Group 1 - The semiconductor capital equipment industry is characterized by significant fluctuations, with companies like Ichor Holdings, Ltd. experiencing these cycles intensely due to their niche market position [1] - Ichor Holdings has achieved rapid growth primarily through acquisitions, indicating a strategic focus on expanding its market presence [1] Group 2 - The article does not provide additional relevant content regarding the industry or company beyond the initial insights [2]

PART I - FINANCIAL INFORMATION [ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS%20(UNAUDITED)) This section presents the unaudited consolidated financial statements, including balance sheets, operations, equity, and cash flows [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Total assets and shareholders' equity slightly decreased due to a reduction in cash and accounts receivable Consolidated Balance Sheet Highlights (in thousands) | Metric | June 27, 2025 | December 27, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $92,224 | $108,669 | | Accounts receivable, net | $80,821 | $86,619 | | Inventories | $259,373 | $250,102 | | Total current assets | $439,128 | $452,620 | | Property and equipment, net | $108,907 | $94,867 | | Total assets | $985,068 | $995,564 | | Total current liabilities | $136,423 | $135,670 | | Total liabilities | $290,921 | $297,228 | | Total shareholders' equity | $694,147 | $698,336 | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) Net sales grew 18.2% year-over-year, but higher costs and taxes led to an increased net loss Consolidated Statements of Operations Highlights (in thousands) | Metric | Three Months Ended June 27, 2025 | Three Months Ended June 28, 2024 | Six Months Ended June 27, 2025 | Six Months Ended June 28, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net sales | $240,285 | $203,227 | $484,750 | $404,610 | | Gross profit | $27,202 | $25,557 | $55,724 | $48,551 | | Operating loss | $(4,840) | $(2,262) | $(6,012) | $(6,003) | | Net loss | $(9,408) | $(5,112) | $(13,967) | $(14,101) | | Basic Net loss per share | $(0.28) | $(0.15) | $(0.41) | $(0.44) | | Diluted Net loss per share | $(0.28) | $(0.15) | $(0.41) | $(0.44) | [Consolidated Statements of Shareholders' Equity](index=5&type=section&id=Consolidated%20Statements%20of%20Shareholders'%20Equity) Total shareholders' equity decreased slightly due to the net loss, partially offset by share-based compensation Changes in Shareholders' Equity (in thousands) | Metric | Balance at Dec 27, 2024 | Net Loss (6 months) | Share-based Compensation (6 months) | Ordinary Shares Issued (6 months) | Balance at Jun 27, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Additional Paid-In Capital | $606,060 | - | $8,350 | $1,430 | $615,838 | | Retained Earnings | $183,851 | $(13,967) | - | - | $169,884 | | Total Shareholders' Equity | $698,336 | $(13,967) | $8,350 | $1,430 | $694,147 | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations decreased significantly, while cash used in investing increased due to higher capital expenditures Consolidated Statements of Cash Flows Highlights (in thousands) | Activity | Six Months Ended June 27, 2025 | Six Months Ended June 28, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $11,469 | $22,296 | | Net cash used in investing activities | $(25,772) | $(7,337) | | Net cash provided by (used in) financing activities | $(2,142) | $19,435 | | Net increase (decrease) in cash | $(16,445) | $34,394 | | Cash at end of period | $92,224 | $114,349 | [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed disclosures on accounting policies, asset breakdowns, debt, and income taxes [Note 1 – Basis of Presentation and Selected Significant Accounting Policies](index=8&type=section&id=Note%201%20%E2%80%93%20Basis%20of%20Presentation%20and%20Selected%20Significant%20Accounting%20Policies) - The company changed its accounting estimate for CNC machinery useful lives from 7 to 10 years, effective Q2 2025, decreasing depreciation expense by **$1.0 million** and reducing Operating loss and Net loss by approximately **$1.0 million** for the three and six months ended June 27, 2025[24](index=24&type=chunk) - Revenue is recognized when control of promised goods or services is transferred to customers, primarily for products like fluid delivery subsystems and weldments, generally at the time of shipment[27](index=27&type=chunk)[29](index=29&type=chunk) - The FASB issued ASU 2023-09 (Improvements to Income Tax Disclosures) and ASU 2024-03 (Disaggregation of Income Statement Expenses), which the company is currently evaluating for potential impacts on its consolidated financial statements[31](index=31&type=chunk)[32](index=32&type=chunk) [Note 2 – Inventories](index=10&type=section&id=Note%202%20%E2%80%93%20Inventories) Inventories Breakdown (in thousands) | Category | June 27, 2025 | December 27, 2024 | | :--- | :--- | :--- | | Raw materials | $200,954 | $197,975 | | Work in process | $49,641 | $45,075 | | Finished goods | $45,844 | $43,445 | | Excess and obsolete adjustment | $(37,066) | $(36,393) | | **Total inventories** | **$259,373** | **$250,102** | [Note 3 – Property and Equipment and Other Noncurrent Assets](index=10&type=section&id=Note%203%20%E2%80%93%20Property%20and%20Equipment%20and%20Other%20Noncurrent%20Assets) Property and Equipment, Net (in thousands) | Category | June 27, 2025 | December 27, 2024 | | :--- | :--- | :--- | | Machinery | $140,086 | $123,509 | | Construction-in-process | $18,965 | $12,612 | | Total property and equipment, net | $108,907 | $94,867 | - Depreciation expense was **$5.5 million** for Q2 2025 (vs $5.3 million in Q2 2024) and **$11.1 million** for the six months ended June 27, 2025 (vs $10.4 million in the prior year period)[34](index=34&type=chunk)[35](index=35&type=chunk) - Capitalized cloud computing implementation costs, net of accumulated amortization, increased to **$13.3 million** as of June 27, 2025, from **$11.2 million** as of December 27, 2024[36](index=36&type=chunk) [Note 4 – Intangible Assets](index=11&type=section&id=Note%204%20%E2%80%93%20Intangible%20Assets) Definite-Lived Intangible Assets, Net (in thousands) | Category | June 27, 2025 | December 27, 2024 | | :--- | :--- | :--- | | Customer relationships | $40,744 | $44,363 | | Developed technology | $3,816 | $4,353 | | **Total intangible assets** | **$44,560** | **$48,716** | [Note 5 – Leases](index=11&type=section&id=Note%205%20%E2%80%93%20Leases) - A **$1.3 million** non-cash impairment charge was recorded for an ROU lease asset due to the abandonment of Scotland operations, included in selling, general, and administrative expenses[40](index=40&type=chunk) Operating Lease Costs (in thousands) | Period | June 27, 2025 | June 28, 2024 | | :--- | :--- | :--- | | Three Months Ended | $2,885 | $2,492 | | Six Months Ended | $5,630 | $4,984 | Lease Liabilities and Terms | Metric | June 27, 2025 | December 27, 2024 | | :--- | :--- | :--- | | Weighted-average remaining lease term of operating leases | 5.8 years | 6.1 years | | Weighted-average discount rate of operating leases | 4.9% | 4.7% | | Total lease liabilities, less current portion | $30,300 | $34,189 | [Note 6 – Income Taxes](index=12&type=section&id=Note%206%20%E2%80%93%20Income%20Taxes) - The One Big Beautiful Bill Act (OBBBA) was signed into law on July 4, 2025, enacting significant changes to U.S tax laws The company is evaluating its impact, expecting it to be included in Q3 2025 financial statements[42](index=42&type=chunk) - The increase in income tax expense and the change in effective tax rate are primarily due to additional tax expense provisioned in Singapore related to **Pillar Two minimum tax rules** and increased withholding taxes[43](index=43&type=chunk) Income Tax Expense and Effective Rate (in thousands) | Metric | Three Months Ended June 27, 2025 | Three Months Ended June 28, 2024 | Six Months Ended June 27, 2025 | Six Months Ended June 28, 2024 | | :--- | :--- | :--- | :--- | :--- | | Income tax expense | $2,740 | $942 | $4,400 | $1,855 | | Loss before income taxes | $(6,668) | $(4,170) | $(9,567) | $(12,246) | | Effective income tax rate | (41.1)% | (22.6)% | (46.0)% | (15.1)% | [Note 7 – Employee Benefit Programs](index=13&type=section&id=Note%207%20%E2%80%93%20Employee%20Benefit%20Programs) 401(k) Matching Contributions (in thousands) | Period | June 27, 2025 | June 28, 2024 | | :--- | :--- | :--- | | Three Months Ended | $700 | $600 | | Six Months Ended | $1,500 | $1,400 | [Note 8 – Long-Term Debt](index=13&type=section&id=Note%208%20%E2%80%93%20Long-Term%20Debt) - The credit agreement includes a **$150.0 million** term loan facility and a **$250.0 million** revolving credit facility, maturing on October 29, 2026 Term loan principal payments of **$1.9 million** are due quarterly[46](index=46&type=chunk) - As of June 27, 2025, credit facilities bore interest under the SOFR option at **6.07%**[47](index=47&type=chunk) Long-Term Debt, Net (in thousands) | Category | June 27, 2025 | December 27, 2024 | | :--- | :--- | :--- | | Term loan | $125,625 | $129,375 | | Less unamortized debt issuance costs | $(620) | $(852) | | Total long-term debt, net | $125,005 | $128,523 | | Less current portion | $(7,500) | $(7,500) | | Total long-term debt, less current portion, net | $117,505 | $121,023 | [Note 9 – Share‑Based Compensation](index=13&type=section&id=Note%209%20%E2%80%93%20Share%E2%80%91Based%20Compensation) - The 2025 Omnibus Incentive Plan was approved by stockholders on May 14, 2025, allowing for the issuance of **2,963,471 shares** for awards, replacing the 2016 Plan[48](index=48&type=chunk) - Approximately **2.1 million** ordinary shares remain available for purchase under the 2017 Employee Stock Purchase Plan (ESPP)[54](index=54&type=chunk) Share-Based Compensation Expense (in thousands) | Period | June 27, 2025 | June 28, 2024 | | :--- | :--- | :--- | | Three Months Ended | $4,227 | $3,938 | | Six Months Ended | $8,350 | $6,313 | [Note 10 – Earnings per Share](index=15&type=section&id=Note%2010%20%E2%80%93%20Earnings%20per%20Share) - Potentially dilutive options and RSUs (ranging from **1.995 million to 2.492 million shares**) were excluded from the diluted EPS calculation because their inclusion would have been antidilutive due to the net loss[55](index=55&type=chunk) Net Loss Per Share | Metric | Three Months Ended June 27, 2025 | Three Months Ended June 28, 2024 | Six Months Ended June 27, 2025 | Six Months Ended June 28, 2024 | | :--- | :--- | :--- | :--- | :--- | | Basic EPS | $(0.28) | $(0.15) | $(0.41) | $(0.44) | | Diluted EPS | $(0.28) | $(0.15) | $(0.41) | $(0.44) | | Basic weighted average ordinary shares outstanding | 34,179,382 | 33,548,071 | 34,088,873 | 31,779,521 | | Diluted weighted average ordinary shares outstanding | 34,179,382 | 33,548,071 | 34,088,873 | 31,779,521 | [Note 11 – Segment Information](index=16&type=section&id=Note%2011%20%E2%80%93%20Segment%20Information) - The company operates as a single business operating segment, focusing on the design, engineering, and manufacturing of critical fluid delivery subsystems and components for semiconductor capital equipment[57](index=57&type=chunk) Net Sales by Geographic Area (in thousands) | Geographic Area | Three Months Ended June 27, 2025 | Three Months Ended June 28, 2024 | Six Months Ended June 27, 2025 | Six Months Ended June 28, 2024 | | :--- | :--- | :--- | :--- | :--- | | Singapore | $106,870 | $81,541 | $215,958 | $160,667 | | United States of America | $76,684 | $69,259 | $152,494 | $133,653 | | Europe | $25,279 | $21,307 | $50,412 | $52,656 | | Other | $31,452 | $31,120 | $65,886 | $57,634 | | **Total net sales** | **$240,285** | **$203,227** | **$484,750** | **$404,610** | [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=17&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses financial results, highlighting increased sales from semiconductor demand alongside a larger net loss from higher costs [Cautionary Statement Concerning Forward-Looking Statements](index=17&type=section&id=Cautionary%20Statement%20Concerning%20Forward-Looking%20Statements) - Forward-looking statements are subject to risks including geopolitical, economic, and market conditions (inflation, interest rates, currency fluctuations, supply chain disruptions, conflicts), dependence on semiconductor capital equipment industry cycles and OEMs, and challenges in attracting and retaining key personnel[60](index=60&type=chunk) [Overview](index=18&type=section&id=Overview) - The company specializes in designing, engineering, and manufacturing critical fluid delivery subsystems and components for semiconductor capital equipment, including gas and chemical delivery systems[64](index=64&type=chunk) - The company also provides precision-machined components and other proprietary products for commercial space, aerospace, defense, medical device, and general-industrial industries[64](index=64&type=chunk) - OEMs increasingly outsource fluid delivery subsystems due to specialized engineering, design, and production skills required, allowing them to reduce costs and development time[65](index=65&type=chunk) [Macroeconomic Conditions and Business Update](index=19&type=section&id=Macroeconomic%20Conditions%20and%20Business%20Update) - Overall semiconductor equipment spending in 2025 is anticipated to grow over 2024 levels, particularly in the primary markets of etch and deposition, where current demand remains healthy[68](index=68&type=chunk) - The company remains confident in the long-term demand for semiconductors, semiconductor capital equipment, and its products, driven by the increasing need for expanded productive capacity and advanced manufacturing process technologies[69](index=69&type=chunk) - Tariffs have not materially impacted demand for products or costs for materials to date, and current exclusions/exemptions (e.g, U.S-Mexico-Canada Agreement) remain applicable, but their indefinite continuation is not assured[68](index=68&type=chunk) [Results of Operations](index=19&type=section&id=Results%20of%20Operations) Sales increased 18.2% in Q2 2025, but gross margin fell and operating expenses rose, leading to a larger net loss [Net sales](index=20&type=section&id=Net%20sales) - The increase in net sales was primarily due to increased customer demand resulting from a stronger semiconductor capital