Ichor Revenue Rises 37% in Third Quarter; Company Expects Nearly 30% Annual Growth
Key Facts
Ichor management said it expects full-year 2026 revenue to grow about 30% at the midpoint of its fourth-quarter revenue guidance, after third-quarter revenue rose 37% year over year to $329 million. Revenue increased 12% from the previous quarter, according to the earnings-call transcript published by Investing.com. The annual guidance puts the growth outlook in the context of strong quarterly results, but remains management’s forecast rather than revenue already realized. The company gave fourth-quarter revenue guidance of $345 million to $365 million, alongside adjusted earnings per share of $0.65 to $0.75. Management said demand visibility extends into 2027, while acknowledging that supply constraints in advanced etch and deposition applications are limiting the pace of growth.
Third-quarter revenue came in slightly below analysts’ average estimate of $330.11 million, according to Investing.com, despite year-over-year and sequential growth. Adjusted earnings per share, meanwhile, were $0.63, above the average estimate of $0.45. The divergence between revenue and earnings reflects stronger-than-expected earnings performance, while revenue remained below consensus. For the coming quarter, the company expects a non-GAAP gross margin of 16.5%, with a range of half a percentage point above or below that level. Management said gross margin will increase sequentially from the third quarter.
Management attributed the margin improvement to a higher share of company-owned content in the gas systems it sells and a better product mix as deliveries of components outside gas systems expand. Incremental margin in the third quarter was 33%, exceeding the range the company said it consistently expects, between 25% and 30%. The share of company-owned content in gas systems also rose to more than 30% at the end of the third quarter, from 25% in the second quarter. Management said it remains on track to reach about 35% by the end of the fourth quarter. The company links this increase in content and its delivery mix to wider margins, alongside revenue growth.
The company’s outlook takes into account supply-chain constraints related to advanced etch and deposition applications. Management said second-half 2026 revenue growth is estimated at 24% at the midpoint, compared with a previous forecast for growth of at least 25% over the first half. The adjustment indicates that strong demand does not eliminate the effect of supply constraints on delivery rates and expected growth. Even so, the CEO described customer demand as strong and said the company’s visibility extends into 2027. Supply constraints remain one of the factors the company is monitoring as it seeks to meet demand.
On production, management said high-volume manufacturing sites in Malaysia and Mexico continue to ramp up output, and that its plan to move operations to Mexico is complete. It added that the company has finished building the planned cleanroom space to support demand in 2027. Preparing this production capacity is part of the company’s readiness for the period through which it says its demand visibility extends. Management said: "We completed construction of the planned cleanroom space during the third quarter to support 2027 demand." The company expects every quarter of 2027 to be a growth quarter, with earnings growth more than twice revenue growth.
In trading, ICHR closed at $36.84 on November 2, after its closing price fell from $43.08 on October 28, according to EL7 data. Investing.com, meanwhile, reported that the stock rose 2.4% after the third-quarter results were announced. These movements offer two different time frames: changes in closing prices over recent days and the stock’s reaction following the results announcement. The available data did not include session opening prices or intraday highs or lows. The next operating milestone is fourth-quarter guidance, while management’s demand visibility extends into 2027.