Financial Data and Key Metrics Changes - FormFactor's Q4 2025 revenues reached $215.2 million, exceeding the outlook range of $205 million to $215 million, marking a record for both quarterly and annual revenue [24][30] - GAAP gross margins for Q4 were 42.2%, up 240 basis points from 39.8% in Q3, while non-GAAP gross margins were 43.9%, a 290 basis point increase from 41% in Q3 [24][25] - GAAP net income for Q4 was $23.2 million, or $0.29 per diluted share, compared to $15.7 million, or $0.20 per diluted share in Q3 [26] - Free cash flows in Q4 were $34.7 million, up from $19.7 million in Q3, demonstrating improved cash-generating power [27] Business Line Data and Key Metrics Changes - In the DRAM probe card segment, sequential growth was achieved, driven by non-HBM applications like DDR4 and DDR5, with expectations for record growth in HBM applications in Q1 [7][8] - The probe card segment's gross margins improved by 364 basis points to 44.5%, while the systems segment saw a decline of 50 basis points [25] - The systems segment experienced a sequential revenue increase in Q4, driven by customer investments in co-packaged optics and quantum computing, although a seasonal reduction in demand is expected in Q1 [14][15] Market Data and Key Metrics Changes - The demand for DRAM, particularly HBM, is expected to continue growing, with FormFactor positioned to capture market share due to increased test intensity and complexity [6][11] - The foundry and logic probe card market is anticipated to see increased demand in Q1, shifting from traditional drivers to data center applications like network switches [11][12] - The company is also focusing on high-performance compute applications, with ongoing production qualifications in leading-edge GPU applications [14] Company Strategy and Development Direction - FormFactor is committed to improving gross margins and achieving its target model, with a focus on operational effectiveness and financial discipline [18][20] - The company plans to expand its Farmers Branch site to increase capacity at structurally lower costs, which is expected to support further revenue growth and gross margin expansion [5][23] - The strategic acquisition of Keystone Photonics aims to enhance capabilities in co-packaged optics, positioning the company for growth in energy-efficient optical data transmission [15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the robust demand environment for memory and DRAM, driven by customer investments and industry forecasts [37] - The company anticipates continued gross margin improvements, although at a more moderate pace moving forward [22] - Management highlighted the importance of maintaining strong relationships with customers to navigate the dynamic DRAM market and capitalize on growth opportunities [73] Other Important Information - The company expects Q1 revenues of $225 million ±$5 million, with non-GAAP gross margins projected at 45% ±150 basis points [30][31] - The impact of tariffs on gross margins is estimated at around 200 basis points, with ongoing efforts to mitigate these costs through customs drawbacks [31][80] - The company has a share repurchase program with $70.9 million remaining for future repurchases, although cash is currently prioritized for the Farmers Branch ramp-up [30] Q&A Session Summary Question: What has driven the recent gross margin improvements? - Management noted that workforce reductions and improvements in cycle times and yields have been primary drivers of the faster-than-expected gross margin improvements [34][35] Question: How does FormFactor view the growth potential in the DRAM market? - Management indicated that robust demand and favorable pricing dynamics are expected to drive continued growth in the DRAM market, particularly with the transition to HBM4 [36][37] Question: Can FormFactor increase its run rate before the Farmers Branch comes online? - Management confirmed that they are currently operating at a run rate of $225 million per quarter and expect to continue improving output from existing facilities [39][40] Question: What is the expected impact of HBM5 on FormFactor's business? - Management highlighted that HBM5 will likely drive increased test intensity and complexity, presenting significant opportunities for FormFactor as they engage with customers on R&D [43][44] Question: How does FormFactor plan to address the foundry and logic market dynamics? - Management expects growth in the foundry and logic market, driven by share gains and participation in high-performance compute applications [78]

FormFactor (NasdaqGS:FORM) Q4 2025 Earnings call February 04, 2026 04:25 PM ET Company ParticipantsAric McKinnis - Senior VPBrian Chin - MDCraig Ellis - Senior MD and Director of ResearchDavid Duley - Portfolio ManagerElizabeth Sun - Former Senior Director of Corporate Communications and IRMatthew Prisco - VP and Equity Research AssociateMike Slessor - CEORobert Mertens - VPStan Finkelstein - VP of Investor RelationsVedvati Shrotre - DirectorConference Call ParticipantsCharles Shi - MD and Senior AnalystMik ...

