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    NVMI
    Earnings call· Mar 2026(Q1 FY26)

    NOVA Q1 FY26 earnings call NVMI

    May 14, 2026 Source

    Executive summary

    Nova Q1 FY26 — Record Revenue and Profitability Driven by Memory and Advanced Packaging

    Nova delivered a record Q1 FY26, driven by strong demand in memory, particularly advanced DRAM, and advanced packaging, alongside significant market share gains. The company is strategically investing in capacity expansion and R&D to capitalize on AI-driven industry growth and increasing metrology intensity, while navigating supply chain pressures and a dynamic China market. Management expects continued momentum with higher performance in the second half of the year.

    Highlights

    5

    • Q1 FY26 revenue reached $235.3 million, exceeding guidance and growing 6% QoQ and 10% YoY.

    • Achieved record profitability with non-GAAP operating margin of 34%, exceeding the target model range.

    • Gained an additional 400 basis points market share in film and critical dimension metrology in 2025, becoming the second largest vendor.

    • Memory revenue reached a record high, driven by advanced DRAM (approx. 2/3 of memory business) and robust HBM-related bookings.

    • Advanced packaging revenue also hit a record, driven by 2.5D/3D production and faster-than-expected hybrid bonding adoption.

    Concerns

    3

    • Effective tax rate in Q1 FY26 was approximately 17%, modestly above guidance, due to geographic and entity mix of income.

    • Supply chain is experiencing some pressure, with cost pressure at the supplier level due to higher chip prices and other factors.

    • China's share of revenue is expected to decrease compared to last year due to advanced nodes growth, stabilizing at 25% to 30% long-term.

    Guidance & targets

    15
    CategoryTargetConfidence
    Revenue
    $245 million to $255 million
    high materiality
    High
    GAAP earnings per diluted share
    $2.10 to $2.24
    medium materiality
    High
    Non-GAAP earnings per diluted share
    $2.34 to $2.48
    high materiality
    High
    GAAP gross margins
    approximately 57%
    medium materiality
    High
    Non-GAAP gross margins
    approximately 59%
    medium materiality
    High
    GAAP operating expenses
    approximately $72 million
    medium materiality
    High
    Non-GAAP operating expenses
    approximately $66 million
    medium materiality
    High
    Non-GAAP financial income
    approximately $16 million
    low materiality
    High
    Effective tax rate
    approximately 15%
    low materiality
    High
    WFE growth
    mid-teens growth
    high materiality
    High
    Gross margins
    within the same rate that you -- that we were giving the guidance for the first half of the year
    medium materiality
    High
    Revenue
    $1 billion
    high materiality
    High
    Cumulative gate-all-around revenue
    $500 million
    medium materiality
    High
    Gate-all-around investments
    growth
    medium materiality
    High
    China revenue share
    25% to 30%
    medium materiality
    Medium

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Logic and Foundry
    Record revenue from integrated metrology product line, driven by gate-all-around and new customer penetrations in mature nodes and advanced packaging. Received Intel EPIC Supplier Award.
    Revenue mix: 66% of total
    		————
    Memory
    Record revenue this quarter, driven by strong demand for advanced DRAM applications. Record sales of Metrion platform with repeat purchases for 3D NAND and DRAM. Record sales for Nova AncoScene chemical metrology solution. Robust HBM-related bookings for Nova WMC and Semdex stand-alone platform.
    Revenue mix: 34% of totalAdvanced DRAM share of memory business: approximately 2/3
    		————
    Advanced Packaging
    Record quarterly revenue driven by strong demand in 2.5D and 3D packaging production. Nova WMC addresses warpage and non-uniform surfaces. Hybrid bonding adoption progressing faster than expected, requiring high metrology intensity. Strong positioning of optical and chemical metrology platforms with top-tier manufacturers.
    Product revenue share: edging towards mid-20s (this quarter)
    		————
    Services
    Delivered record service revenue, reflecting expanding scale and increasing utilization of installed base and deep operational engagement with customers worldwide.
    		——13th consecutive quarter of sequential growth—

    Operational metrics

    15
    Revenue
    $235.3 million6% QoQ growth, 10% YoY growth
    Q1 FY26

    Exceeded high end of guidance range.

    GAAP Gross Margin
    57.7%
    Q1 FY26

    In the upper end of target model range of 57% to 60%.

    Non-GAAP Gross Margin
    59.4%
    Q1 FY26

    In the upper end of target model range of 57% to 60%. Driven by favorable product mix and services business growth.

    GAAP Operating Expenses
    $64.9 million
    Q1 FY26

    Strategic investment in R&D and go-to-market capabilities.

    Non-GAAP Operating Expenses
    $59.4 million
    Q1 FY26

    Strategic investment in R&D and go-to-market capabilities.

    GAAP Operating Margin
    30%
    Q1 FY26

    Exceeded upper end of target model range of 28% to 33%.

    Non-GAAP Operating Margin
    34%
    Q1 FY26

    Exceeded upper end of target model range of 28% to 33%. Highlights strength of operating model and focus on profitable growth.

    Effective Tax Rate
    17%modestly above guidance
    Q1 FY26

    Primarily reflecting geographic and entity mix of income. Expected to normalize as the year progresses.

    GAAP EPS
    $2.04
    Q1 FY26

    Exceeded high end of Q1 guidance.

    Non-GAAP EPS
    $2.33
    Q1 FY26

    Exceeded high end of Q1 guidance.

    Geographic Footprint
    4 customers and 5 geographic regions
    Q1 FY26

    Reflects diversified customer and geographic footprint.

