FORM earnings analysis
What we found in FORM's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
FormFactor delivered record Q2 revenue of $258.242 million, up 31.9% year over year, with GAAP gross margin expanding 13.4 percentage points to 50.7% and operating margin increasing 16.1 points to 22.4%. Growth was led by DRAM/HBM probe cards, Foundry & Logic demand tied to networking and high-performance compute, and Triton CPO Systems sales. Liquidity improved materially, although Flash demand contracted 48.4%, restructuring and factory start-up costs remain elevated, and working-capital growth consumed $25.9 million of first-half operating cash flow.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Record revenue and sharply higher EPS
- Q2 revenue was a record $258.242 million, rising $62.444 million, or 31.9%, from $195.798 million a year earlier and approximately $32.2 million from $226 million in Q1 FY2026. GAAP diluted EPS was $0.71, versus $0.12 in Q2 FY2025 and $0.26 in Q1 FY2026.
- Margins expanded materially
- Gross margin expanded to 50.7% from 37.3% a year ago and 38.4% in Q1 FY2026, while operating margin rose to 22.4% from 6.3% and 7.4%, respectively. Management attributed improvement to favorable product mix, higher factory utilization, and gross-margin initiatives.
- AI-related DRAM and logic demand accelerated
- Probe Cards revenue increased to $209.695 million from $162.108 million. DRAM grew $27.942 million, or 49.0%, to $84.999 million, with HBM representing about 75% of the year-over-year DRAM increase; Foundry & Logic rose $22.326 million, or 22.4%, to $121.839 million.
- Triton drove Systems growth
- Systems revenue rose 44.1% to $48.547 million from $33.690 million, driven primarily by sales of the recently introduced Triton high-volume co-packaged-optics testing platform.
- Cash generation strengthened
- Free cash flow was $52.6 million in Q2, compared with $30 million in Q1 FY2026 and negative $47 million in Q2 FY2025. For the first six months, operating cash flow increased to $106.764 million from $42.432 million, while PP&E purchases were $24.8 million.
- Liquidity remains substantial
- Cash, cash equivalents, and marketable securities increased to $345.6 million at June 27, 2026 from $275.2 million at year-end, and working capital increased to $505.3 million from $433.2 million. The $150 million revolver was fully undrawn, while the building term loan balance was only $11.7 million.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Flash demand declined sharply
- Flash revenue declined 48.4% year over year to $2.857 million as customer production activity and demand fell. Management expects Flash to be a smaller share of revenue after the Baldwin Park closure and as other end markets grow.
- Restructuring remains a cost and execution risk
- Restructuring charges included in cost of revenue were $4.3 million in Q2 and $25.8 million for the first six months. The Carlsbad factory is expected to manufacture through December 2026, leaving execution risk in the remaining consolidation.
- Texas expansion pressures near-term costs
- Factory start-up costs increased to $4.859 million in Q2 from $0.357 million a year ago and are expected to continue through the Farmers Branch build-out. The Texas site is not expected to begin production until late Q4 FY2026, with ramp to initial target levels occurring during FY2027.
- Working-capital investment increased
- First-half operating cash flow absorbed a $25.9 million increase in net working capital, including a $30.7 million accounts-receivable increase and a $19.6 million inventory increase. These investments could reverse some cash-flow strength if demand or collections weaken.
- No new risk-factor changes disclosed
- Item 1A states there were no material changes to risk factors during the three months ended June 27, 2026. Existing risks still include tariffs, export controls, trade barriers, supply chain constraints, and execution of restructuring and expansion plans.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $0.71
- Gross margin
- 50.7%
- Operating margin
- 22.4%
- Segment
- Probe Cards: $209.695 million revenue, up $47.587 million (29.4%) year over year.
- Segment
- Systems: $48.547 million revenue, up $14.857 million (44.1%) year over year.
What they said about what is next.
The Q3 FY2026 GAAP outlook disclosed with earnings is revenue of $260 million-$280 million and diluted EPS of $0.66-$0.84. In the 10-Q, management also anticipates approximately $7.0 million-$9.0 million of IEEPA tariff refunds in Q3 and expects Farmers Branch production to begin late in Q4 FY2026; no earlier Q3 company outlook was provided for comparison.
The filing reads better than the one before it.
What came before.
- 10-Q · May 5, 2026
- FormFactor reported record Q1 2026 revenue of $226.1 million, exceeding estimates and driven by strong demand in both Probe Cards and DRAM segments. The company achieved an EPS of $0.56, significantly above the…
- 10-K · February 20, 2026
- FormFactor reported a record $784.99 million of revenue in fiscal 2025, driven by DRAM/HBM demand and strength in South Korea, producing net income of $54.4 million. Gross margin compressed to 39.3% (from 40.3% in 2024)…
- 10-Q · November 4, 2025
- FormFactor reported third-quarter revenue of $202.676 million, roughly flat vs. the prior quarter (+$6.7M vs Q2) and down modestly vs. year-ago Q3 ($207.917M). Gross margin was 39.8% and operating margin 8.9%; diluted…
- 10-Q · August 5, 2025
- FormFactor reported Q2 revenue of $195,798 (thousands) roughly flat with the prior year ($197,474) but up materially vs Q1 2025 ($171,356 derived from six-month totals). Gross margin compressed to 37.3% (gross profit…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
Read the next one first.
We read every filing FORM makes the day it lands, and put it next to what the options market did about it. Members get both, and an alert when a filing arrives.
Cancel anytime · Month to month · Switch tiers whenever