Revenue growth accelerated to 23.7% year-over-year in 2026Q2, with gross margin expanding 840 basis points to 29.9% and operating margin reaching 19.6%, the highest in ten quarters, though net income was boosted by a tax benefit.
Tower Semiconductor Ltd. (TSEM) annual income statement — 30-year revenue, gross profit & net income history
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 | Dec'11 | Dec'10 | Dec'09 | Dec'08 | Dec'07 | Dec'06 | Dec'05 | Dec'04 | Dec'03 | Dec'02 | Dec'01 | Dec'00 | Dec'99 | Dec'98 | Dec'97 | Dec'96 |
|---|
| Sales/Revenue | 1.71B | 1.57B | 1.44B | 1.42B | 1.68B | 1.51B | 1.27B | 1.23B | 1.3B | 1.39B | 1.25B | 960.56M | 828.01M | 505.01M | 638.83M | 611.02M | 509.26M | 298.81M | 251.66M | 230.85M | 187.44M | 101.99M | 126.06M | 61.37M | 51.8M | 52.37M | 104.78M | 69.81M | 69.6M | 125.9M | 97.9M |
| Revenue Growth % | 14.9% | 9.05% | 0.94% | -15.2% | 11.24% | 19.16% | 2.57% | -5.37% | -6% | 11.02% | 30.09% | 16.01% | 63.96% | -20.95% | 4.55% | 19.98% | 70.43% | 18.74% | 9.01% | 23.16% | 83.78% | -19.09% | 105.41% | 18.47% | -1.09% | -50.01% | 50.08% | 0.31% | -44.72% | 28.6% | -1.71% |
| Cost of Goods Sold | 1.25B | 1.2B | 1.1B | 1.07B | 1.21B | 1.18B | 1.03B | 1B | 1.01B | 1.03B | 946.53M | 755.2M | 764.22M | 476.9M | 560.05M | 526.2M | 402.08M | 325.31M | 298.68M | 284.77M | 267.39M | 238.36M | 228.41M | 122.39M | 67.02M | 76.73M | 62.72M | 50.39M | 76.8M | 66M | 58.1M |
| COGS % of Revenue | - | 76.77% | 76.36% | 75.15% | 72.2% | 78.18% | 81.57% | 81.39% | 77.54% | 74.46% | 75.74% | 78.62% | 92.3% | 94.43% | 87.67% | 86.12% | 78.95% | 108.87% | 118.69% | 123.36% | 142.66% | 233.7% | 181.2% | 199.44% | 129.38% | 146.52% | 59.86% | 72.18% | 110.34% | 52.42% | 59.35% |
| Gross Profit | 459.38M | 363.85M | 339.44M | 353.52M | 466.31M | 329.12M | 233.32M | 229.67M | 292.95M | 354.31M | 303.1M | 205.37M | 63.79M | 28.11M | 78.78M | 84.83M | 107.19M | -26.5M | -47.02M | -53.92M | -79.95M | -136.37M | -102.36M | -61.03M | -15.22M | -24.36M | 42.05M | 19.43M | -7.2M | 59.9M | 39.8M |
| Gross Margin % | 26.87% | 23.23% | 23.64% | 24.85% | 27.8% | 21.82% | 18.43% | 18.61% | 22.46% | 25.54% | 24.26% | 21.38% | 7.7% | 5.57% | 12.33% | 13.88% | 21.05% | -8.87% | -18.69% | -23.36% | -42.66% | -133.7% | -81.2% | -99.44% | -29.38% | -46.52% | 40.14% | 27.82% | -10.34% | 47.58% | 40.65% |
| Gross Profit Growth % | - | 7.19% | -3.98% | -24.19% | 41.68% | 41.06% | 1.59% | -21.6% | -17.32% | 16.89% | 47.59% | 221.95% | 126.93% | -64.32% | -7.12% | -20.86% | 504.5% | 43.65% | 12.79% | 32.56% | 41.37% | -33.23% | -67.72% | -300.94% | 37.52% | -157.93% | 116.5% | 369.79% | -112.02% | 50.5% | 0.25% |
