resulting from vertical and horizontal consolidation among our suppliers, competitors, and customers;
- the ability to successfully ramp up new programs that could be impacted by factors beyond our control, including the availability of critical third-party components and performance of subcontractors in line with our expectations; and
- individual customer use of certain products, which may differ from the anticipated uses of such products and result in differences in performance, including energy consumption, may lead to a failure to achieve our disclosed emission-reduction goals, adverse legal action or additional research costs.
Such forward-looking statements are subject to various risks and uncertainties, which may cause actual results and performance of our business to differ materially and adversely from the forward-looking statements. Certain forward-looking statements can be identified by the use of forward-looking terminology, such as “believes”, “expects”, “may”, “are expected to”, “should”, “would be”, “seeks” or “anticipates” or similar expressions or the negative thereof or other variations thereof or comparable terminology, or by discussions of strategy, plans or intentions.
Some of these risk factors are set forth and are discussed in more detail in “Item 3. Key Information — Risk Factors” included in our Annual Report on Form 20-F for the year ended
Unfavorable changes in the above or other factors listed under “Item 3. Key Information — Risk Factors” from time to time in our
About
At ST, we are 49,000 creators and makers of semiconductor technologies mastering the semiconductor supply chain with state-of-the-art manufacturing facilities. An integrated device manufacturer, we work with more than 200,000 customers and thousands of partners to design and build products, solutions, and ecosystems that address their challenges and opportunities, and the need to support a more sustainable world. Our technologies enable smarter mobility, more efficient power and energy management, and the wide-scale deployment of cloud-connected autonomous things. We are on track to be carbon neutral in all direct and indirect emissions (scopes 1 and 2), product transportation, business travel, and employee commuting emissions (our scope 3 focus), and to achieve our 100% renewable electricity sourcing goal by the end of 2027. Further information can be found at www.st.com.
For further information, please contact:
INVESTOR RELATIONS:
Tel: +41 22 929 59 20
jerome.ramel@st.com
MEDIA RELATIONS:
Tel: + 33 6 59 16 79 08
alexis.breton@st.com
| CONSOLIDATED STATEMENTS OF INCOME | |||
| (in millions of | |||
| Three months ended | |||
| 2026 | 2025 | ||
| (Unaudited) | (Unaudited) | ||
| Net sales | 3,481 | 2,745 | |
| Other revenues | 6 | 21 | |
| NET REVENUES | 3,487 | 2,766 | |
| Cost of sales | (2,272) | (1,840) | |
| GROSS PROFIT | 1,215 | 926 | |
| Selling, general and administrative expenses | (444) | (420) | |
| Research and development expenses | (551) | (514) | |
| Other income and expenses, net | 25 | 65 | |
| Impairment, restructuring charges and other related phase-out costs | (58) | (190) | |
| Total operating expenses | (1,028) | (1,059) | |
| OPERATING INCOME (LOSS) | 187 | (133) | |
| Interest income | 41 | 60 | |
| Interest expense | (15) | (15) | |
| Other components of pension benefit costs | (4) | (5) | |
| Gain (loss) on financial instruments, net | 46 | (19) | |
| INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTEREST | 255 | (112) | |
| Income tax benefit (expense) | (30) | 18 | |
| NET INCOME (LOSS) | 225 | (94) | |
| Net income attributable to noncontrolling interest | (3) | (3) | |
| NET INCOME (LOSS) ATTRIBUTABLE TO PARENT COMPANY STOCKHOLDERS | 222 | (97) | |
| EARNINGS PER SHARE (BASIC) ATTRIBUTABLE TO PARENT COMPANY STOCKHOLDERS | 0.25 | (0.11) | |
| EARNINGS PER SHARE (DILUTED) ATTRIBUTABLE TO PARENT COMPANY STOCKHOLDERS | 0.24 | (0.11) | |
| NUMBER OF WEIGHTED AVERAGE SHARES USED IN CALCULATING DILUTED EPS | 928.0 | 893.9 | |
| CONSOLIDATED STATEMENTS OF INCOME | |||
| (in millions of | |||
| Six months ended | |||
| 2026 | 2025 | ||
