Ultra Clean Holdings Reports Q2 2025 Revenue Growth Despite Significant Net Loss

Ultra Clean Holdings, Inc. (UCT) reported its financial results for the second quarter of fiscal year 2025, revealing a total revenue of $518.8 million, a slight increase of 0.5% compared to $516.1 million in the same period last year. For the first half of the fiscal year, revenues reached $1.037 billion, up 4.4% from $993.9 million in the prior year. The Products segment generated $454.9 million in revenue for the quarter, reflecting a 0.5% increase, while the Services segment saw a 0.8% rise to $63.9 million. The growth in both segments was attributed to increased customer demand and an overall improvement in the semiconductor market.

Despite the revenue growth, UCT reported a significant net loss of $162 million for the quarter, compared to a net income of $19.1 million in the same period last year. This loss was primarily driven by a goodwill impairment charge of $151.1 million, which was recorded due to a decline in the fair value of the Fluid Solutions and Services reporting units. The company's gross margin also decreased, with total gross profit falling to $79.5 million, down from $88.5 million a year earlier, resulting in a gross margin of 15.3%, compared to 17.1% in the prior year.

Operationally, UCT's total assets decreased to $1.746 billion as of June 27, 2025, down from $1.920 billion at the end of the previous fiscal year. The company reported a reduction in accounts receivable and inventories, with cash and cash equivalents increasing to $327.4 million from $313.9 million. The company’s employee headcount remained stable, and it continued to leverage factoring arrangements to manage its working capital, having sold $29.4 million in accounts receivable during the first half of the fiscal year.

Looking ahead, UCT anticipates continued growth in the semiconductor market, driven by demand for advanced technologies such as artificial intelligence and machine learning. The company is focused on enhancing its operational efficiency and addressing the material weaknesses identified in its internal controls over financial reporting. Management has initiated a remediation plan, including hiring additional personnel and engaging external advisors to strengthen its internal controls. UCT remains committed to leveraging its cash reserves and operational cash flow to meet its financial obligations and support future growth initiatives.