Nova Ltd. Posts Record $255 Million Quarter on AI-Driven Semiconductor Demand
The Israeli metrology specialist exceeded guidance with Q2 revenue at the high end of projections, driven by advanced logic and packaging applications as it positions for accelerated growth.
Record Results Exceed Expectations
Nova Ltd. (NVMI), the Israeli semiconductor metrology equipment maker, reported record second-quarter revenue of $255 million, at the high end of its guidance range, marking the first time quarterly revenue surpassed $250 million (earnings call, 2026-08-06). The company posted non-GAAP earnings per share of $2.51, also exceeding $2.50 for the first time and beating the upper bound of guidance.
The results represent 8% sequential growth and 16% year-over-year growth, driven by what CEO Gaby Waisman described as "strong execution amid a favorable industry backdrop, characterized by accelerating technology transitions and capacity investments" (earnings call, 2026-08-06).
Advanced Logic Doubles Sequential Revenue
Revenue from advanced logic more than doubled quarter-over-quarter as customers expanded production capacity for AI-related chips. The company's VeraFlex XPS platform for materials metrology gained traction in gate-all-around manufacturing, prompting Nova to double its U.S. manufacturing capacity through a clean room expansion in California (earnings call, 2026-08-06).
Advanced packaging emerged as another growth driver, delivering record sales that represented nearly 25% of product revenue. Waisman highlighted a tool-of-record selection by a leading foundry customer for the company's Nova WMC platform for advanced packaging production flows (earnings call, 2026-08-06).
The product revenue mix skewed 73% to logic and foundry versus 27% to memory and others, with Waisman projecting memory to reach approximately 30% of revenue for the full year (earnings call, 2026-08-06).
Strong Margins and Operating Leverage
Non-GAAP gross margins reached 58%, while operating margins hit 33%, at the upper end of the company's 28% to 33% target range (earnings call, 2026-08-06). CFO Guy Kizner attributed the performance to revenue growth and "the company robust operational model" (earnings call, 2026-08-06).
Service revenue also reached a record level, augmented by value-added services including tool upgrades that enable customers to address new applications and materials (earnings call, 2026-08-06).
Guidance Points to Continued Momentum
For the third quarter, Nova expects revenue between $277 million and $287 million, representing sequential growth of 9% to 13% at the midpoint. Non-GAAP EPS guidance of $2.70 to $2.85 suggests continued margin strength (earnings call, 2026-08-06).
The company anticipates delivering "another year of double-digit growth, supported by sustained customer investment, broader adoption of our solution and continued market share gains," according to Waisman (earnings call, 2026-08-06). He noted that Nova is "on a path to reaching our organic growth objectives sooner than originally planned" and announced plans for an investor day during the first quarter of 2027 to outline the next phase of long-term strategic planning (earnings call, 2026-08-06).
When asked about 2027 visibility amid industry projections for 40% wafer fab equipment growth, Waisman said the company is working closely with customers on capacity planning and already receiving orders for 2027 deliveries, though cautioned it was "too early to say whether 2027 will grow 40%" (earnings call, 2026-08-06).
Nova ended the quarter with more than $1.7 billion in cash and investments, providing flexibility for continued R&D investment and selective M&A opportunities (earnings call, 2026-08-06).
This article was generated by MarginX from the earnings call on 2026-08-06. It is not investment advice.