Semiconductor testing company FormFactor (NASDAQ:FORM) met Wall Street’s revenue expectations in Q1 CY2026, with sales up 32% year on year to $226.1 million. The company expects next quarter’s revenue to be around $240 million, coming in 5.8% above analysts’ estimates. Its non-GAAP profit of $0.56 per share was 28.7% above analysts’ consensus estimates.
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FormFactor (FORM) Q1 CY2026 Highlights:
- Revenue: $226.1 million vs analyst estimates of $225.4 million (32% year-on-year growth, in line)
- Adjusted EPS: $0.56 vs analyst estimates of $0.44 (28.7% beat)
- Adjusted Operating Income: $48.73 million vs analyst estimates of $39.58 million (21.5% margin, 23.1% beat)
- Revenue Guidance for Q2 CY2026 is $240 million at the midpoint, above analyst estimates of $226.8 million
- Adjusted EPS guidance for Q2 CY2026 is $0.61 at the midpoint, above analyst estimates of $0.45
- Operating Margin: 7.4%, up from 1.9% in the same quarter last year
- Free Cash Flow Margin: 13.6%, up from 2.9% in the same quarter last year
- Inventory Days Outstanding: 74, down from 81 in the previous quarter
- Market Capitalization: $10.46 billion
“FormFactor’s first quarter revenue grew sequentially to the second consecutive all-time record, with gross margin and earnings per share significantly above the high end of our outlook range,” said Mike Slessor, CEO of FormFactor, Inc.
Company Overview
With customers across the foundry and fabless markets, FormFactor (NASDAQ:FORM) is a US-based provider of test and measurement technologies for semiconductors.
Revenue Growth
A company’s long-term sales performance is one signal of its overall quality. Any business can have short-term success, but a top-tier one grows for years. Unfortunately, FormFactor’s 3.1% annualized revenue growth over the last five years was mediocre. This fell short of our benchmark for the semiconductor sector and is a tough starting point for our analysis. Semiconductors are a cyclical industry, and long-term investors should be prepared for periods of high growth followed by periods of revenue contractions.
Long-term growth is the most important, but short-term results matter for semiconductors because the rapid pace of technological innovation (Moore's Law) could make yesterday's hit product obsolete today. FormFactor’s annualized revenue growth of 12.4% over the last two years is above its five-year trend, suggesting its demand recently accelerated. 
This quarter, FormFactor’s year-on-year revenue growth of 32% was wonderful, and its $226.1 million of revenue was in line with Wall Street’s estimates. Company management is currently guiding for a 22.6% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 9.8% over the next 12 months, a slight deceleration versus the last two years. This projection is underwhelming and indicates its products and services will see some demand headwinds.
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Product Demand & Outstanding Inventory
Days Inventory Outstanding (DIO) is an important metric for chipmakers, as it reflects a business’ capital intensity and the cyclical nature of semiconductor supply and demand. In a tight supply environment, inventories tend to be stable, allowing chipmakers to exert pricing power. Steadily increasing DIO can be a warning sign that demand is weak, and if inventories continue to rise, the company may have to downsize production.
This quarter, FormFactor’s DIO came in at 74, which is 21 days below its five-year average. At the moment, these numbers show no indication of an excessive inventory buildup.
Key Takeaways from FormFactor’s Q1 Results
It was good to see FormFactor beat analysts’ operating income and EPS expectations this quarter. We were also excited its revenue and EPS guidance for the next quarter both outperformed Wall Street’s estimates by a wide margin. Zooming out, we think this was a very solid print. The stock traded up 12.6% to $152.55 immediately after reporting.
FormFactor put up rock-solid earnings, but one quarter doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).