FormFactor, Inc. Reports 2024 Fourth Quarter Results

FY24 revenue of $764 million, up 15.2% from $663 million in FY23, driven by growth in HBM revenue;Announces acquisition of minority interest in FICT Limited, a key supplier of industry-leading, high-performance advanced probe card components LIVERMORE, Calif., Feb. 05, 2025 (GLOBE NEWSWIRE) -- FormFactor, Inc. (Nasdaq: FORM) today announced its financial results for the fourth quarter of fiscal 2024 ended December 28, 2024. Quarterly revenues were $189.5 million, a decrease of 8.9% compared to $207.9 million in the third quarter of fiscal 2024, and an increase of 12.7% from $168.2 million in the fourth quarter of fiscal 2023. For fiscal 2024, FormFactor recorded revenues of $764 million, up 15.2% from $663 million in fiscal 2023. High Bandwidth Memory grew fourfold in fiscal 2024 compared to the prior year, driven by adoption of Generative AI, overcoming persistent lackluster demand in important high-unit-volume markets like PCs and mobile handsets.DRAM probe-card revenue during the fourth quarter set third consecutive quarterly record.Continued focus on expanding and diversifying FormFactor’s market position in enabling advanced packaging, through new customer qualifications in client PCs and server applications and new high-performance-compute applications.FICT acquisition with MBK Partners solidifies FormFactor’s access to FICT’s technologies and products, which are an important component of advanced probe cards. “As expected, FormFactor reported sequentially lower fourth-quarter revenue, gross margin, and non-GAAP earnings per share, driven by the forecasted reduction in Foundry & Logic probe-card revenue,” said Mike Slessor, CEO of FormFactor, Inc. “This was partially offset by growth in DRAM probe-card revenue, with HBM increasing to approximately half of DRAM revenue.” FormFactor also announced today that together with MBK Partners (“MBKP”), the largest private equity firm in North Asia, it is acquiring FICT Limited (“FICT”) from Advantage Partners Inc. FICT, headquartered in Nagano, Japan, has been providing the semiconductor test and high-performance computing industries with complex multi-layer organic substrates, printed circuit boards, and related leading-edge technologies and services since its inception as a Fujitsu business unit in 1967. This acquisition is designed to strengthen and grow FICT’s business, and the FormFactor+MBKP consortium is committed to advancing FICT’s mission to serve its entire customer base. With this transaction, FormFactor invests approximately US$60M into the consortium. FormFactor will hold a minority, non-controlling stake of 20% and will be granted a seat on the company’s board of directors. All required regulatory and third-party approvals and conditions have been satisfied and the transaction is expected to close within the current quarter. The transaction is not expected to have a material impact on FormFactor’s results of operations. “The semiconductor industry’s rapidly accelerating adoption of advanced packaging requires increased investment and stronger collaboration across the test and assembly supply chain,” said Mike Slessor, FormFactor’s CEO. “FormFactor’s investment in FICT builds on our long-term collaboration with them as a supplier of the industry-leading, high-performance components we use in our advanced probe cards, and provides a platform for accelerated development of tomorrow’s test and packaging consumables.” “We’ve built a partnership with MBKP, North Asia’s leading private equity firm, with a shared vision to enhance FICT’s long-term value by fully serving all of FICT’s existing and potential customers,” Slessor concluded. Fourth Quarter and Fiscal 2024 Highlights On a GAAP basis, net income for the fourth quarter of fiscal 2024 was $9.7 million, or $0.12 per fully-diluted share, compared to net income for the third quarter of fiscal 2024 of $18.7 million, or $0.24 per fully-diluted share, and net income for the fourth quarter of fiscal 2023 of $75.8 million, or $0.97 per fully-diluted share. Net income for fiscal 2024 was $69.6 million, or $0.89 per fully-diluted share, compared to net income for fiscal 2023 of $82.4 million, or $1.05, per fully-diluted share. Gross margin