Tower Semiconductor Ltd.

Record profitability + strong top-line momentum (Q2’26) - Revenue $460M (+11% QoQ, +24% YoY) = company record. - Gross margin 30%, operating margin 20%, net margin 20% — all company records (excluding nonrecurring accounting items). - EPS $0.80 basic / $0.79 diluted (vs. $0.49 / $0.41 in Q2’25). - Company frames this as operating leverage and a step toward multi-year margin expansion, not a one-off.

Clear near-term forecast: Q3’26 and “run-rate” inflection - Guides Q3’26 revenue to ~$520M (midrange) → annualized > $2B run rate. - Management emphasizes that previously announced capacity investments are expected to convert to shipments as the year progresses, supporting the run-rate jump. - Expectation: “strong second half” driven by capacity ramp becoming “qualified and converted into shipments.”

Upgraded long-term outlook: 2028 business model raised materially - Updated 2028 model: $3.6B revenue, $1.63B gross profit (45% gross margin), $1.2B net profit (33% net margin). - Management highlights higher gross/operating profitability and improved efficiency: - Operating expense ratio targeted to fall to ~7% of revenue (about 30% lower than current levels). - Notably: higher spending in R&D is still included (model assumes >40% higher R&D than current levels), so SG&A/support efficiency is the lever. - Implication/opportunity: investors are being asked to underwrite sustained margin expansion as scale increases.