Tower Semiconductor Stock Jumps on Earnings Beat and Strong Guidance

Tower Semiconductor reported first quarter results that exceeded analyst expectations, and provided record guidance for the current quarter.

The company’s shares soared 13.6% in pre-market trading following the release.

The semiconductor foundry reported adjusted earnings per share of $0.65, beating the analyst consensus of $0.55 by $0.10. Revenue reached $413.63 million, surpassing the estimate of $408.38 million and marking a 15% increase from $358 million in the first quarter of 2025.

The company’s second quarter revenue guidance of $455 million, with a range of 5% up or down, exceeded the analyst consensus of $436.4 million, with the midpoint representing what would be a company record.

Net profit for the quarter was $65 million, or $0.57 per diluted share, compared to $40 million, or $0.35 per diluted share, in the year-ago period. Gross profit increased 52% YoY to $111 million, while operating profit nearly doubled to $65 million from $33 million a year earlier.

"We delivered a strong start to 2026, with broad-based year-over-year revenue growth across our key technology platforms and continued execution with strong advancement of our strategic priorities," said Russell Ellwanger, Chief Executive Officer.

The company generated $510 million in cash from operating activities during the quarter, which included $290 million in prepayments from silicon photonics customers. Excluding customer prepayments, operating cash flow was $225 million. Capital expenditures totaled $156 million.

Tower Semiconductor expects sequential quarter-over-quarter revenue and margin growth throughout 2026, supported by $1.3 billion of contracted silicon photonics revenue for 2027.

The company maintained its long-term targets of $2.8 billion in annual revenue and $750 million in net profit by 2028.