for the fourth quarter of 2024 was 38.8%, compared with 40.7% in the third quarter of 2024, and 40.4% in the fourth quarter of 2023. Gross margin for fiscal 2024 was 40.3%, compared to 39.0% for fiscal 2023. The GAAP financial results for the fourth quarter of 2023 and fiscal 2023 include a $73.0 million gain from the sale of FRT that has been excluded from FormFactor's fourth quarter and fiscal 2023 non-GAAP results. The GAAP financial results for fiscal 2024 include a $20.3 million gain from the sale of our China operations that has been excluded from FormFactor's fiscal 2024 non-GAAP results. On a non-GAAP basis, net income for the fourth quarter of fiscal 2024 was $21.3 million, or $0.27 per fully-diluted share, compared to net income for the third quarter of fiscal 2024 of $27.2 million, or $0.35 per fully-diluted share, and net income for the fourth quarter of fiscal 2023 of $15.7 million, or $0.20 per fully-diluted share. Non-GAAP net income for fiscal 2024 was $90.2 million, or $1.15 per fully-diluted share, compared to net income of $56.8 million, or $0.73 per fully-diluted share for fiscal 2023. On a non-GAAP basis, gross margin for the fourth quarter of 2024 was 40.2%, compared with 42.2% in the third quarter of 2024, and 42.1% in the fourth quarter of 2023. Non-GAAP gross margin for fiscal 2024 was 41.7%, compared to 40.7% for fiscal 2023. A reconciliation of GAAP to non-GAAP measures is provided in the schedules included below. GAAP net cash provided by operating activities for the fourth quarter of fiscal 2024 was $35.9 million, compared to $26.7 million for the third quarter of fiscal 2024, and $9.3 million for the fourth quarter of fiscal 2023. Free cash flow for the fourth quarter of fiscal 2024 was $28.8 million, compared to free cash flow for the third quarter of fiscal 2024 of $20.0 million, and free cash flow for the fourth quarter of 2023 of negative $0.3 million. GAAP net cash provided by operating activities for fiscal 2024 was $117.5 million, compared to $64.6 million for fiscal 2023. Free cash flow for fiscal 2024 and fiscal 2023 was $82.8 million and $11.4 million, respectively. A reconciliation of net cash provided by operating activities to non-GAAP free cash flow is provided in the schedules included below. Outlook Dr. Slessor added, “We continue to see slow demand in important high-unit-volume markets, like client PCs and mobile handsets, through the first quarter, with anticipated sequential reductions in demand for both non-HBM DRAM probe cards and Systems. That notwithstanding, as we move through 2025, we expect an overall increase in demand for FormFactor’s products.” For the first quarter ending March 29, 2025, FormFactor is providing the following outlook*: GAAP Reconciling Items** Non-GAAPRevenue $170 million +/- $5 million — $170 million +/- $5 millionGross Margin 36.5% +/- 1.5% $3 million 38% +/- 1.5%Net income per diluted share $0.07 +/- $0.04 $0.12 $0.19 +/- $0.04 *This outlook assumes consistent foreign currency rates.**Reconciling items are stock-based compensation, amortization of intangible assets and fixed asset fair value adjustments due to acquisitions, and restructuring charges, net of applicable income tax impacts. We posted our revenue breakdown by geographic region, by market segment and with customers with greater than 10% of total revenue on the Investor Relations section of our website at www.formfactor.com. We will conduct a conference call at 1:25 p.m. PT, or 4:25 p.m. ET, today. The public is invited to listen to a live webcast of FormFactor’s conference call on the Investor Relations section of our website at www.formfactor.com. A telephone replay of the conference call will be available approximately two hours after the conclusion of the call. The replay will be available on the Investor Relations section of our website, www.formfactor.com. Use of Non-GAAP Financial Information: To supplement our condensed consolidated financial results prepared under generally accepted accounting principles, or GAAP, we disclose certain non-GAAP measures of non-GAAP net income, non-GAAP net income per basic and diluted share, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income and free cash flow, that are adjusted from the nearest GAAP