equipment spending environment[74](index=74&type=chunk) Net Sales (in thousands) | Period | June 27, 2025 | June 28, 2024 | Change Amount | Change % | | :--- | :--- | :--- | :--- | :--- | | Three Months Ended | $240,285 | $203,227 | $37,058 | 18.2% | | Six Months Ended | $484,750 | $404,610 | $80,140 | 19.8% | [Gross margin](index=21&type=section&id=Gross%20margin) - The decrease in gross margin was primarily due to increased material costs, unfavorable sales mix, and **$1.6 million** in inventory write-off costs associated with the planned exit from Scotland operations[75](index=75&type=chunk)[76](index=76&type=chunk) - The decrease was partially offset by reduced excess and obsolete inventory expense (**$1.3 million** for Q2, **$2.9 million** for six months)[75](index=75&type=chunk)[76](index=76&type=chunk) Gross Profit and Margin (in thousands) | Metric | Three Months Ended June 27, 2025 | Three Months Ended June 28, 2024 | Change Amount | Change % | | :--- | :--- | :--- | :--- | :--- | | Cost of sales | $213,083 | $177,670 | $35,413 | 19.9% | | Gross profit | $27,202 | $25,557 | $1,645 | 6.4% | | Gross margin | 11.3% | 12.6% | -130 bps | | | Six Months Ended June 27, 2025 | Six Months Ended June 28, 2024 | Change Amount | Change % | | Cost of sales | $429,026 | $356,059 | $72,967 | 20.5% | | Gross profit | $55,724 | $48,551 | $7,173 | 14.8% | | Gross margin | 11.5% | 12.0% | -50 bps | | [Research and development](index=21&type=section&id=Research%20and%20development) - Fluctuations in R&D expenses were primarily due to changes in material and service costs from new product development programs and in employee-related expenses, inclusive of share-based compensation expense, and professional legal expenses[77](index=77&type=chunk) Research and Development Expenses (in thousands) | Period | June 27, 2025 | June 28, 2024 | Change Amount | Change % | | :--- | :--- | :--- | :--- | :--- | | Three Months Ended | $5,710 | $5,926 | $(216) | (3.6)% | | Six Months Ended | $11,584 | $11,296 | $288 | 2.5% | [Selling, general, and administrative](index=21&type=section&id=Selling,%20general,%20and%20administrative) - Key drivers for the increase in SG&A include: **$2.0 million** in exit disposal costs for Scotland operations, **$1.3 million** (Q2) / **$1.5 million** (6 months) in employee health insurance claims, and increased software, IT services, and outside service provider costs[78](index=78&type=chunk)[79](index=79&type=chunk) Selling, General, and Administrative Expenses (in thousands) | Period | June 27, 2025 | June 28, 2024 | Change Amount | Change % | | :--- | :--- | :--- | :--- | :--- | | Three Months Ended | $24,254 | $19,807 | $4,447 | 22.5% | | Six Months Ended | $45,996 | $39,026 | $6,970 | 17.9% | [Amortization of intangible assets](index=22&type=section&id=Amortization%20of%20intangible%20assets) Amortization of Intangible Assets (in thousands) | Period | June 27, 2025 | June 28, 2024 | Change Amount | Change % | | :--- | :--- | :--- | :--- | :--- | | Three Months Ended | $2,078 | $2,086 | $(8) | (0.4)% | | Six Months Ended | $4,156 | $4,232 | $(76) | (1.8)% | [Interest expense, net](index=22&type=section&id=Interest%20expense,%20net) - The decrease in interest expense was primarily driven by the payoff of the revolving credit facility near the end of Q1 2024 and lower SOFR rates[81](index=81&type=chunk) Interest Expense, Net (in thousands) | Metric | Three Months Ended June 27, 2025 | Three Months Ended June 28, 2024 | Change Amount | Change % | | :--- | :--- | :--- | :--- | :--- | | Interest expense, net | $1,635 | $1,858 | $(223) | (12.0)% | | Weighted average borrowings outstanding | $125,666 | $133,104 | $(7,438) | (5.6)% | | Weighted average borrowing rate | 6.06% | 7.45% | -139 bps | | | Six Months Ended June 27, 2025 | Six Months Ended June 28, 2024 | Change Amount | Change % | | Interest expense, net | $3,281 | $5,954 | $(2,673) | (44.9)% | | Weighted average borrowings outstanding | $126,614 | $188,520 | $(61,906) | (32.8)% | | Weighted average borrowing rate | 6.15% | 7.53% | -138 bps | | [Other expense, net](index=22&type=section&id=Other%20expense,%20net) - The change in other expense, net, was primarily due to currency exchange rate fluctuations related to local currency payables and cash holdings of foreign operations[82](index=82&type=chunk) Other Expense, Net (in thousands) | Period | June 27, 2025 | June 28, 2024 | Change Amount | Change % | | :--- | :--- | :--- | :--- | :--- | | Three Months Ended | $193 | $50 | $143 | 286.0% | | Six Months Ended | $274 | $289 | $(15) | (5.2)% | [Income tax expense](index=22&type=section&id=Income%20tax%20expense) - The increase in income tax expense was primarily due to additional tax expense provisioned in Singapore in connection with **Pillar Two minimum tax rules** and increased withholding taxes[83](index=83&type=chunk) Income Tax Expense and Effective Rate (in thousands) | Metric | Three Months Ended June 27, 2025 | Three Months Ended June 28, 2024 | Change Amount | Change % | | :--- | :--- | :--- | :--- | :--- | | Income tax expense | $2,740 | $942 | $1,798 | 190.9% | | Loss before income taxes | $(6,668) | $(4,170) | $(2,498) | 59.9% | | Effective income tax rate | (41.1)% | (22.6)% | -1,850 bps | | | Six Months Ended June 27, 2025 | Six Months Ended June 28, 2024 | Change Amount | Change % | | Income tax expense | $4,400 | $1,855 | $2,545 | 137.2% | | Loss before income taxes | $(9,567) | $(12,246) | $2,679 | (21.9)% | | Effective income tax rate | (46.0)% | (15.1)% | -3,090 bps | | [Non‑GAAP Financial Results](index=24&type=section&id=Non%E2%80%91GAAP%20Financial%20Results) Non-GAAP net income was $1.1 million in Q2 2025, excluding items like amortization and facility shutdown costs - Non-GAAP metrics exclude amortization of intangible assets, share-based compensation expense, and discrete or infrequent charges and gains (e.g, transaction-related costs, facility shutdown costs, severance costs), and related tax impacts[85](index=85&type=chunk) - Non-GAAP adjustments for Q2 2025 included **$2.078 million** for amortization of intangible assets, **$4.227 million** for share-based compensation, and **$4.296 million** for facility shutdown costs (including **$1.6 million** inventory write-off and **$1.3 million** ROU asset impairment related to Scotland operations exit)[90](index=90&type=chunk)[92](index=92&type=chunk) Non-GAAP Financial Highlights (in thousands, except per share amounts) | Metric | Three Months Ended June 27, 2025 | Three Months Ended June 28, 2024 | Six Months Ended June 27, 2025 | Six Months Ended June 28, 2024 | | :--- | :--- | :--- | :--- | :--- | | U.S. GAAP net loss | $(9,408) | $(5,112) | $(13,967) | $(14,101) | | Non-GAAP net income (loss) | $1,097 | $1,819 | $5,333 | $(893) | | U.S. GAAP diluted EPS | $(0.28) | $(0.15) | $(0.41) | $(0.44) | | Non-GAAP diluted EPS | $0.03 | $0.05 | $0.16 | $(0.03) | | Non-GAAP operating margin | 2.6% | 2.2% | 2.6% | 1.7% | | Non-GAAP gross margin | 12.5% | 13.0% | 12.4% | 12.6% | [Liquidity and Capital Resources](index=26&type=section&id=Liquidity%20and%20Capital%20Resources) Cash decreased by $16.4 million due to capital expenditures and debt