PART I [ITEM 3. KEY INFORMATION](index=6&type=section&id=ITEM%203.%20KEY%20INFORMATION) This section outlines the principal risks facing the company, categorized into business and industry, manufacturing operations, intellectual property, legal and regulatory, and risks related to its status as a controlled foreign private issuer [Risk Factors](index=6&type=section&id=Risk%20Factors) The company faces significant risks from global economic and geopolitical conditions, particularly US-China trade tensions and the Russia-Ukraine conflict, which could disrupt supply chains and demand - The company's business is materially affected by geopolitical tensions, particularly between the United States and China, and the conflict in Ukraine, which have led to trade barriers, export controls, and supply chain uncertainties for materials like natural gas[29](index=29&type=chunk)[30](index=30&type=chunk) - A significant portion of revenue comes from a small number of customers, with the **ten largest customers accounting for approximately 70%, 67%, and 73% of wafer shipment volume** in 2022, 2021, and 2020, respectively[38](index=38&type=chunk) - The company relies heavily on a limited number of suppliers for silicon-on-insulator (SOI) wafers, with its largest supplier, **Soitec S.A., providing 54% of its SOI wafers in 2022**[39](index=39&type=chunk) - The company has entered into multiple Long-Term Agreements (LTAs) that obligate it to meet specific production requirements, exposing it to potential liquidated damages and constraining its ability to reallocate production capacity[32](index=32&type=chunk)[33](index=33&type=chunk) - As a controlled company, the majority shareholder, **Mubadala, beneficially owns approximately 85.7% of outstanding ordinary shares**, giving it substantial control over key transactions and corporate matters[152](index=152&type=chunk) [ITEM 4. INFORMATION ON THE COMPANY](index=34&type=section&id=ITEM%204.%20INFORMATION%20ON%20THE%20COMPANY) This section details the company's history, business operations, organizational structure, and physical assets [History and Development of the Company](index=34&type=section&id=A.%20History%20and%20Development%20of%20the%20Company) Established in 2009 from AMD's manufacturing operations, GlobalFoundries has grown through acquisitions and strategically pivoted to focus on specialized process technologies - The company was established in 2009 from an acquisition of AMD's manufacturing operations and has since grown through key acquisitions like Chartered Semiconductor (2010) and IBM's Microelectronics division (2015)[175](index=175&type=chunk) - In 2018, the company underwent a strategic pivot to focus on the pervasive foundry market and specialized process technologies, divesting non-aligned assets[176](index=176&type=chunk) - The company completed its IPO on **November 1, 2021**, with shares listed on Nasdaq under the symbol "GFS"[177](index=177&type=chunk) - On **December 31, 2022**, the company completed the sale of its East Fishkill (EFK) business to ON Semiconductor for a gain of **$403 million**[176](index=176&type=chunk) [Business Overview](index=35&type=section&id=B.%20Business%20Overview) GlobalFoundries is a leading semiconductor foundry manufacturing complex, feature-rich ICs for diverse markets, differentiating itself with a global manufacturing footprint outside of China and Taiwan - The company is one of the world's leading semiconductor foundries, focusing on feature-rich ICs for markets like Smart Mobile Devices, IoT, Communications Infrastructure, Automotive, and Personal Computing[183](index=183&type=chunk)[191](index=191&type=chunk) - As of **December 31, 2022**, the company had long-term agreements with an aggregate remaining revenue commitment of over **$22 billion**[186](index=186&type=chunk) - Single-sourced products, which can only be manufactured with the company's technology without significant redesign, represented approximately **65% of wafer shipment volume in 2022**[187](index=187&type=chunk)[188](index=188&type=chunk) - The company operates seven primary differentiated technology platforms: RF SOI, FinFET, Feature-Rich CMOS, FDX™, SiGe, GaN, and SiPh[192](index=192&type=chunk) R&D Expenditures (2020-2022) | Year | R&D Expense (in millions) | % of Net Revenue | | :--- | :--- | :--- | | 2022 | $482 | 6% | | 2021 | $478 | 7% | | 2020 | $476 | 10% | [Property, Plant and Equipment](index=42&type=section&id=D.