Summary of FormFactor's Conference Call Company Overview - **Company**: FormFactor - **Industry**: Semiconductor testing equipment - **Recent Revenue**: Trailing 12-month revenues approximately $750 million, with guidance for Q4 indicating an annual run rate closer to $800 million [6][11] Business Segments - **Probe Cards**: The largest segment, serving as connectors between test equipment and customer wafers, crucial for testing chips before assembly. Increased demand driven by advanced packaging technologies like high bandwidth memory (HBM) [6][7] - **Engineering Systems**: Focused on co-packaged optics (CPO), aiding customers in R&D and addressing power consumption issues in data centers [8][9] Market Position and Strategy - **Key Customers**: Strong relationships with major DRAM manufacturers, particularly SK Hynix, which represents 10% of FormFactor's revenue [19] - **Competitive Advantage**: Unique capabilities in high-speed and RF testing, particularly for HBM applications, allowing for high parallelism and productivity in testing [20][21] - **Future Technology**: Transitioning to hybrid bonding in HBM may require new probing technologies, which FormFactor is prepared for due to its experience with copper probing [28] Growth Drivers - **HBM and DRAM**: Anticipated growth in DRAM, particularly DDR5, with expectations to set records in probe card sales. Current market dynamics suggest a shortage in supply due to clean room constraints [55][56] - **GPU and ASIC Testing**: Increased focus on GPU testing due to long test times and high transistor counts, with FormFactor adapting its technology to meet these demands [31][36] Operational Changes - **Factory Realignment**: Recent consolidation of manufacturing sites in California and the establishment of a new site in Farmers Branch, Texas, aimed at increasing efficiency and capacity [12][14][70] - **Gross Margin Improvement**: Targeting a gross margin of 47% by 2026, with recent improvements from 38.5% to a projected 42% in Q4, driven by operational efficiencies and cost structure optimization [11][66][70] Challenges and Considerations - **Market Dynamics**: The company faces challenges from tariff impacts, which are estimated to be a 200 basis points headwind to gross margins [70] - **NAND Business**: Limited focus on NAND due to its commodity nature and lack of differentiation opportunities [54] Future Outlook - **CPO and Optical Probing**: Continued investment in CPO technologies, with expectations for significant growth in AI applications. Integration of electrical and optical probing technologies is anticipated [42][43] - **Capacity Expansion**: The new Texas facility is expected to ramp up production by the end of 2026, aligning with anticipated market demand [70][71]

January 2026 Investor Presentation Forward-Looking Statements; Non-GAAP Financial Measures This presentation contains forward-looking statements within the meaning of the U.S. Securities Exchange Act of 1934 and the Securities Act of 1933. The forward-looking statements include statements concerning, among other things, our future business model and strategies, our financial model and structure, market and market share growth, industry trends, customer demand and growth opportunities. In some instances, you ...

Group 1 - FormFactor (FORM) has shown a year-to-date performance increase of approximately 31.1%, outperforming the average gain of 29% in the Computer and Technology sector [4] - The Zacks Consensus Estimate for FormFactor's full-year earnings has risen by 18.5% over the past three months, indicating improved analyst sentiment and a stronger earnings outlook [4] - FormFactor holds a Zacks Rank of 2 (Buy), reflecting its potential to outperform the market in the near term [3] Group 2 - FormFactor is part of the Electronics - Semiconductors industry, which consists of 47 companies and currently ranks 100 in the Zacks Industry Rank [6] - The average gain for stocks in the Electronics - Semiconductors industry this year is 46.4%, suggesting that FormFactor is slightly underperforming its industry [6] - In contrast, Sandisk Corporation, another stock in the Computer and Technology sector, has achieved a year-to-date return of 64% and has a Zacks Rank of 1 (Strong Buy) [5]