| Operating Expenses | 183.12M | 169.68M | 148.13M | -193.75M | 154.63M | 162.61M | 142.28M | 142.96M | 138M | 134.46M | 128.57M | 124.46M | 110.62M | 75.98M | 75.51M | 73.13M | 63.86M | 55.32M | 171.05M | 45.39M | 119.57M | 33.45M | 38.35M | 43.32M | 34.12M | 24.05M | 20.54M | 44.59M | 16.8M | 39.9M | 30.1M |
| OpEx % of Revenue | - | 10.83% | 10.31% | -13.62% | 9.22% | 10.78% | 11.24% | 11.58% | 10.58% | 9.69% | 10.29% | 12.96% | 13.36% | 15.05% | 11.82% | 11.97% | 12.54% | 18.51% | 67.97% | 19.66% | 63.79% | 32.79% | 30.42% | 70.6% | 65.87% | 45.91% | 19.61% | 63.87% | 24.14% | 31.69% | 30.75% |
| Selling, General & Admin | 89.11M | 83.19M | 74.96M | 72.45M | 80.28M | 77.22M | 63.97M | 67.38M | 64.95M | 66.8M | 65.44M | 62.79M | 58.78M | 42.92M | 44.41M | 48.24M | 39.99M | 31.94M | 33.22M | 31.6M | 24.51M | 17.42M | 21.3M | 22.61M | 17.09M | 14.49M | 9.91M | 8.71M | 8.7M | 9M | 8.4M |
| SG&A % of Revenue | - | 5.31% | 5.22% | 5.09% | 4.79% | 5.12% | 5.05% | 5.46% | 4.98% | 4.81% | 5.24% | 6.54% | 7.1% | 8.5% | 6.95% | 7.89% | 7.85% | 10.69% | 13.2% | 13.69% | 13.08% | 17.08% | 16.89% | 36.85% | 32.99% | 27.67% | 9.46% | 12.48% | 12.5% | 7.15% | 8.58% |
| Research & Development | 94M | 86.5M | 20.62M | 79.81M | 83.91M | 85.39M | 78.32M | 75.58M | 73.05M | 67.66M | 63.13M | 61.67M | 51.84M | 33.06M | 31.09M | 24.89M | 23.88M | 23.38M | 14.97M | 13.79M | 14.98M | 16.03M | 17.05M | 20.71M | 17.03M | 9.56M | 8.96M | 9.24M | 8.1M | 7.3M | 4.1M |
| R&D % of Revenue | - | 5.52% | 1.44% | 5.61% | 5% | 5.66% | 6.19% | 6.12% | 5.6% | 4.88% | 5.05% | 6.42% | 6.26% | 6.55% | 4.87% | 4.07% | 4.69% | 7.82% | 5.95% | 5.97% | 7.99% | 15.72% | 13.53% | 33.75% | 32.88% | 18.25% | 8.56% | 13.23% | 11.64% | 5.8% | 4.19% |
| Other Operating Expenses | 0 | 0 | 52.54M | -346.01M | -9.56M | 0 | 0 | 0 | 0 | 0 | 0 | -190K | -140K | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 80.07M | 0 | 0 | 0 | 0 | 0 | 1.66M | 26.64M | 0 | 23.6M | 17.6M |
| Operating Income | 276.26M | 194.17M | 191.31M | 547.26M | 311.67M | 166.51M | 91.03M | 86.72M | 154.94M | 219.84M | 175.15M | 81.89M | -103.56M | -55.34M | -2.51M | 10.21M | 43.32M | -81.82M | -218.07M | -99.31M | -119.45M | -169.81M | -140.71M | -104.35M | -49.34M | -48.41M | -4.41M | -25.17M | -24M | 20M | 9.7M |
| Operating Margin % | 16.16% | 12.4% | 13.32% | 38.47% | 18.58% | 11.04% | 7.19% | 7.03% | 11.88% | 15.85% | 14.02% | 8.53% | -12.51% | -10.96% | -0.39% | 1.67% | 8.51% | -27.38% | -86.65% | -43.02% | -63.73% | -166.5% | -111.62% | -170.04% | -95.25% | -92.43% | -4.2% | -36.05% | -34.48% | 15.89% | 9.91% |
