What changed in this filing

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Item 1. Financial Statements

2025-05-06 compared with 2024-11-05 · 123 added, 214 removed, 457 unchanged (42% of the section changed)

3 unchanged sentences

(In thousands, except share and per share amounts)

September 28,

2025 December 28,

11 unchanged sentences

Property, plant and equipment, net of accumulated depreciation 208,317 210,230

Equity investment 68,667 —

Goodwill 199,700 199,171

29 unchanged sentences

(In thousands, except per share amounts)

Three Months Ended Nine Months Ended

September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Three Months Ended

2025 March 30,

Revenues $ 171,356 $ 168,725

7 unchanged sentences

Operating income

17,855 2,707 56,930 1,486

Interest income, net 3,317 3,156

Other income (expense), net

( 558 ) 788 322 1,261

Other income, net

Income before income taxes 7,476 24,979

Provision for income taxes

2,211 786 7,564 626

Net income $ 6,401 $ 21,781

9 unchanged sentences

(In thousands)

Three Months Ended Nine Months Ended

September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Three Months Ended

2025 March 30,

Net income $ 6,401 $ 21,781

1 unchanged sentence

Foreign currency translation adjustments 3,339 ( 2,283 )

Unrealized gains on available-for-sale marketable securities

1,669 283 1,432 801

Unrealized gains (losses) on available-for-sale marketable securities 370 ( 198 )

Unrealized gains (losses) on derivative instruments 1,094 ( 232 )

Other comprehensive income (loss), net of tax:

4,803 ( 2,713 )

Other comprehensive income (loss) 6,175 ( 4,064 ) 2,279 ( 2,931 )

Comprehensive income $ 11,204 $ 19,068

7 unchanged sentences

Loss Accumulated

(Deficit) Total

Three Months Ended September 28, 2024

Balances, June 29, 2024

77,281,052 $ 77 $ 863,283 $ ( 7,948 ) $ 92,504 $ 947,916

Issuance of common stock under the Employee Stock Purchase Plan 143,975 — 4,800 — — 4,800

Issuance of common stock pursuant to vesting of restricted stock units, net of stock withheld for tax 428,694 — ( 14,421 ) — — ( 14,421 )

Purchase and retirement of common stock through repurchase program ( 405,732 ) — ( 16,909 ) — — ( 16,909 )

Stock-based compensation — — 8,713 — — 8,713

Other comprehensive income — — — 6,175 — 6,175

Net income — — — — 18,736 18,736

Balances, September 28, 2024

77,447,989 $ 77 $ 845,466 $ ( 1,773 ) $ 111,240 $ 955,010

Nine Months Ended September 28, 2024

Three Months Ended March 29, 2025

Balances, December 28, 2024

2 unchanged sentences

Issuance of common stock pursuant to vesting of restricted stock units, net of stock withheld for tax 93,981 — ( 2,132 ) — — ( 2,132 )

Issuance of common stock pursuant to private placement 334,971 — 15,000 — — 15,000

Purchase and retirement of common stock through repurchase program ( 665,000 ) — ( 22,207 ) — — ( 22,207 )

2 unchanged sentences

Net income — — — — 6,401 6,401

Balances, September 28, 2024

77,447,989 $ 77 $ 845,466 $ ( 1,773 ) $ 111,240 $ 955,010

Three Months Ended September 30, 2023

Balances, July 1, 2023 77,184,012 $ 77 $ 867,517 $ ( 4,445 ) $ ( 28,886 ) $ 834,263

Issuance of common stock under the Employee Stock Purchase Plan 153,135 — 3,798 — — 3,798

Issuance of common stock pursuant to vesting of restricted stock units, net of stock withheld for tax 502,170 1 ( 8,894 ) — — ( 8,893 )

Stock-based compensation — — 11,213 — — 11,213

Other comprehensive loss — — — ( 4,064 ) — ( 4,064 )

Net income — — — — 4,371 4,371

Balances, September 30, 2023

Balances, March 29, 2025

77,075,636 $ 77 $ 844,488 $ ( 6,037 ) $ 127,346 $ 965,874

Nine Months Ended September 30, 2023

Three Months Ended March 30, 2024

Balances, December 30, 2023 77,376,903 $ 77 $ 861,448 $ ( 4,052 ) $ 51,331 $ 908,804

1 unchanged sentence

Issuance of common stock pursuant to vesting of restricted stock units, net of stock withheld for tax 78,957 — ( 1,840 ) — — ( 1,840 )

Purchase and retirement of common stock through repurchase program ( 411,756 ) — ( 17,398 ) — — ( 17,398 )

