The Top 5 Analyst Questions From Nova’s Q1 Earnings Call

Nova's first quarter results surpassed Wall Street’s expectations, driven by robust demand from both logic and memory semiconductor manufacturers. Management attributed this outperformance to increased adoption of advanced process control solutions, particularly for gate-all-around and advanced packaging technologies. CEO Gaby Waisman pointed to record sales of the PRISM platform and a significant expansion in the company’s software and services businesses. Waisman stated, “Our performance was driven by Nova’s strong standing across market segments, regions, key customers, and technologies.” Despite these results, management acknowledged that macroeconomic uncertainty and evolving trade dynamics are starting to influence operational visibility.

Is now the time to buy NVMI? Find out in our full research report (it’s free).

Nova (NVMI) Q1 CY2025 Highlights:

• Revenue: $213.4 million vs analyst estimates of $210.2 million (50.5% year-on-year growth, 1.5% beat)

• Adjusted EPS: $2.18 vs analyst estimates of $2.09 (4.4% beat)

• Adjusted EBITDA: $76.72 million vs analyst estimates of $73.62 million (36% margin, 4.2% beat)

• Revenue Guidance for Q2 CY2025 is $215 million at the midpoint, above analyst estimates of $211.7 million

• Adjusted EPS guidance for Q2 CY2025 is $2.05 at the midpoint, below analyst estimates of $2.10

• Operating Margin: 29.6%, up from 26.2% in the same quarter last year

• Inventory Days Outstanding: 177, up from 168 in the previous quarter

• Market Capitalization: $7.87 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 Nova’s Q1 Earnings Call

• Ezra Weener (Jefferies) asked about the trajectory of gate-all-around revenue growth and its transition from pilot to high-volume manufacturing. CEO Gaby Waisman indicated the ramp is progressing as planned and expects business from this segment to be higher next year.

• Atif Malik (Citi) probed the degree of cross-selling between advanced packaging and gate-all-around customers. Waisman described double-digit growth in advanced packaging and highlighted Sentronics’ contribution to this market segment.

• Atif Malik (Citi) followed up on the impact of tariffs on revenue in China and on service growth. CFO Guy Kizner confirmed that tariffs primarily affect gross margin, not revenue, and reiterated service growth targets of 10-15% for the year.

• Mark Lipacis (Evercore) sought clarification on the nature and geographic source of tariff impacts. Kizner explained that tariffs mainly affect the bill of materials and spare parts shipped between regions, due to Nova's mostly localized supply chain.

• Charles Shi (Needham & Company) questioned Nova’s outlook for China and visibility into the second half of the year. Waisman said China revenue is expected to be flat or slightly down, but highlighted backlog strength and offsetting growth elsewhere.

Catalysts in Upcoming Quarters

In coming quarters, the StockStory team will closely watch (1) whether Nova’s advanced node and packaging solutions continue to gain market share, (2) how effectively the company manages margin headwinds from tariffs and supply chain shifts, and (3) progress on integrating Sentronics and expanding direct sales in Europe. The evolution of demand from China and customer investment in AI-related manufacturing will also be important signposts.

Nova currently trades at $277, up from $201.53 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).

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