Semiconductor quality control company Nova (NASDAQ:NVMI) reported Q3 2026 results topping the market's revenue expectations , with revenue rising 28.2% year on year to $287.8 million. Guidance for next quarter's revenue was better than expected at $310 million at the midpoint, 1.9% above analysts' consensus estimates. Its non-GAAP profit of $2.86 per share was 2.8% above analysts' consensus estimates.
For more on Nova, read our full research report .
Nova (NVMI) Q3 2026 highlights:
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Revenue$287.8 million vs S&P analysts' consensus estimates of $282.1 million (28.2% year-on-year growth, 2% beat)
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Adjusted EPS$2.86 vs S&P analysts' consensus estimates of $2.78 (2.8% beat)
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Adjusted operating income$102.2 million vs analysts' consensus estimates of $98.42 million (35.5% margin, 3.8% beat)
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Revenue guidance$310 million at the midpoint for Q4 2026, above analysts' consensus estimates of $304.2 million
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Adjusted EPS guidance$3.11 at the midpoint for Q4 2026, above analysts' consensus estimates of $3.07
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Operating margin32.3%, up from 28.4% in the same quarter last year
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Free cash flow margin45.8%, up from 29.8% in the same quarter last year
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Inventory days outstanding150, down from 152 in the previous quarter
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Market capitalization$9.39 billion
"We delivered an exceptional third quarter, achieving record revenue and profitability while broadening our position across the semiconductor industry's most important growth areas," said Gaby Waisman, President and CEO. "Record revenue in memory and advanced packaging, together with strong demand from logic customers, reflects both the strength of the current investment cycle and the growing adoption of Nova's solutions in critical applications. Supported by enhanced visibility into customer investment plans, we remain confident in our ability to capture opportunities created by the industry's most advanced technology transitions."
Revenue growth
Examining a company's long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last five years, Nova grew its revenue at a strong 22% compounded annual growth rate. Its growth beat 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.
Long-term growth is the most important, but short-term results matter for semiconductors because the rapid pace of technological innovation (Moore's Law) could make yesterday's hit product obsolete today. Nova's annualized revenue growth of 27.9% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated.
This quarter, Nova reported year-on-year revenue growth of 28.2%, and its $287.8 million of revenue topped Wall Street's consensus estimates by 2%. Beyond the beat, this marks 11 straight quarters of growth, showing that the current upcycle has lasted longer than the typical 8-10 quarters. Management is guiding for a 39.2% year-on-year increase in revenue next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 31.2% over the next 12 months, according to S&P. Although this projection suggests its newer products and services will spur better top-line performance, it is still below the sector average. Still, the company is performing well on other measures of financial health.
Product demand & outstanding inventory
Days inventory outstanding, or DIO, is an important metric for chipmakers, as it reflects a business's 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, Nova's DIO came in at 150, which is 33 days below its five-year average. At the moment, these numbers show no indication of an excessive inventory buildup.
Key takeaways from Nova's Q3 results
Nova delivered a solid Q3, with operating income above analysts' consensus estimates and EPS also topping Wall Street's consensus. Those were clear positives, but investors were likely hoping for more. Shares tumbled 5.7% to $277.80 immediately after the results.
To assess whether Nova is a buy at its current price, consider its valuation, business quality and latest quarterly results. Read the full research report here for free .
