STMicroelectronics delivered a strong Q2 2026, with higher revenue, better margins and a firmer outlook for the months ahead. The chipmaker also pointed to stronger momentum in AI datacenters and LEO satellite programs as it prepares for a sharper second-half ramp.
Earnings snapshot in Q2 2026
ST reported second quarter 2026 net revenues of $3.49 billion, up 26% from a year earlier and 12.7% from the previous quarter.
Gross margin reached 34.8% under U.S. GAAP and 35.2% on a non U.S. GAAP basis, while operating income came in at $187 million under U.S. GAAP and $269 million on a non U.S. GAAP basis.
What drove the Q2 2026
Chief Executive Officer, Jean-Marc Chery said the company finished above the midpoint of its guidance, helped by stronger sales in CECP and automotive.
He said demand improved across end markets, bookings were strong, and distribution inventory fell below the company’s target level.
Segment trends
Growth was broad based, with standout performance in Embedded Processing and RF Optical Communications.
In the Analog products, MEMS and Sensors business, revenue rose 26% to $1.43 billion, while Embedded Processing climbed 35.5% to $1.15 billion and RF Optical Communications increased 32% to $445 million.
Cash and outlook
The company generated $502 million in operating cash flow and posted positive free cash flow of $75 million in the quarter.
It ended the quarter with a net financial position of $2.01 billion and said Q3 revenue should land around $3.70 billion, with gross margin near 37%.
The results suggest ST is entering a better phase after earlier margin pressure and restructuring costs.Investors will likely focus on whether the company can hold margins near current levels as AI and optical demand build into the second half.
