Tower Semiconductor (TSEM) investor relations material

Executive summary

• Q1 2026 revenue reached $414 million, up 15% year-over-year, with net profit of $65 million, a 62% increase, and net margin rising to 16% from 11% last year.

• Q2 2026 revenue guidance is $455 million ±5%, a 22% year-over-year and 10% sequential increase, marking a company record.

• Management targets sequential revenue and margin growth throughout 2026, supported by strong customer demand and technology leadership.

• Secured $1.3 billion in 2027 silicon photonics contractual commitments, with $290 million in prepayments received.

• Strategic expansion of 300mm manufacturing capacity, including full ownership of Fab 7 in Japan, to support high-value photonics growth.

Financial highlights

• Q1 2026 revenue: $414 million (+15% YoY); gross profit: $111 million (+52% YoY); operating profit: $65 million (+96% YoY).

• Net profit: $65 million (+62% YoY); net margin: 16% (up from 11% YoY); adjusted net profit: $74 million.

• EPS: $0.58 basic, $0.57 diluted (up 61% and 63% YoY, respectively); adjusted EPS: $0.66 basic, $0.65 diluted.

• Assets at March 2026: $3.7 billion; cash and equivalents: $243 million; current assets ratio: 5.6x; shareholders’ equity: $3 billion.

• S&P Maalot reaffirmed ilAA rating, outlook raised to positive.

Outlook and guidance

• Q2 2026 revenue guided to $455 million ±5%, highest in company history.

• Management expects continued quarter-over-quarter revenue and margin growth in 2026.

• Long-term model targets: $2.8 billion annual revenue, $1.12 billion gross profit, $900 million operating profit, $750 million net profit.

• Strong SiPho and SiGe demand, with capacity investments supporting growth through 2027 and beyond.

• Revenue visibility enhanced by $1.3 billion in contracted SiPho revenue for 2027.