Chief Executive Rick Wallace reported that calendar 2025 revenue reached $12.745 billion, a 17% increase over the prior year and the highest annual total in company history. The process control systems segment outpaced the broader semiconductor equipment market by several percentage points. Earnings per share rose more than 20% year-over-year, while free cash flow exceeded $3.5 billion, enabling $3.2 billion in capital returns to shareholders through dividends and share repurchases. Annual services revenue grew for the 16th consecutive year, delivering a compound annual growth rate above 12%.

In the December quarter, revenue totaled $3.3 billion, up 17% year-over-year and above the guidance midpoint. Non-GAAP earnings per share were $8.85 and GAAP EPS was $8.68, both exceeding guidance midpoints. Non-GAAP gross margin expanded to 62.6%, driven by robust service performance and manufacturing efficiencies. Operating expenses were $653 million, with R&D at $384 million and SG&A at $269 million, yielding a non-GAAP operating margin of 42.8%. Services revenue reached $786 million, up 18% year-over-year and 6% sequentially. Cash flow from operations was $1.37 billion, with a record quarterly free cash flow of $1.26 billion, and $797 million returned to shareholders in the form of $548 million in share repurchases and $250 million in dividends.

Management highlighted advanced packaging as a key growth vector, with total systems revenue of approximately $950 million in calendar 2025, representing over 70% year-over-year growth. For 2026, advanced packaging is expected to grow in the mid- to high-teens percentage range. In the memory market, rising process control intensity—driven by high-bandwidth memory, increased metallization layers and advanced lithography—will require more rigorous inspection and metrology. This trend is underpinned by higher device values and tighter tolerance requirements in high-performance compute applications.

The company provided guidance for the March quarter of $3.35 billion in revenue plus or minus $150 million, with non-GAAP EPS of $9.08 ± $0.78 and GAAP EPS of $8.85 ± $0.78. Gross margin is projected at 61.75% ± 1 percentage point and operating expenses at approximately $645 million. For calendar 2026, management expects the core wafer fab equipment market to grow in the high single- to low double-digit range to about $120 billion, with advanced packaging adding roughly $12 billion to reach a total market around $132 billion. The planning tax rate is 14.5% and a fully diluted share count of 131.7 million. Supply constraints on optics and customer lead-time limitations are anticipated to cap first-half growth, while transitory DRAM cost pressures may reduce gross margins by 75–100 basis points before returning toward the long-term target of 63%+.