Ichor (NasdaqGS:ICHR) Q4 2025 Earnings call February 09, 2026 04:30 PM ET Speaker10Good day, ladies and gentlemen, and welcome to Ichor's fourth quarter and fiscal year 2025 earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be given at that time. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this call is being recorded. I would now like ...

Core Insights - Ichor Holdings, Ltd. reported fourth quarter and fiscal year 2025 financial results, indicating a favorable alignment with earlier expectations and a positive outlook for fiscal 2026 driven by strengthening customer demand [1][2][3]. Financial Performance Fourth Quarter 2025 Highlights - Revenue for Q4 2025 was $223.6 million, a decrease from $239.3 million in Q3 2025 and $233.3 million in Q4 2024 [2][6]. - The gross margin was 9.4% on a GAAP basis and 11.7% on a non-GAAP basis, compared to 4.6% and 12.1% respectively in Q3 2025 [1][6]. - The net loss for Q4 2025 was $(15.96) million, with a diluted EPS of $(0.46), improving from a net loss of $(22.85) million and diluted EPS of $(0.67) in Q3 2025 [2][6]. Fiscal Year 2025 Highlights - Total revenue for FY 2025 reached $947.7 million, representing an 11.6% increase from $849.0 million in FY 2024 [3][6]. - The net loss for FY 2025 was $(52.8) million, with a diluted EPS of $(1.54), compared to a net loss of $(20.8) million and diluted EPS of $(0.64) in FY 2024 [3][6]. Non-GAAP Financial Results - For Q4 2025, non-GAAP net income was $0.3 million, with a non-GAAP diluted EPS of $0.01, down from $2.3 million and $2.8 million in Q3 2025 and Q4 2024 respectively [4][6]. - For FY 2025, non-GAAP net income was $7.9 million, with a non-GAAP diluted EPS of $0.23, compared to $5.9 million and $0.18 in FY 2024 [4][6]. Cash Flow and Balance Sheet - At the end of Q4 2025, cash and cash equivalents totaled $98.3 million, an increase of $5.8 million from the previous quarter but a decrease of $10.4 million from the prior year [8][9]. - Cash provided by operating activities for Q4 2025 was $9.2 million, driven by net cash from operations despite a net loss of $(15.96) million [10][9]. Outlook for First Quarter 2026 - The company expects Q1 2026 revenue to range from $240 million to $260 million, with GAAP diluted EPS projected between $(0.10) and $0.02, and non-GAAP diluted EPS between $0.08 and $0.16 [5][6].

Core Insights - Artificial intelligence (AI) is identified as the greatest investment opportunity of the current era, with a strong emphasis on the urgent need for energy to support its growth [1][2][3] Group 1: AI and Energy Demand - AI technologies, particularly large language models like ChatGPT, are extremely energy-intensive, with data centers consuming as much energy as small cities [2] - The increasing demand for AI is straining global power grids, leading to rising electricity prices and a need for utilities to expand capacity [2] - Industry leaders, including Sam Altman and Elon Musk, have highlighted the critical link between AI development and energy availability, warning of potential shortages [2] Group 2: Investment Opportunity - A specific company is positioned as a key player in the AI energy sector, owning critical energy infrastructure assets that will benefit from the anticipated surge in energy demand from AI data centers [3][7] - This company is not a chipmaker or cloud platform but is described as a "toll booth" operator in the energy market, profiting from the export of American LNG and the onshoring of manufacturing due to tariffs [5][6] - The company is debt-free and has significant cash reserves, equating to nearly one-third of its market capitalization, making it an attractive investment option [8] Group 3: Market Position and Valuation - The company is involved in large-scale engineering, procurement, and construction projects across various energy sectors, including nuclear energy, which is crucial for America's future power strategy [7] - It is trading at a low valuation of less than 7 times earnings, excluding cash and investments, indicating a potential for significant upside [10] - The company also holds a substantial equity stake in another AI-related venture, providing investors with indirect exposure to multiple growth opportunities in the AI sector [9] Group 4: Future Outlook - The ongoing AI infrastructure supercycle, combined with the onshoring boom and a surge in U.S. LNG exports, positions this company favorably for future growth [14] - The influx of talent into the AI sector ensures continuous innovation, further solidifying the importance of energy infrastructure in supporting this technological advancement [12]

