Financial Performance - Net sales for the three months ended March 28, 2025, were $244,465,000, representing a 21.4% increase from $201,383,000 for the same period in 2024[62] - The net loss for the three months ended March 28, 2025, was $4,559,000, an improvement from a net loss of $8,989,000 in the same period of 2024[62] - Non-GAAP net income for the same period was $4,236,000, compared to a non-GAAP net loss of $2,712,000 in the prior year[62] - Non-GAAP gross profit increased by $5,798 thousand (23.6%) from $24,518 thousand in Q1 2024 to $30,316 thousand in Q1 2025, with a non-GAAP gross margin of 12.4%[80] - Non-GAAP operating income rose to $6,575 thousand in Q1 2025 from $2,432 thousand in Q1 2024, reflecting a significant improvement in non-GAAP operating margin from 1.2% to 2.7%[80] - Non-GAAP net income increased to $4,236 thousand in Q1 2025 from a loss of $2,712 thousand in Q1 2024, with non-GAAP diluted EPS improving from -$0.09 to $0.12[82] Expenses - Research and development expenses increased by 9.4% to $5,874,000, driven by higher material and service costs related to new product development[71] - Selling, general, and administrative expenses rose by 13.1% to $21,742,000, primarily due to increased share-based compensation and IT system costs[72] - Interest expense, net decreased by $2,450 thousand (59.8%) from $4,096 thousand in Q1 2024 to $1,646 thousand in Q1 2025, primarily due to a reduction in weighted average borrowings outstanding and borrowing rate[74] - Other expense, net decreased by $158 thousand (66.1%) from $239 thousand in Q1 2024 to $81 thousand in Q1 2025, mainly due to currency exchange rate fluctuations[75] - Income tax expense increased by $747 thousand (81.8%) from $913 thousand in Q1 2024 to $1,660 thousand in Q1 2025, attributed to additional tax provisions in Singapore and valuation allowances in Scotland and Korea[76] Margins - Gross margin improved to 11.7% for the three months ended March 28, 2025, up from 11.4% in the prior year, attributed to lower excess and obsolete inventory expense[70] - Operating margin improved to (0.5)% for the three months ended March 28, 2025, compared to (1.9)% in the same period of 2024[62] Cash Flow and Liquidity - Cash provided by operating activities increased from $4,804 thousand in Q1 2024 to $18,977 thousand in Q1 2025, driven by favorable changes in working capital[89] - Cash and cash equivalents at the end of Q1 2025 were $109.3 million, an increase of $0.6 million from the previous year[88] - The company expects its cash and cash equivalents, along with available credit facilities, to be sufficient to meet business obligations for at least the next 12 months[86] Market Outlook - The semiconductor capital equipment industry is expected to see growth in 2025, particularly in etch and deposition markets, despite uncertain global trade conditions[63] - Future demand for semiconductors and related capital equipment is anticipated to grow, driven by the need for expanded manufacturing capacity[64] Company Operations - The company has a global footprint with production facilities in multiple countries, including the United States, Singapore, and Mexico[60] - There have been no material changes to the market risk information disclosed in the 2024 Annual Report on Form 10-K[95]

Core Viewpoint - Ichor Holdings reported quarterly earnings of $0.12 per share, missing the Zacks Consensus Estimate of $0.26 per share, and showing a significant decline from a loss of $0.09 per share a year ago, indicating a negative earnings surprise of -53.85% [1] Financial Performance - The company posted revenues of $244.47 million for the quarter ended March 2025, which was slightly below the Zacks Consensus Estimate by 0.19%, but an increase from $201.38 million in the same quarter last year [2] - Over the last four quarters, Ichor Holdings has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Stock Performance - Ichor Holdings shares have declined approximately 34.9% since the beginning of the year, contrasting with the S&P 500's decline of -3.3% [3] - The current Zacks Rank for Ichor Holdings is 5 (Strong Sell), indicating expectations of underperformance in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.31 on revenues of $243.93 million, and for the current fiscal year, it is $1.27 on revenues of $972.13 million [7] - The trend for estimate revisions ahead of the earnings release was unfavorable, which may impact future stock performance [6] Industry Context - The Electronics - Semiconductors industry, to which Ichor Holdings belongs, is currently ranked in the top 28% of over 250 Zacks industries, suggesting a relatively strong industry performance [8] - The performance of Ichor Holdings may be influenced by the overall outlook for the industry [8]