Market Overview - U.S. stock markets ended positively with the Nasdaq Composite, Dow Jones Industrial Average, and S&P 500 gaining 1.18%, 1.08%, and 0.93% respectively despite mid-week volatility [1] - Market direction was influenced by U.S. policy developments regarding Venezuela, enthusiasm for AI-linked technology stocks, and mixed economic data [1] Economic Indicators - The manufacturing Purchasing Managers' Index (PMI) fell to 47.9 in December 2025, the lowest since October 2024, indicating contraction [2] - Conversely, the Services PMI unexpectedly rose to 54.4 in December from 52.6 in the previous month, indicating expansion [2] - Nonfarm Payrolls increased by 50,000 jobs in December, below expectations, while the unemployment rate slightly declined to 4.4% from 4.5% in November [2] - Average Hourly Earnings increased by 3.8% year-over-year, up from 3.6% in November [2] Stock Performance - Indivior PLC shares rose 21.7% since being upgraded to Zacks Rank 1 (Strong Buy) on October 31, outperforming the S&P 500's 2% increase [4] - FormFactor, Inc. shares increased by 15.9% since its upgrade to Zacks Rank 2 (Buy) on October 31, also outperforming the S&P 500 [5] - An equal-weight portfolio of Zacks Rank 1 stocks outperformed the equal-weight S&P 500 index by 7 percentage points, returning +17.81% compared to +10.85% for the index [5] Focus List and Model Portfolios - The Zacks Focus List portfolio returned +22.1% in 2025, outperforming the S&P 500 index's +17.9% gain [12] - The Focus List has consistently outperformed the S&P 500 over various time frames, including a +22.1% return in the last year compared to +17.9% for the index [14] - The Earnings Certain Admiral Portfolio (ECAP) returned -1.67% in 2025, underperforming the S&P 500's +17.9% gain [15] - The Earnings Certain Dividend Portfolio (ECDP) returned -0.6% in 2025, also underperforming compared to the S&P 500 [19] Notable Stock Recommendations - FIGS, Inc. shares surged 56.8% since being upgraded to Outperform on November 7, significantly outperforming the S&P 500's 3.5% increase [8] - Five Below, Inc. shares increased by 21.7% since its upgrade on October 29, again outperforming the S&P 500 [8] - Mettler-Toledo International Inc. and Accenture plc saw returns of 16.6% and 16.5% respectively over the past 12 weeks [14]

Company Overview - FormFactor, a semiconductor testing equipment company, is laying off over 200 workers and closing manufacturing facilities to cut costs due to higher import taxes [1][6] - The company plans to close its Baldwin Park facility, resulting in 113 job losses, and its Carlsbad facility, leading to 107 job losses [2] Industry Context - The semiconductor testing equipment industry has been benefiting from increased AI chip adoption and infrastructure spending [3] - The tech industry in California has faced significant job losses post-pandemic, influenced by economic uncertainty and the rise of AI tools that are reshaping the workforce [4] Restructuring Plans - FormFactor's workforce reductions are part of restructuring plans aimed at aligning cost structure and improving gross margins [6] - The company is consolidating its facilities in Baldwin Park and Carlsbad as part of these efforts [7] Competitive Landscape - Companies like Nvidia and OpenAI have thrived during the AI boom, while legacy tech firms such as Intel are struggling to keep pace [6] - The competitive landscape in the tech industry has led to cuts in middle management and other roles as companies accelerate the release of AI-powered products [5]

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] Company Overview: FormFactor (FORM) - FormFactor currently holds a Momentum Style Score of B and a Zacks Rank of 2 (Buy), indicating strong potential for outperformance [3][4] - The stock has shown significant price appreciation, with a 46.88% increase over the past quarter and a 42.19% rise over the last year, compared to the S&P 500's 3.36% and 18.44% respectively [7] Price Performance - Over the past week, FormFactor shares increased by 1.95%, outperforming the Zacks Electronics - Semiconductors industry, which rose by 1.6% [6] - The monthly price change for FormFactor is 5.89%, compared to the industry's 3.29% [6] Trading Volume - The average 20-day trading volume for FormFactor is 878,399 shares, which serves as a bullish indicator when combined with rising stock prices [8] Earnings Outlook - In the last two months, one earnings estimate for FormFactor has increased, raising the consensus estimate from $1.15 to $1.17 [10] - For the next fiscal year, one estimate has also moved upwards, with no downward revisions during the same period [10] Conclusion - Given the positive momentum indicators and earnings outlook, FormFactor is positioned as a strong buy candidate for investors seeking short-term opportunities [12]

