ICHR's Net Loss Widens to $22.85M Despite Revenue Growth

TL;DR

**ICHR's inventory impairment and ballooning net loss are red flags; steer clear until they fix their operational leaks.**

AI Summary

ICHOR HOLDINGS, LTD. (ICHR) reported a significant net loss of $22.853 million for the three months ended September 26, 2025, a substantial increase from the $2.776 million net loss in the prior-year period. For the nine months ended September 26, 2025, the net loss widened to $36.820 million, compared to $16.877 million in the same period of 2024. Despite the losses, net sales increased to $239.296 million for the quarter, up from $211.139 million, and to $724.046 million for the nine months, up from $615.749 million. Gross profit, however, declined sharply to $11.069 million for the quarter from $27.791 million, and to $66.793 million for the nine months from $76.342 million, primarily due to a significant impairment of inventory totaling $16.713 million. The company also changed its accounting estimate for CNC machinery useful lives, reducing depreciation expense by $1.0 million for the quarter and $2.0 million for the nine months, positively impacting net loss per share by $0.03 and $0.06, respectively. Cash and cash equivalents decreased from $108.669 million at December 27, 2024, to $92.500 million at September 26, 2025.

Why It Matters

ICHR's widening net loss and declining gross profit, despite increased net sales, signal significant operational challenges for investors. The $16.713 million inventory impairment suggests potential issues with demand forecasting or product obsolescence, which could impact future profitability and competitive positioning in the semiconductor equipment market. This performance could lead to increased investor scrutiny and potentially pressure the stock price, while also raising questions about the company's ability to manage costs and maintain margins against competitors. Employees might face uncertainty if these trends continue, and customers could see impacts on product availability or pricing if inventory issues persist.

Risk Assessment

Risk Level: high — The company reported a net loss of $22.853 million for the three months ended September 26, 2025, a significant increase from $2.776 million in the prior-year period. This is exacerbated by a $16.713 million impairment of inventory, indicating potential issues with product demand or obsolescence, and a substantial decline in gross profit from $27.791 million to $11.069 million for the quarter.

Analyst Insight

Investors should exercise caution and consider reducing exposure to ICHR given the significant increase in net loss and the large inventory impairment. Await clearer signs of operational efficiency improvements and a reversal in gross profit trends before considering new investments.

Financial Highlights

debt To Equity

0.43

revenue

$239.296M

operating Margin

-8.1%

total Assets

$966.583M

total Debt

$123.451M

net Income

$ -22.853M

eps

$ -0.67

gross Margin

4.6%

cash Position

$92.500M

revenue Growth

+13.3%

Key Numbers

• $22.853M — Net Loss (Q3 2025) (Increased from $2.776M in Q3 2024, indicating significant deterioration.)
• $16.713M — Impairment of Inventory (A new charge in 2025, directly impacting gross profit and net loss.)
• $11.069M — Gross Profit (Q3 2025) (Decreased sharply from $27.791M in Q3 2024, despite higher net sales.)
• $239.296M — Net Sales (Q3 2025) (Increased from $211.139M in Q3 2024, showing revenue growth but not profitability.)
• $92.500M — Cash and Cash Equivalents (Decreased from $108.669M at December 27, 2024, reflecting negative cash flow.)
• $0.67 — Basic Net Loss Per Share (Q3 2025) (Increased from $0.08 in Q3 2024, reflecting higher losses per share.)
• 10 years — New Useful Life for CNC Machinery (Increased from 7 years, reducing depreciation expense by $1.0M for Q3 2025.)
• $36.820M — Net Loss (Nine Months 2025) (Widened from $16.877M in the prior nine-month period.)