Financial Data and Key Metrics Changes - First quarter revenues were $244.5 million, up 5% sequentially from Q4 and 21% year-over-year [5][20] - Gross margin for Q1 was 12.4%, an increase of 40 basis points from Q4 but below the forecast of 14.5% [20] - Operating income for Q1 was $6.6 million, with a net interest expense of $1.6 million and a non-GAAP net income tax expense of $600,000 [20] - Free cash flow was $500,000 after generating $19 million in cash flow from operations and deducting $18.5 million in capital expenditures [21] Business Line Data and Key Metrics Changes - The company acknowledged challenges in transitioning from externally supplied products to internally manufactured products, impacting gross margins [6][20] - A new contract in the commercial space market led to higher costs and revenue push-outs due to redesign requirements [9] - The decision to exit the refurbishment business in Scotland had a slight negative impact on both revenue and gross margin [9] Market Data and Key Metrics Changes - The overall customer demand environment has remained consistent, with expectations for modest growth in wafer fab equipment (WFE) for 2025 [5] - The company expects revenue growth to outperform overall WFE growth in 2025 [5] - Specific markets such as silicon carbide applications have weakened, affecting OEM customers differently [14] Company Strategy and Development Direction - The company aims to increase the use of proprietary, internally sourced components to drive gross margin expansion [10] - By the end of 2025, the company expects to have all four major customers qualified on all three major product families: valves, fittings, and substrates [12] - Planned capital expenditures for 2025 are expected to be around 4% of revenue, higher than the historical average of 2% [22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the demand for products and qualifications, despite challenges in aligning supply with demand [60] - The company is working to mitigate the impact of tariffs on gross margins and is optimistic about collaboration with customers [42] - Visibility for the second half of the year is less certain, but management believes the business will be relatively evenly weighted between the first and second halves of 2025 [15] Other Important Information - The company is facing complexities due to recent tariff announcements, particularly affecting steel and aluminum imports [12][13] - The exit from the refurbishment business in Scotland was primarily due to declining demand, resulting in a loss of approximately $10 million in annual revenue [96] Q&A Session Summary Question: Change in revenue outlook for the year - Management noted that the lithography business is softer, primarily due to the exit from Scotland, while NAND investment continues [27][29] Question: Gross margins and tariff impacts - Management indicated that they executed about 75% to 80% of their internal sourcing goals, with ongoing improvements expected [32] Question: Customer behavior regarding tariffs - Management stated that customers are collaborating to address tariff impacts, with some costs being passed through [42] Question: Confidence in second half growth - Management expressed confidence in continued strength in DRAM and NAND upgrades, with expectations for growth in the second half [46] Question: Disconnect with largest customer guidance - Management believes there are natural offsets in the market, and they do not see significant disconnects from customer forecasts [54] Question: Impact of exiting Scotland operations - The exit from Scotland was primarily responsible for severance costs, with the majority of the impact coming from that decision [65] Question: Monitoring steps for gross margins - Management acknowledged the need for better forecasting and alignment between supply and demand, with plans for deeper organizational oversight [72] Question: Long-term view on internal sourcing - Management maintains a positive long-term view on incremental margins from internal sourcing, with ongoing improvements expected [82]

Financial Performance - Q1 2025 revenue was $244.5 million, an increase of 4.9% from Q4 2024 ($233.3 million) and 21.4% from Q1 2024 ($201.4 million) [2] - The net loss for Q1 2025 was $(4.6) million, compared to $(3.9) million in Q4 2024 and $(9.0) million in Q1 2024 [2] - Non-GAAP net income for Q1 2025 was $4.2 million, compared to $2.8 million in Q4 2024 and a loss of $(2.7) million in Q1 2024 [3] - U.S. GAAP net loss for Q1 2025 was $4,559 thousand, compared to a loss of $3,943 thousand in Q4 2024 and $8,989 thousand in Q1 2024 [33] - Non-GAAP net income for Q1 2025 was $4,236 thousand, up from $2,761 thousand in Q4 2024, while Q1 2024 reported a loss of $2,712 thousand [33] Margins and Profitability - GAAP gross margin for Q1 2025 was 11.7%, slightly up from 11.6% in Q4 2024 and 11.4% in Q1 2024; non-GAAP gross margin was 12.4% [4] - Gross profit for the same period was $28,522 thousand, resulting in a gross margin of 11.7%, compared to 11.6% in the previous quarter and 11.4% a year ago [27] - Operating loss was $1,172 thousand, a slight improvement from a loss of $1,252 thousand in the previous quarter and a loss of $3,741 thousand a year ago [30] - Non-GAAP operating income for the three months ended March 28, 2025, was $6,575 thousand, compared to $5,602 thousand in the previous quarter and $2,432 thousand a year ago [30] Cash Flow and Liquidity - Cash and cash equivalents at the end of Q1 2025 were $109.3 million, an increase of $0.6 million from the prior year [6] - Operating activities provided $19.0 million in cash during Q1 2025, despite a net loss of $(4.6) million [7] - Net cash provided by operating activities for Q1 2025 was $18,977 thousand, a significant improvement from $(2,488) thousand in Q4 2024 and $4,804 thousand in Q1 2024 [36] - Free cash flow for Q1 2025 was $496 thousand, recovering from $(6,886) thousand in Q4 2024 and up from $314 thousand in Q1 2024 [36] Future Outlook - For Q2 2025, the company expects revenue between $225 million and $245 million, with GAAP diluted EPS ranging from $(0.06) to $0.04 [5] - The company is focused on maintaining a balanced revenue growth profile between the first and second halves of 2025, despite policy uncertainties affecting demand visibility [1] - The company anticipates meaningful gross margin improvement as it integrates internal component supply into high-volume manufacturing operations throughout 2025 [1] Assets and Expenditures - Total current assets increased to $459,834 thousand as of March 28, 2025, up from $452,620 thousand in the previous quarter and $421,221 thousand a year ago [22] - The company’s total assets reached $1,006,613 thousand as of March 28, 2025, an increase from $995,564 thousand in the previous quarter and $957,388 thousand a year ago [22] - Capital expenditures in Q1 2025 were $18,481 thousand, compared to $4,398 thousand in Q4 2024 and $4,490 thousand in Q1 2024 [36] - The company incurred capital expenditures of $18,481 thousand during the quarter, compared to $4,398 thousand in the previous quarter and $4,490 thousand a year ago [25] Other Considerations - The decrease in net operating assets and liabilities of $11.0 million was primarily due to an increase in accounts payable of $14.3 million [8] - Research and development expenses were $5,874 thousand, slightly up from $5,850 thousand in the previous quarter and $5,370 thousand a year ago [23] - The company incurred severance costs related to global reduction-in-force programs and the exit from Scotland operations in Q1 2025 [34] - A valuation allowance against deferred tax assets from Scotland and Korea operations was recorded in Q1 2025 [34] - Transaction-related costs associated with acquisitions were not incurred in Q1 2025, contrasting with $785 thousand in Q1 2024 [33]

Financial Performance - Revenue for 2024 was $849.0 million, an increase from $811.1 million in 2023, but a decrease from $1,280.1 million in 2022[22]. - Net loss for 2024 was $(20.8) million, compared to a net loss of $(43.0) million in 2023 and a net income of $72.8 million in 2022[22]. - Total capital expenditures for 2024 were $17.6 million, representing 2.1% of sales, compared to $15.5 million (1.9%) in 2023 and $29.4 million (2.3%) in 2022[28]. - The company had total principal outstanding of $129.4 million under its term loan facility as of December 27, 2024[132]. - Total indebtedness as of December 27, 2024, was $129.4 million, with $7.5 million payable within the next 12 months[226]. - The company’s quarterly sales and operating results fluctuate significantly, which may cause volatility in its share price[137]. Market Position and Strategy - The company aims to grow market share within existing customers by leveraging specialized engineering talent and early collaboration[29]. - The company has expanded its customer base to include leading manufacturers in lithography and ALD systems[31]. - The acquisition of IMG Companies in November 2021 expanded the customer base into medical, aerospace, and defense sectors[32]. - The company maintains long-standing relationships with top-tier OEM customers, including Lam Research, Applied Materials, and ASML[26]. - The semiconductor capital equipment market is cyclical, and the company has structured its business to grow net income at a higher rate than sales during growth periods[28]. - The semiconductor equipment market is highly concentrated, with five companies accounting for over 70% of all process tool revenues, and two customers, Lam Research and Applied Materials, representing 73% of total sales for 2024[39]. - The company emphasizes customer relationships, early engagement, and flexible manufacturing capabilities as key competitive factors[51]. - The company aims to design innovative and performance-enhancing features to differentiate its products from competitors[16]. Operational Efficiency - The company focuses on improving manufacturing process efficiency to reduce cycle times and costs, enhancing profitability[33]. - The manufacturing process can reduce order-to-delivery cycle times to as little as 20 to 30 days for gas delivery systems after receiving an order[42]. - The company utilizes just-in-time stocking programs to manage component inventories effectively and respond to changing customer requirements[46]. - The company operates ISO 9001 certified facilities in multiple countries, including the United States, Singapore, and Korea, ensuring adherence to strict design tolerances and specifications[43]. - The company has a strong focus on continuous technology investment and product development to meet evolving customer requirements[47]. Risks