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Tower Semiconductor

Tower Semiconductor (TSEM) Q2 2026 Earnings

Reported Aug 4, 2026 at 7:04 AM ET · SEC Source

Q2 26 EPS

$0.88

BEAT +16.09%

Est. $0.76

Q2 26 Revenue

$460.1M

BEAT +1.19%

Est. $454.7M

vs S&P Since Q2 26

+2.5%

BEATING MARKET

TSEM +2.6% vs S&P +0.0%

Market Reaction

Did TSEM Beat Earnings? Q2 2026 Results

Tower Semiconductor delivered a standout second quarter for fiscal 2026, beating Wall Street expectations on both the top and bottom lines and extending its EPS beat streak to four consecutive quarters. The Israeli specialty chipmaker reported adjust… Read more Tower Semiconductor delivered a standout second quarter for fiscal 2026, beating Wall Street expectations on both the top and bottom lines and extending its EPS beat streak to four consecutive quarters. The Israeli specialty chipmaker reported adjusted diluted EPS of $0.88, clearing the $0.76 consensus estimate by 16.09%, while revenue of $460.08 million edged past the $454.68 million consensus by 1.19% and rose 23.7% year over year. The primary engine behind the outperformance was silicon photonics, which reached a $680 million annual run rate in the quarter, up sharply from a $180 million annual run rate a year earlier, as surging AI and data center demand drove outsized volume through Tower's specialty fabs. Gross profit nearly doubled on a year-over-year basis, reflecting meaningful operating leverage as revenue scaled. The company's aggressive capacity expansion, spanning facilities in Israel, the U.S., Japan, and Italy, is increasingly supported by visible customer commitments, with deferred revenue ballooning to $176.04 million from $25.58 million at year-end 2025. Looking ahead, management guided Q3 2026 revenue to $520 million and raised its 2028 target to $3.60 billion in revenue with $1.20 billion in net profit.

Key Takeaways

  • • Triple digit year-over-year SiPho revenue growth to $680 million annual run rate
  • • Powerful demand momentum across key business units
  • • 24% year-over-year revenue growth driven by strong customer demand
  • • Gross profit increased 72% year-over-year reflecting operating leverage

TSEM Forward Guidance & Outlook

Tower Semiconductor provided Q3 2026 revenue guidance of $520 million with an upward or downward range of 5%, representing 31% year-over-year growth and 13% quarter-over-quarter growth. The company expects SiPho revenue to cross $1 billion annual run rate by Q4 2026 with continued significant growth throughout 2027. Management raised the 2028 target business model to $3.6 billion of revenue with $1.2 billion of net profit, stating these targets are fully supported by customer engagements.

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TSEM YoY Financials

Q2 2026 vs Q2 2025, source: SEC Filings

“Amidst a powerful demand momentum across Tower's key business units, we achieved record revenue and record profitability, whilst simultaneously strengthening our technology leadership and greatly expanding manufacturing capacity throughout 2026. Moreover, we recently announced additional substantial capacity expansions, in direct support of our strong growing customer demand. SiPho presented triple digit year over year revenue increase to $680 million annual run rate in the second quarter of 2026 from $180 million annual run rate in the second quarter of 2025. We plan to cross the $1 billion of SiPho revenue annual run rate in the fourth quarter of 2026, with continued significant growth throughout 2027.”

— Russell Ellwanger, Q2 2026 Earnings Press Release

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