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

Nova Ltd. NVMI shares have risen 3.7% since the company reported its second-quarter 2025 results on Aug. 7. The momentum can be attributed to better-than-expected results, as well as robust guidance for the third quarter of 2025.

In the second quarter of 2025, NVMI reported non-GAAP earnings of $2.20 per share, surpassing the Zacks Consensus Estimate by 7.32% and increasing 36.6% year over year. Revenues of $220 million climbed 40% year over year and 3% sequentially and beat the consensus mark by 2.08%. 

Product revenues increased 42.7% year over year to $177.8 million, accounting for 80.8% of total revenues Product revenue distribution was 75% from logic and foundry, 25% from memory. Service revenues increased 30.7% year over year to $42.2 million, accounting for 19.2% of total revenues,marking 10 consecutive quarters of growth.

NVMI shares have jumped 38.2% year to date, outperforming the Zacks Computer & Technology sector’s 13.5% return.

Nova Ltd. Price, Consensus and EPS Surprise

Nova Ltd. price-consensus-eps-surprise-chart | Nova Ltd. Quote

NVMI Q2 Operating Details

Nova’s second-quarter 2025 non-GAAP gross margin contracted 100 basis points (bps) to 60%.

In the reported quarter, Research and development and sales and marketing expenses declined 20 bps and 120 bps, respectively. General and administrative expenses decreased 60 bps year over year.

Second-quarter operating margin remained unchanged year over year at 34%.

NVMI Balance Sheet Details

As of June 30, 2025, Nova had cash and cash equivalents of $160.56 million compared with $141.05 million as of March 31, 2025.

In the reported quarter, cash provided by operating activities was $45.6 million, while free cash flow hit $43 million.

An additional $4.7 million was paid in connection with the acquisition of Sentronics as part of the final purchase price adjustment.

NVMI Provides Q3 Guidance

NVMI now expects third-quarter 2025 revenues between $215 million and $227 million. Non-GAAP earnings are now expected between $2.02 per share and $2.22 per share.

Zacks Rank & Stocks to Consider

Nova currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the broader Zacks Computer and Technology sector are Autodesk ADSK, Applied Materials AMAT, and Cisco Systems CSCO. Each stock carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Autodesk is set to report second-quarter fiscal 2026 results on Aug. 28. Autodesk shares have lost 3.7% year to date.

Applied Materials is slated to report third-quarter fiscal 2025 results on Aug. 14. Applied Materials shares have gained 13.5% year to date.

Cisco Systems is set to report fourth-quarter fiscal 2025 results on Aug. 13. Cisco Systems shares have rallied 19.3% year to date.

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This article originally published on Zacks Investment Research (zacks.com).

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