FormFactor Posts Record Third-Quarter Revenue of $280.5 Million
Key Facts
FormFactor reported revenue of $280.5 million in the third quarter of fiscal 2026, up 8.6% from the previous quarter and 38.4% from the same period last year, according to results published on October 28. The company said revenue growth, gross margin and earnings per share exceeded the high end of its previous guidance. In July, it had forecast revenue of $270 million, plus or minus $10 million, for the quarter ended September 26. Revenue thus set a record for the fourth consecutive quarter and was about 40% higher than in the same period a year earlier, the company said. At the same time, FormFactor raised the baseline of its forecast for the next quarter, setting fourth-quarter revenue at $285 million, plus or minus $10 million.
Net income under generally accepted accounting principles was $73.8 million, or $0.93 per diluted share, compared with $56.2 million and $0.71 per share in the second quarter, and $15.7 million and $0.20 per share a year earlier. On a non-GAAP basis, net income was $82.3 million and diluted earnings per share were $1.04. That compares with $65 million and $0.82 per share in the previous quarter, and $25.7 million and $0.33 per share in the third quarter of fiscal 2025. Analysts had expected revenue of $270.52 million and adjusted earnings per share of $0.86, according to Investing.com. Actual results therefore exceeded both the company’s previous guidance and the analyst consensus cited in market data.
Gross margin improved to 54.7% under generally accepted accounting principles, from 50.7% in the previous quarter and 39.8% a year earlier. Non-GAAP gross margin was 56.5%, compared with 53.3% in the second quarter and 41% in the same period of fiscal 2025. By business, Foundry & Logic revenue grew 10% quarter over quarter, with broad strength across multiple end-market applications, the company said. Systems revenue also increased by more than 20% from the previous quarter, driven by higher demand for co-packaged optics technologies. Chief Executive Mike Slessor linked the ability to meet rising demand to the company’s capacity to “increase production within our existing manufacturing footprint.”
Operating activities generated $104.3 million in cash in the third quarter, while free cash flow was $64.8 million, according to the results. The company noted, however, that productivity gains from its existing facilities are slowing as they approach capacity limits. It said it had begun operating its new Farmers Branch facility to add production capacity in support of growth. FormFactor announced the facility’s opening on October 22, saying the investment expands its capacity to manufacture advanced semiconductor test technologies. On October 12, the company and Teradyne announced a collaboration to accelerate the development, testing and production of next-generation semiconductors, with Teradyne agreeing to make a $300 million strategic investment in FormFactor equity.
FormFactor expects revenue of $285 million, plus or minus $10 million, in the fourth quarter ending December 26, 2026. It also set non-GAAP diluted earnings per share at $0.95, plus or minus $0.09. In the October 28 session, the stock rose 3.24% to $110.31, then fell 1.59% in after-hours trading to $108.56, according to prices reported by Investing.com. The after-hours move came despite results exceeding analysts’ expectations cited by the same source. The new guidance comes as the company said its current facilities are nearing capacity and it is working to bring the Farmers Branch facility into operation.