FormFactor’s second quarter saw flat year-over-year sales, but revenue came in above Wall Street expectations, driven by robust demand in its probe card business, especially for high-bandwidth memory (HBM) applications. However, profitability disappointed, as management cited an unfavorable shift in product mix and higher ramp-up costs tied to a specific HBM DRAM customer. CEO Mike Slessor acknowledged that, despite FormFactor’s leading role in advanced semiconductor test solutions, “recent financial results and especially gross margins have not reflected our unique market leadership position,” pointing to ongoing operational and external challenges.

Is now the time to buy FORM? Find out in our full research report (it’s free).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From FormFactor’s Q2 Earnings Call

• Brian Edward Chin (Stifel): Asked about residual ramp-up costs for HBM4 in Q3. CFO Shai Shahar confirmed no additional start-up costs are expected, as prior issues were resolved.
• Craig Andrew Ellis (B. Riley Securities): Questioned the gap between current and target gross margins. CEO Mike Slessor outlined volume gains, operational cost reductions, and strategic market focus as priorities to bridge the gap.
• Thomas Robert Diffely (D.A. Davidson): Inquired about the P&L impact and timing of the new Texas facility. Shahar said impact depends on ramp-up progress and highlighted the facility’s long-term cost benefits.
• David Duley (Steelhead Securities): Asked why FormFactor is expanding capacity despite flat near-term revenue. Slessor explained the move is based on long-term industry growth forecasts and the need for future capacity.
• Auguste Philip Richard (Northland Capital Markets): Asked about tariff mitigation strategies. Shahar noted ongoing supply chain adjustments and a wait-and-see approach, acknowledging the complexity of the semiconductor supply chain.

Catalysts in Upcoming Quarters

In upcoming quarters, the StockStory team will be watching (1) execution of the Texas facility ramp and its impact on manufacturing costs, (2) margin stabilization as FormFactor manages tariff and product mix headwinds, and (3) continued diversification of the HBM and hyperscaler customer base. Progress in advanced packaging and AI-related test solutions will also be key indicators of future competitiveness.

FormFactor currently trades at $30.05, down from $34.42 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).

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