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Call sheet · Q2'26

STMicroelectronics (STM)

Q2'26 earnings call · held July 23, 2026 · compared with the Q1'26 call · management-credibility review
8/12
Disclosure score
1 high, 5 medium, 2 low flags
Financial quality
Bottom line
The sleeper story isn't the AI boom everyone sees; it's that STM raised data center guidance 100% but admits they can't fulfill 'unconstrained demand,' meaning the real number could be $3B+ if they had capacity. The headline $3.49B beat masks that their largest segment (Personal Electronics) is cratering in H2 with Apple likely pushing out orders. The binding constraint is their own fab capacity, both in advanced nodes for AI and embarrassingly in legacy analog where they 'delayed' the ramp. Lorenzo's tell: 'the unconstrained demand we have today for 26 and 27 is well above.' My view changes if Q3 book-to-bill drops below 1.5, signaling the panic-buying has ended.

The 30-second version

  • Data center revenue target went from 'well above $1B' to 'well above $2B' for 2027, but they're capacity constrained NOW
  • The 'beat' is actually a warning: book-to-bill near 2x but they can't ship fast enough
  • Personal Electronics quietly imploding while everyone celebrates AI wins

What changed this quarter

MetricQ1'26Q2'26Change
Revenue$3.10B (+24.5% YoY)$3.49B (+24.9% YoY)+12.6% sequential vs 11.6% guided
Non-GAAP EPS$0.13$0.31+138% sequential beat
Gross Margin33.8%34.8%+100bps sequential improvement
Operating Cash Flow$534M$502MDeteriorating despite revenue growth
Free Cash Flow-$723M (includes $895M acquisition)$75MTurned positive but still weak
Book-to-BillWell above 1Close to 2 overall, significantly above 2 in comm equipmentDemand explosion or supply panic?
Automotive Revenue-10% sequential, +15% YoY+14% sequential, +16% YoYBeat expectations
Industrial Revenue-1% sequential, +26% YoY+20% sequential, +34% YoYMassive acceleration
Personal Electronics Revenue-14% sequential, +21% YoY+3% sequential, +20% YoYGrowth stalling, H2 goes negative
Comm Equipment Revenue+3% sequential, +41% YoY+13% sequential, +50% YoYAI data center driving

Accountability tracked

8 new promises made5 narrative shifts flagged6 prior promises scored
Inside the full report
The complete write-up covers the full promise ledger with kept/missed calls, disclosure-quality scoring, the metrics-vanished check, verification items, and the questions to ask next quarter.
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Scores, kept-promise rates, and flags on this site reflect the author's opinion, applying a stated methodology to statements management made on public earnings calls. Informational and educational purposes only - not investment advice, a recommendation, or an offer to buy or sell any security. Sources believed reliable but not guaranteed; the author may hold positions in the securities discussed.

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