FormFactor, Inc. Reports 2025 Second Quarter Results

Q2 Revenue Exceeds Outlook Range, Sees Similar Demand Level for Q3'25 July 30, 2025 16:01 ET | Source: FormFactor, Inc. LIVERMORE, Calif., July 30, 2025 (GLOBE NEWSWIRE) -- FormFactor, Inc. (Nasdaq: FORM) today announced its financial results for the second quarter of fiscal 2025 ended June 28, 2025. Quarterly revenues were $195.8 million, an increase of 14.3% compared to $171.4 million in the first quarter of fiscal 2025, and a decrease of 0.8% from $197.5 million in the second quarter of fiscal 2024. Anticipated strength in HBM and Foundry & Logic probe cards drove sequentially stronger second-quarter revenueFormFactor is now shipping in volume to all three major HBM manufacturersClosed acquisition of Farmers Branch manufacturing facility, providing significant operational flexibility in lower operating cost region “FormFactor reported sequentially stronger second-quarter revenue that exceeded the high end of our outlook range, due to higher-than-anticipated growth in our probe-card business,” said Mike Slessor, CEO of FormFactor, Inc. “Despite this revenue strength, non-GAAP gross margin and overall profitability fell short of our outlook, mainly caused by an unfavorable shift in product mix and unforecasted ramp-up costs for a second HBM DRAM customer.” Second Quarter Highlights On a GAAP basis, net income for the second quarter of fiscal 2025 was $9.1 million, or $0.12 per fully-diluted share, compared to net income for the first quarter of fiscal 2025 of $6.4 million, or $0.08 per fully-diluted share, and net income for the second quarter of fiscal 2024 of $19.4 million, or $0.25 per fully-diluted share. Gross margin for the second quarter of 2025 was 37.3%, compared with 37.7% in the first quarter of 2025, and 44.0% in the second quarter of 2024. On a non-GAAP basis, net income for the second quarter of fiscal 2025 was $21.2 million, or $0.27 per fully-diluted share, compared to net income for the first quarter of fiscal 2025 of $18.0 million, or $0.23 per fully-diluted share, and net income for the second quarter of fiscal 2024 of $27.3 million, or $0.35 per fully-diluted share. On a non-GAAP basis, gross margin for the second quarter of 2025 was 38.5%, compared with 39.2% in the first quarter of 2025, and 45.3% in the second quarter of 2024. GAAP net cash provided by operating activities for the second quarter of fiscal 2025 was $18.9 million, compared to $23.5 million for the first quarter of fiscal 2025, and $21.9 million for the second quarter of fiscal 2024. Free cash flow for the second quarter of fiscal 2025 was negative $47.1 million, compared to free cash flow for the first quarter of fiscal 2025 of $6.3 million, and free cash flow for the second quarter of 2024 of $14.2 million. A reconciliation of GAAP to non-GAAP measures is provided in the schedules included below. Outlook Dr. Slessor added, “In the current third quarter, we expect to deliver revenue comparable to the second quarter, with slightly higher gross margin and operating profit.” For the third quarter ending September 27, 2025, FormFactor is providing the following outlook*: GAAP Reconciling Items** Non-GAAPRevenue $200 million +/- $5 million — $200 million +/- $5 millionGross Margin 38.5% +/- 1.5% $3 million 40% +/- 1.5%Net income per diluted share $0.14 +/- $0.04 $0.11 $0.25 +/- $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 six months ended June 28, 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, 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. FORMFACTOR, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME(In thousands, except per share amounts) (Unaudited) Three Months Ended Six Months Ended June 28,2025 March 29,2025 June 29,2024 June 28,2025 June 29,2024Revenues$195,798 $171,356 $197,474 $367,154 $366,199 Cost of revenues 