| Operating Income Growth % | - | 1.49% | -65.04% | 75.59% | 87.18% | 82.91% | 4.98% | -44.03% | -29.52% | 25.51% | 113.88% | 179.08% | -87.16% | -2104.58% | -124.59% | -76.44% | 152.95% | 62.48% | -119.58% | 16.86% | 29.66% | -20.69% | -34.84% | -111.48% | -1.94% | -998.89% | 82.5% | -4.86% | -220% | 106.19% | -58.55% |
| EBITDA | 595.67M | 497.28M | 457.59M | 805.28M | 604.31M | 437.22M | 331.56M | 301.19M | 369.33M | 428.25M | 372.76M | 249.93M | 139.8M | 109.49M | 171.07M | 172.89M | 186.35M | 61.59M | -79.27M | 55.03M | 35.35M | -24.96M | -19.64M | -49.74M | -30.52M | -21.76M | 21.51M | 1.48M | -21.2M | 43.6M | 27.3M |
| EBITDA Margin % | 34.84% | 31.75% | 31.86% | 56.6% | 36.02% | 28.99% | 26.2% | 24.41% | 28.32% | 30.87% | 29.83% | 26.02% | 16.88% | 21.68% | 26.78% | 28.29% | 36.59% | 20.61% | -31.5% | 23.84% | 18.86% | -24.47% | -15.58% | -81.05% | -58.92% | -41.55% | 20.53% | 2.12% | -30.46% | 34.63% | 27.89% |
| EBITDA Growth % | 25.78% | 8.67% | -43.18% | 33.26% | 38.22% | 31.87% | 10.08% | -18.45% | -13.76% | 14.89% | 49.15% | 78.78% | 27.68% | -36% | -1.05% | -7.22% | 202.57% | 177.7% | -244.04% | 55.69% | 241.6% | -27.11% | 60.52% | -62.96% | -40.25% | -201.17% | 1356.47% | 106.97% | -148.62% | 59.71% | -14.15% |
| D&A (Non-Cash Add-back) | 319.41M | 303.11M | 266.28M | 258.02M | 292.64M | 270.71M | 240.53M | 214.47M | 214.39M | 208.41M | 197.61M | 168.03M | 243.36M | 164.82M | 173.59M | 162.68M | 143.02M | 143.4M | 138.81M | 154.34M | 154.79M | 144.85M | 121.07M | 54.61M | 18.82M | 26.64M | 25.92M | 26.64M | 2.8M | 23.6M | 17.6M |
| EBIT | 307.01M | 240.38M | 185.04M | 589.29M | 297.66M | 162.41M | 95.44M | 97.84M | 154.94M | 214.39M | 223.74M | 80.9M | -46.84M | -63.22M | 3.28M | 11.7M | 43.32M | -81.82M | -86.12M | -99.31M | -120.96M | -169.81M | -140.71M | -104.35M | -49.34M | -48.41M | 21.51M | -25.17M | -23.96M | 20.02M | 9.7M |
| Net Interest Income | 46.65M | 46.21M | 49.63M | 35.54M | 7.91M | -6.32M | -7.57M | 980K | -12.12M | -8.47M | -17.33M | -14.97M | -47.03M | -35.1M | -33.5M | -45.28M | -47.12M | -45.71M | -17.57M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Income | 46.65M | 46.21M | 55.49M | 39.99M | 13.6M | 5.37M | 8.48M | 12.95M | 10.76M | 4.15M | 0 | 0 | 0 | 18.73M | 10.24M | 0 | 25.8M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Expense | 0 | 0 | 5.86M | 4.44M | 5.69M | 11.69M | 16.06M | 11.97M | 22.88M | 12.62M | 17.33M | 14.97M | 47.03M | 53.83M | 43.75M | 45.28M | 72.92M | 45.71M | 17.57M | 0 | 0 | 0 | 0 | 84K | 2.06M | 0 | 25M | 0 | 0 | 0 | 0 |
