It has been about a month since the last earnings report for FormFactor (FORM). Shares have lost about 9.1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is FormFactor due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
FORM Q3 Earnings Surpass Estimates, Revenues Up Y/Y
FormFactor reported third-quarter 2025 non-GAAP earnings of 33 cents per share, comfortably surpassing the Zacks Consensus Estimate by 32%. The bottom line decreased 5.7% year over year.
Revenues of $202.7 million beat the Zacks Consensus Estimate by 1.31% but decreased 2.5% year over year.
FORM’s Segmental Revenue Details
Probe card revenues were $166.4 million, down 3.4% year over year. The decrease was driven by lower Foundry & Logic revenues. Foundry & Logic revenues (45.8% of the total revenues) were $92.9 million, down 13.6% year over year. DRAM revenues (33.6% of the total revenues) were $68.2 million, up 13.3% year over year. Flash revenues (2.6% of the total revenues) were $5.3 million, up 17.8% year over year.
Systems revenues (17.9% of the total revenues) were $36.3 million, up 1.7% year over year.
Revenues generated from South Korea, Japan, Malaysia, Singapore and the Rest of the World increased 69.8%, 40.7%, 9.4%, 80% and 14.3%, respectively, year over year. However, revenues from the United States, Taiwan, China and Europe declined 33.8%, 2.1%, 66.1% and 5.1%, respectively, year over year.
FORM’s Operating Results
In the third quarter of 2025, the gross margin contracted 110 basis points (bps) year over year to 41%.
Non-GAAP operating expenses decreased 8% year over year to $54.6 million. As a percentage of revenues, operating expenses were down 160 bps year over year to 26.9%.
The non-GAAP operating margin improved 50 bps year over year to 14.1%.
FormFactor’s Balance Sheet & Cash Flow
As of Sept. 27, 2025, cash and cash equivalents, and marketable securities were $266 million compared with $249.3 million as of June 28, 2025.
Cash generated from operating activities was $27 million in the reported quarter, up from $18.9 million in the previous quarter. Free cash flow was $19.7 million.
FORM Offers Optimistic Q3 Guidance
FORM expects third-quarter 2025 revenues of $210 million (+/- $5 million). The company expects a non-GAAP gross margin of 42% (+/- 1.5%). On a non-GAAP basis, FORM expects earnings of 35 cents (+/- 4 cents) per share.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a upward trend in estimates review.
The consensus estimate has shifted 33.33% due to these changes.
VGM Scores
Currently, FormFactor has a average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock has a score of D on the value side, putting it in the bottom 40% for value investors.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise FormFactor has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
FormFactor belongs to the Zacks Electronics - Semiconductors industry. Another stock from the same industry, Amkor Technology (AMKR), has gained 9.4% over the past month. More than a month has passed since the company reported results for the quarter ended September 2025.
Amkor Technology reported revenues of $1.99 billion in the last reported quarter, representing a year-over-year change of +6.7%. EPS of $0.51 for the same period compares with $0.49 a year ago.
Amkor Technology is expected to post earnings of $0.42 per share for the current quarter, representing a year-over-year change of -2.3%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
Amkor Technology has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.
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FormFactor, Inc. (FORM): Free Stock Analysis Report Amkor Technology, Inc. (AMKR): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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