FormFactor, Inc. Reports 2025 First Quarter Results

Q1 Revenue, Gross Margin and EPS Above Mid-Point of the Outlook Range, Sees Significant Demand Step-Up in Q2'25 Announces Additional $75 Million Stock Repurchase Authorization April 30, 2025 16:01 ET | Source: FormFactor, Inc. LIVERMORE, Calif., April 30, 2025 (GLOBE NEWSWIRE) -- FormFactor, Inc. (Nasdaq: FORM) today announced its financial results for the first quarter of fiscal 2025 ended March 29, 2025. Quarterly revenues were $171.4 million, a decrease of 9.6% compared to $189.5 million in the fourth quarter of fiscal 2024, and an increase of 1.6% from $168.7 million in the first quarter of fiscal 2024. Foundry & Logic first-quarter demand increased low single digits sequentiallyExperienced reduction in DRAM as export controls limited FormFactor’s ability to ship probe cards for advanced node designs to ChinaClosed acquisition of minority interest in FICT Limited, a key supplier of advanced probe card components “As expected, FormFactor reported sequentially lower first-quarter revenue and profitability due to anticipated reductions in demand for both DRAM probe cards and Systems,” said Mike Slessor, CEO of FormFactor, Inc. “Longer-term, we remain confident in the growth prospects for FormFactor and the semiconductor industry overall, driven by the fundamental trends of Advanced Packaging, High-Bandwidth-Memory, and Co-Packaged Optics.” The company also announced that its Board of Directors has authorized a $75 million stock repurchase plan. This new stock repurchase authorization will expire April 23, 2027, and may be suspended, modified or discontinued at any time. Under the new repurchase authorization, repurchases may be made both in the open market and through privately negotiated transactions. First Quarter Highlights On a GAAP basis, net income for the first quarter of fiscal 2025 was $6.4 million, or $0.08 per fully-diluted share, compared to net income for the fourth quarter of fiscal 2024 of $9.7 million, or $0.12 per fully-diluted share, and net income for the first quarter of fiscal 2024 of $21.8 million, or $0.28 per fully-diluted share. Gross margin for the first quarter of 2025 was 37.7%, compared with 38.8% in the fourth quarter of 2024, and 37.2% in the first quarter of 2024. On a non-GAAP basis, net income for the first quarter of fiscal 2025 was $18.0 million, or $0.23 per fully-diluted share, compared to net income for the fourth quarter of fiscal 2024 of $21.3 million, or $0.27 per fully-diluted share, and net income for the first quarter of fiscal 2024 of $14.3 million, or $0.18 per fully-diluted share. On a non-GAAP basis, gross margin for the first quarter of 2025 was 39.2%, compared with 40.2% in the fourth quarter of 2024, and 38.7% in the first quarter of 2024. A reconciliation of GAAP to non-GAAP measures is provided in the schedules included below. GAAP net cash provided by operating activities for the first quarter of fiscal 2025 was $23.5 million, compared to $35.9 million for the fourth quarter of fiscal 2024, and $33.0 million for the first quarter of fiscal 2024. Free cash flow for the first quarter of fiscal 2025 was $6.3 million, compared to free cash flow for the fourth quarter of fiscal 2024 of $28.8 million, and free cash flow for the first quarter of 2024 of $19.7 million. 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, “Although our sequential growth outlook is tempered by the uncertainty created by the current tariff situation, we expect to deliver double-digit sequential revenue growth, with increases across all our major served markets and segments.” For the second quarter ending June 28, 2025, FormFactor is providing the following outlook*: GAAP Reconciling Items** Non-GAAPRevenue $190 million +/- $5 million — $190 million +/- $5 millionGross Margin 38.5% +/- 1.5% $3 million 40% +/- 1.5%Net income per diluted share $0.18 +/- $0.04 $0.12 $0.30 +/- $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 