repayments, offset by operating cash flow - The company believes that its cash and cash equivalents, the amounts available under its credit facilities, and its operating cash flow will be sufficient to fund its business and current obligations for at least the next 12 months and beyond[96](index=96&type=chunk) [Material Cash Requirements](index=27&type=section&id=Material%20Cash%20Requirements) - Primary liquidity requirements include working capital, business acquisitions, interest and principal payments under credit facilities, research and development investments and capital expenditures, payment of income taxes, and payments associated with noncancellable leases and related occupancy costs[95](index=95&type=chunk) [Sources and Conditions of Liquidity](index=27&type=section&id=Sources%20and%20Conditions%20of%20Liquidity) - Ongoing sources of liquidity are primarily derived from sales to customers and related changes in net operating assets and liabilities, and proceeds from credit facilities and equity offerings, when applicable[97](index=97&type=chunk) [Summary of Cash Flows](index=27&type=section&id=Summary%20of%20Cash%20Flows) - The decrease in cash provided by operating activities was primarily due to unfavorable changes in working capital of **$15.9 million**, partially offset by an increase in net non-cash charges and a decrease in net loss[100](index=100&type=chunk) - Cash used in financing activities decreased significantly year-over-year due to the prior year's **$136.7 million** proceeds from an ordinary share issuance, partially offset by the payoff of a **$115 million** revolving credit facility in Q1 2024[101](index=101&type=chunk) Summary of Cash Flows (in thousands) | Activity | Six Months Ended June 27, 2025 | Six Months Ended June 28, 2024 | | :--- | :--- | :--- | | Cash provided by operating activities | $11,469 | $22,296 | | Cash used in investing activities | $(25,772) | $(7,337) | | Cash provided by (used in) financing activities | $(2,142) | $19,435 | | Net increase (decrease) in cash | $(16,445) | $34,394 | | Cash at end of period | $92,224 | $114,349 | [Critical Accounting Estimates](index=28&type=section&id=Critical%20Accounting%20Estimates) - Significant estimates include inventory valuation, uncertain tax positions, valuation allowance on deferred tax assets, and impairment analysis for both definite-lived intangible assets and goodwill[23](index=23&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=28&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) There have been no material changes to market risk disclosures since the 2024 Annual Report on Form 10-K - No material changes to market risk disclosures since the 2024 Annual Report on Form 10-K[104](index=104&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=28&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Disclosure controls and procedures were evaluated and found to be effective as of the end of the reporting period [Evaluation of Disclosure Controls and Procedures](index=28&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) - Disclosure controls and procedures were evaluated and deemed effective as of June 27, 2025, providing reasonable assurance of achieving control objectives[105](index=105&type=chunk) [Inherent limitations on Effectiveness of Controls and Procedures](index=28&type=section&id=Inherent%20limitations%20on%20Effectiveness%20of%20Controls%20and%20Procedures) - Internal control over financial reporting has inherent limitations, including human error and circumvention, providing only reasonable assurance, not preventing or detecting all misstatements[106](index=106&type=chunk) [Changes in Internal Control Over Financial Reporting](index=28&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) - No material changes in internal control over financial reporting occurred during the reporting period[107](index=107&type=chunk) PART II - OTHER INFORMATION [ITEM 1. LEGAL PROCEEDINGS](index=29&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company is not currently a party to any material legal proceedings - No material adverse legal proceedings are currently active against the company or its subsidiaries[108](index=108&type=chunk) [ITEM 1A. RISK FACTORS](index=29&type=section&id=ITEM%201A.%20RISK%20FACTORS) This section refers to the risk factors detailed in the 2024 Annual Report on Form 10-K - Readers should refer to the risk factors in the 2024 Annual Report on Form 10-K, as this report does not identify all risks, and past financial results are not reliable indicators of future performance[109](index=109&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=29&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) There were no unregistered sales of equity securities or use of proceeds to report during the period - None to report[110](index=110&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=29&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) There were no defaults upon senior securities to report during the period - None to report[111](index=111&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=29&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable to the company - Not applicable[112](index=112&type=chunk) [ITEM 5. OTHER INFORMATION](index=29&type=section&id=ITEM%205.%20OTHER%20INFORMATION) There is no other information to report under this item - None to report[113](index=113&type=chunk) [ITEM 6. EXHIBITS](index=30&type=section&id=ITEM%206.%20EXHIBITS) This section lists the exhibits filed with the Form 10-Q, including certifications and Inline XBRL documents - Exhibits include forms of Performance Restricted Stock Unit Agreement and Restricted Stock Unit Agreement under the 2025 Omnibus Incentive Plan, certifications of principal executive and financial officers, and Inline XBRL documents[114](index=114&type=chunk) [SIGNATURES](index=31&type=section&id=SIGNATURES) The report is duly signed by the Chief Executive Officer and Chief Financial Officer - The report was signed by Jeffrey S Andreson (CEO) and Greg Swyt (CFO) on August 5, 2025[119](index=119&type=chunk)

Group 1 - U.S. stock futures are higher, with Dow futures gaining around 0.1% [1] - Inspire Medical Systems, Inc. shares fell 25% to $98.00 in pre-market trading after reporting second-quarter results and cutting FY25 guidance below estimates [1] - Ichor Holdings, Ltd. declined 24.3% to $15.24 in pre-market trading due to worse-than-expected second-quarter adjusted EPS results and below-estimate third-quarter adjusted EPS guidance [3] Group 2 - Gartner, Inc. shares fell 15% to $287.20 after issuing soft FY25 guidance [3] - Vertex Pharmaceuticals Incorporated declined 14.5% to $403.85 following second-quarter financial results and Vx-993 Phase 2 trial results [3] - Semrush Holdings, Inc. fell 14.1% to $7.91 after reporting a second-quarter EPS miss [3] - Navitas Semiconductor Corporation shares dropped 14.1% to $6.92 after issuing third-quarter sales guidance below estimates [3] - Kyndryl Holdings, Inc. fell 12.2% to $32.21 after reporting a first-quarter revenue miss [3]

