Photronics Posts $42.9M Profit on 6% Revenue Jump in Q1 FY2026

Photronics, Inc. (NASDAQ: PLAB), a manufacturer of photomasks for the semiconductor and flat panel display industries, reported net income of $42.9 million for the three months ending February 1, 2026, essentially flat versus $42.9 million in the prior-year quarter. Revenue climbed 6.1% to $225.1 million from $212.1 million a year earlier. Read more earnings reports.

The company's gross profit expanded to $78.7 million from $75.5 million, while operating income rose to $54.9 million from $52.2 million in the prior-year period. Operating expenses ticked up 2.3% to $23.9 million, driven primarily by higher selling, general and administrative costs of $21.3 million versus $19.1 million.

Diluted earnings per share came in at $0.74, up from $0.68 a year earlier. The share count reflected 58.4 million diluted weighted average shares outstanding compared to 62.7 million in the prior-year quarter.

Balance Sheet and Cash Position

Total assets rose to $1.90 billion as of February 1, 2026, from $1.80 billion at the end of the prior quarter on October 31, 2025. Cash and cash equivalents stood at $544.1 million, up from $492.3 million three months earlier.

The company's property, plant and equipment balance grew to $894.6 million from $854.4 million at the end of October. Accounts payable jumped to $111.7 million from $84.2 million, reflecting increased capital spending activity.

Stockholders' equity increased to $1.21 billion from $1.17 billion at the end of the prior quarter. Retained earnings climbed to $814.3 million from $772.2 million.

Cash Flow

Cash from operations totaled $97.3 million for the quarter, a 24% increase from $78.5 million in the same period last year. The company used $40.3 million in investing activities, a reversal from the prior-year quarter when it generated $6.8 million from investing.

Financing activities contributed $749,000 in cash, contrasting with a $20.5 million outflow in the prior-year period.

Segment Performance

The IC segment, which produces photomasks for integrated circuits, generated $165.3 million in revenue compared to $154.0 million a year earlier. The FPD segment, serving flat panel display manufacturers, posted $59.8 million in revenue versus $58.2 million.

High-end IC revenue rose to $71.3 million from $60.1 million, while mainstream IC revenue held essentially flat at $94.0 million versus $93.9 million. Other revenue, including services, increased to $12.8 million from $8.5 million.

Operating Metrics

Cost of goods sold increased to $146.4 million from $136.6 million, reflecting the higher revenue base. Research and development expenses declined to $2.6 million from $4.3 million in the prior-year quarter.

The effective tax rate for the quarter was 25.0%, down from 30.6% a year earlier, contributing to the improved per-share earnings despite flat net income.