Stock-based compensation — — 10,168 — — 10,168

1 unchanged sentence

Net income — — — — 21,781 21,781

Balances, September 30, 2023

Balances, March 30, 2024

77,241,118 $ 77 $ 857,326 $ ( 6,765 ) $ 73,112 $ 923,750

3 unchanged sentences

(In thousands)

Nine Months Ended

September 28,

2024 September 30,

Three Months Ended

2025 March 30,

Cash flows from operating activities:

7 unchanged sentences

Provision for excess and obsolete inventories 2,879 3,146

Non-cash restructuring charges 2,102 —

Gain on sale of business — ( 20,271 )

9 unchanged sentences

Deferred revenues ( 620 ) 4,499

Deferred grant — 18,000

Operating lease liabilities ( 2,030 ) ( 1,530 )

3 unchanged sentences

Proceeds from sale of business — 21,275

Purchase of equity investment ( 67,156 ) —

Purchases of marketable securities ( 26,330 ) ( 37,472 )

Purchase of promissory note receivable ( 1,500 ) —

Proceeds from maturities and sales of marketable securities 27,410 25,813

7 unchanged sentences

Effect of exchange rate changes on cash, cash equivalents and restricted cash 180 ( 1,592 )

Net increase in cash, cash equivalents and restricted cash 9,216 726

Net increase (decrease) in cash, cash equivalents and restricted cash ( 63,905 ) 13,108

Cash, cash equivalents and restricted cash, beginning of year 197,206 181,273

4 unchanged sentences

(In thousands)

Nine Months Ended

September 28,

2024 September 30,

Three Months Ended

2025 March 30,

Non-cash investing and financing activities:

Decrease in accounts payable and accrued liabilities related to property, plant and equipment purchases $ 8,563 $ 2,567

Operating lease, right-of-use assets obtained in exchange for lease obligations — 4,728

Supplemental disclosure of cash flow information:

6 unchanged sentences

Restricted cash 2,445 2,220

Cash and cash equivalents included in Assets held-for-sale — 1,660

Total cash, cash equivalents and restricted cash $ 133,301 $ 194,381

10 unchanged sentences

We operate on a 52/53 week fiscal year, whereby the fiscal year ends on the last Saturday of December.

Fiscal 2024 and 2023 each contain 52 weeks and the nine months ended September 28, 2024 and September 30, 2023 each contained 39 weeks.

Fiscal 2025 and 2024 each contain 52 weeks and the three months ended March 29, 2025 and March 30, 2024 each contained 13 weeks.

Fiscal 2025 will end on December 27 , 2025.

Significant Accounting Policies

Our significant accounting policies have not changed during the nine months ended September 28, 2024 from those disclosed in our Annual Report on Form 10-K for the year ended December 30, 2023.

Our significant accounting policies have not changed during the three months ended March 29, 2025 from those disclosed in our Annual Report on Form 10-K for the year ended December 28, 2024, except for:

Equity Investment

On February 21, 2025, Frontier Investments Co., Ltd (“HoldCo”), a joint holding company in which we hold a 20 % share of the equity and an affiliate of MBK Partners holds an 80 % share of the equity, through HoldCo’s wholly-owned subsidiary, FM Holdings Co., Ltd., acquired 100 % of the shares of FICT Limited (“FICT”) from Advantage Partners Inc.

Our investment of $ 67.2 million, comprises the funding of our share of the purchase price of $ 59.6 million, subject to changes in foreign currency fluctuations, and acquisition costs of $ 7.5 million.

Headquartered in Nagano, Japan, FICT is a provider of semiconductor test and high-performance computing industries with complex multi-layer organic substrates, printed circuit boards, and related leading-edge technologies and services.

This investment is accounted for as an equity method investment and recorded in Equity investment on our Condensed Consolidated Balance Sheets.

We will report the results of our share of the investment with HoldCo on a one-quarter lag as their results are not expected to be available in time to be recorded in the concurrent period.

During the three months ended March 29, 2025, we engaged in transactions with FICT, a related party.

These transactions were conducted in the normal course of business and at arm's length.

The total amount of these transactions was not material to our financial statements.

New Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2023-09, “ Income Taxes (Topic 740):

In November 2024, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No.

2024-03, “ Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses .” This ASU requires an entity to disclose the amounts of purchases of inventory, employee compensation, depreciation, and intangible asset amortization included in each relevant expense caption.

It also requires an entity to include certain amounts that are already required to be disclosed under current GAAP in the same disclosure.