| Other Income/Expense | 46.65M | 46.21M | 26.11M | 37.58M | -19.7M | -11.41M | -2.35M | 4.3M | -15.63M | -18.07M | 35.44M | -123.3M | 77.45M | -61.71M | -60.43M | -7.38M | -72.86M | -43.66M | -8.47M | -34.88M | -46.97M | -33.27M | 2.94M | -84K | -2.06M | 9.88M | 916K | 2.29M | 2.76M | 3.2M | 2.6M |
| Pretax Income | 322.91M | 240.38M | 217.43M | 584.84M | 291.97M | 155.1M | 88.69M | 91.02M | 139.32M | 201.77M | 210.6M | -41.41M | -26.11M | -117.05M | -62.94M | 2.83M | -29.54M | -125.48M | -105.86M | -99.22M | -38.78M | -167.43M | -108.02M | -104.44M | -51.4M | -38.52M | -3.49M | -22.87M | -21.2M | 23.2M | 12.3M |
| Pretax Margin % | 18.89% | 15.35% | 15.14% | 41.11% | 17.4% | 10.28% | 7.01% | 7.38% | 10.68% | 14.54% | 16.85% | -4.31% | -3.15% | -23.18% | -9.85% | 0.46% | -5.8% | -41.99% | -42.06% | -42.98% | -20.69% | -164.16% | -85.7% | -170.18% | -99.23% | -73.55% | -3.33% | -32.76% | -30.46% | 18.43% | 12.56% |
| Income Tax | 31.22M | 21.57M | 10.21M | 65.31M | 25.5M | 1.02M | 5.4M | 2.95M | 5.94M | -99.89M | 1.43M | -12.28M | -24.74M | -9.39M | 7.33M | 21.36M | 12.83M | -5.02M | 575K | 34.88M | -32.52M | 33.27M | -2.94M | 9.91M | 0 | 0 | 500K | -2.4M | -5.7M | 4M | 2.3M |
| Effective Tax Rate % | 9.67% | 8.97% | 4.69% | 11.17% | 8.73% | 0.66% | 6.09% | 3.24% | 4.26% | -49.51% | 0.68% | 29.65% | 94.75% | 8.02% | -11.64% | 754.31% | -43.44% | 4% | -0.54% | -35.16% | 83.86% | -19.87% | 2.72% | -9.49% | 0% | 0% | -14.33% | 10.52% | 26.89% | 17.24% | 18.7% |
| Net Income | 289.58M | 220.47M | 207.86M | 518.49M | 264.57M | 150.01M | 82.3M | 90.05M | 135.58M | 298.01M | 203.92M | -29.65M | 4.26M | -107.66M | -70.27M | -18.53M | -42.37M | -120.46M | -106.44M | -134.2M | -86.93M | -203.08M | -137.77M | -114.26M | -51.4M | -38.52M | -3.99M | -20.47M | -15.5M | 19.2M | 10M |
| Net Margin % | 16.94% | 14.08% | 14.47% | 36.44% | 15.77% | 9.95% | 6.5% | 7.3% | 10.4% | 21.48% | 16.32% | -3.09% | 0.51% | -21.32% | -11% | -3.03% | -8.32% | -40.31% | -42.29% | -58.13% | -46.38% | -199.12% | -109.29% | -186.19% | -99.23% | -73.55% | -3.81% | -29.32% | -22.27% | 15.25% | 10.21% |
| Net Income Growth % | 47.38% | 6.06% | -59.91% | 95.98% | 76.37% | 82.27% | -8.6% | -33.58% | -54.51% | 46.14% | 787.84% | -795.45% | 103.96% | -53.21% | -279.22% | 56.26% | 64.83% | -13.18% | 20.69% | -54.38% | 57.2% | -47.41% | -20.57% | -122.29% | -33.44% | -865.71% | 80.51% | -32.05% | -180.73% | 92% | -50.98% |
