FormFactor posts record Q1 revenue on HBM probe card surge
FormFactor (Nasdaq: FORM) has reported first-quarter 2026 revenue of $226.1 million, a 32% increase on the same period a year ago and a 5.1% sequential rise from Q4 2025. The Livermore, California-based maker of semiconductor test and measurement equipment said the result represents its second consecutive all-time record quarter.
On a non-GAAP basis, gross margin expanded 510 basis points sequentially to 49.0%, and non-GAAP earnings per diluted share came in at $0.56, both above the company's own outlook range. GAAP net income for the quarter was $20.4 million, or $0.26 per diluted share, compared with $6.4 million in Q1 2025. Free cash flow was $30.7 million.
What drove the numbers
Two segments led the outperformance. DRAM probe card revenue reached a new record, lifted by growing demand in high-bandwidth memory (HBM) applications — the stacked memory architecture used in AI accelerator packages — alongside continued demand in conventional DRAM. The company's Foundry & Logic segment also saw significant sequential growth, which FormFactor attributed to increased probe card demand for networking chips.
Chief executive Mike Slessor said the results "exceed our target model on a quarterly run-rate basis" and that the current quarter's outlook is expected to validate that model on an annualised basis. For Q2 2026, the company is guiding to revenue of $240 million, plus or minus $5 million — another prospective record — with non-GAAP gross margin of 49.5% and non-GAAP EPS of $0.61.
One item worth noting in the GAAP reconciliation: restructuring charges of $23.3 million inflated the gap between GAAP and non-GAAP operating income significantly in Q1, contributing to GAAP gross margin of 38.4% versus non-GAAP gross margin of 49.0%. FormFactor flagged $7.1 million in factory start-up costs, absent in the year-ago period, indicating ongoing capacity investment.
Market context
FormFactor operates in a niche but strategically important segment of the semiconductor supply chain: probe cards and wafer-level test equipment that sit upstream of final chip packaging and are therefore sensitive to leading-edge wafer-start volumes. As AI accelerator demand has pulled HBM into the mainstream, vendors in the test and measurement segment have seen a structural step-up in their addressable market — HBM stacks require substantially more test steps per wafer than conventional DRAM.
The broader semiconductor test equipment sector has seen healthy order books as chipmakers ramp capacity for AI workloads. Competitors in wafer-level test include Cohu and MPI Corporation, while the capital equipment market more broadly is monitored closely for signs of over-ordering cycles. FormFactor's networking-chip probe card growth is a useful leading indicator: networking silicon demand tends to correlate with hyperscaler infrastructure build-out, which remains robust entering mid-2026.
Export controls remain a live risk. The company's forward-looking statements explicitly cite US-China trade restrictions as a material uncertainty, and any tightening of semiconductor equipment export rules — such as further restrictions under US Bureau of Industry and Security regulations — could limit addressable market in China, a significant geography for test equipment vendors.
With a balance sheet carrying $123.5 million in cash, $179.7 million in marketable securities, and modest net debt, FormFactor appears well-capitalised to sustain its factory investment programme while maintaining free cash flow generation.