FormFactor, Inc.

Thank you and welcome everyone to FormFactor's second quarter 2026 earnings conference call. On today's call are Chief Executive Officer Mike Slessor and Chief Financial Officer Eric McInnes. Before we begin, Stan Finkelstein, the company's VP of Investor Relations, will remind you of some important information.

Thank you. Today the company will be discussing GetPNL results. and some important non-GAAP results intended to supplement your understanding of the company's financials. Reconciliations of GAAP to non-GAAP measures and other financial information are available in the press release issued today by the company and on the investor relations section of our website. Today's discussion contains forward-looking statements within the meaning of the federal securities laws. Examples of such forward-looking statements include those with respect to the projections of financial and business performance, future macroeconomic and geopolitical conditions, the benefits of acquisitions and investments, including the ramp up of manufacturing facilities, anticipated industry trends, potential disruptions in our supply chain, the impacts of regulatory changes, including tariffs and changes in export controls, the anticipated volatility in demand for Thank you very much. Thanks for joining us today.

FormFactor's second quarter revenue, gross profit, and earnings per share set all-time records, and we achieved two important milestones on the path to the new target model we introduced in May. First, we surpassed a billion-dollar annual revenue run rate, and second, we exceeded 50% gross margin. In the current third quarter, we expect to deliver sequential increases in both revenue and profitability as we extend our run of record results. Over the past four quarters, we've grown revenue by more than 30%, increased non-gap gross margin by 1,500 basis points, and tripled our earnings per share. These improvements are the product of a multi-year effort to create and expand FormFactor's unique position at the intersection of high-performance compute and advanced packaging, while simultaneously strengthening the company's execution to enhance profitability and drive operating leverage. Our second quarter results and third quarter outlook show a clear path to our new target model. Looking further ahead, our Farmers Branch site is on track to come online in the fourth quarter and ramp throughout 2027, providing increased capacity at a structurally lower cost. This will in turn enable us to accelerate revenue growth and generate additional profitability and operating leverage. Eric will discuss our current operational performance and future plans later in the call. The breadth of demand we saw during the quarter is particularly encouraging, with strength in major growth initiatives like high-bandwidth memory and copackage optics powering sequential revenue increases in both the probe cards and system segments. This broad participation reflects the diversification strategy we've discussed for years and demonstrates the value of serving all major semiconductor customers and applications rather than concentrating on any single segment, customer, or application. Currently, most of the manufacturing activity at this intersection of HPC and advanced packaging is occurring in Taiwan. FormFactor's important role in this region is evident in our supplemental materials. Second quarter revenue from Taiwan grew sequentially by more than 30%, and the world's leading foundry was again a 10% customer. Yesterday, we announced the expansion of our multi-year partnership with Keystone Microtech, a provider of semiconductor manufacturing and test services based in Zhubei, Taiwan. This latest step expands FormFactor's regional footprint in Taiwan, improving our local assembly and service capabilities and our responsiveness in supporting the exceptionally steep ramps of complex devices like GPUs and custom ASICs. Turning now to segment and market details, in DRAM probe cards, we delivered the expected sequential growth from the first quarter to set another record in this business, with increased HBM4 demand paired with sustained demand in DDR applications. HBM comprised approximately two-thirds of our overall DRAM revenue. Driven by two customers, continued adoption of FormFactor's differentiated SmartMatrix full wafer contract group technology in high-speed HBM4 applications. SmartMatrix provides a unique combination of high parallelism productivity and high-speed performance, enabling our customers to test hundreds of completed HBM stacks simultaneously at the 10 gigabit plus IO data rate of HBM4. This capability is critical in advanced packaging processes like TSMC's CoAus and Intel's eMib, where stack-die test insertions ensure a known-good HBM stack before it's combined with costly GPUs or custom ASICs. Our second quarter results show the impact of FormFactor's competitive advantage and the resulting market share gains, as pin IO speeds and overall stack bandwidth for HBM continue the relentless increase As you've heard recently from all our major DRAM customers, the supply environment continues to be extremely constrained, and our customers are shifting their wafer start mix to DDR designs to capture the profit opportunity provided by significant DDR price increases. Since probe cards are specific to each customer chip design, we expect DRAM mix to track these dynamic customer product shifts while these unusual end market conditions persist. Shifting now to the founder and logic probe card market, as expected, second quarter founder and logic demand increased significantly over the first quarter. This increase was driven primarily by growth in probe cards for data center CPU applications, building on continued strength in networking applications, initial momentum in hyperscaler custom ASICs, and steady demand in PC and mobile. In the current quarter, we expect continued growth in Foundry and Logic probe card revenue, driven by broad incremental demand across our served application space in this market. Compared to a quarter ago, the trend of increasing CPU compute intensity to enable agentic AI use cases is now broadly appreciated and is resulting in increased probe card demand for data center CPU designs. FormFactor has opportunities to benefit from this trend in several ways. First, our long-term relationship and strong incumbent market share with a leader in data center CPUs. Second, an expanding relationship with a world leader in high-performance compute. as our strong position in networking expands into supporting their GPU and CPU product lines. And third, our successful qualification and subsequent multiple design wins at a large Fabless XPU customer. Each of these three customer relationships is in a different stage, but together they represent a broad-based opportunity for FormFactor to serve growing CPU demand. They also provide an excellent example of the value of FormFactor's long-held diversification strategy, where being a key supplier to all major customers for growing applications like CPUs provides us with broad exposure to the overall growth trend. Turning to our systems segment, systems revenue nearly doubled sequentially in the second quarter, albeit off an unusually weak first quarter. This growth was driven by two components. A quarter ago, we forecasted our 2026 CPO revenues to reach the high end of the $10 to $20 million range we communicated at the start of the year. We now expect to exceed that range by the end of the third quarter and to significantly exceed the $20 million level for the year overall. This acceleration is driven by two factors. First, the growing volumes of CPO chips planned for later this year. And second, our leadership in the all-important test insertion one, which ensures no good die on the photonic integrated circuit, or PIC wafer, before it's combined with the electrical integrated circuit, or EIC, to form the optical module in scale-up and scale-out network switches. The rapid re-growth of our CPO business is an exciting development, which we believe represents the very early stages of widespread adoption of silicon photonics in the broader semiconductor industry. Traditional copper interconnect is reaching physical limits in speed, heat, and energy consumption, and photonics provides a fundamentally more efficient way to transact data within and between data centers by using light instead of electricity. FormFactor is ideally positioned to help lead tests for this new area of the semiconductor industry as our lab-to-fab strategy has produced a decade-long first-mover advantage paired with key customer and partner relationships. Before turning the call over to Eric, I want to thank the global FormFactor team as they continue to demonstrate remarkable agility in navigating the challenging supply environment by quickly resolving internal and external constraints. This agility helped deliver double-digit sequential growth in the second quarter, and we expect to grow again to another record in the current third quarter. We're well-positioned as test intensity and complexity continue to rise at the intersection of high-performance compute and advanced packaging and are excited to be making good initial progress on the path to our new target model that commits to double revenue and more than double profitability by 2030. Eric, you're up.