FormFactor’s first quarter results were positively received by the market, reflecting solid execution despite a challenging demand environment. Management attributed stable year-over-year revenue growth to continued momentum in high bandwidth memory (HBM) probe cards and resilient demand for advanced test systems, even as traditional DRAM and Flash segments softened. CEO Mike Slessor emphasized, “The strength in our HBM probe card demand is driven by continued shipments of probe cards for existing HBM3e designs and increasing shipments for new HBM4 designs.” The company also highlighted a favorable shift in product mix and cost controls as key to maintaining profitability.
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FormFactor (FORM) Q1 CY2025 Highlights:
- Revenue: $171.4 million vs analyst estimates of $169.9 million (1.6% year-on-year growth, 0.9% beat)
- Adjusted EPS: $0.23 vs analyst estimates of $0.19 (21.1% beat)
- Adjusted EBITDA: $27.44 million vs analyst estimates of $21.81 million (16% margin, 25.8% beat)
- Revenue Guidance for Q2 CY2025 is $190 million at the midpoint, above analyst estimates of $186.3 million
- Adjusted EPS guidance for Q2 CY2025 is $0.30 at the midpoint, above analyst estimates of $0.29
- Operating Margin: 1.9%, down from 12.6% in the same quarter last year
- Inventory Days Outstanding: 94, up from 80 in the previous quarter
- Market Capitalization: $2.66 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions FormFactor’s Q1 Earnings Call
- Charles Shi (Needham & Company) asked about tariff-related revenue and margin impacts. CFO Shai Shahar explained the company’s estimates are based on dynamic scenarios, with most reductions tied to non-U.S. supply imports and sales to China.
- Craig Ellis (B. Riley Securities) inquired about customer concentration and the path to higher gross margins. CEO Mike Slessor responded that growth is increasingly driven by HBM and AI-related applications, while Shahar emphasized ongoing cost initiatives and mix improvements.
- Tom Diffely (D.A. Davidson) questioned the outlook for HBM3 versus HBM4 and the influence of new customers. Slessor projected a late-year transition to HBM4 and highlighted growing contributions from a second major HBM customer.
- Christian Schwab (Craig Hallum Capital) asked about foundry and logic demand amid a potential PC refresh cycle. Slessor noted optimism if consumer demand holds, but cautioned that tariffs and trade uncertainties could be headwinds.
- David Duley (Steelhead Securities) sought updates on the GPU and co-package optics opportunities. Slessor described ongoing customer qualifications in GPUs and noted the move of co-package optics from lab to production as a mid-term growth driver.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be watching (1) the pace of HBM probe card adoption and transition to HBM4, (2) the company’s ability to manage tariff-related cost and revenue challenges, and (3) the integration of FICT and its impact on advanced probe card capabilities. The trajectory of co-package optics adoption and continued product innovation will also be critical to track.
FormFactor currently trades at $34.70, up from $28.08 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).
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