Nova Q1 Earnings Call Highlights
Nova (NASDAQ:NVMI) reported record first-quarter 2026 revenue and profitability, with management citing strong demand from advanced DRAM, advanced packaging and gate-all-around applications as key drivers of the quarter’s performance.
President and CEO Gaby Waisman said Nova delivered “another record quarter, exceeding guidance across financial and operational metrics.” Revenue reached $235.3 million, supported by what the company described as record revenue from memory devices and record sales in several product lines. CFO Guy Kizner said revenue rose 6% sequentially and 10% from the prior year.
The company’s revenue mix in the quarter was approximately 66% from logic and foundry customers and 34% from memory customers. Kizner said Nova also maintained a diversified customer and geographic base, with four customers and five geographic regions each contributing more than 10% of total product revenue.
Memory and Advanced Packaging Drive Momentum
Waisman said memory revenue reached a record in the quarter, driven primarily by advanced DRAM applications, which accounted for about two-thirds of Nova’s memory business. He highlighted record sales of the Metrion platform, including repeat purchases from a leading memory customer for advanced 3D NAND and DRAM devices.
Nova’s front-end chemical metrology solution, Nova Ancosium, also posted record sales, and Waisman said the company gained additional market share at a leading memory customer in Asia, with multiple tool deliveries expected during the year. He also noted continued demand for XPS and dimensional metrology products and said Nova is seeing robust high-bandwidth memory-related bookings for its WMC and SemDex standalone platforms.
In logic, Waisman said demand and production ramps for advanced devices drove record revenue from Nova’s integrated metrology product line, particularly in gate-all-around, mature node penetration and advanced packaging. He also cited Nova’s receipt of Intel’s EPIC Supplier Award, which he described as Intel’s highest honor in its global supply chain.
Advanced packaging also delivered record quarterly revenue. Waisman said Nova’s portfolio is aligned with the needs of 2.5D and 3D packaging production, pointing to the Nova WMC platform as a solution for warpage and non-uniform surfaces arising from new packaging schemes.
AI, Hybrid Bonding and Process Complexity Cited as Growth Drivers
Management described artificial intelligence investment as a central driver of industry growth. Waisman said the shift toward agentic AI models is increasing computing and memory requirements, accelerating capacity expansion across logic, memory and advanced packaging. He added that these trends are increasing manufacturing complexity and yield challenges, which in turn raise demand for process control and metrology.
Waisman said hybrid bonding adoption is progressing faster than expected in several advanced device segments. Because hybrid bonding relies on direct copper-to-copper interfaces and ultra-fine pitch interconnects, he said it requires tight control of surface planarity, alignment accuracy and interface integrity across multiple steps.
During the Q session, Waisman said hybrid bonding presents “a higher metrology intensity” and pointed to challenges including flatness, CMP uniformity, work pitch, edge roll-off and interconnect yield. He said Nova has already established positioning with top-tier customers and is seeing some pull-ins for hybrid bonding, particularly in memory.
Margins Exceed Target Model
Nova reported GAAP gross margin of 57.7% and non-GAAP gross margin of 59.4% for the first quarter. Kizner said the result was at the upper end of the company’s target model range of 57% to 60%, driven by favorable product mix and continued growth in services.
Operating expenses totaled $64.9 million on a GAAP basis and $59.4 million on a non-GAAP basis. Kizner said the company continues to invest in research and development and go-to-market capabilities to support innovation and future growth.
Operating margin reached 30% on a GAAP basis and 34% on a non-GAAP basis, exceeding the upper end of Nova’s target model range of 28% to 33%. GAAP earnings were $2.04 per diluted share, while non-GAAP earnings were $2.33 per diluted share, both above the high end of the company’s prior guidance.
Nova’s services business also reached a record level, marking the 13th consecutive quarter of sequential service revenue growth. Waisman attributed the performance to the company’s expanding installed base, higher utilization and close engagement with customers.
Second-Quarter Guidance and 2026 Outlook
For the second quarter of 2026, Nova guided revenue to a range of $245 million to $255 million. The company expects GAAP diluted EPS of $2.10 to $2.24 and non-GAAP diluted EPS of $2.34 to $2.48.
At the midpoint of the second-quarter outlook, Kizner said Nova expects GAAP gross margin of approximately 57% and non-GAAP gross margin of approximately 59%. GAAP operating expenses are expected to increase to about $72 million, while non-GAAP operating expenses are expected to rise to about $66 million. The company also expects non-GAAP financial income of approximately $16 million and an effective tax rate of about 15%.
In response to analyst questions, Waisman said Nova now expects wafer fab equipment spending to grow in the mid-teens this year, higher than the company’s view in February. He said Nova expects to outperform that growth rate, with demand supported by logic, memory and advanced packaging. Within memory, he said the main driver is DRAM.
Waisman also said memory is expected to become more dominant in Nova’s revenue mix this year than it was last year, reflecting investment in advanced DRAM. He reiterated that Nova remains on track with its strategic plan to reach $1 billion in revenue by 2027, while noting that the company does not provide guidance beyond its stated outlook.
Capacity Expansion, China and Market Share
Nova is expanding its manufacturing footprint with a new facility in Asia, which Waisman said is expected to become operational toward the end of 2026. He said the facility is intended to increase production capacity, improve cost structure and bring the company closer to key customers and supply chain partners.
Waisman said customer visibility has improved into next year, with some orders already being placed for 2027 deliveries. He also said Nova is seeing some pull-ins that are helping lift first-half expectations. While the company is seeing some supply chain and cost pressure, he said Nova is managing suppliers to meet demand.
On China, Waisman said the region remains significant to Nova’s business and overall wafer fab equipment spending. He said China’s share of Nova’s revenue is expected to decline as advanced-node growth increases elsewhere, and he expects China to stabilize over the long term at 25% to 30% of the company’s business. He also noted rising demand in China for advanced packaging and high-bandwidth memory-related engagements.
Waisman highlighted a recent Gartner market share report showing Nova gained an additional 400 basis points of share in film SIMS and critical dimension metrology, marking the second consecutive year of significant share growth. He said the gains strengthened Nova’s position as the second-largest vendor in that market.
About Nova (NASDAQ:NVMI)
Nova Measuring Instruments Ltd (NASDAQ: NVMI) develops and supplies advanced metrology and process control systems for the semiconductor manufacturing industry. The company's core product line includes spectroscopic ellipsometry and scatterometry tools designed to measure film thickness, critical dimensions, overlay alignment and other key parameters that drive yield and performance in integrated circuit fabrication.
Founded in 1993 and headquartered in Rehovot, Israel, Nova Measuring Instruments has established itself as a critical partner to leading semiconductor foundries and device manufacturers.
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