| (Unaudited) | (Unaudited) | ||
| Net sales | 6,570 | 5,257 | |
| Other revenues | 12 | 26 | |
| NET REVENUES | 6,582 | 5,283 | |
| Cost of sales | (4,322) | (3,516) | |
| GROSS PROFIT | 2,260 | 1,767 | |
| Selling, general and administrative expenses | (873) | (810) | |
| Research and development expenses | (1,071) | (1,004) | |
| Other income and expenses, net | 70 | 115 | |
| Impairment, restructuring charges and other related phase-out costs | (129) | (198) | |
| Total operating expenses | (2,003) | (1,897) | |
| OPERATING INCOME (LOSS) | 257 | (130) | |
| Interest income | 80 | 122 | |
| Interest expense | (28) | (29) | |
| Other components of pension benefit costs | (8) | (9) | |
| Gain on financial instruments, net | 7 | 6 | |
| INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTEREST | 308 | (40) | |
| Income tax benefit (expense) | (40) | 4 | |
| NET INCOME (LOSS) | 268 | (36) | |
| Net income attributable to noncontrolling interest | (9) | (5) | |
| NET INCOME (LOSS) ATTRIBUTABLE TO PARENT COMPANY STOCKHOLDERS | 259 | (41) | |
| EARNINGS PER SHARE (BASIC) ATTRIBUTABLE TO PARENT COMPANY STOCKHOLDERS | 0.29 | (0.05) | |
| EARNINGS PER SHARE (DILUTED) ATTRIBUTABLE TO PARENT COMPANY STOCKHOLDERS | 0.28 | (0.05) | |
| NUMBER OF WEIGHTED AVERAGE SHARES USED IN CALCULATING DILUTED EPS | 921.3 | 894.9 | |
| CONSOLIDATED BALANCE SHEETS | |||
| As at | |||
| In millions of | 2026 | 2026 | 2025 |
| (Unaudited) | (Unaudited) | (Audited) | |
| ASSETS | |||
| Current assets: | |||
| Cash and cash equivalents | 3,096 | 1,889 | 2,837 |
| Short-term deposits | 1,800 | 1,850 | 1,100 |
| Marketable securities | 1,136 | 832 | 985 |
| Trade accounts receivable, net | 2,067 | 1,820 | 1,745 |
| Inventories | 3,188 | 3,173 | 3,136 |
| Other current assets | 1,410 | 1,263 | 1,468 |
| Total current assets | 12,697 | 10,827 | 11,271 |
| 705 | 707 | 315 | |
| Other intangible assets, net | 747 | 750 | 324 |
| Property, plant and equipment, net | 10,895 | 10,959 | 11,058 |
| Non-current deferred tax assets | 435 | 436 | 408 |
| Long-term investments | 144 | 113 | 152 |
| Other non-current assets | 1,409 | 1,338 | 1,272 |
| 14,335 | 14,303 | 13,529 | |
| Total assets | 27,032 | 25,130 | 24,800 |
| LIABILITIES AND EQUITY | |||
| Current liabilities: | |||
| Short-term debt | 1,063 | 319 | 298 |
| Trade accounts payable | 1,774 | 1,436 | 1,487 |
| Other payables and accrued liabilities | 1,406 | 1,438 | 1,440 |
| Dividends payable to stockholders | 265 | 18 | 89 |
| Accrued income tax | 62 | 57 | 37 |
| Total current liabilities | 4,570 | 3,268 | 3,351 |
| Long-term debt | 2,962 | 2,250 | 1,835 |
| Post-employment benefit obligations | 382 | 380 | 403 |
| Long-term deferred tax liabilities | 58 | 58 | 60 |
| Other long-term liabilities | 1,010 | 1,003 | 926 |
| 4,412 | 3,691 | 3,224 | |
| Total liabilities | 8,982 | 6,959 | 6,575 |
| Commitment and contingencies | |||
| Equity | |||
| Parent company stockholders' equity | |||
| Common stock (preferred stock: 540,000,000 shares authorized, not issued; common stock: | 1,157 | 1,157 | 1,157 |
| 3,373 | 3,331 | 3,281 | |
| Retained earnings | 12,888 | 13,118 | 13,082 |
| Accumulated other comprehensive income | 732 | 798 | 945 |
| (506) | (636) | (637) | |
| Total parent company stockholders' equity | 17,644 | 17,768 | 17,828 |
| Noncontrolling interest | 406 | 403 | 397 |
| Total equity | 18,050 | 18,171 | 18,225 |
| Total liabilities and equity | 27,032 | 25,130 | 24,800 |
| SELECTED CONSOLIDATED CASH FLOW DATA | |||
| Cash Flow Data (in US$ millions) | Q2 2026 | Q1 2026 | Q2 2025 |
| 502 | 534 | 354 | |
| (686) | (1,874) | (332) | |
| 1,392 | 398 | (191) | |
| 1,207 | (948) | (165) | |
| Selected Cash Flow Data (in US$ millions) | Q2 2026 | Q1 2026 | Q2 2025 |
| Depreciation & amortization | 492 | 454 | 464 |
| Net payment for Capital expenditures | (419) | (379) | (481) |
| Payment for business acquisition | - | (895) | - |
| Net proceeds from issuance of convertible bonds | 1,490 | - | - |
| Dividends paid to stockholders | (75) | (71) | (81) |
| Change in inventories, net | (42) | (3) | (140) |
Appendix