Financial Data and Key Metrics Changes - FormFactor reported Q4 2025 revenues of $215.2 million, exceeding the outlook range of $205 million to $215 million, marking record revenue for both quarterly and annual results [23][25] - GAAP gross margins for Q4 were 42.2%, up 240 basis points from 39.8% in Q3, while non-GAAP gross margins were 43.9%, an increase of 290 basis points from 41% in Q3 [24][25] - GAAP net income for Q4 was $23.2 million, or $0.29 per diluted share, compared to $15.7 million, or $0.20 per diluted share in the previous quarter [25] - Free cash flows in Q4 were $34.7 million, up from $19.7 million in Q3, demonstrating improved cash-generating power [26] Business Line Data and Key Metrics Changes - In the DRAM probe card segment, sequential growth was achieved, driven by non-HBM applications like DDR4 and DDR5, with expectations for record DRAM revenue in Q1 2026 due to HBM strength [6][7] - The probe card segment's gross margins improved by 364 basis points to 44.5%, while the systems segment saw a decline of 50 basis points [24] - The systems segment experienced a sequential revenue increase in Q4, driven by investments in co-packaged optics and quantum computing, although a seasonal reduction in demand is expected in Q1 [12][13] Market Data and Key Metrics Changes - The company is experiencing strong demand in advanced packaging and high-performance compute markets, particularly in areas like HBM and DRAM, network switches, and foundry and logic [5][6] - The transition to HBM4 is expected to increase test intensity and complexity, driving higher probe card spending by customers [8][9] - The foundry and logic probe card market is anticipated to see increased demand in Q1, shifting from traditional drivers to data center applications [10][11] Company Strategy and Development Direction - FormFactor is focused on improving gross margins and operational effectiveness, with a target model gross margin of 47% at an $850 million annual run rate [17][77] - The company plans to leverage its Farmers Branch site to increase capacity at structurally lower costs, supporting further revenue growth and gross margin expansion [5][22] - Strategic acquisitions, such as Keystone Photonics, are aimed at enhancing capabilities in co-packaged optics, positioning the company for future growth [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued revenue growth driven by robust demand in the memory market, particularly for DRAM and HBM applications [36][37] - The company anticipates a more moderate pace of gross margin improvement moving forward, with ongoing focus on operational efficiency and cost management [20][34] - Management highlighted the importance of maintaining strong relationships with customers to capture market share and navigate industry dynamics effectively [49][50] Other Important Information - The company expects Q1 2026 revenues of $225 million ±$5 million, with non-GAAP gross margins projected at 45% ±150 basis points [28][30] - Tariffs are expected to impact gross margins by approximately 200 basis points, with ongoing efforts to mitigate these effects through customs drawbacks [29][77] - The Farmers Branch facility is on track to come online by the end of 2026, with expected capital expenditures between $140 million and $170 million over 2026 [27][22] Q&A Session Summary Question: What has driven the recent improvement in gross margins? - Management noted that actions taken to reduce workforce and improve cycle times and yields have significantly contributed to the faster-than-expected gross margin improvement [33] Question: How does the company view the growth potential in the DRAM market? - Management indicated that robust demand and strong forecasts from major ATE manufacturers suggest continued growth in the DRAM market, with a focus on expanding competitive advantages and capacity [36] Question: What is the expected output capacity before the Farmers Branch facility comes online? - Management expressed confidence in increasing output from the existing footprint, with expectations to continue improvements throughout 2026 [51] Question: Can you provide insights on the qualification process for GPUs and custom ASICs? - Management confirmed ongoing progress in GPU qualification, with expectations for revenue generation in the second half of the year, while custom ASICs have already generated multimillion-dollar revenues [82]

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Investor Presentation This presentation contains forward-looking statements within the meaning of the U.S. Securities Exchange Act of 1934 and the Securities Act of 1933. The forward-looking statements include statements concerning, among other things, our future business model and strategies, our financial model and structure, market and market share growth, industry trends, customer demand and growth opportunities. In some instances, you can identify these statements by forward-looking words, such as "may ...