financial measure to exclude certain costs, expenses, gains and losses. Reconciliations of the adjustments to GAAP results for the three and twelve months ended months ended December 28, 2024, and for outlook provided before, as well as for the comparable periods of fiscal 2023, are provided below, and on the Investor Relations section of our website at www.formfactor.com. Information regarding the ways in which management uses non-GAAP financial information to evaluate its business, management's reasons for using this non-GAAP financial information, and limitations associated with the use of non-GAAP financial information, is included under “About our Non-GAAP Financial Measures” following the tables below. About FormFactor: FormFactor, Inc. (NASDAQ: FORM), is a leading provider of essential test and measurement technologies along the full semiconductor product life cycle - from characterization, modeling, reliability, and design de-bug, to qualification and production test. Semiconductor companies rely upon FormFactor’s products and services to accelerate profitability by optimizing device performance and advancing yield knowledge. The Company serves customers through its network of facilities in Asia, Europe, and North America. For more information, visit the Company’s website at www.formfactor.com. Forward-looking Statements: This press release contains forward-looking statements within the meaning of the “safe harbor” provisions of the federal securities laws, including with respect to the Company’s future financial and operating results, and the Company’s plans, strategies and objectives for future operations. These statements are based on management’s current expectations and beliefs as of the date of this release, and are subject to a number of risks and uncertainties, many of which are beyond the Company’s control, that could cause actual results to differ materially from those described in the forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding future financial and operating results, including under the heading “Outlook” above, customer demand, conditions in the semiconductor industry, the timing of completion of the FICT acquisition, the expected benefit thereof and other statements regarding the Company’s business. Forward-looking statements may contain words such as “may,” “might,” “will,” “expect,” “plan,” “anticipate,” “forecast,” and “continue,” the negative or plural of these words and similar expressions, and include the assumptions that underlie such statements. The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: changes in demand for the Company’s products; customer-specific demand; market opportunity; anticipated industry trends; delays in the consummation of the FICT acquisition; the potential impact on the business of FormFactor and FICT due to uncertainties in connection with the acquisition; the retention of employees of FICT following acquisition; the ability of FormFactor to achieve expected benefits from the FICT acquisition; the availability, benefits, and speed of customer acceptance or implementation of new products and technologies; manufacturing, processing, and design capacity, goals, expansion, volumes, and progress; difficulties or delays in research and development; industry seasonality; risks to the Company’s realization of benefits from acquisitions, investments in capacity and investments in new electronic data systems and information technology; reliance on customers or third parties (including suppliers); changes in macro-economic environments; events affecting global and regional economic and market conditions and stability such as military conflicts, political volatility, infectious diseases and pandemics, and similar factors, operating separately or in combination; and other factors, including those set forth in the Company’s most current annual report on Form 10-K, quarterly reports on Form 10-Q and other filings by the Company with the U.S. Securities and Exchange Commission. In addition, there are varying barriers to international trade, including restrictive trade and export regulations such as the US-China restrictions, dynamic tariffs, trade disputes between the U.S. and other countries, and national security developments or