%20Property,%20Plant%20and%20Equipment) The company operates four primary manufacturing sites in Dresden (Germany), Singapore, Malta (New York), and Burlington (Vermont), with significant capacity expansions underway 2022 Wafer Shipments by Facility (300mm equivalent) | Facility Location | Wafer Size (mm) | 2022 Shipments (kwpa) | | :--- | :--- | :--- | | Malta, New York | 300 | ~390 | | Burlington, Vermont | 200 | ~231 | | Dresden, Germany | 300 | ~650 | | Singapore | 300, 200 | ~1060 | | East Fishkill, New York (Sold) | 300 | ~140 | - The company is expanding its Singapore facility with Module 7H, expected to begin production in 2023 and add **450,000 wafers of 300mm capacity** when fully ramped[240](index=240&type=chunk) - Expansion plans in Malta, New York include a **$1.0 billion investment** to expand the existing fab's capacity by **~150,000 wafers per year**, followed by construction of a new fab to double capacity[241](index=241&type=chunk) - A new jointly-operated 300mm facility is being built in Crolles, France with STMicroelectronics, targeted to ramp to **620,000 wafers per year** at full build-out[242](index=242&type=chunk) [ITEM 5. OPERATING AND FINANCIAL REVIEWS AND PROSPECTS](index=48&type=section&id=ITEM%205.%20OPERATING%20AND%20FINANCIAL%20REVIEWS%20AND%20PROSPECTS) This section provides a detailed analysis of the company's financial performance and condition, highlighting significant growth in revenue and profitability for fiscal year 2022 [Operating Results](index=50&type=section&id=A.%20Operating%20Results) For the year ended December 31, 2022, net revenue increased 23.1% to $8.11 billion, with gross profit more than doubling and a significant turnaround to net income Consolidated Statement of Operations Summary (FY 2022 vs. FY 2021) | Metric | 2022 (in millions) | 2021 (in millions) | Change (%) | | :--- | :--- | :--- | :--- | | Net Revenue | $8,108 | $6,585 | 23.1% | | Gross Profit | $2,239 | $1,013 | 121.0% | | Gross Margin | 27.6% | 15.4% | +1,220 bps | | Income (Loss) from Operations | $1,167 | $(60) | N/M | | Net Income (Loss) | $1,446 | $(254) | N/M | - The **23.1% increase in net revenue** was primarily driven by a **17% year-over-year increase in ASP per wafer** and a **4.1% increase in wafer shipments**[268](index=268&type=chunk)[269](index=269&type=chunk) - A gain of **$403 million** was recognized from the sale of the EFK business, significantly contributing to the net income for 2022[277](index=277&type=chunk) - The company implemented a restructuring plan in Q4 2022, resulting in **$94 million of charges** related to workforce reduction and other strategic support[274](index=274&type=chunk) - Selling, general and administrative (SG&A) expenses decreased by **16.6% to $496 million**, mainly due to a **$59 million reduction in share-based compensation**[273](index=273&type=chunk) [Liquidity and Capital Resources](index=53&type=section&id=B.%20Liquidity%20and%20Capital%20Resources) As of December 31, 2022, the company maintained a strong liquidity position with $3.35 billion in cash, cash equivalents, and marketable securities, alongside access to a $1 billion revolving credit facility Liquidity and Debt Position (as of Dec 31) | Metric (in millions) | 2022 | 2021 | | :--- | :--- | :--- | | Cash and cash equivalents | $2,352 | $2,939 | | Marketable securities | $994 | $0 | | **Total Liquidity** | **$3,346** | **$2,939** | | Total Debt Outstanding | $2,511 | $2,013 | Summary of Cash Flows (Year Ended Dec 31) | Cash Flow (in millions) | 2022 | 2021 | | :--- | :--- | :--- | | Cash from Operating Activities | $2,624 | $2,839 | | Cash used in Investing Activities | $(4,058) | $(1,450) | | Cash from Financing Activities | $842 | $650 | - The significant increase in cash used for investing activities was driven by a **$1.29 billion rise in purchases of property, plant, and equipment** for capacity expansion and **$996 million in net purchases of marketable securities**[289](index=289&type=chunk) - As of **December 31, 2022**, the company had **$6.36 billion in unconditional purchase commitments**, with **$2.77 billion for capital expenditures** and **$3.59 billion for operating expenditures**[292](index=292&type=chunk) [Trend Information](index=55&type=section&id=D.%20Trend%20information) The company's performance is influenced by macroeconomic headwinds and a semiconductor industry inventory correction, but benefits from improved visibility through its long-term partnership model - The company is cautious about macroeconomic headwinds facing the semiconductor industry in the first half of 2023[295](index=295&type=chunk) - The mix of single-sourced business, a key measure of customer partnership, increased to approximately **65% of wafer shipment volume in 2022**, up from **62% in 2021**[297](index=297&type=chunk) - Long-Term Agreements (LTAs) provide significant revenue visibility, with an aggregate lifetime revenue commitment of approximately **$22 billion** as of **December 31, 2022**[301](index=301&type=chunk) - Shipment utilization is a key driver of financial performance, with the average utilization rate across 300mm fabs at **103% in 2022**, down slightly from **106% in 2021**[304](index=304&type=chunk) [Critical Accounting Policies and Estimates](index=56&type=section&id=E.