ST Supplemental Financial Information
| Q2 2026 | Q1 2026 | Q4 2025 | Q3 2025 | Q2 2025 | |
| Net Revenues By Market Channel (%) | |||||
| Total OEM | 70% | 72% | 73% | 73% | 72% |
| Distribution | 30% | 28% | 27% | 27% | 28% |
| €/$ Effective Rate | 1.16 | 1.16 | 1.14 | 1.14 | 1.09 |
| Reportable Segment Data (US$ m) | |||||
| Analog products, MEMS and Sensors (AM&S) segment | |||||
| - Net Revenues | 1,426 | 1,318 | 1,449 | 1,434 | 1,133 |
| - Operating Income | 144 | 161 | 235 | 221 | 85 |
| Power and Discrete products (P&D) segment | |||||
| - Net Revenues | 464 | 389 | 412 | 429 | 447 |
| - Operating Income (Loss) | (99) | (84) | (124) | (67) | (56) |
| Subtotal: Analog, Power & Discrete, | |||||
| - Net Revenues | 1,890 | 1,707 | 1,861 | 1,863 | 1,580 |
| - Operating Income | 45 | 77 | 111 | 154 | 29 |
| Embedded Processing (EMP) segment | |||||
| - Net Revenues | 1,147 | 975 | 1,015 | 976 | 847 |
| - Operating Income | 226 | 164 | 195 | 161 | 114 |
| - Net Revenues | 445 | 409 | 449 | 345 | 336 |
| - Operating Income | 94 | 61 | 105 | 57 | 60 |
| Subtotal: Microcontrollers, Digital ICs and RF products (MDRF) | |||||
| - Net Revenues | 1,592 | 1,384 | 1,464 | 1,321 | 1,183 |
| - Operating Income | 320 | 226 | 300 | 218 | 174 |
| Others (a) | |||||
| - Net Revenues | 5 | 4 | 4 | 3 | 3 |
| - Operating Income (Loss) | (178) | (232) | (286) | (192) | (336) |
| Total | |||||
| - Net Revenues | 3,487 | 3,095 | 3,329 | 3,187 | 2,766 |
| - Operating Income (Loss) | 187 | 70 | 125 | 180 | (133) |
(a) Net revenues of Others include revenues from sales of assembly services and other revenues. Operating income (loss) of Others include items such as unused capacity charges, including incidents leading to power outage, impairment, restructuring charges and other related phase-out costs, management reorganization costs, start-up costs, and other unallocated income (expenses) such as: strategic or special research and development programs, certain corporate-level operating expenses, patent claims and litigations, and other costs that are not allocated to reportable segments, operating earnings of other products as well as PPA effects from the acquisition of NXP’s MEMS sensor business. With additional cost elements included in the table below:
| (US$ m) | Q2 2026 | Q1 2026 | Q4 2025 | Q3 2025 | Q2 2025 |
| Unused capacity charges | 37 | 69 | 88 | 102 | 103 |
| Impairment, restructuring charges and other related phase-out costs | 58 | 71 | 141 | 37 | 190 |
| PPA effects from the acquisition of NXP’s MEMS sensor business | 24 | 30 | - | - | - |
(Appendix – continued)
ST Supplemental Non-
The supplemental non-
ST believes that these non-
Non-
Operating income before impairment, restructuring charges and other related phase-out costs, and other certain items, is used by management to help enhance an understanding of ongoing operations and to communicate the impact of the excluded items, such as impairment, restructuring charges and other related phase-out costs, and PPA effects. Non-
| Q2 2026 (US$ m, except per share data) | Gross Profit | Operating Income | Net Income | Corresponding Diluted EPS |
| 1,215 | 187 | 222 | 0.24 | |
| Impairment, restructuring charges and other related phase-out costs | - | 58 | 58 | |
| PPA effects of NXP’s MEMS sensor business acquisition | 14 | 24 | 24 | |
| Estimated income tax effect | - | - | (13) | |
| Non- | 1,229 | 269 | 291 | 0.31 |
(Appendix – continued)
Net Financial Position and Adjusted Net Financial Position (non-
Net Financial Position, a non-
ST believes its Net Financial Position and Adjusted Net Financial Position provide useful information for investors and management because they give evidence of our global position either in terms of net indebtedness or net cash by measuring our capital resources based on cash and cash equivalents, restricted cash, if any, short-term deposits and marketable securities and the total level of our financial debt. Our definitions of Net Financial Position and Adjusted Net Financial Position may differ from definitions used by other companies, and therefore, comparability may be limited.
