Ichor (ICHR) - 2025 Q2 - Quarterly Results

Executive Summary & Highlights 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) 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] CEO Commentary 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] - 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] - Focus for the second half of the year remains on increasing manufacturing capacity and aligning production to meet targeted product margins[1] Financial Performance Overview 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 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 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 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] Balance Sheet and Cash Flow Analysis This section analyzes Ichor's cash position, operating cash flow, and changes in operating assets and liabilities for Q2 2025 Cash and Cash Equivalents 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] Operating Activities Cash Flow 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] - Primary drivers for cash used: increase in net operating assets and liabilities ($12.8 million) and net loss ($9.4 million)[8] - 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] Changes in Operating Assets and Liabilities 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] - 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] Company Information & Disclosures 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 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] - 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] - Non-GAAP results have limitations as analytical tools and should not be considered in isolation or as substitutes for results reported under GAAP[13] About Ichor 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] - Primarily serves the semiconductor capital equipment industry, also other industries like defense/aerospace and medical[16] - 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] Fiscal Year Information 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] Safe Harbor Statement 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] - 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] - The company undertakes no obligation to update or revise any forward-looking statements, except as required by law[19] Consolidated Financial Statements This section presents Ichor's consolidated balance sheets, statements of operations, and cash flows for the reported periods Consolidated Balance Sheets 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 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 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 This section provides reconciliations of GAAP to non-GAAP gross profit, operating income, net income, and free cash flow Reconciliation of Gross Profit 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][30] Reconciliation of Operating Income (Loss) 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][33] Reconciliation of Net Income (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][36][37] Reconciliation of Free Cash Flow 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 |