Key Players & Entities

• ICHOR HOLDINGS, LTD. (company) — Registrant
• SEC (regulator) — Securities and Exchange Commission
• $22.853 million (dollar_amount) — Net loss for Q3 2025
• $2.776 million (dollar_amount) — Net loss for Q3 2024
• $16.713 million (dollar_amount) — Impairment of inventory
• $239.296 million (dollar_amount) — Net sales for Q3 2025
• $211.139 million (dollar_amount) — Net sales for Q3 2024
• $11.069 million (dollar_amount) — Gross profit for Q3 2025
• $27.791 million (dollar_amount) — Gross profit for Q3 2024
• $92.500 million (dollar_amount) — Cash and cash equivalents as of September 26, 2025

FAQ

Risk Factors

• Significant Net Loss and Deteriorating Profitability [high — financial]: The company reported a substantial net loss of $22.853 million for Q3 2025, a significant increase from $2.776 million in the prior year. For the nine months, the net loss widened to $36.820 million from $16.877 million. This deterioration is driven by a sharp decline in gross profit to $11.069 million from $27.791 million, despite a revenue increase to $239.296 million.
• Inventory Impairment Charge [high — financial]: A significant impairment of inventory totaling $16.713 million was recognized in the current period. This charge directly reduced gross profit and contributed substantially to the increased net loss, highlighting potential issues with inventory management or demand forecasting.
• Declining Cash Position [medium — financial]: Cash and cash equivalents decreased from $108.669 million at December 27, 2024, to $92.500 million at September 26, 2025. This reduction indicates negative cash flow from operations or significant cash outflows, which could impact the company's ability to fund operations and investments.
• Increased Operating Expenses [medium — operational]: Selling, general, and administrative expenses increased to $22.519 million for Q3 2025 from $20.227 million in Q3 2024, and for the nine months to $68.515 million from $59.253 million. This rise in operating expenses, coupled with declining gross profit, exacerbates the net loss.
• Increased Net Loss Per Share [high — financial]: Basic net loss per share increased to $0.67 for Q3 2025 from $0.08 in the prior year, and for the nine months to $1.08 from $0.52. This reflects the amplified losses on a per-share basis, impacting shareholder value.

Industry Context

Ichor Holdings operates in the semiconductor capital equipment industry, a sector characterized by cyclical demand tied to semiconductor manufacturing cycles and significant R&D investment. The industry faces intense competition and rapid technological advancements, requiring continuous innovation and efficient production to maintain market share.

Regulatory Implications

The company must adhere to U.S. GAAP for financial reporting, including proper accounting for inventory valuation and asset impairments. Changes in accounting estimates, like the one for CNC machinery, require clear disclosure and justification to investors and regulators.

What Investors Should Do

1. Monitor inventory levels and turnover closely.
2. Analyze the drivers of increased operating expenses.
3. Evaluate the sustainability of revenue growth against profitability.
4. Assess the impact of the change in accounting estimate.

Key Dates

• 2025-09-26: End of Q3 2025 reporting period — Reported a significant net loss of $22.853M and a sharp decline in gross profit, despite revenue growth.
• 2025-03-29: Change in accounting estimate for CNC machinery useful lives — Extended useful life from 7 to 10 years, reducing depreciation expense by $1.0M for Q3 2025 and positively impacting net loss per share.
• 2024-12-27: End of Fiscal Year 2024 — Company had $108.669M in cash and cash equivalents.

Glossary

CNC machinery

Computer Numerical Control machinery, used for automated manufacturing processes. (A change in the accounting estimate for the useful life of this machinery impacted depreciation expense and net loss.)

Impairment of inventory

A reduction in the carrying value of inventory when its market value or net realizable value falls below its cost. (A significant $16.713M charge for inventory impairment heavily impacted the company's gross profit and net loss.)

Operating lease right-of-use assets

Assets recognized under accounting standards for leases, representing the right to use an underlying asset for the lease term. (These assets, along with corresponding liabilities, are part of the company's balance sheet and affect its financial leverage.)

Goodwill

An intangible asset that arises when a company acquires another company for a price greater than the fair value of its identifiable net assets. (The company holds a substantial amount of goodwill ($335.402M), which is subject to impairment testing.)

