FORMFACTOR INC 10-K

Item 9A: Controls and Procedures Evaluation of Disclosure Controls and Procedures Based on our management’s evaluation (with the participation of our principal executive officer and principal financial officer), as of the end of the period covered by this report, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”)) were effective as of December 27, 2025 to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Changes in Internal Control over Financial Reporting There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the fourth quarter of fiscal 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 40 Management's Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Internal control over financial reporting is a process designed by, or under the supervision of, our principal executive officer and principal financial officer, and effected by our board of directors, management and other personnel and consultants, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, and includes those policies and procedures that: (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and dispositions of assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with the authorization of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an assessment of the effectiveness of our internal control over financial reporting as of December 27, 2025. In making this assessment, our management used the criteria set forth in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on the results of this assessment, management has concluded that our internal control over financial reporting was effective as of December 27, 2025. The effectiveness of our internal control over financial reporting as of December 27, 2025 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their report which appears in this Annual Report on Form 10-K. Limitations on the Effectiveness of Controls Control systems, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control systems’ objectives are being met. Further, the design of any control systems must reflect the fact that there are resource constraints, and the benefits of all controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of simple error or mistake. Control systems can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based, in part, on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures. CEO and CFO Certifications We have attached as exhibits to this Annual Report on Form 10-K the certifications of our Chief Executive Officer and Chief Financial Officer, which are required in accordance with the Exchange Act. We recommend that this Item 9A be read in conjunction with the certifications for a more complete understanding of the subject matter presented. Item 9B: Other Information Insider Trading Arrangements During the quarter ended December 27, 2025, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement” as each term is defined in Item 408(a) of Regulation S-K, except as follows: 41 On December 4, 2025 , Aric McKinnis , the Company's Chief Financial Officer , adopted a Rule 10b5-1 trading agreement. Under this arrangement, a total of up to 5,552 shares of our common stock may be sold, subject to certain conditions, after March 5, 2026 and before the arrangement expires on December 4, 2026. The above arrangement is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act. Item 9C: Disclosure Regarding Foreign Jurisdictions that Prevent Inspections None. 42 PART III Item 10: Directors, Executive Officers and Corporate Governance The information required by this item is incorporated by reference to the proxy statement for our 2026 Annual Meeting of Stockholders under the captions Corporate Governance, Executive Officers, and, if applicable, Delinquent Section 16(a) Reports. Item 11: Executive Compensation The information required by this item is incorporated by reference to the proxy statement for our 2026 Annual Meeting of Stockholders under the captions Compensation Discussion and Analysis, Executive Compensation and Related Information, Compensation Committee Interlocks and Insider Participation and Compensation Committee Report. Item 12: Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information required by this item is incorporated by reference to the proxy statement for our 2026 Annual Meeting of Stockholders under the captions Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters, and Equity Compensation Plan. Item 13: Certain Relationships and Related Transactions, and Director Independence The information required by this item is incorporated by reference to the proxy statement for our 2026 Annual Meeting of Stockholders under the captions Certain Relationships and Related Person Transactions and Independence of Directors. Item 14: Principal Accountant Fees and Services Our independent registered public accounting firm is KPMG LLP ; Portland, Oregon ; Auditor Firm ID: 185 . The information required by this item is incorporated by reference to the proxy statement for our 2026 Annual Meeting of Stockholders under the caption Principal Auditor Fees and Services. 43 PART IV Item 15: Exhibits and Financial Statement Schedules Financial Statements and Schedules The Consolidated Financial Statements, together with the report thereon of KPMG LLP, are included on the pages indicated below: Page Report of Independent Registered Public Accounting Firm 49 Consolidated Balance Sheets as of December 27, 2025 and December 28, 2024 51 Consolidated Statements of Income for the fiscal years ended December 27, 2025, December 28, 2024 and December 30, 2023 52 Consolidated Statements of Comprehensive Income for the fiscal years ended December 27, 2025, December 28, 2024 and December 30, 2023 53 Consolidated Statements of Stockholders' Equity for the fiscal years ended December 27, 2025, December 28, 2024 and December 30, 2023 54 Consolidated Statements of Cash Flows for the fiscal years ended December 27, 2025, December 28, 2024 and December 30, 2023 55 Notes to Consolidated Financial Statements 57 Financial statement schedules have been omitted because they are not applicable or the required information is shown in the consolidated financial statements or notes thereto. Exhibits The exhibits listed in the accompanying index to exhibits are filed or incorporated by reference as part of this Annual Report on Form 10-K. Item 16: Form 10-K Summary None. 44 EXHIBIT INDEX Incorporated by Reference Exhibit Number Exhibit Description Form File No Date of First Filing Exhibit Number Filed Herewith 3.1 Certificate of Amendment of Amended and Restated Certificate of Incorporation of FormFactor, Inc. 10-K 000-50307 2/21/2025 3.1 3.2 Restated Certificate of Incorporation of FormFactor, Inc. 10-K 000-50307 2/21/2025 3.2 3.3 Amended and Restated By-laws of FormFactor, Inc. 8-K 000-50307 7/30/2025 3.2 4.1 Specimen Common Stock Certificate S-1/A 333-86738 5/28/2002 4.01 4.2 Description of Securities 10-K 000-50307 2/22/2021 4.2 10.1 + FormFactor, Inc. Severance Plan for US Executives 10-K 000-50307 2/21/2025 10.1 10.2 + Form of Indemnity Agreement S-1/A 333-86738 5/28/2002 10.01 10.3 + Employee Incentive Plan, as amended and restated effective January 28, 2025 10-K 000-50307 2/21/2025 10.3 10.4 + Employee Incentive Plan, as amended and restated effective January 25, 2022 10-K 000-50307 2/21/2025 10.4 10.5 + Equity Incentive Plan, as amended and restated effective May 27, 2022 DEF 14A 000-50307 4/13/2022 Appendix B 10.6 + Employee Stock Purchase Plan, as amended and restated May 19, 2023 DEF 14A 000-50307 4/4/2023 Appendix A 10.7 Pacific Corporate Center Lease (Building 1) by and between Greenville Holding Company LLC (successor to Greenville Investors, L.P.) (“Greenville”) and the Registrant dated May 3, 2001 S-1/A 333-86738 6/10/2003 10.18 10.8 First Amendment to Pacific Corporate Center Lease (Building 1) by and between Greenville and the Registrant dated January 31, 2003 S-1/A 333-86738 5/7/2003 10.18.1 10.9 Pacific Corporate Center Lease (Building 2) by and between Greenville and the Registrant dated May 3, 2001 S-1/A 333-86738 6/10/2003 10.19 10.10 First Amendment to Pacific Corporate Center Lease (Building 2) by and between Greenville and the Registrant dated January 31, 2003 S-1/A 333-86738 5/7/2003 10.19.1 10.11 Pacific Corporate Center Lease (Building 3) by and between Greenville and the Registrant dated May 3, 2001 S-1/A 333-86738 6/10/2003 10.20 10.12 First Amendment to Pacific Corporate Center Lease (Building 3) by and between Greenville and the Registrant dated January 31, 2003 S-1/A 333-86738 5/7/2003 10.20.1 10.13 Third Amendment, dated December 19, 2016, between FormFactor, Inc. and MOHR PCC, LP, to Pacific Corporate Center Leases (Buildings 1, 2 and 3), dated May 3, 2001, by and between Greenville Investors, L.P. and FormFactor, Inc., as amended 8-K 000-50307 12/23/2016 10.2 10.14 ++ Pacific Corporate Center Lease by and between Greenville and the Registrant dated September 7, 2004, as amended by First Amendment to Building 6 Lease dated August 16, 2006 10-Q 000-50307 11/7/2006 10.01 10.15 Second Amendment, dated December 19, 2016, between FormFactor, Inc. and MOHR PCC, LP, to Pacific Corporate Center Lease, dated October 5, 2004, by and between Greenville Investors, L.P. and FormFactor, Inc., as amended 8-K 000-50307 12/23/2016 10.1 10.16 Third Amendment, dated October 1, 2018, between FormFactor, Inc. and MOHR PCC, LP, to Pacific Corporate Center Lease, dated October 5, 2004, by and between Greenville Investors, L.P. and FormFactor, Inc., as amended 8-K 000-50307 10/2/2018 10.1 10.17 Fourth Amendment, dated October 1, 2018, between FormFactor, Inc. and MOHR PCC, LP, to Pacific Corporate Center Lease, dated October 5, 2004, by and between Greenville Investors, L.P. and FormFactor, Inc., as amended 8-K 000-50307 10/2/2018 10.2 10.18 Rental Agreement by and between Cascade Microtech Dresden GmbH and Süss Grundstücksverwaltungs GbR dated as of June 17, 2011. 10-Q 000-51072 8/10/2011 10.3 10.19 First Amendment to Lease dated January 10, 2007, between Nimbus Center LLC (as successor in interest to Spieker Properties, L.P.) and Cascade Microtech, Inc. 10-Q 000-51072 5/9/2014 10.1 45 Incorporated by Reference Exhibit Number Exhibit Description Form File No Date of First Filing Exhibit Number Filed Herewith 10.20 Second Amendment to Lease dated February 25, 2013, between Nimbus Center LLC and Cascade Microtech, Inc. 10-Q 000-51072 5/8/2013 10.2 10.21 Third Amendment to Lease dated January 23, 2014, between Nimbus Center LLC and Cascade Microtech, Inc. 10-Q 000-51072 5/9/2014 10.2 10.22 Fourth Amendment to Lease dated March 31, 2014, between Nimbus Center LLC and Cascade Microtech, Inc. 10-Q 000-51072 5/9/2014 10.3 10.23 Fifth Amendment to Lease dated September 24, 2014, between Nimbus Center LLC and Cascade Microtech, Inc. 10-K 000-51072 3/72016 10.22 10.24 ++ Sixth Amendment to Lease dated July 8, 2015, between Nimbus Center LLC and Cascade Microtech, Inc. 10-K 000-51072 3/72016 10.23 10.25 Seventh Amendment to Lease dated June 5, 2018, between Nimbus Center LLC and FormFactor Beaverton, Inc. 10-K 000-50307 2/24/2023 10.35 10.26 Eighth Amendment to Lease dated December 14, 2022, between Nimbus Center LLC and FormFactor, Inc. 10-K 000-50307 2/24/2023 10.36 10.27 + Employment Offer Letter, dated August 29, 2012 to Mike Slessor 10-K 000-50307 3/13/2013 10.19 10.28 + CEO Change of Control and Severance Agreement, dated November 15, 2024 by and between Mike Slessor and the Registrant 10-K 000-50307 2/21/2025 10.28 10.29 + Employment Offer Letter, dated February 15, 2018 to Shai Shahar 10-Q 000-50307 5/8/2018 10.1 10.30 + Change of Control Severance Agreement, dated July 20, 2022 by and between Shai Shahar and the Registrant 8-K 000-50307 7/26/2022 10.2 1 0.31 + Employment Offer Letter, dated August 4, 2025 to Aric McKinnis — — — — X 10.32 ++# Share Purchase Agreement by and among Camtek, Ltd. as purchaser and FormFactor GmbH as seller and FormFactor, Inc as Parent and FRT GmbH as Company, dated as of September 17, 2023 10-K 000-50307 2/21/2025 10.31 10.33 Credit Agreement, dated as of July 29, 2025, by and among FormFactor, Inc. and Wells Fargo Bank, National Association, as Administrative Agent, and the lenders party thereto from time to time 8-K 000-50307 7/30/2025 10.1 19.1 Insider Trading Policy 10-K 000-50307 2/21/2025 19.1 21.1 List of Registrant's subsidiaries — — — — X 23.1 Consent of Independent Registered Public Accounting Firm - KPMG LLP — — — — X 24.1 Power of Attorney (included on the signature page of this Form 10-K) — — — — X 31.1 Certification of Chief Executive Officer pursuant to 15 U.S.C. Section 7241, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 — — — — X 31.2 Certification of Chief Financial Officer pursuant to 15 U.S.C. Section 7241, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 — — — — X 32.1 * Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 — — — — X 97.1 Incentive Compensation Clawback Policy, effective October 2, 2023 10-K 000-50307 2/21/2025 97.1 101** The following financial statements from the Company’s Annual Report on Form 10-K for the year ended December 27, 2025, formatted in Inline XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Cash Flows, and (v) Notes to Consolidated Financial Statements, tagged as blocks of text and including detailed tags. — — — — X 101.SCH** XBRL Taxonomy Extension Schema Document — — — — X 46 Incorporated by Reference Exhibit Number Exhibit Description Form File No Date of First Filing Exhibit Number Filed Herewith 101.CAL** XBRL Taxonomy Extension Calculation Linkbase Document — — — — X 101.DEF** XBRL Taxonomy Extension Definition Linkbase Document — — — — X 101.LAB** XBRL Taxonomy Extension Label Linkbase Document — — — — X 101.PRE** XBRL Taxonomy Extension Presentation Linkbase Document — — — — X 104 The cover page from the Company’s Annual Report on Form 10-K for the year ended December 27, 2025, formatted in Inline XBRL (included as Exhibit 101). — — — — X * This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any filings. ** Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability. + Indicates a management contract or compensatory plan or arrangement. ++ The schedules, exhibits, and annexes to this exhibit have been omitted in reliance on Item 601(a)(5) of Regulation S-K and will be furnished supplementally to the SEC upon request. # Certain information identified by bracketed asterisks ([***]) has been omitted from this exhibit pursuant to Item 601(b)(10)(iv) of Regulation S-K because it is both (i) not material and (ii) the type that the Registrant treats as private or confidential. 