Nova’s third quarter saw revenue and non-GAAP profits roughly in line with Wall Street expectations, but the market responded negatively. Management attributed the quarter's growth to robust demand in advanced nodes and packaging—particularly from memory devices such as DRAM and high-bandwidth memory. CEO Gabriel Waisman highlighted record service revenues and strong adoption of the ELIPSON and METRION platforms in materials metrology. He also noted that “our record sales in memory this quarter was driven by several key achievements,” including new wins in key memory and logic applications.
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Nova (NVMI) Q3 CY2025 Highlights:
- Revenue: $224.6 million vs analyst estimates of $221.2 million (25.5% year-on-year growth, 1.5% beat)
- Adjusted EPS: $2.16 vs analyst estimates of $2.15 (in line)
- Adjusted EBITDA: $76.22 million vs analyst estimates of $77.19 million (33.9% margin, 1.3% miss)
- Revenue Guidance for Q4 CY2025 is $220 million at the midpoint, above analyst estimates of $214.9 million
- Adjusted EPS guidance for Q4 CY2025 is $2.11 at the midpoint, above analyst estimates of $2.09
- Operating Margin: 28.4%, in line with the same quarter last year
- Inventory Days Outstanding: 171, down from 180 in the previous quarter
- Market Capitalization: $9.25 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Nova’s Q3 Earnings Call
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Atif Malik (Citi) asked if Nova could outperform the overall wafer fab equipment (WFE) market amid changing memory dynamics. CEO Gabriel Waisman said Nova expects to outperform, with growth likely weighted toward the second half of next year.
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Atif Malik (Citi) questioned margin fluctuations and the impact of China trade restrictions. CFO Guy Kizner replied that gross margin shifts are mainly due to product mix and that China restrictions have not had a significant impact.
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Ezra Weener (Jefferies) inquired about the sharp rise in memory sales and expectations for next year. Waisman emphasized DRAM recovery and continued adoption of Nova’s memory portfolio as positive signs for 2026.
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Unknown Analyst (Bank of America) asked about the trajectory for gate-all-around technology. Waisman said Nova’s exposure spans all four leading manufacturers, with business on track for $500 million over three years.
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Yu Shi (Needham) requested color on China trends and visibility. Waisman stated that while China business has normalized, limited visibility and a dynamic market add uncertainty for next year.
Catalysts in Upcoming Quarters
In the coming quarters, our analysts will closely watch (1) the pace of adoption for Nova’s WMC platform and other advanced packaging tools, (2) the ramp-up in gate-all-around and memory-related revenues, and (3) the company’s ability to maintain or improve gross margins despite shifts in product mix and geographic exposure. Execution in scaling new manufacturing capacity and progress in securing new customer wins will also be key signposts.
Nova currently trades at $311.87, down from $341.38 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free for active Edge members).
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