Ichor Extends Margin Expansion as Sequential Sales Growth Cools

The Tip Desk · November 3, 2026 · 2 min read

Third-quarter revenue was $328.7 million, up 37% from a year earlier, while GAAP diluted earnings reached $0.55 a share.

Ichor Holdings, Ltd. (ICHR), a designer and manufacturer of fluid-delivery subsystems for semiconductor capital equipment, reported third-quarter revenue of $328.7 million, up 37% from a year earlier. Sequential growth slowed to 12% from 15% in the second quarter.

The company said it was executing an exceptionally steep revenue ramp, with third-quarter sales up nearly 50% from the fourth quarter of 2025, and described the three-quarter increase as unprecedented. Chief executive Phil Barros said customer demand remains robust, with visibility extending well into 2027.

Profitability widened even as the sequential sales pace eased. GAAP gross margin expanded to 15.8% from 13.9% in the second quarter, after 12.6% in the first quarter. Non-GAAP gross margin was 16.0%. GAAP operating margin widened to 6.9% from 2.4%. Non-GAAP operating margin was 8.6%.

GAAP net income was $20.9 million, or $0.55 a share, compared with $1.0 million, or $0.03 a share, in the second quarter. Non-GAAP net income was $24.2 million, or $0.63 a share, versus $12.2 million, or $0.34 a share. A year earlier, the company posted a GAAP net loss of $22.9 million, or $0.67 a share.

Barros said the realignment of the global footprint into volume manufacturing sites and a steady increase in proprietary Ichor content were delivering planned operating-model improvements. He said the company is investing to support customers’ growth well beyond this year and expects structural improvements in the operating model to help further earnings leverage as revenues continue to ramp.

Cash and cash equivalents ended the quarter at $213.5 million, down $43.0 million from $256.5 million at the end of the second quarter. The company said the decline reflected net cash used in operating activities of $28.8 million, capital expenditures of $10.7 million, share-based compensation issuances net of taxes of $1.9 million, and $1.6 million of credit-facility payments. Operating cash outflow widened from $15.9 million used in the second quarter. The company said the increase in net operating assets and liabilities of $58.8 million was primarily due to a $39.5 million rise in inventory and a $36.0 million rise in accounts receivable, partially offset by higher accrued liabilities, accounts payable, and lower prepaid expenses.

For the fourth quarter of 2026, Ichor expects revenue of $345 million to $365 million, with a midpoint of $355 million. GAAP diluted EPS is expected at $0.50 to $0.60, and non-GAAP diluted EPS at $0.65 to $0.75. The company said that outlook indicates continued sequential growth in revenues, gross margin, and earnings per share. The non-GAAP EPS range excludes about $1.9 million of intangible-asset amortization and about $4.0 million of share-based compensation, plus related tax effects.