%20Critical%20Accounting%20Policies%20and%20Estimates) This section details the accounting policies requiring the most significant judgments and estimates, including revenue recognition, inventory valuation, and deferred income tax assets - Revenue is generally recognized when control transfers to the customer, which is typically at the point of shipment from the company's facilities[307](index=307&type=chunk) - In Q1 2021, the company revised the estimated useful life of certain production equipment to **10 years**, which benefited loss before income taxes by approximately **$628 million** for the year ended **December 31, 2021**[317](index=317&type=chunk)[669](index=669&type=chunk) - The realization of deferred tax assets is a critical estimate, dependent on the generation of future taxable income, with **$292 million in deferred tax assets** as of **December 31, 2022**, primarily in Singapore[314](index=314&type=chunk)[315](index=315&type=chunk) - Share-based compensation is valued using the Black-Scholes and Monte Carlo simulation models, which require subjective assumptions about volatility, expected term, and risk-free rates[318](index=318&type=chunk) [ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES](index=59&type=section&id=ITEM%206.%20DIRECTORS,%20SENIOR%20MANAGEMENT%20AND%20EMPLOYEES) This section provides information on the company's leadership, compensation practices, and employee base, including executive officers, board members, and global workforce distribution - The aggregate compensation for directors and executive officers for the year ended **December 31, 2022, was $46.4 million**, including salary, benefits, and equity awards[348](index=348&type=chunk) - Executive compensation in 2022 consisted of base salary, an Annual Incentive Program (AIP) based on financial and strategic goals, and long-term incentives in the form of Performance Stock Units (PSUs) and Restricted Stock Units (RSUs)[347](index=347&type=chunk)[351](index=351&type=chunk)[353](index=353&type=chunk) - The board of directors is divided into three staggered classes, with terms expiring in 2023, 2024, and 2025, and several directors are designated by the majority shareholder, Mubadala, under a Shareholder's Agreement[370](index=370&type=chunk)[371](index=371&type=chunk)[373](index=373&type=chunk) - As of **December 31, 2022**, the company employed approximately **14,000 people**, with **42% in North America, 25% in EMEA, and 33% in APAC**, and approximately **70% of employees were engineers or technicians**[386](index=386&type=chunk) [ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS](index=69&type=section&id=ITEM%207.%20MAJOR%20SHAREHOLDERS%20AND%20RELATED%20PARTY%20TRANSACTIONS) This section details the company's ownership structure and transactions with related parties, highlighting Mubadala's dominant shareholder position and its significant control through various agreements - As of **December 31, 2022, Mubadala beneficially owned 469,501,994 ordinary shares**, representing an **85.72% stake** in the company[390](index=390&type=chunk) - A Shareholder's Agreement grants Mubadala the right to nominate a majority of the board of directors and provides consent rights over significant corporate actions as long as it maintains certain ownership thresholds[392](index=392&type=chunk)[395](index=395&type=chunk) - A Registration Rights Agreement provides Mubadala with demand and "piggyback" rights to have its shares registered for sale in public offerings[398](index=398&type=chunk)[399](index=399&type=chunk) - The company holds a **49% interest in Silicon Manufacturing Partners Pte Ltd. ("SMP")**, a joint venture from which it purchased **$60 million in products** (primarily wafers) in 2022[401](index=401&type=chunk) [ITEM 8. FINANCIAL INFORMATION](index=72&type=section&id=ITEM%208.