122,860 106,833 110,574 229,693 216,561 Gross profit 72,938 64,523 86,900 137,461 149,638 Operating expenses: Research and development 28,793 27,800 31,564 56,593 60,191 Selling, general and administrative 31,839 33,454 37,874 65,293 70,953 Total operating expenses 60,632 61,254 69,438 121,886 131,144 Gain on sale of business — — 310 — 20,581 Operating income 12,306 3,269 17,772 15,575 39,075 Interest income, net 2,642 3,317 3,415 5,959 6,571 Other income (expense), net (6) 890 360 884 880 Income before income taxes 14,942 7,476 21,547 22,418 46,526 Provision for income taxes 2,372 1,075 2,155 3,447 5,353 Loss from equity investment 3,484 — — 3,484 — Net income$9,086 $6,401 $19,392 $15,487 $41,173 Net income per share: Basic$0.12 $0.08 $0.25 $0.20 $0.53 Diluted$0.12 $0.08 $0.25 $0.20 $0.52 Weighted-average number of shares used in per share calculations: Basic 77,107 77,345 77,235 77,226 77,343 Diluted 77,527 77,884 78,717 77,721 78,746 FORMFACTOR, INC.NON-GAAP FINANCIAL MEASURE RECONCILIATIONS(In thousands, except per share amounts)(Unaudited) Three Months Ended Six Months Ended June 28,2025 March 29,2025 June 29,2024 June 28,2025 June 29,2024GAAP Gross Profit$72,938 $64,523 $86,900 $137,461 $149,638 Adjustments: Amortization of intangibles and fixed asset fair value adjustments due to acquisitions 528 542 545 1,070 1,131 Stock-based compensation 1,690 2,005 1,932 3,695 3,860 Restructuring charges 183 60 39 243 83 Non-GAAP Gross Profit$75,339 $67,130 $89,416 $142,469 $154,712 GAAP Gross Margin 37.3% 37.7% 44.0% 37.4% 40.9%Adjustments: Amortization of intangibles and fixed asset fair value adjustments due to acquisitions 0.3% 0.3% 0.3% 0.3% 0.3%Stock-based compensation 0.8% 1.2% 1.0% 1.0% 1.1%Restructuring charges 0.1% —% —% 0.1% —%Non-GAAP Gross Margin 38.5% 39.2% 45.3% 38.8% 42.3% GAAP operating expenses$60,632 $61,254 $69,438 $121,886 $131,144 Adjustments: Amortization of intangibles (191) (191) (191) (382) (382)Stock-based compensation (7,701) (7,791) (8,277) (15,492) (16,754)Restructuring charges (195) (2,823) (49) (3,018) (98)Costs related to sale and acquisition of businesses (55) (217) (43) (272) (689)Non-GAAP operating expenses$52,490 $50,232 $60,878 $102,722 $113,221 GAAP operating income$12,306 $3,269 $17,772 $15,575 $39,075 Adjustments: Amortization of intangibles and fixed asset fair value adjustments due to acquisitions 719 733 736 1,452 1,513 Stock-based compensation 9,391 9,796 10,209 19,187 20,614 Restructuring charges 378 2,883 88 3,261 181 Gain on sale of business, net of costs and acquisition related expenses 55 217 (267) 272 (19,892)Non-GAAP operating income$22,849 $16,898 $28,538 $39,747 $41,491 FORMFACTOR, INC.NON-GAAP FINANCIAL MEASURE RECONCILIATIONS(In thousands, except per share amounts)(Unaudited) Three Months Ended Six Months Ended June 28,2025 March 29,2025 June 29,2024 June 28,2025 June 29,2024GAAP net income$9,086 $6,401 $19,392 $15,487 $41,173 Adjustments: Amortization of intangibles and fixed asset fair value adjustments due to acquisitions 719 733 736 1,452 1,513 Stock-based compensation 9,391 9,796 10,209 19,187 20,614 Restructuring charges 378 2,883 88 3,261 181 Gain on sale of business and assets, net of costs and acquisition related expenses 3,460 217 (267) 3,677 (19,892)Income tax effect of non-GAAP adjustments (1,812) (2,026) (2,835) (3,838) (1,922)Non-GAAP net income$21,222 $18,004 $27,323 $39,226 $41,667 GAAP net income per share: Basic$0.12 $0.08 $0.25 $0.20 $0.53 Diluted$0.12 $0.08 $0.25 $0.20 $0.52 Non-GAAP net income per share: Basic$0.28 $0.23 $0.35 $0.51 $0.54 Diluted$0.27 $0.23 $0.35 $0.50 $0.53 GAAP net cash provided by operating activities$18,893 $23,539 $21,878 $42,432 $54,890 Adjustments: Sale of business and acquisition related payments in working capital 168 1,221 630 1,389 677 Cash paid for interest 95 92 101 187 201 Capital