Tower Semiconductor (TSEM) Q4 2025 earnings summary

Executive summary

• Q4 2025 revenue reached $440 million, up 11% quarter-over-quarter and 14% year-over-year, with full-year revenue at $1.566 billion, a 9% increase from 2024.

• Net profit for Q4 was $80 million (18% margin), and full-year net profit was $220 million, both showing significant growth.

• Major growth was driven by silicon photonics (SiPho) and silicon germanium (SiGe) platforms, with strong customer demand and capacity expansion plans.

Financial highlights

• Q4 gross profit was $118 million, operating profit $71 million, and net profit $80 million; full-year gross profit was $364 million and operating profit $194 million.

• Q4 EPS was $0.71 basic and $0.70 diluted; full-year basic EPS was $1.97, up from $1.87 in 2024.

• Q4 2025 gross margin was 26.7%, operating margin 16.1%, and net margin 18.2%; full-year gross margin was 23.2%, operating margin 12.4%, and net margin 14.1%.

• Q4 included a non-recurring tax benefit, resulting in a 2% effective tax rate.

Outlook and guidance

• Q1 2026 revenue guidance is $412 million ±5%, a 15% increase from Q1 2025.

• Targeting sequential revenue and profitability growth throughout 2026.

• New financial model targets $2.84 billion revenue, 39.4% gross margin, 31.7% operating margin, and $750 million net profit (26.4% margin) by 2028.

• SiPho and SiGe capacity expansion to be fully qualified by Q4 2026, with full production starts in 2027.