third quarter of fiscal 2026
Filed Oct 28, 2026FORMFACTOR, INC. REPORTS 2026 THIRD QUARTER RESULTS
Quarterly revenue reached $280.5 million, up 8.6% sequentially and 38.4% from the third quarter of fiscal 2025, while GAAP and non-GAAP gross margins, earnings, operating cash flow, and free cash flow all improved versus both comparison periods. The company said revenue, gross margin, and earnings per share exceeded the high end of its outlook range and issued fourth-quarter revenue guidance of $285 million +/- $10 million.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Revenue, three months ended September 26, 2026 (in thousands)GAAP | $280.5M | 8.6% | 38.4% |
| Cost of revenues, three months ended September 26, 2026 (in thousands)GAAP | 127.2M | – | – |
| Gross profit, three months ended September 26, 2026 (in thousands)GAAP | $153.4M | – | – |
| Gross margin, three months ended September 26, 2026GAAP | 54.7 % | – | – |
| Non-GAAP gross profit, three months ended September 26, 2026 (in thousands)non-GAAP | $158.5M | – | – |
| Non-GAAP gross margin, three months ended September 26, 2026non-GAAP | 56.5 % | – | – |
| Research and development expense, three months ended September 26, 2026 (in thousands)GAAP | 29.50M | – | – |
| Selling, general and administrative expense, three months ended September 26, 2026 (in thousands)GAAP | 35.92M | – | – |
| Factory start-up costs, three months ended September 26, 2026 (in thousands)GAAP | 6.38M | – | – |
| Total operating expenses, three months ended September 26, 2026 (in thousands)GAAP | $71.80M | – | – |
| Non-GAAP operating expenses, three months ended September 26, 2026 (in thousands)non-GAAP | $64.42M | – | – |
| Operating income, three months ended September 26, 2026 (in thousands)GAAP | $81.60M | – | – |
| Non-GAAP operating income, three months ended September 26, 2026 (in thousands)non-GAAP | $94.07M | – | – |
| Interest income, net, three months ended September 26, 2026 (in thousands)GAAP | 3.34M | – | – |
| Other income (expense), net, three months ended September 26, 2026 (in thousands)GAAP | −143K | – | – |
| Income before income taxes and equity investment, three months ended September 26, 2026 (in thousands)GAAP | 84.79M | – | – |
| Provision for income taxes, three months ended September 26, 2026 (in thousands)GAAP | 13.11M | – | – |
| Income (loss) from equity investment, three months ended September 26, 2026 (in thousands)GAAP | 2.14M | – | – |
| Net income, three months ended September 26, 2026 (in thousands)GAAP | $73.82M | – | – |
| Non-GAAP net income, three months ended September 26, 2026 (in thousands)non-GAAP | $82.28M | – | – |
| Net income per share, basic, three months ended September 26, 2026GAAP | $ 0.94 | – | – |
| Net income per share, diluted, three months ended September 26, 2026GAAP | $ 0.93 | – | – |
| Non-GAAP net income per share, basic, three months ended September 26, 2026non-GAAP | $ 1.05 | – | – |
| Non-GAAP net income per share, diluted, three months ended September 26, 2026non-GAAP | $ 1.04 | – | – |
| GAAP net cash provided by operating activities, three months ended September 26, 2026 (in thousands)GAAP | $104.3M | – | – |
| Free cash flow, three months ended September 26, 2026 (in thousands)non-GAAP | $64.78M | – | – |
| GAAP net cash provided by (used in) investing activities, three months ended September 26, 2026 (in thousands)GAAP | −$62.04M | – | – |
| GAAP net cash used in financing activities, three months ended September 26, 2026 (in thousands)GAAP | −$14.65M | – | – |
| Revenue, nine months ended September 26, 2026 (in thousands)GAAP | $764.9M | – | – |
| Gross profit, nine months ended September 26, 2026 (in thousands)GAAP | $371.1M | – | – |
| Gross margin, nine months ended September 26, 2026GAAP | 48.5 % | – | – |
| Operating income, nine months ended September 26, 2026 (in thousands)GAAP | $156.0M | – | – |
| Non-GAAP operating income, nine months ended September 26, 2026 (in thousands)non-GAAP | $214.8M | – | – |
| Net income, nine months ended September 26, 2026 (in thousands)GAAP | $150.4M | – | – |
| Non-GAAP net income, nine months ended September 26, 2026 (in thousands)non-GAAP | $191.8M | – | – |
| Net income per share, diluted, nine months ended September 26, 2026GAAP | $ 1.89 | – | – |
| Non-GAAP net income per share, diluted, nine months ended September 26, 2026non-GAAP | $ 2.42 | – | – |
| GAAP net cash provided by operating activities, nine months ended September 26, 2026 (in thousands)GAAP | $211.0M | – | – |
| Free cash flow, nine months ended September 26, 2026 (in thousands)non-GAAP | $148.1M | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
fourth quarter ending December 26, 2026 outlook
- Revenue$285 million +/- $10 million
- Gross marginGAAP 52.3% +/- 1.5%; non-GAAP 54.0% +/- 1.5%
- NoteGAAP reconciling items: $4.9 million
- NoteGAAP net income per diluted share: $0.84 +/- $0.09
- NoteGAAP reconciling items for net income per diluted share: $0.11
- NoteNon-GAAP net income per diluted share: $0.95 +/- $0.09
- NoteThis outlook assumes consistent foreign currency rates.
Capital returns
- Purchase of common stock through stock repurchase program, nine months ended September 26, 2026: —
- Purchase of common stock through stock repurchase program, nine months ended September 27, 2025: (26,244)
- Proceeds from issuances of common stock, nine months ended September 26, 2026: 11,102
- Tax withholdings related to net share settlements of equity awards, nine months ended September 26, 2026: (35,627)
What drove it
- The company cited continued strong broad-based demand.