Financial Performance - Record revenue of $785.0 million for FY25, up 2.8% from $763.6 million in FY24[2] - Q4 revenue reached $215.2 million, a 6.2% increase from $202.7 million in Q3 FY25 and a 13.6% increase from $189.5 million in Q4 FY24[2] - GAAP net income for Q4 FY25 was $23.2 million, or $0.29 per diluted share, compared to $15.7 million, or $0.20 per diluted share in Q3 FY25[4] - Non-GAAP net income for Q4 FY25 was $36.6 million, or $0.46 per diluted share, compared to $25.7 million, or $0.33 per diluted share in Q3 FY25[5] - GAAP gross profit for the three months ended December 27, 2025, was $90,764,000, an increase from $80,626,000 in the previous quarter, representing a 1.4% year-over-year growth[19] - Non-GAAP gross profit for the twelve months ended December 27, 2025, reached $320,053,000, compared to $318,516,000 for the same period in 2024, indicating a slight increase[19] - GAAP net income for the three months ended December 27, 2025, was $23,218,000, up from $15,656,000 in the previous quarter, reflecting a 48.5% increase[21] - Non-GAAP net income for the twelve months ended December 27, 2025, was $101,473,000, compared to $90,217,000 in the previous year, showing a 12.4% growth[21] - GAAP operating income for the three months ended December 27, 2025, was $23,490,000, an increase from $18,005,000 in the previous quarter, marking a 30.5% rise[19] Cash Flow and Liquidity - Free cash flow for Q4 FY25 was $34.7 million, compared to $19.7 million in Q3 FY25[8] - Free cash flow for the three months ended December 27, 2025, was $34,748,000, compared to $19,658,000 in the previous quarter, indicating a significant increase of 76.6%[21] - GAAP net cash provided by operating activities for the twelve months ended December 27, 2025, was $115,398,000, slightly down from $117,534,000 in the previous year[23] - The company emphasizes the importance of free cash flow as a liquidity measure, which complements GAAP results for a comprehensive understanding of cash flows[26] Margins and Profitability - Gross margin for Q4 FY25 was 42.2%, up from 39.8% in Q3 FY25 and 38.8% in Q4 FY24[4] - Non-GAAP gross margin for Q4 FY25 was 43.9%, compared to 41.0% in Q3 FY25[5] - The company reported a GAAP gross margin of 42.2% for the three months ended December 27, 2025, compared to 39.8% in the previous quarter, showing an improvement in profitability[19] Future Outlook - The company expects Q1 FY26 revenue of $225 million +/- $5 million, with a gross margin of 34% +/- 1.5%[10] - Continued focus on capacity expansion within existing footprint to drive output increases and gross-margin expansion throughout 2026[7] Strategic Initiatives - Strategic acquisition of Keystone Photonics to strengthen leadership in co-packaged optics testing[7] Balance Sheet and Assets - Total cash, cash equivalents, and restricted cash at the end of the period was $107,047,000, down from $197,206,000 at the beginning of the period, reflecting a decrease of 45.8%[23] - Total assets increased to $1,224,362 million in December 2025, up from $1,202,992 million in September 2025, representing a growth of 1.3%[25] - Cash and cash equivalents rose to $103,330 million, compared to $97,678 million in the previous quarter, marking an increase of 5.6%[25] - Total current liabilities decreased to $123,861 million from $130,115 million, a reduction of 4.6%[25] - Stockholders' equity increased to $1,035,403 million, up from $1,009,615 million, reflecting a growth of 2.5%[25] - The company reported a total current assets figure of $557,054 million, slightly down from $559,260 million in the previous quarter, a decrease of 0.4%[25] - Accounts receivable decreased to $125,416 million from $133,316 million, a decline of 5.4%[25] Non-GAAP Measures - Non-GAAP financial measures are used by management to assess operating performance and future planning, providing a clearer view of financial trends[26] - Non-GAAP net income and related metrics are adjusted to exclude certain items, enhancing comparability of operating performance across periods[26] - The company continues to incur expenses similar to those excluded from non-GAAP adjustments, indicating ongoing operational costs[26]