47 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. FORMFACTOR, INC. Date: February 20, 2026 By: /s/ ARIC MCKINNIS Aric McKinnis Chief Financial Officer POWER OF ATTORNEY KNOW BY ALL PERSONS BY THESE PRESENTS, that each of the undersigned whose signature appears below constitutes and appoints Aric McKinnis and Alan Chan, and each of them, the undersigned's true and lawful attorneys in-fact and agents with full power of substitution, for the undersigned and in the undersigned's name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K and any other documents in connection therewith, and to file the same, with all exhibits thereto, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act requisite and necessary to be done with respect to this Annual Report on Form 10-K, including amendments, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or his or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. Signature Title Date /s/ MICHAEL D. SLESSOR President, Chief Executive Officer and Director (Principal Executive Officer) February 20, 2026 Michael D. Slessor /s/ ARIC MCKINNIS Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) February 20, 2026 Aric McKinnis /s/ THOMAS ST. DENNIS Director February 20, 2026 Thomas St. Dennis /s/ KEVIN BREWER Director February 20, 2026 Kevin Brewer /s/ REBECA OBREGON JIMENEZ Director February 20, 2026 Rebeca Obregon Jimenez /s/ SHERI RHODES Director February 20, 2026 Sheri Rhodes /s/ KELLEY STEVEN-WAISS Director February 20, 2026 Kelley Steven-Waiss /s/ JORGE TITINGER Director February 20, 2026 Jorge Titinger /s/ BRIAN WHITE Director February 20, 2026 Brian White 48 Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors FormFactor, Inc.: Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting We have audited the accompanying consolidated balance sheets of FormFactor, Inc. and subsidiaries (the Company) as of December 27, 2025 and December 28, 2024, the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 27, 2025, and the related notes (collectively, the consolidated financial statements). We also have audited the Company’s internal control over financial reporting as of December 27, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 27, 2025 and December 28, 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 27, 2025, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 27, 2025 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Basis for Opinions The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. 49 Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Evaluation of inventory excess and obsolescence As discussed in notes 2 and 3 to the consolidated financial statements, the Company’s net inventories were $110.9 million as of December 27, 2025, and inventory write-downs totaled $14.9 million for the year ended December 27, 2025. The Company states its inventories at the lower of cost or net realizable value. The Company records an adjustment to the cost basis of inventory when evidence exists that the net realizable value of inventory is lower than its cost, which occurs when the Company has excess and/or obsolete inventory. The Company’s model to estimate the excess and/or obsolete inventory is based on an analysis of existing inventory quantities compared to estimated future consumption. Future consumption is estimated based upon assumptions about how past consumption, recent purchases, backlog or other factors indicate future consumption. We identified the evaluation of inventory excess and obsolescence as a critical audit matter. Complex auditor judgment was required to evaluate certain assumptions used to estimate future consumption of inventory in the Company’s model, specifically assumptions and qualitative other factors that have a higher degree of subjectivity and are based on the outcome of uncertain future events. The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s process to estimate inventory excess and obsolescence. This included controls related to the development of certain assumptions used to estimate future consumption of inventory, including qualitative other factors. We assessed the Company’s assumptions used to estimate future consumption of inventory, including qualitative other factors by: • evaluating historical cumulative write down trends and relevant changes to the overall business environment, including key customers and product lines • evaluating the Company’s ability to accurately estimate future consumption by comparing certain assumptions made in the prior year to actual results in the current period • performing inquiries with nonfinancial personnel, including sales and production employees, for a selection of products within inventory for which the Company evaluated excess and obsolescence based on assumptions or qualitative other factors with a higher degree of subjectivity • selecting a sample of products within inventory and for each sample selection, we inspected internal and/or external information underlying the Company’s evaluation of excess and obsolescence and recalculated the Company’s estimate of the cumulative inventory write-downs based on the actual quantity of product on hand compared to the estimate of future consumption. /s/ KPMG LLP We have served as the Company’s auditor since 2013. Portland, Oregon February 20, 2026 50 FORMFACTOR, INC. CONSOLIDATED BALANCE SHEETS December 27, 2025 December 28, 2024 (In thousands, except share and per share data) ASSETS Current assets: Cash and cash equivalents $ 103,330 $ 190,728 Marketable securities 171,842 169,295 Accounts receivable, net 125,416 104,294 Inventories, net 110,884 101,676 Restricted cash 1,063 3,746 Prepaid expenses and other current assets 44,519 35,389 Total current assets 557,054 605,128 Restricted cash 2,654 2,732 Operating lease, right-of-use-assets 17,202 22,579 Property, plant and equipment, net of accumulated depreciation 259,068 210,230 Equity investment 64,096 — Goodwill 216,029 199,171 Intangibles, net 16,302 10,355 Deferred tax assets 89,524 92,012 Other assets 2,433 4,008 Total assets $ 1,224,362 $ 1,146,215 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 47,436 $ 62,287 Accrued liabilities 47,535 43,742 Current portion of term loan, net of unamortized issuance cost of $ 5 and $ 5 1,137 1,106 Deferred revenue 20,091 15,847 Operating lease liabilities 7,662 8,363 Total current liabilities 123,861 131,345 Term loan, less current portion, net of unamortized issuance cost of $ 44 and $ 49 11,071 12,208 Deferred tax liabilities 1,600 — Long-term operating lease liabilities 12,488 17,550 Deferred grant 18,000 18,000 Other liabilities 21,939 19,344 Total liabilities 188,959 198,447 Stockholders’ equity: Preferred stock, $ 0.001 par value: 10,000,000 shares authorized; no shares issued and outstanding — — Common stock, $ 0.001 par value: 250,000,000 shares authorized; 77,647,935 and 77,114,633 shares issued and outstanding 78 77 Additional paid-in capital 863,547 837,586 Accumulated other comprehensive loss ( 3,528 ) ( 10,840 ) Accumulated income 175,306 120,945 Total stockholders’ equity 1,035,403 947,768 Total liabilities and stockholders’ equity $ 1,224,362 $ 1,146,215 The accompanying notes are an integral part of these consolidated financial statements. 51 FORMFACTOR, INC. CONSOLIDATED STATEMENTS OF INCOME Fiscal Year Ended December 27, 2025 December 28, 2024 December 30, 2023 (In thousands, except per share data) Revenues $ 784,993 $ 763,599 $ 663,102 Cost of revenues 476,142 455,676 404,522 Gross profit 308,851 307,923 258,580 Operating expenses: Research and development 115,682 121,938 115,765 Selling, general and administrative 133,074 141,786 133,012 Factory start-up costs 3,025 — — Total operating expenses 251,781 263,724 248,777 Gain on sale of business — 20,581 72,953 Operating income 57,070 64,780 82,756 Interest income 10,640 14,111 7,217 Interest expense ( 521 ) ( 418 ) ( 421 ) Other income (expense), net 2,202 939 ( 285 ) Income before income taxes and equity investment 69,391 79,412 89,267 Provision for income taxes 13,004 9,798 6,880 Loss from equity investment 2,026 — — Net income $ 54,361 $ 69,614 $ 82,387 Net income per share: Basic $ 0.70 $ 0.90 $ 1.06 Diluted $ 0.69 $ 0.89 $ 1.05 Weighted-average number of shares used in per share calculations: Basic 77,348 77,340 77,370 Diluted 78,313 78,437 78,159 The accompanying notes are an integral part of these consolidated financial statements. 52 FORMFACTOR, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Fiscal Year Ended December 27, 2025 December 28, 2024 December 30, 2023 (In thousands) Net income $ 54,361 $ 69,614 $ 82,387 Other comprehensive income (loss), net of tax: Foreign currency translation adjustments 6,369 ( 5,861 ) 107 Unrealized gains on available-for-sale marketable securities 405 432 2,022 Unrealized gains (losses) on derivative instruments 538 ( 1,359 ) ( 603 ) Other comprehensive income (loss), net of tax 7,312 ( 6,788 ) 1,526 Comprehensive income $ 61,673 $ 62,826 $ 83,913 The accompanying notes are an integral part of these consolidated financial statements. 53 FORMFACTOR, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Accumulated Income (Deficit) Total Shares Amount (In thousands, except shares) Balances, December 31, 2022 76,914,590 $ 77 $ 844,842 $ ( 5,578 ) $ ( 31,056 ) $ 808,285 Issuance of common stock under the Employee Stock Purchase Plan 363,190 — 8,822 — — 8,822 Issuance of common stock pursuant to vesting of restricted stock units, net of stock withheld for tax 635,495 1 ( 10,688 ) — — ( 10,687 ) Purchase and retirement of common stock ( 536,372 ) ( 1 ) ( 19,800 ) — — ( 19,801 ) Stock-based compensation — — 38,272 — — 38,272 Other comprehensive income — — — 1,526 — 1,526 Net income — — — — 82,387 82,387 Balances, December 30, 2023 77,376,903 77 861,448 ( 4,052 ) 51,331 908,804 Issuance of common stock under the Employee Stock Purchase Plan 340,989 — 9,748 — — 9,748 Issuance of common stock pursuant to vesting of restricted stock units, net of stock withheld for tax 706,376 — ( 19,983 ) — — ( 19,983 ) Purchase and retirement of common stock ( 1,309,635 ) — ( 53,379 ) — — ( 53,379 ) Stock-based compensation — — 39,752 — — 39,752 Other comprehensive loss — — — ( 6,788 ) — ( 6,788 ) Net income — — — — 69,614 69,614 Balances, December 28, 2024 77,114,633 77 837,586 ( 10,840 ) 120,945 947,768 Issuance of common stock under the Employee Stock Purchase Plan 385,189 — 11,119 — — 11,119 Issuance of common stock pursuant to vesting of restricted stock units, net of stock withheld for tax 613,142 1 ( 12,403 ) — — ( 12,402 ) Issuance of common stock pursuant to private placement 334,971 — 15,000 — — 15,000 Purchase and retirement of common stock ( 800,000 ) — ( 26,168 ) — — ( 26,168 ) Stock-based compensation — — 38,413 — — 38,413 Other comprehensive income — — — 7,312 — 7,312 Net income — — — — 54,361 54,361 Balances, December 25, 2025 77,647,935 $ 78 $ 863,547 $ ( 3,528 ) $ 175,306 $ 1,035,403 The accompanying notes are an integral part of these consolidated financial statements. 54 FORMFACTOR, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS Twelve Months Ended December 27, 2025 December 28, 2024 December 30, 2023 (In thousands) Cash flows from operating activities: Net income $ 54,361 $ 69,614 $ 82,387 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 37,589 32,903 37,453 Accretion of discount on investments ( 1,975 ) ( 3,240 ) ( 2,828 ) Reduction in the carrying amount of right-of-use assets 6,880 6,803 7,389 Stock-based compensation expense 38,576 39,763 38,616 Deferred income tax provision (benefit) 1,927 ( 13,355 ) ( 12,100 ) Gain on sale of business and assets ( 103 ) ( 20,581 ) ( 72,953 ) Provision for excess and obsolete inventories 14,853 12,342 15,003 Acquired inventory step-up amortization — — 501 Non-cash restructuring charges 2,119 428 — Loss from equity investment 2,026 — — Foreign currency transaction losses 2,110 1,509 2,282 Other than temporary impairment on debt receivable — — 1,083 Changes in assets and liabilities: Accounts receivable ( 20,156 ) ( 1,921 ) ( 23,304 ) Inventories ( 20,663 ) ( 8,259 ) ( 9,488 ) Prepaid expenses and other current assets 734 546 ( 3,057 ) Other assets ( 483 ) 285 ( 146 ) Accounts payable ( 5,682 ) ( 8,235 ) 1,319 Accrued liabilities 4,601 3,675 ( 2,424 ) Other liabilities 2,258 9,834 4,660 Deferred revenues 4,489 2,699 ( 10,176 ) Deferred grant — — 18,000 Operating lease liabilities ( 8,063 ) ( 7,276 ) ( 7,615 ) Net cash provided by operating activities 115,398 117,534 64,602 Cash flows from investing activities: Acquisition of property, plant and equipment ( 103,658 ) ( 38,436 ) ( 56,027 ) Acquisition of business, net of cash acquired ( 20,580 ) — — Proceeds from sale of business and assets 103 21,585 101,785 Purchase of equity investment ( 67,156 ) — — Purchase of promissory note receivable — ( 1,500 ) — Purchases of marketable securities ( 126,307 ) ( 139,091 ) ( 135,462 ) Proceeds from maturities and sales of marketable securities 126,130 123,962 118,753 Net cash provided by (used in) investing activities ( 191,468 ) ( 33,480 ) 29,049 Cash flows from financing activities: Proceeds from issuances of common stock 26,119 9,748 8,822 Purchase of common stock through stock repurchase program, including excise tax paid ( 26,244 ) ( 53,302 ) ( 19,801 ) Tax withholdings related to net share settlements of equity awards ( 12,402 ) ( 19,983 ) ( 10,687 ) Payments on term loan ( 1,106 ) ( 1,075 ) ( 1,045 ) Net cash used in financing activities ( 13,633 ) ( 64,612 ) ( 22,711 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 456 ) ( 3,509 ) ( 2,649 ) Net increase (decrease) in cash, cash equivalents and restricted cash ( 90,159 ) 15,933 68,291 Cash, cash equivalents and restricted cash, beginning of year 197,206 181,273 112,982 Cash, cash equivalents and restricted cash, end of year $ 107,047 $ 197,206 $ 181,273 The accompanying notes are an integral part of these consolidated financial statements. 55 FORMFACTOR, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS Fiscal Year Ended December 27, 2025 December 28, 2024 December 30, 2023 (In thousands) Supplemental disclosure of non-cash investing and financing activities: Operating lease, right-of-use assets obtained in exchange for lease obligations $ 954 $ 61 $ 6,491 Increase (decrease) in accounts payable and accrued liabilities related to property, plant and equipment purchases ( 11,447 ) 7,194 ( 5,961 ) Supplemental disclosure of cash flow information: Cash paid for income taxes, net $ 8,932 $ 15,584 $ 17,385 Cash paid for interest 362 391 422 Operating cash outflows from operating leases 9,753 9,308 9,135 Reconciliation of cash, cash equivalents and restricted cash: Cash and cash equivalents $ 103,330 $ 190,728 $ 177,812 Restricted cash, current 1,063 3,746 1,152 Restricted cash 2,654 2,732 2,309 Total cash, cash equivalents and restricted cash $ 107,047 $ 197,206 $ 181,273 The accompanying notes are an integral part of these consolidated financial statements. 