    Market Share Gain
    400 basis pointsvs 2024
    2025

    Second consecutive year of significant share growth, based on Gartner report.

    Memory Business Share
    approximately 2/3
    Q1 FY26

    Driven by robust demand for advanced DRAM.

    Advanced Packaging Product Revenue Share
    mid-20s
    Q1 FY26

    Edging towards this level this quarter.

    WFE World
    —
    next year

    Analyst asked if Nova could support a '$180 billion plus WFE world next year'. Management confirmed ability to support due to capacity expansion.

    Industry KPIs

    8
    MetricValueDetails
    Lead times—
    Ai data center revenue—
    Services installed base—
    Bookings net order intake—
    Wfe industry spend outlookmid-teens growth%
    Design wins socket pipelinemultiple customer wins
    Node platform ramp schedule—
    End market segment revenue mixLogic and Foundry: 66%, Memory: 34%%

    Deals & partnerships

    1
    IntelNova received the Intel EPIC Supplier Award, the highest honor in Intel's global supply chain.

    Nova was included in a select list of companies to receive this award in 2026 out of thousands of suppliers. This recognition underscores the scale and depth of engagement and collaboration with Intel.

    Capital programs

    1
    New manufacturing facility in Asiaunderway

    Benefit: increase production capacity, optimize cost structure, improve load balancing, position closer to key customers and supply chain partners

    Investment designed to support growing demand and improve operational efficiency.

    Risks & headwinds

    3
    Effective tax rate modestly above guidanceQ1 FY26, expected to normalize as year progresses

    approximately 17% (Q1 FY26), modestly above guidance

    Mitigation: Expected to normalize due to geographic and entity mix of income.

    Supply chain pressure and cost increasesCurrent

    some pressure, cost pressure, mainly tied to the higher chip prices and other factors

    Mitigation: Mitigating by working with multiple suppliers for agility, applying active cost management, leveraging long-term relationships, and managing suppliers to meet demand.

    China revenue share decreaseFY26 vs FY25, long-term stabilization

    expected to decrease, stabilize in the range of 25% to 30% of our business (long-term)

    Mitigation: Focusing on ensuring best-of-breed products, value, and cost of ownership in a competitive market.

    What to watch in Q2 FY26

    5

    Nova's growth vs WFE

    FY26
    CurrentWFE mid-teens growth expected for FY26
    TargetOutperform WFE growth

    Why it matters

    Indicates Nova's competitive strength and market share gains in a growing industry.

    the way we read the market today, we expect WFE to reach mid-teens growth... We are expecting to outperform this number.

    Q&A highlights

    6

    Asked for elaboration on multiple customer wins (segment, product type) and where Nova expects to see the most share gain in 2026 (front end vs. packaging).

    Gaby stated wins were across Logic and Memory, and several product lines including chemical metrology and Metrion. For share gains, he noted the 400 bps gain in 2025 and aims to continue, highlighting advanced packaging (2.5D/3D, hybrid bonding) as a particular growth area due to higher metrology intensity.

    “Advanced packaging is definitely one of them. We have good traction with advanced packaging customers across the board, top-tier customers as well as growth in the Chinese advanced packaging realm.”

    asked by Yiling Sun · answered by Gabriel Waisman

    2 min read6 chapters

    Detailed Narrative

    01

    Record Q1 Performance and Market Share Gains

    Nova achieved record Q1 FY26 revenue of $235.3 million and record profitability, exceeding guidance. The company gained an additional 400 basis points market share in film and critical dimension metrology in 2025, marking the second consecutive year of significant growth and solidifying its position as the second largest vendor in this market. This performance is attributed to strong demand in memory and advanced packaging, alongside strategic investments.

    02

    AI as a Key Industry Driver

    AI investments are a fundamental driver, increasing computing and memory requirements, accelerating capacity expansion across Logic, Memory, and advanced packaging. This introduces greater manufacturing complexity and yield challenges, driving higher process control and metrology intensity, which directly benefits Nova's portfolio. The company is well-positioned to support production ramps and yield improvements in this evolving landscape.

    03

    Strategic Capacity Expansion and Supply Chain Management

    To meet growing demand, Nova is expanding its global manufacturing footprint with a new facility in Asia, expected to be operational by the end of 2026. This investment aims to increase production capacity, optimize costs, and improve load balancing. While facing supply chain pressures🌐 and cost increases from suppliers, Nova is mitigating these through active cost management and long-term relationships to ensure demand is met.

    04

    Hybrid Bonding and Advanced Packaging Momentum

    Advanced packaging continues to be a strong growth area, with record quarterly revenue driven by 2.5D and 3D packaging production. Hybrid bonding adoption is progressing faster than expected, particularly in memory, due to its high metrology intensity requirements for surface planarity, alignment accuracy, and interface integrity. Nova's optical and chemical metrology platforms are well-positioned with top-tier manufacturers in this critical area.

    05

    China Market Dynamics

    China remains a significant part of Nova's business, though its share of revenue is expected to decrease this year compared to last due to advanced nodes growth, stabilizing at 25% to 30% long-term. The company observes increased demand in China for advanced packaging and high-bandwidth memory, with new customer engagements. Nova focuses on providing best-of-breed products and value in this competitive market, noting some positive momentum compared to the prior quarter.

    06

    Customer Engagement and Visibility

    Nova reports improved visibility into next year, with customers planning further ahead and engaging closely on capacity and inventory levels. This has led to some pull-ins, driving stronger first-half performance, and orders are already being received for 2027 deliveries. The company's lead times, while shorter than some peers, are supported by this enhanced customer collaboration.

    AI-generated summary of the company’s earnings call. Not investment advice.