Tower Semiconductor (NASDAQ:TSEM) has reported second quarter results above Wall Street expectations, including record revenue and profitability as the chipmaker continues to benefit from demand across its key business units.
The company reported adjusted earnings per share of $0.88 for the second quarter, above the analyst consensus of $0.67.
Revenue reached a record $460 million, up 24% year over year and ahead of expectations of $437.33 million.
Gross profit rose to a record $138 million, up from $80 million a year earlier, while operating profit excluding non-recurring items more than doubled to $90 million from $40 million.
Net profit excluding non-recurring items reached a record $91 million, up 95% from $47 million in the second quarter of 2025. The result represented a 20% net margin, with basic earnings per share of $0.80 and diluted earnings per share of $0.79.
Tower generated $177 million in cash from operating activities during the quarter and invested $187 million in property and equipment, compared with $123 million and $111 million, respectively, a year earlier.
For the third quarter, Tower guided for record revenue of $520 million, plus or minus 5%. The midpoint represents 31% year-over-year growth and a 13% increase from the second quarter.
The company also raised its 2028 target business model to $3.6 billion in revenue and $1.2 billion in net profit, with Ellwanger noting that the target is fully supported by customer commitments.
Tower Semiconductor CEO Russell Ellwanger highlighted demand momentum across Tower's key business units, alongside expanded manufacturing capacity.
He noted that silicon photonics, or SiPho, revenue reached a $680 million annualized run rate in the second quarter, compared with $180 million a year earlier. Tower expects the SiPho annualized revenue run rate to exceed $1 billion in the fourth quarter.
“Deep strategic customer engagements provide exciting sustainable growth for our customers, and for Tower, thus enabling growing shareholders’ value,” Ellwanger said.
Tower Semiconductor shares were down more than 2% following the report, likely reflecting profit taking after an almost 100% increase in the company’s share price this year.