| Net Income (Continuing) | 291.69M | 218.81M | 207.22M | 519.53M | 266.47M | 154.07M | 83.29M | 88.07M | 133.38M | 301.66M | 209.17M | -29.13M | -1.37M | -107.66M | -70.27M | -18.53M | -42.37M | -120.46M | -106.44M | -134.2M | -167.93M | -203.08M | -137.77M | -114.26M | -51.4M | -38.52M | -3.99M | -20.47M | -15.5M | 19.2M | 10M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | -13.14M | -5.46M | -2.64M | -6.62M | -2.91M | -7.82M | -6.76M | -6.35M | -7.42M | -11.76M | -9.42M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | 2.53 | 1.94 | 1.85 | 4.66 | 2.39 | 1.37 | 0.76 | 0.84 | 1.32 | 2.90 | 2.09 | -0.40 | 0.07 | -2.72 | -3.17 | -0.90 | -2.67 | -10.46 | -11.70 | -16.72 | -15.59 | -37.74 | -26.47 | -35.54 | -24.15 | -28.49 | -4.32 | -23.04 | -17.47 | 20.43 | 11.25 |
| EPS Growth % | 45.4% | 4.86% | -60.3% | 94.98% | 74.45% | 80.26% | -9.52% | -36.36% | -54.48% | 38.76% | 622.5% | -671.43% | 102.57% | 14.2% | -252.22% | 66.29% | 74.47% | 10.6% | 30.02% | -7.25% | 58.69% | -42.58% | 25.52% | -47.16% | 15.23% | -559.49% | 81.25% | -31.88% | -185.51% | 81.6% | -56.83% |
| EPS (Basic) | - | 1.97 | 1.87 | 4.70 | 2.42 | 1.39 | 0.77 | 0.85 | 1.35 | 3.08 | 2.33 | -0.40 | 0.08 | -2.72 | -3.17 | -0.90 | -2.67 | -10.46 | -11.70 | -16.72 | -15.59 | -37.74 | -26.47 | -35.54 | -24.15 | -28.49 | -4.32 | -23.04 | -17.47 | 21.47 | 11.25 |
| Diluted Shares Outstanding | 114.43M | 113.6M | 112.34M | 111.22M | 110.75M | 109.8M | 108.48M | 107.44M | 102.52M | 105.95M | 101.3M | 74.37M | 63.18M | 39.63M | 22.17M | 20.65M | 15.89M | 11.51M | 9.1M | 8.03M | 5.58M | 5.38M | 5.2M | 3.22M | 2.13M | 1.35M | 923.58K | 888.46K | 887.08K | 939.59K | 888.59K |
| Basic Shares Outstanding | 112.91M | 113.64M | 111.15M | 110.29M | 109.35M | 108.28M | 107.25M | 106.26M | 100.4M | 96.65M | 87.48M | 74.37M | 51.8M | 39.63M | 22.17M | 20.65M | 15.89M | 11.51M | 9.1M | 8.03M | 5.58M | 5.38M | 5.2M | 3.22M | 2.13M | 1.35M | 923.58K | 888.46K | 887.08K | 894.23K | 888.59K |
| Dividend Payout Ratio | - | - | - | - | - | - | - | - | - | 1.47% | 1.26% | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | 68.75% | 198% |
Quick answers to the most common questions about buying TSEM stock.
For fiscal year 2025, Tower Semiconductor Ltd. (TSEM) reported total revenue of $1.57B. This represents a 1499.7% increase compared to $97.9M in 1996.
Tower Semiconductor Ltd. (TSEM) is profitable, generating $220.5M in net income for the fiscal year ending 2025 with a net profit margin of 14.1%.
Tower Semiconductor Ltd. (TSEM) reported an operating income of $194.2M, resulting in an operating profit margin of 12.4%. This margin reflects the operational efficiency of the business before interest and taxes.
Tower Semiconductor Ltd. (TSEM) generated $363.9M in gross profit for the year, representing a gross profit margin of 23.2%. This demonstrates the company's core pricing power and production efficiency.
