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FormFactor (FORM - Free Report) reported fourth-quarter 2021 adjusted earnings of 44 cents per share, which surpassed the Zacks Consensus Estimate by 7.3%. Also, the bottom line increased 10% on a sequential basis and came in line with the year-ago reported figure.
Revenues increased 4% year over year and 7.9% from the third quarter to $205 million. Further, the figure surpassed the Zacks Consensus Estimate by 3.5%.
The year-over-year growth in the top line was driven by strong demand for DRAM, Flash and Systems. Further, the launch of cryogenic testing as a service for quantum applications remained a tailwind.
Yet, weak momentum in the foundry and logic market remained a concern.
FormFactor, Inc. Price, Consensus and EPS Surprise
Probe card: Revenues from this segment were $165.9 million for the fourth quarter, up 7.1% sequentially and 2.1% year over year.
Foundry & Logic (accounting for 55.6% of revenues) revenues were $114 million, down 7% year over year but up 8.9% sequentially.
Revenues for DRAM products (19.7% of revenues) were $40.3 million, reflecting an increase of 16.5% year over year and 1.3% sequentially.
Flash revenues (5.7% of revenues) were $11.6 million, up 123.1% from the year-ago period and 11.5% from the third quarter.
Systems: Revenues from this segment were $39.1 million (19.1% of revenues), up 11.4% sequentially and 13.3% year over year.
Regional Details
Revenues generated from Taiwan (accounting for 23% of revenues), China (18%), Europe (5%), and the rest of the world (1%) were $46.9 million, $37.6 million, $11.2 million and $1.4 million, respectively. The respective revenues decreased 4.3%, 30.4%, 16.4% and 58.8% year over year.
Then again, revenues generated from South Korea (19%), the United States (17%), Asia Pacific (12%) and Japan (4%) were $39.2 million, $34.5 million, $25.4 million and $8.8 million, respectively. The respective revenues were up 39%, 10.2%, 161.9% and 10% year over year.
Operating Results
On a non-GAAP basis, gross margin expanded 90 basis points (bps) year over year to 44.3%. Also, the Probe card segment’s gross margin was 44.1%, expanding 20 bps year over year. The Systems segment’s gross margin was 45.5%, expanding 440 bps year over year.
Non-GAAP operating expenses increased 3.3% year over year to $49.7 million. As a percentage of total fourth-quarter revenues, the metric contracted 17 bps year over year to 24.2%.
Non-GAAP operating income was $41.2 million, up 9.7% year over year. As a percentage of revenues, it expanded 103 bps year over year to 20.1%.
Balance Sheet & Cash Flow
As of Dec 25, 2021, cash & cash equivalents and marketable securities were $276.1 million compared with $264.7 million on Sep 25, 2021.
Further, cash generated from operating activities was $38.9 million for the reported quarter, up from $34.3 million in the previous quarter.
Capital expenditure was $15.1 million, down from $20 million in the third quarter.
Further, free cash flow was $23.9 million for the fourth quarter, up from $14.4 million in the third quarter.
Guidance
FormFactor expects first-quarter 2022 revenues between $188 million and $200 million. The Zacks Consensus Estimate for revenues is currently pegged at $200.1 million.
The company expects a seasonal decline in Foundry and Logic revenues and a moderate decrease in DRAM revenues.
Further, management expects non-GAAP gross margin between 44% and 47%.
On a non-GAAP basis, it projects earnings in the band of 35-43 cents per share. The consensus mark for earnings is pegged at 43 cents per share.
Bruker is scheduled to release fourth-quarter 2021 results on Feb 15.It has gained 19.6% over a year. The long-term earnings growth rate for BRKR is currently projected at 20.6%.
Intuit is slated to report second-quarter fiscal 2022 results on Feb 24. It has gained 43.2% over a year. The long-term earnings growth rate for INTU is currently projected at 15.7%.
Zscaler is slated to report second-quarter fiscal 2022 results on Feb 24. It has gained 20.5% over a year. The long-term earnings growth rate for ZS is currently projected at 37.1%.
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FormFactor (FORM) Q4 Earnings Beat, Revenues Increase Y/Y
FormFactor (FORM - Free Report) reported fourth-quarter 2021 adjusted earnings of 44 cents per share, which surpassed the Zacks Consensus Estimate by 7.3%. Also, the bottom line increased 10% on a sequential basis and came in line with the year-ago reported figure.
