Tower Semiconductor (NASDAQ:TSEM) reported better-than-expected financial results for the first quarter and issued an upbeat outlook, sending its shares 12% higher on Wednesday morning.
For the quarter ended March 31, 2026, Tower Semiconductor reported revenue of $413.6 million, compared with $358 million a year earlier, representing 15% year-over-year growth and above consensus estimates of about $408 million.
Adjusted earnings per share came in at $0.65, topping estimates of $0.55.
Net profit for the quarter was $65 million, or $0.57 diluted EPS, up from $40 million, or $0.35 diluted EPS, in the prior-year period.
Gross profit rose to $111 million, while operating profit increased to $65 million, reflecting stronger profitability versus last year.
The company also highlighted $290 million in customer prepayments included in cash from operating activities, primarily tied to silicon photonics customers. Excluding these prepayments, operating cash flow totaled $225 million, while net investments in property and equipment were $156 million.
Looking ahead, Tower Semiconductor guided second-quarter 2026 revenue to $455 million, with a 5% plus or minus range, which would mark a company record. The outlook implies 22% year-over-year growth and 10% sequential growth.
The company also reiterated expectations for continued sequential revenue and margin expansion throughout 2026.
“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,” Tower Semiconductor CEO Russell Ellwanger said in the earnings release.
“Our second quarter guidance positions us with the highest quarterly revenue in Tower’s history, with expected sequential quarter-over-quarter growth throughout the remainder of the year.”