Nova (NASDAQ:NVMI) reported record results for the fourth quarter and full year 2025, highlighting strength across its metrology portfolio and continued demand tied to leading-edge logic, advanced packaging and memory investments. On the company’s earnings call, management also outlined early 2026 expectations, citing a constructive wafer fab equipment (WFE) backdrop and order patterns that it said point to another growth year.
Record 2025 performance and fourth-quarter results
President and CEO Gaby Waisman said 2025 was “an exceptional year,” with record annual revenue of $880.6 million, up 31% year-over-year. He added that the company delivered record GAAP and non-GAAP profitability, with earnings per share growth of 29% year-over-year.
Gross margin in the fourth quarter was 57.6% on a GAAP basis and 59.6% on a non-GAAP basis, which Kizner attributed to a favorable product mix. Operating expenses rose to $67.5 million GAAP and $62 million non-GAAP as the company increased targeted spending in R&D and sales and marketing. Operating margin was 27% GAAP and 32% non-GAAP.
Fourth-quarter GAAP EPS was $1.94 and non-GAAP EPS was $2.14, exceeding the midpoint of guidance. Kizner said the GAAP tax rate was about 11%, primarily reflecting the release of uncertain tax positions after the completion of a tax assessment audit, while the non-GAAP tax rate was about 16%.
Business drivers: Gate-All-Around, advanced packaging and memory
Waisman described 2026 as beginning with “a robust investment cycle,” citing accelerating demand for leading-edge nodes and continued investment in mature nodes. He pointed to increasing process complexity, more process steps, and adoption of integration methods such as backside power delivery and hybrid bonding as drivers for more precise metrology.
Among fourth-quarter highlights, Waisman said a “global leading logic customer” selected Nova’s integrated metrology portfolio for CMP applications across Gate-All-Around processes. He said the customer adopted the full CMP product suite, expanding earlier back-end deployment into front-end, high-volume manufacturing. Management said multiple orders have already been placed for 2026, with additional orders expected as capacity ramps.
Waisman also said services delivered record quarterly and annual revenue, driven by capacity installation, adoption of value-added services aimed at yield improvement, and an effort to shift from time-and-materials arrangements to annual service contracts. He added that teams received multiple service excellence awards from customers in Asia.
Management characterized 2025 growth as broad-based:
- Gate-All-Around: Waisman said Nova is “firmly established” as a foundational partner in the transition to next-generation architectures and expects demand to increase further in 2026.
- Advanced packaging: Revenue rose more than 60% year-over-year and represented about 20% of product revenue, with traction across dimensional and chemical metrology platforms.
- Memory: The company posted record results driven primarily by DRAM, as manufacturers expanded adoption of materials and chemical metrology offerings.
Portfolio positioning and share commentary
On the call, Waisman cited Gartner’s latest report for 2024, saying Nova became second in market share in CD and film, at roughly 25%, and that it is seeing continued gains across its portfolio.
He highlighted several product and qualification milestones, including Elipson being selected as a tool of record by a leading foundry for advanced Gate-All-Around production and recent adoption of the Metrion platform in Gate-All-Around, as well as in advanced 3D NAND and DRAM manufacturing. Waisman said the company recently shipped its 300th XPS tool and described both Elipson and Metrion as important growth engines, while noting the company remains in an early phase of proliferation with a goal of scaling to “multiple tool per fab” deployments over time.
Waisman also discussed an emerging opportunity in silicon photonics, which he said requires highly accurate measurement of optical structures and opens new opportunities for Nova’s alignment and 3D characterization capabilities.
Geographic trends and China commentary
Kizner said the company’s 2025 geographic revenue split was China 33%, Taiwan 29%, Korea 16%, U.S. 9%, and other territories 13%. Addressing China on the Q&A, Waisman said China represented 39% of business in 2024 before “normalizing” to 33% in 2025, and he expects China to represent around 30% of sales going forward.
He added that shorter lead times in China reduce visibility, and he said that as advanced nodes and DRAM investments increase globally—while China remains more focused on mature nodes—China’s share could decline even if nominal sales remain flat. He also said the company is seeing signs of improvement in China and has more confidence in the nominal level of business there for 2026.
Outlook: Q1 2026 guidance, WFE view, and capacity plans
For the first quarter of 2026, Kizner guided for revenue of $222 million to $232 million, GAAP EPS of $1.90 to $2.02, and non-GAAP EPS of $2.13 to $2.25. At the midpoint, the company expects gross margin of about 56% GAAP and 58% non-GAAP, GAAP operating expenses of about $65 million and non-GAAP operating expenses of about $60 million, non-GAAP financial income of about $16 million, and an effective tax rate of about 16%.
In discussing the broader 2026 environment, Waisman said the company anticipates WFE growth in the low double digits and expects to outperform. He told analysts that momentum is expected to build through the first half of 2026 and accelerate in the second half. He also said Nova has invested over the last year to expand manufacturing capacity, including clean room capacity for advanced packaging, and is continuing to invest in infrastructure such as a new ERP system and new production capacity in Asia.
When asked about lead times and potential optical-component constraints, Waisman said there is more pressure on lead times, which affects visibility, but he emphasized Nova’s operational agility and work with suppliers to ensure materials and capacity. He said the lead time pressure is driven by customers converting CapEx plans into equipment orders and deliveries, and that it affects the company’s portfolio broadly rather than being tied to a specific component.
On profitability, management said quarter-to-quarter gross margin can fluctuate with product mix and that the company does not see a correlation between memory pricing and its gross margin.
Nova ended 2025 with more than $1.6 billion in cash, cash equivalents, bank deposits and marketable securities, and generated $218 million in free cash flow during the year, according to Kizner.
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.
