GlobalFoundries Inc.

Good day, and thank you for standing by. Welcome to the Global Foundries conference call to review third quarter of fiscal year 2024 financial results. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Sam Franklin, VP Business Finance and Investor Relations. Please go ahead.

Thank you, Operator. Good morning, everyone, and welcome to Global Foundry's third quarter 2024 earnings call. On the call with me today are Dr. Thomas Caulfield, CEO, John Hollister, CFO, and Neil Zanderskoff, Chief Business Officer. A short while ago, we released GF's third quarter financial results, which are available on our website at investors.gf.com, along with today's accompanying slide presentation. This call is being recorded and a replay will be made available on our investor relations webpage. During this call, we will present both IFRS and non-IFRS financial measures. The most directly comparable IFRS measures and reconciliations for non-IFRS measures are available in today's press release and accompanying slides. Please note that these financial results are unaudited and subject to change. Certain statements on today's call may be deemed to be forward-looking statements. Such statements can be identified by terms such as believe, expect, intend, anticipate, and may, or by the use of the future tense. You should not place undue reliance on forward-looking statements. Actual results may differ materially from these forward-looking statements, and we do not undertake any obligation to update any forward-looking statements we make today. For more information about factors that may cause actual results to differ materially from forward-looking statements, please refer to the press release we issued today, as well as risks and uncertainties described in our SEC filings, including in the sections under the caption Risk Factors in our annual report on Form 20F filed with the SEC on April 29th, 2024. We begin today's call with Tom providing a summary update on the current business environment and technologies Niels will then discuss our recent design wins and highlights across the end markets, following which John will provide details on our third quarter results and also provide fourth quarter 2024 guidance. We will then open the call for questions with Tom, John, and Niels. We request that you please limit your questions to one with one follow-up. I'll now turn the call over to Tom for his prepared remarks.

Thank you, Sam, and welcome, everyone, to our third quarter earnings call. Our three key results reflect another consistent quarter of execution towards our strategic objectives as we continue to partner with our customers to deliver feature-rich products in the geographies where they need us using our essential chip technologies. In the third quarter, we delivered revenue at the high end of the guidance range, meaningful year-over-year free cash flow generation, and gross margins consistent with our commentary from the start of the year in an environment of lower factor utilization levels. Although we remain mindful of the near-term demand and utilization dynamics impacting the end markets we serve, these results reinforce our prior commentary that the first quarter was a low point for our revenue in 2024 and that we would deliver sequential quarter-over-quarter top-line growth throughout the year. To this end, we are reporting revenue of $1.739 billion for the quarter which is roughly 7% sequential quarterly revenue growth. John will later cover that we are guiding the continuation of sequential growth in the fourth quarter. As we focus on diversifying and differentiating our product portfolio and broadening our customer base, I am also encouraged by the rate and pace and the size of the business opportunity of new design wins we closed in 3Q, as well as the funnel of opportunities we have built in partnership with our customers across all the end markets that we serve. Year to date, approximately 90% of our design wins are sole source opportunities. These wins are important proof points of our relentless focus on innovation and meeting the needs of our customers. Just recently, we announced a key design win with NXP on our 22 FDX platform. We developed our 22 FDX platform for a broad set of applications serving a range of end markets including AI intelligence at the edge applications. The performance benefits are purpose-built by optimizing energy management to deliver up to 50% higher performance and 70% lower power versus other planar CMOS technologies. Niels will comment further in his prepared remarks that this partnership is a testament to what matters most to our customers, power and performance solutions delivered with the resiliency of GS manufacturing execution and global footprint. Our global manufacturing footprint uniquely positions GF to support our customers' desire to source from the US, Europe, and Asia across all the critical end markets we serve. These design wins are consistent with our strategy to diversify our technology footprint, end market served, and breadth of customer service in our Malta, New York fab. We remain on track to transfer capacity across 22, 28, and 40 nanometer offerings into the Malta facility over the coming years. Upon completion of these transfers, Malta will offer our customers one of the most diversified foundry solutions here in the U.S. to complement the 12 nanometer FinFET, RFSOI, and silicon photonic platforms that are already manufactured there. Our silicon photonics product line positions Fab8 beyond diversification as data center bandwidth and connectivity requirements continue to rapidly increase GF's monolithic solution is well positioned to win next generation applications with hyperscalers, leading fabulous companies, and startups in this space. Before I pass it over to Niels to discuss our end markets and design win activity, let me now review our third quarter results, which John will discuss in more detail in his commentary. As mentioned earlier, revenue in the third quarter increased sequentially to $1.739 billion, which was at the high end of our guidance range. We reported non-IFRS gross margin of 24.7% in the quarter, which exceeded the midpoint of our guidance range. We delivered non-IFRS diluted earnings per share of 41 cents, which exceeded the high end of our guidance range. I'm also pleased to report another quarter of strong year-over-year free cash flow generation. Cash flow generation remains a long-term objective for driving the company towards a sustainable, foundry expansion model and creating long-term value for our shareholders. We are well on our way to this goal, and we have delivered $779 million of non-IFRS adjusted free cash flow in the year to date. For the full year of 2024, we still anticipate approximately three times growth of this metric compared to 2023. Free cash flow is an important metric for our business, and as our cash balance continues to grow, and our total leverage reduces, we intend to consider a range of capital allocation strategies. In conclusion, our third quarter results reflect good progress towards our long-term strategic goals. I am tremendously proud of our teams around the world as they executed the plan and partnered closely with our customers on critical design wins to support our growth objectives. So a big thank you to the entire GF team for their hard work and to our customers for the continued trust in us. With that, Over to you, Niels.