FormFactor(US:FORM)2025-10-29 20:02Financial Performance - Q3 2025 revenue was $202.7 million, a 3.5% increase from Q2 2025 and a 2.5% decrease from Q3 2024[1] - GAAP net income for Q3 2025 was $15.7 million, or $0.20 per diluted share, compared to $9.1 million, or $0.12 per diluted share in Q2 2025[3] - Non-GAAP net income for Q3 2025 was $25.7 million, or $0.33 per diluted share, compared to $21.2 million, or $0.27 per diluted share in Q2 2025[4] - Gross margin for Q3 2025 was 39.8%, up from 37.3% in Q2 2025, but down from 40.7% in Q3 2024[3] - GAAP gross profit for the three months ended September 27, 2025, was $80,626,000, an increase from $72,938,000 in the previous quarter[18] - Non-GAAP gross profit for the nine months ended September 27, 2025, was $225,642,000, compared to $242,405,000 for the same period in 2024, reflecting a decrease of 6.9%[18] - GAAP net income for the three months ended September 27, 2025, was $15,656,000, up from $9,086,000 in the previous quarter, representing a 72.5% increase[20] - Non-GAAP net income for the nine months ended September 27, 2025, was $64,910,000, compared to $68,893,000 for the same period in 2024, a decrease of 5.4%[20] - GAAP operating income for the three months ended September 27, 2025, was $18,005,000, compared to $12,306,000 in the previous quarter, an increase of 46.5%[18] - Non-GAAP operating income for the three months ended September 27, 2025, was $28,591,000, compared to $22,849,000 in the previous quarter, reflecting a 25.4% increase[18] Cash Flow and Liquidity - Free cash flow for Q3 2025 was $19.7 million, compared to negative $47.1 million in Q2 2025[5] - Free cash flow for the three months ended September 27, 2025, was $19,658,000, a significant recovery from a negative $47,100,000 in the previous quarter[20] - The company emphasizes the importance of free cash flow as a measure of liquidity, which is preferred by many investors[25] - GAAP net cash provided by operating activities for the nine months ended September 27, 2025, was $69,423,000, down from $81,621,000 in the same period in 2024[22] - Total cash, cash equivalents, and restricted cash at the end of the period was $101,111,000, down from $197,206,000 at the beginning of the period[22] - Cash and cash equivalents increased to $97,678 million in September 2025, compared to $67,380 million in June 2025, a significant rise of 45%[24] Assets and Liabilities - Total assets increased to $1,202,992 million in September 2025, up from $1,181,608 million in June 2025, representing a growth of 1.6%[24] - Total current assets rose to $559,260 million in September 2025, compared to $525,262 million in June 2025, marking an increase of 6.5%[24] - Total liabilities decreased slightly to $193,377 million in September 2025 from $191,585 million in June 2025, a reduction of 0.9%[24] - Stockholders' equity reached $1,009,615 million in September 2025, up from $990,023 million in June 2025, reflecting a growth of 2.6%[24] - Accounts receivable net of allowance for credit losses grew to $133,316 million in September 2025, up from $115,199 million in June 2025, an increase of 15.7%[24] - Deferred revenue increased to $21,623 million in September 2025, compared to $16,450 million in June 2025, representing a growth of 31.5%[24] Future Outlook - For Q4 2025, the company expects revenue of $210 million +/- $5 million and a gross margin of 42.0% +/- 1.5%[8] - The Systems Segment is expected to see additional revenue growth in Q4 2025 with increased momentum towards co-packaged optics production[7] Operational Initiatives - The company is implementing rapid gross margin improvement actions, resulting in a 250 basis point increase from Q2 2025[2] - The company continues to focus on long-term structural initiatives to further enhance gross margins[2] - DRAM probe cards achieved double-digit sequential growth, driven by HBM growth[7] - The company continues to incur expenses similar to non-GAAP adjustments, indicating ongoing operational costs that may impact financial results[25] - Non-GAAP net income and related measures are used by management for planning and forecasting future periods, indicating a focus on operational performance[25]