Kulicke & Soffa (NASDAQ: KLIC) reported fiscal Q3 2026 revenue of $330.4 million, up about 123% from $148.4 million a year earlier, while diluted EPS improved to $1.07 from a loss of $0.06. Net income reached $57.4 million, and higher sales helped lift GAAP operating margin to 20.7% from negative 4.1%. Management said demand conditions continued to improve across all end markets.
Core Earnings Data
The revenue increase produced substantial operating leverage. Gross profit rose faster than revenue, while operating expenses increased by a much smaller amount, allowing the company to move from an operating loss to a $68.3 million operating profit.
Non-GAAP diluted EPS reached $1.20 after excluding $6.8 million of net adjustments, primarily equity-based compensation, amortization and restructuring costs, partly offset by related tax benefits.
| Metric | Fiscal Q3 2026 | Fiscal Q3 2025 | Year-over-year change |
|---|---|---|---|
| Revenue | $330.4 million | $148.4 million | Approximately +123% |
| Gross profit | $157.9 million | $69.2 million | Approximately +128% |
| Gross margin | 47.8% | Approximately 46.7% | Approximately +1.1 points |
| GAAP operating income (loss) | $68.3 million | $(6.1) million | Returned to profit |
| GAAP operating margin | 20.7% | (4.1)% | +24.8 points |
| GAAP net income (loss) | $57.4 million | $(3.3) million | Returned to profit |
| GAAP diluted EPS | $1.07 | $(0.06) | Returned to profit |
| Non-GAAP diluted EPS | $1.20 | $0.07 | Increased by $1.13 |
| Operating cash flow | $45.2 million | $7.4 million | Increased by $37.8 million |
| Adjusted free cash flow | $41.0 million | $5.4 million | Increased by $35.5 million |
Revenue Growth Restored Operating Leverage
Revenue increased by approximately $182.0 million year over year, lifting gross profit by about $88.7 million. By comparison, operating expenses rose by approximately $14.3 million to $89.7 million, even as selling, general and administrative expenses and research and development spending both increased.
That relationship explains the sharp improvement in profitability: the larger gross profit contribution more than absorbed higher expenses. GAAP operating margin expanded to 20.7%, while non-GAAP operating margin reached 22.9%, compared with 1.1% in the prior-year quarter.
The improvement was not limited to the year-over-year comparison. Revenue increased from $242.6 million in fiscal Q2, while GAAP operating margin rose from 15.9% and non-GAAP operating margin increased from 19.1%.
Profitability, Cash Flow and Balance Sheet
Quarterly cash generation improved alongside earnings. Operating cash flow reached $45.2 million, and adjusted free cash flow was $41.0 million after purchases and proceeds related to property, plant and equipment.
The nine-month picture shows weaker cash conversion than the quarterly result alone. Fiscal year-to-date operating cash flow was $46.6 million, down from $105.0 million a year earlier, even though nine-month net income improved to $109.4 million from a $6.2 million loss. Since the end of fiscal 2025, accounts and other receivables increased by about $146.0 million and inventory rose by approximately $66.9 million. Accounts payable and accrued liabilities also increased, partially offsetting that working-capital build.
Cash and cash equivalents totaled $368.6 million on July 4, while short-term investments were $148.0 million, bringing combined liquidity from those two categories to $516.6 million. The company repurchased 5,000 shares for $0.5 million during the quarter.
Fiscal Q4 2026 Guidance
K&S expects another sequential revenue increase in the quarter ending October 3, 2026. The $375 million revenue midpoint would represent approximately 13.5% growth from fiscal Q3, while the central GAAP and non-GAAP EPS targets are also above the latest quarter’s results.
| Metric | Fiscal Q4 2026 outlook |
|---|---|
| Revenue | Approximately $375 million, plus or minus $20 million |
| GAAP diluted EPS | Approximately $1.29, plus or minus 10% |
| Non-GAAP diluted EPS | Approximately $1.42, plus or minus 10% |
| GAAP operating expenses | Approximately $95.1 million, plus or minus 2% |
| Non-GAAP operating expenses | Approximately $87.5 million, plus or minus 2% |
The EPS outlook assumes approximately 53.0 million diluted weighted-average shares. Beyond the next quarter, K&S expects its expanded Advanced Solutions production facility to be completed as scheduled during the second half of fiscal 2027.
Recent Insider Transactions
The supplied insider data shows 6,492 shares purchased and 174,456 shares sold over the past six months, resulting in net sales of 167,964 shares. The latest 10 reported transactions consist of six stock grants with no reported cash value and four sales; those transactions do not by themselves establish insiders’ views on the company’s outlook.
| Date | Insider and role | Transaction | Reported amount |
|---|---|---|---|
| July 6, 2026 | Mui Sung Yeo, Director | Stock grant | $0 |
| July 6, 2026 | Denise Dignam, Director | Stock grant | $0 |
| July 6, 2026 | Gregory F. Milzcik, Director | Stock grant | $0 |
| July 6, 2026 | David Jeffrey Richardson, Director | Stock grant | $0 |
| July 6, 2026 | Jon A. Olson, Director | Stock grant | $0 |
| July 6, 2026 | Peter Tat-Ming Kong, Director | Stock grant | $0 |
| June 18, 2026 | Lester Alfred Wong, CEO | Sale | $7,302,552 |
| June 12, 2026 | Nelson Munpun Wong, Officer | Sale | $1,705,788 |
| June 11, 2026 | Peter Tat-Ming Kong, Director | Sale | $170,610 |
| May 20, 2026 | Mui Sung Yeo, Director | Sale | $2,000,000 |
Risks Investors Should Monitor
- Demand must support the Q4 ramp: The revenue guidance midpoint assumes another sequential increase. If the reported improvement across end markets does not continue, revenue and operating leverage could fall short of the company’s outlook.
- Working capital could limit cash conversion: Receivables and inventory have increased substantially since fiscal year-end, while nine-month operating cash flow remains below the prior-year level despite improved earnings.
- Facility execution remains important: The expanded Advanced Solutions production facility is scheduled for completion in the second half of fiscal 2027. Delays or difficulties expanding and relocating capacity could affect the company’s ability to meet customer production requirements.
- Business-cessation execution carries uncertainty: The company identifies potential failures or delays in completing the cessation of its Electronics Assembly equipment business as a factor that could affect future results.
Summary
K&S’s fiscal Q3 recovery was driven by a sharp increase in revenue that more than offset higher operating expenses, restoring profitability and improving quarterly cash flow. Fiscal Q4 guidance calls for the sequential expansion to continue. The main issues to monitor are whether improving demand can sustain that outlook, whether higher receivables and inventory translate into stronger cash conversion, and whether planned operational changes remain on schedule.
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