ACM Research, Inc. (ACMR) - Q1 2026 10-Q Summary
Business Context and Reporting Period
This report covers the quarterly period ended March 31, 2026. ACM Research, Inc. is a Delaware corporation supplying capital equipment for the global semiconductor industry. The company conducts the majority of its product development, manufacturing, and services through its subsidiary, ACM Research (Shanghai), Inc. (ACM Shanghai), in mainland China. As of March 31, 2026, ACM Research held a 73.6% ownership interest in ACM Shanghai, following a secondary share sale in February 2026.
Key Financial Metrics
| Metric (in thousands, except per share) | Q1 2026 | Q1 2025 |
|---|---|---|
| Revenue | $231,263 | $172,347 |
| Gross Profit | $107,238 | $82,550 |
| Gross Margin | 46.4% | 47.9% |
| Net Income (Total) | $26,235 | $25,013 |
| Net Income Attributable to ACMR | $17,307 | $20,380 |
| Diluted EPS (ACMR) | $0.24 | $0.30 |
| Operating Cash Flow | $(29,538) | $5,282 |
| Cash & Equivalents (Total) | $894,135 | $467,826 |
| Total Debt (Short + Long Term) | $328,141 | $N/A |
Note: Total Debt figure derived from Note 9 and Note 7. Q1 2025 debt figures not explicitly aggregated in the provided text.
Material Changes vs. Prior Period
- Revenue Growth: Revenue increased 34.2% year-over-year to $231.3 million. This was driven by a 204.9% surge in ECP (front-end and packaging) and furnace technologies ($84.2M) and a 62.0% increase in advanced packaging services ($24.5M). These gains were partially offset by a 5.5% decline in single wafer cleaning equipment revenue.
- Profitability: While total net income rose slightly (4.9%), net income attributable to ACMR shareholders decreased by 15.1% to $17.3 million. This was primarily due to a significant increase in net income attributable to non-controlling interests (up 92.7% to $8.9M) and a large foreign exchange loss.
- Foreign Exchange Impact: The company recorded a $9.3 million "Other expense, net" in Q1 2026, compared to $0.3 million in Q1 2025. This was largely driven by a $9.5 million unrealized foreign exchange loss on working capital due to RMB/USD fluctuations.
- Operating Expenses: Total operating expenses increased 25.2% to $71.1 million. R&D expenses rose 32.9% due to higher personnel costs and component costs for tool development. Stock-based compensation decreased by $4.2 million year-over-year.
- Cash Flow: Operating cash flow turned negative at $(29.5) million, compared to positive $5.3 million in the prior year. This was driven by a $29.5 million increase in inventory and a $20.6 million decrease in customer advances.
Guidance, Outlook, and Risks
- Outlook: Management expects gross margins to remain between 42.0% and 48.0% for the foreseeable future. Operating expenses are expected to increase in absolute dollars as the company invests in sales, marketing, and R&D to support global expansion.
- Shipments: Total shipments for Q1 2026 were $240.7 million (up from $156.7M in Q1 2025). First-tool shipments were $143.8 million, indicating potential future revenue opportunities.
- Regulatory Risks:
- BIS Entity List: ACM Shanghai and ACM Korea were added to the U.S. Department of Commerce's Entity List in December 2024, restricting the export of U.S.-origin hardware and software to these entities without authorization.
- HFCA Act: The company faces potential delisting risks if the PCAOB cannot inspect its auditor in China for two consecutive years.
- Outbound Investment: New U.S. regulations (OISP/COINS Act) may restrict cross-border investment opportunities, though the COINS Act may reverse certain restrictions for ACM Research in 2026/2027.
- Legal Matters: A customs investigation in Korea regarding ACM Korea was dismissed in April 2026 with no charges.
Investor Verification Checklist
- Revenue Recognition Timing: Verify the acceptance status of the $143.8 million in "first tool" shipments, as revenue is only recognized upon customer acceptance or purchase commitment.
- Inventory Levels: Review the $738 million inventory balance, specifically the $119.5 million in finished goods at customer locations awaiting acceptance, to assess potential write-down risks.
- Foreign Exchange Exposure: Monitor the impact of RMB/USD fluctuations on working capital and future earnings, given the $9.5 million loss recorded in Q1.
- Debt Covenants: Confirm continued compliance with bank covenants, specifically the requirement that ACM Shanghai's debt does not exceed five times annual EBITDA.
- Non-Controlling Interest: Analyze the trend of net income attributable to non-controlling interests, which consumed a larger portion of total net income in Q1 2026.