%20FINANCIAL%20INFORMATION) This section references the full consolidated financial statements and discusses significant legal proceedings and the company's dividend policy - The company is involved in a significant legal proceeding with IBM, which alleges breach of contract and fraudulent misrepresentation concerning the 2015 acquisition of IBM's Microelectronics division, with IBM seeking **$2.5 billion in damages**[404](index=404&type=chunk)[758](index=758&type=chunk) - The company does not expect to declare or pay any cash dividends in the foreseeable future, intending to retain all available funds to support business development and growth[406](index=406&type=chunk) [ITEM 10. ADDITIONAL INFORMATION](index=73&type=section&id=ITEM%2010.%20ADDITIONAL%20INFORMATION) This section provides details on the company's corporate structure and governance, outlining significant differences between Cayman Islands and U.S. (Delaware) corporate law, and discussing taxation - The company is an exempted company incorporated in the Cayman Islands with limited liability[180](index=180&type=chunk) - Significant differences exist between Cayman Islands and Delaware corporate law regarding mergers, shareholder suits, directors' fiduciary duties, and shareholder proposals, for example, Cayman law provides for a right of dissenting shareholders to be paid fair value in a merger, but these rights are not available in all circumstances[418](index=418&type=chunk)[421](index=421&type=chunk)[428](index=428&type=chunk)[433](index=433&type=chunk) - The company has received a tax concession undertaking from the Cayman Islands government, effective for **20 years from October 21, 2008**, stating that no law imposing tax on profits, income, or gains will apply to the company or its operations[465](index=465&type=chunk)[466](index=466&type=chunk) - For U.S. federal income tax purposes, the company believes it was not a Passive Foreign Investment Company (PFIC) for 2021 or 2022 and does not anticipate becoming one[474](index=474&type=chunk)[480](index=480&type=chunk) [ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS](index=83&type=section&id=ITEM%2011.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISKS) The company's primary market risk exposures are to foreign currency fluctuations and interest rate changes, which it mitigates using derivative instruments - The company's main market risks are foreign currency risk (primarily Euro, Singapore dollar, Japanese yen) and interest rate risk on its floating-rate debt[490](index=490&type=chunk)[491](index=491&type=chunk)[492](index=492&type=chunk) - The company utilizes derivative financial instruments, including foreign currency forward contracts, interest rate swaps, and cross-currency swaps, to hedge its exposure to market fluctuations[491](index=491&type=chunk)[492](index=492&type=chunk) - As of **December 31, 2022**, management believes that a hypothetical **10% change** in existing interest rates or in the relative value of the U.S. dollar to key foreign currencies would not materially impact the company's financial statements[491](index=491&type=chunk)[493](index=493&type=chunk) PART II [ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS](index=84&type=section&id=ITEM%2014.%20MATERIAL%20MODIFICATIONS%20TO%20THE%20RIGHTS%20OF%20SECURITY%20HOLDERS%20AND%20USE%20OF%20PROCEEDS) This section details the use of proceeds from the company's October 2021 Initial Public Offering (IPO) and a concurrent private placement, which have been partially used for capacity expansion projects - The company raised approximately **$1.4 billion in net proceeds** from its IPO and a concurrent private placement in October/November 2021[498](index=498&type=chunk) - From the IPO closing through **December 31, 2022**, a portion of the proceeds was used for construction at the Singapore facility and other capacity expansion projects[500](index=500&type=chunk) [ITEM 15. CONTROLS AND PROCEDURES](index=84&type=section&id=ITEM%2015.%20CONTROLS%20AND%20PROCEDURES) This section addresses the company's internal controls, with management concluding that both disclosure controls and internal control over financial reporting were effective as of December 31, 2022 - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of **December 31, 2022**[502](index=502&type=chunk)[503](index=503&type=chunk) - Management assessed its internal control over financial reporting as effective as of **December 31, 2022**, based on the COSO framework[505](index=505&type=chunk) - The independent registered public accounting firm, KPMG LLP, audited and issued an unqualified opinion on the effectiveness of the company's internal control over financial reporting as of **December 31, 2022**[506](index=506&type=chunk)[507](index=507&type=chunk) [Corporate Governance and Other Disclosures](index=85&type=section&id=ITEM%2016.