Nova Shares Jump 4% on Q2 Earnings Beat, Robust Q3 Guidance

Core Insights - Nova Ltd. (NVMI) shares increased by 3.7% following the release of its second-quarter 2025 results, driven by better-than-expected performance and strong guidance for Q3 2025 [1] Financial Performance - In Q2 2025, NVMI reported non-GAAP earnings of $2.20 per share, exceeding the Zacks Consensus Estimate by 7.32% and reflecting a year-over-year increase of 36.6% [2][8] - Revenues reached $220 million, marking a 40% year-over-year growth and a 3% sequential increase, surpassing the consensus estimate by 2.08% [2][8] - Product revenues rose by 42.7% year over year to $177.8 million, constituting 80.8% of total revenues, with 75% from logic and foundry and 25% from memory [3] - Service revenues increased by 30.7% year over year to $42.2 million, accounting for 19.2% of total revenues, achieving 10 consecutive quarters of growth [3] Operating Metrics - The non-GAAP gross margin for Q2 2025 contracted by 100 basis points to 60% [4] - Operating margin remained stable year over year at 34%, with reductions in research and development and sales and marketing expenses [4] Balance Sheet Highlights - As of June 30, 2025, NVMI had cash and cash equivalents of $160.56 million, up from $141.05 million as of March 31, 2025 [5] - Cash provided by operating activities was $45.6 million, with free cash flow reaching $43 million [5] Q3 Guidance - NVMI anticipates Q3 2025 revenues between $215 million and $227 million, with non-GAAP earnings projected between $2.02 and $2.22 per share [6][8] Market Position - Year-to-date, NVMI shares have surged by 38.2%, outperforming the Zacks Computer & Technology sector's return of 13.5% [3]