STMicroelectronics N.V. reported first‑quarter 2026 revenue of $3.10 billion, a 23.0% year‑over‑year increase that includes the contribution from its February 2026 acquisition of NXP’s MEMS sensor business. The acquisition added $200 million of revenue and helped lift the top line, but also introduced purchase‑price allocation and integration costs that weigh on profitability.
The company’s GAAP gross margin fell 140 basis points sequentially to 33.8%, a decline driven by higher cost of goods sold associated with the NXP acquisition and related integration expenses. Excluding those effects, the non‑GAAP gross margin was 34.1%, up 40 basis points year‑over‑year, reflecting a stronger product mix and lower unused capacity charges.
Operating income for the quarter was $70 million, or 2.3% of revenue, largely offset by impairment, restructuring, and purchase‑price allocation charges. When those one‑time items are excluded, non‑GAAP operating income rose to $171 million. Net income was $37 million, a GAAP figure that reflects the same one‑time charges; the non‑GAAP net income was $122 million. Diluted earnings per share were $0.04 GAAP and $0.13 non‑GAAP, the latter missing analyst expectations of $0.17.
Segment performance highlights a mixed picture. Analog, MEMS and Sensors (AM&S) revenue grew 23.2% year‑over‑year, driven by automotive and industrial demand. Microcontrollers, Digital ICs and RF products (MDRF) jumped 32.1%, while Power and Discrete (P&D) revenue fell 1.8% as margin pressure in that business persisted.
Management emphasized the company’s strategic positioning for AI and datacenter growth. "Q1 net revenues, excluding the contribution of our acquisition of NXP's MEMS sensor business, came above the mid‑point of our business outlook range, driven mainly by higher revenues in our engaged customer programs in Personal electronics and CECP. Gross margin was above the mid‑point of our business outlook range mainly due to better product mix," said Jean‑Marc Chery, ST President & CEO. "In the first quarter, despite the macroeconomic uncertainty, we saw improving demand with strong booking and normalized inventory in distribution." The company guided for Q2 2026 revenue of $3.45 billion and a gross margin of 34.8%, surpassing consensus estimates of $3.19 billion.
Investors responded positively, citing the revenue beat, the strong Q2 outlook, and the company’s focus on AI‑driven programs and datacenter revenue, which management expects to exceed $500 million in 2026 and $1 billion in 2027. The guidance signals confidence in continued growth, while the company acknowledges ongoing restructuring and acquisition integration costs as short‑term headwinds.
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