56 FORMFACTOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1— Formation and Nature of Business FormFactor, Inc. is a leading provider of electrical and optical test and measurement technologies along the full semiconductor product lifecycle - from characterization, modeling, reliability, and design de-bug, to qualification and production test. We provide a broad range of high-performance probe cards, analytical probes, probe stations, thermal systems, and cryogenic systems to both semiconductor companies and scientific institutions. Our products provide electrical and optical information from a variety of semiconductor and electro-optical devices and integrated circuits from early research, through development, to high-volume production. Customers use our products and services to accelerate profitability by optimizing device performance, reducing scrap, and improving yields. Design, development and manufacturing operations are located in Livermore, Carlsbad, and Baldwin Park, California; Beaverton, Oregon; and Boulder, Colorado, all in the United States; Munich, Thiendorf, and Karlsruhe, Germany, and sales, service and support operations are located in the United States, Germany, France, Italy, South Korea, Japan, Taiwan, and Singapore. We also have smaller manufacturing operations in Yokohama, Japan. Fiscal Year Our fiscal year ends on the last Saturday in December. The fiscal years ended on December 27, 2025, December 28, 2024 and December 30, 2023 each consisted of 52 weeks. Note 2— Summary of Significant Accounting Policies Basis of Consolidation and Foreign Currency Translation The consolidated financial statements include our accounts and those of our wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated. The functional currencies of certain of our foreign subsidiaries are the local currencies and, accordingly, all assets and liabilities of these foreign operations are translated to U.S. Dollars at current period-end exchange rates, and revenues and expenses are translated to U.S. Dollars using average exchange rates in effect during the period. The gains and losses from the foreign currency translation of these subsidiaries' financial statements are included as a separate component of stockholders' equity on our Consolidated Balance Sheets within Accumulated other comprehensive loss. Certain other of our foreign subsidiaries use the U.S. Dollar as their functional currency. Accordingly, monetary assets and liabilities in non-functional currencies of these subsidiaries are remeasured using exchange rates in effect at the end of the period. Revenues and costs in local currency are remeasured using average exchange rates for the period, except for costs related to those balance sheet items that are remeasured using historical exchange rates. The resulting remeasurement gains and losses are included in the Consolidated Statements of Income as a component of Other income (expense), net as incurred. Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Estimates may change as new information is obtained. We believe that the estimates, assumptions and judgments involved in revenue recognition, fair value of marketable securities, fair value of derivative financial instruments used to hedge both foreign currency and interest rate exposures, allowance for credit losses, reserves for product warranty, valuation of obsolete and slow moving inventory, assets acquired and liabilities assumed in business combinations, legal contingencies, valuation of goodwill, the assessment of recoverability of long-lived assets, valuation and recognition of stock-based compensation, loss contingencies, provision for income taxes and valuation of deferred tax assets have the greatest potential impact on our consolidated financial statements. Actual results could differ from those estimates. Business Acquisitions Our consolidated financial statements include the operations of acquired businesses after the completion of their respective acquisitions. We account for acquired businesses using the acquisition method of accounting, which requires, among other things, that assets acquired and liabilities assumed be recognized at their estimated fair values as of the acquisition date, and 57 FORMFACTOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) that the fair value of acquired intangibles be recorded on the balance sheet. Transaction costs are expensed as incurred. Any excess of the purchase price over the assigned fair values of the net assets acquired is recorded as goodwill. Cash and Cash Equivalents and Marketable Securities Cash and cash equivalents consist of deposits and financial instruments which are readily convertible into cash and have original maturities of 90 days or less at the time of acquisition. Marketable securities consist primarily of highly liquid investments with maturities of greater than 90 days when purchased. We classify our available-for-sale marketable securities as current assets because they represent investments of cash available for current operations. As a result, the Company recorded all its marketable securities in short-term investments regardless of the contractual maturity date of the securities. Furthermore, we report them at fair value with the related unrealized gains and losses included in Accumulated other comprehensive loss in our Consolidated Balance Sheets. Any unrealized losses which are considered to be other-than-temporary are recorded in Other income (expense), net, in the Consolidated Statements of Income. Realized gains and losses on the sale of marketable securities are determined using the specific-identification method and recorded in Other income (expense), net, in the Consolidated Statements of Income. All of our available-for-sale investments are subject to a periodic impairment review. If an available-for-sale debt security’s fair value is less than its amortized cost basis, then we evaluate whether the decline is the result of a credit loss, in which case an impairment is recorded through an allowance for credit losses. Unrealized gains and losses not attributable to credit losses are included, net of tax, in Accumulated other comprehensive loss in our Consolidated Balance Sheets. We did not record an allowance for credit losses related to our available-for-sale investments during fiscal 2025. Foreign Exchange Management We transact business in various foreign currencies. We enter into forward foreign exchange contracts in an effort to mitigate the risks associated with currency fluctuations on certain foreign currency balance sheet exposures and certain operational costs denominated in local currency impacting our statement of income. For accounting purposes, certain of our foreign currency forward contracts are not designated as hedging instruments and, accordingly, we record the fair value of these contracts as of the end of our reporting period in our Consolidated Balance Sheets with changes in fair value recorded within Other income (expense), net in our Consolidated Statements of Income for both realized and unrealized gains and losses. Certain of our foreign currency forward contracts are designated as cash flow hedges, and, accordingly, we record the fair value of these contracts as of the end of our reporting period in our Consolidated Balance Sheets with changes in fair value recorded as a component of Accumulated other comprehensive loss and reclassified into earnings in the same period in which the hedged transaction affects earnings, and in the same line item on the Consolidated Statements of Income as the impact of the hedge transaction. We do not use derivative financial instruments for trading or speculative purposes. Accounts Receivable and Allowance for Credit Losses The majority of our accounts receivable are derived from sales to large multinational semiconductor manufacturers throughout the world, are recorded at their invoiced amount, and do not bear interest. In order to monitor potential credit losses, we perform ongoing credit evaluations of our customers' financial condition. An allowance for credit losses is maintained based upon our assessment of the expected collectability of all accounts receivable. The allowance for credit losses is reviewed and assessed for adequacy on a quarterly basis. We take into consideration (1) any circumstances of which we are aware of a customer's inability to meet its financial obligations and (2) our judgments as to prevailing economic conditions in the industry and their impact on our customers. If circumstances change, and the financial condition of our customers is adversely affected and they are unable to meet their financial obligations, we may need to take additional allowances, which would result in an increase in our operating expense. Activity related to our allowance for credit losses was as follows (in thousands): Fiscal Year Ended December 27, 2025 December 28, 2024 December 30, 2023 Balance at beginning of year $ 4 $ 501 $ 168 Charges to costs and expenses 38 20 333 Write-offs ( 13 ) ( 517 ) — Balance at end of year $ 29 $ 4 $ 501 58 FORMFACTOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Inventories We state our inventories at the lower of cost (principally standard cost which approximates actual cost on a first in, first out basis) or net realizable value. We regularly assess the value of our inventory and will periodically write down its value for estimated excess inventory and product obsolescence based upon an analysis of existing inventory quantities compared to estimated future consumption. Future consumption is estimated based upon assumptions about how past consumption, recent purchases, backlog and other factors may indicate future consumption. On a quarterly basis, we review existing inventory quantities in comparison to our past consumption, recent purchases, backlog and other factors to determine what inventory quantities, if any, may not be sellable. Based on this analysis, we record an adjustment to the cost basis of inventory when evidence exists that the net realizable value of inventory is lower than its cost, which occurs when we have excess and/or obsolete inventory. Once the value is adjusted, the original cost of our inventory, less the related inventory write-down, represents the new cost basis. Reversal of these write downs is recognized only when the related inventory has been scrapped or sold. Shipping and handling costs are classified as a component of Cost of revenues in the Consolidated Statements of Income. We design, manufacture and sell a custom product into a market that has been subject to cyclicality and significant demand fluctuations. Many of our products are complex, custom to a specific chip design and have to be delivered on short lead-times. Probe cards are manufactured in low volumes, but, for certain materials, the purchases are often subject to minimum order quantities in excess of the actual underlying probe card demand. It is not uncommon for us to acquire production materials and commence production activities based on estimated production yields and forecasted demand prior to, or in excess of, actual demand for our probe cards. These factors result in normal recurring inventory valuation charges to Cost of revenues. Inventory write downs totaled $ 14.9 million, $ 12.3 million and $ 15.0 million for fiscal 2025, 2024 and 2023, respectively. Restricted Cash Restricted cash is comprised primarily of funds held by our foreign subsidiaries for employee obligations, office leases, environmental remediation, and temporary customs import permits. Property, Plant, and Equipment Property, plant and equipment is stated at cost less accumulated depreciation and amortization. Depreciation is recorded on a straight-line method. Machinery and equipment, computer equipment and software, and furniture and fixtures are depreciated over 3 to 5 years. Leasehold improvements are amortized over 7 years. Building and building improvements are depreciated over 30 years. Construction-in-progress assets are not depreciated until the assets are placed in service. Upon sale or retirement of assets, the cost and related accumulated depreciation or amortization are removed from the Consolidated Balance Sheets and the resulting gain or loss, if any, is reflected in Operating income in our Consolidated Statements of Income. Leases The Company determines if an arrangement is a lease at its inception. Right-of-use (“ROU”) assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. We use our estimated incremental borrowing rate in determining the present value of lease payments considering the term of the lease, which is derived from information available at the lease commencement date. The lease term includes renewal options when it is reasonably certain that the option will be exercised and excludes termination options. To the extent that the Company’s agreements have variable lease payments, the Company includes variable lease payments that depend on an index or a rate and excludes those that depend on facts or circumstances occurring after the commencement date, other than the passage of time. Lease expense for these leases is recognized on a straight-line basis over the lease term. We have elected not to recognize ROU assets and lease liabilities that arise from short-term leases for any class of underlying asset. Operating leases are included in Operating lease, right-of-use-assets, Operating lease liabilities, and Long-term operating lease liabilities in our Consolidated Balance Sheets. Equity Investment The Company accounts for an investment under the equity method if the Company has the ability to exercise significant influence, but not control, over an investee. The investment in the equity-method investee is included within Equity investment in our Consolidated Balance Sheets with our proportional share of the earnings or losses as reported by the equity-method investee within Loss from equity investment in our Consolidated Statements of Income. As results are not available in time to be recorded in the concurrent period, we report our share of the earnings or losses on a one quarter lag. The Company regularly evaluates the investment, which is not carried at fair value, for other-than-temporary impairment and records any impairment charge in earnings when the decline in value below the carrying amount of its equity method investment is determined to be other-than-temporary. 