CEO Rick Wallace highlighted record annual revenue of $12.745 billion in calendar 2025, representing 17% year-over-year growth and outpacing broader industry expansion by several percentage points. Non-GAAP operating margin expanded on improved mix and efficiency, while non-GAAP earnings per share increased double digits year-over-year. Free cash flow exceeded $4 billion, enabling $3.1 billion returned to shareholders through dividends and share repurchases and leaving the company with a net cash position of approximately $1 billion by year-end.

For the December quarter, revenue reached $3.3 billion, up 17% year-over-year, driven by demand for leading-edge foundry/logic and memory systems. Non-GAAP diluted EPS was $8.85, surpassing guidance midpoints, while GAAP EPS was $8.68. Gross margin of 62.6% reflected stronger-than-modeled services performance and manufacturing efficiencies. Operating expenses totaled $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 rose 18% year-over-year to $786 million, marking the 16th consecutive year of annual growth at a CAGR above 12%.

In calendar 2025, advanced packaging systems revenue was approximately $950 million, up more than 70% year-over-year, as chip packages grow increasingly complex. Management expects mid- to high-teens percentage growth in this segment for 2026. On the memory side, rising process control intensity—driven by high-bandwidth memory, additional metallization layers and advanced lithography—has increased inspection and metrology requirements. The limited ability to bin high-performance compute devices further tightens quality tolerances and underpins continued investment in inspection solutions.

The company guided March quarter revenue of $3.35 billion plus or minus $150 million and non-GAAP EPS of $9.08 plus or minus $0.78, with gross margin anticipated near 61.75% and operating expenses around $645 million. For calendar 2026, core wafer fab equipment spending is expected to grow to the low $120 billion range and advanced packaging to approximately $12 billion, implying a combined market of mid-$130 billion. Management cautioned that first-half growth will be constrained by long-lead component shortages and longer customer lead times, but projects full-year gross margin around 62% plus or minus 50 basis points and reaffirms a longer-term target above 63%.