Core Insights - FormFactor, Inc. reported record revenue of $785.0 million for fiscal year 2025, driven by growth in high bandwidth memory applications [1][2] - The company exceeded expectations in Q4 2025 for revenue, gross margin, and earnings per share, with a strong outlook for Q1 2026 [2][9] Financial Performance - Q4 2025 revenue was $215.2 million, a 6.2% increase from Q3 2025 and a 13.6% increase from Q4 2024 [1][3] - Fiscal 2025 net income was $54.4 million, or $0.69 per diluted share, compared to $69.6 million, or $0.89 per diluted share in fiscal 2024 [3][4] - Q4 2025 gross margin was 42.2%, up from 39.8% in Q3 2025 and 38.8% in Q4 2024 [3][4] Non-GAAP Measures - Non-GAAP net income for Q4 2025 was $36.6 million, or $0.46 per diluted share, compared to $25.7 million, or $0.33 per diluted share in Q3 2025 [4][6] - Non-GAAP gross margin for Q4 2025 was 43.9%, compared to 41.0% in Q3 2025 [4][6] Cash Flow and Operating Activities - GAAP net cash provided by operating activities for Q4 2025 was $46.0 million, compared to $27.0 million in Q3 2025 [6] - Free cash flow for Q4 2025 was $34.7 million, an increase from $19.7 million in Q3 2025 [6] Outlook - The company anticipates continued revenue growth and gross margin expansion in Q1 2026, with expected revenue of $225 million +/- $5 million [10][9] - FormFactor aims to strengthen its position in advanced packaging and high-performance compute markets, particularly in DRAM applications [10][9]

Core Viewpoint - FormFactor (FORM) shares experienced a 5.1% increase, closing at $83.46, attributed to notable trading volume and a 36.5% gain over the past four weeks, driven by growing test intensity and complexity in the semiconductor industry [1] Company Performance - FormFactor is projected to report quarterly earnings of $0.35 per share, reflecting a year-over-year increase of 29.6%, with expected revenues of $210.08 million, up 10.9% from the previous year [2] - The consensus EPS estimate for FormFactor has been revised 5% higher in the last 30 days, indicating a positive trend that typically correlates with price appreciation [3] Industry Context - FormFactor operates within the Zacks Electronics - Semiconductors industry, where another company, Sequans (SQNS), closed 1.5% higher at $5.36, with an 8.4% return over the past month [3] - Sequans has an unchanged consensus EPS estimate of -$0.49 for the upcoming report, representing a 38.8% year-over-year change, and currently holds a Zacks Rank of 3 (Hold) [4]

Core Viewpoint - FormFactor, Inc. is set to report its Q4 and full-year 2025 results on February 4, indicating a significant upcoming event for investors and analysts to monitor [1]. Company Overview - FormFactor, Inc. is involved in the semiconductor industry, focusing on providing advanced test and measurement solutions [1]. Investment Strategy - The company is perceived as a long-term investment opportunity, with a typical investment horizon of 5-10 years, emphasizing a balanced portfolio that includes growth, value, and dividend-paying stocks [1].

Core Viewpoint - FormFactor, Inc. is set to report its financial results for the fourth quarter of the 2025 fiscal year on February 4, 2026, at 1:25 p.m. Pacific Time, with a live webcast available for public access [1]. Company Overview - FormFactor, Inc. (NASDAQ: FORM) is a prominent provider of test and measurement technologies throughout the entire integrated circuit (IC) life cycle, which includes characterization, modeling, reliability, design debugging, qualification, and production testing [3]. - The company’s products and services are essential for semiconductor companies aiming to enhance profitability by optimizing device performance and improving yield knowledge [3]. - FormFactor operates a network of facilities across Asia, Europe, and North America to serve its customers effectively [3].