Additionally, it requires an entity to disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, and to disclose the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses.

The amendments in the ASU are effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, with early adoption permitted.

An entity may apply the amendments prospectively for reporting periods after the effective date or retrospectively to any or all prior periods presented in the financial statements.

While this ASU will impact only our disclosures

and not our financial condition and results of operations, we are currently evaluating the effect the adoption of this ASU may have on our disclosures.

In December 2023, the FASB issued ASU 2023-09, “ Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

2 unchanged sentences

This ASU is effective for annual periods beginning after December 15, 2024, with early adoption permitted.

We are currently evaluating the effect the adoption of this ASU may have on our disclosures.

In November 2023, the FASB issued ASU 2023-07, “ Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures .” The ASU includes requirements that an entity disclose the title of the chief operating decision maker (“CODM”) and on an interim and annual basis, significant segment expenses and the composition of other segment items for each segment's reported profit.

The standard also permits disclosure of additional measures of segment profit.

This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, on a retrospective basis, with early adoption permitted.

We are currently evaluating the effect the adoption of this ASU may have on our disclosures.

An entity may apply the amendments outlined in this ASU prospectively by providing the revised disclosures for the current period and continuing to provide the pre-ASU disclosures for the prior periods, or may apply the amendments retrospectively by providing the revised disclosures for all periods presented.

We will adopt this ASU retrospectively for the period ending December 27, 2025, and it will impact only our disclosures with no impacts to our financial condition and results of operations.

Note 2 — Concentration of Credit and Other Risks

Each of the following customers accounted for 10 % or more of our revenues for the periods indicated:

Three Months Ended Nine Months Ended

September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Three Months Ended

2025 March 30,

SK hynix Inc.

4 unchanged sentences

* Less than 10% of revenues.

At September 28, 2024 and December 30, 2023, two customers accounted for 24.7 % and 10.2 % and two customers accounted for 17.8 % and 11.0 % of gross accounts receivable, respectively.

At March 29, 2025 and December 28, 2024, three customers accounted for 16.5 %, 15.8 %, and 12.4 % and one customer accounted for 22.0 % of gross accounts receivable, respectively.

Note 3 — Inventories, net

1 unchanged sentence

Inventories, net, consisted of the following (in thousands):

September 28,

2025 December 28,

3 unchanged sentences

$ 109,965 $ 101,676

Note 4 — Divestitures

China Operations Divestiture

On February 7, 2024, the Company entered into a definitive agreement to sell its China operations to Grand Junction Semiconductor Pte.

Note 4 — Divestiture

On February 7, 2024, we entered into a definitive agreement to sell our China operations to Grand Junction Semiconductor Pte.

(“Grand Junction”) for $ 25.0 million in cash, subject to customary purchase price adjustments, and establish an exclusive distribution and partnership agreement to continue sales and support of our products in the region.

4 unchanged sentences

On February 26, 2024, we closed on the sale of the operations in China to Grand Junction and received total consideration of $ 21.4 million, net of cash transferred and transaction expenses, and after customary adjustments for indebtedness and changes in net working capital.

The disposition of the China operations did not meet the criteria to be classified as a discontinued operation in the Company’s financial statements because the disposition did not represent a strategic shift that had, or will have, a major effect on the Company’s operations and financial results.

The disposition of the China operations did not meet the criteria to be classified as a discontinued operation in our financial statements because the disposition did not represent a strategic shift that had, or will have, a major effect on our operations and financial results.

The following table summarizes the fair value of the sale proceeds received in connection with the divestiture (in thousands):

20 unchanged sentences

Total liabilities $ 9,568

As a result of the divestiture, the Company recognized a pre-tax gain of $ 20.3 million.

The Company recorded income tax expense associated with the divestiture of approximately $ 3.3 million.

FRT Divestiture

On September 18, 2023, the Company announced entry into a definitive agreement to sell its FRT Metrology (“FRT”) business to Camtek Ltd.

(“Camtek”) for $ 100 million in cash, subject to customary purchase price adjustments.

The Company acquired FRT GmbH in fiscal 2019 for total consideration of $ 24.4 million, net of cash acquired.

Headquartered in Bergisch Gladbach, Germany, the FRT business is a leading supplier of high-precision metrology solutions for the Advanced Packaging and Silicon Carbide markets, and was part of the Company's Systems segment.

On November 1, 2023, we closed on the sale of the FRT business to Camtek and received net cash proceeds of $ 100.1 million, net of cash transferred and transaction expenses, and after customary adjustments for indebtedness and changes in net working capital.