Core Insights - Ichor reported Q2 FY2025 GAAP revenue of $240.3 million, exceeding expectations, but non-GAAP earnings per share fell to $0.03, significantly below the $0.14 estimate, indicating profitability challenges due to margin pressure and operational inefficiencies [1][5][10] Financial Performance - Non-GAAP EPS for Q2 FY2025 was $0.03, down 40% from $0.05 in Q2 FY2024 [2] - GAAP revenue increased by 18.3% year-over-year from $203.2 million in Q2 FY2024 [2] - Non-GAAP gross margin decreased to 12.5% from 13.0% in the prior year [2] - Free cash flow turned negative at $(14.8) million, a decline of 201.4% compared to $14.6 million in Q2 FY2024 [2][7] Business Overview - Ichor specializes in precision fluid delivery systems essential for semiconductor manufacturing, serving major clients like Lam Research and ASML [3] - The company is focusing on increasing proprietary product content and operational flexibility, aiming to internalize more gas panel components to enhance margins and supply control [4] Operational Challenges - Despite strong revenue, profitability was impacted by a decline in gross margin from 12.6% in Q2 FY2024 to 11.3% in Q2 FY2025, attributed to slow internal production integration and reliance on external suppliers [6] - The company faced operational setbacks, including a strategic exit from its refurbishment operation in Scotland, which previously contributed approximately $10 million in annual revenue [5][6] Future Outlook - For Q3 FY2025, Ichor expects revenue between $225 million and $245 million, with a midpoint of $235 million, slightly below Q2 FY2025 actual revenue [10] - Non-GAAP EPS guidance for Q3 FY2025 is projected between $0.06 and $0.18, indicating potential recovery [10] - Management anticipates sequential improvement in gross margins, targeting 15% to 16% for the second half of FY2025, but has tempered expectations for full-year gross margins compared to prior years [10][11]

Group 1 - Ichor Holdings reported quarterly earnings of $0.03 per share, missing the Zacks Consensus Estimate of $0.14 per share, and down from $0.05 per share a year ago, representing an earnings surprise of -78.57% [1] - The company posted revenues of $240.29 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 2.04%, and up from $203.23 million year-over-year [2] - Ichor Holdings has surpassed consensus revenue estimates three times over the last four quarters, while it has only surpassed consensus EPS estimates once in the same period [2] Group 2 - The stock has underperformed, losing about 39.9% since the beginning of the year compared to the S&P 500's gain of 6.1% [3] - The current consensus EPS estimate for the coming quarter is $0.21 on revenues of $232.9 million, and for the current fiscal year, it is $0.71 on revenues of $950.18 million [7] - The Electronics - Semiconductors industry, to which Ichor Holdings belongs, is currently in the top 38% of the Zacks industries, indicating a favorable outlook compared to the bottom 50% [8]

Financial Data and Key Metrics Changes - Q2 revenues reached $240 million, reflecting an 18% year-over-year increase and at the upper end of expectations, although 2% lower than Q1 [14] - Q2 gross margin was 12.5%, a slight increase of 10 basis points from Q1 but at the lower end of expectations due to hiring challenges [14] - Operating income for Q2 was $6.1 million, with net interest expense aligned with expectations at $1.6 million [14] Business Line Data and Key Metrics Changes - The revenue upside in Q2 was primarily driven by the lower margin gas panel integration business [4] - Hiring and retention challenges have limited output volumes, impacting the ability to achieve expected gross margins [5][6] - Significant progress was made in qualifying new proprietary components, including a major milestone with the flow control product [9][10] Market Data and Key Metrics Changes - Customer demand environment remains steady, with expectations for modest growth in wafer fab equipment (WFE) for 2025 [6] - Year-to-date revenues are up 20% year-over-year, with expectations to outperform overall WFE growth for 2025 [6] - Demand for NAND investments is continuing into the second half, while advanced packaging has plateaued [35] Company Strategy and Development Direction - The company is focused on ramping internal supply to meet strong customer demand and improve gross margins [6][10] - A new product strategy is gaining traction, with ongoing qualifications and commercialization of proprietary components [10] - The company aims to achieve a gross margin target of 20% as it scales production and aligns output with customer needs [77] Management's Comments on Operating Environment and Future Outlook - Management expressed a more conservative view on hiring and gross margin expectations for the upcoming quarters [12] - The second half of 2025 is expected to be slightly front-half weighted, with potential for a slower quarter in December [11] - Management remains confident in the long-term strategy but acknowledges the need for improved visibility on revenue growth and cost targets before raising gross margin expectations significantly [12] Other Important Information - The company announced CEO succession plans, with the current CEO remaining until a successor is identified [18][19] - The balance sheet shows cash and equivalents totaling $92 million, down from Q1, reflecting working capital investments [15] Q&A Session Summary Question: Can you unpack the dynamics that affected gross margins in Q2? - Management indicated that hiring challenges and turnover impacted the ability to meet production needs, which affected gross margins [25][26] Question: Where is the demand coming from in Q3? - Demand is strong in foundry logic and NAND, while advanced packaging has plateaued [35] Question: Are there any market share issues arising from hiring or retention challenges? - Management noted that market share is impacted by internal supply issues, as external purchases prevent capturing market share [44] Question: What are the expectations for the second half of the year? - Management expects a slight decline in the second half, primarily due to timing of shipments and customer demand patterns [90][91] Question: Are tariffs impacting the business? - Management confirmed that tariffs are being passed on to customers, and regulations are clearer now, allowing for better management of impacts [61][62]