%20Corporate%20Governance%20and%20Other%20Disclosures) This section covers various governance topics, including the audit committee financial expert, fees paid to the principal accountant, and the company's adherence to Nasdaq listing standards as a foreign private issuer - The board of directors has identified Jack Lazar as an "audit committee financial expert"[509](index=509&type=chunk) Principal Accountant Fees (KPMG LLP) | Fee Category (in thousands) | 2022 | 2021 | | :--- | :--- | :--- | | Audit fees | $4,744 | $4,900 | | Audit-related fees | $61 | $0 | | Tax fees | $0 | $152 | | All other fees | $0 | $29 | | **Total** | **$4,805** | **$5,081** | - As a foreign private issuer, the company follows home country (Cayman Islands) practices for certain Nasdaq listing standards, including those related to director nominations and shareholder approval for certain equity issuances[521](index=521&type=chunk) PART III [ITEM 18. FINANCIAL STATEMENTS](index=89&type=section&id=ITEM%2018.%20FINANCIAL%20STATEMENTS) This section contains the company's audited consolidated financial statements and the reports from its independent registered public accounting firms for the years ended December 31, 2022, 2021, and 2020 Consolidated Financial Position (as of Dec 31) | Metric (in millions) | 2022 | 2021 | | :--- | :--- | :--- | | **Total Assets** | **$17,841** | **$15,028** | | Total Current Assets | $5,800 | $5,291 | | Property, plant and equipment, net | $10,596 | $8,713 | | **Total Liabilities** | **$7,881** | **$6,995** | | Total Current Liabilities | $3,359 | $3,163 | | **Total Equity** | **$9,960** | **$8,033** | Consolidated Statement of Operations (Year Ended Dec 31) | Metric (in millions) | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Net Revenue | $8,108 | $6,585 | $4,851 | | Gross Profit (Loss) | $2,239 | $1,013 | $(712) | | Income (Loss) from Operations | $1,167 | $(60) | $(1,656) | | Net Income (Loss) | $1,446 | $(254) | $(1,353) | | Diluted EPS | $2.62 | $(0.49) | $(2.70) | - The company's revenue is primarily from wafer fabrication, which accounted for **$7.63 billion of the $8.11 billion total revenue in 2022**[671](index=671&type=chunk) - In 2020, a change in contract cancellation terms led to a shift from recognizing revenue over time to recognizing it at a point in time (shipment), resulting in a one-time cumulative decrease in revenue of **$315 million** for that year[672](index=672&type=chunk)[673](index=673&type=chunk)

GLOBALFOUNDRIES Inc. (NASDAQ:GFS) Q4 2022 Earnings Conference Call February 14, 2023 8:30 AM ET Company Participants Sam Franklin - Head of Capital Markets and Investor Relations Tom Caulfield - Chief Executive Officer Dave Reeder - Chief Financial Officer Conference Call Participants Mark Lipacis - Jefferies Joseph Moore - Morgan Stanley Harlan Sur - JPMorgan Vivek Arya - Bank of America Ross Seymore - Deutsche Bank Chris Caso - Credit Suisse Mehdi Hosseini - SIG Rajvindra Gill - Needham Operator Good day ...

[Financial Performance Overview](index=1&type=section&id=Financial%20Performance%20Overview) [Fourth Quarter 2022 Financial Highlights](index=1&type=section&id=Fourth%20Quarter%202022%20Financial%20Highlights) The company reported strong Q4 2022 results with a 14% revenue increase and significant margin expansion Q4 2022 Key Financial Metrics (vs. Q4 2021) | Metric | Q4 2022 | Q4 2021 | Change (YoY) | | :--- | :--- | :--- | :--- | | Net Revenue | $2,101 M | $1,847 M | +14% | | Gross Margin | 29.6% | 20.8% | +880 bps | | Net Income | $668 M | $43 M | +1,453% | | Adjusted EBITDA | $821 M | $584 M | +41% | | Diluted EPS | $1.21 | $0.08 | +1,413% | | Wafer Shipments | 580k | 622k | -7% | [Full Year 2022 Financial Highlights](index=1&type=section&id=Full%20Year%202022%20Financial%20Highlights) The company achieved record full-year 2022 results with 23% revenue growth and a return to profitability Full Year 2022 Key Financial Metrics (vs. FY 2021) | Metric | FY 2022 | FY 2021 | Change (YoY) | | :--- | :--- | :--- | :--- | | Net Revenue | $8,108 M | $6,585 M | +23% | | Gross Margin | 27.6% | 15.4% | +1,220 bps | | Net Income (Loss) | $1,446 M | ($254 M) | N/A | | Adjusted EBITDA | $3,088 M | $1,848 M | +67% | | Diluted EPS | $2.62 | ($0.49) | N/A | - CEO Dr. Thomas Caulfield highlighted that despite a well-publicized inventory correction in Q4, the company **grew revenue by 23%** for the full year and delivered **record gross margin and net income**[2](index=2&type=chunk) [Recent Business Highlights](index=1&type=section&id=Recent%20Business%20Highlights) Key strategic initiatives included a GM agreement, technology acquisition, and a major facility sale - Entered a multi-year agreement with General