FormFactor, Inc.

Q3 revenue was $280.5 million, up $22.3 million, or 9%, from Q2. Non-GAAP gross margin was 56.5%, up 320 basis points sequentially, and non-GAAP earnings per fully diluted share were $1.04. GAAP gross margin was 54.7%, GAAP net income was $73.8 million, or $0.93 per fully diluted share, and non-GAAP net income was $82.3 million, or $1.04 per fully diluted share. Revenue was close to 40% higher than the same quarter a year ago. Systems revenue reached a record $59.5 million, up $11 million, or 23%, from Q2. For Q4, management guided to revenue of approximately $285 million, plus or minus $10 million; non-GAAP gross margin of 54%, plus or minus 150 basis points; non-GAAP operating expense of approximately $69 million, plus or minus $2 million; non-GAAP EPS of $0.95, plus or minus $0.09; and a non-GAAP tax rate of 15% to 19%. The company also said the midpoint of Q4 outlook puts it on track to exceed $1 billion of revenue in 2026.

Mike Slessor framed the quarter as validation of FormFactor’s strategy of serving high-performance compute and advanced packaging with a diversified product set and a more productive manufacturing footprint. He highlighted broad-based demand across foundry/logic, DRAM and systems, plus the early launch of Farmers Branch and the expanded partnerships with Teradyne and Advantest to support an open ecosystem. His tone was upbeat and confident, while also noting that the company is reaching the limits of its existing footprint and needs Farmers Branch to support the next leg of growth.

Aric McKinnis emphasized operating leverage, citing Q3 non-GAAP gross margin of 56.5%, non-GAAP operating expense of $64.4 million, free cash flow of $64.8 million and cash and investments of $399 million. He said about $10.5 million of gross margin benefit came from tariff refunds and favorable Quantum subcomponent costs that are not expected to recur, and that the baseline non-GAAP gross margin is now around 53% at Q3 volumes. He also said 2026 cash capex for Farmers Branch should be $100 million to $110 million, preproduction expense should be $25 million to $30 million in 2026, and the facility should exit 2027 with about $400 million of annual probe card revenue capability.

Analysts pressed on whether 2027 gross margins could improve despite the Farmers Branch ramp, and management said temporary ramp inefficiencies should largely be offset by higher volume and ongoing productivity gains, keeping margins near the current baseline. Questions on HBM de-specing drew a response that FormFactor is not seeing a significant impact and still expects continued HBM growth, especially given its differentiation in final stack test and higher-speed DRAM roadmaps. Analysts also asked about GPU, custom ASIC and TSMC-related growth, and management said those are early but meaningful opportunities that should expand in 2027 as Farmers Branch adds capacity; they added that TRITON growth is strong, customers remain bullish, and capacity is not expected to constrain systems growth.