Ultra Clean Holdings, Inc. (Nasdaq: UCTT), today reported its financial results for the third quarter ended September 26, 2025.
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“We are very pleased with our third quarter results having achieved our highest gross margins for the year and exceeding the mid-point of our guidance on the top and bottom line,” said James Xiao, CEO. “Despite near-term volatility and reduced visibility, AI-enabled high-performance computing remains the central force behind semiconductor innovation.”
Third Quarter 2025 GAAP Financial Results Total revenue was $510.0 million. Products contributed $445.0 million and Services added $65.0 million. Total gross margin was 16.1%, operating margin was 2.1%, and net loss was $(10.9) million or $(0.24) per diluted share. This compares to total revenue of $518.8 million, gross margin of 15.3%, operating margin of (27.3)%, and net loss of $(162.0) million or $(3.58) per diluted share, in the prior quarter.
Third Quarter 2025 Non-GAAP Financial Results On a non-GAAP basis, gross margin was 17.0%, operating margin was 5.7%, and net income was $12.9 million or $0.28 per diluted share. This compares to gross margin of 16.3%, operating margin of 5.5%, and net income of $12.1 million or $0.27 per diluted share in the prior quarter.
Fourth Quarter 2025 Outlook The Company expects revenue in the range of $480 million to $530 million. The Company expects GAAP diluted net income (loss) per share to be between $(0.11) and $0.09 and non-GAAP diluted net income per share to be between $0.11 and $0.31.
Conference Call The call will take place at 1:45 p.m. PT and can be accessed by dialing 1-800-836-8184 or 1-646-357-8785. No passcode is required. A replay of the call will be available by dialing 1-888-660-6345 or 1-646-517-4150 and entering the confirmation code 83886#. The Webcast will be available on the Investor Relations section of the Company's website at http://uct.com/investors/events/.
About Ultra Clean Holdings, Inc. Ultra Clean Holdings, Inc. is a leading developer and supplier of critical subsystems, components, parts, and ultra-high purity cleaning and analytical services, primarily for the semiconductor industry. Under its Products division, UCT offers its customers an integrated outsourced solution for major subassemblies, improved design-to-delivery cycle times, design for manufacturability, prototyping, and high-precision manufacturing. Under its Services Division, UCT offers its customers tool chamber parts cleaning and coating, as well as micro-contamination analytical services. Ultra Clean is headquartered in Hayward, California. Additional information is available at www.uct.com.
Use of Non-GAAP Measures In addition to providing results that are determined in accordance with Generally Accepted Accounting Principles in the United States of America (“GAAP”), management uses non-GAAP gross margin, non-GAAP operating margin and non-GAAP net income to evaluate the Company's operating and financial results. We believe the presentation of non-GAAP results is useful to investors for analyzing our core business and business trends and comparing performance to prior periods, along with enhancing investors' ability to view the Company's results from management's perspective. The presentation of this additional information should not be considered a substitute for results prepared in accordance with GAAP. Tables presenting reconciliations from GAAP results to non-GAAP results are included at the end of this press release.
The Company defines non-GAAP net income as net income (loss) before amortization of intangible assets, stock-based compensation, restructuring charges, VAT settlement, acquisition activity costs, fair value adjustments, debt refinancing costs, impairment of goodwill, legal-related costs and the tax effects of the foregoing adjustments.
A reconciliation of our guidance for non-GAAP net income per diluted share for the subsequent quarter is not available due to fluctuations in the geographic mix of our earnings from quarter to quarter, which impacts our tax rate and cannot be reasonably predicted or determined. As a result, such reconciliation is not available without unreasonable efforts and we are unable to determine the probable significance of the unavailable information.