59 FORMFACTOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 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 initial $ 67.2 million equity investment comprised of 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. During the year ended December 27, 2025, we recorded a loss of $ 2.0 million, from our equity share of the HoldCo using lag reporting. As of December 27, 2025, the carrying value of our investment was $ 64.1 million, and we had a $ 7.5 million basis difference between the carrying value of our investment and our proportionate share of the underlying net assets of the HoldCo. The basis difference is accounted for as equity method goodwill that is not amortized. We engage in transactions with FICT, a related party and a supplier, in the normal course of business and at arm's length. Total related party purchases of inventory from FICT for the year ended December 27, 2025 was $ 10.3 million. Goodwill Goodwill represents the excess of the purchase price over the fair value of identifiable assets acquired and liabilities assumed. Goodwill is not amortized, rather assessed, at least annually, for impairment at a reporting unit level. Impairment of goodwill exists when the carrying amount of a reporting unit exceeds its fair value. A goodwill impairment loss is recognized for the amount that the carrying amount of the reporting unit, including goodwill, exceeds its fair value, limited to the total amount of goodwill allocated to that reporting unit. If the fair value of a reporting unit exceeds the carrying amount, goodwill of the reporting unit is not considered impaired. We evaluate impairment by first assessing qualitative factors to determine whether it is necessary to perform a quantitative impairment test. If we determine, as a result of the qualitative assessment, that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the quantitative impairment test is required. Otherwise, no further testing is required. We perform our annual goodwill impairment test in the fourth quarter of each year by assessing qualitative factors, including, but not limited to, an assessment of our market capitalization, which was significantly higher than our book value. Based on these tests, we determined that the quantitative impairment test was not required and no impairment charges were recorded in fiscal 2025, 2024 or 2023. The evaluation of goodwill for impairment requires the exercise of judgment. In the event of future changes in business conditions, we will be required to reassess and update our forecasts and estimates used in future impairment analysis. If the results of these analysis are lower than current estimates, a material impairment charge may result at that time. See Note 11, Goodwill and Intangible Assets , for additional information. Intangible Assets Intangible assets consist of acquisition related intangible assets and intellectual property. The intangible assets are being amortized over periods of 1 to 10 years, which reflect the pattern in which economic benefits of the assets are expected to be realized. We perform a review of intangible assets when facts and circumstances indicate that the useful life is shorter than originally estimated or that the carrying amount of assets may not be recoverable. Such facts and circumstances include significant adverse changes in the business climate or legal factors; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the intangible assets; and current expectation that the intangible assets will more likely than not be sold or disposed of before the end of their estimated useful lives. We assess the recoverability of identified intangible assets by comparing the projected undiscounted net cash flows associated with the related asset or group of assets over their remaining lives against their respective carrying amounts. Impairments, if any, are based on the excess of the carrying amount over the fair value of those assets. See Note 11, Goodwill and Intangible Assets , for additional information. Impairment of Long-Lived Assets We test long-lived assets or asset groups, such as property, plant and equipment and intangible assets, for recoverability when events or changes in circumstances indicate that their carrying amounts may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a 60 FORMFACTOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed of before the end of its estimated useful life. Recoverability is assessed based on the carrying amounts of the asset or asset group and the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value. Concentration of Credit Risk and Other Risks and Uncertainties Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash equivalents, marketable securities and accounts receivable. Our cash equivalents and marketable securities are held in safekeeping by large, credit-worthy financial institutions. We invest our excess cash primarily in U.S. banks, government and agency bonds, money market funds and corporate obligations. We have established guidelines relative to credit ratings, diversification and maturities that seek to maintain safety and liquidity. Deposits in these banks may exceed the amounts of insurance provided on such deposits. To date, we have not experienced any losses on our deposits of cash and cash equivalents. We market and sell our products to a relatively narrow base of customers and generally do not require collateral. The following customers represented 10% or more of our revenues: Fiscal Year Ended December 27, 2025 December 28, 2024 December 30, 2023 SK hynix Inc. 22.9 % 18.9 % * Intel Corporation * 14.6 % 17.1 % * Less than 10% of revenues. At December 27, 2025, two customers accounted for 15.8 % and 10.8 % of gross accounts receivable. At December 28, 2024, one customer accounted for 22.0 % of gross accounts receivable. No other customers accounted for 10% or more of gross accounts receivable for these fiscal period ends. We are exposed to non-performance risk by counterparties on our derivative instruments used in hedging activities. We seek to minimize risk by diversifying our hedging program across multiple financial institutions. These counterparties are large international financial institutions, and, to date, no such counterparty has failed to meet its financial obligations to us. Government Assistance California Competes Grant: In January 2023, we received $ 18.0 million in cash from a California Competes Grant (the “Grant”) awarded from the California Governor’s Office of Business and Economic Development. The Grant requires us to create and maintain full-time jobs and make significant infrastructure investments within California over a 5-year term. If we do not meet the requirements of the Grant, we will be required to repay all or a portion of the Grant. The Grant is included in our Consolidated Balance Sheets within Deferred grant and we will recognize the Grant over time when earned as an offset to Cost of revenues and Operating expenses within our Consolidated Statements of Income. We have presented the proceeds from the Grant as cash provided by operating activities within our Consolidated Statements of Cash Flows as the Grant is to offset operations. No amounts were recognized as an offset to expenses in fiscal 2025, 2024 or 2023, and the full grant remains deferred. Advanced Manufacturing Investment Credit: The Creating Helpful Incentives to Produce Semiconductors and Science Act of 2022 (the “CHIPS Act”) was signed into law on August 9, 2022. The CHIPS Act provides for various incentives and tax credits, among other items, including the Advanced Manufacturing Investment Credit (“AMIC”), which equals 25% of qualified investments in an advanced manufacturing facility that is placed in service after December 31, 2022. On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law. Among other changes, the OBBBA increased the AMIC rate from 25% to 35% for for qualified investments placed in service after December 31, 2025. 61 FORMFACTOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The Company expects to receive refundable federal investment tax credits through the CHIPS Act in connection with ongoing expansion projects. At least a portion of our capital expenditures qualify for this credit, which benefits us by allowing us to net the credit received against our costs. The AMIC credit is accounted as a reduction to the depreciable basis of the assets used in operations. The Company has offset the cost of property, plant, and equipment by the amount of the estimated credit of $ 8.7 million and $ 7.3 million for fiscal December 27, 2025 and December 28, 2024, respectively. The receivable recorded is an estimate based on the Company's interpretation of the Section 48D Advanced Manufacturing Investment Credit under the CHIPS Act, which may be refunded to us in cash to the extent it exceeds our outstanding income tax liabilities. Revenue Recognition Revenue is recognized upon transferring control of products and services, and the amounts recognized reflect the consideration we expect to be entitled to receive in exchange for these products and services. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities. An arrangement may include some or all of the following products and services: probe cards, systems, accessories, engineering services, installation services, service contracts and extended warranty contracts. We sell our products and services direct to customers and to partners in two distribution channels: global direct sales force and through a combination of manufacturers’ representatives and distributors. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. In contracts with multiple performance obligations, we identify each performance obligation and evaluate whether the performance obligation is distinct within the context of the contract at contract inception. Performance obligations that are not distinct at contract inception are combined and accounted for as one unit of account. Generally, the performance obligations in a contract are considered distinct within the context of the contract and are accounted for as separate units of account. Our products may be customized to our customers’ specifications; however, control of our product is typically transferred to the customer at the point in time the product is either shipped or delivered, depending on the terms of the arrangement, as the criteria for over time recognition is not met. In limited circumstances, substantive acceptance by the customer exists which results in the deferral of revenue until acceptance is formally received from the customer. Judgment may be required in determining if the acceptance clause is substantive. In certain instances control of products is transferred to the customer over time based on performance and in those instances we utilize an appropriate input or output measure to determine to what extent control has transferred to the customer. Judgment may be required in determining an appropriate measure of performance. Installation services are routinely provided to customers purchasing our systems. Installation services are a distinct performance obligation apart from the systems and are recognized in the period they are performed. Service contracts, which include repair and maintenance service contracts, and extended warranty contracts are also distinct performance obligations and are recognized over the contractual service period, which ranges from one to three years . For these service contracts recognized over time, we use the input measure of days elapsed to measure progress. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. In determining the transaction price, we evaluate whether the price is subject to refund or adjustment to determine the net consideration to which we expect to be entitled. We generally do not grant return privileges, except for defective products during the warranty period. Sales incentives and other programs that we may make available to our customers are considered to be a form of variable consideration, which is estimated in determining the contract’s transaction price to be allocated to the performance obligations. For contracts with multiple performance obligations, we allocate the contract’s transaction price to each performance obligation based on its relative stand-alone selling price. The stand-alone selling prices are determined based on observable prices, which are the prices at which we separately sell these products. For items which do not have observable prices, we use our best estimate of the stand-alone selling prices. Transaction price allocated to the remaining performance obligations: On December 27, 2025, we had $ 30.3 million of remaining performance obligations, which were comprised of deferred service contracts, extended warranty contracts, and contracts with over time revenue recognition that are not yet delivered. We expect to recognize approximately 63.7 % of our remaining performance obligations as revenue in fiscal 2026, approximately 33.6 % in fiscal 2027, and approximately 2.7 % in fiscal 2028 and thereafter. The foregoing excludes the value of remaining performance obligations that have original durations of one year or less, and also excludes information about variable consideration allocated entirely to a wholly unsatisfied performance obligation. Contract balances: The timing of revenue recognition may differ from the timing of invoicing to customers. Accounts receivable is recorded at the invoiced amount, net of an allowance for credit losses. A receivable is recognized in the period we 62 FORMFACTOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) deliver goods or provide services or when our right to consideration is unconditional. 