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Why Is FormFactor (FORM) Up 3.5% Since Last Earnings Report?
FormFactorFormFactor(US:FORM) ZACKSยท2024-11-29 17:37

Core Viewpoint - FormFactor reported strong Q3 2024 earnings, beating estimates and showing significant year-over-year growth in revenue and earnings per share [2][3][4]. Financial Performance - Adjusted earnings for Q3 2024 were 35 cents per share, exceeding the Zacks Consensus Estimate by 12.90% and increasing 59.1% year over year [2]. - Total revenues reached $207.9 million, surpassing the Zacks Consensus Estimate by 3.7% and reflecting a 21.2% increase year over year [3]. - Probe card revenues were $172.2 million, up 34.1% year over year, driven by strong demand in the DRAM segment [4]. Segment Analysis - DRAM revenues, which accounted for 29% of total revenues, were $60.2 million, marking a 118.9% increase year over year due to strong DDR5 demand [4]. - Foundry & Logic revenues were $107.5 million, up 11.5% year over year, representing 51.7% of total revenues [4]. - Flash revenues remained unchanged at $4.5 million, constituting 2.2% of total revenues [5]. - Systems revenues decreased by 17.4% year over year to $35.7 million, making up 17.2% of total revenues [6]. Geographic Revenue Breakdown - Revenue growth was observed in various regions: United States (+25.9%), Taiwan (+11.4%), South Korea (+18.8%), China (+58.3%), Japan (+15.7%), Singapore (+48.6%), and the rest of the world (+5%) [6]. - Conversely, revenues from Europe and Malaysia declined by 16.1% and 11.7%, respectively [7]. Operating Results - Gross margin increased by 40 basis points year over year to 42.2% [8]. - Non-GAAP operating expenses rose by 8.9% year over year to $59.3 million, but as a percentage of revenues, they decreased by 320 basis points to 28.5% [8]. - Non-GAAP operating margin expanded by 360 basis points year over year to 13.6% [9]. Cash Flow and Balance Sheet - As of September 28, 2024, cash and cash equivalents, along with marketable securities, totaled $354.5 million, slightly down from $357.6 million as of June 29, 2024 [10]. - Cash generated from operating activities was $26.7 million, up from $22 million in the previous quarter [10]. - Free cash flow increased to $20 million from $14.2 million in the previous quarter [11]. Q4 Guidance - For Q4 2024, FormFactor expects revenues of $190 million (+/- $5 million), indicating a 12.57% growth from the same quarter last year [12]. - The company anticipates a non-GAAP gross margin of 41% (+/- 1.5%) and earnings of 29 cents (+/- 4 cents) per share, with the Zacks Consensus Estimate at 31 cents per share, reflecting a 55% growth year over year [13]. Market Sentiment - Recent estimates for FormFactor have shown a downward trend, with a consensus estimate shift of -7.56% [14][15]. - The stock currently holds a Zacks Rank 3 (Hold), suggesting an expectation of an in-line return in the coming months [17]. Industry Comparison - FormFactor operates within the Zacks Electronics - Semiconductors industry, where competitor Amkor Technology reported revenues of $1.86 billion, reflecting a year-over-year change of +2.2% [18]. - Amkor Technology's expected earnings for the current quarter indicate a decline of -14.6% from the previous year, with a Zacks Rank 5 (Strong Sell) [19].