Nova Ltd. Q4 FY2025 earnings call

Key Points

• 2025 was an exceptional year for Nova with record annual revenue and profitability. Fourth quarter revenue exceeded guidance midpoint.
• Emerging segment silicon photonics presents new opportunities.
• A global leading logic customer selected Nova's integrated metrology portfolio for CMP applications.
• Services organization delivered record quarterly and annual revenues.
• Growth was broad-based across gate-all-around processes, advanced packaging (revenue up >60% YOY, ~20% of product revenue), and memory.
• Nova's advanced metrology solutions secured multiple strategic qualifications.
• Continued investment in R&D, including a new metrology solution addressing emerging challenges.

In the fourth quarter of 2025, total revenues reached $222.6 million, up 14% year-over-year, exceeding the guidance midpoint of $220 million. Product revenue was approximately 75% from logic and foundry and 25% from memory. For the full year 2025, revenues increased 31% year-over-year to $880.6 million. The geographic revenue split in 2025 was: China 33%, Taiwan 29%, Korea 16%, U.S. 9% and other territories 13%. Gross margins in the fourth quarter were 57.6% GAAP and 59.6% non-GAAP, and for the full year were 57.4% GAAP and 59% non-GAAP.

First Quarter 2026 Guidance

• Revenues expected between $222 million and $232 million.
• GAAP earnings per diluted share range from $1.90 to $2.02; non-GAAP from $2.13 to $2.25.
• GAAP gross margin approximately 56%; non-GAAP approximately 58%.
• GAAP operating expenses approximately $65 million; non-GAAP operating expenses approximately $60 million.
• Non-GAAP financial income expected to be approximately $16 million.
• Effective tax rate expected to be approximately 16%.

Risks

• Reduced visibility in the China market.
• Supply chain-related lead time pressures impacting business operations.

Q: Ezra Weener asked about guidance and WFE outlook.

A: Gabriel Waisman said outperforming WFE is due to right growth engine, WFE anticipated to be low double digits with second half acceleration.

Q: Matthew Prisco inquired about customer conversations and orders.

A: Gabriel Waisman mentioned key growth drivers like advanced logic, DRAM, advanced packaging and encouraging customer announcements.

Q: Michael Mani asked about business growth between DRAM, foundry, logic and outperformance.

A: Gabriel Waisman said significant growth from advanced logic, DRAM, advanced packaging, with NAND waiting for inflection.

Q: Shane Brett asked about share position in leading-edge logic and advanced packaging growth.

A: Gabriel Waisman said well positioned in gate-all-around with advanced packaging seeing strong double-digit growth.

Q: Elizabeth Sun asked about gross margin guidance for Q1 and gate-all-around accumulative revenue.

A: Guy Kizner said Q1 gross margin guidance reflects specific product mix; Gabriel Waisman said on track to $500 million accumulated revenue for gate-all-around.

Q: Charles Shi asked about China market visibility and memory price impact on gross margin.

A: Gabriel Waisman said China will continue to be key territory with some increased visibility and no correlation between memory pricing and gross margin.

Q: Vedvati Shrotre asked about lead times and optical component impact.

A: Gabriel Waisman said additional lead time pressure with operational agility being improved and pressure across portfolio components.