Financial Data and Key Metrics Changes - Q2 2025 revenues were $240 million, reflecting an 18% year-over-year increase and at the upper end of expectations, but 2% lower than Q1 [16][17] - Q2 gross margin was 12.5%, a slight increase of 10 basis points from Q1, but at the lower end of expectations due to hiring challenges [17] - Operating income for Q2 was $6.1 million, with net interest expense aligned with expectations at $1.6 million [17] - EPS for the quarter was $0.03 per share, impacted by a higher-than-expected tax expense of $3.2 million [17] Business Line Data and Key Metrics Changes - The revenue upside in Q2 was primarily driven by the lower margin gas panel integration business [5] - The company faced hiring and retention challenges that limited output volumes, impacting gross margins [6][14] - Significant progress was made in qualifying new products, including a major milestone with the flow control product [10][11] Market Data and Key Metrics Changes - The customer demand environment remains steady, with expectations for modest growth in wafer fab equipment (WFE) for 2025 [7] - Year-to-date revenues were up 20% year-over-year, indicating that the company expects to outperform overall WFE growth for 2025 [7] - Demand for NAND and foundry logic remains strong, while advanced packaging has plateaued [37][39] Company Strategy and Development Direction - The company is focused on ramping internal supply to meet strong customer demand and improve gross margins [7][9] - A new product strategy is gaining traction, with ongoing qualifications and commercializations of proprietary components [12] - The company is proactively reducing costs elsewhere to secure necessary headcount in US machining operations [6] Management's Comments on Operating Environment and Future Outlook - Management expressed a more conservative view on hiring and gross margin expectations for the upcoming quarters [14] - The outlook for 2025 is slightly front-half weighted, with potential for a slower quarter in December [13] - Management remains confident in the long-term gross margin targets but emphasizes the need for improved visibility on revenue growth [14] Other Important Information - The company announced CEO succession plans, with the current CEO remaining until a successor is identified [21][22] - The company recorded exit costs of $5.7 million related to personnel and facility costs, with potential for additional charges in Q3 and Q4 [18] Q&A Session Summary Question: Can you unpack the dynamics that affected gross margins in Q2? - Management indicated that hiring challenges and turnover impacted the ability to meet production needs, which affected gross margins [28][30] Question: Where is the demand coming from for Q3? - Demand is primarily coming from foundry logic and NAND, while advanced packaging has plateaued [37][39] Question: Are there any market share issues arising from hiring and retention challenges? - Management stated that market share is affected by internal supply issues, as external purchases do not capture market share [46] Question: What are the expected tax implications from recent legislation? - Management indicated no near-term material benefits from new tax legislation due to the current tax position [74] Question: Is the target of 20% gross margin still attainable? - Management confirmed that the 20% gross margin target remains a goal, contingent on successful product qualifications and internal sourcing [78][80]

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) This section provides an overview of Ichor Holdings, Ltd.'s Q2 2025 financial performance and key strategic commentary from the CEO [Q2 2025 Financial Highlights (GAAP & Non-GAAP)](index=1&type=section&id=Q2%202025%20Financial%20Highlights%20(GAAP%20%26%20Non-GAAP)) Ichor reported Q2 2025 revenue of **$240.3 million**, GAAP net loss of **$(9.4) million**, and non-GAAP net income of **$1.1 million** | Metric | Q2 2025 (GAAP) | Q2 2025 (Non-GAAP) | | :--- | :--- | :--- | | Net sales | $240,285 | N/A | | Gross margin | 11.3 % | 12.5 % | | Operating margin | (2.0)% | 2.6 % | | Net loss/income | $(9,408) | $1,097 | | Diluted EPS | $(0.28) | $0.03 | - Revenue of **$240.3 million** exceeded the mid-point of the company's guidance range communicated in May[4](index=4&type=chunk) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Jeff Andreson highlighted steady customer demand, proprietary product expansion, and anticipated 2025 revenue growth outperforming the wafer fab equipment industry - Progress made in driving the expansion of the proprietary product portfolio within a relatively steady customer demand environment year-to-date[1](index=1&type=chunk) - **2025** is shaping up to be a solid revenue growth year for Ichor, with expectations to outperform the wafer fab equipment industry's growth[1](index=1&type=chunk) - Focus for the second half of the year remains on increasing manufacturing capacity and aligning production to meet targeted product margins[1](index=1&type=chunk) [Financial Performance Overview](index=1&type=section&id=Financial%20Performance%20Overview) This section details Ichor's GAAP and non-GAAP financial results for Q2 2025 and provides the financial outlook for Q3 2025 [U.S. GAAP Financial Results](index=1&type=section&id=U.S.%20GAAP%20Financial%20Results) Q2 2025 GAAP revenue was **$240.3 million**, with a net loss of **$(9.4) million** and diluted EPS of **$(0.28)** | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net sales | $240,285 | $244,465 | $203,227 | | Net loss | $(9,408) | $(4,559) | $(5,112) | | Diluted EPS | $(0.28) | $(0.13) | $(0.15) | [Non-GAAP Financial Results](index=1&type=section&id=Non-GAAP%20Financial%20Results) Non-GAAP net income for Q2 2025 was **$1.1 million**, a decrease from prior quarters, with diluted EPS at **$0.03** | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Non-GAAP Net income | $1,097 | $4,236 | $1,819 | | Non-GAAP Diluted EPS | $0.03 | $0.12 | $0.05 | [Third Quarter 2025 Financial Outlook](index=2&type=section&id=Third%20Quarter%202025%20Financial%20Outlook) Ichor projects Q3 2025 revenue between **$225 million** and **$245 million**, with GAAP diluted EPS from **$(0.12)** to **$0.00** and non-GAAP diluted EPS from **$0.06** to **$0.18** | Metric | Low-End | Mid-Point | High-End | | :--- | :--- | :--- | :--- | | Revenue | $225 million | $235 million | $245 million | | GAAP diluted EPS | $(0.12) | $(0.06) | $0.00 | | Non-GAAP diluted EPS | $0.06 | $0.12 | $0.18 | - The outlook for non-GAAP diluted EPS excludes approximately **$2.1 million** for amortization of intangible assets and **$4.4 million** for share-based compensation expense, as well as related income tax effects[5](index=5&type=chunk) [Balance Sheet and Cash Flow Analysis](index=2&type=section&id=Balance%20Sheet%20and%20Cash%20Flow%20Analysis) This section analyzes Ichor's cash position, operating cash flow, and changes in operating assets and liabilities for Q2 2025 [Cash and Cash Equivalents](index=2&type=section&id=Cash%20and%20Cash%20Equivalents) Ichor ended Q2 2025 with **$92.2 million** in cash, a **$17.1 million** decrease from the prior quarter and **$16.4 million** from the prior year-end | Period | Cash and Cash Equivalents ($ in millions) | | :--- | :--- | | June 27, 2025 | $92.2 million | | Decrease from Q1 2025 | $(17.1) million | | Decrease from Dec 27, 2024 | $(16.4) million | - The **$17.1 million** decrease in Q2 2025 was primarily due to net cash used in operating activities (**$7.5 million**), capital expenditures (**$7.3 million**), net payments on credit facilities (**$1.9 million**), and net cash payments related to share-based compensation (**$0.4 million**)[7](index=7&type=chunk) [Operating Activities Cash Flow](index=2&type=section&id=Operating%20Activities%20Cash%20Flow) Q2 2025 saw **$7.5 million** in cash used in operating activities, driven by increased net operating assets and a net loss, partially offset by non-cash charges - Net cash used in operating activities