The following table summarizes the fair value of the sale proceeds received in connection with the divestiture (in thousands):

November 1, 2023

Gross purchase price $ 99,100

Estimated working capital adjustment 4,266

Cash transferred to the buyer at closing ( 2,049 )

Direct costs to sell ( 1,225 )

Fair value of sale consideration $ 100,092

The carrying amount of net assets associated with the FRT business was approximately $ 26.8 million.

The major classes of assets and liabilities sold consisted of the following (in thousands):

November 1, 2023

Accounts receivable, net $ 7,738

Inventories, net 6,446

Other current assets 635

Total current assets 14,819

Intangibles, net 6,897

Goodwill 10,660

Other assets 1,612

Total assets $ 33,988

Current liabilities $ 4,300

Other liabilities 2,856

Total liabilities $ 7,156

As a result of the divestiture, the Company recognized a pre-tax gain of $ 73.3 million.

The Company recorded income tax expense associated with the divestiture of approximately $ 6.0 million.

As a result of the divestiture, we recognized a pre-tax gain of $ 20.3 million.

We recorded income tax expense associated with the divestiture of approximately $ 3.3 million.

Note 5 — Goodwill and Intangible Assets

2 unchanged sentences

Goodwill, as of December 30, 2023 $ 178,424 $ 22,666 $ 201,090

Reduction - FRT divestiture — ( 10,660 ) ( 10,660 )

Reduction - China divestiture ( 1,055 ) ( 62 ) ( 1,117 )

Foreign currency translation — ( 802 ) ( 802 )

1 unchanged sentence

177,369 21,802 199,171

Reduction - China divestiture ( 1,055 ) ( 62 ) ( 1,117 )

Foreign currency translation — 529 529

Goodwill, as of September 28, 2024

Goodwill, as of March 29, 2025

$ 177,369 $ 22,331 $ 199,700

We have no t recorded goodwill impairments for the nine months ended September 28, 2024.

We have no t recorded goodwill impairments for the three months ended March 29, 2025.

Intangible assets were as follows (in thousands):

September 28, 2024 December 30, 2023

March 29, 2025 December 28, 2024

Intangible Assets Gross Accumulated

4 unchanged sentences

Customer relationships 47,956 47,547 409 47,831 47,241 590

In-process research and development 400 — 400 400 — 400

$ 215,518 $ 205,837 $ 9,681 $ 214,927 $ 204,572 $ 10,355

Amortization expense was included in our Condensed Consolidated Statements of Income as follows (in thousands):

Three Months Ended Nine Months Ended

September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Three Months Ended

2025 March 30,

Cost of revenues $ 483 $ 449

Selling, general and administrative 191 191

$ 640 $ 1,277 $ 1,920 $ 6,043

The estimated future amortization of definite-lived intangible assets, excluding in-process research and development, is as follows (in thousands):

4 unchanged sentences

Accrued liabilities consisted of the following (in thousands):

September 28,

2025 December 28,

11 unchanged sentences

• Level 3 valuations utilize unobservable inputs to the valuation methodology and include our own data about assumptions market participants would use in pricing the asset or liability based on the best information available under the circumstances.

We did not have any transfers of assets or liabilities measured at fair value on a recurring basis to or from Level 1, Level 2 or Level 3 during the nine months ended September 28, 2024 or the year ended December 30, 2023.

We did not have any transfers of assets or liabilities measured at fair value on a recurring basis to or from Level 1, Level 2 or Level 3 during the three months ended March 29, 2025 or the year ended December 28, 2024.

The carrying values of Cash, Accounts receivable, net, Restricted cash, Prepaid expenses and other current assets, Accounts payable, and Accrued liabilities approximate fair value due to their short maturities.

No changes were made to our valuation techniques during the first nine months of fiscal 2024.

No changes were made to our valuation techniques during the first three months of fiscal 2025.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Assets and liabilities measured at fair value on a recurring basis were as follows (in thousands):

September 28, 2024 Level 1 Level 2 Level 3 Total

March 29, 2025 Level 1 Level 2 Level 3 Total

Cash equivalents:

1 unchanged sentence

treasuries 1,598 — — 1,598

Commercial paper — 999 — 999

66,672 999 — 67,671

9 unchanged sentences

Total assets $ 133,189 $ 105,601 $ 1,516 $ 240,306

Foreign exchange derivative contracts $ — $ ( 42 ) $ — $ ( 42 )

Total liabilities $ — $ ( 42 ) $ — $ ( 42 )

December 28, 2024 Level 1 Level 2 Level 3 Total

1 unchanged sentence

Money market funds $ 131,519 $ — $ — $ 131,519

treasuries 4,581 — — 4,581

115,561 — — 115,561

Marketable securities:

4 unchanged sentences

71,252 98,043 — 169,295

Foreign exchange derivative contracts — 284 — 284

Promissory note receivable — — 1,512 1,512

Interest rate swap derivative contracts — 2,025 — 2,025

10 unchanged sentences

In addition, all investments have a sufficient trading volume to demonstrate that the fair value is appropriate.

