Corning grew Q2 2026 sales 17% to $4.51B and diluted EPS 19% to $0.64. Optical Communications sales rose 32% on AI data-center demand, while Solar swung to a loss during its capacity ramp and a $1.0B customer deposit lifted cash flow.
Revenue
$4.5B
+16.6% YoY
Net income
$559M
+19.2% YoY
Diluted EPS
$0.64
+18.5% YoY
Operating margin
15.5%
Overview
Corning's second quarter of 2026 (three months ended June 30) was again driven mainly by fiber for AI data centers. Net sales rose 17% to $4.51 billion, and $506 million of the $643 million increase came from optical communications products: fiber, cable and connectivity. The 10-Q attributes that to "continued growth in our Enterprise business driven by strong demand for our Generative AI products." Another $207 million came from Solar (polysilicon, wafers and modules). The rest of the business was roughly flat or shrank.
Net income attributable to Corning rose 19% to $559 million, or $0.64 per diluted share (vs. $0.54). A much lower tax rate (6.2% vs. 14.4%) helped that headline growth. Smaller currency-hedge gains and higher restructuring and share-based pay costs held it back. The operating line gives the clearer picture: operating income grew 22% to $698 million.
The quarter also brought two deals that change the balance sheet. A customer paid a $1.0 billion upfront deposit under a supply agreement that runs through 2029. Corning also issued warrants to NVIDIA as part of a partnership to expand U.S. manufacturing for AI infrastructure (Corning's May 6 8-K names NVIDIA as the holder).
Key figures (GAAP)
Metric
Q2 2026
Q2 2025
YoY Change
Net sales
$4,505M
$3,862M
+16.6%
Gross margin (% of sales)
36.1%
36.0%
+0.1 pts
Operating income
$698M
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Operating margin is the share of sales left after running the business (production, selling, administration and research). It is measured before interest, currency-hedge results and tax.
Year to date (six months):
Metric
H1 2026
H1 2025
YoY Change
Net sales
$8,649M
$7,314M
+18.3%
Operating income
$1,337M
$1,018M
+31.3%
Net income attributable to Corning
$930M
$626M
+48.6%
Diluted EPS
$1.06
$0.72
+47.2%
The first half of 2025 was weak, which inflates the first-half growth rates.
Segments: one engine, one drag
Corning changed how it reports segments at the start of 2026:
The old Display and Specialty Materials segments are now one segment, Glass Innovations.
Hemlock Semiconductor and the solar wafer and module plants now form Solar.
Life Sciences is too small to report separately and now sits in "Life Sciences and Emerging Growth Businesses."
Prior periods are recast to the new structure.
The segment figures below are on Corning's internal management basis. They restate hedged foreign-currency sales at the hedge rates (explained in the next section) and leave out one-off items, so they don't add up to the GAAP totals.
Segment
Q2 2026 sales
YoY
Q2 2026 segment net income
Q2 2025 segment net income
YoY
Optical Communications
$2,072M
+32%
$438M
$247M
+77%
Glass Innovations (Display + Specialty Materials)
$1,463M
+1%
$354M
$324M
+9%
Automotive
$471M
+2%
$82M
$79M
+4%
Solar (incl. Hemlock)
$438M
+90%
-$7M
$2M
n/m
Life Sciences & Emerging Growth
$294M
-15%
-$21M
$6M
n/m
Optical Communications is where the profit growth came from:
Sales rose $506M and segment net income rose $191M, so about 38 cents of each extra sales dollar became segment profit.
The segment's net margin rose from 15.8% to 21.1%.
Corning's earnings release says Enterprise Networks (the data-center business) grew 65%, "with Gen AI product sales growing significantly faster."
Year to date, Optical sales were $3,918M (+34%) and segment net income was $825M (+84%).
Glass Innovations:
Grew 1% on the segment basis, which the 10-Q attributes to "continued strong demand for LCD glass."
On a GAAP basis the picture is weaker: the "electronics glass and advanced optics products" category fell 2.9% to $1,230M, from $1,267M.
The $233M gap between $1,230M and $1,463M matches the company's total hedged-currency adjustment. Corning says that adjustment mainly relates to "Japanese yen exposure within the Glass Innovations segment."
