Latest news with #Slessor
Yahoo
14-05-2025
- Business
- Yahoo
FORM Q1 Earnings Call: Tariffs and AI-Driven Demand Shape FormFactor's Outlook
Semiconductor testing company FormFactor (NASDAQ:FORM) reported revenue ahead of Wall Street's expectations in Q1 CY2025, with sales up 1.6% year on year to $171.4 million. The company expects next quarter's revenue to be around $190 million, close to analysts' estimates. Its non-GAAP profit of $0.23 per share was 21.7% above analysts' consensus estimates. Is now the time to buy FORM? Find out in our full research report (it's free). Revenue: $171.4 million vs analyst estimates of $169.9 million (1.6% year-on-year growth, 0.9% beat) Adjusted EPS: $0.23 vs analyst estimates of $0.19 (21.7% beat) Adjusted EBITDA: $27.44 million vs analyst estimates of $21.81 million (16% margin, 25.8% beat) Revenue Guidance for Q2 CY2025 is $190 million at the midpoint, roughly in line with what analysts were expecting Adjusted EPS guidance for Q2 CY2025 is $0.30 at the midpoint, above analyst estimates of $0.29 Operating Margin: 1.9%, down from 12.6% in the same quarter last year Free Cash Flow Margin: 2.9%, down from 11.7% in the same quarter last year Inventory Days Outstanding: 94, up from 80 in the previous quarter Market Capitalization: $2.5 billion FormFactor's first quarter results reflected anticipated declines in DRAM probe card and systems demand, partially offset by stable foundry and logic markets. CEO Mike Slessor attributed sequential revenue softness to tighter export controls and lower non-high bandwidth memory (HBM) demand, but noted that ongoing investments in generative AI and advanced packaging are increasing test intensity and driving opportunities in HBM and co-packaged optics. Slessor stated, 'HBM represents a much larger portion of the total silicon area and wafers produced,' highlighting the significance of this trend for the business. Looking ahead, FormFactor's guidance for the second quarter assumes revenue growth across all major segments, with particular emphasis on rising HBM probe card and foundry logic demand fueled by AI and new chip designs. However, management emphasized uncertainty from evolving tariff policies, indicating that the company is taking a cautious, wait-and-see approach regarding potential supply chain adjustments. CFO Shai Shahar noted, 'We estimate a mid-single-digit million-dollar reduction in revenues and a one percentage point reduction in gross margins due to tariffs,' underscoring the external pressures factored into the company's outlook. FormFactor's first quarter was shaped by shifting demand in key semiconductor testing markets, ongoing product innovation, and the impact of global trade policies. Management focused on how product mix, tariffs, and industry trends are influencing both short-term results and long-term positioning. AI and HBM Demand: Generative AI adoption is increasing demand for HBM (high bandwidth memory) probe cards and co-packaged optics test systems. Slessor highlighted a ramp in HBM4 shipments and growing contributions from multiple HBM customers, positioning FormFactor to benefit from rising test complexity and intensity tied to AI-driven chip production. Tariff and Export Controls: New U.S. tariffs and export controls have directly reduced sales in China and increased costs for U.S.-manufactured products. Management noted that 80% of FormFactor's manufacturing is in the U.S., meaning tariffs on imported subcomponents and exported finished goods are impacting both revenue and gross margin, with further uncertainty ahead. Customer Diversification: The company's diversification strategy has lessened prior dependence on single large customers. Recent increases in client PC probe card demand reflect a rebound, but management stressed the importance of exposure to broader industry trends like advanced packaging and AI. Acquisition of FICT Limited: The completed acquisition of FICT Limited, a supplier of multilayer organic substrates, is expected to enhance FormFactor's technology access and production efficiency for advanced probe cards, addressing new technical requirements in foundry and logic segments. Systems Segment Growth: Demand for FormFactor's measurement systems is being driven by customer innovation in quantum computing and data center applications. The company plans to ship multiple systems supporting pilot production of co-packaged optics photonic integrated circuits, which management believes could fuel mid-term growth. Management's outlook for the coming quarters centers on continued AI-driven demand, increased test complexity, and ongoing supply chain risks from tariffs. The company expects sequential growth but sees external factors as critical to achieving margin and revenue targets. AI and Advanced Packaging Expansion: Rising adoption of generative AI and advanced chip packaging is expected to drive higher sales of HBM probe cards and test systems, increasing both revenue potential and market share in these segments. Tariff and Geopolitical Uncertainty: Management identified tariffs and evolving trade policies as significant risks, with potential for further cost increases and revenue headwinds depending on future regulatory developments. The company is monitoring the situation but has not committed to supply chain changes. Product and Customer Portfolio Mix: Achieving targeted gross margins and earnings will depend on a recovery in end markets, a favorable shift toward higher-margin products, and increased market share in foundry and logic probe cards. Internal efforts such as lean manufacturing and new product architectures are also expected to contribute to future profitability. Charles Shi (Needham & Company): Asked about the quantified impact of tariffs on revenue and margin; CFO Shai Shahar explained that the guidance includes an estimated mid-single-digit million-dollar revenue reduction and a one percentage point gross