Motors to secure a capacity corridor in its Upstate NY Fab, supporting GM's U.S. supply chain[5](index=5&type=chunk) - Acquired Conductive Bridging Random Access Memory (CBRAM) technology from Renesas, strengthening its embedded nonvolatile memory solutions portfolio[5](index=5&type=chunk) - Completed the sale of its East Fishkill, NY, facility to onsemi for a final price of **$406 million**, allowing GF to optimize assets and investments in differentiated technologies[5](index=5&type=chunk) [First Quarter 2023 Outlook](index=4&type=section&id=First%20Quarter%202023%20Outlook) The company projects Q1 2023 revenue between $1,810 million and $1,850 million with an adjusted gross margin of 28.0% Q1 2023 Guidance | Metric | Guidance Range (Mid-point) | | :--- | :--- | | Net Revenue | $1,810 M - $1,850 M | | Adjusted Gross Margin | 28.0% | | Adjusted Diluted EPS | $0.45 - $0.53 | | Adjusted EBITDA | $667 M - $722 M | [Consolidated Financial Statements (Unaudited)](index=4&type=section&id=Consolidated%20Financial%20Statements%20(Unaudited)) [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) Net revenue grew 23% to $8,108 million in 2022, driving a significant turnaround to a net income of $1,446 million Annual Income Statement Highlights (in millions USD) | Line Item | Year Ended Dec 31, 2022 | Year Ended Dec 31, 2021 | | :--- | :--- | :--- | | Net Revenue | $8,108 | $6,585 | | Gross Profit | $2,239 | $1,013 | | Operating Profit (Loss) | $1,167 | ($60) | | Gain on sale of a business | $403 | - | | Net Income (Loss) | $1,446 | ($254) | | Diluted EPS | $2.62 | ($0.49) | [Consolidated Statements of Financial Position](index=5&type=section&id=Consolidated%20Statements%20of%20Financial%20Position) Total assets grew to $17,841 million, and shareholders' equity increased to $9,960 million by year-end 2022 Key Balance Sheet Items (in millions USD) | Account | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Cash and cash equivalents | $2,352 | $2,939 | | Total Assets | $17,841 | $15,028 | | Total Liabilities | $7,881 | $6,995 | | Total Shareholders' Equity | $9,960 | $8,033 | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow was $2,624 million, while significant capital expenditures led to a net decrease in cash Annual Cash Flow Summary (in millions USD) | Cash Flow Activity | Year Ended Dec 31, 2022 | Year Ended Dec 31, 2021 | | :--- | :--- | :--- | | Net cash from operating activities | $2,624 | $2,839 | | Net cash used in investing activities | ($4,058) | ($1,450) | | Net cash provided by financing activities | $842 | $650 | | Net change in cash and cash equivalents | ($587) | $2,031 | [Reconciliation of IFRS to Non-IFRS Measures](index=7&type=section&id=Reconciliation%20of%20IFRS%20to%20Non-IFRS%20Measures) [Reconciliation of Key Profit Metrics](index=7&type=section&id=Reconciliation%20of%20Key%20Profit%20Metrics) FY2022 adjusted net income reached $1,717 million, with adjusted diluted EPS of $3.11 after non-IFRS adjustments FY 2022 IFRS to Non-IFRS Reconciliation (in millions USD, except EPS) | Metric | IFRS | Adjustments | Non-IFRS Adjusted | | :--- | :--- | :--- | :--- | | Gross Profit | $2,239 | $64 | $2,303 | | Operating Profit | $1,167 | $276 | $1,443 | | Net Income (Loss) | $1,446 | $271 | $1,717 | | Diluted EPS | $2.62 | $0.49 | $3.11 | [Reconciliation of Net Income to Adjusted EBITDA](index=8&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20EBITDA) Adjusted EBITDA grew 67% to $3,088 million in FY2022, with the margin improving to 38.1% FY 2022 Net Income to Adjusted EBITDA Reconciliation (in millions USD) | Line Item | FY 2022 | FY 2021 | | :--- | :--- | :--- | | Net Income (Loss) | $1,446 | ($254) | | Depreciation & Amortization | $1,623 | $1,619 | | Share based compensation | $182 | $228 | | (Gains) on transactions | ($403) | $46 | | **Adjusted EBITDA** | **$3,088** | **$1,848** | [Explanation of Adjusted Financial Measures (Non-IFRS)](index=9&type=section&id=Explanation%20of%20Adjusted%20Financial%20Measures%20(Non-IFRS)) Non-IFRS measures are used to provide supplemental insight into core operational performance - The company uses non-IFRS measures to provide useful information to management and investors for measuring financial performance and highlighting business trends not apparent in IFRS results[25](index=25&type=chunk) - Key adjustments to derive non-IFRS metrics include share-based compensation expense, restructuring charges, transaction gains/expenses, and labor optimization initiatives[24](index=24&type=chunk) [Supplementary Information](index=9&type=section&id=Supplementary%20Information) [Conference Call and Webcast