Automotive sales grew 2%, which Corning credits to customers adopting its auto glass products. Segment profit rose 4%.
Solar:
Sales nearly doubled (+90% to $438M) on growth in polysilicon, wafers and modules, but the segment swung to a $7M loss.
The 10-Q blames "temporarily higher costs to ramp up capacity." The earnings release adds that the quarter included an extended maintenance shutdown and equipment upgrade at the solar wafer plant.
This is also why company-wide gross margin stayed flat at 36% even though the higher-margin Optical business made up more of sales.
Life Sciences & Emerging Growth sales fell 15% and the segment swung to a $21M loss. Corning attributes both to its Pharmaceutical Technologies business.
GAAP vs. "core": why Corning reports two sets of numbers
The headline figures in Corning's earnings release are "core" (non-GAAP) numbers:
core sales: $4.74B (+17%)
core net income: $680M (+30%)
core EPS: $0.78 (+30%)
Core EPS is $0.14 higher than GAAP EPS. The 10-Q bridges the two as follows (after tax):
Item (Q2 2026, after tax)
Effect on net income
Per share
GAAP net income attributable to Corning
$559M
$0.64
Adjustment for hedged currency exposures
+$159M
+$0.18
Remove gains on currency-hedge contracts
-$68M
-$0.08
Remove discrete tax benefits
-$79M
-$0.09
Add back restructuring, impairment and other charges
+$60M
+$0.07
Add back acquisition-related costs
+$18M
+$0.02
Add back pension mark-to-market loss
+$18M
+$0.02
Add back loss on investments
+$13M
+$0.01
Other (debt translation, sale of business)
$0M
$0.00
Core net income
$680M
$0.78
In plain terms:
The yen hedge.
Corning sells much of its display glass in Japanese yen. When the yen is weak, those sales convert into fewer dollars, and GAAP shows that.
Corning buys currency contracts to protect against this. Under GAAP, gains on those contracts appear below the operating line as "translated earnings contract gain" ($90M pretax this quarter), not in sales.
Core results instead value the hedged share of sales and profit at the contract rates and remove the contract gains. For the yen, the contract rate was ¥120 per dollar, and 98% of yen exposure was hedged in Q2.
The adjustment adds $233M to sales and $208M to pretax income, and removes $90M of contract gains. So core counts about $118M more pretax currency benefit than the hedge contracts actually booked in GAAP this quarter.
Part of that gap: the GAAP contract line is net of $75M of non-cash losses on the premiums of expired option contracts.
A methodology change.
From April 1, 2026, Corning replaced its old "constant-currency" adjustment with a new "adjustment for hedged exposures."
The old method applied fixed long-term rates to all significantly hedged exposure. The new one applies actual contract rates, and only to the portion that was actually hedged.
Prior-year figures were not restated, so Q2 2026 and Q2 2025 core figures are calculated in two different ways.
Corning says applying the new method to 2025 would have shown higher year-over-year growth in core sales, core net income and core EPS. By the company's own account, the 30% core EPS growth may be understated.
Tax worked the other way. GAAP includes $79M of discrete tax benefits that core removes. That is why the GAAP effective tax rate was 6.2% and the core rate was 18.5%. Corning attributes the low GAAP rate mainly to:
share-based compensation adjustments
government incentives
a U.S. deduction on export-related income
Restructuring and mark-to-market items.
Restructuring, impairment and other charges were $71M pretax ($60M after tax), vs. $1M a year ago. Year to date they total $115M pretax.
Core also excludes a pension mark-to-market loss of $22M pretax and a $13M loss on investments.
The earnings release puts core gross margin at 39.6%, up 1.2 points, and core operating margin at 20.9%, up 1.9 points. That compares with GAAP's 36.1% and 15.5%. Most of the gap comes from the yen restatement, which lands in sales and gross profit.
Costs, cash and the balance sheet
Share-based pay is now a large cost.
SG&A (selling, general and administrative costs) rose $93M (18%) to $608M. The 10-Q says this was "primarily due to higher share-based compensation expense, as the rise in the Company's stock price increased the fair value of performance-based restricted stock units."