| (US$ m) | 2026 | 2026 | 2025 | ||
| Cash and cash equivalents | 3,096 | 1,889 | 2,837 | 1,999 | 1,616 |
| Short term deposits | 1,800 | 1,850 | 1,100 | 1,450 | 1,650 |
| Marketable securities | 1,136 | 832 | 985 | 1,327 | 2,363 |
| Total liquidity (a) | 6,032 | 4,571 | 4,922 | 4,776 | 5,629 |
| Short-term debt (b) | (1,063) | (319) | (298) | (256) | (1,006) |
| Long-term debt (a) (b) | (2,962) | (2,250) | (1,835) | (1,910) | (1,951) |
| Total financial debt | (4,025) | (2,569) | (2,133) | (2,166) | (2,957) |
| Net Financial Position (non- | 2,007 | 2,002 | 2,789 | 2,610 | 2,672 |
| Advances received on capital grants | (306) | (316) | (333) | (345) | (361) |
| Adjusted Net Financial Position (non- | 1,701 | 1,686 | 2,456 | 2,265 | 2,311 |
(a) Total liquidity and long-term debt increased following the issuance of a new
(b) Long-term debt contains standard conditions but does not impose minimum financial ratios. Committed credit facilities for $1,191 million equivalent are currently undrawn. Short-term debt includes
(Appendix – continued)
Net Capex and Free Cash Flow (non-
ST presents Net Capex as a non-
Net Capex, a non-
ST believes Net Capex provides useful information for investors and management because annual capital expenditures budget includes the effect of capital grants. Our definition of Net Capex may differ from definitions used by other companies, and therefore, comparability may be limited.
| (US$ m) | Q2 2026 | Q1 2026 | Q4 2025 | Q3 2025 | Q2 2025 |
| Payment for purchase of tangible assets, as reported | (453) | (549) | (518) | (431) | (574) |
| Proceeds from sale of tangible assets, as reported | - | 3 | - | 3 | 4 |
| Proceeds from capital grants and other contributions, as reported | 34 | 167 | 111 | 11 | 89 |
| Advances from capital grants allocated to property, plant and equipment | 10 | 17 | 12 | 16 | 16 |
| Net Capex (non- | (409) | (362) | (395) | (401) | (465) |
Free Cash Flow, which is a non-
ST believes Free Cash Flow provides useful information for investors and management because it measures our capacity to generate cash from our operating and investing activities to sustain our operations.
Free Cash Flow reconciles with the total cash flow and the net cash increase (decrease) by including the payment for purchases of (and proceeds from matured) marketable securities and net investment in (and proceeds from) short-term deposits, the net cash from (used in) financing activities and the effect of changes in exchange rates, and by excluding the advances from capital grants received on prior periods allocated to property, plant and equipment in the reporting period. Our definition of Free Cash Flow may differ from definitions used by other companies, and therefore, comparability may be limited.
| (US$ m) | Q2 2026 | Q1 2026 | Q4 2025 | Q3 2025 | Q2 2025 |
| Net cash from operating activities | 502 | 534 | 674 | 549 | 354 |
| Net Capex | (409) | (362) | (395) | (401) | (465) |
| Payment for purchase of intangible assets, net of proceeds from sale | (31) | (17) | (20) | (18) | (41) |
| Proceeds from (payment for) financial assets | 13 | 17 | (2) | - | - |
| Payment for business acquisitions(a) | - | (895) | - | - | - |
| Free Cash Flow (non- | 75 | (723) | 257 | 130 | (152) |
(a) Q126 Free cash flow includes
1 Non-
1 Non-
2 Q226 Analog products, MEMS and Sensors (AM&S) segment included revenues associated with NXP’s MEMS sensor business.
3 Non-
2 Q126 Free cash flow includes
Attachment