for Q2 2025: **$(7.5) million**[8](index=8&type=chunk) - Primary drivers for cash used: increase in net operating assets and liabilities (**$12.8 million**) and net loss (**$9.4 million**)[8](index=8&type=chunk) - Partially offset by net non-cash charges (**$14.7 million**), primarily depreciation and amortization (**$8.0 million**) and share-based compensation expense (**$4.2 million**)[8](index=8&type=chunk) [Changes in Operating Assets and Liabilities](index=2&type=section&id=Changes%20in%20Operating%20Assets%20and%20Liabilities) The **$12.8 million** increase in net operating assets and liabilities in Q2 2025 was mainly due to decreased accounts payable, partially offset by lower inventories - Q2 2025 increase in net operating assets and liabilities (**$12.8 million**) primarily due to a decrease in accounts payable of **$14.8 million**, partially offset by a decrease in inventories of **$4.1 million**[9](index=9&type=chunk) - Six months ended June 27, 2025, increase in net operating assets and liabilities (**$1.8 million**) primarily due to an increase in inventory of **$9.3 million** and a decrease in other liabilities of **$2.9 million**, partially offset by a decrease in accounts receivable of **$5.8 million** and a decrease in prepaid expenses and other assets of **$4.8 million**[10](index=10&type=chunk) [Company Information & Disclosures](index=3&type=section&id=Company%20Information%20%26%20Disclosures) This section outlines Ichor's use of non-GAAP metrics, company profile, fiscal year details, and forward-looking statement disclaimers [Use of Non-GAAP Financial Results](index=3&type=section&id=Use%20of%20Non-GAAP%20Financial%20Results) Ichor uses non-GAAP metrics to assess performance, excluding items like amortization and share-based compensation, but cautions against their use as sole indicators - Management uses non-GAAP metrics (gross profit, operating income, net income/loss, diluted EPS, free cash flow) to evaluate operating and financial results, believing they are useful for investors to analyze business trends and compare performance[11](index=11&type=chunk) - Non-GAAP adjustments typically exclude amortization of intangible assets, share-based compensation expense, discrete or infrequent charges/gains (e.g., transaction-related costs, facility shutdown costs, severance), and their associated tax impacts[12](index=12&type=chunk) - Non-GAAP results have limitations as analytical tools and should not be considered in isolation or as substitutes for results reported under GAAP[13](index=13&type=chunk) [About Ichor](index=3&type=section&id=About%20Ichor) Ichor Holdings, Ltd. is a leading designer and manufacturer of critical fluid delivery subsystems and components for semiconductor capital equipment and other industries - Ichor is a leader in the design, engineering, and manufacturing of critical fluid delivery subsystems and components[16](index=16&type=chunk) - Primarily serves the semiconductor capital equipment industry, also other industries like defense/aerospace and medical[16](index=16&type=chunk) - Primary product offerings include gas and chemical delivery subsystems, precision-machined components, weldments, e-beam and laser welded components, precision vacuum and hydrogen brazing, and surface treatment technologies[16](index=16&type=chunk) [Fiscal Year Information](index=4&type=section&id=Fiscal%20Year%20Information) Ichor operates on a 52- or 53-week fiscal year ending the last Friday in December, with Q2 2025, Q1 2025, and Q2 2024 each being 13-week periods - The company uses a 52- or 53-week fiscal year ending on the last Friday in December. The three-month periods ended June 27, 2025, March 28, 2025, and June 28, 2024, were each **13 weeks**[17](index=17&type=chunk) [Safe Harbor Statement](index=4&type=section&id=Safe%20Harbor%20Statement) The release contains forward-looking statements subject to risks like geopolitical conditions, personnel retention, and industry cycles, with no obligation to update - The release contains "forward-looking statements" regarding future events, including the outlook for Q3 2025, revenue levels, industry growth, and investments in R&D[18](index=18&type=chunk) - Actual results could differ materially due to various factors, including geopolitical/economic conditions, inability to attract/retain key personnel, dependence on semiconductor capital equipment industry cycles and a small number of OEMs, competitiveness, technological innovation, product development, litigation, manufacturing/procurement management, product defects, and dependence on limited suppliers[19](index=19&type=chunk) - The company undertakes no obligation to update or revise any forward-looking statements, except as required by law[19](index=19&type=chunk) [Consolidated Financial Statements](index=5&type=section&id=Consolidated%20Financial%20Statements) This section presents Ichor's consolidated balance sheets, statements of operations, and cash flows for the reported periods [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) As of June 27, 2025, total assets were **$985.1 million**, total liabilities **$290.9 million**, and total shareholders' equity **$694.1 million** | Metric | June 27, 2025 | March 28, 2025 | December 27, 2024 | June 28, 2024 | | :--- | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $92,224 | $109,281 | $108,669 | $114,349 | | Total current assets | $439,128 | $459,834 | $452,620 | $418,636 | | Total assets | $985,068 | $1,006,613 | $995,564 | $947,689 | | Total current liabilities | $136,423 | $148,916 | $135,670 | $98,116 | | Total liabilities | $290,921 | $306,252 | $297,228 | $252,813 | | Total shareholders' equity | $694,147 | $700,361 | $698,336 | $694,876 | [Consolidated Statement of Operations](index=6&type=section&id=Consolidated%20Statement%20of%20Operations) Q2 2025 net sales were **$240.3 million**, resulting in a gross profit of **$27.2 million** (11.3% margin), an operating loss of **$(4.8) million**, and a net loss of **$(9.4) million** | Metric | Three Months Ended June 27, 2025 | Three Months Ended March 28, 2025 | Three Months Ended June 28, 2024 | | :--- | :--- | :--- | :--- | | Net sales | $240,285 | $244,465 | $203,227 | | Cost of sales | $213,083 | $215,943 | $177,670 | | Gross profit | $27,202 | $28,522 | $25,557 | | Operating expenses | $32,042 | $29,694 | $27,819 | | Operating loss | $(4,840) | $(1,172) | $(2,262) | | Net loss | $(9,408) | $(4,559) | $(5,112) | | Diluted EPS | $(0.28) | $(0.13) | $(0.15) | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) In Q2 2025, Ichor experienced net cash outflows of **$(7.5) million** from operations, **$(7.3) million** from investing, and **$(2.3) million** from financing, totaling a **$(17.1) million** decrease in cash | Cash Flow Activity | Three Months Ended June 27, 2025 | Three Months Ended March 28, 2025 | Three Months Ended June 28, 2024 | | :--- | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $(7,508) | $18,977 | $17,492 | | Net cash used in investing activities | $(7,291) | $(18,481) | $(2,847) | | Net cash provided by (used in) financing activities | $(2,258) | $116 | $(2,420) | | Net increase (decrease) in cash | $(17,057) | $612 | $12,225 | | Cash at end of period | $92,224 | $109,281 | $114,349 | [Non-GAAP Reconciliations](index=8&type=section&id=Non-GAAP%20Reconciliations) This section provides reconciliations of GAAP to non-GAAP gross profit, operating income, net income, and free cash flow [Reconciliation of Gross Profit](index=8&type=section&id=Reconciliation%20of%20U.S.