- Foundry & Logic delivered ten percent sequential growth, with broad-based strength across multiple end applications.
- Systems segment revenue grew greater than twenty percent sequentially on higher demand for co-packaged optics.
- The company said it increased output within its existing manufacturing footprint.
- Following quarter end, FormFactor announced an expansion of its longstanding partnership with Teradyne aimed at accelerating development, validation, and high-volume production of next-generation semiconductor applications enabling high-performance compute.
Concerns
- Productivity gains from the existing manufacturing footprint are moderating as the company approaches its capacity limits.
- Factory start-up costs were 6,375 (in thousands) in the third quarter of fiscal 2026.
- The filing identifies risks from export controls, tariffs and other trade barriers, customer-specific demand, demand volatility and cyclicality, supply chain disruption, and macroeconomic and geopolitical conditions.
What to watch
- Execution in bringing the new Farmers Branch factory online and its ability to provide additional capacity.
- Whether continued broad-based demand supports fourth-quarter revenue of $285 million +/- $10 million.
- Gross-margin performance against fourth-quarter GAAP guidance of 52.3% +/- 1.5% and non-GAAP guidance of 54.0% +/- 1.5%.
- Demand for co-packaged optics and the continuation of Foundry & Logic strength across end applications.
- The effect of moderating productivity gains as the existing manufacturing footprint approaches capacity limits.
Balance sheet and cash flow
- Cash and cash equivalents as of September 26, 2026: $ 138,179 (in thousands)
- Marketable securities as of September 26, 2026: 257,233 (in thousands)
- Cash, cash equivalents and restricted cash as of September 26, 2026: $ 141,769 (in thousands)
- Property, plant and equipment, net of accumulated depreciation as of September 26, 2026: 300,369 (in thousands)
- Acquisition of property, plant and equipment, nine months ended September 26, 2026: (64,439) (in thousands)
- Long-term debt, less current portion, net of unamortized issuance costs as of September 26, 2026: 10,197 (in thousands)
- Current portion of long-term debt, net of unamortized issuance costs as of September 26, 2026: 1,161 (in thousands)
- Principal repayments on term loans, nine months ended September 26, 2026: (850) (in thousands)
- Total assets as of September 26, 2026: $ 1,431,701 (in thousands)
- Total liabilities as of September 26, 2026: 250,417 (in thousands)
- Total stockholders’ equity as of September 26, 2026: 1,181,284 (in thousands)
Analysis
FormFactor reported a fourth consecutive quarterly revenue record, with third-quarter fiscal 2026 revenue of $280.5 million. Revenue increased 8.6% from $258.2 million in the second quarter of fiscal 2026 and 38.4% from $202.7 million in the third quarter of fiscal 2025. Management attributed the performance to broad-based demand, including ten percent sequential growth in Foundry & Logic and greater than twenty percent sequential growth in Systems segment revenue on higher demand for co-packaged optics.
Profitability expanded materially. GAAP gross margin was 54.7%, compared with 50.7% in the preceding quarter and 39.8% a year earlier. Non-GAAP gross margin was 56.5%, compared with 53.3% and 41.0%, respectively. GAAP operating income was $81,597 thousand and non-GAAP operating income was $94,069 thousand. GAAP net income was $73,820 thousand, or $0.93 per diluted share, while non-GAAP net income was $82,278 thousand, or $1.04 per diluted share.
Cash generation also improved. GAAP net cash provided by operating activities was $104,270 thousand, compared with $61,803 thousand in the second quarter and $26,991 thousand in the prior-year quarter. Free cash flow was $64,778 thousand, compared with $52,552 thousand and $19,658 thousand, respectively. Cash and cash equivalents were $138,179 thousand at September 26, 2026, with marketable securities of 257,233 thousand. Acquisition of property, plant and equipment was (64,439) thousand in the nine months ended September 26, 2026.
The fourth-quarter outlook calls for revenue of $285 million +/- $10 million, GAAP gross margin of 52.3% +/- 1.5%, non-GAAP gross margin of 54.0% +/- 1.5%, GAAP diluted EPS of $0.84 +/- $0.09, and non-GAAP diluted EPS of $0.95 +/- $0.09. Management said productivity gains in the existing footprint are moderating as capacity limits are approached, making the ramp of the Farmers Branch factory an important operational item. The filing also identifies factory start-up costs and trade, export-control, tariff, demand-volatility, and supply-chain risks as factors that could affect results.
Management, verbatim
FormFactor continued its strong momentum during the third quarter, delivering growth in revenue, gross margin, and earnings per share that exceeded the high end of our guidance.
Mike Slessor, CEO of FormFactor, Inc.
Our fourth-quarter outlook reflects continued broad-based strength in demand. While the productivity gains from our existing manufacturing footprint are moderating as we approach its capacity limits, we are bringing our new Farmers Branch factory online, which will provide additional capacity to support our growth.
Dr. Slessor
Not in the filing
stated, not guessed- Prior-quarter and prior-year percentage changes for metrics other than revenue were not explicitly reported.
- Revenue figures by geographic region, market segment, and customers with greater than 10% of total revenue were not included in the filing text.
- Segment revenue amounts for Foundry & Logic and Systems were not included in the filing text.
- Fourth-quarter operating-expense guidance was not provided.
- Fourth-quarter tax-rate guidance was not provided.
- A prior-quarter outlook was not provided, so comparison of actual results with prior guidance is unavailable.
- Dividend information was not provided.
- A reported income tax rate was not provided.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was checked against the filing text, and a metric whose value, prior period and change do not add up is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.