Photronics (PLAB) Q2 2026 earnings summary

Executive summary

• Q2 2026 revenue was $209.9 million, down 0.5% year-over-year and 6.7% sequentially, mainly due to lower IC demand and delayed design releases, while FPD revenue grew 13% year-over-year.

• Net income attributable to shareholders was $31.4 million for Q2 2026, with diluted GAAP EPS of $0.54 and non-GAAP diluted EPS of $0.42.

• Gross margin declined to 31.3% from 36.9% a year ago, reflecting higher costs and product mix.

• Strategic investments in the U.S. and Korea are on track, targeting advanced technology nodes and supporting future growth.

• High-end photomask demand for AI chips remains robust, but near-term visibility is limited due to industry headwinds and macroeconomic factors.

Financial highlights

• Gross margin was 31.3%, and operating margin was 20.1% for Q2 2026.

• Diluted GAAP EPS was $0.54; non-GAAP diluted EPS was $0.42.

• Operating cash flow was $47.0 million (22% of revenue); CapEx was $45.8 million, focused on U.S. and Korea expansions.

• Cash and equivalents totaled $637.7 million, with $477 million in joint ventures and minimal debt.

• Six-month revenue was $435.0 million, up 2.8% year-over-year.

Outlook and guidance

• Q3 2026 revenue expected between $207 million and $215 million.

• Q3 operating margin projected at 18%-20%; non-GAAP diluted EPS between $0.39 and $0.45.

• Fiscal 2026 CapEx guidance maintained at $330 million, focused on strategic investments in the U.S. and Korea.

• Initial U.S. expansion revenue anticipated late in fiscal 2026; Korea expansion revenue by end of fiscal 2027.

• Management expects continued investment in technology and manufacturing to support customer needs.