Ichor (US:ICHR)2026-02-09 22:32Financial Data and Key Metrics Changes - Revenue for Q4 2025 was $224 million, above the midpoint of guidance, and fiscal 2025 revenue totaled $948 million, reflecting a 12% year-over-year increase [8][14] - Gross margin for Q4 was 11.7%, which was 70 basis points above the midpoint of guidance [14] - Operating income for Q4 was $2.7 million, with net income per share at $0.01 [15] Business Line Data and Key Metrics Changes - The etch and deposition segments drove the year-over-year revenue growth, while demand in certain trailing edge markets softened [8] - The commercial space business grew significantly in 2025, now representing a notable portion of overall revenues [8] Market Data and Key Metrics Changes - The company is experiencing a sustained demand ramp driven by technology transitions, particularly in gate-all-around architectures and high-bandwidth memory [5] - The outlook for Q1 2026 anticipates revenues between $240 million and $260 million, indicating double-digit growth from Q4 2025 [9][16] Company Strategy and Development Direction - The company aims to increase market share through strategic capacity additions and responsiveness to customer demand [5] - A global footprint realignment is underway, focusing on expanding machining capacity in Mexico and a new manufacturing center in Malaysia [9][10] - The company is transitioning from an integration company to a product company, aiming for Ichor-branded products to support up to 75% of system content by year-end 2026 [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in a strong growth year for 2026, with expectations for sequential growth every quarter [9] - The visibility for demand is solid, particularly for the second half of 2026, with indications that inventory levels at major customers are decreasing [48][60] Other Important Information - The company expects gross profit dollars to grow at twice the rate of revenues as the year progresses, with significant margin improvements anticipated by mid-year [11][16] - The anticipated non-GAAP effective tax rate is expected to be in the range of 20%-25% due to geographic profit distribution [18] Q&A Session Summary Question: Update on Q1 revenue guidance - Management noted that demand has strengthened since the last update, aligning with industry growth forecasts of 15%-20% [20][21] Question: Gross margin expectations - Management indicated that gross margins are expected to improve as production capacity is optimized and additional components are introduced [22][30] Question: Sequential growth expectations - Management expects the first half to be gas panel-heavy, with increased component supply contributing to growth in the second half [30] Question: Malaysia business relocation impact - Management acknowledged that the relocation may present short-term headwinds but emphasized that it is necessary for long-term capacity needs [31][32] Question: Demand visibility for 2027 - Management confirmed solid visibility for the next six months and indicated that customer feedback suggests a positive outlook for 2027 [48][49] Question: Inventory levels at major customers - Management stated that inventory levels are decreasing, indicating a need for replenishment, which aligns with revenue forecasts [58][60] Question: Growth opportunities in commercial space - Management aims to increase the commercial space business from under 5% to 10% of total revenue in the medium term [72]