Revenues increased 4% year over year and 7.9% from the third quarter to $205 million. Further, the figure surpassed the Zacks Consensus Estimate by 3.5%.
The year-over-year growth in the top line was driven by strong demand for DRAM, Flash and Systems. Further, the launch of cryogenic testing as a service for quantum applications remained a tailwind.
Yet, weak momentum in the foundry and logic market remained a concern.
FormFactor, Inc. Price, Consensus and EPS Surprise
FormFactor, Inc. price-consensus-eps-surprise-chart | FormFactor, Inc. Quote
Segments in Detail
Probe card: Revenues from this segment were $165.9 million for the fourth quarter, up 7.1% sequentially and 2.1% year over year.
Foundry & Logic (accounting for 55.6% of revenues) revenues were $114 million, down 7% year over year but up 8.9% sequentially.
Revenues for DRAM products (19.7% of revenues) were $40.3 million, reflecting an increase of 16.5% year over year and 1.3% sequentially.
Flash revenues (5.7% of revenues) were $11.6 million, up 123.1% from the year-ago period and 11.5% from the third quarter.
Systems: Revenues from this segment were $39.1 million (19.1% of revenues), up 11.4% sequentially and 13.3% year over year.
Regional Details
Revenues generated from Taiwan (accounting for 23% of revenues), China (18%), Europe (5%), and the rest of the world (1%) were $46.9 million, $37.6 million, $11.2 million and $1.4 million, respectively. The respective revenues decreased 4.3%, 30.4%, 16.4% and 58.8% year over year.
Then again, revenues generated from South Korea (19%), the United States (17%), Asia Pacific (12%) and Japan (4%) were $39.2 million, $34.5 million, $25.4 million and $8.8 million, respectively. The respective revenues were up 39%, 10.2%, 161.9% and 10% year over year.
Operating Results
On a non-GAAP basis, gross margin expanded 90 basis points (bps) year over year to 44.3%. Also, the Probe card segment’s gross margin was 44.1%, expanding 20 bps year over year. The Systems segment’s gross margin was 45.5%, expanding 440 bps year over year.
Non-GAAP operating expenses increased 3.3% year over year to $49.7 million. As a percentage of total fourth-quarter revenues, the metric contracted 17 bps year over year to 24.2%.
Non-GAAP operating income was $41.2 million, up 9.7% year over year. As a percentage of revenues, it expanded 103 bps year over year to 20.1%.
Balance Sheet & Cash Flow
As of Dec 25, 2021, cash & cash equivalents and marketable securities were $276.1 million compared with $264.7 million on Sep 25, 2021.
Further, cash generated from operating activities was $38.9 million for the reported quarter, up from $34.3 million in the previous quarter.
Capital expenditure was $15.1 million, down from $20 million in the third quarter.
Further, free cash flow was $23.9 million for the fourth quarter, up from $14.4 million in the third quarter.
Guidance
FormFactor expects first-quarter 2022 revenues between $188 million and $200 million. The Zacks Consensus Estimate for revenues is currently pegged at $200.1 million.
The company expects a seasonal decline in Foundry and Logic revenues and a moderate decrease in DRAM revenues.
Further, management expects non-GAAP gross margin between 44% and 47%.
On a non-GAAP basis, it projects earnings in the band of 35-43 cents per share. The consensus mark for earnings is pegged at 43 cents per share.
Zacks Rank & Stocks to Consider
Currently, FormFactor has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector include Bruker (BRKR - Free Report) , Intuit (INTU - Free Report) and Zscaler (ZS - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Bruker is scheduled to release fourth-quarter 2021 results on Feb 15.It has gained 19.6% over a year. The long-term earnings growth rate for BRKR is currently projected at 20.6%.
Intuit is slated to report second-quarter fiscal 2022 results on Feb 24. It has gained 43.2% over a year. The long-term earnings growth rate for INTU is currently projected at 15.7%.
Zscaler is slated to report second-quarter fiscal 2022 results on Feb 24. It has gained 20.5% over a year. The long-term earnings growth rate for ZS is currently projected at 37.1%.