FormFactor, Inc.

What they do

FormFactor designs, manufactures and sells probe cards, analytical probes, probe stations, thermal systems, cryogenic systems and related services along the full semiconductor product lifecycle, from characterization and design debug through qualification and production test. Probe cards and analytical probes are sold in the Probe Cards segment, while probe stations, thermal, and cryogenic systems are sold in the Systems segment. Its probe cards are customized to each customer's wafer and chip designs and test device types including logic SoC, DRAM and HBM, NAND and NOR flash, RF devices, image sensors, co-packaged optical ICs, and quantum computing processors.

Revenue drivers

• Probe Cards segment — Sells customized probe cards and analytical probes; the 10-K describes probe card technologies with over 150,000 contact elements, spacings as small as 40 microns, testing at millimeter-wave frequencies exceeding 80 GHz, and the 8-K cites High Bandwidth Memory as a driver of sequential revenue growth in this segment.
• Systems segment — Sells probe stations, thermal systems and cryogenic systems; the Q2 fiscal 2026 earnings release cites Co-Packaged Optics as driving a sequential revenue increase in this segment.
• End-market demand — The Q2 2026 release cites broad-based demand, with particular strength in Foundry Logic for the third-quarter outlook and momentum in Systems.

Recent performance

Q2 fiscal 2026 revenue was $258.2 million, up 14.2% from $226.1 million in Q1 fiscal 2026 and up 31.9% from $195.8 million in Q2 fiscal 2025. GAAP gross margin was 50.7% versus 38.4% in Q1 2026 and 37.3% in Q2 2025; non-GAAP gross margin was 53.3%. GAAP net income was $56.2 million, or $0.71 per diluted share, versus $20.4 million, or $0.26, in Q1 2026 and $9.1 million, or $0.12, in Q2 2025. GAAP operating cash flow was $61.8 million and free cash flow was $52.6 million. For the first six months of fiscal 2026, net income was $76.6 million versus $15.5 million a year earlier.

Strategy

The 10-K states FormFactor continues to evaluate acquisitions of businesses and technologies to build a semiconductor test and measurement market leader with greater scale, diversification and breadth from Lab to Fab. It has invested, and intends to continue investing, considerable resources in proprietary probe card design tools and processes. In January 2026 it adopted restructuring plans to better align its cost structure and support gross margin improvement. In Q2 fiscal 2026 it announced an expanded multi-year partnership with Keystone Microtech, reinforcing its presence in the Taiwan semiconductor ecosystem.

Risks

• Competition and pricing pressure — The 10-K states that competition has increased and is expected to intensify, and that increased competition has resulted in and may result in price reductions, reduced gross margins or loss of market share.
• Customer product and design changes — The 10-K notes semiconductor manufacturers may implement chip designs or methodologies that increase test throughput, reduce test content, or change test procedures, eliminating some or all of FormFactor's current product advantages.
• Tariff and trade exposure — The 10-Q discloses U.S. tariffs imposed under IEEPA beginning in 2025 and a February 20, 2026 Supreme Court ruling that such tariffs were not authorized; FormFactor paid these tariffs and is pursuing refunds through the CBP CAPE process, with roughly $0.8 million received as of June 27, 2026 and $7.0 million to $9.0 million of refunds anticipated in Q3 fiscal 2026.
• Restructuring execution — FormFactor adopted 2026 restructuring plans in January 2026, and the 10-Q attributes part of the increase in first-half fiscal 2026 net income to improved gross margins partially offset by higher restructuring charges.

Outlook

For the third quarter ending September 26, 2026, FormFactor guided to revenue of $270 million plus or minus $10 million, GAAP gross margin of 52.0% plus or minus 1.5%, and non-GAAP gross margin of 54.0% plus or minus 1.5%. GAAP net income per diluted share is guided to $0.75 plus or minus $0.09, with non-GAAP at $0.86 plus or minus $0.09. Management said it continues to see strong demand across end markets, with particular strength in Foundry Logic and continued momentum in Systems, and expects another quarter of record revenue and profitability.