Information](index=9&type=section&id=Conference%20Call%20and%20Webcast%20Information) A conference call was scheduled for February 14, 2022, to discuss the financial results - A conference call to review Q4 and Full Year 2022 results was scheduled for Tuesday, February 14, 2022, at 8:30 a.m. U.S. Eastern Time[27](index=27&type=chunk) [About GlobalFoundries](index=9&type=section&id=About%20GlobalFoundries) GlobalFoundries is a leading semiconductor manufacturer with a global fabrication footprint - GlobalFoundries is one of the world's leading semiconductor manufacturers, offering design, development, and fabrication services with a manufacturing footprint in the U.S., Europe, and Asia[28](index=28&type=chunk) [Forward-looking Statements](index=9&type=section&id=Forward-looking%20Statements) The report contains forward-looking statements subject to risks and uncertainties - The report contains forward-looking statements under the 'safe harbor' provisions of the U.S. Private Securities Litigation Reform Act of 1995, which are subject to a broad variety of risks and uncertainties[29](index=29&type=chunk) - Investors are cautioned not to place undue reliance on these statements, as they are based on current information and the company assumes no obligation to update them[30](index=30&type=chunk)[31](index=31&type=chunk)

GLOBALFOUNDRIES Inc. (NASDAQ:GFS) Q3 2022 Earnings Conference Call November 8, 2022 8:30 AM ET Company Participants | --- | |--------------------------------------------------------------------------------------------------------------------| | | | | | Sukhi Nagesh - Investor Relations Thomas Caulfield - Chief Executive Officer Dave Reeder - Chief Financial Officer | | Conference Call Participants | | Harlan Sur - JPMorgan | | Ross Seymore - Deutsche Bank | | Joseph Moore - Morgan Stanley | | Vivek Arya - B ...

Financial Performance - Record revenue of $2.1 billion, up 22% year-over-year[4] - Gross profit reached $610 million, a 103% increase year-over-year[6] - Net income of $336 million, representing a 6,620% increase compared to the same quarter last year[6] - Adjusted EBITDA of $793 million, up 57% year-over-year[6] - Gross profit for Q3 2022 was $610 million, up from $538 million in Q2 2022 and $300 million in Q3 2021, representing a year-over-year increase of 103.3%[19] - Adjusted EBITDA for Q3 2022 was $793 million, with an adjusted EBITDA margin of 38.2%, compared to $784 million and 39.3% in Q2 2022[23] - Net income for Q3 2022 was $336 million, a significant increase from $264 million in Q2 2022 and $5 million in Q3 2021, resulting in a net income margin of 16.2%[19] - Adjusted diluted earnings per share for Q3 2022 was $0.67, compared to $0.58 in Q2 2022 and $0.07 in Q3 2021[19] - Operating profit for Q3 2022 was $357 million, with an operating profit margin of 17.2%, up from $297 million and 14.9% in Q2 2022[19] - Adjusted net income for Q3 2022 was $368 million, compared to $317 million in Q2 2022, reflecting a year-over-year increase of 15.9%[19] - Share-based compensation for Q3 2022 was $32 million, down from $53 million in Q2 2022[23] Outlook and Future Plans - Fourth quarter 2022 outlook projects net revenue between $2,050 million and $2,100 million[10] - Adjusted diluted earnings per share expected to be between $1.24 and $1.44 for the fourth quarter[10] - Future outlook includes addressing potential risks such as supply chain disruptions and economic conditions impacting performance[29] - The company will host a conference call on November 8, 2022, to discuss Q3 2022 results in detail[27] Product Development and Innovation - The company qualified a proprietary automotive eNVM product for a major automotive MCU supplier, enhancing supply chain security[5] - Awarded $30 million in federal funding for the development of next-generation gallium nitride (GaN) on silicon semiconductors[5] - The company is focused on redefining innovation in semiconductor manufacturing and expanding its market presence globally[28] Operational Metrics - Wafer shipments of 637 thousand (300mm equivalent), a record high, up 5% year-over-year[6]

GLOBALFOUNDRIES Inc. (NASDAQ:GFS) Q2 2022 Earnings Conference Call August 9, 2022 8:30 AM ET Company Participants Sukhi Nagesh - IR Thomas Caulfield - CEO Dave Reeder - CFO Conference Call Participants Harlan Sur - JP Morgan Vivek Arya - Bank of America Ross Seymore - Deutsche Bank Mehdi Hosseini - SIG Rajvindra Gill - Needham Chris Danely - Citi Randy Abrams - Credit Suisse Operator Thank you for standing by, and welcome to GlobalFoundries Second Quarter Fiscal Year 2022 Earnings Conference Call [Operator ...