tensions, that may substantially restrict or condition our sales to or in certain countries, increase the cost of doing business internationally, and disrupt our supply chain. No assurances can be given that any of the events anticipated by the forward-looking statements within this press release will transpire or occur, or if any of them do so, what impact they will have on the results of operations or financial condition of the Company. Unless required by law, the Company is under no obligation (and expressly disclaims any such obligation) to update or revise its forward-looking statements whether as a result of new information, future events, or otherwise. FORMFACTOR, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME(In thousands, except per share amounts) (Unaudited) Three Months Ended Twelve Months Ended December 28,2024 September 28,2024 December 30,2023 December 28,2024 December 30,2023Revenues$189,483 $207,917 $168,163 $763,599 $663,102 Cost of revenues 115,903 123,212 100,229 455,676 404,522 Gross profit 73,580 84,705 67,934 307,923 258,580 Operating expenses: Research and development 30,504 31,243 28,166 121,938 115,765 Selling, general and administrative 35,226 35,607 31,451 141,786 133,012 Total operating expenses 65,730 66,850 59,617 263,724 248,777 Gain on sale of business — — 72,953 20,581 72,953 Operating income 7,850 17,855 81,270 64,780 82,756 Interest income, net 3,472 3,650 2,376 13,693 6,796 Other income (expense), net 617 (558) (1,546) 939 (285)Income before income taxes 11,939 20,947 82,100 79,412 89,267 Provision for income taxes 2,234 2,211 6,254 9,798 6,880 Net income$9,705 $18,736 $75,846 $69,614 $82,387 Net income per share: Basic$0.13 $0.24 $0.98 $0.90 $1.06 Diluted$0.12 $0.24 $0.97 $0.89 $1.05 Weighted-average number of shares used in per share calculations: Basic 77,267 77,406 77,684 77,340 77,370 Diluted 77,982 78,439 78,410 78,437 78,159 FORMFACTOR, INC. NON-GAAP FINANCIAL MEASURE RECONCILIATIONS(In thousands, except per share amounts)(Unaudited) Three Months Ended Twelve Months Ended December 28,2024 September 28,2024 December 30,2023 December 28,2024 December 30,2023GAAP Gross Profit$73,580 $84,705 $67,934 $307,923 $258,580 Adjustments: Amortization of intangibles, inventory and fixed asset fair value adjustments due to acquisitions 555 530 756 2,216 4,336 Stock-based compensation 1,944 1,934 2,053 7,738 6,854 Restructuring charges 32 524 — 639 357 Non-GAAP Gross Profit$76,111 $87,693 $70,743 $318,516 $270,127 GAAP Gross Margin 38.8% 40.7% 40.4% 40.3% 39.0%Adjustments: Amortization of intangibles, inventory and fixed asset fair value adjustments due to acquisitions 0.4% 0.3% 0.5% 0.3% 0.6%Stock-based compensation 1.0% 0.9% 1.2% 1.0% 1.0%Restructuring charges —% 0.3% —% 0.1% 0.1%Non-GAAP Gross Margin 40.2% 42.2% 42.1% 41.7% 40.7% GAAP operating expenses$65,730 $66,850 $59,617 $263,724 $248,777 Adjustments: Amortization of intangibles and other (191) (191) (518) (764) (4,081)Stock-based compensation (8,269) (7,002) (7,230) (32,025) (31,762)Restructuring charges (371) (298) — (767) (1,183)Costs related to sale and acquisition of businesses (1,689) (13) (268) (2,391) (2,407)Non-GAAP operating expenses$55,210 $59,346 $51,601 $227,777 $209,344 GAAP operating income$7,850 $17,855 $81,270 $64,780 $82,756 Adjustments: Amortization of intangibles, inventory and fixed asset fair value adjustments due to acquisitions, and other 746 721 1,274 2,980 8,417 Stock-based compensation 10,213 8,936 9,283 39,763 38,616 Restructuring charges 403 822 — 1,406 1,540 Gain on sale of business, net of cost related to sale and acquisition of businesses 1,689 13 (72,685) (18,190) (70,546)Non-GAAP operating income$20,901 $28,347 $19,142 $90,739 $60,783 FORMFACTOR, INC. NON-GAAP FINANCIAL MEASURE RECONCILIATIONS(In thousands, except per share amounts)(Unaudited) Three Months Ended Twelve Months Ended December 28,2024 September 28,2024 December 30,2023 December 28,2024 December 30,2023GAAP net income$9,705 $18,736 $75,846 $69,614 $82,387 Adjustments: Amortization of intangibles, inventory and fixed asset fair value adjustments due to acquisitions, and other 746 721 1,274 2,980 8,417 Stock-based compensation 10,213 8,936 9,283 39,763 38,616 Restructuring charges 415 822 — 1,418 1,540 Gain on