Net revenues totaled $2.99 billion, a year-over-year increase of 43.4%. On a year-over-year basis, the Company recorded higher net sales in all product groups except the RF Communications sub-group. Year-over-year net sales to OEMs and Distribution increased 38.4% and 53.1%, respectively. On a sequential basis, net revenues decreased 0.8% but were 300 basis points above the mid-point of the Company’s guidance. ADG and MDG reported increases in net revenues on a sequential basis while AMS decreased.

Gross profit totaled $1.21 billion, a year-over-year increase of 66.1%. Gross margin of 40.5% increased 550 basis points year-over-year, mainly driven by lower unloading charges, manufacturing efficiencies, favorable pricing and improved product mix partially offset by negative currency effects, net of hedging. Second quarter gross margin was 100 basis points above the mid-point of the Company’s guidance mainly due to more favorable pricing and improved product mix.

Operating income increased 358.8% to $489 million, compared to $106 million in the year-ago quarter. The Company’s operating margin increased 1,120 basis points on a year-over-year basis to 16.3% of net revenues, compared to 5.1% in the 2020 second quarter.

By product group, compared with the year-ago quarter:

Automotive and Discrete Group (ADG):

• Revenue increased in both Automotive and in Power Discrete.
• Operating profit increased by 523.8% to $102 million. Operating margin was 9.5% compared to 2.3%.

Analog, MEMS and Sensors Group (AMS):

• Revenue increased in Analog, MEMS and Imaging.
• Operating profit increased by 234.2% to $189 million. Operating margin was 18.6% compared to 9.0%.

Microcontrollers and Digital ICs Group (MDG):

• Revenue increased in Microcontrollers and decreased in RF Communications.
• Operating profit increased by 76.5% to $206 million. Operating margin was 22.9% compared to 15.9%.

Net income and diluted earnings per share increased to $412 million and $0.44, respectively, compared to $90 million and $0.10, respectively, in the year-ago quarter.

Cash Flow and Balance Sheet Highlights

				Trailing 12 Months
(US$ m)	Q2 2021	Q1 2021	Q2 2020	Q2 2021	Q2 2020	TTM Change
Net cash from operating activities	602	682	387	2,591	1,990	30.2%
Free cash flow (non-U.S. GAAP)	125	261	28	873	772	13.1%

Capital expenditure payments, net of proceeds from sales, were $438 million in the second quarter. In the year-ago quarter, capital expenditures, net, were $312 million.