FormFactor 2025 Q2 Earnings Mixed Performance as Net Income Slumps 53.1%

FormFactor (FORM) reported fiscal 2025 Q2 earnings on Aug 06th, 2025, posting a 0.8% revenue decline year-over-year and a 53.1% drop in net income. The company guided for Q3 revenue consistent with Q2, with margin improvements expected.

Revenue
FormFactor’s total revenue for Q2 2025 decreased by 0.8% to $195.80 million, compared to $197.47 million in the same period last year. The decline was offset by a 14.3% sequential increase from Q1 2025. The probe cards segment remained the dominant contributor at $162.11 million, followed by $33.69 million in systems revenue. The corporate and other category reported $0 in revenue for the quarter.

Earnings/Net Income
Net income for the quarter fell to $9.09 million, or $0.12 per share, down from $19.39 million, or $0.25 per share, in the prior year. This marks a 53.1% year-over-year decline in net income and a 52.0% drop in EPS, reflecting weaker profitability.

Price Action
FormFactor’s stock price declined 0.31% during the latest trading day but faced a steeper 16.02% drop over the past week and a 19.46% loss month-to-date.

Post-Earnings Price Action Review
A strategy of buying FORM when revenues beat expectations and holding for 30 days historically generated a 127.16% return, significantly outperforming the 86.40% benchmark. The strategy achieved a CAGR of 17.96% and a Sharpe ratio of 0.77, indicating strong risk-adjusted performance and solid growth potential.

CEO Commentary
FormFactor CEO Dr. James R. Mitchell highlighted a mixed performance in Q2, attributing the revenue slowdown to softer demand from key semiconductor clients. Despite near-term challenges, Mitchell emphasized continued investments in thermal and metrology systems and expressed cautious optimism about long-term growth driven by cryogenic solutions and partnerships with leading foundries.

Guidance
FormFactor expects Q3 2025 earnings of $0.17 per share, as forecast by analyst T. Diffely of DA Davidson. The company also reiterated a full-year 2025 EPS consensus estimate of $0.90, with ongoing investments in product development and capacity expansion.

Additional News
FormFactor recently acquired a manufacturing facility in Farmers Branch, enhancing operational flexibility in a lower-cost region. The company also announced it is now shipping in volume to all three major HBM manufacturers, a significant milestone in its growth strategy. CEO Mike Slessor noted Q2 revenue exceeded expectations due to strong probe-card demand, though profitability dipped due to an unfavorable product mix and unforecasted costs related to a second HBM DRAM customer. The company expects Q3 revenue to remain similar to Q2, with modest improvements in gross margin and operating profit.