Sales were flat against a year earlier, yet gross margin widened by 3.9 points and net income rose 50.6%. Q4 guidance is net sales of $1.9 billion to $2.0 billion and net income of $160 million to $185 million, below Q3's $191 million 8-K.
Amkor Technology, Inc · Q3 2026 · Reported 26 Oct 2026 · US
Key figures
Million USD | Q3 2026 | Q3 2025 | Change |
|---|---|---|---|
Revenue | 1,990.56 | 1,986.97 | +0.2 % |
Gross profit | 363.53 | 284.49 | +27.8 % |
Operating income | 224.71 | 158.93 | +41.4 % |
Net income | 190.61 | 126.59 | +50.6 % |
Diluted EPS | 0.76 USD/share | 0.51 USD/share | +49.0 % |
Gross margin | 18.3 % | 14.3 % | +3.9 pp |
Operating margin | 11.3 % | 8.0 % | +3.3 pp |
Net margin | 9.6 % | 6.4 % | +3.2 pp |
Figures in USD, as reported. Margins are computed from the reported lines.
Profit grew on a materially cheaper cost base, not on volume
Net sales were $1,991 million against $1,987 million a year earlier (up 0.2%), while gross profit rose 27.8% and gross margin reached 18.3% against 14.3% 8-K. Operating income rose 41.4% to $225 million, and operating margin was 11.3% against 8.0% 8-K. Against the prior quarter, sales rose from $1,898 million and gross margin from 16.8% 8-K.
The cost table shows where the gain came from. Materials fell to 50.7% of sales from 57.5% a year earlier, while labor rose to 10.1% from 9.2%, depreciation to 8.6% from 7.5%, and other manufacturing to 12.3% from 11.5% 8-K. The shift in end markets suggests mix is part of the answer, but that is our reading.
The end-market mix moved sharply away from Communications
Communications was 37% of sales against 51% a year earlier and 42% in the prior quarter, while Computing rose to 26% from 19% and Automotive, industrial and other to 22% from 16% 8-K. Management cited record revenue in Computing and Automotive Industrial and called the Communications weakness expected 8-K.
Advanced products sales fell to $1,632 million from $1,684 million a year earlier, while mainstream products rose to $359 million from $303 million 8-K. Top-ten customers were 66% of sales against 73% a year earlier 8-K. Flat total sales therefore hide a large change in what Amkor sells and to whom.
Earnings growth held through the income statement, with some help from other income
Operating expenses rose to $138.8 million from $125.6 million, as SG&A increased to $99.0 million from $83.2 million and R&D fell to $39.8 million from $42.4 million 8-K. Other income, net improved to $23.4 million from $16.7 million, and tax expense rose to $39.2 million from $27.7 million 8-K.
Net income attributable to Amkor rose 50.6% to $190.6 million and diluted EPS rose 49.0% to $0.76 8-K. The gap between the two is small because diluted shares grew to 249.5 million from 248.3 million 8-K. EBITDA, which the company defines as a non-GAAP measure, was $435 million against $340 million 8-K.
Debt rose alongside heavy capex, while nine-month operating cash flow nearly doubled
For the nine months, net cash from operating activities was $868 million against $451 million a year earlier, alongside net income of $450 million against $204 million 8-K. Payments for property, plant and equipment were $1,237 million against $473 million 8-K. Long-term debt reached $2,318 million at September 30 against $1,283 million at December 31, 2025, after $1,150 million of debt proceeds in the nine months 8-K.
Cash and short-term investments were $2.4 billion against total debt of $2.5 billion 8-K. Inventories rose to $604 million from $438 million at year-end, and capital expenditures payable to $496 million from $244 million 8-K. Management now expects full-year 2026 capex of approximately $2.5 billion 8-K.
What to watch next
Q4 guidance is net sales of $1.9 billion to $2.0 billion, gross margin of 18.0% to 19.0%, and net income of $160 million to $185 million, or $0.65 to $0.75 per diluted share 8-K.
Whether Communications, at 37% of sales, stabilises as Computing and Automotive grow, since the margin gain has coincided with that mix change 8-K.
How the heavy capex programme, about $2.5 billion for 2026, converts into sales, given that depreciation already rose to 8.6% of sales from 7.5% a year earlier 8-K.
The report does not give customer commitments referenced by management.
Sources
Produced by Clarifo Research with the Clarifo financial research engine from the company's public filings. AI was used in parts of the analysis and drafting. Figures are checked automatically against the filings they come from. This is not investment advice.