Photronics Probed After 36% Stock Drop and Q2 Revenues Fall 6.7%
PLAB•Photronics reported Q2 2026 revenues down 6.7% and IC revenues down 11%, sending shares down 36% on May 28 and erasing over $1.1 billion in market value. Following a $16.8 million tax valuation allowance reversal that boosted non-GAAP EPS by 17.6%, Hagens Berman launched an investigation into misleading investors.
1. Company’s Q2 2026 Performance
Photronics reported sequential declines in revenues of 6.7% and IC revenues of 11%, with GAAP net income down 26.8% and non-GAAP net income down 30%, leading to a 36% share price drop that erased over $1.1 billion in market value.
2. Tax Valuation Allowance Reversal
In December 2025 the company reversed a $16.8 million tax valuation allowance on improved US operations, which had lifted non-GAAP EPS by 17.6% and driven a 45% share rally; investors now question the timing and fairness of that accounting maneuver.
3. Hagens Berman Investigation and Insider Selling
Hagens Berman opened an investigation into whether management misled investors regarding the allowance reversal, while regulatory filings reveal insiders sold over $15 million in shares in the three months preceding the Q2 report.