Unrealized gains and losses were immaterial and were recorded as a component of Accumulated other comprehensive loss in

our Condensed Consolidated Balance Sheets.

Unrealized gains and losses were immaterial and were recorded as a component of Accumulated other comprehensive loss in our Condensed Consolidated Balance Sheets.

We did not have any other-than-temporary unrealized gains or losses at either period end included in these financial statements.

15 unchanged sentences

The fair value of our foreign exchange derivative contracts was determined based on current foreign currency exchange rates and forward points.

All of our foreign exchange derivative contracts outstanding at September 28, 2024 will mature by the third quarter of fiscal 2025.

The following table provides information about our foreign currency forward contracts outstanding as of September 28, 2024 (in thousands):

All of our foreign exchange derivative contracts outstanding at March 29, 2025 will mature by the first quarter of fiscal 2026.

The following table provides information about our foreign currency forward contracts outstanding as of March 29, 2025 (in thousands):

Currency Contract Position Contract Amount

6 unchanged sentences

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

We measure and report our non-financial assets such as Property, plant and equipment, Goodwill and Intangible assets at fair value on a non-recurring basis if we determine these assets to be impaired or in the period when we make a business acquisition.

There were no assets or liabilities measured at fair value on a nonrecurring basis during the three and nine months ended September 28, 2024 or September 30, 2023.

We measure and report our non-financial assets such as Property, plant and equipment, Equity investment, Goodwill and Intangible assets at fair value on a non-recurring basis if we determine these assets to be impaired or in the period when we make a business acquisition.

There were no assets or liabilities measured at fair value on a nonrecurring basis during the three months ended March 29, 2025 or March 30, 2024.

Note 8 — Warranty

We offer warranties on certain products and record a liability for the estimated future costs associated with warranty claims at the time revenue is recognized.

The warranty liability is based upon historical experience and our estimate of the level of future

The warranty liability is based upon historical experience and our estimate of the level of future costs.

While we engage in product quality programs and processes, our warranty obligation is affected by product failure rates, material usage and service delivery costs.

4 unchanged sentences

Changes in our warranty liability were as follows (in thousands):

Nine Months Ended

September 28,

2024 September 30,

Three Months Ended

2025 March 30,

Balance at beginning of year $ 3,558 $ 3,177

1 unchanged sentence

Settlements ( 1,675 ) ( 2,238 )

Reclassification - Liabilities held-for-sale — ( 106 )

Balance at end of period $ 3,551 $ 3,668

1 unchanged sentence

Property, plant and equipment, net consisted of the following (in thousands):

September 28,

2025 December 28,

12 unchanged sentences

Common Stock Repurchase Programs

On May 20, 2022, our Board of Directors authorized a two-year program to repurchase up to $ 75.0 million of outstanding common stock to offset potential dilution from issuance of common stock under our stock-based compensation programs.

During fiscal 2022 and fiscal 2023, we repurchased and retired 1,700,893 shares of common stock for $ 56.4 million and 504,352 shares of common stock for $ 18.6 million, respectively, utilizing the remaining shares available for repurchase under the program.

On October 30, 2023, our Board of Directors authorized an additional two-year program to repurchase up to $ 75.0 million of outstanding common stock, with the primary purpose of offsetting potential dilution from issuance of common stock under our stock-based compensation programs.

This share repurchase program will expire on October 30, 2025.

On October 30, 2023, our Board of Directors authorized a two-year program to repurchase up to $ 75.0 million of outstanding common stock, with the primary purpose of offsetting potential dilution from issuance of common stock under our stock-based compensation programs.

On March 29, 2025, our Board of Directors approved an increase to the repurchase program, authorizing the repurchase of an additional $ 1.6 million in shares of common stock.

During fiscal 2024 we repurchased and retired 1,309,635 shares of common stock for $ 53.3 million.

During the nine months ended September 28, 2024, we repurchased and retired 889,683 shares of common stock for $ 37.2 million, and as of September 28, 2024, $ 36.6 million remained available for future repurchases.

