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FORM's Q3 earnings surged 215.2% year over year, while revenues rose 38.4% to a record $280.5 million.
FORM's Systems revenues jumped 63.8%, driven by strong demand for TRITON photonics in CPO.
FORM projects Q4 revenues of $285 million, putting annual sales on track to exceed $1 billion.
FormFactor (FORM - Free Report) delivered third-quarter 2026 non-GAAP earnings of $1.04 per share, up 215.2% year over year, and beat the Zacks Consensus Estimate by 20.93%.
Revenues increased 38.4% year over year to $280.5 million and surpassed the consensus mark of $271 million by 3.68%. Broad-based demand across foundry and logic, DRAM and co-packaged optics helped FORM post its fourth consecutive quarterly revenue record. Foundry and Logic revenues increased 44.2% year over year, while Systems revenues jumped 63.8%.
FORM’s Probe Card Revenues Advance
Probe Card revenues reached $221.1 million, increasing 32.9% year over year. The segment benefited from growing demand for semiconductor testing across high-performance computing and advanced memory applications.
Foundry and Logic revenues rose 44.2% year over year to $134 million, representing 10% sequential growth. Strength across data-center CPUs, networking and emerging GPU applications supported performance. FORM highlighted growing demand for CPUs used in agentic AI applications, alongside opportunities in hyperscaler custom ASICs.
FormFactor, Inc. Price, Consensus and EPS Surprise
FORM shipped probe cards for a GPU design to a leading foundry in multimillion-dollar volumes during the quarter. The company expects to gain additional share in GPU and custom ASIC applications in 2027 as new manufacturing capacity becomes available.
FormFactor’s DRAM Business Maintains Momentum
DRAM revenues increased 24.5% year over year to $84.9 million, remaining essentially unchanged from the second-quarter record of $85 million.
The revenue mix shifted toward DDR5 from high-bandwidth memory as customers adjusted wafer production to capitalize on higher DDR pricing. Despite the less favorable mix, manufacturing cost reductions and efficiency improvements supported stronger profitability.
Management expects continued demand for HBM, supported by ongoing development of HBM4E and HBM5 designs. FORM's SmartMatrix technology remains differentiated in high-speed testing of completed HBM stacks.
FORM’s Systems Segment Sets Revenue Record
Systems revenues surged 63.8% year over year to a record $59.5 million, increasing 22.6% sequentially. Growth was primarily driven by accelerating demand for TRITON photonics systems used in co-packaged optics applications.
FORM now expects TRITON revenues to exceed $30 million in 2026, compared with its initial projection of $10-$20 million. The company is also seeing adoption of its optical probing technologies in near-package optics and pluggable applications.
Management expects continued photonics growth in 2027 and does not anticipate manufacturing capacity becoming a constraint for the Systems business.
FormFactor’s Margins Reflect Operating Leverage
Non-GAAP gross margin expanded to 56.5% from 41% in the year-ago quarter and 53.3% in the preceding quarter.
Approximately $10.5 million of the quarterly gross margin benefit came primarily from tariff refunds and favorable Quantum business subcomponent costs. Excluding these nonrecurring items, the underlying gross margin was between 52.5% and 53%.
Non-GAAP operating expenses increased 18% year over year to $64.4 million but declined from $65.7 million sequentially.
Non-GAAP operating income surged to $94.1 million from $28.6 million a year earlier, reflecting higher revenues, improved manufacturing efficiency and spending discipline.
FORM’s Cash Flow and Liquidity Strengthen
As of Sept. 26, 2026, cash, cash equivalents and marketable securities totaled $395.4 million compared with $345.6 million at the end of the preceding quarter.
Cash provided by operating activities increased to $104.3 million from $27 million in the year-ago quarter. Free cash flow reached $64.8 million compared with $19.7 million a year earlier.
FORM lowered its projected 2026 Farmers Branch cash capital expenditures to $100-$110 million from $140-$170 million, reflecting changes in payment timing rather than project scope.
The new manufacturing facility has begun production shipments. Management expects it to reach approximately $400 million in annual probe card production capability by the end of 2027.
FormFactor Offers Upbeat Q4 Guidance
For the fourth quarter of 2026, FormFactor expects revenues of $285 million, plus or minus $10 million, reflecting continued broad-based demand.
Non-GAAP gross margin is projected at 54%, plus or minus 150 basis points. Non-GAAP earnings are expected to be 95 cents per share, plus or minus 9 cents.
Management anticipates approximately $69 million in non-GAAP operating expenses, including Farmers Branch ramp costs. The expected non-GAAP effective tax rate ranges from 15% to 19%.
At the midpoint of its fourth-quarter outlook, FORM expects 2026 revenues to exceed $1 billion for the first time. The company continues to target a longer-term operating model of $1.6 billion in revenues, 55% gross margin and $5 in non-GAAP earnings per share.
Zacks Rank & Stocks to Consider
FormFactor currently carries a Zacks Rank #3 (Hold).
Both Shopify and AMETEK are expected to report their respective quarterly results on Nov. 3, while Affirm will report its on Nov. 5. Shares of Affirm have dropped 1.5%, while Shopify and AMETEK have returned 4.5% and 20.8%, year to date, respectively.