Safe Harbor Statement The foregoing information contains, or may be deemed to contain, “forward-looking statements” (as defined in the US Private Securities Litigation Reform Act of 1995) which reflect our current views with respect to future events and financial performance. We use words such as “anticipates,” “projection,” “outlook,” “forecast,” “believes,” “plan,” “expect,” “future,” “intends,” “may,” “will,” “estimates,” “see,” “predicts,” “should” and similar expressions to identify these forward-looking statements. Forward looking statements included in this press release include our expectations about the semiconductor capital equipment market and outlook. All forward-looking statements address matters that involve risks and uncertainties. Accordingly, the Company's actual results may differ materially from the results predicted or implied by these forward-looking statements. These risks, uncertainties and other factors also include, among others, those identified in “Risk Factors,” “Management's Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in our annual report on Form 10-K for the year ended December 27, 2024, as filed with the Securities and Exchange Commission. Ultra Clean Holdings, Inc. undertakes no obligation to publicly update or review any forward-looking statements, whether as a result of new information, future developments or otherwise unless required by law.
Contact: Rhonda Bennetto SVP Investor Relations rbennetto@uct.com
ULTRA CLEAN HOLDINGS, INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited; in millions, except per share data) Three Months Ended Nine Months Ended September 26, September 27, September 26, September 27, 2025 2024 2025 2024Revenues:Products $ 445.0 $ 479.0 $ 1,356.9 $ 1,350.2Services 65.0 61.4 190.4 184.1Total revenues 510.0 540.4 1,547.3 1,534.3Cost of revenues:Products 380.4 403.3 1,163.9 1,141.2Services 47.4 43.7 137.8 128.6Total cost revenues 427.8 447.0 1,301.7 1,269.8Gross margin 82.2 93.4 245.6 264.5Operating expenses:Research and development 7.8 7.1 23.2 21.2Sales and marketing 15.1 14.4 45.5 42.9General and administrative 48.7 46.7 144.1 135.1Impairment of goodwill – – 151.1 -Total operating expenses 71.6 68.2 363.9 199.2Income (loss) from operations 10.6 25.2 (118.3) 65.3Interest income 1.1 1.1 3.0 3.9Interest expense (9.9) (12.0) (29.9) (35.8)Other income (expense), net (1.2) (4.1) (2.5) 9.3Income (loss) before provision for income taxes 0.6 10.2 (147.7) 42.7Provision for income taxes 8.7 9.9 23.3 28.2Net income (loss) (8.1) 0.3 (171.0) 14.5Less: Net income attributable to noncontrolling interests 2.8 2.6 6.9 7.1Net income (loss) attributable to UCT $ (10.9) $ (2.3) $ (177.9) $ 7.4Net income (loss) per share attributable to UCT common stockholders:Basic $ (0.24) $ (0.05) $ (3.93) $ 0.16Diluted $ (0.24) $ (0.05) $ (3.93) $ 0.16Shares used in computing net income (loss) per share:Basic 45.4 45.0 45.2 44.8Diluted 45.4 45.0 45.2 45.4
ULTRA CLEAN HOLDINGS, INC.CONDENSED CONSOLIDATED BALANCE SHEETS(Unaudited; in millions) September 26, December 27, 2025 2024ASSETSCurrent assets:Cash and cash equivalents $ 314.1 $ 313.9Accounts receivable, net of allowance for credit losses 199.5 241.1Inventories 382.2 381.0Prepaid expenses and other current assets 45.6 34.1Total current assets 941.4 970.1Property, plant and equipment, net 329.1 325.9Goodwill 114.2 265.3Intangible assets, net 163.7 184.9Deferred tax assets, net 3.1 3.1Operating lease right-of-use assets 156.9 161.0Other non-current assets 12.1 9.6Total assets $ 1,720.5 $ 1,919.9LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities:Bank borrowings $ 9.9 $ 16.0Accounts payable 191.2 212.5Accrued