During the three months ended March 29, 2025, we repurchased

and retired 665,000 shares of common stock for $ 22.1 million, utilizing the remaining shares available for repurchase under the program.

On April 24, 2025, our Board of Directors authorized a new two-year program to repurchase up to $ 75.0 million of outstanding common stock to offset potential dilution from issuance of common stock under our stock-based compensation programs.

Our policy related to repurchases of our common stock is to charge the excess of cost over par value to additional paid-in capital once the shares are retired.

1 unchanged sentence

Certain exceptions apply to the excise tax.

The excise tax incurred

reduces the amount available under the repurchase programs, as applicable, and is included in the cost of shares repurchased in the Condensed Consolidated Statement of Stockholders Equity.

The excise tax incurred is included in the cost of shares repurchased in the Condensed Consolidated Statement of Stockholders Equity, as applicable.

All repurchases were made in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended.

Private Placement

On January 10, 2025, Advantest America, Inc., a Delaware corporation, acquired 334,971 shares of FormFactor's common stock in a private placement for $44.78 per share, representing the 5-day trailing volume-weighted average price prior to signing the related private placement agreement.

Restricted Stock Units

6 unchanged sentences

Awards forfeited ( 51,875 ) 38.10

RSUs at September 28, 2024

RSUs at March 29, 2025

1,582,610 39.68

1 unchanged sentence

We may grant Performance RSUs (“PRSUs”) to certain executives, which vest based upon us achieving certain market performance criteria.

On August 5, 2024, we granted 117,624 PRSUs to certain senior executives for a total grant date fair value of $ 5.8 million which will be recognized ratably over the requisite service period.

The number of PRSUs granted represents the “target” number of units that can be earned based on the performance criteria.

The performance criteria are based on Total Shareholder Returns (“TSR”) for the period of July 1, 2024 - June 30, 2027, relative to the TSR of the companies identified as being part of the S&P Semiconductors Select Industry Index (FormFactor peer companies) as of the grant date.

Of the 197,128 PRSUs granted in fiscal 2021, 56,685 shares were forfeited during the requisite service period, resulting in 140,443 shares vesting in 2024.

These shares achieved 146 % TSR performance, which resulted in an additional 64,525 shares issued in fiscal 2024 in excess of the target number of units related to the fiscal 2021 PRSU grant.

There were no PRSUs granted during the three months ended March 29, 2025.

PRSUs are included as part of the RSU activity above.

1 unchanged sentence

Information related to activity under our Employee Stock Purchase Plan (“ESPP”) was as follows:

Nine Months Ended

September 28, 2024

Three Months Ended

March 29, 2025

Shares issued 197,051

3 unchanged sentences

Stock-based compensation was included in our Condensed Consolidated Statements of Income as follows (in thousands):

Three Months Ended Nine Months Ended

September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Three Months Ended

2025 March 30,

Cost of revenues $ 2,005 $ 1,928

3 unchanged sentences

Unrecognized Compensation Costs

At September 28, 2024, the unrecognized stock-based compensation was as follows (dollars in thousands):

At March 29, 2025, the unrecognized stock-based compensation was as follows (dollars in thousands):

Average Expected

6 unchanged sentences

The following table reconciles the shares used in calculating basic net income per share and diluted net income per share (in thousands):

Three Months Ended Nine Months Ended

September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Three Months Ended

2025 March 30,

Weighted-average shares used in computing basic net income per share 77,345 77,452

5 unchanged sentences

Contractual Obligations and Commitments

Our contractual obligations and commitments have not materially changed as of September 28, 2024 from those disclosed in our Annual Report on Form 10-K for the year ended December 30, 2023.

Our contractual obligations and commitments have not materially changed as of March 29, 2025 from those disclosed in our Annual Report on Form 10-K for the year ended December 28, 2024.

Legal Matters

3 unchanged sentences

We lease real estate space under non-cancelable operating lease agreements for commercial and industrial space, as well as for a portion of our corporate headquarters located in Livermore, California.

Our leases have remaining terms of 1 year to 10 years, and some leases include options to extend up to 20 years.

We also have operating leases for automobiles with remaining lease terms of 1 year to 3 years.

Our leases have remaining terms of one to nine years , and some leases include options to extend up to twenty years .

We also have operating leases for automobiles with remaining lease terms of one year .

We did not include any of our renewal options in our lease terms for calculating our lease liability as the renewal options allow us to maintain operational flexibility and we are not reasonably certain we will exercise these options at this time.

The weighted-average remaining lease term for our operating leases was 4 years as of September 28, 2024 and the weighted-average discount rate was 4.70 %.

