Nova (NASDAQ:NVMI) reported record third-quarter 2026 revenue of $287.8 million, exceeding its guidance as demand for semiconductor measurement tools rose in memory and advanced packaging. The company forecast further growth in the fourth quarter and said it expects to surpass $1 billion in annual revenue a year ahead of its strategic plan.
Revenue rose 28% from a year earlier and 13% from the second quarter, marking Nova’s third consecutive quarter of record sales, Chief Financial Officer Guy Kizner said on the company’s earnings call. Earnings per diluted share were $2.64 on a generally accepted accounting principles, or GAAP, basis and $2.86 on a non-GAAP basis.
President and CEO Gaby Waisman said Nova now expects revenue in the second half of 2026 to grow more than 33% from the same period in 2025. He pointed to a healthy customer pipeline and an investment mix that he expects to become more favorable for the company in 2027.
Memory and packaging demand
Memory generated record revenue and bookings in the third quarter, driven primarily by demand for dynamic random-access memory, or DRAM, Waisman said. Capacity expansions in advanced DRAM manufacturing benefited Nova’s integrated metrology products, while customers increased sampling rates and expanded applications for its X-ray photoelectron spectroscopy, or XPS, platform.
Waisman said a significant order from a major memory customer strengthened the company’s demand profile for 2027. He expects continued strong double-digit growth in DRAM investments next year, alongside a move to more advanced manufacturing nodes.
Advanced packaging also contributed record results. More than 10 customers have placed orders for or completed acceptance of Nova’s WMC platform, which is used in logic and high-bandwidth memory applications, Waisman said. Additional evaluations are underway, and sales to outsourced semiconductor assembly and test customers increased significantly.
Logic and foundry accounted for approximately 61% of third-quarter product revenue, while memory and other applications represented 39%, Kizner said. Four customers and four geographic territories each contributed at least 10% of product revenue.
Nova also recorded service revenue, with value-added services revenue rising approximately 50% year over year. Waisman attributed the increase largely to demand for upgrades supporting production at advanced nodes.
Fourth-quarter forecast and finances
Nova forecast fourth-quarter revenue of $305 million to $315 million. It expects GAAP earnings per diluted share of $2.78 to $2.94 and non-GAAP earnings per diluted share of $3.03 to $3.18.
Third-quarter gross margin was 57.7% on a GAAP basis and 59.1% on a non-GAAP basis. Operating margin reached 32% under GAAP and 35.5% on a non-GAAP basis, exceeding the upper end of the company’s 28% to 33% target range, Kizner said.
At the midpoint of fourth-quarter guidance, Nova expects gross margin of approximately 57% on a GAAP basis and 59% on a non-GAAP basis. Kizner said the company does not currently see gross-margin headwinds, although the quarterly figure could fluctuate by one percentage point in either direction.
Nova ended the third quarter with $1.8 billion in cash equivalents, bank deposits and marketable securities. Free cash flow was $132 million for the quarter and approximately $206 million for the first nine months of 2026. The company repurchased approximately $38.5 million of shares during the quarter following a $200 million authorization announced in September.
2027 opportunities and competition
Waisman said a shift toward gate-all-around transistors could benefit Nova because metrology intensity is about 30% higher than for FinFET devices, and Nova has a higher share across gate-all-around customers. The company remains on track to generate a cumulative $500 million in gate-all-around revenue from 2024 through 2026, he said, but declined to quantify expected revenue for 2027.
Nova’s AncoScene chemical metrology platform completed acceptance and was released for high-volume manufacturing at a leading foundry during the third quarter. Waisman said the company is pursuing additional customers and gaining share across several regions.
Waisman also expects potential new competition in XPS metrology toward the second half of 2027, though he cautioned that it is not yet clear whether the initial competition will be meaningful. Nova is investing in new products and lower cost of ownership to maintain its position, he said.
The rapid industry ramp is stretching Nova’s supply chain, Waisman said. The company is working with suppliers on capacity, broadening its supply base and expanding manufacturing infrastructure, including a new clean room in Asia expected to become operational by year-end.
Nova plans to discuss its future strategy at an investor day on March 9, 2027, in New York City.
About Nova (NASDAQ:NVMI)
Nova Ltd. (NASDAQ: NVMI) develops and supplies metrology and process-control solutions for the semiconductor manufacturing industry. Its systems help chipmakers measure and control critical dimensions, film thickness, material properties and other characteristics during the production of integrated circuits.
The company’s product portfolio includes optical and X-ray metrology systems, chemical metrology solutions, and related software and analytics tools. These technologies are used in multiple stages of semiconductor fabrication, including front-end wafer processing and advanced packaging, to support process development, yield improvement and manufacturing control.
Founded in 1993, Nova is headquartered in Rehovot, Israel, and serves semiconductor manufacturers and other industry customers through operations and support activities across North America, Europe and Asia.
