The strong YoY revenue growth and upbeat Q2 guidance signal a cyclical recovery in STM's key end markets. However, the GAAP EPS decline and negative free cash flow from the MEMS acquisition warrant monitoring of debt levels and integration progress. The stock may see positive momentum on the print, but watch for near-term volatility from ongoing restructuring and litigation overhangs.
Price Chart
Executive Summary
STMicroelectronics reported Q1 2026 net revenues of $3,095M, up 23.0% YoY, driven by strong growth across most segments. Non-GAAP EPS rose 85.7% to $0.13, although GAAP EPS fell to $0.04 from $0.06 due to $71M in restructuring charges. The company guided Q2 revenue up ~11.6% sequentially, above seasonal trends, and gross margin expansion. The Q1 results and Q2 outlook reflect robust demand recovery, particularly in embedded processing and RF/optical, partially offset by a weak power discrete segment.
Key Facts
- Q1 2026 net revenues $3,095M, up 23.0% YoY (21.4% excluding MEMS acquisition)
- Non-GAAP diluted EPS $0.13 vs $0.07 YoY, up 85.7%
- GAAP EPS $0.04 vs $0.06 YoY, impacted by $71M restructuring charges
- Q2 2026 guidance: revenue up ~11.6% sequentially (midpoint), GAAP gross margin ~34.8%, non-GAAP ~35.2%
- Completed acquisition of NXP's MEMS sensor business for $936M ($895M cash + $41M contingent consideration)
- Free cash flow negative $723M in Q1 due to acquisition; net financial position $2,002M
- Restructuring charges of $71M related to manufacturing footprint reshaping program
Financial Impact
Revenue growth of 23% YoY ($3,095M vs $2,517M) and non-GAAP EPS improvement from $0.07 to $0.13 are positive. GAAP EPS decline from $0.06 to $0.04 is due to one-time restructuring charges.
Risk Factors
- Restructuring execution risk: $71M in charges may not yield expected cost savings
- Integration of NXP MEMS business could face delays or cost overruns
- Securities class action lawsuit (motion to dismiss denied) and $32M patent verdict (under appeal) pose legal overhang
- Tariff exposure: Q2 guidance excludes potential further global trade tariff changes
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 7 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 6-K Filing (Primary) | 0000932787-26-000025 |
| Document: stm-ex12_2xq126.htm | 0000932787-26-000025 |
| Document: stm-ex12_1xq126.htm | 0000932787-26-000025 |
| Document: stm-ex13_1xq126.htm | 0000932787-26-000025 |
| Document: 0000932787-26-000025-index-headers.html | 0000932787-26-000025 |
| Document: 0000932787-26-000025-index.html | 0000932787-26-000025 |
| Document: 0000932787-26-000025.txt | 0000932787-26-000025 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Jun 2, 2026 21w ago | 6-K | $78.75 $78.73 | ▼ −0.03% | ▲ +0.67% | $45.58 (−42.12%) |
May 27, 2026 21w ago | 6-K | $66.60 $66.60 | · 0.00% | ▼ −0.55% | $45.58 (−31.56%) |
May 27, 2026 21w ago | 6-K | $66.60 $66.60 | · 0.00% | ▼ −0.55% | $45.58 (−31.56%) |
May 4, 2026 25w ago | 6-K | $56.72 $57.38 | ▲ +1.16% | ▼ −0.22% | $45.58 (−19.64%) |
Apr 23, 2026 26w ago | 6-K | $50.50 $51.17 | ▲ +1.33% | ▲ +0.54% | $45.58 (−9.74%) |
Mar 27, 2026 30w ago | 6-K | $32.76 $31.39 | ▼ −4.19% | ▼ −3.84% | $45.58 (+39.12%) |
Mar 26, 2026 30w ago | 6-K | $32.76 $31.39 | ▲ +4.19% | ▲ +3.84% | $45.58 (−39.12%) |
Feb 6, 2026 37w ago | Court Ruling | $31.97 $32.85 | ▲ +2.74% | ▲ +3.00% | $45.58 (+42.57%) |
Feb 3, 2026 38w ago | Court Ruling | $28.88 $28.54 | ▼ −1.21% | ▲ +0.04% | $45.58 (+57.80%) |
US Market Status
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