FormFactor, Inc. (FORM) - Q2 2026 10-Q Summary
Business Context and Reporting Period
This summary covers FormFactor, Inc.'s unaudited financial results for the quarterly period ended June 27, 2026 (Q2 2026) and the six months ended June 27, 2026. FormFactor is a leading provider of test and measurement technologies for the semiconductor industry, operating through two segments: Probe Cards and Systems. The company operates on a 52-week fiscal year.
Key Financial Metrics
| Metric (in thousands) | Q2 2026 | Q2 2025 | 6 Months 2026 | 6 Months 2025 |
|---|---|---|---|---|
| Revenues | $258,242 | $195,798 | $484,386 | $367,154 |
| Gross Profit | $130,922 | $72,938 | $217,716 | $137,461 |
| Gross Margin | 50.7% | 37.3% | 44.9% | 37.4% |
| Operating Income | $57,799 | $12,306 | $74,447 | $15,575 |
| Net Income | $56,207 | $9,086 | $76,591 | $15,487 |
| Diluted EPS | $0.71 | $0.12 | $0.96 | $0.20 |
| Cash & Equivalents | $109,761 | $67,380 | $109,761 | $67,380 |
| Marketable Securities | $235,879 | $171,842 | $235,879 | $171,842 |
| Total Debt (Current + Long-term) | $11,644 | $12,208 | $11,644 | $12,208 |
| Operating Cash Flow (6mo) | $106,764 | $42,432 | $106,764 | $42,432 |
Material Changes vs. Prior Period
- Revenue Growth: Q2 2026 revenue increased 31.9% year-over-year (YoY) to $258.2 million, driven by strong demand in Foundry & Logic and DRAM markets. Six-month revenue grew 31.9% to $484.4 million.
- Margin Expansion: Gross margin improved significantly to 50.7% in Q2 2026 from 37.3% in Q2 2025, attributed to favorable product mix, higher factory utilization, and operational effectiveness.
- Restructuring Charges: The company incurred $4.5 million in restructuring charges in Q2 2026 and $27.8 million for the six-month period. These relate to the "2026 Restructuring Plans" to consolidate manufacturing facilities in Carlsbad and Baldwin Park, California.
- Factory Start-up Costs: Start-up costs for the new Farmers Branch, Texas facility increased to $4.9 million in Q2 2026 (from $0.4 million in Q2 2025) and $11.9 million for the six-month period.
- Segment Performance:
- Probe Cards: Revenue grew to $209.7 million (Q2) and $408.0 million (6mo). DRAM revenue surged 49.0% YoY in Q2, largely due to High-Bandwidth Memory (HBM) demand for AI applications.
- Systems: Revenue grew to $48.5 million (Q2) and $76.4 million (6mo), driven by sales of the Triton co-packaged optics (CPO) testing solution.
Guidance, Outlook, and Risks
- Tariff Refunds: Following a Supreme Court ruling, the company expects to receive approximately $7.0 million to $9.0 million in IEEPA tariff refunds in Q3 2026. $0.8 million was received as of June 27, 2026.
- Factory Expansion: Production at the new Farmers Branch, Texas facility is expected to begin in Q4 2026, with a ramp to target levels in fiscal 2027.
- Restructuring Outlook: Total restructuring charges are estimated at $32.0 million to $40.0 million, with the majority expected to be incurred in fiscal 2026.
- Liquidity: The company maintains a strong liquidity position with $345.6 million in cash, cash equivalents, and marketable securities. A $150 million revolving credit facility is available with no outstanding borrowings.
- Stock Repurchases: No shares were repurchased in the first six months of 2026 as capital was prioritized for the Texas facility expansion. $70.9 million remains available under the current repurchase program.
- Risks: Key risks include customer concentration (SK hynix, Intel, and TSMC accounted for 47.8% of revenue in Q2), supply chain dependencies, and the impact of trade barriers and export controls.
Investor Verification Checklist
- Customer Concentration: Verify the stability of revenue from top three customers (SK hynix, Intel, TSMC) which represent nearly half of total revenue.
- Restructuring Execution: Monitor the timeline and cost realization of the 2026 Restructuring Plans, specifically the closure of Carlsbad and Baldwin Park facilities.
- Texas Facility Ramp: Track the progress of the Farmers Branch, Texas facility to ensure production starts in Q4 2026 as planned to offset start-up costs.
- HBM Demand Sustainability: Assess the durability of the 49% YoY growth in DRAM revenue driven by AI-related HBM demand.
- Tariff Refund Timing: Confirm the receipt of the anticipated $7.0M-$9.0M tariff refunds in Q3 2026.