GLOBALFOUNDRIES(GFS) - 2022 Q1 - Quarterly Report

Financial & Business Highlights GlobalFoundries reported record Q1 2022 financial results, achieving a 37% year-over-year revenue increase and record profitability Q1 2022 Key Financial Highlights | Metric | Value | Growth (YoY) | | :--- | :--- | :--- | | Net Revenue | $1.94 billion | 37% | | Gross Margin | 24.2% | +1,720 bps | | Adjusted Gross Margin | 25.3% | +1,830 bps | | Net Income | $178 million | N/A (from loss) | | Adjusted Net Income | $232 million | 283% | | Cash and Cash Equivalents | $3.26 billion | - | - Announced GF Fotonix™, its next-generation silicon photonics platform, in collaboration with industry leaders like Broadcom, Cisco, Marvell, and NVIDIA to address challenges in data centers[3] - The waiting period under the Hart-Scott-Rodino (HSR) Act expired for Onsemi's proposed acquisition of GF's East Fishkill, NY site. The transaction is expected to close at the end of 2022[3] - Appointed Bobby Yerramilli-Rao, Chief Strategy Officer at Microsoft, as an independent director to the company's board[3] Q1 2022 Financial Performance Summary GlobalFoundries achieved significant year-over-year and sequential growth in Q1 2022, with revenue reaching $1.94 billion and net income turning positive Quarterly Financial Performance (in millions USD, except per share amounts) | Metric | Q1 2022 | Q1 2021 | YoY Change | Q4 2021 | QoQ Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Net Revenue | $1,940 | $1,418 | +37% | $1,847 | +5% | | Gross Profit | $469 | $99 | +374% | $384 | +22% | | Gross Margin | 24.2% | 7.0% | +1,720 bps | 20.8% | +340 bps | | Operating Profit (Loss) | $225 | $(95) | +337% | $87 | +159% | | Net Income (Loss) | $178 | $(127) | +240% | $43 | +314% | | Adjusted Net Income | $232 | $(127) | +283% | $98 | +137% | | Adjusted Diluted EPS | $0.42 | $(0.25) | +268% | $0.18 | +133% | | Adjusted EBITDA | $698 | $294 | +137% | $584 | +20% | | Wafer Shipments (k) | 625 | 548 | +14% | 622 | +0.5% | Q2 2022 Financial Outlook GlobalFoundries anticipates continued growth into Q2 2022, forecasting revenues between $1.955 billion and $1.985 billion with strong profitability Q2 2022 Outlook (Mid-point, in millions USD) | Metric | IFRS Guidance | Non-IFRS Adjusted Guidance | | :--- | :--- | :--- | | Net Revenue | $1,955 - $1,985 M | - | | Gross Profit | $470 - $504 M | $503 - $531 M | | Gross Margin | 24.7% | 26.2% | | Operating Profit | $206 - $251 M | $272 - $305 M | | Net Income | $169 - $211 M | $235 - $265 M | | Diluted EPS | $0.31 - $0.38 | $0.43 - $0.48 | | Adjusted EBITDA | - | $705 - $745 M | Consolidated Financial Statements (Unaudited) Q1 2022 unaudited consolidated financial statements detail performance and position, showing significant revenue growth and a shift to net income Consolidated Statements of Operations Q1 2022 net revenue grew to $1,940 million, driving $469 million gross profit and $178 million net income, a significant improvement from prior-year loss Statement of Operations (in millions USD) | Account | Three Months Ended Mar 31, 2022 | Three Months Ended Mar 31, 2021 | | :--- | :--- | :--- | | Net revenue | $1,940 | $1,418 | | Gross profit | $469 | $99 | | Operating profit (loss) | $225 | $(95) | | Net income (loss) | $178 | $(127) | | Diluted EPS | $0.33 | $(0.25) | Consolidated Statements of Financial Position As of March 31, 2022, total assets reached $15.90 billion, driven by increased cash and property, plant, and equipment, with total liabilities at $7.56 billion Statement of Financial Position (in millions USD) | Account | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $3,264 | $2,939 | | Total current assets | $5,659 | $5,291 | | Property, plant, and equipment, net | $9,173 | $8,713 | | Total assets | $15,902 | $15,028 | | Liabilities and Equity | | | | Total current liabilities | $3,320 | $3,163 | | Total liabilities | $7,563 | $6,995 | | Total shareholders' equity | $8,339 | $8,033 | | Total liabilities and equity | $15,902 | $15,028 | Consolidated Statements of Cash Flows Q1 2022 net cash from operating activities significantly increased to $845 million, with cash used in investing activities rising to $639 million due to capital expenditures Statement of Cash Flows (in millions USD) | Account | Three Months Ended Mar 31, 2022 | Three Months Ended Mar 31, 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $845 | $148 | | Net cash used in investing activities | $(639) | $(257) | | Net cash (used in) provided by financing activities | $118 | $(162) | | Net change in cash and cash equivalents | $325 | $(273) | | Cash and cash equivalents at end of period | $3,264 | $635 | Reconciliation of IFRS to Non-IFRS Measures Non-IFRS measures are provided to offer a clearer view of core operating performance by excluding items like share-based compensation, resulting in adjusted net income of $232 million for Q1 2022 - Non-IFRS measures like adjusted gross profit, adjusted operating profit, adjusted net income, adjusted diluted EPS, and adjusted EBITDA are presented to supplement IFRS results. The primary adjustment is the exclusion of share-based compensation expense[16][17] Reconciliation of IFRS to Adjusted Non-IFRS (Q1 2022, in millions USD) | Metric | IFRS | Share-based Compensation | Adjusted Non-IFRS | | :--- | :--- | :--- | :--- | | Gross Profit | $469 | $21 | $490 | | Operating Profit | $225 | $54 | $279 | | Net Income | $178 | $54 | $232 | Reconciliation of Net Income to Adjusted EBITDA (Q1 2022, in millions USD) | Metric | Amount | | :--- | :--- | | Net income for the period | $178 | | Depreciation and amortization | $408 | | Finance expense | $29 | | Income tax expense | $29 | | Share based compensation | $54 | | Adjusted EBITDA | $698 | About GlobalFoundries & Other Information This section provides a corporate overview of GlobalFoundries, details for its Q1 2022 results conference call, and the standard safe harbor statement regarding forward-looking statements - GlobalFoundries (GF) is a leading semiconductor manufacturer that provides design, development, and fabrication services with a manufacturing footprint in the U.S., Europe, and Asia[21] - A conference call to review the Q1 2022 results was scheduled for May 10, 2022, at 4:30 p.m. U.S. Eastern Time[19][20] - The press release contains forward-looking statements subject to risks and uncertainties, including potential impacts from the COVID-19 pandemic, supply chain disruptions, and global economic conditions. Readers are cautioned not to place undue reliance on these statements[22]