three months ended March 29, 2025, and for outlook provided before, as well as for the comparable periods of fiscal 2024, 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, market trends, conditions in and the growth of the semiconductor industry and the Company's performance, and other statements regarding the Company’s business. Forward-looking statements may contain words such as “may,” “might,” “will,” “expect,” “plan,” “anticipate,” “forecast,” “continue,” and "prospect," and 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 and impacts from export control, tariffs and other trade barriers; changes in demand for the Company’s products; customer-specific demand; market opportunity; anticipated industry trends; 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; 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 tariffs, 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. Investor Contact:Stan FinkelsteinInvestor Relations(925) 290-4273ir@formfactor.com FORMFACTOR, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME(In thousands, except per share amounts) (Unaudited) Three Months Ended March 29,2025 December 28,2024 March 30,2024Revenues$171,356 $189,483 $168,725 Cost of revenues 106,833 115,903 105,987 Gross profit 64,523 73,580 62,738 Operating expenses: Research and development 27,800 30,504 28,627 Selling, general and administrative 33,454 35,226 33,079 Total operating expenses 61,254 65,730 61,706 Gain on sale of business — — 20,271 Operating income 3,269 7,850 21,303 Interest income, net 3,317 3,472 3,156 Other income, net 890 617 520 Income before income taxes 7,476 11,939 24,979 Provision for income taxes 1,075 2,234 3,198 Net income$6,401 $9,705 $21,781 Net income per share: Basic$0.08 $0.13 $0.28 Diluted$0.08 $0.12 $0.28 Weighted-average number of shares used in per share calculations: Basic 77,345 77,267 77,452 Diluted 77,884 77,982 78,490 FORMFACTOR, INC. NON-GAAP FINANCIAL MEASURE RECONCILIATIONS(In thousands, except per share amounts)(Unaudited) Three Months Ended March 29,2025 December 28,2024 March 30,2024GAAP Gross Profit$64,523 $73,580 $62,738 Adjustments: Amortization of intangibles and fixed asset fair value adjustments due to acquisitions 542 555 586 Stock-based compensation 2,005 1,944 1,928 Restructuring charges 60 32 44 Non-GAAP Gross Profit$67,130 $76,111 $65,296 GAAP Gross Margin 37.7% 38.8% 37.2%Adjustments: Amortization of intangibles and fixed asset fair value adjustments due to acquisitions 0.3% 0.4% 0.4%Stock-based compensation 1.2% 1.0% 1.1%Restructuring charges —% —% —%Non-GAAP Gross Margin 39.2% 40.2% 38.7% GAAP operating expenses$61,254 $65,730 $61,706 Adjustments: Amortization of intangibles (191) (191) (191)Stock-based compensation (7,791) (8,269) (8,477)Restructuring charges (2,823) (371) (49)Costs related to sale and acquisition of businesses (217) (1,689) (646)Non-GAAP operating expenses$50,232 $55,210 $52,343 GAAP operating income$3,269 $7,850 $21,303 Adjustments: Amortization of intangibles and fixed asset fair value adjustments due to acquisitions 733 746 777 Stock-based compensation 9,796 10,213 10,405 Restructuring charges 2,883 403 93 Gain on sale of business, net of cost related to sale and acquisition of businesses 217 1,689 (19,625)Non-GAAP operating income$16,898 $20,901 $12,953 FORMFACTOR, INC. NON-GAAP FINANCIAL MEASURE RECONCILIATIONS(In thousands, except per share amounts)(Unaudited) Three Months Ended March 29,2025 December 28,2024 March 30,2024GAAP net income$6,401 $9,705 $21,781 Adjustments: Amortization of intangibles and fixed asset fair value adjustments due to acquisitions 733 746 777 Stock-based compensation 9,796 10,213 10,405 Restructuring charges 2,883 415 93 Gain on sale of business, net of cost related to sale and acquisition of businesses 217 1,689 (19,625)Income tax effect of non-GAAP adjustments (2,026) (1,445) 913 Non-GAAP net income$18,004 $21,323 $14,344 GAAP