Group 1: Company Overview - Ichor Holdings (NASDAQ: ICHR) is a semiconductor equipment company that has recently seen significant stock price movement, with shares more than doubling in value, gaining approximately 110% since August 2025 [1][2]. Group 2: Stock Performance - On the day of the filings, ICHR shares were priced at $14.54, and as of the latest report, the price has risen to $30.57 [2]. - Despite the recent rally, ICHR shares are still down 6% on a yearly basis, indicating ongoing execution challenges for the company [6]. Group 3: Market Sentiment and Analyst Ratings - The recent momentum in the semiconductor sector is expected to support Ichor's performance, leading to an upgrade by Needham to a 'Buy' rating with a price target of $36 [7]. - The upcoming fourth-quarter 2025 financial results, scheduled for release on February 9, 2026, are anticipated to be crucial for Ichor's future trajectory, especially following a 42% drop in earnings growth and a 13% increase in sales growth in the past quarter [8].

Company Overview - Ichor Holdings (ICHR) shares increased by 6.9% to $27.92 in the last trading session, with a notable trading volume, and have gained 48.8% over the past four weeks, driven by strong demand for etch and deposition applications [1] - The company is expected to report a quarterly loss of $0.06 per share, reflecting a year-over-year decline of 175%, with revenues projected at $220.95 million, down 5.3% from the previous year [2] Earnings Estimates - The consensus EPS estimate for Ichor Holdings has remained unchanged over the last 30 days, indicating that stock price movements may not sustain without trends in earnings estimate revisions [3] - SkyWater Technology, another company in the same industry, has a consensus EPS estimate of -$0.01, representing a 125% decline from the previous year [4] Industry Context - Ichor Holdings operates within the Zacks Electronics - Semiconductors industry, which is currently experiencing strong demand due to investments in advanced technologies [1] - SkyWater Technology has also shown significant performance, closing 4% higher at $30.44 and achieving a 79.4% return in the past month [3]

Ichor Holdings Conference Call Summary Company Overview - **Company**: Ichor Holdings - **Industry**: Semiconductor manufacturing equipment and components - **CEO**: Phil Burrows (newly appointed) - **CFO**: Greg Swyt Key Points and Arguments Company Strategy and Focus Areas - **Cost Transformation**: Aiming to build a more cost-competitive Ichor through consolidation and realignment of global footprint, particularly in Malaysia and Mexico [11][12][13] - **Market Growth**: Anticipates that etch and deposition will outgrow the overall wafer fabrication equipment (WFE) market due to technological advancements [11][15] - **Differentiation**: Transitioning from a manufacturing company to a product and technology company, with a goal of achieving 75% vertical integration by 2026 [12][17][21] - **Vertical Integration**: Currently capable of producing 35% of components internally, targeting 75% by the end of 2026, which is expected to enhance margins [17][19][55] Market Dynamics - **Semiconductor Market Growth**: The semiconductor market is experiencing growth, with a notable trend in memory pricing surging, which is expected to drive equipment purchases [15][40][41] - **Customer Base Expansion**: Non-semiconductor business is growing, with SpaceX identified as the fifth largest customer, indicating diversification beyond traditional semiconductor clients [19][20][80] Financial Performance and Projections - **Gross Margin Strategy**: Aiming for a gross margin of 15% at a $250 million run rate and 20% at a $350 million run rate, with operational execution and cost management as key drivers [29][30][49] - **Q4 Pre-announcement**: Expected to exceed midpoint guidance for Q4, with incremental revenue improvements anticipated [25][33] Operational Challenges and Opportunities - **Inventory Management**: Acknowledgment of inventory challenges faced by customers, particularly in the lithography segment, which is expected to remain flat due to existing inventory positions [42][44][46] - **Customer Demand**: Observing a pull-forward in demand for the second half of the year, indicating potential growth opportunities [33][39] Future Outlook - **Active Process Control**: A strategic vision to become a leader in active process control, leveraging technical capabilities and vertical integration to meet customer needs [66][67] - **Market Share Gains**: Focused on expanding market share within existing customer bases and targeting aerospace and defense sectors for growth [75][76] Additional Important Insights - **Technological Expertise**: Phil Burrows emphasizes the importance of technical expertise in navigating the Angstrom era of semiconductor manufacturing [9][10] - **Customer Relationships**: Strong relationships with major customers, particularly in etch and deposition, are crucial for future growth [41][85] - **Operational Discipline**: Commitment to operational discipline and execution to ensure predictable business outcomes moving forward [78] This summary encapsulates the key insights and strategic directions discussed during the Ichor Holdings conference call, highlighting the company's focus on growth, market dynamics, and operational strategies.

