FormFactor Beats Estimates on Strong HBM Demand and Margin Gains, Lifts Outlook
Semiconductor testing equipment provider FormFactor, Inc. (NASDAQ: FORM) delivered a robust fourth-quarter performance, surpassing analyst expectations and signaling sustained momentum in advanced chip testing markets. The company reported revenue of $215.2 million, a 13.6% year-over-year increase and ahead of Wall Street forecasts. Perhaps more notably, its guidance for the current quarter midpoint of $225 million came in well above consensus estimates, suggesting confidence in near-term demand.
Non-GAAP earnings per share of $0.46 significantly exceeded expectations, underscoring a period of operational execution. The results were welcomed by investors, with shares rising in after-hours trading.
"Our performance reflects the successful execution of our margin expansion initiatives and the strength of our position in key growth markets," said CEO Mike Slessor in a statement. He specifically pointed to workforce optimization, improved manufacturing yields, and shorter cycle times as contributors to gross margin improvement. The company's leadership in DRAM and advanced packaging test solutions, including its SmartMatrix technology, were cited as primary revenue drivers.
Looking ahead, management expressed bullishness on the demand environment, particularly for high-bandwidth memory (HBM) used in artificial intelligence and data center applications. The impending industry transition to next-generation HBM4 and HBM5 standards is expected to drive increased test complexity and intensity, a trend that plays to FormFactor's technological strengths.
CFO Aric McKinnis emphasized ongoing cost discipline and the strategic role of the new, lower-cost Farmers Branch production facility in supporting future margin structure. "We are positioning the company to capitalize on these multi-year trends," Slessor added, announcing plans for an upcoming Analyst Day to detail the next phase of the financial model.
The positive report sparked immediate discussion among industry observers.
Raj Chen, Portfolio Manager at TechGrowth Capital: "This isn't just a beat-and-raise story. It's validation that FormFactor's operational overhaul is bearing fruit precisely as demand for advanced memory testing inflects. The HBM tailwind is real and structural, not cyclical."
Dr. Elena Vance, Semiconductor Analyst at ClearView Research: "The margin expansion is impressive and suggests better pricing power and mix. The guidance implies they are gaining share in the HBM test socket, which is critical as every major memory maker races to ramp production."
Marcus Thorne, independent investor and frequent commentator on investor forums: "Let's not get carried away. The stock popped on the headline, but how much of this 'demand' is just customers double-ordering ahead of tariffs? Their 'structural improvements' look a lot like layoffs and cost-cutting. I'll believe the HBM hype when I see sustained orders, not just optimistic guidance."
Sarah Li, Engineering Manager at a leading memory chipmaker: "From the front lines, the test intensity for HBM is unlike anything in standard DRAM. FormFactor's tools have been crucial for yield learning. If their new facility improves lead times, it directly addresses a major bottleneck in our supply chain."
Analysts will be closely watching several execution points in the coming quarters: the ramp and efficiency gains from the Farmers Branch facility, the company's ability to maintain margin progress amid potential tariff and supply chain pressures, and its success in qualifying new products for GPU and custom ASIC customers. The integration of recently acquired Keystone Photonics technology also remains a key strategic focus.