Ultra Clean Q3 Revenue Hits $759 Million; Q4 Outlook Higher

Ultra Clean Holdings, Inc. (NASDAQ: UCTT) reported third-quarter 2026 revenue of $759.0 million and projected fourth-quarter revenue of $800 million to $860 million, placing the entire guidance range above the latest quarter’s level. The semiconductor equipment supplier also posted non-GAAP earnings of $1.15 per share, while operating cash flow was negative despite quarterly profitability.

Products remain the primary revenue driver

The Products segment generated $681.9 million of Q3 revenue, accounting for most of the company’s total. The business recorded a non-GAAP gross margin of 15.9% and a non-GAAP operating margin of 8.5%.

Services contributed $77.1 million of revenue and remained the higher-margin operation. Its non-GAAP gross margin was 30.1%, while its non-GAAP operating margin reached 13.6%.

At the consolidated level, Ultra Clean reported a non-GAAP gross margin of 17.3% and a non-GAAP operating margin of 9.0%. The measures exclude intangible-asset amortization, stock-based compensation and certain non-recurring costs.

GAAP net income was $39.1 million, or $0.85 per diluted share, compared with $8.7 million, or $0.19 per share, in Q2. Non-GAAP net income rose sequentially to $53.2 million from $32.3 million, while non-GAAP earnings per share increased to $1.15 from $0.70.

Operating cash flow was negative $42.3 million during the quarter. Ultra Clean ended Q3 with $270.9 million in cash.

Semiconductor exposure remains concentrated

Ultra Clean’s Q3 industry mix was led by foundry and logic wafer-fabrication equipment, which represented 52% of its footprint. Memory equipment accounted for 34%, services for 10% and non-semiconductor markets for 4%.

The customer breakdown showed Lam Research at 39% and Applied Materials at 22%. Other original equipment manufacturers represented 25%, while services and non-semiconductor activities accounted for the remainder.

Management’s end-market assessment emphasized artificial-intelligence-related investment across foundry, logic and memory. The presentation cited a steep 2-nanometer foundry ramp, regional expansion of leading-edge manufacturing and increased advanced-packaging investment. It also pointed to AI-related data-center and edge-computing demand as support for logic node upgrades.

For memory, the company said AI storage requirements were supporting new 3D NAND capacity and node transitions. Management expects DRAM to lead wafer-fabrication-equipment growth in 2027, citing demand for high-bandwidth memory and DDR5, as well as planned capacity additions.

Q4 outlook and operating priorities

Ultra Clean expects Q4 revenue of $800 million to $860 million and earnings per share of $1.11 to $1.35. The presentation did not provide additional assumptions behind the ranges.

The company’s broader operating program, called UCT 3.0, focuses on ramp readiness, execution and margin expansion through vertical integration and regional alignment. Other priorities include technical partnerships, acquisitions, artificial intelligence and the company’s NPX initiative.

Ultra Clean cautioned that its semiconductor capital-equipment outlook and other forward-looking statements involve risks and uncertainties. Actual results could differ materially from current expectations, and the presentation did not provide updated forecasts beyond the fourth-quarter guidance.