expenditures (66,256) (18,584) (8,398) (84,840) (21,834)Free cash flow$(47,100) $6,268 $14,211 $(40,832) $33,934 GAAP net cash used in investing activities$(78,553) $(84,660) $(6,140) $(163,213) $(9,960)GAAP net cash used in financing activities$(4,214) $(2,964) $(4,934) $(7,178) $(19,426) FORMFACTOR, INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands)(Unaudited) Six Months Ended June 28,2025 June 29,2024Cash flows from operating activities: Net income$15,487 $41,173 Selected adjustments to reconcile net income to net cash provided by operating activities: Depreciation 17,051 14,563 Amortization 1,339 1,280 Stock-based compensation expense 19,187 20,614 Provision for excess and obsolete inventories 6,695 6,277 Loss from equity investment 3,484 — Gain on sale of business and assets (103) (20,581)Non-cash restructuring charges 2,160 — Other activity impacting operating cash flows (22,868) (8,436)Net cash provided by operating activities 42,432 54,890 Cash flows from investing activities: Acquisition of property, plant and equipment (84,840) (21,834)Proceeds from sale of business and assets 103 21,585 Purchase of equity investment (67,156) — Purchases of marketable securities, net (11,320) (9,711)Net cash used in investing activities (163,213) (9,960)Cash flows from financing activities: Purchase of common stock through stock repurchase program, including excise tax paid (24,586) (20,271)Proceeds from issuances of common stock 21,576 4,948 Principal repayments on term loans (549) (534)Tax withholdings related to net share settlements of equity awards (3,619) (3,569)Net cash used in financing activities (7,178) (19,426)Effect of exchange rate changes on cash, cash equivalents and restricted cash 1,658 (2,826)Net increase (decrease) in cash, cash equivalents and restricted cash (126,301) 22,678 Cash, cash equivalents and restricted cash, beginning of period 197,206 181,273 Cash, cash equivalents and restricted cash, end of period$70,905 $203,951 FORMFACTOR, INC.CONDENSED CONSOLIDATED BALANCE SHEETS(In thousands) (Unaudited) June 28,2025 December 28,2024ASSETS Current assets: Cash and cash equivalents$67,380 $190,728 Marketable securities 181,949 169,295 Accounts receivable, net of allowance for credit losses 115,199 104,294 Inventories, net 110,789 101,676 Restricted cash 1,061 3,746 Prepaid expenses and other current assets 48,884 35,389 Total current assets 525,262 605,128 Restricted cash 2,464 2,732 Operating lease, right-of-use-assets 19,475 22,579 Property, plant and equipment, net of accumulated depreciation 259,288 210,230 Equity investment 67,264 — Goodwill 200,858 199,171 Intangibles, net 9,017 10,355 Deferred tax assets 94,795 92,012 Other assets 3,185 4,008 Total assets$1,181,608 $1,146,215 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable$59,932 $62,287 Accrued liabilities 38,545 43,742 Current portion of term loan, net of unamortized issuance costs 1,121 1,106 Deferred revenue 16,450 15,847 Operating lease liabilities 7,919 8,363 Total current liabilities 123,967 131,345 Term loan, less current portion, net of unamortized issuance costs 11,644 12,208 Long-term operating lease liabilities 15,231 17,550 Deferred grant 18,000 18,000 Other liabilities 22,743 19,344 Total liabilities 191,585 198,447 Stockholders’ equity: Common stock 77 77 Additional paid-in capital 850,064 837,586 Accumulated other comprehensive income (loss) 3,450 (10,840)Accumulated income 136,432 120,945 Total stockholders’ equity 990,023 947,768 Total liabilities and stockholders’ equity$1,181,608 $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” included in this press release. Investor Contact:Stan FinkelsteinInvestor Relations(925) 290-4273ir@formfactor.com Source: FormFactor, Inc.FORM-F

FormFactor, Inc. Reports 2025 Second Quarter Results

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