Key Metrics
Top Statement Risk
Dependence on cyclical semiconductor demand
Revenue Momentum Accelerates Sharply
Tower Semiconductor's revenue grew 23.7% year-over-year in 2026Q2, reaching $460.1M, a notable acceleration from the 5.9% growth in 2025Q2, as reported in the latest quarterly data.
The sequential revenue progression from $358.2M in 2025Q1 to $460.1M in 2026Q2 indicates a robust demand environment, likely driven by increased wafer shipments and favorable product mix. The acceleration from single-digit to mid-20s growth suggests the company is capturing market share or benefiting from industry tailwinds, though sustainability warrants monitoring given the cyclical nature of semiconductors.
Gross Margin Expansion Reflects Pricing Power
Gross margin improved from 21.5% in 2025Q2 to 29.9% in 2026Q2, a 840 basis point expansion, according to the income statement data, indicating strong pricing power and operational efficiency.
The consistent upward trend in gross margin from 20.4% in 2025Q1 to 29.9% in 2026Q2 suggests that Tower is successfully passing through cost increases or benefiting from a richer product mix. This margin expansion outpaces peers like GlobalFoundries (25.2%) and approaches UMC's 29.0%, positioning Tower competitively. However, the cyclicality of semiconductor pricing could reverse this trend if demand softens.
Operating Leverage Drives Profit Growth
Operating income surged from $39.9M in 2025Q2 to $90.3M in 2026Q2, a 126% increase, while revenue grew only 23.7%, as per the quarterly data, demonstrating significant operating leverage.
The operating margin expanded from 10.7% to 19.6% over the same period, indicating that fixed costs are being spread over a larger revenue base. R&D and SG&A expenses grew modestly (from $40.1M to $47.5M combined) relative to the revenue increase, suggesting disciplined cost control. This leverage is a key driver of the earnings growth, but investors should watch for potential increases in operating expenses as the company scales.
Earnings Quality Boosted by Tax Benefits
Net income in 2026Q2 was $90.8M, exceeding operating income of $90.3M, implying a net tax benefit, as shown in the income statement, which may not be sustainable.
The fact that net income is higher than operating income suggests a favorable tax position, possibly due to one-time tax credits or deferred tax adjustments. This inflates reported EPS to $0.79, which may overstate underlying profitability. Investors should adjust for this anomaly when forecasting future earnings, as such benefits are unlikely to recur consistently.
Cost Discipline Amidst Growth
COGS as a percentage of revenue declined from 78.5% in 2025Q2 to 70.1% in 2026Q2, while R&D and SG&A remained stable around 10% of revenue, based on the quarterly data, indicating effective cost management.
The reduction in COGS ratio is a primary driver of margin expansion, suggesting improved manufacturing efficiency or better utilization of fabs. R&D and SG&A expenses have grown in absolute terms but remained relatively flat as a percentage of revenue, reflecting a scalable cost structure. This discipline is crucial for maintaining profitability as the company expands.
2026Q2 Marks a Profitability Inflection
The most significant inflection occurred in 2026Q2, where gross margin jumped to 29.9% and operating margin to 19.6%, the highest in the ten-quarter period, as per the income statement data.
This quarter represents a clear departure from the prior trend of sub-25% gross margins and sub-16% operating margins. The inflection appears driven by a combination of revenue acceleration and cost efficiencies, possibly reflecting a strategic shift towards higher-value products. The durability of this inflection will depend on whether the company can sustain these margins amid potential industry cyclicality.
What Could Invalidate the Base Case
Despite strong recent performance, Tower's reliance on cyclical semiconductor demand and potential tax benefit reversals could undermine earnings sustainability, as evidenced by the 2026Q2 net income exceeding operating income.
The sharp acceleration in revenue and margins may be partly driven by temporary factors such as industry upcycles or one-time tax benefits. The 2026Q2 net income exceeding operating income suggests a tax benefit that may not recur, potentially inflating EPS. Additionally, the semiconductor industry is highly cyclical, and a downturn could reverse the margin expansion. Investors should monitor order trends and tax rates closely, as the current trajectory may not be linear.