Share-based compensation for the first half was $250M, more than double last year's $117M.
R&D rose 8% to $299M.
A customer deposit boosted cash flow.
Per the earnings release, Q2 operating cash flow was $1.72B (vs. $708M) and Corning's "adjusted free cash flow" was $1.42B (vs. $451M).
The 10-Q says Corning received a $1.0B upfront customer deposit in the quarter, under a long-term supply agreement that runs through December 31, 2029. Most of that free cash flow is prepayment for future sales rather than a sign of quarterly earnings power.
Contract liabilities (customer deposits plus deferred revenue) rose to $2.7B from $2.3B at year-end.
The NVIDIA warrants.
On May 6, Corning issued NVIDIA a warrant to buy up to 15 million shares at $180. It also sold NVIDIA a pre-funded warrant for 3 million shares, for $500M in cash.
The $180 warrant's $296M fair value is treated as a payment to a customer. It is netted against the $1.0B deposit and will be recorded as a reduction of revenue as sales occur under the agreement, a small drag on reported sales over several years.
The 3 million pre-funded shares already count in the share total used for EPS. Diluted shares were 875M, vs. 865M a year ago.
Balance sheet and capital spending.
Cash was $2.5B (vs. $1.5B at year-end), total debt was $8.4B and debt-to-capital was 39%.
Capital spending was $754M in the first half. Corning expects about $2.0B for full-year 2026, which implies roughly $1.25B in the second half.
That spending fits the capacity expansion Corning has announced, including three new plants in North Carolina and Texas under the NVIDIA partnership (per the joint press release).
Takeaway: Corning's growth now comes mostly from AI fiber. Optical Communications delivered $191M of the $215M increase in net income across the four reportable segments. The rest of the business is flat (glass, auto), losing money while it ramps (Solar), or shrinking (Life Sciences). Two items make the headline figures look better: a yen-hedge restatement adds $0.18 to core EPS, and a $1.0B customer prepayment inflates free cash flow. Even so, the underlying operating growth (GAAP operating income +22%) is real.
Guidance and the Springboard plan
Corning gives guidance only on a core basis. It says it can't forecast currency moves, so it provides no GAAP outlook. For Q3 2026, the July 28 earnings release guides to:
core sales of $4.9–5.0B, about +16% year over year
core EPS of $0.85–0.89, about +28%
Management also said it expects "an improving impact on earnings from Solar starting in Q3." It described Solar as building toward "a revenue stream of more than $3 billion."
Corning launched its Springboard plan in Q3 2023, starting from a $13B annualized sales run rate, and upgraded it at the May 2026 investor day. According to the earnings release, the internal plan targets an annualized sales run rate of:
$20B by the end of 2026
$30B by the end of 2028
$40B by the end of 2030
That works out to 19% compound annual growth from Q4 2026 to Q4 2030, with earnings growing faster than sales. For context, Q2 core sales of $4.74B equal about $19.0B annualized, and the Q3 guidance ($4.9–5.0B) equals about $19.6–20.0B. Corning is close to the end-2026 target, but hitting it depends on Q4 sales holding at or above the Q3 level.
Our read: Near-term results depend on how fast Corning can add Optical capacity. Enterprise demand is backed by contracts, including Amazon's multiyear supply agreement, the NVIDIA partnership and the $1.0B deposit. Optical also turns a high share of each extra sales dollar into profit. The main risks are execution and the gap between GAAP and core results, not demand:
Solar has to turn its ramp into profit, which management has promised starting in Q3.
The roughly $2B of 2026 capital spending has to come online on schedule.
The gap between GAAP and core EPS widened to $0.14 this quarter from $0.06 a year ago, partly because of the new currency method.
The $296M warrant will slowly reduce reported revenue under the NVIDIA-linked agreement.
Sources: Corning Form 10-Q for the quarter ended June 30, 2026. Enterprise Networks growth, core margins, adjusted free cash flow, Q3 guidance, the Springboard targets and the Amazon agreement come from Corning's Q2 2026 earnings release (8-K Exhibit 99, July 28, 2026). NVIDIA's identity as the warrant holder and the plant details come from Corning's 8-K dated May 6, 2026.