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FormFactor (FORM - Free Report) reported first-quarter 2022 adjusted earnings of 49 cents per share, which surpassed the Zacks Consensus Estimate by 25.6%. Also, the bottom line increased 11.4% on a sequential basis and 28.9% year over year.
Revenues increased 5.7% year over year to $197.2 million. Further, the figure surpassed the Zacks Consensus Estimate by 1.5%.
The year-over-year growth in the top line was driven by strong demand for Foundry & Logic and Systems.
Yet, revenues decreased 3.8% from the previous quarter owing to weak demand for DRAM and Flash products.
FormFactor, Inc. Price, Consensus and EPS Surprise
Probe card: Revenues from this segment were $159.98 million for the first quarter, up 0.7% year over year but down 3.6% sequentially.
Foundry & Logic (accounting for 57.9% of revenues) revenues were $114.1 million, up 0.6% year over year and 0.1% sequentially.
Revenues for DRAM products (17.5% of revenues) were $34.5 million, reflecting an increase of 1.8% year over year but a decrease of 14.4% from the previous quarter.
Flash revenues (5.8% of revenues) were $11.4 million, down 1.72% from the year-ago period and fourth-quarter 2021.
Systems: Revenues from this segment were $37.2 million (18.9% of revenues), up 34.3% year over year but down 4.9% sequentially.
Regional Details
Revenues generated from Taiwan (accounting for 27% of revenues), South Korea (14%), Malaysia (11%) and Japan (5%) were $53.1 million, $27.5 million, $25.6 million, $22.2 million and $9.4 million, respectively. The respective revenues increased 16.4%, 44%, 158.1% and 1.1% year over year.
Then again, revenues generated from China (19%), the United States (13%), Singapore (6%), Europe (4%) and the Rest of World (1%) were $38.4 million, $25.6 million, $10.9 million, $8.4 million and $1.7 million, respectively. The respective revenues were down 9.9%, 13.2%, 45.2%, 16% and 15% from the year-ago period.
Operating Results
On a non-GAAP basis, gross margin expanded 4 basis points (bps) year over year to 49%. Also, the Probe card segment’s gross margin was 48.3%, expanding 4 bps year over year. The Systems segment’s gross margin was 49%, contracting 320 bps year over year.
Non-GAAP operating expenses increased 11.7% year over year to $51.9 million. As a percentage of total first-quarter revenues, the metric expanded 142 bps year over year to 26.3%.
Non-GAAP operating income was $44.7 million, up 19% year over year. As a percentage of revenues, it expanded 255 bps year over year to 22.7%.
Balance Sheet & Cash Flow
As of Mar 26, 2022, cash & cash equivalents and marketable securities were $296.4 million compared with $276.1 million on Dec 25, 2021.
Further, cash generated from operating activities was $44.2 million for the reported quarter, up from $38.9 million in the previous quarter.
Capital expenditure was $15.6 million, up from $15.1 million in the fourth quarter of 2021.
Further, free cash flow was $28.7 million for the reported quarter, up from $23.9 million in the previous quarter.
Guidance
FormFactor expects second-quarter 2022 revenues of $203 million (+/- $6 million). The Zacks Consensus Estimate for revenues is currently pegged at $201.9 million.
Further, management expects non-GAAP gross margin of 47% (+/- 1.5%).
On a non-GAAP basis, it projects earnings of 43 cents (+/- 4 cents) per share. The consensus mark for earnings is pegged at 43 cents per share.
Image: Bigstock
FormFactor (FORM) Q1 Earnings Beat, Revenues Increase Y/Y
FormFactor (FORM - Free Report) reported first-quarter 2022 adjusted earnings of 49 cents per share, which surpassed the Zacks Consensus Estimate by 25.6%. Also, the bottom line increased 11.4% on a sequential basis and 28.9% year over year.
Revenues increased 5.7% year over year to $197.2 million. Further, the figure surpassed the Zacks Consensus Estimate by 1.5%.
The year-over-year growth in the top line was driven by strong demand for Foundry & Logic and Systems.
Yet, revenues decreased 3.8% from the previous quarter owing to weak demand for DRAM and Flash products.
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 $159.98 million for the first quarter, up 0.7% year over year but down 3.6% sequentially.
Foundry & Logic (accounting for 57.9% of revenues) revenues were $114.1 million, up 0.6% year over year and 0.1% sequentially.
Revenues for DRAM products (17.5% of revenues) were $34.5 million, reflecting an increase of 1.8% year over year but a decrease of 14.4% from the previous quarter.
Flash revenues (5.8% of revenues) were $11.4 million, down 1.72% from the year-ago period and fourth-quarter 2021.
Systems: Revenues from this segment were $37.2 million (18.9% of revenues), up 34.3% year over year but down 4.9% sequentially.
Regional Details
Revenues generated from Taiwan (accounting for 27% of revenues), South Korea (14%), Malaysia (11%) and Japan (5%) were $53.1 million, $27.5 million, $25.6 million, $22.2 million and $9.4 million, respectively. The respective revenues increased 16.4%, 44%, 158.1% and 1.1% year over year.
Then again, revenues generated from China (19%), the United States (13%), Singapore (6%), Europe (4%) and the Rest of World (1%) were $38.4 million, $25.6 million, $10.9 million, $8.4 million and $1.7 million, respectively. The respective revenues were down 9.9%, 13.2%, 45.2%, 16% and 15% from the year-ago period.
Operating Results
On a non-GAAP basis, gross margin expanded 4 basis points (bps) year over year to 49%. Also, the Probe card segment’s gross margin was 48.3%, expanding 4 bps year over year. The Systems segment’s gross margin was 49%, contracting 320 bps year over year.
Non-GAAP operating expenses increased 11.7% year over year to $51.9 million. As a percentage of total first-quarter revenues, the metric expanded 142 bps year over year to 26.3%.
Non-GAAP operating income was $44.7 million, up 19% year over year. As a percentage of revenues, it expanded 255 bps year over year to 22.7%.
Balance Sheet & Cash Flow
As of Mar 26, 2022, cash & cash equivalents and marketable securities were $296.4 million compared with $276.1 million on Dec 25, 2021.
Further, cash generated from operating activities was $44.2 million for the reported quarter, up from $38.9 million in the previous quarter.
Capital expenditure was $15.6 million, up from $15.1 million in the fourth quarter of 2021.
Further, free cash flow was $28.7 million for the reported quarter, up from $23.9 million in the previous quarter.
Guidance
FormFactor expects second-quarter 2022 revenues of $203 million (+/- $6 million). The Zacks Consensus Estimate for revenues is currently pegged at $201.9 million.
Further, management expects non-GAAP gross margin of 47% (+/- 1.5%).
On a non-GAAP basis, it projects earnings of 43 cents (+/- 4 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).
Investors interested in the broader technology sector can consider stocks like Jabil (JBL - Free Report) , Jack Henry & Associates (JKHY - Free Report) , and Broadcom (AVGO - Free Report) . While Jabil currently sports a Zacks Rank #1 (Strong Buy), Jack Henry & Associates and Broadcom carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Jabil has gained 5.5% over a year. The long-term earnings growth rate for JBL is currently projected at 12%.
Jack Henry & Associates has gained 16.9% over a year. The long-term earnings growth rate for JKHY is currently projected at 17%.
Broadcom has gained 20% over a year. The long-term earnings growth rate for AVGO is currently projected at 14.5%.