compensation and related benefits 49.6 50.1Operating lease liabilities 18.6 18.6Other current liabilities 24.1 38.4Total current liabilities 293.4 335.6Bank borrowings, net of current portion 466.5 476.5Deferred tax liabilities 16.4 16.1Operating lease liabilities 155.1 149.2Other liabilities 7.8 6.7Total liabilities 939.2 984.1Equity:UCT stockholders' equity:Common stock 0.1 0.1Additional paid-in capital 572.8 558.4Common shares held in treasury (48.4) (45.0)Retained earnings 192.5 370.4Accumulated other comprehensive loss (7.1) (10.3)Total UCT stockholders' equity 709.9 873.6Noncontrolling interests 71.4 62.2Total equity 781.3 935.8Total liabilities and equity $ 1,720.5 $ 1,919.9
ULTRA CLEAN HOLDINGS, INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited; in millions) Nine Months Ended September 26, September 27, 2025 2024Cash flows from operating activities:Net income (loss) $ (171.0) $ 14.5Adjustments to reconcile net income (loss) to net cash provided by operating activities:Depreciation and amortization 35.5 34.1Amortization of intangible assets 21.2 22.9Stock-based compensation 14.4 12.7Amortization of debt issuance costs 2.1 2.4Impairment of goodwill 151.1 -Change in the fair value of financial instruments (0.1) (21.7)Deferred income taxes 0.4 (1.2)Loss on sale of property, plant and equipment 0.7 1.2Changes in assets and liabilities:Accounts receivable 41.6 (47.3)Inventories (1.2) (28.1)Prepaid expenses and other current assets (6.3) (2.9)Other non-current assets (1.0) 0.6Accounts payable (22.8) 46.1Accrued compensation and related benefits (0.6) 0.2Income taxes payable (12.1) 1.4Operating lease assets and liabilities 10.2 8.1Other liabilities (4.6) 4.9Net cash provided by operating activities 57.5 47.9Cash flows from investing activities:Purchases of property, plant and equipment (40.2) (46.2)Other investing activities 3.2 -Net cash used in investing activities (37.0) (46.2)Cash flows from financing activities:Proceeds from bank borrowings 59.3 67.7Extinguishment of bank borrowings (59.3) (44.2)Proceeds from issuance of common stock 1.1 0.9Principal payments on bank borrowings (18.2) (10.1)Repurchase of shares (3.4) -Employees' taxes paid upon vesting of restricted stock units (1.1) (2.5)Payments of dividends to a joint venture shareholder (0.1) (0.5)Payment of debt issuance costs – (2.5)Other financing activities (0.6) -Net cash provided by (used in) financing activities (22.3) 8.8Effect of exchange rate changes on cash and cash equivalents 2.0 0.7Net increase in cash and cash equivalents 0.2 11.2Cash and cash equivalents at beginning of period 313.9 307.0Cash and cash equivalents at end of period $ 314.1 $ 318.2
ULTRA CLEAN HOLDINGS, INC.REPORTABLE SEGMENTSGAAP TO NON-GAAP RECONCILIATION(Unaudited; dollars in millions) GAAP Non-GAAP ThreeMonthsEnded ThreeMonthsEnded September 26, 2025 September 26, 2025 Products Services Consolidated Products Services ConsolidatedRevenues $ 445.0 $ 65.0 $ 510.0 $ 445.0 $ 65.0 $ 510.0Gross profit $ 64.6 $ 17.6 $ 82.2 $ 67.4 $ 19.5 $ 86.9Gross margin 14.5% 27.1% 16.1% 15.1% 30.0% 17.0%Income from operations $ 7.9 $ 2.7 $ 10.6 $ 22.0 $ 7.2 $ 29.2Operating margin 1.8% 4.2% 2.1% 4.9% 11.1% 5.7% ThreeMonthsEnded September 26, 2025 Products Services ConsolidatedReconciliation of GAAP Gross profit to Non-GAAP Gross profit (in millions)Reported gross profit on a GAAP basis $ 64.6 $ 17.6 $ 82.2Amortization of intangible assets (1) 1.3 1.0 2.3Stock-based compensation expense (2) 0.5 – 0.5Restructuring charges (3) 1.0 1.1 2.1VAT settlement (5) – (0.2) (0.2)Non-GAAP gross profit $ 67.4 $ 19.5 $ 86.9Reconciliation of GAAP Gross margin to Non-GAAP Gross marginReported