FormFactor (FORM) Q4 2025 earnings summary

Executive summary

• Achieved record annual revenue of $785 million in FY25, with Q4 revenue of $215.2 million, both exceeding guidance and driven by strong demand in DRAM, HBM, and advanced packaging markets.

• Q4 2025 revenue, gross margin, and EPS surpassed the high end of guidance, with sequential growth expected in Q1 2026.

• Recognized as the #1 global supplier in test subsystems and focused chip making equipment for 2025, with major awards from SK hynix and Intel.

• Strategic acquisition of Keystone Photonics in 2025 strengthened leadership in co-packaged optics testing.

• Market leader in semiconductor test and measurement, benefiting from secular trends like AI, data center, and 5G growth.

Financial highlights

• FY25 revenue was $785 million, up from $764 million in 2024; Q4 2025 revenue was $215.2 million, at the high end of guidance.

• Q4 2025 GAAP gross margin was 42.2%, non-GAAP gross margin 43.9%; Q4 non-GAAP EPS was $0.46.

• FY25 non-GAAP gross margin was 40.8%, with non-GAAP EPS at $1.30 and free cash flow of $83 million.

• Q4 2025 GAAP net income was $23.2 million ($0.29 per share); non-GAAP net income was $36.6 million ($0.46 per share).

• Q4 2025 free cash flow was $34.7 million; total cash and investments at quarter end were $275 million.

Outlook and guidance

• Q1 2026 revenue guidance is $225 million ±$5 million, with non-GAAP gross margin expected at 45% ±1.5% and non-GAAP EPS at $0.45 ±$0.04.

• Non-GAAP operating expenses for Q1 are projected at $62 million ±$2 million, with a non-GAAP effective tax rate of 15–19%.

• Target model aims for $850 million revenue, 47% non-GAAP gross margin, 22% operating margin, $2.00 EPS, and $160 million free cash flow.

• Gross margin improvement is expected to continue, with the Farmers Branch site coming online later in 2026 to support further growth.

• Q1 2026 outlook reflects strong demand in advanced packaging and high-performance compute markets.