FormFactor Reports Decline in Revenue and Profitability for Q2 Fiscal 2025

FormFactor, Inc. reported its financial results for the second quarter of fiscal 2025, revealing a slight decline in revenue and profitability compared to the same period last year. The company generated revenues of $195.8 million for the three months ended June 28, 2025, a decrease of 0.8% from $197.5 million in the prior year. For the first half of the fiscal year, revenues totaled $367.2 million, a marginal increase from $366.2 million in the same period of 2024. Net income for the second quarter was $9.1 million, down from $19.4 million a year earlier, while net income for the first half was $15.5 million compared to $41.2 million in the previous year.

The decline in profitability was attributed primarily to a significant gain of $20.3 million recognized in the first half of fiscal 2024 from the sale of the company's operations in China. Additionally, FormFactor's gross profit for the second quarter fell to $72.9 million, down 16.1% from $86.9 million in the same quarter last year, resulting in a gross margin of 37.3%, compared to 44.0% in the prior year. The decrease in gross margin was driven by higher manufacturing costs and an unfavorable product mix.

In terms of operational developments, FormFactor made a strategic acquisition of a manufacturing site in Farmers Branch, Texas, for $55 million, which is expected to enhance its operational flexibility. The company also reported a loss of $3.5 million from its equity investment in Frontier Investments Co., Ltd., which was established to acquire FICT Limited, a provider of semiconductor test technologies. This investment is expected to contribute to FormFactor's growth in the semiconductor testing market.

Geographically, FormFactor saw varied performance, with South Korea and Taiwan being the largest markets, accounting for 29.2% and 27.0% of revenues, respectively, in the second quarter. The company reported a decrease in sales to China, which accounted for only 4.8% of revenues, down from 12.7% in the previous year. The company’s total cash, cash equivalents, and marketable securities decreased to approximately $249.3 million as of June 28, 2025, down from $360.0 million at the end of the previous fiscal year.

Looking ahead, FormFactor anticipates continued challenges in the semiconductor market, particularly due to fluctuating demand and increased manufacturing costs. The company is focused on leveraging its new manufacturing facility to enhance production capabilities and is evaluating the impact of recent tax reforms on its financial outlook. The management remains optimistic about long-term growth prospects, driven by ongoing investments in research and development and strategic partnerships in the semiconductor industry.