GLOBALFOUNDRIES(GFS) - 2022 Q4 - Annual Report

Financial Performance Overview Fourth Quarter 2022 Financial Highlights 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 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] Recent Business Highlights 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] - Acquired Conductive Bridging Random Access Memory (CBRAM) technology from Renesas, strengthening its embedded nonvolatile memory solutions portfolio[5] - 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] First Quarter 2023 Outlook 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) Consolidated Statements of Operations 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 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 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 Reconciliation of Key Profit Metrics 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 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) 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] - Key adjustments to derive non-IFRS metrics include share-based compensation expense, restructuring charges, transaction gains/expenses, and labor optimization initiatives[24] Supplementary Information Conference Call and Webcast Information 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] About GlobalFoundries 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] Forward-looking Statements 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] - 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][31]