net income per share: Basic$0.08 $0.13 $0.28 Diluted$0.08 $0.12 $0.28 Non-GAAP net income per share: Basic$0.23 $0.28 $0.19 Diluted$0.23 $0.27 $0.18 FORMFACTOR, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands)(Unaudited) Three Months Ended March 29,2025 March 30,2024Cash flows from operating activities: Net income$6,401 $21,781 Selected adjustments to reconcile net income to net cash provided by operating activities: Depreciation 8,156 7,193 Amortization 674 640 Stock-based compensation expense 9,796 10,405 Provision for excess and obsolete inventories 2,879 3,146 Gain on sale of business — (20,271)Non-cash restructuring charges 2,102 — Other activity impacting operating cash flows (6,469) 10,118 Net cash provided by operating activities 23,539 33,012 Cash flows from investing activities: Acquisition of property, plant and equipment (18,584) (13,436)Proceeds from sale of business — 21,275 Purchase of equity investment (67,156) — Proceeds from (purchases of) marketable securities, net 1,080 (11,659)Net cash used in investing activities (84,660) (3,820)Cash flows from financing activities: Purchase of common stock through stock repurchase program (22,135) (17,334)Proceeds from issuances of common stock 21,576 4,948 Principal repayments on term loans (273) (266)Tax withholdings related to net share settlements of equity awards (2,132) (1,840)Net cash used in financing activities (2,964) (14,492)Effect of exchange rate changes on cash, cash equivalents and restricted cash 180 (1,592)Net increase (decrease) in cash, cash equivalents and restricted cash (63,905) 13,108 Cash, cash equivalents and restricted cash, beginning of period 197,206 181,273 Cash, cash equivalents and restricted cash, end of period$133,301 $194,381 FORMFACTOR, INC. RECONCILIATION OF CASH PROVIDED BY OPERATING ACTIVITIES TO NON-GAAP FREE CASH FLOW(In thousands)(Unaudited) Three Months Ended March 29,2025 December 28,2024 March 30,2024Net cash provided by operating activities$23,539 $35,913 $33,012 Adjustments: Sale of business and acquisition related payments in working capital 1,221 506 47 Cash paid for interest 92 93 100 Capital expenditures (18,584) (7,663) (13,436)Free cash flow$6,268 $28,849 $19,723 FORMFACTOR, INC.CONDENSED CONSOLIDATED BALANCE SHEETS(In thousands) (Unaudited) March 29,2025 December 28,2024ASSETS Current assets: Cash and cash equivalents$129,889 $190,728 Marketable securities 169,099 169,295 Accounts receivable, net of allowance for credit losses 98,605 104,294 Inventories, net 109,965 101,676 Restricted cash 967 3,746 Prepaid expenses and other current assets 42,716 35,389 Total current assets 551,241 605,128 Restricted cash 2,445 2,732 Operating lease, right-of-use-assets 20,054 22,579 Property, plant and equipment, net of accumulated depreciation 208,317 210,230 Equity investment 68,667 — Goodwill 199,700 199,171 Intangibles, net 9,681 10,355 Deferred tax assets 92,759 92,012 Other assets 3,303 4,008 Total assets$1,156,167 $1,146,215 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable$64,536 $62,287 Accrued liabilities 34,909 43,742 Current portion of term loan, net of unamortized issuance costs 1,113 1,106 Deferred revenue 14,996 15,847 Operating lease liabilities 8,461 8,363 Total current liabilities 124,015 131,345 Term loan, less current portion, net of unamortized issuance costs 11,927 12,208 Long-term operating lease liabilities 15,980 17,550 Deferred grant 18,000 18,000 Other liabilities 20,371 19,344 Total liabilities 190,293 198,447 Stockholders’ equity: Common stock 77 77 Additional paid-in capital 844,488 837,586 Accumulated other comprehensive loss (6,037) (10,840)Accumulated income 127,346 120,945 Total stockholders’ equity 965,874 947,768 Total liabilities and stockholders’ equity$1,156,167 $1,146,215 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

FormFactor, Inc. Reports 2025 First Quarter Results

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