Financial Results - Ichor Holdings, Ltd. announced preliminary financial results for Q4 2025, which are subject to change and not yet audited [7]. - The company has not yet filed its annual report on Form 10-K for the fiscal year 2025, indicating ongoing financial review processes [8]. - Preliminary results are based on management estimates and may materially differ from actual results once finalized [8]. Compliance and Disclosure - The company utilizes its website's "Investors" section for disclosing material non-public information, complying with Regulation FD [10].

Core Viewpoint - Ichor Holding (ICHR) is expected to see improved fundamentals by 2026, with indications that the share price is nearing a bottom, leading to a BUY rating recommendation [1] Group 1 - Multiple catalysts are identified that will contribute to the improvement of Ichor Holding's fundamentals [1] - The share price of Ichor Holding is in the process of bottoming, suggesting a potential investment opportunity [1]

Core Viewpoint - Ichor Holdings is facing challenges in earnings performance despite showing strong revenue growth, leading to a cautious outlook from analysts [2][3][4]. Company Overview - Ichor Holdings specializes in the design, engineering, and manufacturing of critical fluid delivery subsystems for semiconductor capital equipment, playing a vital role in semiconductor production [1]. Earnings Performance - The company reported quarterly earnings of $0.07 per share, missing the Zacks Consensus Estimate of $0.12 per share, and this represents a decrease from $0.12 per share reported in the same quarter last year [3]. - Ichor has consistently failed to exceed consensus EPS estimates over the past four quarters, with a significant earnings surprise of -41.67% reported recently [2][3]. Revenue Performance - Ichor Holdings reported revenues of $239.3 million for the quarter ending September 2025, exceeding the Zacks Consensus Estimate by 1.77% and showing an improvement from $211.14 million in revenues reported a year ago [4]. - The company has surpassed consensus revenue estimates in three of the last four quarters, indicating strong revenue growth despite challenges in meeting earnings expectations [4]. Stock Performance - The stock for Ichor Holdings is currently priced at $22.92, reflecting an increase of 1.06% or $0.24, with fluctuations between a low of $22.12 and a high of $23.30 during the trading day [5]. - Over the past year, the stock has reached a high of $36.48 and a low of $13.12, with a market capitalization of approximately $786.8 million [5].

Core Insights - Premarket trading is showing notable activity with significant price movements indicating potential trading opportunities before the market opens [1] Premarket Gainers - Denny's Corporation (DENN) is up 49% at $6.16 [3] - Cambium Networks Corporation (CMBM) is up 25% at $2.55 [3] - Tactile Systems Technology, Inc. (TCMD) is up 22% at $19.35 [3] - Upwork Inc. (UPWK) is up 19% at $18.60 [3] - Kforce Inc. (KFRC) is up 12% at $27.50 [3] - Super Group (SGHC) Limited (SGHC) is up 12% at $11.91 [3] - Innovex International, Inc. (INVX) is up 10% at $22.62 [3] - Sanmina Corporation (SANM) is up 9% at $154.03 [3] - Exact Sciences Corporation (EXAS) is up 8% at $72.69 [3] - OTG Acquisition Corp. I Class A Ordinary Share (OTGA) is up 7% at $10.77 [3] Premarket Losers - Sarepta Therapeutics, Inc. (SRPT) is down 40% at $14.44 [4] - JELD-WEN Holding, Inc. (JELD) is down 32% at $2.81 [4] - Ichor Holdings, Ltd. (ICHR) is down 29% at $16.05 [4] - Insperity, Inc. (NSP) is down 27% at $32.50 [4] - Prelude Therapeutics Incorporated (PRLD) is down 22% at $3.08 [4] - Forward Industries, Inc. (FORD) is down 20% at $11.11 [4] - Navitas Semiconductor Corporation (NVTS) is down 18% at $10.03 [4] - Diginex Limited (DGNX) is down 17% at $19.51 [4] - Atlas Energy Solutions Inc. (AESI) is down 16% at $10.58 [4] - Chijet Motor Company, Inc. (CJET) is down 15% at $3.24 [4]