Q2 FY2026
Filed Aug 6, 2026Nova Reports Record Second Quarter 2026 Financial Results
Nova reported record quarterly revenue, GAAP net income and non-GAAP net income, with revenue up 8% QoQ and 16% YoY. Third-quarter revenue guidance of $277 million to $287 million and diluted EPS guidance above the second-quarter reported levels point to continued growth, although gross margin declined from both comparison periods and operating expenses increased.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenuesGAAP | $254,958 (U.S. dollars in thousands) | 8% | 16% |
| Gross profitGAAP | 144,161 (U.S. dollars in thousands) | – | – |
| Gross marginGAAP | 56.5% | – | – |
| Non-GAAP gross profitnon-GAAP | 148,189 (U.S. dollars in thousands) | – | – |
| Non-GAAP gross margin as a percentage of revenuesnon-GAAP | 58% | – | – |
| Total operating expensesGAAP | $68.0 million | – | – |
| Research and development, netGAAP | 39,257 (U.S. dollars in thousands) | – | – |
| Sales and marketingGAAP | 21,333 (U.S. dollars in thousands) | – | – |
| General and administrativeGAAP | 7,386 (U.S. dollars in thousands) | – | – |
| Operating incomeGAAP | 76,185 (U.S. dollars in thousands) | – | – |
| GAAP operating margin as a percentage of revenuesGAAP | 30% | – | – |
| Non-GAAP operating incomenon-GAAP | 85,248 (U.S. dollars in thousands) | – | – |
| Non-GAAP operating margin as a percentage of revenuesnon-GAAP | 33% | – | – |
| Financing income, netGAAP | 12,920 (U.S. dollars in thousands) | – | – |
| Income before taxes on incomeGAAP | 89,105 (U.S. dollars in thousands) | – | – |
| Income tax expensesGAAP | 14,095 (U.S. dollars in thousands) | – | – |
| Net incomeGAAP | $75.0 million | 8% | 3% |
| Non-GAAP net incomenon-GAAP | $86.5 million | 8% | 14% |
| Basic earnings per shareGAAP | 2.36 | – | – |
| Diluted earnings per shareGAAP | $2.20 | 8% | 3% |
| Non-GAAP basic earnings per sharenon-GAAP | 2.72 | – | – |
| Non-GAAP diluted earnings per sharenon-GAAP | $2.51 | 8% | 14% |
| Shares used for calculation of earnings per share, basicGAAP | 31,800 (in thousands) | – | – |
| Shares used for calculation of earnings per share, dilutedGAAP | 34,450 (in thousands) | – | – |
| Net cash provided by operating activitiesGAAP | 40,918 (U.S. dollars in thousands) | – | – |
| Purchase of property and equipmentGAAP | (2,494) (U.S. dollars in thousands) | – | – |
| Net cash provided by (used in) investing activitiesGAAP | (338,006) (U.S. dollars in thousands) | – | – |
| Changes in cash and cash equivalents and restricted cashGAAP | (296,970) (U.S. dollars in thousands) | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| ProductsRecord revenue from Advanced logic devices was driven by transition to Gate-All-Around and demand for advanced nodes. | 201,472 (U.S. dollars in thousands) | – | – |
| ServicesNot separately discussed in the filing. | 53,486 (U.S. dollars in thousands) | – | – |
Third quarter 2026, the period ending September 30, 2026 outlook
- Revenue$277 million to $287 million
- Note$2.46 to $2.61 in diluted GAAP EPS
- Note$2.70 to $2.85 in diluted non-GAAP EPS
- NoteEstimated GAAP net income per diluted share: 2.46 to 2.61
- NoteEstimated non-GAAP net income per diluted share: 2.70 to 2.85
- NoteEstimated non-GAAP items per diluted share: Stock-based compensation 0.19 to 0.19; Amortization of acquired intangible assets 0.07 to 0.07; Amortization of debt issuance costs 0.03 to 0.03; Tax effect of non-GAAP adjustments (0.05) to (0.05)
Capital returns
- Purchases of treasury shares: - (U.S. dollars in thousands) for the three months ended June 30, 2026.
- Purchases of treasury shares: - (U.S. dollars in thousands) for the six months ended June 30, 2026, compared with (20,002) (U.S. dollars in thousands) for the six months ended June 30, 2025.
