Ultra Clean Holdings, Inc. posted record Q2 2026 revenue of $644.9M, up 21% YoY. EPS soared to $0.70, beating estimates. Guidance for Q3 is positive.
Ultra Clean Holdings, Inc. reported Q2 2026 revenue of $644.9 million (USD), up 21% year-over-year and significantly ahead of the $533.7 million consensus estimate. This strong performance was driven by increased demand across both its products and services segments, reflecting a broader recovery in the semiconductor capital equipment market.
Key Takeaways
- Record total revenue reached $644.9 million, up 21% YoY from $533.7 million.
- Products revenue rose to $572.7 million, up 23% YoY, compared to $465.7 million in the prior quarter.
- Gross margin improved to 16.7%, slightly up from 16.5% in Q1, driven by higher volumes.
- Earnings per share (EPS) rose to $0.70, compared to $0.31 in Q1, reflecting strong operational execution.
- Guidance for Q3 is set between $700 million and $750 million in revenue, with EPS expected to be in the range of $0.83 to $1.03.
Record Revenue Driven by Strong Demand
Ultra Clean Holdings, Inc. experienced a record revenue of $644.9 million in Q2 2026, representing a 21% increase year-over-year from $533.7 million. Sequentially, this marks a notable rise from $533.7 million in Q1 2026. The revenue growth was underpinned by substantial demand in both products and services, with product revenue climbing to $572.7 million, a 23% increase from the previous quarter. Services revenue also showed an increase, reaching $72.2 million, up from $68 million in Q1.
| Metric | Q2 2026 | YoY | QoQ |
|---|---|---|---|
| Revenue | $644.9M | +21% | +21% |
| Products Revenue | $572.7M | +23% | +23% |
| Services Revenue | $72.2M | +6% | +6% |
| Gross Margin | 16.7% | +0.2 pts | +0.2 pts |
| EPS | $0.70 | +126% | +126% |
Capacity Expansion to Support Future Growth
Management emphasized the company's ongoing expansion efforts as a crucial component of its growth strategy. The addition of 26,000 square feet of clean room space in Malaysia is expected to aid in achieving a $4 billion annualized revenue run rate by mid-2027. Further expansions are planned for the Singapore and Czech Republic facilities. This strategic capacity increase aligns with the anticipated rise in semiconductor manufacturing demand, particularly in AI-driven applications.
“Our objective is straightforward to deepen our strategic co-innovation partnerships, outgrow the market we serve, and create sustainable long-term value for our shareholders,” said James Zhao, CEO.
Focus on Margin Improvement
Gross margin for the quarter slightly improved to 16.7%, compared to 16.5% in Q1, driven by higher volumes that enhanced factory efficiencies. Product gross margins rose to 15.1% from 14.6%, while services margins decreased slightly to 28.9% from 30%. Management noted that fluctuations in volume, mix, and material costs continue to influence margins, but they expect improved operating leverage as production ramps up.
Guidance Indicates Positive Momentum
Looking ahead, Ultra Clean Holdings has provided guidance for Q3 2026, projecting total revenue between $700 million and $750 million, with EPS anticipated in the range of $0.83 to $1.03. This outlook reflects confidence in ongoing demand and the company's ability to capitalize on strategic investments made in capacity and technology.
Leadership Transition
This earnings call marked the final appearance for Sherry Savage as CFO, as she transitions into retirement after 17 years with the company. The incoming CFO, Mike Keogh, brings extensive experience and is expected to support the company’s continued growth and execution of the UCT 3.0 strategy.
“It has been a privilege to be a part of UCT's growth and transformation over the past 17 years,” said Sherry Savage.
Frequently Asked Questions
Did Ultra Clean Holdings, Inc. beat earnings estimates in Q2 2026?
Yes, Ultra Clean Holdings reported an EPS of $0.70, beating the consensus estimate of $0.31 by $0.39.
What is the revenue guidance for Ultra Clean Holdings in Q3 2026?
The company has guided for total revenue between $700 million and $750 million for Q3 2026.
How much has Ultra Clean Holdings invested in capacity expansion?
Recently, the company added 26,000 square feet of clean room space in Malaysia, with further expansions planned in Singapore and the Czech Republic.
What is the expected gross margin at the $4 billion run rate?
Management targets a gross margin of 20% at the $4 billion revenue run rate, with expectations of improved margins as production increases.
This analysis is based on public earnings call materials and is not investment advice.