and Challenges - The semiconductor capital equipment industry is experiencing cyclical downturns, with significant fluctuations in customer orders anticipated in 2023 and early 2024 due to reduced demand[75]. - The company faces significant pricing pressure from customers, which has resulted in reduced gross margins and increased liability risks in commercial arrangements[81]. - The current macroeconomic environment is characterized by high inflation and supply chain challenges, which may lead to reduced orders from customers and increased inventory[85]. - The introduction of new products is risky, as it is difficult to predict market adoption and coordinate technical personnel, which could adversely affect the company's financial condition[89]. - The company is exposed to risks associated with geopolitical instability and economic uncertainty, which could adversely affect customer spending and order placements[85]. - The company may face significant warranty and performance guarantee claims, which could materially affect financial condition and results of operations[96]. - The reliance on a limited number of suppliers poses risks to production output and costs, potentially leading to delays and increased charges[97]. - Cybersecurity threats remain a concern, with potential material impacts on financial condition and operations if breaches occur[103]. - The company may face substantial liquidity problems if cash flows from operating activities are insufficient to fund debt service obligations[135]. Compliance and Regulatory Issues - Compliance with governmental regulations did not materially affect the company's capital expenditures, earnings, or competitive position in 2024[61]. - The company is subject to various U.S. and international laws regarding privacy and data protection, including GDPR and CCPA, which can be costly to comply with and may impede product development[111]. - Recent changes in U.S. trade policy, particularly the BIS Rules, restrict the export of advanced computing and semiconductor manufacturing items to China, impacting sales and operations[120]. - The company is subject to numerous environmental laws and regulations that could increase manufacturing costs or result in liabilities[124]. Human Resources and Labor - The company employs approximately 1,820 full-time employees and 560 contingent/temporary workers as of December 27, 2024[55]. - Labor cost reduction initiatives were initiated in the fourth quarter of 2022 and continued through the second quarter of 2024 to align resources with decreased demand[76]. - The company initiated labor cost reduction initiatives in Q4 2022, continuing through Q2 2024, which may adversely affect employee morale and institutional knowledge[108]. - The company’s business could suffer from labor disruptions, as it does not maintain key person life insurance for employees, and key personnel are not subject to non-competition agreements[108]. Financial Risks - The company is exposed to interest rate risk due to variable interest rates on its credit facilities, which could increase debt service costs[136]. - Changes in applicable tax laws in jurisdictions where the company operates could materially adversely affect its financial condition and results of operations[127]. - The company may incur additional indebtedness in the future, which could restrict its ability to pursue new business opportunities[133]. - A hypothetical 100 basis point change in the interest rate on outstanding debt would result in a $1.3 million change to interest expense on an annualized basis[226]. - The company does not expect foreign currency exchange rate fluctuations to materially affect its results of operations, as most sales and supplier arrangements are in U.S. dollars[224]. - Foreign currency transaction gains and losses have not been material to the financial statements, and the company has not engaged in foreign currency hedging transactions[225]. Intellectual Property and Legal Matters - The company relies on a combination of trade secrets and contractual confidentiality provisions to protect its proprietary technology, making its intellectual property position vulnerable[106]. - The company may face significant litigation costs and operational disruptions due to claims of intellectual property infringement from third parties[113]. - The company reviews goodwill for impairment annually, which could affect financial condition if future earnings do not meet expectations[91]. - The company’s competitive position could suffer if it fails to adequately protect its proprietary rights, leading to potential litigation and increased costs[106]. Strategic Growth and Expansion - The company may pursue strategic acquisitions to enhance its business, although integration challenges could arise[91]. - The company may seek to expand its presence in emerging markets, which could require considerable management time and incur start-up expenses before generating significant sales[117]. - The company’s operations are at risk from geopolitical changes, particularly in China-Taiwan relations, which could disrupt supply chains and manufacturing capabilities[122].