What drove it
- Record quarterly revenue of $255.0 million was supported by broad-based customer demand, continued market share gains, and deeper customer engagement across leading-edge device segments.
- Record revenue from Advanced logic devices was driven by transition to Gate-All-Around and demand for advanced nodes.
- Record revenue of Advanced Packaging solutions was driven by capacity increases across logic and memory manufacturing.
- Management cited record sales of its front-end chemical metrology solution and Sentronics dimensional metrology solutions for advanced packaging.
- Product revenues were 201,472 (U.S. dollars in thousands), while services revenues were 53,486 (U.S. dollars in thousands).
Concerns
- Gross margin was 56.5%, compared with 57.7% in the first quarter of 2026 and 57.8% in the second quarter of 2025.
- Non-GAAP gross margin as a percentage of revenues was 58%, compared with 59% in March 31, 2026 and 60% in June 30, 2025.
- Total operating expenses were $68.0 million, compared with $64.9 million in the first quarter of 2026 and $61.6 million in the second quarter of 2025.
- Financing income, net was 12,920 (U.S. dollars in thousands), compared with 15,177 (U.S. dollars in thousands) in the second quarter of 2025.
- Net cash provided by operating activities was 40,918 (U.S. dollars in thousands), compared with 45,661 (U.S. dollars in thousands) in the second quarter of 2025.
- Trade accounts receivable, net was 210,279 (U.S. dollars in thousands) as of June 30, 2026, compared with 151,929 (U.S. dollars in thousands) as of December 31, 2025.
What to watch
- Delivery against third-quarter revenue guidance of $277 million to $287 million.
- Delivery against third-quarter diluted GAAP EPS guidance of $2.46 to $2.61 and diluted non-GAAP EPS guidance of $2.70 to $2.85.
- Whether transition to Gate-All-Around, advanced-node demand, and advanced-packaging capacity increases continue to support revenue growth.
- Gross-margin progression following second-quarter gross margin of 56.5%.
- Operating-expense progression after total operating expenses of $68.0 million.
- Operating cash-flow development after 40,918 (U.S. dollars in thousands) in the second quarter of 2026.
Balance sheet and cash flow
- Cash and cash equivalents: 124,846 (U.S. dollars in thousands) as of June 30, 2026, compared with 214,462 (U.S. dollars in thousands) as of December 31, 2025.
- Short-term interest-bearing bank deposits: 397,082 (U.S. dollars in thousands) as of June 30, 2026, compared with 512,250 (U.S. dollars in thousands) as of December 31, 2025.
- Current marketable securities: 499,071 (U.S. dollars in thousands) as of June 30, 2026, compared with 321,798 (U.S. dollars in thousands) as of December 31, 2025.
- Non-current marketable securities: 685,471 (U.S. dollars in thousands) as of June 30, 2026, compared with 584,731 (U.S. dollars in thousands) as of December 31, 2025.
- Convertible senior notes, net, current: 733,588 (U.S. dollars in thousands) as of June 30, 2026, compared with - (U.S. dollars in thousands) as of December 31, 2025.
- Convertible senior notes, net, non-current: - (U.S. dollars in thousands) as of June 30, 2026, compared with 731,680 (U.S. dollars in thousands) as of December 31, 2025.
- Trade accounts receivable, net: 210,279 (U.S. dollars in thousands) as of June 30, 2026, compared with 151,929 (U.S. dollars in thousands) as of December 31, 2025.
- Inventories: 185,273 (U.S. dollars in thousands) as of June 30, 2026, compared with 183,671 (U.S. dollars in thousands) as of December 31, 2025.
- Net cash provided by operating activities: 80,995 (U.S. dollars in thousands) for the six months ended June 30, 2026, compared with 114,210 (U.S. dollars in thousands) for the six months ended June 30, 2025.
- Investment in marketable securities: (364,260) (U.S. dollars in thousands) for the three months ended June 30, 2026, compared with (74,529) (U.S. dollars in thousands) for the three months ended June 30, 2025.
- Proceeds from maturity of marketable securities: 92,735 (U.S. dollars in thousands) for the three months ended June 30, 2026, compared with 51,092 (U.S. dollars in thousands) for the three months ended June 30, 2025.