margin hit, mainly related to costs of imported components and customer impacts in China. Craig Ellis (B. Riley Securities): Inquired about the rebound in sales to a major client PC customer and confidence in ongoing demand; CEO Mike Slessor highlighted the customer's renewed investment in advanced test equipment as part of their turnaround strategy, along with FormFactor's broader diversification into AI and HBM markets. Tom Diffely (D.A. Davidson): Asked about the transition between HBM3 and HBM4 probe cards and whether the product mix affects margins; Slessor noted that HBM generally carries higher margins than commodity DRAM, with incremental margin improvement possible as HBM4 ramps, though not matching foundry/logic margins. Christian Schwab (Craig Hallum Capital): Sought clarity on foundry and logic revenue outlook given possible PC demand from Windows 10 end-of-life; Slessor acknowledged the potential but flagged tariff uncertainty as a key headwind to realizing this growth. David Duley (Steelhead Securities): Asked about FormFactor's position with a major GPU manufacturer and the significance of co-package optics; Slessor indicated the company is making progress in both switch and GPU probe cards, with co-package optics representing a new production opportunity. In upcoming quarters, the StockStory team will monitor (1) the pace of HBM and co-packaged optics adoption, particularly as customers transition to new AI-driven designs; (2) the impact of tariffs and export controls on both revenue and gross margins as global trade policies evolve; and (3) progress in integrating FICT Limited's substrate technology to support advanced probe card offerings. The company's ability to capture share in emerging applications and adjust to external pressures will be key indicators of execution. FormFactor currently trades at a forward P/E ratio of 21.9×. Should you double down or take your chips? See for yourself in our free research report. The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today. Sign in to access your portfolio
Wales Online
07-05-2025
- Sport
- Wales Online
Zhao Xintong told Ronnie O'Sullivan and Co are nothing like him by flabbergasted snooker star
Zhao Xintong told Ronnie O'Sullivan and Co are nothing like him by flabbergasted snooker star Zhao Xintong has been showered with praise after becoming snooker's first Asian world champion, with one of his opponents in Sheffield among those to laud his abilities Zhao Xintong has been told exactly where he reigns supreme among snooker's elite (Image: Getty Images ) Zhao Xintong has been picked out for special praise by Elliot Slessor, who has outlined exactly where the new snooker world champion stands clear of the competition. And Slessor, 30, has earned the right to comment after he posed the greatest challenge to Zhao during the 2025 World Snooker Championship. Zhao, 28, made history as the first Asian person to be crowned world champion at the Crucible. That's after he impressively outplayed his mentor and snooker legend Ronnie O'Sullivan with a 17-7 victory in the semi-finals. He followed up with an equally commanding 18-12 win against Mark Williams to claim the title. However, it was during the final qualifier at the English Institute of Sport, referred to as Judgement Day, that Slessor pushed the new world champion close in a 10-8 defeat. Having offered Zhao what may have been his sternest test of the competition, Slessor took to social media to express his admiration of the player. And it's the Chinese ace's cutthroat nature in putting away chances that gives Zhao a distinct edge over his peers. "I said it then and will say it again," wrote Slessor on X. "I've played them all [and] nobody pots balls like this kid. "The consistency in the long game and to make tough shots look easy is staggering. Congratulations to Xintong and Victoria's Snooker Academy. Incredible stuff." Article continues below Neither Ronnie O'Sullivan nor Judd Trump can stack up against the new world champion, according to Slessor (Image: VCG, VCG via Getty Images ) That vicious mentality was on full display against Gwent's own Williams in the Crucible decider. The Welsh Potting Machine was guilty of leaving glaring opportunities unpotted from a multitude of positions, but Zhao proved far more clinical, even in the most challenging circumstances. Although Judd Trump entered the tournament as the bookies' choice to take home the trophy, his campaign ended in the semis thanks to Williams. That's despite Trump setting a new record for centuries in a season and demonstrating conquering form in the earlier phases of the tournament. Slessor did not manage to secure a spot in the main draw but faced formidable opponents nonetheless. Speaking about his match with Zhao, he was candid about his disappointment yet continued to heap admiration on the victorious challenger. "I wanted to win," he replied to one fan, accompanied by a crying-with-laughter emoji. "But the boy is very special every credit to him congratulations." Slessor pushed Zhao close in qualifying for the 2025 World Snooker Championship (Image: Getty ) Article continues below Zhao entered the competition as an amateur due to his 20-month ban for betting-related activities. He had been sanctioned following an extensive WPBSA probe into corruption that led to the suspension or banning of 10 Chinese players in total. Specifically, Zhao was implicated for "being party to another player fixing two matches" and placing bets on games himself. However, his 20-month suspension was the most lenient handed out by the sport's authorities, reports the Daily Express. After his return to the sport, many aficionados are enthusiastic about witnessing one of snooker's most promising talents compete again following his punishment. Six-time world champion Steve Davis labelled Zhao's infraction "a stain on his CV" but affirmed the snooker star "deserves a second chance."