The weighted-average remaining lease term for our operating leases was four years as of March 29, 2025 and the weighted-average discount rate was 4.7 %.

The components of lease expense were as follows (in thousands):

Three Months Ended Nine Months Ended

September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Three Months Ended

2025 March 30,

Lease expense:

3 unchanged sentences

$ 3,035 $ 3,000

Future minimum payments under our non-cancelable operating leases were as follows as of September 28, 2024 (in thousands):

Future minimum payments under our non-cancelable operating leases were as follows as of March 29, 2025 (in thousands):

Fiscal Year Amount

8 unchanged sentences

Transaction price allocated to the remaining performance obligations:

On September 28, 2024, we had $ 23.9 million of remaining performance obligations, which were comprised of deferred service contracts, extended warranty contracts, and contracts with overtime revenue recognition that are not yet delivered.

On March 29, 2025, we had $ 19.4 million of remaining performance obligations, which were comprised of deferred service contracts, extended warranty contracts, and contracts with overtime revenue recognition that are not yet delivered.

We expect to recognize approximately 61.2 % of our remaining performance obligations as revenue in the remainder of fiscal 2025, approximately 34.5 % in fiscal 2026, and approximately 4.3 % in fiscal 2027 and thereafter.

5 unchanged sentences

A contract asset is recorded when we have performed under the contract but our right to consideration is conditional on something other than the passage of time.

Contract assets as of September 28, 2024 and December 30, 2023 were $ 6.8 million and $ 3.8 million, respectively, and are reported on the Condensed Consolidated Balance Sheets as a component of Prepaid expenses and other current assets.

Contract assets as of March 29, 2025 and December 28, 2024 were $ 7.5 million and $ 6.9 million, respectively, and are reported on the Condensed Consolidated Balance Sheets as a component of Prepaid expenses and other current assets.

Contract liabilities include payments received and payments due in advance of performance under a contract and are satisfied as the associated revenue is recognized.

Contract liabilities are reported on the Condensed Consolidated Balance Sheets at the end of each reporting period as a component of Deferred revenue and Other liabilities.

Contract liabilities as of September 28, 2024 and December 30, 2023 were $ 22.1 million and $ 18.0 million, respectively.

During the nine months ended September 28, 2024, we recognized $ 12.7 million of revenue that was included in contract liabilities as of December 30, 2023.

During the nine months ended September 28, 2024, we divested contract liabilities of $ 1.7 million as of December 30, 2023 with the divestiture of our China operations.

Contract liabilities as of March 29, 2025 and December 28, 2024 were $ 16.3 million and $ 16.9 million, respectively.

During the three months ended March 29, 2025, we recognized $ 8.0 million of revenue that was included in contract liabilities as of December 28, 2024.

Costs to obtain a contract:

3 unchanged sentences

Note 15 — Operating Segments and Enterprise-Wide Information

Our CODM is our Chief Executive Officer, who reviews operating results to make decisions about allocating resources and assessing performance for the entire company.

We operate in two reportable segments consisting of the Probe Cards segment and the Systems segment.

The following table summarizes the operating results by reportable segment (dollars in thousands):

Our chief operating decision maker (“CODM”) is our President and Chief Executive Officer, who assesses the reportable segments' performance by using each reportable segment's net contribution to make decisions about allocating resources and assessing performance for the entire company.

The CODM uses net contribution for each reportable segment predominantly in the annual budget and forecasting process, as well as consideration of budget-to-actual variances on a quarterly basis when making decisions for assessment of our performance and results of operations.

Certain components of net contribution are utilized to determine executive compensation along with other measures.

The following table provides net contribution by reportable segment and includes a reconciliation to net income before income taxes (dollars in thousands):

Three Months Ended

September 28, 2024 September 30, 2023

Probe Cards Systems Corporate and Other Total Probe Cards Systems Corporate and Other Total

Revenues $ 172,174 $ 35,743 $ — $ 207,917 $ 128,339 $ 43,236 $ — $ 171,575

Gross profit 72,855 14,838 ( 2,988 ) 84,705 49,383 22,396 ( 2,494 ) 69,285

Gross margin 42.3 % 41.5 % 40.7 % 38.5 % 51.8 % 40.4 %

Nine Months Ended

September 28, 2024 September 30, 2023

March 29, 2025 March 30, 2024

Probe Cards Systems Corporate and Other Total Probe Cards Systems Corporate and Other Total

Revenues $ 136,520 $ 34,836 $ — $ 171,356 $ 136,701 $ 32,024 $ — $ 168,725

Cost of revenues 84,905 19,321 ( 2,607 ) 106,833 85,910 17,518 ( 2,559 ) 105,987

Gross profit 51,615 15,515 ( 2,607 ) 64,523 50,791 14,506 ( 2,559 ) 62,738

Gross margin 37.8 % 44.5 % 37.7 % 37.2 % 45.3 % 37.2 %

Operating results provide useful information to our management for assessment of our performance and results of operations.

