FormFactor (FORM) Q4 2025 earnings summary

Executive summary

• Achieved record annual revenue of $785 million in FY25, with Q4 revenue of $215.2 million, both exceeding guidance and prior periods, driven by strong demand in DRAM, advanced packaging, and high-performance compute markets.

• Recognized as the #1 global supplier in test subsystems and focused chip making equipment for 2025, with major awards from SK hynix and Intel.

• Strategic acquisition of Keystone Photonics in December 2025 strengthened leadership in co-packaged optics testing.

• Farmers Branch site is expected to come online later in 2026, providing increased capacity at lower cost and supporting further growth.

• Market leader in semiconductor test and measurement, benefiting from secular trends like AI, data center, and 5G growth.

Financial highlights

• FY25 revenue reached $785 million, up from $764 million in 2024; Q4 2025 revenue was $215.2 million, at the high end of guidance.

• Q4 2025 GAAP gross margin was 42.2% (up from 39.8% in Q3); non-GAAP gross margin was 43.9%.

• Q4 2025 GAAP net income was $23.2 million ($0.29 per diluted share), up from $15.7 million ($0.20) in Q3; non-GAAP net income was $36.6 million ($0.46 per diluted share).

• FY25 non-GAAP net income was $101.5 million ($1.30 per diluted share), up from $90.2 million ($1.15) in FY24.

• Q4 2025 free cash flow was $34.7 million; FY25 free cash flow was $13.6 million, down from $82.8 million in FY24.

Outlook and guidance

• Q1 2026 revenue guidance is $225 million ±$5 million, with non-GAAP gross margin expected at 45% ±1.5%.

• Q1 2026 non-GAAP EPS is expected to be $0.45 ±$0.04; non-GAAP operating expenses projected at $62 million ±$2 million.

• Gross margin improvement is expected to continue, though at a more moderate pace through 2026, supported by capacity expansion.

• Target model aims for $850 million revenue, 47% non-GAAP gross margin, 22% operating margin, $2.00 EPS, and $160 million free cash flow.