Group 1 - FormFactor, Inc. will participate in the 28th Annual Needham Growth Conference on January 13th and 14th, 2026, with a presentation scheduled for January 13th at 3:00 PM ET [1] - The presentation will be led by the company's CEO, Michael Slessor, and will be available for live webcast on the company's investor website [2] - FormFactor is a leading provider of test and measurement technologies throughout the IC life cycle, serving semiconductor companies to enhance profitability and optimize device performance [2] Group 2 - The company operates a network of facilities across Asia, Europe, and North America to support its customers [2] - For further information, the company can be contacted through its investor relations representative, Stan Finkelstein [3]

Group 1 - FormFactor, Inc. announced the acquisition of Keystone Photonics to enhance its capabilities in silicon photonics and co-packaged optics for wafer testing [1][2] - The acquisition is a strategic move to meet the increasing demand from AI data centers for faster data communication with lower power consumption [2] - Management expects silicon photonics to grow at a CAGR of 30% until 2029, positioning FormFactor favorably to support manufacturers transitioning to high-volume production [4] Group 2 - Wall Street analysts maintain a positive outlook on FormFactor, with Craig-Hallum and B. Riley Securities reiterating Buy ratings and raising price targets from $66 to $78 [5] - FormFactor provides essential test and measurement technologies throughout the semiconductor lifecycle, including solutions for quantum engineers [6]

Core Insights - Quantum computing is rapidly transitioning towards daily use, with significant advancements made in the last decade, as highlighted by IBM Fellow Ray Harishankar [1][2] - HSBC's implementation of IBM's quantum computing for bond derivatives resulted in a 35% performance improvement, showcasing the practical benefits of quantum technology [1] - Several financial institutions, including Wells Fargo and Vanguard, are exploring quantum computing to enhance their operations [2] Quantum Computing Industry Developments - IBM has made over 80 quantum computers available on the cloud since 2016, with additional deployments at client locations [2] - The expectation is that quantum technology will be flawless and ready for daily business use by 2028 to 2029 [2] Investment Opportunities in Quantum Computing Stocks - A list of the 10 Best Performing Quantum Computing Stocks in 2025 was curated based on performance metrics and hedge fund interest [5][6] - FormFactor, Inc. (NASDAQ:FORM) has shown a year-to-date performance of 31.54% and is expanding its capabilities through the acquisition of Keystone Photonics [7][8] - The silicon photonics market is expected to grow at a CAGR of 30% until 2029, positioning FormFactor favorably for future demand [9] Stock Performance and Analyst Ratings - Wall Street maintains a positive outlook on FormFactor, with buy ratings from analysts and an increased price target from $66 to $78 [10] - NVIDIA Corporation (NASDAQ:NVDA) has a year-to-date performance of 36.37% and is making a significant $20 billion purchase of AI acceleration chips from Groq [12][13] - Analysts have reiterated buy ratings for NVIDIA, with price targets set at $275 and $300 following the announcement of the Groq acquisition [14]

Company Overview - FormFactor, Inc. is a leading supplier of test and measurement solutions for the semiconductor sector, focusing on both production and R&D needs [6] - The company generates revenue by designing, manufacturing, and selling advanced testing and measurement solutions used throughout the semiconductor manufacturing and research lifecycle [9] - Primary customers include semiconductor integrated device manufacturers, foundries, fabless semiconductor companies, research institutions, and universities worldwide [9] Financial Performance - For the trailing twelve months (TTM), FormFactor reported revenue of $759.31 million and net income of $40.84 million [4] - In the latest quarter, revenue reached $202.7 million, with gross margin expanding to 39.8% GAAP and 41.0% on a non-GAAP basis, up roughly 250 basis points sequentially [10] - Free cash flow rebounded to $19.7 million after a weak second quarter, with management guiding for further revenue, earnings, and margin improvements in Q4 [10] Recent Developments - Shannon River Fund Management initiated a new position in FormFactor, acquiring 968,161 shares valued at $35.26 million, which represents 5.68% of the fund's reportable U.S. equity holdings [2][3] - The fund's new position in FormFactor indicates a strategic move towards semiconductor infrastructure spending, particularly in response to high-bandwidth memory demand and momentum in co-packaged optics [11] - FormFactor's DRAM probe cards experienced double-digit sequential growth, contributing to the company's profitability improvement rather than just a recovery in the semiconductor cycle [11]