Ultra Clean’s Record $759 Million Revenue Pairs With Strong Profit Growth
Key Facts
Ultra Clean reported on October 27 results for the third quarter ended September 25, 2026, posting record revenue of $759 million. The company said revenue rose 18% from the second quarter and 49% from the same period in 2025. The result was above analysts’ estimate of $728.07 million, according to Investing.com. Adjusted earnings per share also exceeded expectations, at $1.15 versus $0.94, a beat of $0.21 per share. The results combined accelerating sales with improved profitability, while management attributed demand growth to the expansion of the semiconductor sector.
Products contributed $681.9 million in revenue, while services added $77.1 million, according to the company statement published via PR Newswire. Gross margin was 16.9% on a GAAP basis and 17.3% on a non-GAAP basis. On a non-GAAP basis, gross margin rose to 17.3% from 16.7% in the previous quarter, while operating margin climbed to 9.0% from 7.0%. The company reported net income of $39.1 million and diluted earnings per share of $0.85 under GAAP. On a non-GAAP basis, net income was $53.2 million and diluted earnings per share was $1.15.
The quarter-on-quarter comparison highlights the broad improvement in net income and earnings per share under GAAP. Net income rose from $8.7 million in the second quarter to $39.1 million in the third quarter, while diluted earnings per share increased from $0.19 to $0.85. Year over year, the company moved from a net loss of $10.9 million and revenue of $510 million in the third quarter of 2025 to positive net income and record revenue in the third quarter of 2026. Semiconductor revenue accounts for 86% of the company’s total revenue, according to the earnings call transcript. Memory represents 34% of semiconductor segment revenue, while foundry and logic account for 52% of that segment.
Chief Executive James Xiao said Ultra Clean expanded production to keep pace with “accelerating customer demand,” linking growth opportunities to industry expansion driven by artificial intelligence, co-innovation and the development of advanced solutions. Xiao added, according to the earnings call transcript, that the company expects semiconductor manufacturing equipment spending to exceed $200 billion in 2027, based on its customers’ outlook. He said demand remains strong across advanced foundry, memory and advanced packaging. He also noted that mass flow controller constraints could persist for a quarter or two. But he said the company did not miss any customer deliveries of units or subsystems during the quarter.
The company raised its fourth-quarter outlook, setting revenue at $800 million to $860 million and GAAP diluted earnings per share at $1.02 to $1.26. It also expects non-GAAP earnings per share of $1.11 to $1.35. The midpoint of the revenue range is $830 million, compared with analysts’ consensus of $813.9 million, according to Investing.com. The comparison differs between the two earnings measures: the low end of the GAAP forecast is above the third-quarter result of $0.85, while the low end of the non-GAAP forecast is below the third-quarter result of $1.15. The guidance presents management’s expectations for the coming period on two separate accounting bases.
The outlook is tied to a plan to increase production capacity, with the company targeting first-quarter 2027 capacity equivalent to about $4 billion in annual revenue. Xiao said Ultra Clean plans an additional investment of $80 million to $100 million during 2027 and 2028 to support the expansion. The plan aims to raise production capacity to a level that exceeds $5 billion in annual revenue. In premarket trading on October 28, the stock rose 12% after the results and quarterly outlook were announced, according to Investing.com. The plans put production expansion and continued demand at the center of the company’s performance in the coming periods.