gross margin on a GAAP basis 14.5% 27.1% 16.1%Amortization of intangible assets (1) 0.3% 1.5% 0.4%Stock-based compensation expense (2) 0.1% -% 0.1%Restructuring charges (3) 0.2% 1.7% 0.4%VAT settlement (5) -% (0.3)% 0.0%Non-GAAP gross margin 15.1% 30.0% 17.0%Reconciliation of GAAP Income from operations to Non-GAAP Income from operations (in millions)Reported income from operations on a GAAP basis $ 7.9 $ 2.7 $ 10.6Amortization of intangible assets (1) 4.0 2.9 6.9Stock-based compensation expense (2) 4.1 0.5 4.6Restructuring charges (3) 5.8 1.3 7.1Legal-related costs (4) 0.2 – 0.2VAT settlement (5) – (0.2) (0.2)Non-GAAP income from operations $ 22.0 $ 7.2 $ 29.2Reconciliation of GAAP Operating margin to Non-GAAP Operating marginReported operating margin on a GAAP basis 1.8% 4.2% 2.1%Amortization of intangible assets (1) 0.9% 4.4% 1.3%Stock-based compensation expense (2) 0.9% 0.8% 0.9%Restructuring charges (3) 1.3% 2.0% 1.4%Legal-related costs (4) 0.0% -% 0.0%VAT settlement (5) -% (0.3)% 0.0%Non-GAAP operating margin 4.9% 11.1% 5.7%1 Amortization of intangible assets related to the Company's business acquisitions2 Represents compensation expense for stock granted to employees and directors3 Represents costs associated with employee separation, severance, retention, and facility related closures expenses4 Represents estimated costs related to certain legal proceedings and a cybersecurity incident5 Represents impact of value added tax ruling
ULTRA CLEAN HOLDINGS, INC.UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED RESULTS Three Months Ended September 26, September 27, June 27, 2025 2024 2025Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income (in millions)Reported net loss attributable to UCT on a GAAP basis $ (10.9) $ (2.3) $ (162.0)Amortization of intangible assets (1) 6.9 7.6 7.0Stock-based compensation expense (2) 4.6 4.5 7.1Restructuring charges (3) 7.1 0.3 4.8VAT settlement (4) (0.2) – -Legal-related costs (5) 0.2 1.3 0.3Debt refinancing costs expensed (6) 1.1 – -Fair value related adjustments (7) – 0.8 -Impairment of goodwill (8) – – 151.1Acquisition related costs (9) – 0.6 -Income tax effect of non-GAAP adjustments (10) (4.5) (4.1) (34.1)Income tax effect of valuation allowance (11) 8.6 7.2 37.9Non-GAAP net income attributable to UCT $ 12.9 $ 15.9 $ 12.1Reconciliation of GAAP Income (loss) from operations to Non-GAAP Income from operations (in millions)Reported income (loss) from operations on a GAAP basis $ 10.6 $ 25.2 $ (141.8)Amortization of intangible assets (1) 6.9 7.6 7.0Stock-based compensation expense (2) 4.6 4.5 7.1Restructuring charges (3) 7.1 0.3 4.8VAT settlement (4) (0.2) – -Legal-related costs (5) 0.2 1.3 0.3Impairment of goodwill (8) – – 151.1Acquisition related costs (9) – 0.6 -Non-GAAP income from operations $ 29.2 $ 39.5 $ 28.5Reconciliation of GAAP Operating margin to Non-GAAP Operating marginReported operating margin on a GAAP basis 2.1% 4.7% (27.3)%Amortization of intangible assets (1) 1.3% 1.4% 1.3%Stock-based compensation expense (2) 0.9% 0.8% 1.4%Restructuring charges (3) 1.4% 0.1% 0.9%VAT settlement (4) 0.0% -% -%Legal-related costs (5) 0.0% 0.2% 0.1%Impairment of goodwill (8) -% -% 29.1%Acquisition related costs (9) -% 0.1% -%Non-GAAP operating margin 5.7% 7.3% 5.5%Reconciliation of GAAP Gross profit to Non-GAAP Gross profit (in millions)Reported gross profit on a GAAP basis $ 82.2 $ 93.4 $ 79.5Amortization of intangible assets (1) 2.3 2.3 2.3Stock-based compensation expense (2) 0.5 0.3 0.4Restructuring charges (3) 2.1 – 2.4VAT settlement (4) (0.2) – -Non-GAAP gross profit $ 86.9 $ 96.0 $ 84.6Reconciliation of GAAP Gross margin to Non-GAAP Gross marginReported