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 driven by strong demand in DRAM, HBM, and advanced packaging markets.

• Q4 2025 revenue, gross margin, and EPS surpassed the high end of guidance, with sequential improvements expected in Q1 2026.

• Strategic acquisitions, including Keystone Photonics, enhanced leadership in co-packaged optics testing.

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

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

Financial highlights

• FY25 revenue reached $785 million, up from $764 million in 2024; Q4 2025 revenue was $215.2 million.

• Q4 2025 GAAP gross margin was 42.2%, non-GAAP gross margin was 43.9%; FY25 non-GAAP gross margin was 40.8%.

• Q4 2025 GAAP net income was $23.2 million ($0.29 per share); non-GAAP net income was $36.6 million ($0.46 per share).

• FY25 non-GAAP EPS was $1.30; free cash flow for Q4 was $34.7 million, with $107 million in cash and cash equivalents at year-end.

• Total assets at year-end FY25 were $1.22 billion; total stockholders' equity was $1.04 billion.

Outlook and guidance

• Q1 2026 revenue guidance is $225 million ±$5 million, with non-GAAP gross margin expected at 45% ±1.5% and non-GAAP EPS at $0.45 ±$0.04.

• Q1 non-GAAP operating expenses are expected to be $62 million ±$2 million, mainly due to Farmers Branch ramp costs.

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

• Continued focus on capacity expansion and gross margin improvement, with further gains expected as new facilities come online in late 2026.