GLOBALFOUNDRIES Inc. (NASDAQ:GFS) Q1 2022 Earnings Conference Call May 10, 2022 4:30 PM ET Company Participants Sukhi Nagesh - Vice President, Corporate Development and Investor Relations Thomas Caulfield - President and Chief Executive Officer David Reeder - Chief Financial Officer Conference Call Participants Harlan Sur - JPMorgan Vivek Arya - Bank of America Ross Seymore - Deutsche Bank Chris Danely - Citi Joe Moore - Morgan Stanley Chris Caso - Raymond James Mehdi Hosseini - SIG Matt Bryson - Wedbush Se ...

Financial Data and Key Metrics Changes - Fourth quarter revenue was approximately $1.85 billion, a 9% sequential increase driven by higher wafer shipments, ASPs, and non-wafer revenue [32] - Full year revenue reached approximately $6.6 billion, representing a 36% year-over-year increase [34] - Adjusted gross profit for the fourth quarter was $397 million, translating to a 21.5% adjusted gross margin, with a 346 basis points sequential improvement [35] - Fourth quarter adjusted net income was approximately $98 million, resulting in earnings of $0.18 per share [38] Business Line Data and Key Metrics Changes - Smart mobile device end market accounted for about 48% of fourth quarter revenue, growing roughly 24% year-over-year [16] - Communications infrastructure and data center end market constituted approximately 16% of fourth quarter revenue, with a sequential growth of 7% [18] - Home and industrial IoT end market revenue was roughly 14% of total, growing approximately 20% year-over-year [19] - Automotive end market revenue was about 5% of total fourth quarter revenue, more than doubling from a year ago [20] Market Data and Key Metrics Changes - The smart mobile device market grew approximately 38% over 2020, outpacing smartphone industry growth [16] - Silicon photonics revenue almost tripled in 2021, with expectations to more than double again in 2022 [18] - The market for image sensing processors is expected to grow over 25% in 2022 [17] Company Strategy and Development Direction - The company aims to increase output by more than 50% by the end of 2023 compared to 2020 through capacity additions in various locations [13] - The strategy includes investing 20% of revenue on CapEx to ensure consistent growth and strong free cash flow [14] - The company is focused on long-term agreements with customers to secure visibility for future growth [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the semiconductor industry's growth, expecting to chase capacity to meet demand for the next five years [109] - The company anticipates strong revenue growth in 2022, with expectations of high single-digit growth in ASPs [48][49] - Management highlighted the importance of partnerships with customers to ensure demand certainty before making investments [69] Other Important Information - The company plans to invest approximately $4.5 billion in CapEx for 2022 to support capacity expansion [43] - Cash flow from operations for the fourth quarter was approximately $1.15 billion, including significant customer prepayments [40] Q&A Session Summary Question: ASP progression for 2022 - Management expects ASPs to grow about 10% year-over-year, with volume increasing in the high single digits [48][49] Question: Margin progression for 2022 - Management discussed factors driving margins, including disciplined CapEx and improved fixed cost absorption [51][52] Question: Growth drivers for 2022 - Automotive and home/industrial IoT markets are expected to drive the strongest growth, with smart mobile devices growing at the enterprise average [63] Question: CHIPS Act funding impact - Management indicated that while they will leverage government support, investments are primarily driven by customer demand [69][72] Question: Supply-demand balance in the industry - Management believes the industry will continue to experience a supply-demand imbalance for the next five years [109] Question: Equipment supply conversations - Management reported that they have managed to secure equipment orders early, mitigating potential supply chain issues [100]

GlobalFoundries Inc. (NASDAQ:GFS) Q3 2021 Earnings Conference Call November 30, 2021 4:30 PM ET Company Participants Sukhi Nagesh – Head-Investor Relations Tom Caulfield – Chief Executive Officer Dave Reeder – Chief Financial Officer Conference Call Participants Harlan Sur – JPMorgan Ross Seymore – Deutsche Bank Vivek Arya – Bank of America Securities Joe Moore – Morgan Stanley Chris Danely – Citi Chris Caso – Raymond James Tristan Gerra – Baird Steven Chin – Cowen Raji Gill – Needham & Company Mehdi Hossei ...