%20GAAP%20Gross%20Profit%20to%20Non-GAAP%20Gross%20Profit) Q2 2025 GAAP gross profit was **$27.2 million** (11.3% margin), adjusted to a non-GAAP gross profit of **$30.0 million** (12.5% margin) after **$2.8 million** in adjustments | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | U.S. GAAP gross profit | $27,202 | $28,522 | $25,557 | | Non-GAAP adjustments (total) | $2,771 | $1,794 | $877 | | Non-GAAP gross profit | $29,973 | $30,316 | $26,434 | | U.S. GAAP gross margin | 11.3 % | 11.7 % | 12.6 % | | Non-GAAP gross margin | 12.5 % | 12.4 % | 13.0 % | - Non-GAAP adjustments for Q2 2025 included **$774k** for share-based compensation, **$1,619k** for facility shutdown costs (related to Scotland operations exit, including obsolete inventory write-off and severance), and **$378k** for other severance costs[29](index=29&type=chunk)[30](index=30&type=chunk) [Reconciliation of Operating Income (Loss)](index=9&type=section&id=Reconciliation%20of%20U.S.%20GAAP%20Operating%20Loss%20to%20Non-GAAP%20Operating%20Income) Q2 2025 GAAP operating loss was **$(4.8) million** ((2.0)% margin), adjusted to a non-GAAP operating income of **$6.1 million** (2.6% margin) after **$11.1 million** in adjustments | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | U.S. GAAP operating loss | $(4,840) | $(1,172) | $(2,262) | | Non-GAAP adjustments (total) | $11,087 | $7,747 | $6,757 | | Non-GAAP operating income | $6,147 | $6,575 | $4,495 | | U.S. GAAP operating margin | (2.0)% | (0.5)% | (1.1)% | | Non-GAAP operating margin | 2.6 % | 2.7 % | 2.2 % | - Non-GAAP adjustments for Q2 2025 included **$2,078k** for amortization of intangible assets, **$4,227k** for share-based compensation, **$4,296k** for facility shutdown costs (related to Scotland operations exit, including inventory write-off, lease impairment, accelerated depreciation, and severance), and **$386k** for other severance costs[31](index=31&type=chunk)[33](index=33&type=chunk) [Reconciliation of Net Income (Loss)](index=10&type=section&id=Reconciliation%20of%20U.S.%20GAAP%20Net%20Loss%20to%20Non-GAAP%20Net%20Income%20(Loss)) Q2 2025 GAAP net loss was **$(9.4) million**, adjusted to a non-GAAP net income of **$1.1 million** (diluted EPS of **$0.03**) after **$10.5 million** in adjustments | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | U.S. GAAP net loss | $(9,408) | $(4,559) | $(5,112) | | Non-GAAP adjustments (total) | $10,505 | $8,795 | $6,927 | | Non-GAAP net income (loss) | $1,097 | $4,236 | $1,819 | | U.S. GAAP diluted EPS | $(0.28) | $(0.13) | $(0.15) | | Non-GAAP diluted EPS | $0.03 | $0.12 | $0.05 | - Non-GAAP adjustments for Q2 2025 included **$2,078k** for amortization of intangible assets, **$4,227k** for share-based compensation, **$4,296k** for facility shutdown costs, **$386k** for other severance costs, and **$(482)k** for tax adjustments related to non-GAAP adjustments[35](index=35&type=chunk)[36](index=36&type=chunk)[37](index=37&type=chunk) [Reconciliation of Free Cash Flow](index=11&type=section&id=Reconciliation%20of%20U.S.%20GAAP%20Net%20Cash%20Provided%20by%20Operating%20Activities%20to%20Free%20Cash%20Flow) In Q2 2025, net cash used in operating activities was **$(7.5) million**, leading to a free cash flow of **$(14.8) million** after **$(7.3) million** in capital expenditures | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $(7,508) | $18,977 | $17,492 | | Capital expenditures | $(7,291) | $(18,481) | $(2,847) | | Free cash flow | $(14,799) | $496 | $14,645 |

Core Viewpoint - Ichor Holdings (ICHR) is anticipated to report a year-over-year increase in earnings and revenues for the quarter ended June 2025, with earnings expected to be $0.14 per share, reflecting a 180% increase, and revenues projected at $235.48 million, up 15.9% from the previous year [1][3]. Earnings Expectations - The upcoming earnings report is scheduled for August 4, and the stock may rise if the reported numbers exceed expectations, while a miss could lead to a decline [2]. - The consensus EPS estimate has remained unchanged over the last 30 days, indicating stability in analyst expectations [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model shows a positive Earnings ESP of +12.28% for Ichor Holdings, suggesting analysts have recently become more optimistic about the company's earnings prospects [12]. - A positive Earnings ESP is a strong indicator of an earnings beat, especially when combined with a Zacks Rank of 1, 2, or 3 [10]. Historical Performance - In the last reported quarter, Ichor Holdings had an expected EPS of $0.26 but reported only $0.12, resulting in a surprise of -53.85% [13]. - Over the past four quarters, the company has beaten consensus EPS estimates two times [14]. Industry Context - Qualcomm (QCOM), a peer in the electronics-semiconductors industry, is expected to report earnings of $2.68 per share, reflecting a 15% year-over-year increase, with revenues projected at $10.36 billion, up 10.3% from the previous year [18]. - Qualcomm's consensus EPS estimate has been revised up by 0.3% over the last 30 days, and it has an Earnings ESP of +0.6%, indicating a likelihood of beating the consensus EPS estimate [19].

Core Insights - DPRG IM is a management-owned partnership with over 50 years of experience in real estate and financial markets, focusing on understanding industries and investment cycles [1] - The company aims to manage real estate equity that is often underutilized, providing a product that addresses the need for managing equity locked in properties [1] - DPRG IM has developed a Leveraged Long Only Absolute Return Strategy (LLARS) that prioritizes regular income while aiming for long-term growth, making it suitable for commercial real estate owners [1] Company Overview - DPRG IM originated from DPRG's private equity business and has established a track record in managing released funds through client mortgage facility banking [1] - The company has built strong banking relationships to finance European and UK real estate, adapting to country-specific pricing [1] - DPRG IM operates with a strong management team located in Nicosia, Cyprus, and has a presence in London, Monaco, and Dubai & Abu Dhabi [1] Investment Strategy - LLARS focuses on providing regular income on a quarterly basis, which is beneficial for servicing debt payments and maintenance costs [1] - The strategy enhances rental and free cash flow streams for commercial real estate owners without correlating to the asset's operations [1] - DPRG IM also offers structuring services, including legal, taxation, and cross-jurisdiction expertise to optimize capital efficiency [1] Regulatory Compliance - DPRG IM is authorized and regulated by the Cyprus Securities and Exchange Commission (CySEC) with License No. 454/25, ensuring compliance with regulatory standards [1]