Q3 FY2026
Filed Oct 29, 2026Silicom Reports Q3 2026 Results - Return to Non-GAAP Profitability ahead of initial expectations - - 71% revenue growth backed by strong Design Win momentum -
Third-quarter revenue rose 71% year over year to $26.7 million, the company returned to non-GAAP net income of $0.3 million, and it raised full-year 2026 revenue projections to $96 - $98 million.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Q3 2026 SalesGAAP | $26.72M | – | 71% |
| Q3 2026 Cost of salesGAAP | $18.70M | – | – |
| Q3 2026 Gross profitGAAP | $8.02M | – | – |
| Q3 2026 Research and development expensesGAAP | $5.55M | – | – |
| Q3 2026 Selling and marketing expensesGAAP | $1.95M | – | – |
| Q3 2026 General and administrative expensesGAAP | $1.38M | – | – |
| Q3 2026 Total operating expensesGAAP | $8.87M | – | – |
| Q3 2026 Operating income (loss)GAAP | −$848K | – | – |
| Q3 2026 Financial income (expenses), netGAAP | $643K | – | – |
| Q3 2026 Income (loss) before income taxesGAAP | −$205K | – | – |
| Q3 2026 Income taxesGAAP | $136K | – | – |
| Q3 2026 Net income (loss)GAAP | −$341K | – | 88% improvement |
| Q3 2026 Basic and diluted income (loss) per ordinary shareGAAP | $ (0.06 ) per ordinary share | – | – |
| Q3 2026 Weighted average number of ordinary shares used to compute basic and diluted income (loss) per shareGAAP | 5.78M | – | – |
| Q3 2026 Gross profitnon-GAAP | $8.09M | – | – |
| Q3 2026 Operating income (loss)non-GAAP | $20K | – | – |
| Q3 2026 Net income (loss)non-GAAP | $257K | – | – |
| Q3 2026 Basic income (loss) per ordinary sharenon-GAAP | $ 0.04 per ordinary share | – | – |
| Q3 2026 Diluted income (loss) per ordinary sharenon-GAAP | $ 0.04 per ordinary share | – | – |
| First nine months 2026 SalesGAAP | $69.62M | – | 55% |
| First nine months 2026 Cost of salesGAAP | $48.79M | – | – |
| First nine months 2026 Gross profitGAAP | $20.83M | – | – |
| First nine months 2026 Research and development expensesGAAP | $16.56M | – | – |
| First nine months 2026 Selling and marketing expensesGAAP | $5.81M | – | – |
| First nine months 2026 General and administrative expensesGAAP | $4.12M | – | – |
| First nine months 2026 Total operating expensesGAAP | $26.48M | – | – |
| First nine months 2026 Operating income (loss)GAAP | −$5.65M | – | – |
| First nine months 2026 Financial income (expenses), netGAAP | $1.20M | – | – |
| First nine months 2026 Income (loss) before income taxesGAAP | −$4.45M | – | – |
| First nine months 2026 Income taxesGAAP | $347K | – | – |
| First nine months 2026 Net income (loss)GAAP | −$4.79M | – | 46% improvement |
| First nine months 2026 Basic and diluted income (loss) per ordinary shareGAAP | $ (0.84 ) per ordinary share | – | – |
| First nine months 2026 Weighted average number of ordinary shares used to compute basic and diluted income (loss) per shareGAAP | 5.74M | – | – |
| First nine months 2026 Gross profitnon-GAAP | $21.06M | – | – |
| First nine months 2026 Operating income (loss)non-GAAP | −$2.98M | – | – |
| First nine months 2026 Net income (loss)non-GAAP | −$2.10M | – | 66% improvement |
| First nine months 2026 Basic income (loss) per ordinary sharenon-GAAP | $ (0.37 ) per ordinary share | – | – |
| First nine months 2026 Diluted income (loss) per ordinary sharenon-GAAP | $ (0.37 ) per ordinary share | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Q4 2026 and full-year 2026 outlook
- Revenue$27 - $28 million
- NoteFull-year 2026 revenue projections: $96 - $98 million
- NoteQ4 2026 revenue growth: 66% year-over-year growth at the upper end of the guidance
- NoteFull-year 2026 revenue growth: 57% year-over-year growth
What drove it
- Q3 2026 revenue growth was backed by strong Design Win momentum.
- The company added two new Design Wins during the quarter, bringing the year-to-date total to eight.
- Management cited highly predictable recurring revenues from the company’s Design Win platform in its Q4 outlook.
- Management cited opportunities across Edge systems, Smart NICs, FPGA, AI Inference, White Box Switches, and Post-Quantum Cryptography.
Concerns
- The company states that substantial revenue growth depends on a limited number of customers.
- The company identifies customer purchasing-cycle fluctuations and the timing of customer deployments as risks.
- The company identifies the pace of adoption of AI inference infrastructure and the timing and extent of market adoption of new products and Design Wins as risks.
- The company identifies wars in Gaza, Lebanon and with Iran, the war in the Ukraine, and potential global shipping-route disruptions as risks.
What to watch
- Q4 2026 revenue performance against guidance of $27 - $28 million.
- Delivery of full-year 2026 revenue projections of $96 - $98 million.
- Whether the company meets or exceeds the high end of its full-year Design Win guidance.
- Sustainability of non-GAAP profitability following Q3 2026 non-GAAP net income of $ 257 (US$ thousands).
- Inventory, reported at 72,791 (US$ thousands) as of September 30, 2026.
