FormFactor posts record Q3 revenue of $280.5m on HPC probe demand
FormFactor reported third-quarter fiscal 2026 revenues of $280.5 million, a 38.4% increase on the $202.7 million it recorded in the same period a year ago and an 8.6% sequential rise on Q2. The Livermore, California-based maker of semiconductor probe cards and test systems said the result marked its fourth consecutive quarterly revenue record, driven by broad demand in its Foundry and Logic segment and a greater than 20% sequential surge in its Systems division on the back of co-packaged optics orders.
On a GAAP basis, net income came in at $73.8 million, or $0.93 per diluted share, compared with $15.7 million, or $0.20 per diluted share, in Q3 2025. GAAP gross margin expanded sharply to 54.7%, up from 39.8% a year earlier. On a non-GAAP basis, gross margin reached 56.5% and diluted earnings per share were $1.04. Operating cash flow was $104.3 million for the quarter, supporting free cash flow of $64.8 million.
Chief executive Mike Slessor said the results "underscore the strength of our diversified leadership position at the intersection of high-performance compute and advanced packaging." He added that the company had absorbed higher output within its existing manufacturing footprint but acknowledged that productivity gains from that base are beginning to moderate as it approaches capacity limits.
Capacity expansion and Teradyne tie-up
FormFactor is bringing a new factory in Farmers Branch, Texas online to provide additional headroom for growth beyond its current sites. The company also announced, following the quarter's close, an expansion of its longstanding partnership with test-equipment peer Teradyne, targeting accelerated development and high-volume production of next-generation semiconductor applications for high-performance compute workloads. No financial terms were disclosed for the Teradyne arrangement.
For Q4, ending 26 December 2026, FormFactor guided revenue of $285 million, plus or minus $10 million, with GAAP gross margin of approximately 52.3% and non-GAAP gross margin of approximately 54.0%. The sequential margin step-down reflects the ramp costs associated with the new Farmers Branch facility rather than any deterioration in demand.
Market context
FormFactor operates in the semiconductor test and measurement market alongside peers including Cohu, Kulicke and Soffa, and the probe-card divisions of larger instrumentation groups. Demand for advanced probe cards and wafer-level test systems has accelerated markedly as chip designers push into chiplet architectures, gate-all-around transistors, and co-packaged optics, all of which require more granular test coverage at earlier points in the design cycle.
The co-packaged optics signal is particularly notable. Data-centre operators pursuing power-efficient, high-bandwidth interconnects for AI accelerator clusters are driving a new category of test requirement, and FormFactor's Systems segment appears to be an early beneficiary. Export-control dynamics remain a background risk: the company's filings note US-China trade restrictions as a material uncertainty, and any tightening of semiconductor equipment controls by the US Bureau of Industry and Security could affect the geographic revenue mix, which the company discloses separately on its investor-relations website.
With nine-month revenues of $764.9 million against $569.8 million in the prior-year period, FormFactor is on track for a materially stronger full-year result. Investors will be watching whether the Farmers Branch ramp proceeds on schedule and whether the Teradyne partnership produces named programme wins before the end of the fiscal year.