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 December 27, 2025 and December 28, 2024 were $ 2.3 million and $ 6.9 million, respectively, and are reported on the 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 Consolidated Balance Sheets on a contract-by-contract basis at the end of each reporting period as a component of Deferred revenue and Other liabilities. Contract liabilities totaled $ 21.4 million and $ 16.9 million at December 27, 2025 and December 28, 2024, respectively. During fiscal 2025, we recognized $ 14.6 million of revenue that was included in contract liabilities as of December 28, 2024. Costs to obtain a contract: We generally expense sales commissions when incurred as a component of Selling, general and administrative expense as the amortization period is typically less than one year. Revenue by Category: Refer to Note 17, Segments and Geographic Information , for further details. Warranty Obligations 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 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 incurred in correcting a product failure. We continuously monitor product returns for warranty and maintain a reserve for the related expenses based upon our historical experience and any specifically identified field failures. As we sell new products to our customers, we must exercise considerable judgment in estimating the expected failure rates. This estimating process is based on historical experience of similar products, as well as various other assumptions that we believe to be reasonable under the circumstances. We provide for the estimated cost of product warranties at the time revenue is recognized. Warranty costs are reflected in the Consolidated Statement of Income as a Cost of revenues. A reconciliation of the changes in our warranty liability is as follows (in thousands): Fiscal Year Ended December 27, 2025 December 28, 2024 December 30, 2023 Balance at beginning of year $ 3,558 $ 3,177 $ 4,199 Accruals 5,149 8,580 7,771 Settlements ( 6,204 ) ( 8,199 ) ( 8,687 ) Reduction - FRT divestiture — — ( 106 ) Balance at end of year $ 2,503 $ 3,558 $ 3,177 Research and Development Research and development expenses include expenses related to product development, engineering and material costs. All research and development costs are expensed as incurred. Income Taxes We utilize the asset and liability method of accounting for income taxes, under which deferred taxes are determined based on the temporary differences between the financial statement and tax basis of assets and liabilities using tax rates expected to be in effect during the years in which the basis differences reverse and for operating losses and tax credit carryforwards. We estimate our provision for income taxes and amounts ultimately payable or recoverable in numerous tax jurisdictions around the world. Estimates involve interpretations of regulations and are inherently complex. Resolution of income tax treatments in individual jurisdictions may not be known for many years after completion of any fiscal year. We are required to evaluate the realizability of our deferred tax assets on an ongoing basis to determine whether there is a need for a valuation allowance with respect to such deferred tax assets. A valuation allowance is recorded when it is more likely than not that some or all of the deferred tax assets will not be realized. In evaluating the ability to recover deferred tax assets, we consider all available positive and negative evidence giving greater weight to our recent cumulative income, our historical ability to utilize net operating losses in recent years, and our forecast of future taxable income, including the reversal of temporary differences and the implementation of feasible and prudent tax planning strategies. 63 FORMFACTOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) We recognize and measure uncertain tax positions taken or expected to be taken in a tax return if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized are then measured based on the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement. We report a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. We adjust these reserves in light of changing facts and circumstances, such as the closing of a tax audit or the refinement of an estimate. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will impact the provision for income taxes in the period in which such determination is made. The provision for income taxes includes the impact of reserve provisions and changes to reserves, as well as the related net interest. We recognize interest and penalties related to unrecognized tax benefits within the income tax provision. Accrued interest and penalties are included within the related tax liability in the Consolidated Balance Sheets. We file annual income tax returns in multiple taxing jurisdictions around the world. A number of years may elapse before an uncertain tax position is audited and finally resolved. While it is often difficult to predict the final outcome or the timing of resolution of any particular uncertain tax position, we believe that our related liability reflects the most likely outcome. We adjust the liability, as well as the related interest, in light of changing facts and circumstances. Settlement of any particular position could require the use of cash. Stock-Based Compensation We recognize compensation expense for all stock-based awards based on the grant-date estimated fair values. The value of the portion of the award that is ultimately expected to vest is recognized as expense ratably over the requisite service periods in our Consolidated Statements of Income. The fair value of restricted stock units (“RSUs”) is measured based on the closing market price of our common stock on the date of grant. The fair value of Performance RSUs (“PRSU”) is based on certain market performance criteria and is measured using a Monte Carlo simulation pricing model. See Note 13, Stockholders' Equity , and Note 14, Stock-Based Compensation , for additional information. Net Income Per Share Basic net income per share is computed by dividing net income by the weighted-average number of common shares outstanding for the period. Diluted net income per share is computed giving effect to all potentially dilutive common stock and common stock equivalents, including stock options, RSUs and common stock subject to repurchase. The following table reconciles the shares used in calculating basic net income per share and diluted net income per share (in thousands): Fiscal Year Ended December 27, 2025 December 28, 2024 December 30, 2023 Weighted-average shares used in computing basic net income per share 77,348 77,340 77,370 Add potentially dilutive securities 965 1,097 789 Weighted-average shares used in computing basic and diluted net income per share 78,313 78,437 78,159 Accumulated other comprehensive loss Accumulated other comprehensive loss (“AOCL”) includes the following items, the impact of which has been excluded from earnings and reflected as components of stockholders' equity as shown below (in thousands): December 27, 2025 December 28, 2024 Unrealized gains (losses) on available-for-sale marketable securities and other investments $ 110 $ ( 295 ) Translation adjustments ( 5,060 ) ( 11,429 ) Unrealized gains on derivative instruments 1,422 884 Accumulated other comprehensive loss $ ( 3,528 ) $ ( 10,840 ) 64 FORMFACTOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Note 3— Balance Sheet Components Marketable Securities Marketable securities consisted of the following (in thousands): December 27, 2025 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. treasuries $ 76,397 $ 229 $ — $ 76,626 Commercial paper 7,414 1 ( 1 ) 7,414 Corporate bonds 74,612 296 ( 11 ) 74,897 U.S. agency securities 12,887 24 ( 6 ) 12,905 $ 171,310 $ 550 $ ( 18 ) $ 171,842 December 28, 2024 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. treasuries $ 71,188 $ 139 $ ( 75 ) $ 71,252 Commercial paper 998 — — 998 Corporate bonds 83,091 211 ( 126 ) 83,176 U.S. agency securities 13,881 15 ( 27 ) 13,869 $ 169,158 $ 365 $ ( 228 ) $ 169,295 We typically invest in highly-rated securities with low probabilities of default. Our investment policy requires investments to be rated single A or better, limits the types of acceptable investments, concentration as to security holder and duration of the investment. The gross unrealized gains and losses in fiscal 2025 and 2024 were caused primarily by changes in interest rates. The longer the duration of marketable securities, the more susceptible they are to changes in market interest rates and bond yields. As yields increase, those securities with a lower yield-at-cost show a mark-to-market unrealized loss. We anticipate recovering the full cost of the securities either as market conditions improve or as the securities mature. Accordingly, we believe that the unrealized losses are not as a result of a credit loss. The contractual maturities of marketable securities were as follows (in thousands): December 27, 2025 December 28, 2024 Amortized Cost Fair Value Amortized Cost Fair Value Due in one year or less $ 105,351 $ 105,654 $ 82,492 $ 82,587 Due after one year to five years 65,959 66,188 86,666 86,708 $ 171,310 $ 171,842 $ 169,158 $ 169,295 See also Note 10, Fair Value . Inventories, net Inventories consisted of the following (in thousands): December 27, 2025 December 28, 2024 Raw materials $ 47,969 $ 45,547 Work-in-progress 42,812 38,366 Finished goods 20,103 17,763 $ 110,884 $ 101,676 65 FORMFACTOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Property, Plant and Equipment, net Property, plant and equipment, net consisted of the following (in thousands): December 27, 2025 December 28, 2024 Land $ 35,274 $ 17,124 Building and building improvements 46,502 46,578 Machinery and equipment 317,024 307,201 Computer equipment and software 45,135 47,344 Furniture and fixtures 7,043 7,430 Leasehold improvements 104,262 101,374 Sub-total 555,240 527,051 Less: Accumulated depreciation and amortization ( 390,323 ) ( 379,968 ) Net property, plant and equipment 164,917 147,083 Construction-in-progress 94,151 63,147 Total $ 259,068 $ 210,230 Accrued Liabilities Accrued liabilities consisted of the following (in thousands): December 27, 2025 December 28, 2024 Accrued compensation and benefits $ 31,495 $ 26,077 Accrued income and other taxes 3,098 2,969 Accrued employee stock purchase plan contributions withheld 5,190 6,034 Accrued warranty 2,503 3,558 Other accrued expenses 5,249 5,104 $ 47,535 $ 43,742 Note 4— Acquisition On December 15, 2025, we acquired 100 % of the shares of Keystone Photonics for total consideration of $ 20.6 million, net of cash acquired of $ 1.7 million. Keystone Photonics provides optical probing technology used in the testing of silicon photonics (“SiPh”) and co‑packaged optics devices. The acquisition expands the Company’s testing capabilities in these areas and supports customers as SiPh and co‑packaged optics technologies transition from development into high‑volume manufacturing, including applications related to artificial intelligence infrastructure. The acquisition was accounted for under the acquisition method of accounting, which requires that assets acquired and liabilities assumed be recognized on the consolidated balance sheets at their fair values as of the acquisition date. The fair values assigned to assets acquired and liabilities assumed are still preliminary as we continue to gather the necessary information to perform our fair value estimates and provisional amounts. Provisional amounts include items related to intangibles. Goodwill represents the excess of purchase price over the fair value assigned to the assets acquired and liabilities assumed and is allocated to the systems reporting unit within the Systems reportable segment. The identified intangible asset, developed technology, has a preliminary useful life of ten years . Our Consolidated Statements of Income include the financial results of Keystone Photonics subsequent to the acquisition date of December 15, 2025. Revenue in fiscal 2025 related to Keystone Photonics subsequent to the acquisition date that was included in our Consolidated Statements of Income was not material. We have not presented unaudited combined pro forma financial information as the Keystone Photonics acquisition was not significant to our consolidated results of operations and financial position. 66 FORMFACTOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The following table summarizes the preliminary purchase price allocation, which may be adjusted as we finalize our fair value estimates and provisional amounts (in thousands): Amount Cash and cash equivalents $ 1,674 Other current assets 728 Property, plant and equipment 518 Operating lease, right-of-use-assets 888 Other non-current assets 19 Tangible assets acquired 3,827 Accounts payable and accrued liabilities ( 1,650 ) Operating lease liabilities ( 888 ) Deferred tax liabilities ( 2,471 ) Total net tangible assets acquired and liabilities assumed ( 1,182 ) Intangible assets 8,385 Goodwill 15,050 Net assets acquired $ 22,253 Note 5— 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. Ltd. (“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. The following subsidiaries were included as part of the divestiture: Microprobe Hong Kong Limited, FormFactor Technology (Suzhou) Co. Ltd., Cascade Microtech Singapore Pte, Ltd, and FormFactor International (Shanghai) Trading Co., Ltd. These entities supported both the Probe Cards and Systems segments. 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 following table summarizes the fair value of the sale proceeds received in connection with the divestiture (in thousands): February 26, 2024 Gross purchase price $ 25,000 Working capital adjustment 159 Cash transferred to the buyer at closing ( 2,743 ) Direct costs to sell ( 986 ) Fair value of sale consideration, net $ 21,430 67 FORMFACTOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The carrying amount of net assets associated with the China operations was approximately $ 1.2 million. The major classes of assets and liabilities sold consisted of the following (in thousands): February 26, 2024 ASSETS Accounts receivable, net $ 1,174 Inventories, net 3,729 Other current assets 391 Total current assets 5,294 Property, plant and equipment, net 1,283 Goodwill 1,117 Other assets 3,029 Total assets $ 10,723 LIABILITIES Deferred revenue $ 3,739 Other current liabilities 1,546 Other liabilities 4,283 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 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 68 FORMFACTOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 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 ASSETS 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 LIABILITIES 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. Note 6— Debt Our debt consisted of the following (in thousands): December 27, 2025 December 28, 2024 Term loan $ 12,258 $ 13,368 Less unamortized issuance costs ( 50 ) ( 54 ) Term loan less issuance costs $ 12,208 $ 13,314 Revolving Credit Agreement On July 29, 2025, we entered into a Revolving Credit Agreement (the “Revolver”) with Wells Fargo Bank, National Association, as Administrative Agent, and the lenders party thereto, providing us with a $ 150 million revolving credit facility (the “Facility”). The Facility matures on July 29, 2030 and may be used for working capital and other general corporate purposes, subject to the terms and conditions set forth in the Revolver. No amounts were outstanding under the Facility as of December 27, 2025. Borrowings under the Facility will bear interest at a fluctuating rate per annum equal to, at our option, (i) the forward-looking secured overnight financing rate (“term SOFR”), (ii) a base rate set forth in the Revolver, or (iii) a combination thereof, plus, in each case, an applicable margin calculated based on our leverage ratio. Voluntary prepayments may be made without penalty, subject to certain notice requirements and minimum prepayment and reduction thresholds. The Facility is also subject to a quarterly commitment fee ranging from 0.15 % to 0.25 % per annum, applied to the daily amount by which the committed amount exceed the borrowings outstanding. The commitment fee as of December 27, 2025 was 0.15 %. The Revolver contains customary representations and warranties, and affirmative and negative covenants, and events of default, including limitations on subsidiary indebtedness and liens, we well as requirements to maintain specified financial ratios. These financial covenants include a requirement to