Why did ACM Research report tripled GAAP profit while gross margin slipped?

Sonal Goyal

28 October 2026 05:00 PM AEDT

Why did ACM Research report tripled GAAP profit while gross margin slipped?

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Key Highlights

Second-quarter 2026 Revenue was USD 292.9 million, up 36.0 per cent, and shipments were USD 281.5 million.
GAAP Net Income attributable to ACM was USD 89.0 million, largely due to an unrealised gain on short-term investments of USD 69.6 million; non-GAAP net income was USD 44.5 million.
Management narrowed and lifted its full-year 2026 revenue outlook to USD 1.125 billion to USD 1.175 billion.

Revenue up 36 per cent

ACM Research, Inc. (NASDAQ:ACMR), a supplier of wafer-processing equipment to semiconductor manufacturers, reported second-quarter 2026 results on 7 August 2026. Revenue for the quarter ended 30 June 2026 was USD 292.9 million, up 36.0 per cent from USD 215.4 million. Shipments were USD 281.5 million, up 36.4 per cent.

For the first six months, revenue reached USD 524.2 million compared with USD 387.7 million a year earlier. Chief executive Dr David Wang highlighted that revenue and shipments both increased 36 per cent year on year.

A wide gap between GAAP and non-GAAP profit

Gross Margin was 46.0 per cent on both a GAAP and non-GAAP basis, compared with 48.5 per cent and 48.7 per cent respectively a year earlier. Operating Income was USD 49.7 million on a GAAP basis, against USD 31.7 million, and USD 56.3 million on a non-GAAP basis, against USD 41.5 million.

GAAP net income attributable to ACM rose to USD 89.0 million from USD 29.8 million, or USD 1.23 per diluted share against USD 0.44. Non-GAAP net income was USD 44.5 million against USD 37.3 million, or USD 0.61 per diluted share against USD 0.55.

The difference is largely explained in the release. An unrealised gain on short-term investments of USD 69.6 million, compared with USD 2.7 million a year earlier, reflects changes in the Market Value of investments held by ACM Research (Shanghai), Inc., the principal operating subsidiary. The gain is marked to market each quarter and excluded from non-GAAP measures. Net income attributable to non-controlling interests also rose, to USD 33.3 million from USD 6.5 million. The GAAP increase is therefore less indicative of operating trends than the non-GAAP line.

The half-year shows the same pattern. GAAP net income attributable to ACM was USD 106.3 million against USD 50.1 million, while non-GAAP net income was USD 68.5 million against USD 68.4 million, flat. Diluted Earnings per Share were USD 1.49 on a GAAP basis and USD 0.96 non-GAAP, against USD 1.01 non-GAAP a year earlier.

Cash and guidance

Cash, restricted cash and short-term time deposits totalled USD 1.36 billion at 30 June 2026, up from USD 1.25 billion at 31 March 2026. Net cash, excluding borrowings, was USD 1.0 billion against USD 924.2 million.

Management narrowed and lifted its full-year 2026 revenue outlook to USD 1.125 billion to USD 1.175 billion, from USD 1.08 billion to USD 1.175 billion. The chief executive described this as growth of 25 per cent to 30 per cent. This is a forecast, not a reported figure. The release does not provide full-year gross margin guidance. It also cites a long-term revenue target of USD 4 billion, which is an aspiration rather than guidance.

What to watch

Gross margin is the clearest watch point, given the year-on-year decline of roughly 2.5 percentage points alongside higher volume. Other points include how much of the profit line continues to come from marked-to-market Investment gains, which can reverse, and how revenue tracks against the guided range as the second half unfolds.

FAQs

Q: What was ACM Research's second-quarter 2026 revenue?

A: Revenue was USD 292.9 million, up 36.0 per cent from USD 215.4 million a year earlier. Shipments were USD 281.5 million, up 36.4 per cent.

Q: Why did GAAP net income rise so much more than non-GAAP net income?

A: GAAP net income attributable to ACM rose to USD 89.0 million, helped by an unrealised gain on short-term investments of USD 69.6 million that is excluded from non-GAAP measures. Non-GAAP net income was USD 44.5 million.

Q: What is the company's 2026 revenue outlook?

A: Management narrowed and lifted its full-year 2026 revenue outlook to USD 1.125 billion to USD 1.175 billion. The chief executive described this as growth of 25 per cent to 30 per cent.

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