View the Zacks #1 Rank List
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FormFactor's Q3 Earnings Beat Estimates, Revenues Increase Y/Y
Key Takeaways
FormFactor (FORM - Free Report) delivered third-quarter 2026 non-GAAP earnings of $1.04 per share, up 215.2% year over year, and beat the Zacks Consensus Estimate by 20.93%.
Revenues increased 38.4% year over year to $280.5 million and surpassed the consensus mark of $271 million by 3.68%. Broad-based demand across foundry and logic, DRAM and co-packaged optics helped FORM post its fourth consecutive quarterly revenue record. Foundry and Logic revenues increased 44.2% year over year, while Systems revenues jumped 63.8%.
FORM’s Probe Card Revenues Advance
Probe Card revenues reached $221.1 million, increasing 32.9% year over year. The segment benefited from growing demand for semiconductor testing across high-performance computing and advanced memory applications.
Foundry and Logic revenues rose 44.2% year over year to $134 million, representing 10% sequential growth. Strength across data-center CPUs, networking and emerging GPU applications supported performance. FORM highlighted growing demand for CPUs used in agentic AI applications, alongside opportunities in hyperscaler custom ASICs.
FormFactor, Inc. Price, Consensus and EPS Surprise
FormFactor, Inc. price-consensus-eps-surprise-chart | FormFactor, Inc. Quote
FORM shipped probe cards for a GPU design to a leading foundry in multimillion-dollar volumes during the quarter. The company expects to gain additional share in GPU and custom ASIC applications in 2027 as new manufacturing capacity becomes available.
FormFactor’s DRAM Business Maintains Momentum
DRAM revenues increased 24.5% year over year to $84.9 million, remaining essentially unchanged from the second-quarter record of $85 million.
The revenue mix shifted toward DDR5 from high-bandwidth memory as customers adjusted wafer production to capitalize on higher DDR pricing. Despite the less favorable mix, manufacturing cost reductions and efficiency improvements supported stronger profitability.
Management expects continued demand for HBM, supported by ongoing development of HBM4E and HBM5 designs. FORM's SmartMatrix technology remains differentiated in high-speed testing of completed HBM stacks.
FORM’s Systems Segment Sets Revenue Record
Systems revenues surged 63.8% year over year to a record $59.5 million, increasing 22.6% sequentially. Growth was primarily driven by accelerating demand for TRITON photonics systems used in co-packaged optics applications.
FORM now expects TRITON revenues to exceed $30 million in 2026, compared with its initial projection of $10-$20 million. The company is also seeing adoption of its optical probing technologies in near-package optics and pluggable applications.
Management expects continued photonics growth in 2027 and does not anticipate manufacturing capacity becoming a constraint for the Systems business.
FormFactor’s Margins Reflect Operating Leverage
Non-GAAP gross margin expanded to 56.5% from 41% in the year-ago quarter and 53.3% in the preceding quarter.
Approximately $10.5 million of the quarterly gross margin benefit came primarily from tariff refunds and favorable Quantum business subcomponent costs. Excluding these nonrecurring items, the underlying gross margin was between 52.5% and 53%.
Non-GAAP operating expenses increased 18% year over year to $64.4 million but declined from $65.7 million sequentially.
Non-GAAP operating income surged to $94.1 million from $28.6 million a year earlier, reflecting higher revenues, improved manufacturing efficiency and spending discipline.
FORM’s Cash Flow and Liquidity Strengthen
As of Sept. 26, 2026, cash, cash equivalents and marketable securities totaled $395.4 million compared with $345.6 million at the end of the preceding quarter.
Cash provided by operating activities increased to $104.3 million from $27 million in the year-ago quarter. Free cash flow reached $64.8 million compared with $19.7 million a year earlier.
FORM lowered its projected 2026 Farmers Branch cash capital expenditures to $100-$110 million from $140-$170 million, reflecting changes in payment timing rather than project scope.
The new manufacturing facility has begun production shipments. Management expects it to reach approximately $400 million in annual probe card production capability by the end of 2027.
FormFactor Offers Upbeat Q4 Guidance
For the fourth quarter of 2026, FormFactor expects revenues of $285 million, plus or minus $10 million, reflecting continued broad-based demand.
Non-GAAP gross margin is projected at 54%, plus or minus 150 basis points. Non-GAAP earnings are expected to be 95 cents per share, plus or minus 9 cents.
Management anticipates approximately $69 million in non-GAAP operating expenses, including Farmers Branch ramp costs. The expected non-GAAP effective tax rate ranges from 15% to 19%.
At the midpoint of its fourth-quarter outlook, FORM expects 2026 revenues to exceed $1 billion for the first time. The company continues to target a longer-term operating model of $1.6 billion in revenues, 55% gross margin and $5 in non-GAAP earnings per share.
Zacks Rank & Stocks to Consider
FormFactor currently carries a Zacks Rank #3 (Hold).
Shopify (SHOP - Free Report) , AMETEK (AME - Free Report) and Affirm (AFRM - Free Report) are some better-ranked stocks in the broader Zacks Computer and Technology sector. Each of the three stocks sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Both Shopify and AMETEK are expected to report their respective quarterly results on Nov. 3, while Affirm will report its on Nov. 5. Shares of Affirm have dropped 1.5%, while Shopify and AMETEK have returned 4.5% and 20.8%, year to date, respectively.