gross margin on a GAAP basis 16.1% 17.3% 15.3%Amortization of intangible assets (1) 0.4% 0.4% 0.4%Stock-based compensation expense (2) 0.1% 0.1% 0.1%Restructuring charges (3) 0.4% -% 0.5%VAT settlement (4) 0.0% -% -%Non-GAAP gross margin 17.0% 17.8% 16.3%Reconciliation of GAAP Other income (expense), net to Non-GAAP Other income (expense), net (in millions)Reported Other income (expense), net on a GAAP basis $ (1.2) $ (4.1) $ (2.2)Debt refinancing costs expensed (6) 1.1 – -Fair value related adjustments (7) – 0.8 -Non-GAAP Other income (expense), net $ (0.1) $ (3.3) $ (2.2)Reconciliation of GAAP Income (Loss) Per Diluted Share to Non-GAAP Earnings Per Diluted ShareDiluted net loss on a GAAP basis $ (0.24) $ (0.05) $ (3.58)Amortization of intangible assets (1) 0.15 0.17 0.15Stock-based compensation expense (2) 0.10 0.10 0.16Restructuring charges (3) 0.16 0.00 0.10VAT settlement (4) 0.00 – -Legal-related costs (5) 0.00 0.03 0.01Debt refinancing costs expensed (6) 0.02 – -Fair value related adjustments (7) – 0.02 -Impairment of goodwill (8) – – 3.34Acquisition related costs (9) – 0.01 -Income tax effect of non-GAAP adjustments (10) (0.10) (0.09) (0.75)Income tax effect of valuation allowance (11) 0.19 0.16 0.84Non-GAAP net earnings $ 0.28 $ 0.35 $ 0.27Weighted average number of diluted shares (in millions) on a 45.6 45.5 45.3non-GAAP basisULTRA CLEAN HOLDINGS, INC.UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP EFFECTIVE INCOME TAX RATE Three Months Ended September 26, September 27, June 27, 2025 2024 2025Provision for income taxes on a GAAP basis $ 8.7 $ 9.9 $ 7.2Income tax effect of non-GAAP adjustments (10) 4.5 4.1 34.1Income tax effect of valuation allowance (11) (8.6) (7.2) (37.9)Non-GAAP provision for income taxes $ 4.6 $ 6.8 $ 3.4Income (loss) before income taxes on a GAAP basis $ 0.6 $ 10.2 $ (153.3)Amortization of intangible assets (1) 6.9 7.6 7.0Stock-based compensation expense (2) 4.6 4.5 7.1Restructuring charges (3) 7.1 0.3 4.8VAT settlement (4) (0.2) – -Legal-related costs (5) 0.2 1.3 0.3Debt refinancing costs expensed (6) 1.1 – -Fair value related adjustments (7) – 0.8 -Impairment of goodwill (8) – – 151.1Acquisition related costs (9) – 0.6 -Non-GAAP income before income taxes $ 20.3 $ 25.3 $ 17.0Effective income tax rate on a GAAP basis 1450.0% 97.1% (4.7)%Non-GAAP effective income tax rate 22.7% 27.1% 20.0%
1 Amortization of intangible assets related to the Company's business acquisitions2 Represents compensation expense for stock granted to employees and directors3 Represents costs associated with employee separation, severance, retention, and facility related closures expenses4 Represents impact of value added tax ruling5 Represents estimated costs related to certain legal proceedings and a cybersecurity incident6 Represents the third party transaction costs related to the amended credit agreement and the previously capitalized costs of extinguished debt7 Fair value adjustments related to contingent consideration8 Represents non-cash charges related to the impairment of goodwill9 Represents acquisition activity costs10 Tax effect of items (1) through (9) above based on the non-GAAP tax rate11 The Company's GAAP tax expense is generally higher than the Company's non-GAAP tax expense, primarily due to losses in the U.S. with full federal and state valuation allowances. The Company's non-GAAP tax rate and resulting non-GAAP tax expense considers the tax implications as if there was no federal or state valuation allowance position in effect
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SOURCE Ultra Clean Holdings, Inc.
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