Certain components of our operating results are utilized to determine compensation along with other measures.

Corporate and Other includes unallocated expenses relating to amortization of intangible assets, inventory and fixed asset fair value adjustments due to acquisitions, share-based compensation, and restructuring charges which are not used in evaluating the results of, or in allocating resources to, our reportable segments.

Research and development 21,056 3,968 2,776 27,800 20,848 5,166 2,613 28,627

Selling 6,566 3,660 2,801 13,027 7,220 3,586 1,700 12,506

Marketing 1,580 1,741 1,126 4,447 1,918 1,660 1,702 5,280

Net contribution $ 22,413 $ 6,146 $ ( 9,310 ) 19,249 $ 20,805 $ 4,094 $ ( 8,574 ) 16,325

General and administrative 15,980 15,293

Gain on sale of business — 20,271

Operating income 3,269 21,303

Interest income 3,416 3,258

Interest expense ( 99 ) ( 102 )

Other income, net 890 520

Income before income taxes $ 7,476 $ 24,979

Corporate and Other includes unallocated expenses relating to amortization of stock-based compensation expense, intangible assets, acquisition-related costs, including charges related to fixed assets stepped up to fair value, restructuring charges, and other costs, which are not used in evaluating the results of, or in allocating resources to, our reportable segments.

Acquisition-related costs include transaction costs and any costs directly related to the acquisition and integration of acquired businesses.

Net contribution represents Operating income excluding general and administrative expenses and gains on sale of business, which are not used in evaluating the results of, or in allocating resources to, our reportable segments.

Certain revenue category information by reportable segment was as follows (in thousands):

Three Months Ended

September 28, 2024 September 30, 2023

March 29, 2025 March 30, 2024

Probe Cards Systems Total Probe Cards Systems Total

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Geographical region:

United States $ 45,015 $ 10,000 $ 55,015 $ 31,182 $ 12,543 $ 43,725

Taiwan $ 40,747 $ 4,615 $ 45,362 $ 27,179 $ 2,698 $ 29,877

South Korea 42,209 962 43,171 50,672 45 50,717

United States 27,784 12,541 40,325 35,596 10,170 45,766

China 8,152 5,463 13,615 8,686 6,927 15,613

5 unchanged sentences

Total $ 136,520 $ 34,836 $ 171,356 $ 136,701 $ 32,024 $ 168,725

Nine Months Ended

September 28, 2024 September 30, 2023

Probe Cards Systems Total Probe Cards Systems Total

Foundry & Logic $ 297,874 $ — $ 297,874 $ 279,895 $ — $ 279,895

DRAM 164,122 — 164,122 77,832 — 77,832

Flash 13,671 — 13,671 13,243 — 13,243

Systems — 98,449 98,449 — 123,969 123,969

Total $ 475,667 $ 98,449 $ 574,116 $ 370,970 $ 123,969 $ 494,939

Timing of revenue recognition:

Products transferred at a point in time $ 464,668 $ 94,638 $ 559,306 $ 368,939 $ 116,981 $ 485,920

Products and services transferred over time 10,999 3,811 14,810 2,031 6,988 9,019

Total $ 475,667 $ 98,449 $ 574,116 $ 370,970 $ 123,969 $ 494,939

Geographical region:

United States $ 120,046 $ 28,626 $ 148,672 $ 86,954 $ 37,175 $ 124,129

South Korea 140,233 1,319 141,552 77,832 5,881 83,713

Taiwan 109,476 13,136 122,612 103,368 9,448 112,816

China 56,364 18,849 75,213 45,771 26,586 72,357

Europe 8,927 16,493 25,420 8,424 21,114 29,538

Japan 12,594 11,615 24,209 14,014 11,859 25,873

Singapore 12,354 2,401 14,755 7,670 4,170 11,840

Malaysia 11,150 2,595 13,745 22,279 1,632 23,911

Rest of the world 4,523 3,415 7,938 4,658 6,104 10,762

Total $ 475,667 $ 98,449 $ 574,116 $ 370,970 $ 123,969 $ 494,939

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements