FormFactor FORM reported first-quarter 2025 non-GAAP earnings of 23 cents per share, surpassing the Zacks Consensus Estimate by 21.05%. The bottom line increased 27.8% from the year-ago quarter.

Revenues of $171.4 million beat the Zacks Consensus Estimate by 0.79% and increased 1.6% year over year. However, FormFactor reported a 9.6% sequential decline in first-quarter revenues due to anticipated reductions in demand for DRAM probe cards and Systems.

Following the earnings release, FormFactor’s shares jumped more than 10% in the pre-market trading on April 30, driven by a strong second-quarter 2025 outlook that projects double-digit sequential revenue growth across all major segments.

FORM’s earnings beat the Zacks Consensus Estimate twice and missed in the remaining two, the surprise being 3.41%, on average. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

FormFactor, Inc. Price, Consensus and EPS SurpriseFormFactor, Inc. Price, Consensus and EPS Surprise

FormFactor, Inc. price-consensus-eps-surprise-chart | FormFactor, Inc. Quote

FormFactor’s Segmental Revenue Details

Probe card revenues were $136.6 million, down 0.1% year over year. The decrease was led by lower DRAM and Flash revenues.

Foundry and Logic revenues (49.8% of the total revenues) were $85.3 million, down 1.7% year over year.

DRAM revenues (28.5% of the total revenues) were $48.9 million, up 6.5% year over year. 

Flash revenues (1.4% of the total revenues) were $2.4 million. The reported figure fell 40% year over year.

Systems revenues (20.3% of the total revenues) were $34.8 million, up 8.7% year over year.

Revenues generated from Malaysia, Taiwan, Japan and Singapore increased 36.8%, 51.8%, 21.2% and 29.2%, year over year, respectively.

However, revenues from the United States, South Korea, China, Europe and the rest of the world declined 12%, 14.8%, 12.8%, 11.4%, and 25.9%, year over year, respectively.

FORM’s Operating Results

In the first quarter of 2025, the gross margin expanded 50 basis points (bps) year over year to 39.2%.

Non-GAAP operating expenses decreased 4% year over year to $50.2 million. As a percentage of revenues, operating expenses moved down 170 bps year over year to 29.3%.

The non-GAAP operating margin improved 220 bps year over year to 9.9%.

FormFactor’s Balance Sheet & Cash Flow

As of March 29, 2025, cash and cash equivalents, and marketable securities were $299.0 million compared with $360 million as of Dec. 28, 2024.

Cash generated from operating activities was $23.5 million in the reported quarter, down from $35.9 million in the previous quarter.

The company generated a free cash flow of $6.3 million in the first quarter, down from $28.8 million in the prior quarter. The decline was primarily due to reduced operating cash flows, led by lower profitability, higher working capital use and increased capital expenditure.

Story Continues

FORM Offers Optimistic Q2 Guidance

FormFactor remains well-positioned for long-term growth, supported by structural trends in advanced packaging, high-bandwidth memory (HBM) and co-packaged optics, which continue to drive innovation and demand across the semiconductor industry, reinforcing an optimistic outlook for the second quarter of 2025.

FORM expects second-quarter 2025 revenues of $190 million (plus-or-minus $5 million). The Zacks Consensus Estimate is pegged at $185.43 million, indicating a 6.10% dip from the figure reported in the year-ago quarter.

The company expects a non-GAAP gross margin of 40% (plus-or-minus 1.5%).

On a non-GAAP basis, FORM expects earnings of 30 cents (plus-or-minus 4 cents) per share. The Zacks Consensus Estimate is pegged at 27 cents per share, indicating a 22.86% decline from the figure reported in the year-ago quarter.

FormFactor’s Zacks Rank & Other Stocks to Consider

FORM currently carries a Zacks Rank #2 (Buy).

Criteo CRTO, Paycom Software PAYC and Unity Software U are some other top-ranked stocks that investors can consider in the Zacks Computer and Technology sector. These three companies flaunt a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Criteo is scheduled to report first-quarter 2025 results on May 2. Paycom Software is set to report first-quarter 2025 results on May 7, whereas Unity Software is scheduled to report first-quarter 2025 results on May 7.

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