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- **Gross Margin Expansion**: 17% in Q3 (vs. 16.3% Q2), driven by cost recovery and efficiency.
- **China Restructuring**: 7% revenue from China, with manufacturing split into domestic/export-focused.
- **Tariff Mitigation**: 90%+ of tariffs now recoverable, reducing long-term risk.
- **2026 Outlook**: CEO confident in outgrowing WFE through lithography focus and automation.
- **Near-Term Caution**: Q4 guidance $480-530M reflects macro uncertainty, but 2026 growth poised to accelerate.

**【Management Opening Remarks】**
- Q3 2025 revenue of $510 million, with gross margin improving to 17% (up from 16.3% in Q2), driven by cost recovery and operational efficiency.
- Key initiatives: new product introductions, organizational flattening, and SAP system integration across Fluid Solutions Group.
- Tariff-related cost recovery contributed to margin improvement, with 90%+ of tariffs now recoverable.
- 2026 outlook cautious due to macro volatility, but long-term growth driven by AI and HPC trends.

**【CEO Commentary】**
- James Xiao (new CEO) emphasizes operational excellence, automation, and lean manufacturing to improve quality and on-time delivery.
- Focus on UCT 3.0: strategic partnership with customers, co-innovation, and optimized global footprint.
- China business now split into 'China for China' (7% of revenue) and non-China customers, with manufacturing migration underway.
- Long-term confidence in AI-driven semiconductor growth, despite near-term WFE spending uncertainty.

**【CFO Financial Commentary】**
- Q3 non-GAAP EPS: $0.28 (up from $0.27 in Q2), with net income $12.9 million.
- Operating expenses $57.7 million (11.3% of revenue), up due to SAP implementation costs.
- Q4 2025 guidance: $480-530 million revenue, EPS $0.11-0.31, reflecting cautious near-term outlook.
- Cash balance $314 million, with $150 million share buyback program renewed.

**【Q&A Highlights】**
- **Demand Outlook**: Customers see 5-8% WFE growth in 2026, but UCT expects to outpace industry due to leading-edge lithography focus.
- **China Strategy**: 7% revenue from China, with manufacturing split into domestic and export-focused sites.
- **Tariff Recovery**: Ongoing benefit, with 90%+ of tariffs now recoverable.
- **Growth Engine**: Vertical integration, automation, and strategic partnerships to drive margin expansion.
- **Q4 Caution**: Lower guidance due to mixed customer demand signals, but confident in 2026 recovery.

Ultra Clean Holdings, Inc. (UCTT) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

UCTT

UCTT fundamentals

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