FormFactor (FORM) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached $197.5M, up 26.7% year-over-year and 17% sequentially, exceeding guidance midpoint, driven by record DRAM and HBM probe card sales.

• Net income for the first six months of 2024 was $41.2M, up from $2.2M a year ago, aided by a $20.3M gain from the China operations divestiture.

• Diversified product portfolio and advanced packaging trends (HBM, chiplets, co-packaged silicon photonics) are driving long-term growth.

• Recognized for technology leadership and industry awards, including Intel's 2024 EPIC Distinguished Supplier Award.

• Profitable financial model with strong cash flow and active acquisition strategy for scale and diversification.

Financial highlights

• Q2 2024 revenue was $197.5M, non-GAAP gross margin was 45.3%, and non-GAAP EPS was $0.35, nearly doubling from Q1.

• Q2 2024 net income was $19.4M ($0.25/share), up from $0.8M in Q2 2023; free cash flow was $14.2M.

• Cash, cash equivalents, and marketable securities totaled $357.6M at quarter end.

• FY 2023 revenue was $663M, with a non-GAAP gross margin of 40.7% and non-GAAP EPS of $0.73.

• Free cash flow trend: $67M in 2022, $11M in 2023.

Outlook and guidance

• Q3 2024 revenue expected at $200M ± $5M, with non-GAAP gross margin at 43% ±1.5% and non-GAAP EPS at $0.31 ± $0.04.

• Demand anticipated to remain steady, with a less favorable DRAM mix and higher DDR5 weighting.

• Target model: $850M revenue, 47% non-GAAP gross margin, 22% non-GAAP operating margin, $2.00 non-GAAP EPS, $160M free cash flow.

• The company anticipates recognizing 65.1% of its $9.2M in remaining performance obligations as revenue in the remainder of 2024.