STMicroelectronics N.V. Q3 2026 Earnings Recap

ST shares fell 3.4% after the earnings release, despite Q3 revenue and gross margin coming in above the midpoint of the company’s outlook. The transcript does not identify a specific disappointment, but the outlook’s dependence on continued AI-datacenter demand—and the gap between the current-year revenue expectation and the much higher 2027 ambition—may have left investors cautious.

Key Takeaways

• Q3 net revenue was $3.76 billion; gross margin was 37.3%, and non-U.S. GAAP diluted EPS was $0.37.
• Free cash flow was positive at $351 million. Balance-sheet inventory increased slightly to support expected Q4 revenue, while distribution inventory remained below the company’s standard target.
• Revenue grew 40% year over year in Industrial and 64% in Communication Equipment and Computer Peripheral, where management cited AI datacenter and low Earth orbit satellite demand. Personal Electronics rose 12% sequentially but fell 4% year over year; Automotive was flat sequentially and up 5% year over year.
• Management expects about $1.3 billion in AI-datacenter revenue in 2026 and has an ambition of well above $2 billion in 2027, conditional on current demand dynamics and engagements continuing.
• Bookings increased sequentially, with book-to-bill well above 2 overall; management said visibility improved and demand continued to outpace supply in multiple product categories.