NVMI Q3 Deep Dive: AI Demand, Memory Recovery, and Advanced Packaging Shape Outlook

November 07, 2025 at 00:32 AM EST

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Semiconductor quality control company Nova (NASDAQ: NVMI) reported Q3 CY2025 results exceeding the market’s revenue expectations, with sales up 25.5% year on year to $224.6 million. Guidance for next quarter’s revenue was optimistic at $220 million at the midpoint, 2.4% above analysts’ estimates. Its non-GAAP profit of $2.16 per share was in line with analysts’ consensus estimates.

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

Nova (NVMI) Q3 CY2025 Highlights:

Revenue: $224.6 million vs analyst estimates of $221.2 million (25.5% year-on-year growth, 1.5% beat)
Adjusted EPS: $2.16 vs analyst estimates of $2.15 (in line)
Adjusted EBITDA: $76.22 million vs analyst estimates of $77.19 million (33.9% margin, 1.3% miss)
Revenue Guidance for Q4 CY2025 is $220 million at the midpoint, above analyst estimates of $214.9 million
Adjusted EPS guidance for Q4 CY2025 is $2.11 at the midpoint, above analyst estimates of $2.09
Operating Margin: 28.4%, in line with the same quarter last year
Inventory Days Outstanding: 171, down from 180 in the previous quarter
Market Capitalization: $9.31 billion

StockStory’s Take

Nova’s third quarter saw revenue and non-GAAP profits roughly in line with Wall Street expectations, but the market responded negatively. Management attributed the quarter's growth to robust demand in advanced nodes and packaging—particularly from memory devices such as DRAM and high-bandwidth memory. CEO Gabriel Waisman highlighted record service revenues and strong adoption of the ELIPSON and METRION platforms in materials metrology. He also noted that “our record sales in memory this quarter was driven by several key achievements,” including new wins in key memory and logic applications.

Looking ahead, Nova’s guidance for the coming quarter is shaped by expectations of continued demand for advanced logic, packaging, and memory—especially as artificial intelligence drives new requirements in semiconductor manufacturing. Management believes recent large-scale AI investments are creating a positive industry outlook, with Waisman stating, “manufacturing integrated circuit devices for AI applications introduces unique process control challenges,” and emphasizing Nova’s readiness to address these needs. The company anticipates that advanced packaging and gate-all-around processes will remain key growth engines into 2026.

Key Insights from Management’s Remarks

Management credited this quarter’s results to strong demand for advanced memory and logic nodes, growth in service revenue, and new customer wins in materials metrology and packaging.

Advanced memory demand: Nova experienced record sales in DRAM and high-bandwidth memory, with the majority of memory revenue coming from DRAM. The company cited adoption of its Veraflex and PRISM platforms by leading memory manufacturers and expects memory to continue as a primary growth driver in 2026.
Logic and gate-all-around momentum: The company achieved record sales in advanced logic, especially in gate-all-around manufacturing, with its ELIPSON platform selected as a tool of record by a top global foundry. Management expects the gate-all-around business to generate significant revenue through 2026, with exposure to all major players in this segment.
Advanced packaging expansion: Nova launched the WMC platform, a modular optical metrology solution for next-generation packaging. Already adopted for high-bandwidth memory and power devices, WMC addresses complex manufacturing needs such as 2.5D, 3D, and hybrid bonding applications. Management also noted increasing adoption of the PRISM and Ancolyzer platforms for advanced packaging processes.
Material metrology traction: The ELIPSON and METRION platforms saw broader adoption, with ELIPSON leveraging Raman spectroscopy for nondestructive material characterization—important for advanced device nodes. Several systems were delivered for high-volume production in logic applications.
Operational scale and capacity: Nova opened a new advanced manufacturing facility in Mannheim, Germany, tripling capacity for advanced packaging optical metrology products. Management described this as an important step to support future demand and improve production quality.

Drivers of Future Performance

Nova projects future growth to be driven by AI-related semiconductor demand, advanced packaging adoption, and ongoing investments in memory and logic process control.

AI-driven semiconductor complexity: Management expects rising demand for AI chips to heighten process control challenges, requiring more advanced metrology and inspection solutions. Nova believes its portfolio is well-positioned to address customer needs for higher yields and reliability in AI device manufacturing.
Advanced packaging and gate-all-around: The company sees continued momentum in advanced packaging—including WMC platform adoption—and gate-all-around technology as structural growth drivers. Management projects these areas to contribute a growing share of revenue, supported by multi-year investments from leading logic and memory customers.
Geographic and market mix risks: The company noted normalization and a lower revenue share from China, with business stabilizing but visibility remaining limited in the region. Memory remains strong, but NAND demand is muted and expected to recover only in the second half of next year, presenting some cyclicality risk.

Catalysts in Upcoming Quarters

In the coming quarters, our analysts will closely watch (1) the pace of adoption for Nova’s WMC platform and other advanced packaging tools, (2) the ramp-up in gate-all-around and memory-related revenues, and (3) the company’s ability to maintain or improve gross margins despite shifts in product mix and geographic exposure. Execution in scaling new manufacturing capacity and progress in securing new customer wins will also be key signposts.

Nova currently trades at $315, down from $341.38 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free for active Edge members).

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