Analysis
Nova reported record second-quarter revenue of $255.0 million, up 8% from the first quarter of 2026 and 16% from the second quarter of 2025. Product revenue was 201,472 (U.S. dollars in thousands) and services revenue was 53,486 (U.S. dollars in thousands). Management attributed the result to broad-based customer demand, market-share gains and deeper customer engagement, highlighting Advanced logic devices, the transition to Gate-All-Around, advanced-node demand, and Advanced Packaging capacity increases across logic and memory manufacturing.
Profitability reached record levels in absolute terms. GAAP net income was $75.0 million, or $2.20 per diluted share, and non-GAAP net income was $86.5 million, or $2.51 per diluted share. GAAP operating income was 76,185 (U.S. dollars in thousands), while non-GAAP operating income was 85,248 (U.S. dollars in thousands). Gross-margin trends require attention: GAAP gross margin was 56.5%, below 57.7% in the first quarter of 2026 and 57.8% in the second quarter of 2025. Non-GAAP gross margin as a percentage of revenues was 58%, compared with 59% and 60%, respectively.
Operating expenses were $68.0 million, compared with $64.9 million in the first quarter of 2026 and $61.6 million in the second quarter of 2025. Research and development, net was 39,257 (U.S. dollars in thousands), sales and marketing was 21,333 (U.S. dollars in thousands), and general and administrative expense was 7,386 (U.S. dollars in thousands). Financing income, net was 12,920 (U.S. dollars in thousands), compared with 15,177 (U.S. dollars in thousands) a year earlier. The non-GAAP reconciliation identifies stock-based compensation, amortization of acquired intangible assets, amortization of debt issuance costs, revaluation of operating lease and intercompany loans, and tax effects among the items separating GAAP and non-GAAP net income.
Cash generation was 40,918 (U.S. dollars in thousands) from operating activities in the quarter, compared with 45,661 (U.S. dollars in thousands) in the second quarter of 2025. Cash and cash equivalents were 124,846 (U.S. dollars in thousands) at June 30, 2026; short-term interest-bearing bank deposits were 397,082 (U.S. dollars in thousands); current and non-current marketable securities were 499,071 and 685,471 (U.S. dollars in thousands), respectively. Convertible senior notes, net of 733,588 (U.S. dollars in thousands) were classified as current at June 30, 2026, versus 731,680 (U.S. dollars in thousands) classified as non-current at December 31, 2025. No treasury-share purchases were reported for either the quarter or the first six months of 2026.
For the third quarter of 2026, management expects revenue of $277 million to $287 million, diluted GAAP EPS of $2.46 to $2.61, and diluted non-GAAP EPS of $2.70 to $2.85. The outlook calls for revenue and both GAAP and non-GAAP diluted EPS ranges above the second-quarter reported figures. The principal reported operating issue for the next period is whether continued Advanced logic and Advanced Packaging demand can sustain growth while gross-margin trends and higher operating expenses are managed.
Management, verbatim
This quarter marks a significant milestone for Nova, surpassing $250 million in quarterly revenue and $2.50 in quarterly non-GAAP EPS, reflecting the run-rate envisioned in our long-term strategic plan.
Gaby Waisman, President and CEO
We delivered record sales across several of our product lines, including our front-end chemical metrology solution and our Sentronics dimensional metrology solutions for advanced packaging.
Gaby Waisman, President and CEO
These results were supported by broad-based customer demand, continued market share gains, and deeper customer engagement across leading-edge device segments. As a result, we enter the coming quarters with increased visibility, a robust opportunity pipeline, and confidence in our ability to deliver another year of profitable growth.
Gaby Waisman, President and CEO
Not in the filing
stated, not guessed- Prior-quarter product revenue was not provided.
- Prior-quarter services revenue was not provided.
- Percentage changes for product revenue and services revenue were not provided.
- Free cash flow was not reported.
- Dividend declarations or payments were not reported.
- Third-quarter gross-margin guidance was not provided.
- Third-quarter operating-expense guidance was not provided.
- Third-quarter tax-rate guidance was not provided.
- Previous-quarter outlook was not provided, so no comparison of actual results with prior guidance is available.
- Debt maturities, interest rates, and debt-repayment terms were not provided.
AlphaAI analysis generated 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 cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.