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Tower Semiconductor TSEM reported revenues in Q2 2022 of $426 million versus $362.1 million in Q2 2021. The company is no longer providing guidance nor hosting earnings calls. This was year over year growth of 18%. It was also up again sequentially as it has been since Q1 2020. Organic revenue for the second quarter of 2022, (defined as total revenue excluding revenues from Nuvoton in the Japanese fabs and from Maxim in the San Antonio fab,) grew by 30% year over year. We believe sales continue to be mostly constrained by capacity availability but that the bulk of the near term capacity increase has already occurred. Tight industry supply has allowed the company to increase prices which have been reflected in higher gross margins.
Revenues in the second half are expected to be slightly impacted by the shutdown of the Aral manufacturing factory in Japan as of July 1, as part of the agreement between Tower, NTCJ and TPSCo, Uozu and Tonami facilities are unaffected.
Q2 2022 gross margin increased to 26.4% from 20.4% a year ago and 24.8% in Q1 2022. Gross margin dollars increased $39 million, or 52% showing incremental sales are at higher margins and the industry can continue to increase prices due to limited availability. Operating expenses increased only $2.0 million year over year, or 5%,showing the operating leverage of the business. The operating margin improved to 16.6% from 9.4% last year. On a dollar basis it more than doubled. Other income was an expense of $8.2 million compared to $484,000 a year ago.
Pretax profit was $62.5 million versus $33.5 million a year ago. Taxes were $4.3 million in the quarter compared $2.2 million last year.
GAAP net income was $58.1 million versus $30.9 million last year, while non-GAAP net income was $64.1 million versus $37.3 million, up 72%.
Diluted GAAP EPS was $0.53 per share versus $0.28 last year. Adjusted non-GAAP diluted EPS increased to $0.58 versus $0.34 a year ago (up 54%). Average diluted shares for the quarter were 110.6 million, up from 109.6 million last year. EBITDA for the second quarter of 2022 was $137.6 million compared to $98.9 million a year ago and up sequentially from $133.6 million in Q1 2022.
We have adjusted our model and increased our 2022 earnings estimate to a non-GAAP EPS estimate of $2.33 due to higher operating margins.
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