sale of business, net of cost related to sale and acquisition of businesses 1,689 13 (72,685) (18,190) (70,546)Income tax effect of non-GAAP adjustments (1,445) (2,002) 2,026 (5,368) (3,624)Non-GAAP net income$21,323 $27,226 $15,744 $90,217 $56,790 GAAP net income per share: Basic$0.13 $0.24 $0.98 $0.90 $1.06 Diluted$0.12 $0.24 $0.97 $0.89 $1.05 Non-GAAP net income per share: Basic$0.28 $0.35 $0.20 $1.17 $0.73 Diluted$0.27 $0.35 $0.20 $1.15 $0.73 FORMFACTOR, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands)(Unaudited) Twelve Months Ended December 28,2024 December 30,2023Cash flows from operating activities: Net income$69,614 $82,387 Selected adjustments to reconcile net income to net cash provided by operating activities: Depreciation 30,321 30,603 Amortization 2,582 6,850 Stock-based compensation expense 39,763 38,616 Provision for excess and obsolete inventories 12,342 15,003 Gain on sale of business (20,581) (72,953)Non-cash restructuring charges 428 — Other activity impacting operating cash flows (16,507) (35,904)Net cash provided by operating activities 117,534 64,602 Cash flows from investing activities: Acquisition of property, plant and equipment (38,436) (56,027)Proceeds from sale of business 21,585 101,785 Purchases of marketable securities, net (15,129) (16,709)Purchase of promissory note receivable (1,500) — Net cash provided by (used in) investing activities (33,480) 29,049 Cash flows from financing activities: Purchase of common stock through stock repurchase program (53,302) (19,801)Proceeds from issuances of common stock 9,748 8,822 Principal repayments on term loans (1,075) (1,045)Tax withholdings related to net share settlements of equity awards (19,983) (10,687)Net cash used in financing activities (64,612) (22,711)Effect of exchange rate changes on cash, cash equivalents and restricted cash (3,509) (2,649)Net increase in cash, cash equivalents and restricted cash 15,933 68,291 Cash, cash equivalents and restricted cash, beginning of period 181,273 112,982 Cash, cash equivalents and restricted cash, end of period$197,206 $181,273 FORMFACTOR, INC. RECONCILIATION OF CASH PROVIDED BY OPERATING ACTIVITIES TO NON-GAAP FREE CASH FLOW(In thousands)(Unaudited) Three Months Ended Twelve Months Ended December 28,2024 September 28,2024 December 30,2023 December 28,2024 December 30,2023Net cash provided by operating activities$35,913 $26,731 $9,250 $117,534 $64,602 Adjustments: Sale of business and acquisition related payments in working capital 506 2,134 268 3,317 2,407 Cash paid for interest 93 97 105 391 422 Capital expenditures (7,663) (8,939) (9,933) (38,436) (56,027)Free cash flow$28,849 $20,023 $(310) $82,806 $11,404 FORMFACTOR, INC.CONDENSED CONSOLIDATED BALANCE SHEETS(In thousands) (Unaudited) December 28,2024 September 28,2024 December 30,2023ASSETS Current assets: Cash and cash equivalents $190,728 $184,506 $177,812 Marketable securities 169,295 169,961 150,507 Accounts receivable, net of allowance for credit losses 104,294 116,866 102,957 Inventories, net 101,676 105,374 111,685 Restricted cash 3,746 3,773 1,152 Prepaid expenses and other current assets 35,389 34,302 29,667 Total current assets 605,128 614,782 573,780 Restricted cash 2,732 2,210 2,309 Operating lease, right-of-use-assets 22,579 25,034 30,519 Property, plant and equipment, net of accumulated depreciation 210,230 204,108 204,399 Goodwill 199,171 200,137 201,090 Intangibles, net 10,355 11,017 12,938 Deferred tax assets 92,012 92,826 78,964 Other assets 4,008 3,669 2,795 Total assets $1,146,215 $1,153,783 $1,106,794 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $62,287 $52,086 $63,857 Accrued liabilities 43,742 46,508 41,037 Current portion of term loan, net of unamortized issuance costs 1,106 1,098 1,075 Deferred revenue 15,847 20,972 16,704 Operating lease liabilities 8,363 8,512 8,422 Total current liabilities 131,345 129,176 131,095 Term loan, less current portion, net of unamortized issuance costs 12,208 12,488 13,314 Long-term operating lease liabilities 17,550 19,731 25,334 Deferred grant 18,000 18,000 18,000 Other liabilities 19,344 19,378 10,247 Total liabilities 198,447 198,773 197,990 Stockholders’ equity: Common stock 77 77 77 Additional paid-in capital 837,586 845,466 861,448 Accumulated