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Infineon Technologies lifted its full-year 2026 revenue and adjusted free cash flow forecasts after reporting record third-quarter sales, driven by strong demand for AI data center power chips. The German semiconductor company exceeded revenue expectations, although profitability came in below analyst forecasts.
Third-quarter revenue reached €4.17 billion, surpassing the analyst consensus of €4.13 billion and marking a 9% increase from the previous quarter's €3.81 billion. Growth was supported by stronger demand across all business segments, led by the Power & Sensor Systems and Automotive divisions.
Despite the revenue beat, Infineon reported a Segment Result of €797 million, below the expected €809 million, while the Segment Result Margin declined to 19.1%, missing the consensus estimate of 19.6%. Net profit also fell short of expectations at €423 million, versus the projected €452 million. Adjusted diluted earnings per share matched forecasts at €0.44, while diluted EPS from continuing operations came in at €0.32, below expectations.
The Power & Sensor Systems division was the standout performer, generating €1.44 billion in revenue, ahead of estimates, with Segment Result climbing to €359 million. The company attributed the segment's 14% quarterly growth to surging demand from AI servers and data centers. Automotive revenue also exceeded expectations at €1.93 billion, although its operating profit missed analyst forecasts. Meanwhile, the Green Industrial Power and Connected Secure Systems businesses both reported weaker-than-expected results.
CEO Jochen Hanebeck said demand for AI data center power solutions remains the company's strongest growth driver and helped deliver record quarterly revenue.
Looking ahead, Infineon expects approximately €4.7 billion in fourth-quarter revenue, above market estimates, with a Segment Result Margin of around 23%. For the full fiscal year, the company raised its revenue forecast to about €16.3 billion and increased its adjusted free cash flow outlook to €1.85 billion. However, it lowered its reported free cash flow forecast to €900 million following the completion of its ams OSRAM sensor portfolio acquisition.
Infineon also revealed it has secured or is negotiating multi-year capacity reservation agreements with major AI customers, representing cumulative revenue in the high single-digit billion-euro range, reinforcing long-term growth prospects in the AI semiconductor market.