maintain a consolidated total net leverage ratio not exceeding 3.50 to 1.00 as of the last day of each fiscal quarter, which may increase to 4.00 to 1.00 for four fiscal quarters following a permitted acquisition. Building Term Loan and Interest Rate Swap On June 22, 2020, we entered into an $ 18.0 million 15-year credit facility loan agreement (the “Building Term Loan”). Proceeds from the Building Term Loan were used to acquire a building adjacent to our leased facilities in Livermore, 69 FORMFACTOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) California. On May 19, 2023, we amended the Building Term Loan, to replace the benchmark reference rate London Interbank Offered Rate (“LIBOR”) with term SOFR, with no change to the contractual amount or timing of cash flows. The Building Term Loan bears interest at a rate equal to the applicable SOFR rate, plus 1.86 % per annum, with interest payable in monthly installments over the fifteen-year term. The interest rate as of December 27, 2025 prior to the effect of the related interest rate swap was 5.74 %. As of December 27, 2025, the outstanding principal balance under the Building Term Loan was $ 12.3 million. On March 17, 2020, we entered into an interest rate swap agreement to hedge the variable interest payments on the Building Term Loan. The swap was originally executed for a notional amount of $ 18.0 million, with an amortization period that matches the underlying debt. The interest rate swap was intended to mitigate our exposure to variability in interest rates associated with movements in LIBOR. On May 19, 2023, we amended the interest rate swap to replace LIBOR with SOFR, consistent with the amendment to the Building Term Loan. Following this amendment, the interest rate swap continues to convert our floating-rate interest into a fixed-rate at 2.75 %. As of December 27, 2025, the notional amount of the loan that is subject to this interest rate swap is $ 12.3 million. See Note 10, Fair Value , for additional information. Future principal and interest payments on our term loan and Revolver as of December 27, 2025, based on the interest rate in effect at that date were as follows (in thousands): Payments Due In Fiscal Year 2026 2027 2028 2029 2030 2031 and thereafter Total Term loan - principal payments $ 1,142 $ 1,175 $ 1,208 $ 1,242 $ 1,278 $ 6,213 $ 12,258 Term loans - interest payments (1) 683 615 548 477 400 845 3,568 Revolver - commitment fee (2) 228 228 232 228 131 — 1,047 $ 2,053 $ 2,018 $ 1,988 $ 1,947 $ 1,809 $ 7,058 $ 16,873 (1) Represents our minimum interest payment commitment at 5.74 % per annum, excluding the interest rate swap described above. (2) Represents our quarterly commitment fee of 0.15 % on the daily amount by which the commitments under the Facility exceed the outstanding amount. This commitment assumes no borrowings. Note 7— Restructuring Charges During fiscal 2025, the Company executed on multiple restructuring initiatives intended to improve operational efficiency and streamline operations. These actions included the consolidation of certain sites within our Systems and Probe Cards segments. As a result of these initiatives, the Company incurred personnel‑related costs primarily associated with the severance of employees and recognized non‑cash charges related to the impairment of certain property and equipment no longer in use. We recognized restructuring plan charges of approximately $ 5.7 million for the year ended December 27, 2025, with $ 2.8 million within the Probe Cards Segment, $ 1.8 million within the Systems segment, and $ 1.1 million within Corporate. The Company recognized total 2025 restructuring charges of $ 3.0 million for severance and employee-related costs and $ 2.7 million for property and equipment impairments and other asset related costs. Total restructuring charges included in our Consolidated Statements of Income were as follows (in thousands): Fiscal Year Ended December 27, 2025 December 28, 2024 December 30, 2023 Cost of revenues $ 1,768 $ 639 $ 357 Research and development 277 137 291 Selling, general and administrative 3,624 147 1,187 $ 5,669 $ 923 $ 1,835 70 FORMFACTOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Note 8— Leases Our operating lease, right-of-use assets relate to real estate space under non-cancelable operating lease agreements for commercial and industrial space, as well as for our corporate headquarters located in Livermore, California. Our leases have remaining terms of one to nine , and some leases include options to extend up to twenty years . 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 three years at December 27, 2025 and the weighted-average discount rate was 4.99 %. The components of lease expense were as follows (in thousands): Lease Expense December 27, 2025 December 28, 2024 December 30, 2023 Operating lease expense $ 8,577 $ 8,457 $ 8,453 Short-term lease expense 531 341 524 Variable lease expense 3,310 4,194 2,389 $ 12,418 $ 12,992 $ 11,366 Future minimum payments under our non-cancelable operating leases were as follows as of December 27, 2025 (in thousands): Fiscal Year Amount 2026 $ 8,926 2027 8,421 2028 4,736 2029 510 2030 461 Thereafter 993 Total minimum lease payments 24,047 Less: interest ( 3,897 ) Present value of net minimum lease payments 20,150 Less: current portion ( 7,662 ) Total long-term operating lease liabilities $ 12,488 Note 9— Derivative Financial Instruments Foreign Exchange Derivative Contracts We operate and sell our products in various global markets. As a result, we are exposed to changes in foreign currency exchange rates. We utilize foreign currency forward contracts to hedge against future movements in foreign exchange rates that affect certain existing foreign currency denominated assets and liabilities and forecasted foreign currency revenue and expense transactions. Under this program, our strategy is to have increases or decreases in our foreign currency exposures mitigated by gains or losses on the foreign currency forward contracts in order to mitigate the risks and volatility associated with foreign currency transaction gains or losses. We do not use derivative financial instruments for speculative or trading purposes. For accounting purposes, certain of our foreign currency forward contracts are not designated as hedging instruments and, accordingly, we record the fair value of these contracts as of the end of our reporting period in our Consolidated Balance Sheets with changes in fair value recorded within Other income (expense), net in our Consolidated Statements of Income for both realized and unrealized gains and losses. Certain of our foreign currency forward contracts have been designated as cash flow hedges, and, accordingly, we record the fair value of these contracts as of the end of our reporting period in our Consolidated Balance Sheets with changes in fair value recorded as a component of Accumulated other comprehensive loss and reclassified into earnings in the same period in which the hedged transaction affects earnings, and in the same line item on the Consolidated Statements of Income as the impact of the hedge transaction. At December 27, 2025, we have no foreign currency forward contracts that are designated as hedging instruments outstanding. 71 FORMFACTOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 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 December 27, 2025 will mature by the first quarter of fiscal 2026. The following table provides information about our foreign currency forward contracts outstanding as of December 27, 2025 (in thousands): Currency Contract Position Contract Amount (Local Currency) Contract Amount (U.S. Dollars) Euro Sell 8,288 9,764 Japanese Yen Sell 4,074,044 26,077 Korean Won Buy 4,648,606 3,228 Taiwan Dollar Sell 153,567 4,872 Our foreign currency contracts are classified within Level 2 of the fair value hierarchy as they are valued using pricing models that utilize observable market inputs. The location and amount of gains related to non-designated derivative instruments in the Consolidated Statements of Income were as follows (in thousands): Derivatives Not Designated as Hedging Instruments Location of Gain Recognized Fiscal Year Ended December 27, 2025 December 28, 2024 December 30, 2023 Foreign exchange forward contracts Other income (expense), net $ 1,603 $ 2,225 $ 2,504 The location and amount of gains (losses) related to foreign currency derivative instruments designated as cash flow hedges on our Consolidated Statements of Income was as follows (in thousands): Amount of Gain or (Loss) Recognized in AOCL on Derivative Location of Gain or (Loss) Reclassified from AOCL into Income Amount of Gain or (Loss) Reclassified from AOCL into Income Fiscal 2025 $ 2,716 Cost of revenues $ 1,016 Research and development 235 Selling, general and administrative 324 $ 1,575 Fiscal 2024 $ ( 2,023 ) Cost of revenues $ ( 389 ) Research and development ( 141 ) Selling, general and administrative ( 98 ) $ ( 628 ) Fiscal 2023 $ 160 Cost of revenues $ 222 Research and development 75 Selling, general and administrative 80 $ 377 Interest Rate Swaps During fiscal 2020, we entered into an interest rate swap agreement with Union Bank, succeeded by U.S. Bank National Association to hedge the interest payments on the Building Term Loan for the notional amount of $ 18.0 million. As future levels of LIBOR over the life of the loan are uncertain, we entered into this interest-rate swap agreement to hedge the exposure in interest rate risks associated with movement in LIBOR rates. By entering into the agreement, we convert a floating rate interest at one-month LIBOR plus 1.75 % into a fixed rate interest at 2.75 %. This agreement was amended in fiscal 2023 to replace the benchmark reference rate LIBOR with SOFR to match the Building Term Loan agreement (as amended). After the amendment, the interest rate swap continues to convert our floating-rate interest into a fixed-rate at 2.75 %. As of December 27, 2025, the notional amount of the loan that is subject to this interest rate swap was $ 12.3 million. See Note 6, Debt , for additional information. 72 FORMFACTOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) For accounting purposes, the interest-rate swap contracts qualify for and are designated as cash flow hedges. All hedging relationships are formally documented, and the hedges are designed to offset changes to future cash flows on hedged transactions. We evaluate hedge effectiveness at hedge inception and on an ongoing basis. The fair value of our interest rate swap contracts are determined at the end of each reporting period based on valuation models that use interest rate yield curves as inputs. The cash flows associated with the interest rate swaps are reported in Net cash provided by operating activities in our Consolidated Statements of Cash Flows and the fair value of the interest rate swap contracts are recorded within Prepaid expenses and other current assets and Other assets. The impact of the interest rate swaps on the Consolidated Statements of Income was as follows (in thousands): Amount of Gain (Loss) Recognized in AOCL on Derivative (Effective Portion) Location of Gain or (Loss) Reclassified from AOCL into Income (Effective Portion) Amount of Gain Reclassified from AOCL into Income (Effective Portion) Fiscal 2025 $ ( 169 ) Other income (expense), net $ 435 Fiscal 2024 638 Other income (expense), net 602 Fiscal 2023 230 Other income (expense), net 615 See also Note 10, Fair Value . Note 10— Fair Value Whenever possible, the fair values of our financial assets and liabilities are determined using quoted market prices of identical securities or quoted market prices of similar securities from active markets. The three levels of inputs that may be used to measure fair value are as follows: • Level 1 valuations are obtained from real-time quotes for transactions in active exchange markets involving identical securities; • Level 2 valuations utilize significant observable inputs, such as quoted prices for similar assets or liabilities, quoted prices near the reporting date in markets that are less active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and • 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 fiscal 2025, 2024 or 2023. 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 fiscal 2025. Cash Equivalents The fair value of our cash equivalents is determined based on quoted market prices for similar or identical securities. Marketable Securities We classify our marketable securities as available-for-sale and value them utilizing a market approach. Our investments are priced by pricing vendors who provide observable inputs for their pricing without applying significant judgment. Broker pricing is used mainly when a quoted price is not available, the investment is not priced by our pricing vendors or when a broker price is more reflective of fair value. Our broker-priced investments are categorized as Level 2 investments because fair value is based on similar assets without applying significant judgments. In addition, all of our investments have a sufficient level of trading volume to demonstrate that the fair value is appropriate. 73 FORMFACTOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 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): December 27, 2025 Level 1 Level 2 Level 3 Total Assets: Cash equivalents: Money market funds $ 62,017 $ — $ — $ 62,017 Commercial paper — 500 — 500 62,017 500 — 62,517 Marketable securities: U.S. treasuries 76,626 — — 76,626 U.S. agency securities — 12,905 — 12,905 Corporate bonds — 74,897 — 74,897 Commercial paper — 7,414 — 7,414 76,626 95,216 — 171,842 Promissory note receivable — — 1,522 1,522 Interest rate swap derivative contracts — 1,422 — 1,422 Total assets $ 138,643 $ 97,138 $ 1,522 $ 237,303 December 28, 2024 Level 1 Level 2 Level 3 Total Assets: Cash equivalents: Money market funds $ 131,519 $ — $ — $ 131,519 Marketable securities: U.S. treasuries 71,252 — — 71,252 U.S. agency securities — 13,869 — 13,869 Corporate bonds — 83,176 — 83,176 Commercial paper — 998 — 998 71,252 98,043 — 169,295 Promissory note receivable — — 1,512 1,512 Interest rate swap derivative contracts — 2,025 — 2,025 Total assets $ 202,771 $ 100,068 $ 1,512 $ 304,351 Liabilities: Foreign exchange derivative contracts $ — $ ( 1,141 ) $ — $ ( 1,141 ) Total liabilities $ — $ ( 1,141 ) $ — $ ( 1,141 ) 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, 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 or investment. Other than as discussed in Note 4, Acquisition, there were no assets or liabilities measured at fair value on a non-recurring basis during fiscal 2025, 2024 or 2023. 