Semiconductor photomask manufacturer Photronics (NASDAQ: PLAB) reported Q4 CY2025 results exceeding the market’s revenue expectations, with sales up 6.1% year on year to $225.1 million. The company expects next quarter’s revenue to be around $216 million, close to analysts’ estimates. Its non-GAAP profit of $0.61 per share was 15.1% above analysts’ consensus estimates.
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Photronics (PLAB) Q4 CY2025 Highlights:
- Revenue: $225.1 million vs analyst estimates of $220.1 million (6.1% year-on-year growth, 2.3% beat)
- Adjusted EPS: $0.61 vs analyst estimates of $0.53 (15.1% beat)
- Adjusted EBITDA: $77.51 million (34.4% margin, 39.4% year-on-year growth)
- Revenue Guidance for Q1 CY2026 is $216 million at the midpoint, roughly in line with what analysts were expecting
- Adjusted EPS guidance for Q1 CY2026 is $0.52 at the midpoint, above analyst estimates of $0.50
- Operating Margin: 24.4%, in line with the same quarter last year
- Free Cash Flow Margin: 22%, up from 20.4% in the same quarter last year
- Inventory Days Outstanding: 39, down from 40 in the previous quarter
- Market Capitalization: $2.2 billion
Commenting on the first quarter performance, Chairman and CEO George Macricostas said, “Photronics delivered strong results in our fiscal first quarter achieving record high-end IC revenue for the second consecutive quarter. We remain on track with our facility expansion plans, which along with continuous process improvements and the refinement of our execution, will diversify our geographic revenue mix as industry regionalization continues.”
Company Overview
Sporting a global footprint of facilities, Photronics (NASDAQ: PLAB) is a manufacturer of photomasks, templates used to transfer patterns onto semiconductor wafers.
Revenue Growth
A company’s long-term sales performance can indicate its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Over the last five years, Photronics grew its sales at a decent 7.4% compounded annual growth rate. Its growth was slightly above the average semiconductor company and shows its offerings resonate with customers. Semiconductors are a cyclical industry, and long-term investors should be prepared for periods of high growth followed by periods of revenue contractions.
We at StockStory place the most emphasis on long-term growth, but within semiconductors, a half-decade historical view may miss new demand cycles or industry trends like AI. Photronics’s recent performance marks a sharp pivot from its five-year trend as its revenue has shown annualized declines of 2% over the last two years. 
This quarter, Photronics reported year-on-year revenue growth of 6.1%, and its $225.1 million of revenue exceeded Wall Street’s estimates by 2.3%. Adding to the positive news, Photronics’s growth inflected positively this quarter, news that will likely give some shareholders hope. Company management is currently guiding for a 2.4% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 4.3% over the next 12 months. While this projection indicates its newer products and services will fuel better top-line performance, it is still below average for the sector.
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Product Demand & Outstanding Inventory
Days Inventory Outstanding (DIO) is an important metric for chipmakers, as it reflects a business’ capital intensity and the cyclical nature of semiconductor supply and demand. In a tight supply environment, inventories tend to be stable, allowing chipmakers to exert pricing power. Steadily increasing DIO can be a warning sign that demand is weak, and if inventories continue to rise, the company may have to downsize production.
This quarter, Photronics’s DIO came in at 39, which is one day above its five-year average. At the moment, these numbers show no indication of an excessive inventory buildup.
Key Takeaways from Photronics’s Q4 Results
It was good to see Photronics beat analysts’ EPS expectations this quarter. We were also happy its revenue outperformed Wall Street’s estimates. Overall, we think this was a decent quarter with some key metrics above expectations. The stock traded up 6.8% to $40.56 immediately following the results.
Photronics may have had a good quarter, but does that mean you should invest right now? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).