Financial Data and Key Metrics Changes - Q4 2024 revenues reached $233 million, a 10% sequential increase and a 15% year-over-year increase, exceeding expectations [8][24] - Total revenues for the fiscal year 2024 were $849 million, up 5% from 2023, with a 10% growth in the second half of the year [9][24] - Gross margin for Q4 declined to 12%, lower than expectations by about 300 basis points, primarily due to higher direct labor costs and inventory charges [25] - Net income per share for Q4 was $0.08, with cash and equivalents at the end of the quarter totaling $109 million [26][27] Business Line Data and Key Metrics Changes - Significant demand growth was noted in the Etch and CVD applications, particularly from advanced logic and DRAM markets, with a recovery beginning in NAND technology investments [10][11] - The company added machining resources in Q4 to meet increased demand for both build-to-print and internally-developed machine products [11] - Proprietary products, including high-purity valves and fittings, are progressing well in customer qualifications, which are expected to drive margin expansion in 2025 [17][18] Market Data and Key Metrics Changes - The company anticipates a strong year ahead driven by increased investments in NAND and a favorable mix shift in wafer fab equipment demand [12][14] - The visibility for growth improved significantly, with expectations of a solid growth year despite a slowdown in WFE spending in China [13][14] Company Strategy and Development Direction - The company is focused on increasing proprietary content in its products, which is expected to enhance gross margins and support top-line growth [11][21] - Investments are being made to prepare for anticipated growth, with expectations of gross margin improvement throughout 2025 [15][16] - The company aims to outperform overall WFE growth in 2025, driven by a robust customer demand environment and increased share of proprietary products [21][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the demand environment, indicating that the current momentum is expected to continue into 2025 [15][52] - The company is preparing for a modest increase in the second half of 2025, with expectations of strong performance in foundry logic and stable DRAM demand [52][56] - Management noted that the impact of higher labor costs and inventory charges in Q4 was unique to that quarter, with expectations for improved margins moving forward [12][25] Other Important Information - The company reduced total debt to $129 million, down from $250 million a year ago, with a net-debt coverage ratio declining to 1.6 times [28] - Guidance for Q1 2025 includes anticipated revenues in the range of $235 million to $255 million and gross margins between 14% to 15% [29][31] Q&A Session Summary Question: Can you help us understand the gross margin improvement for calendar '25? - Management indicated that gross margins are expected to exceed 16% by the end of the year, with improvements driven by new product progress and the absence of previous headwinds [35][36] Question: How would you rank the growth drivers for 2025? - Management sees foundry logic remaining strong, with DRAM expected to stay steady and NAND showing signs of recovery [42][44] Question: What is the revenue capability of your current infrastructure? - Current infrastructure can support revenue well above $400 million, with capacity being closely aligned with demand [84][85] Question: How are NAND shipments trending? - NAND shipments saw a healthy uptick in Q4, with expectations for continued growth into Q1 and Q2 [68] Question: What is the impact of proprietary gas panels on gross margin? - Proprietary gas panels are a significant contributor to gross margin improvement, with volume and absence of previous excursions also playing key roles [73] Question: What are the expectations for gross margins in 2026? - Management indicated that optimal gross margins could reach 19% to 20% in 2026, depending on growth and product mix [95]