Balance sheet and cash flow
- Cash and cash equivalents: $ 13,741 (US$ thousands) as of September 30, 2026; $ 35,156 (US$ thousands) as of December 31, 2025.
- Short-term bank deposits: - (US$ thousands) as of September 30, 2026; 6,000 (US$ thousands) as of December 31, 2025.
- Marketable securities, current: 13,898 (US$ thousands) as of September 30, 2026; 6,958 (US$ thousands) as of December 31, 2025.
- Accounts receivables: Trade, net: 16,906 (US$ thousands) as of September 30, 2026; 9,194 (US$ thousands) as of December 31, 2025.
- Accounts receivables: Other: 4,784 (US$ thousands) as of September 30, 2026; 3,155 (US$ thousands) as of December 31, 2025.
- Inventories: 72,791 (US$ thousands) as of September 30, 2026; 52,650 (US$ thousands) as of December 31, 2025.
- Total current assets: 122,120 (US$ thousands) as of September 30, 2026; 113,113 (US$ thousands) as of December 31, 2025.
- Marketable securities, non-current: 17,317 (US$ thousands) as of September 30, 2026; 25,518 (US$ thousands) as of December 31, 2025.
- Property, plant and equipment, net: 3,802 (US$ thousands) as of September 30, 2026; 3,140 (US$ thousands) as of December 31, 2025.
- Intangible assets, net: 5,060 (US$ thousands) as of September 30, 2026; 2,569 (US$ thousands) as of December 31, 2025.
- Total assets: $ 156,133 (US$ thousands) as of September 30, 2026; $ 152,157 (US$ thousands) as of December 31, 2025.
- Trade accounts payable: $ 19,871 (US$ thousands) as of September 30, 2026; $ 11,116 (US$ thousands) as of December 31, 2025.
- Other accounts payable and accrued expenses: 10,472 (US$ thousands) as of September 30, 2026; 14,116 (US$ thousands) as of December 31, 2025.
- Lease Liabilities, current: 2,038 (US$ thousands) as of September 30, 2026; 2,019 (US$ thousands) as of December 31, 2025.
- Lease Liabilities, non-current: 3,960 (US$ thousands) as of September 30, 2026; 4,252 (US$ thousands) as of December 31, 2025.
- Total liabilities: 39,585 (US$ thousands) as of September 30, 2026; 34,668 (US$ thousands) as of December 31, 2025.
- Total shareholders' equity: 116,548 (US$ thousands) as of September 30, 2026; 117,489 (US$ thousands) as of December 31, 2025.
Analysis
Silicom reported a strong third quarter, with sales of $26.7 million, up 71% from $15.6 million in the third quarter of 2025. The first nine months also showed substantial expansion, as revenue rose 55% to $69.6 million. Management attributed growth to strong Design Win momentum and said the two Design Wins added during the quarter brought the year-to-date total to eight.
The period showed a material improvement in profitability. GAAP net loss narrowed to $0.3 million from $2.8 million in the prior-year quarter, while non-GAAP net income was $0.3 million compared with a non-GAAP net loss of $2.1 million. Non-GAAP operating income was $20 (US$ thousands), compared with a non-GAAP operating loss of $2,432 (US$ thousands) a year earlier. GAAP operating income remained a loss of $848 (US$ thousands).
For the first nine months, the company remained unprofitable, reporting a GAAP net loss of $4.8 million and a non-GAAP net loss of $2.1 million. However, both measures improved materially from the first nine months of 2025. Research and development expenses, selling and marketing expenses, and general and administrative expenses were all higher year over year for both the quarter and the nine-month period, while the increase in gross profit supported the improved operating result.
The balance sheet showed cash and cash equivalents of $13,741 (US$ thousands), current marketable securities of 13,898 (US$ thousands), and non-current marketable securities of 17,317 (US$ thousands) at September 30, 2026. Inventories were 72,791 (US$ thousands), and trade accounts payable were $19,871 (US$ thousands). No operating cash flow, free cash flow, debt balance, dividend, or share-repurchase activity was reported in the release.
Management raised its full-year 2026 revenue projections once again to $96 - $98 million and guided fourth-quarter revenue to $27 - $28 million. The outlook is based on what the company describes as highly predictable recurring revenues from its Design Win platform. The central execution markers are delivery against the Q4 and full-year revenue ranges, further conversion of the Design Win pipeline, and whether Q3 non-GAAP profitability is sustained.
Management, verbatim
We are pleased to report outstanding third quarter revenues of $26.7 million, a 71% increase over Q3 2025. Driven by strong execution and the significant leverage inherent in our business model, we returned to non-GAAP profitability well ahead of our initial expectations.
Liron Eizenman, President and CEO
Our growth continues to be fueled by strong Design Win momentum. The Design Wins we secure today drive growth for years to come, making them one of the most important indicators of our future performance.
Liron Eizenman, President and CEO
Taken together, these achievements demonstrate clearly that Silicom has passed an inflection point. Customer demand continues to expand, growth momentum continues to build, and our return to profitability marks a significant milestone.
Liron Eizenman, President and CEO
Not in the filing
stated, not guessed- Prior-quarter financial metrics were not reported.
- Gross margin was not reported.
- Operating cash flow was not reported.
- Free cash flow was not reported.
- Debt was not reported.
- Capital-return activity, including dividends and share repurchases, was not reported.
- Revenue by reportable segment was not reported.
- A prior outlook section was not provided, so comparison of actual results with prior guidance is unavailable.
- Guidance for gross margin, operating expenses, and tax rate was not reported.
- Cash-flow statement line items were not reported.
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.