74 FORMFACTOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Note 11— Goodwill and Intangible Assets Goodwill Goodwill by reportable segment was as follows (in thousands): Probe Cards Systems Total Goodwill, as of December 30, 2023 $ 178,424 $ 22,666 $ 201,090 Reduction - China divestiture ( 1,055 ) ( 62 ) ( 1,117 ) Foreign currency translation — ( 802 ) ( 802 ) Goodwill, as of December 28, 2024 177,369 21,802 199,171 Acquisition - Keystone — 15,050 15,050 Foreign currency translation — 1,808 1,808 Goodwill, as of December 27, 2025 $ 177,369 $ 38,660 $ 216,029 Intangible Assets Intangible assets were as follows (in thousands): December 27, 2025 December 28, 2024 Other Intangible Assets Gross Accumulated Amortization Net Gross Accumulated Amortization Net Existing developed technologies $ 169,165 $ 152,863 $ 16,302 $ 159,360 $ 149,631 $ 9,729 Trade name 7,894 7,894 — 7,736 7,700 36 Customer relationships 48,249 48,249 — 47,831 47,241 590 $ 225,308 $ 209,006 $ 16,302 $ 214,927 $ 204,572 $ 10,355 Amortization expense was included in our Consolidated Statements of Income as follows (in thousands): Fiscal Year Ended December 27, 2025 December 28, 2024 December 30, 2023 Cost of revenues $ 1,838 $ 1,818 $ 3,081 Selling, general and administrative 625 764 3,769 $ 2,463 $ 2,582 $ 6,850 The estimated future amortization of definite-lived intangible assets, is as follows (in thousands): Fiscal Year Amount 2026 $ 2,604 2027 2,582 2028 2,471 2029 2,471 2030 1,899 Thereafter 4,275 Total $ 16,302 We did no t record any impairment of intangible assets in fiscal 2025, 2024 and 2023. Note 12— Commitments and Contingencies Leases See Note 8, Leases . Government Assistance In January 2023, we received a $ 18.0 million Grant from the California Governor’s Office of Business and Economic Development. The Grant requires us to create and maintain full-time jobs and make significant infrastructure investments 75 FORMFACTOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) within California over a 5-year term. If we do not meet the requirements of the Grant, we will be required to repay all or a portion of the Grant. See Note 2, Summary of Significant Accounting Policies under the caption “Government Assistance,” for additional information. Environmental Matters We are subject to U.S. federal, state, local, and foreign governmental laws and regulations relating to the protection of the environment, including those governing the discharge of pollutants into the air and water, the management and disposal of hazardous substances and wastes, the clean-up of contaminated sites and the maintenance of a safe workplace. We believe that we comply in all material respects with the environmental laws and regulations that apply to us as of December 27, 2025. There are no matters pending that we currently believe are reasonably possible of having a material impact to our business, consolidated financial condition, results of operations or cash flows. In the future, we may receive notices of violations of environmental regulations, or otherwise learn of such violations. Environmental contamination or violations may negatively impact our business. Indemnification Arrangements We have entered, and may from time to time in the ordinary course of our business enter, into contractual arrangements with third parties that include indemnification obligations. Under these contractual arrangements, we have agreed to defend, indemnify and/or hold the third party harmless from and against certain liabilities. These arrangements include indemnities in favor of customers in the event that our products or services infringe a third party's intellectual property, or cause property damage or other indemnities in favor of our lessors in connection with facility leasehold liabilities that we may cause. In addition, we have entered into indemnification agreements with our directors and certain of our officers, and our bylaws contain indemnification obligations in favor of our directors, officers and agents. These indemnity arrangements may limit the type of the claim, the total amount that we can be required to pay in connection with the indemnification obligation and the time within which an indemnification claim can be made. The duration of the indemnification obligation may vary, and for most arrangements, survives the agreement term and is indefinite. We believe that substantially all of our indemnity arrangements provide either for limitations on the maximum potential future payments we could be obligated to make, or for limitations on the types of claims and damages we could be obligated to indemnify, or both. However, it is not possible to determine or reasonably estimate the maximum potential amount of future payments under these indemnification obligations due to the varying terms of such obligations, a lack of history of prior indemnification claims, the unique facts and circumstances involved in each particular contractual arrangement and in each potential future claim for indemnification, and the contingency of any potential liabilities upon the occurrence of events that are not reasonably determinable. We have not had any material requests for indemnification under these arrangements. We have not recorded any liabilities for these indemnification arrangements on our Consolidated Balance Sheets as of December 27, 2025 or December 28, 2024. Legal Matters From time to time, we are subject to legal proceedings and claims in the ordinary course of business, the outcomes of which cannot be estimated with certainty. Our ability to estimate the outcomes may change in the near term and the effect of any such change could have a material adverse effect on our financial position, results of operations or cash flows. Note 13— Stockholders' Equity Preferred Stock We have authorized 10,000,000 shares of undesignated preferred stock, $ 0.001 par value, none of which is issued and outstanding. Our Board of Directors shall determine the rights, preferences, privileges and restrictions of the preferred stock, including dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences, sinking fund terms and the number of shares constituting any series or the designation of any series. Common Stock Each share of common stock has the right to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when declared by the Board of Directors, subject to the prior rights of holders, if any, of all classes of stock outstanding having priority rights as to dividends. No dividends have been declared or paid as of December 27, 2025. Common Stock Repurchase Programs On May 20, 2022, our Board of Directors authorized a two-year program to repurchase up to $ 75 million of outstanding common stock to offset potential dilution from issuance of common stock under our stock-based compensation programs. During fiscal 2022 and 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 all of the shares available for repurchase under the program. 76 FORMFACTOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) On October 30, 2023, our Board of Directors authorized a two-year program to repurchase up to $ 75 million of outstanding common stock, with the primary purpose of offsetting potential dilution from issuance of common stock under our stock-based compensation programs. During fiscal 2023 and 2024, we purchased and retired 32,020 shares of common stock for $ 1.2 million and 1,309,635 shares of common stock for $ 53.3 million, respectively. 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 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. This share repurchase program will expire on April 24, 2027. During fiscal 2025, we repurchased and retired 135,000 shares of common stock for $ 4.1 million, and as of December 27, 2025, $ 70.9 million remained available for future repurchases. Private Placement On January 10, 2025, Advantest America, Inc., a Delaware corporation, acquired 334,971 shares of our 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. Equity Incentive Plan We currently grant equity-based awards under our Equity Incentive Plan, as amended (the “2012 Plan”) which was approved by our stockholders. As amended, the 2012 Plan has authorized for issuance a total of 29.6 million shares, 4.1 million of which were available for grant as of December 27, 2025. Restricted stock units (“RSUs”) granted under the 2012 Plan generally vest over three years . RSUs, including Performance Restricted Stock Units (“PRSUs”) are converted into shares of our common stock upon vesting on a one-for-one basis. The vesting of RSUs is subject to the employee's continuing service. RSU activity was as follows: Number of Shares Weighted Average Grant Date Fair Value Restricted stock units at December 28, 2024 1,776,743 $ 39.07 Awards granted 1,209,768 30.35 Awards vested ( 963,422 ) 36.45 Awards forfeited ( 148,770 ) 37.24 Restricted stock units at December 27, 2025 1,874,319 35.10 The PRSUs granted in fiscal 2025, 2024 and 2023 listed below vest based on us achieving certain market performance criteria. The performance criteria are based on a metric called Total Shareholder Return (“TSR”) for the performance period of three years , relative to the TSR of the companies identified as being part of the S&P Semiconductor Select Industry Index (FormFactor peer companies) as of a specific date. Of the 204,903 PRSUs granted in fiscal 2022, 73,035 shares were forfeited during the requisite service period, resulting in 131,868 shares that were subject to the achievement of certain TSR performance criteria. We achieved 77 % TSR performance, which resulted in a total of 101,433 shares vested and issued in fiscal 2025 related to the fiscal 2022 PRSU grants. 77 FORMFACTOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) PRSU grant activity was as follows: Fiscal Year Ended December 27, 2025 December 28, 2024 December 30, 2023 Grant Dates August 6 and November 6, 2025 August 5, 2024 August 7, 2023 Performance period July 1, 2025 - June 30, 2028 July 1, 2024 - June 30, 2027 July 1, 2023 - June 30, 2026 Number of shares 177,168 125,496 172,680 TSR as-of date August 6 and November 6, 2025 August 5, 2024 August 7, 2023 Stock-based compensation $ 6.6 million $ 6.2 million $ 8.6 million Employee Stock Purchase Plan Our 2012 Employee Stock Purchase Plan (the “ESPP”), as amended, allows for the issuance of a total of 12,137,559 shares. The offering periods under the ESPP are 12 months commencing on February 1 of each calendar year and ending on January 31 of the subsequent calendar year, and a six-month fixed offering period commencing on August 1 of each calendar year and ending on January 31 of the subsequent calendar year. The 12-month offering period consists of two six-month purchase periods and the six-month offering period consists of one six-month purchase period. The price of the common stock purchased is 85 % of the lesser of the fair market value of the common stock on the first day of the applicable offering period or the last day of each purchase period. We have treated the 2012 ESPP as a compensatory plan. During fiscal 2025, employees purchased 385,189 shares under this program at a weighted average exercise price of $ 28.87 per share, which represented a weighted average discount of $ 5.50 per share from the fair value of the stock purchased. As of December 27, 2025, 2,886,843 shares remained available for issuance. Note 14— Stock-Based Compensation Stock-Based Compensation Expense Certain information regarding our stock-based compensation was as follows (in thousands, except per share amounts): Fiscal Year Ended December 27, 2025 December 28, 2024 December 30, 2023 Weighted average grant date per share fair value of RSUs granted $ 30.35 $ 44.13 $ 33.85 Fair value of RSUs vested 34,362 53,990 32,820 Pre-tax stock-based compensation expense by financial statement line and related tax benefit in the Consolidated Statements of Income are as follows (in thousands): Fiscal Year Ended December 27, 2025 December 28, 2024 December 30, 2023 Stock-based compensation expense included in: Cost of revenues $ 7,391 $ 7,738 $ 6,854 Research and development 10,293 10,721 10,652 Selling, general and administrative 20,892 21,304 21,110 Total stock-based compensation $ 38,576 $ 39,763 $ 38,616 Stock-based compensation tax benefit (expense) $ ( 850 ) $ 2,833 $ ( 1,424 ) 78 FORMFACTOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Unrecognized Stock-Based Compensation Expense Unrecognized stock-based compensation expense at December 27, 2025 consisted of the following (in thousands): Unrecognized Expense Weighted Average Recognition Period (Years) Restricted stock units $ 41,880 2.1 Performance restricted stock units 9,935 2.0 Employee stock purchase plan 463 0.1 Total unrecognized stock-based compensation expense $ 52,278 2.0 Valuation Assumptions The following assumptions were used in estimating the fair value of PRSUs: Fiscal Year Ended December 27, 2025 December 28, 2024 December 30, 2023 PRSUs: Dividend yield — % — % — % Expected volatility 54.0 % - 55.2 % 50.8 % 50.7 % Risk-free interest rate 3.5 % - 3.6 % 3.7 % 4.4 % Expected life (in years) 2.7 - 2.9 2.9 2.9 The following assumptions were used in estimating the fair value of shares under the Employee Stock Purchase Plan: Fiscal Year Ended December 27, 2025 December 28, 2024 December 30, 2023 Employee Stock Purchase Plan: Dividend yield — % — % — % Expected volatility 40.5 % - 67.7 % 40.4 % - 58.7 % 40.6 % - 60.2 % Risk-free interest rate 4.2 % - 5.1 % 4.7 % - 5.5 % 0.8 % - 5.5 % Expected life (in years) 0.5 - 1.0 0.5 - 1.0 0.5 - 1.0 Note 15— Income Taxes Components of Income Before Income Taxes The components of income before income taxes were as follows (in thousands): Fiscal Year Ended December 27, 2025 December 28, 2024 December 30, 2023 United States $ 48,817 $ 66,953 $ ( 10,681 ) Foreign 20,574 12,459 99,948 $ 69,391 $ 79,412 $ 89,267 79 FORMFACTOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Provision for Income Taxes The components of the provision for income taxes are as follows (in thousands): Fiscal Year Ended December 27, 2025 December 28, 2024 December 30, 2023 Current provision: Federal $ 4,585 $ 15,688 $ 8,970 State 647 1,703 835 Foreign 5,845 5,762 9,175 11,077 23,153 18,980 Deferred provision (benefit): Federal 2,699 ( 11,446 ) ( 10,810 ) State ( 657 ) ( 1,806 ) ( 330 ) Foreign ( 115 ) ( 103 ) ( 960 ) 1,927 ( 13,355 ) ( 12,100 ) Total provision for income taxes: Federal 7,284 4,242 ( 1,840 ) State ( 10 ) ( 103 ) 505 Foreign 5,730 5,659 8,215 $ 13,004 $ 9,798 $ 6,880 80 FORMFACTOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Tax Rate Reconciliation The following is a reconciliation of the difference between income taxes computed by applying the federal statutory rate of 21% and the provision from income taxes for fiscal 2025, 2024, and 2023 (dollars in thousands): Fiscal Year Ended December 27, 2025 December 28, 2024 December 30, 2023 Amount Percent Amount Percent Amount Percent U.S. statutory federal tax $ 14,572 21.0 % $ 16,676 21.0 % $ 18,746 21.0 % State taxes and credits, net of federal benefit (1) ( 1,457 ) ( 2.1 ) ( 1,309 ) ( 1.6 ) ( 891 ) ( 1.0 ) Foreign tax effects: Germany: Foreign taxes at rates different than the U.S. 1,657 2.4 1,099 1.4 8,615 9.7 Foreign gain exclusion — — — — ( 21,568 ) ( 24.2 ) Other ( 274 ) ( 0.4 ) 800 1.0 24 — China: Reversal of book gain/loss on China Sale — — 1,072 1.4 — — Foreign Tax on China Sale — — 2,395 3.0 — — Other — — ( 129 ) ( 0.2 ) 21 — Other foreign jurisdictions 405 0.6 281 0.4 657 0.8 Effects of cross-border tax laws: Global intangible low-taxed income — — 660 0.8 4,783 5.4 Foreign-derived intangible income ( 1,515 ) ( 2.2 ) ( 3,774 ) ( 4.8 ) ( 2,986 ) ( 3.3 ) Other ( 18 ) — ( 26 ) — ( 19 ) — Tax credits: Research tax credits ( 5,858 ) ( 8.3 ) ( 4,857 ) ( 6.1 ) ( 7,406 ) ( 8.3 ) Other credits ( 240 ) ( 0.3 ) ( 241 ) ( 0.3 ) ( 306 ) ( 0.3 ) Changes in valuation allowance ( 160 ) ( 0.2 ) ( 196 ) ( 0.2 ) 181 0.2 Nontaxable or nondeductible items: Equity compensation 850 1.2 ( 2,833 ) ( 3.6 ) 1,424 1.6 Officer's compensation 964 1.4 2,258 2.8 296 0.3 Reversal of book gain/loss on China sale — — ( 4,790 ) ( 6.0 ) — — Other 421 0.6 212 0.3 432 0.5 Changes in unrecognized tax benefits 3,745 5.4 2,669 3.4 5,107 5.7 Other adjustments ( 88 ) ( 0.4 ) ( 169 ) ( 0.4 ) ( 230 ) ( 0.4 ) Total $ 13,004 18.7 % $ 9,798 12.3 % $ 6,880 7.7 % (1) State taxes in Oregon made up the majority (greater than 50 %) of the tax effect in this category for 2023-2025. Deferred Tax Assets and Liabilities Deferred tax assets and liabilities are recognized for the future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax basis using enacted tax rates in effect for the year in which the differences are expected to be reversed. 