Photronics Inc. reported fiscal third-quarter 2026 revenue of $216 million, exceeding the high end of management’s guidance by $7.25 million and topping analyst expectations of $208.75 million. Revenue rose 3% from the prior year and 3% sequentially, driven by a 4.8% increase in integrated circuit revenue to $155 million, which accounted for 72% of total revenue.
The company’s high-end IC revenue reached a record 44% of IC revenue, reflecting customer demand for advanced nodes such as 28nm, 22nm, and 14nm. Mainstream business revenue declined to $86 million, while flat-panel display revenue totaled $61 million, remaining near all-time highs despite a modest sequential decrease. Gross margin improved to 33%, with operating margin at 21%, and diluted GAAP EPS of $0.49 per share.
Photronics raised its fiscal 2026 CapEx guidance to a range of $255 million to $305 million, down from the prior range of $330 million, citing timing shifts in tool deliveries and customer orders. Year-to-date CapEx totaled $130 million, with quarterly operating cash flow of $76 million, equivalent to 35% of revenue. Cash and short-term investments increased by $35 million to $673 million, including $504 million held within joint ventures in which the company holds a 50.1% stake.
For the fiscal fourth quarter, Photronics guided revenue between $207 million and $227 million, with operating margin expected between 19% and 24%. Non-GAAP diluted EPS is projected at $0.40 to $0.56 per share. The company also outlined strategic initiatives, including the phased ramp-up of its Allen, Texas facility to support higher-end mainstream capacity, and continued progress on its Korea expansion for 8nm mask production.
Shares of Photronics surged 23.32% in premarket trading to $36.16, following a previous close of $29.32. The stock has traded within a 52-week range of $20.05 to $56.
Chairman and CEO George Macricostas noted that the quarter’s results reflected a recovery in semiconductor design releases delayed from the prior quarter, while CFO Eric Rivera emphasized a cautious approach to EUV investments, citing the need to enter the merchant market at an economically viable point.
