GlobalFoundries (NASDAQ:GFS) has announced its strategic shift towards meeting growing demand in data centers, physical AI, and custom silicon, aiming for a revenue boost and structural margin improvement. CFO Sam Franklin revealed plans during a discussion with JPMorgan at their 54th Annual Technology, Media and Communications Conference.
The company aims for a 40% gross margin by 2028 and a 45% gross margin longer-term, with a projected 10% to 12% revenue compound annual growth rate. For Q2, GlobalFoundries forecasts revenue of approximately $1.76 billion and a gross margin of 28.5%. Remarkably, data center revenue is expected to grow by over 30% annually through 2026, and automotive revenue has seen a significant 14-fold increase over the last five years.
In a significant step towards capital returns, GlobalFoundries announced its first quarterly dividend of $0.12 per share, equating to an annual distribution of approximately $270 million. The firm has also initiated a capital return policy targeting up to 50% of adjusted free cash flow through dividends and share buybacks, showcasing their robust financial positioning with $4 billion in cash and liquidity resources.
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