81 FORMFACTOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Significant deferred tax assets and liabilities consisted of the following (in thousands): As of December 27, 2025 December 28, 2024 Tax credits $ 33,886 $ 31,196 Inventory reserve 12,126 12,818 Other reserves and accruals 11,168 10,600 Non-statutory stock options 1,905 2,213 Lease liability 3,481 4,857 Research and development expenditures capitalization 63,372 65,520 Net operating loss carryforwards 17,125 17,295 Gross deferred tax assets 143,063 144,499 Valuation allowance ( 50,418 ) ( 47,938 ) Total deferred tax assets 92,645 96,561 Right-of-use assets ( 2,803 ) ( 4,104 ) Acquired intangibles and fixed assets ( 1,918 ) ( 445 ) Total deferred tax liabilities ( 4,721 ) ( 4,549 ) Net deferred tax assets $ 87,924 $ 92,012 We are required to evaluate the realizability of our deferred tax assets in both our U.S. and non-U.S. jurisdictions on an ongoing basis to determine whether there is a need for a valuation allowance with respect to such deferred tax assets. As of December 27, 2025, we maintained a valuation allowance of $ 50.4 million, primarily related to California deferred tax assets and foreign tax credit carryovers, due to uncertainty about the future realization of these assets. We believe that future reversals of taxable temporary differences, and our forecast of continued earnings in both our U.S. and non-U.S. jurisdictions, support our decision to not record a valuation allowance on other deferred tax assets. Tax Credits and Carryforwards Tax credits and carryforwards available to us at December 27, 2025 consisted of the following (in thousands): Amount Expiration Date(s) Federal research and development tax credit $ 12,042 2043-2045 Foreign tax credit carryforwards 592 2026-2027 California research credits 66,627 Indefinite State net operating loss carryforwards 239,068 2026-Indefinite Singapore net operating loss carryforwards 2,900 Indefinite Undistributed Earnings As of December 27, 2025, unremitted earnings of foreign subsidiaries was estimated at $ 37.7 million. We intend to permanently invest $ 15.0 million of undistributed earnings indefinitely outside of the U.S. To the extent we repatriate the remaining $ 22.7 million of undistributed foreign earnings to the U.S., we have not established a deferred tax liability for foreign withholding taxes. Foreign earnings that can be remitted back to the U.S. are from jurisdictions with current tax treaties, which exempt us from withholding taxes. Our estimates are provisional and subject to further analysis. Unrecognized Tax Benefits We recognize the benefits of tax return positions if we determine that the positions are “more-likely-than-not” to be sustained by the taxing authority. Interest and penalties accrued on unrecognized tax benefits are recorded as tax expense in the period incurred. 82 FORMFACTOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The following table reflects changes in the unrecognized tax benefits (in thousands): Fiscal Year Ended December 27, 2025 December 28, 2024 December 30, 2023 Unrecognized tax benefit, beginning balance $ 48,364 $ 45,574 $ 40,098 Additions based on tax positions related to the current year 3,504 3,813 4,726 Additions based on tax positions from prior years 163 — 858 Reductions for tax positions of prior years ( 7 ) ( 990 ) — Reductions due to lapse of the applicable statute of limitations ( 36 ) ( 33 ) ( 108 ) Unrecognized tax benefit, ending balance $ 51,988 $ 48,364 $ 45,574 Interest and penalties recognized as a component of provision (benefit) for income taxes $ 728 $ 205 $ 34 Interest and penalties accrued at period end 997 269 63 Of the unrecognized tax benefits at December 27, 2025, $ 27.2 million would impact the effective tax rate if recognized. The amount of income taxes we pay is subject to ongoing audits by federal, state and foreign tax authorities which might result in proposed assessments. Our estimate for the potential outcome for any uncertain tax issue is judgmental in nature. However, we believe we have adequately provided for any reasonably foreseeable outcome related to those matters. Our future results may include favorable or unfavorable adjustments to our estimated tax liabilities in the period the assessments are made or resolved or when statutes of limitation on potential assessments expire. At December 27, 2025, our tax years 2022 through 2025, 2021 through 2025 and 2020 through 2025, remain open for examination in the federal, state and foreign jurisdictions, respectively. However, to the extent allowed by law, the taxing authorities may have the right to examine prior periods where net operating losses and credits were generated and carried forward, and make adjustments up to the net operating loss and credit carryforward amounts. Cash Taxes Paid Income taxes paid, net of refunds received, by jurisdiction are as follows (in thousands): Fiscal Year Ended December 27, 2025 December 28, 2024 December 30, 2023 US federal $ 1,859 $ 2,246 $ 4,184 Domestic state and local Oregon * 1,229 * Other 605 339 304 Foreign Germany - Federal 3,093 4,332 7,152 Germany - Thiendorf 2,149 3,911 3,087 Germany - Bergisch Gladbach * * 1,765 China * 2,120 * Other 1,226 1,407 893 Total $ 8,932 $ 15,584 $ 17,385 * The amount of income taxes paid during the year does not meet the five percent disaggregation threshold. Note 16— Employee Benefit Plans We have an employee savings plan that qualifies as a deferred salary arrangement under Section 401(k) of the Internal Revenue Code. The plan is designed to provide employees with an accumulation of funds for retirement on a tax-deferred basis and 83 FORMFACTOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) provide for annual discretionary employer contributions. The total charge to net income under the 401(k) plan for fiscal 2025, 2024 and 2023 aggregated to $ 2.7 million, $ 2.6 million and $ 2.3 million, respectively. Note 17— Segments and Geographic Information We operate in two reportable segments consisting of the Probe Cards Segment and the Systems Segment. 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 income before income taxes (dollars in thousands): Fiscal 2025 Probe Cards Systems Corporate and Other Total Revenues $ 637,898 $ 147,095 $ — $ 784,993 Cost of revenues 379,398 85,542 11,202 476,142 Gross profit 258,500 61,553 ( 11,202 ) 308,851 Gross margin 40.5 % 41.8 % 39.3 % Research and development 86,295 18,816 10,571 115,682 Selling 29,085 14,938 7,276 51,299 Marketing 6,494 7,472 4,943 18,909 Net contribution $ 136,626 $ 20,327 $ ( 33,992 ) 122,961 General and administrative 62,866 Factory start-up costs 3,025 Operating income 57,070 Interest income 10,640 Interest expense ( 521 ) Other income (expense), net 2,202 Income before income taxes and equity investment $ 69,391 84 FORMFACTOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Fiscal 2024 Probe Cards Systems Corporate and Other Total Revenues $ 625,960 $ 137,639 $ — $ 763,599 Cost of revenues 366,953 78,128 10,595 455,676 Gross profit 259,007 59,511 ( 10,595 ) 307,923 Gross margin 41.4 % 43.2 % 40.3 % Research and development 90,463 20,617 10,858 121,938 Selling 31,462 16,082 5,994 53,538 Marketing 8,775 7,184 5,120 21,079 Net contribution $ 128,307 $ 15,628 $ ( 32,567 ) 111,368 General and administrative 67,169 Gain on sale of business 20,581 Operating income 64,780 Interest income 14,111 Interest expense ( 418 ) Other income (expense), net 939 Income before income taxes and equity investment $ 79,412 Fiscal 2023 Probe Cards Systems Corporate and Other Total Revenues $ 497,903 $ 165,199 $ — $ 663,102 Cost of revenues 312,511 80,464 11,547 404,522 Gross profit 185,392 84,735 ( 11,547 ) 258,580 Gross margin 37.2 % 51.3 % 39.0 % Research and development 83,104 21,487 11,174 115,765 Selling 26,912 17,026 8,581 52,519 Marketing 5,983 9,367 7,273 22,623 Net Contribution $ 69,393 $ 36,855 $ ( 38,575 ) 67,673 General and administrative 57,870 Gain on sale of business 72,953 Operating income 82,756 Interest income 7,217 Interest expense ( 421 ) Other income (expense), net ( 285 ) Income before income taxes and equity investment $ 89,267 Corporate and Other includes unallocated expenses relating to amortization of stock-based compensation expense, intangible assets, acquisition-related costs, including charges related to inventory and 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. 85 FORMFACTOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The following table summarizes revenue, by geographic region, as a percentage of total revenues based upon ship-to location: Fiscal Year Ended December 27, 2025 December 28, 2024 December 30, 2023 South Korea 30.3 % 24.2 % 17.8 % Taiwan 25.8 22.7 22.3 United States 19.4 24.1 25.9 China 7.4 13.5 13.8 Japan 5.5 4.4 5.5 Singapore 4.2 2.6 2.8 Europe 3.7 4.6 5.9 Malaysia 2.4 2.4 4.0 Rest of World 1.3 1.5 2.0 Total revenues 100.0 % 100.0 % 100.0 % The following table summarizes revenue by market (in thousands): Fiscal Year Ended December 27, 2025 December 28, 2024 December 30, 2023 Foundry & Logic $ 369,897 $ 381,182 $ 363,539 DRAM 247,397 227,422 113,779 Flash 20,604 17,356 20,585 Systems 147,095 137,639 165,199 Total revenues $ 784,993 $ 763,599 $ 663,102 The following table summarizes revenue by timing of revenue recognition (in thousands): Fiscal Year Ended December 27, 2025 December 28, 2024 December 30, 2023 Probe Cards Systems Total Probe Cards Systems Total Probe Cards Systems Total Products transferred at a point in time $ 630,955 $ 131,859 $ 762,814 $ 620,597 $ 122,181 $ 742,778 $ 494,624 $ 155,145 $ 649,769 Services transferred over time 6,943 15,236 22,179 5,363 15,458 20,821 3,279 10,054 13,333 Total $ 637,898 $ 147,095 $ 784,993 $ 625,960 $ 137,639 $ 763,599 $ 497,903 $ 165,199 $ 663,102 Long-lived assets, comprised of Operating lease, Right-of-use assets, Property, plant and equipment, net, Goodwill and Intangibles, net, reported based on the location of the asset was as follows (in thousands): December 27, 2025 December 28, 2024 December 30, 2023 United States $ 449,966 $ 411,646 $ 414,607 Europe 48,733 21,323 23,204 Asia-Pacific 9,902 9,366 11,135 Total $ 508,601 $ 442,335 $ 448,946 Note 18— Recent Accounting Pronouncements Adopted ASU 2023-09 In December 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2023-09, “ Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ” The ASU includes requirements that an entity disclose specific categories in the rate reconciliation and provide additional information for reconciling items that are greater than five percent of the amount computed by multiplying pretax income by the applicable statutory income tax rate. The 86 FORMFACTOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) standard also requires that entities disclose income before income taxes and provision for income taxes disaggregated between domestic and foreign. This ASU is effective for annual periods beginning after December 15, 2024, with early adoption permitted. 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 adopted the new standard effective December 27, 2025. As a result, we have enhanced our income tax disclosures retrospectively by reconciling the U.S. federal statutory tax amount and rate to our actual global effective amounts and rates. See Note 15, Income Taxes , for additional information. Pending Adoption ASU 2024-03 In November 2024, the FASB issued 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, in tabular format, in the notes to the financial statements, specific information about certain costs and expenses. Although the ASU does not change the expense captions an entity presents on the face of the income statement, it requires disaggregation of certain expense captions into specified categories. 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. 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. Note 19— Subsequent Events On January 5, 2026, we adopted restructuring plans that are intended to better align our cost structure and support gross margin improvement to the Company’s target financial model, while also aligning manufacturing capabilities with current and anticipated business needs and the Company's strategic priorities. As part of this restructuring plan, the Company is consolidating the manufacturing facilities located in Carlsbad, California and Baldwin Park, California, to other manufacturing facilities. The restructuring plans are expected to result in the Company recording restructuring charges in the aggregate amount of approximately $ 30 million to $ 40 million, estimated to be comprised primarily of $ 20 million to $ 25 million of cost related to impairment of leasehold improvements, facility exits, and other costs, $ 9 million to $ 13 million of severance, retention and other employee-related costs to sever or retain approximately 200 to 300 employees, and $ 1 million to $ 2 million in contract and lease termination costs. Of these amounts, the Company expects the majority of the charges to be incurred in fiscal 2026. The Company expects approximately $ 10 million to $ 15 million of the charges will result in future cash expenditures and approximately $ 20 million to $ 25 million in non-cash charges. 87