FormFactor — Q3 2026 Earnings Summary

Financial Performance:

• Q3 2026 revenue was $280.5 million, up 8.6% sequentially from Q2 2026 ($258.2 million) and up 38.4% year-over-year from Q3 2025 ($202.7 million).
• GAAP net income for Q3 2026 was $73.8 million ($0.93 per diluted share), compared to $56.2 million ($0.71 per diluted share) in Q2 2026 and $15.7 million ($0.20 per diluted share) in Q3 2025.
• Non-GAAP net income for Q3 2026 was $82.3 million ($1.04 per diluted share), compared to $65.0 million ($0.82 per diluted share) in Q2 2026 and $25.7 million ($0.33 per diluted share) in Q3 2025.
• GAAP gross margin for Q3 2026 was 54.7%, up from 50.7% in Q2 2026 and 39.8% in Q3 2025.
• Non-GAAP gross margin for Q3 2026 was 56.5%, up from 53.3% in Q2 2026 and 41.0% in Q3 2025.
• GAAP net cash provided by operating activities for Q3 2026 was $104.3 million, compared to $61.8 million in Q2 2026 and $27.0 million in Q3 2025.
• Free cash flow for Q3 2026 was $64.8 million, compared to $52.6 million in Q2 2026 and $19.7 million in Q3 2025.
• Total assets as of September 26, 2026, were $1.43 billion, up from $1.34 billion as of June 27, 2026.
• Total stockholders' equity as of September 26, 2026, was $1.18 billion, up from $1.11 billion as of June 27, 2026.
• Deferred revenue as of September 26, 2026, was $36.6 million, up from $24.0 million as of June 27, 2026.
• Total debt (current and long-term) was $11.4 million as of September 26, 2026.

Guidance and Future Outlook:

• For Q4 2026 (ending December 26, 2026), FormFactor forecasts revenue of $285 million +/- $10 million.
• Q4 2026 GAAP gross margin is forecast at 52.3% +/- 1.5%, and non-GAAP gross margin at 54.0% +/- 1.5%.
• Q4 2026 GAAP net income per diluted share is forecast at $0.84 +/- $0.09, and non-GAAP net income per diluted share at $0.95 +/- $0.09.
• Outlook assumes consistent foreign currency rates.
• Management notes that productivity gains from the existing manufacturing footprint are moderating as capacity limits are approached.
• The new Farmers Branch factory is being brought online to provide additional capacity to support growth.

Business Segments and Product Lines:

• Foundry & Logic segment saw 10% sequential growth with broad-based strength across multiple end applications.
• Systems segment revenue grew greater than 20% sequentially, driven by higher demand for co-packaged optics.
• The company announced an expansion of its longstanding partnership with Teradyne to accelerate development, validation, and high-volume production of next-generation semiconductor applications for high-performance compute.

Market and Competitive Landscape:

• Management described the results as reflecting "continued strong broad based demand."
• The company highlights its leadership position at the intersection of high-performance compute and advanced packaging.
• The press release notes the company serves customers through a network of facilities in Asia, Europe, and North America.

Risks and Challenges:

• Forward-looking statements cite risks including export controls, tariffs, trade barriers, and restrictive trade regulations (e.g., US-China restrictions).
• Risks include changes in demand for products, customer-specific demand, and industry seasonality.
• Potential disruptions from manufacturing, processing, and design capacity goals, as well as delays in R&D, are noted.
• Risks related to the realization of benefits from acquisitions and investments, demand volatility, and macro-economic environments are identified.
• Reliance on customers, third parties, and suppliers, along with global economic stability factors like military conflicts and political volatility, are listed as potential risks.

Management Commentary and Tone:

• CEO Mike Slessor stated the company delivered growth in revenue, gross margin, and earnings per share that exceeded the high end of the guidance range.
• Management expressed confidence in the company's "diversified leadership position" and ability to meet rising customer demand by increasing output within the existing manufacturing footprint.
• The tone regarding future outlook was positive, citing "continued broad-based strength in demand."

Other Key Points:

• This marks the fourth consecutive quarterly revenue record, with revenue nearly 40% higher than the prior year quarter.
• The company posted a reconciliation of GAAP to non-GAAP financial measures, including adjustments for restructuring charges, stock-based compensation, and amortization of intangibles.
• A conference call was conducted on October 28, 2026, with a webcast and replay available on the Investor Relations website.
• The company reported $150.4 million in net income for the nine months ended September 26, 2026, compared to $31.1 million for the same period in 2025.
• Free cash flow for the nine months ended September 26, 2026, was $148.1 million, compared to a negative $21.2 million in the prior year period.
• Capital expenditures for the nine months ended September 26, 2026, were $64.4 million.
• The company had no stock repurchases during the nine-month period ended September 26, 2026, compared to $26.2 million in the prior year period.