Photronics — Third Quarter 2026 Earnings Summary

Financial Performance

• Revenue was $216.0 million, representing a 2.7% increase year-over-year and a 2.9% increase sequentially.
• GAAP net income attributable to shareholders was $28.9 million ($0.49 per diluted share), compared to $22.9 million ($0.39 per share) in Q3 2025 and $31.4 million ($0.54 per share) in Q2 2026.
• Non-GAAP net income attributable to shareholders was $29.4 million ($0.50 per diluted share), compared to $29.4 million ($0.51 per share) in Q3 2025 and $24.9 million ($0.42 per share) in Q2 2026.
• Gross margin was 33.2% for the quarter, compared to 33.7% in Q3 2025 and 31.3% in Q2 2026.
• Operating margin was 21.1% for the quarter, compared to 22.9% in Q3 2025 and 20.1% in Q2 2026.
• Cash, cash equivalents, and short-term investments totaled $672.8 million at quarter-end, including $503.5 million associated with Joint Ventures (50.01% ownership).
• Cash generated from operating activities was $76.3 million for the quarter; capital expenditures for organic growth were $37.0 million.
• Total assets were $1,990.7 million as of August 2, 2026, up from $1,804.5 million as of October 31, 2025.
• Total debt was minimal, with current portion of long-term debt at $3.9 million and long-term debt at $4.0 million as of August 2, 2026.

Guidance and Future Outlook

• For Q4 fiscal 2026, revenue is expected to be between $207 million and $227 million.
• Operating margin for Q4 2026 is projected to be between 19% and 24%.
• Non-GAAP diluted EPS for Q4 2026 is forecasted to be between $0.40 and $0.56 per share.
• Management expects investments in the U.S. and Korea to remain on track to strengthen the high-end market position.

Business Segments and Product Lines

• IC revenue was $154.7 million, an increase of 5% both year-over-year and sequentially.
• High-end I.C. business accounted for a record 44% of total I.C. revenue.
• FPD revenue was $61.4 million, a decrease of 2% both year-over-year and sequentially.
• The company operates 11 manufacturing facilities in Asia, Europe, and North America.

Management Commentary and Tone

• Chairman and CEO George Macricostas noted a recovery of temporarily delayed semiconductor design releases from fiscal Q2.
• Management cited continued high fab utilization rates throughout the industry as a positive influence on node migration trends.
• The tone reflected confidence in strengthening the company's position at the high end of the market over the coming years.

Other Key Points

• An earnings conference call and webcast were scheduled for August 26, 2026, at 8:30 a.m. Eastern time.
• The company operates as a worldwide leader in photomask technologies and solutions, founded in 1969.
• Non-GAAP measures exclude foreign exchange (gain) loss, estimated tax effects of FX, and estimated noncontrolling interest effects, which are inherently uncertain for future forecasting.
• No quantitative reconciliation of projected Non-GAAP EPS to GAAP EPS is provided for the quarter ending October 31, 2026, due to the unreasonable efforts exception under Regulation S-K regarding unpredictable FX and tax items.