other comprehensive loss (10,840) (1,773) (4,052)Accumulated income 120,945 111,240 51,331 Total stockholders’ equity 947,768 955,010 908,804 Total liabilities and stockholders’ equity $1,146,215 $1,153,783 $1,106,794 About our Non-GAAP Financial Measures: We believe that the presentation of non-GAAP net income, non-GAAP net income per basic and diluted share, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income and free cash flow provides supplemental information that is important to understanding financial and business trends and other factors relating to our financial condition and results of operations. Non-GAAP net income, non-GAAP net income per basic and diluted share, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, and non-GAAP operating income are among the primary indicators used by management as a basis for planning and forecasting future periods, and by management and our board of directors to determine whether our operating performance has met certain targets and thresholds. Management uses non-GAAP net income, non-GAAP net income per basic and diluted share, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, and non-GAAP operating income when evaluating operating performance because it believes that the exclusion of the items indicated herein, for which the amounts or timing may vary significantly depending upon our activities and other factors, facilitates comparability of our operating performance from period to period. We use free cash flow to conduct and evaluate our business as an additional way of viewing our liquidity that, when viewed with our GAAP results, provides a more complete understanding of factors and trends affecting our cash flows. Many investors also prefer to track free cash flow, as opposed to only GAAP earnings. Free cash flow has limitations due to the fact that it does not represent the residual cash flow available for discretionary expenditures, and therefore it is important to view free cash flow as a complement to our entire consolidated statements of cash flows. We have chosen to provide this non-GAAP information to investors so they can analyze our operating results closer to the way that management does, and use this information in their assessment of our business and the valuation of our Company. We compute non-GAAP net income, non-GAAP net income per basic and diluted share, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, and non-GAAP operating income, by adjusting GAAP net income, GAAP net income per basic and diluted share, GAAP gross profit, GAAP gross margin, GAAP operating expenses, and GAAP operating income to remove the impact of certain items and the tax effect, if applicable, of those adjustments. These non-GAAP measures are not in accordance with, or an alternative to, GAAP, and may be materially different from other non-GAAP measures, including similarly titled non-GAAP measures used by other companies. The presentation of this additional information should not be considered in isolation from, as a substitute for, or superior to, net income, net income per basic and diluted share, gross profit, gross margin, operating expenses, or operating income in accordance with GAAP. Non-GAAP financial measures have limitations in that they do not reflect certain items that may have a material impact upon our reported financial results. We may expect to continue to incur expenses of a nature similar to the non-GAAP adjustments described above, and exclusion of these items from our non-GAAP net income, non-GAAP net income per basic and diluted share, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, and non-GAAP operating income should not be construed as an inference that these costs are unusual, infrequent or non-recurring. For more information on the non-GAAP adjustments, please see the table captioned “Non-GAAP Financial Measure Reconciliations” and “Reconciliation of Cash Provided by Operating Activities to non-GAAP Free Cash Flow” included in this press release. Source: FormFactor, Inc.FORM-F Investor Contact:Stan FinkelsteinInvestor Relations(925) 290-4273ir@formfactor.com

FormFactor, Inc. Reports 2024 Fourth Quarter Results

FAQ

Why Bullish?

How important is it?

Why Long Term?

Related Companies

Related News