Company Performance - Ichor Holdings reported quarterly earnings of $0.08 per share, missing the Zacks Consensus Estimate of $0.09 per share, compared to a loss of $0.06 per share a year ago, representing an earnings surprise of -11.11% [1] - The company posted revenues of $233.29 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 0.13%, and compared to year-ago revenues of $203.48 million [2] - Over the last four quarters, Ichor Holdings has surpassed consensus EPS estimates two times and topped consensus revenue estimates four times [2] Stock Outlook - Ichor Holdings shares have lost about 16.1% since the beginning of the year, while the S&P 500 has gained 1.9% [3] - The current consensus EPS estimate for the coming quarter is $0.23 on revenues of $243.5 million, and for the current fiscal year, it is $1.27 on revenues of $991.33 million [7] - The estimate revisions trend for Ichor Holdings is currently unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Industry Context - The Electronics - Semiconductors industry, to which Ichor Holdings belongs, is currently in the top 34% of over 250 Zacks industries, suggesting a favorable industry outlook [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Results - Ichor Holdings, Ltd. announced preliminary estimated financial results for Q4 2024, which are subject to change and not yet audited [7]. - The company has not filed its Annual Report on Form 10-K for fiscal year 2024, indicating that the preliminary results are management estimates and may differ from actual results [8]. - The preliminary financial results reflect management's current views and are subject to risks and uncertainties, emphasizing the need for caution in interpretation [8]. Conference Call - A webcast conference call is scheduled for February 4, 2025, at 1:30 p.m. PT to discuss the preliminary financial results [7]. Investor Communication - The company utilizes its "Investors" section on its website for disclosing material non-public information and compliance with Regulation FD [10].

Core Viewpoint - Wall Street anticipates a year-over-year increase in earnings for Ichor Holdings, with a focus on how actual results compare to estimates impacting stock price [1][2]. Earnings Expectations - Ichor Holdings is expected to report quarterly earnings of $0.08 per share, reflecting a year-over-year increase of +233.3% [3]. - Revenues are projected to be $233 million, representing a 14.5% increase from the previous year [3]. Estimate Revisions - The consensus EPS estimate has been revised down by 17.78% over the last 30 days, indicating a reassessment by analysts [4]. - The Most Accurate Estimate aligns with the Zacks Consensus Estimate, suggesting no recent differing views from analysts [10]. Earnings Surprise Prediction - The Earnings ESP for Ichor Holdings is 0%, indicating no predictive advantage for an earnings beat [11]. - The stock currently holds a Zacks Rank of 4, complicating predictions for beating the consensus EPS estimate [11]. Historical Performance - In the last reported quarter, Ichor Holdings exceeded expectations by delivering earnings of $0.12 per share against an expected $0.11, resulting in a +9.09% surprise [12]. - Over the past four quarters, the company has beaten consensus EPS estimates twice [13]. Market Reaction Factors - An earnings beat or miss alone may not dictate stock movement, as other factors can influence investor sentiment [14]. - Betting on stocks expected to beat earnings can improve success odds, highlighting the importance of Earnings ESP and Zacks Rank [15]. Conclusion - Ichor Holdings does not currently appear to be a strong candidate for an earnings beat, suggesting investors should consider additional factors before making decisions [16].

Core Insights - Ichor Holdings (NASDAQ: ICHR) has shown strong performance post-pandemic, leveraging the period to grow and diversify its business [1] Group 1: Company Performance - The company emerged robustly from the pandemic, indicating effective management and strategic growth initiatives [1] - Ichor Holdings has focused on diversifying its operations, which may enhance its resilience against market fluctuations [1] Group 2: Investment Opportunities - The investment group "Value In Corporate Events" provides insights into major corporate events, including earnings reports and M&A activities, which can present actionable investment opportunities [1] - The service covers approximately 10 significant events monthly, aiming to identify the best investment prospects [1]