Year-Over-Year Comparison

Compared to the prior year, Ichor Holdings has experienced a significant deterioration in profitability. While net sales increased by 13.3% to $239.296 million for the third quarter of 2025, the gross profit declined sharply by 60.2% to $11.069 million. This resulted in a net loss of $22.853 million, a substantial increase from the $2.776 million loss in the prior year. A new $16.713 million inventory impairment charge was a key factor in this margin compression. Cash and cash equivalents also decreased, indicating a weaker liquidity position.

Key Financial Figures

• $0.0001 — registered Ordinary Shares, par value $0.0001 ICHR The NASDAQ Stock Market LLC Indi

Filing Documents

• ichr-20250926.htm (10-Q) — 1022KB
• ex-311_25q3.htm (EX-31.1) — 9KB
• ex-312_25q3.htm (EX-31.2) — 9KB
• ex-321_25q3.htm (EX-32.1) — 4KB
• ex-322_25q3.htm (EX-32.2) — 4KB
• 0001652535-25-000078.txt ( ) — 5147KB
• ichr-20250926.xsd (EX-101.SCH) — 36KB
• ichr-20250926_cal.xml (EX-101.CAL) — 60KB
• ichr-20250926_def.xml (EX-101.DEF) — 153KB
• ichr-20250926_lab.xml (EX-101.LAB) — 516KB
• ichr-20250926_pre.xml (EX-101.PRE) — 342KB
• ichr-20250926_htm.xml (XML) — 563KB

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION ITEM 1.

FINANCIAL STATEMENTS (UNAUDITED)

FINANCIAL STATEMENTS (UNAUDITED) 1 Consolidated Balance Sheets 1 Consolidated Statements of Operations 2 Consolidated Statements of Shareholders' Equity 3 Consolidated Statements of Cash Flows 5

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 6 ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 16 ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 27 ITEM 4.

CONTROLS AND PROCEDURES

CONTROLS AND PROCEDURES 27

- OTHER INFORMATION

PART II - OTHER INFORMATION ITEM 1.

LEGAL PROCEEDINGS

LEGAL PROCEEDINGS 28 ITEM 1A.

RISK FACTORS

RISK FACTORS 28 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 28 ITEM 3. DEFAULTS UPON SENIOR SECURITIES 28 ITEM 4. MINE SAFETY DISCLOSURES 28 ITEM 5. OTHER INFORMATION 28 ITEM 6. EXHIBITS 29

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

FINANCIAL STATEMENTS (UNAUDITED)

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED) ICHOR HOLDINGS, LTD. Consolidated Balance Sheets (in thousands, except share and per share amounts) (unaudited) September 26, 2025 December 27, 2024 Assets Current assets: Cash and cash equivalents $ 92,500 $ 108,669 Accounts receivable, net 84,400 86,619 Inventories 241,680 250,102 Prepaid expenses and other current assets 6,362 7,230 Total current assets 424,942 452,620 Property and equipment, net 110,373 94,867 Operating lease right-of-use assets 37,059 44,461 Other noncurrent assets 14,208 15,182 Deferred tax assets, net 2,116 4,316 Intangible assets, net 42,483 48,716 Goodwill 335,402 335,402 Total assets $ 966,583 $ 995,564 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ 92,600 $ 91,719 Accrued liabilities 18,315 15,992 Other current liabilities 9,488 8,965 Current portion of long-term debt 6,250 7,500 Current portion of lease liabilities 11,337 11,494 Total current liabilities 137,990 135,670 Long-term debt, less current portion, net 117,201 121,023 Lease liabilities, less current portion 28,334 34,189 Deferred tax liabilities, net 1,555 1,555 Other non-current liabilities 5,326 4,791 Total liabilities 290,406 297,228 Shareholders' equity: Preferred shares ($ 0.0001 par value; 20,000,000 shares authorized; 0 shares issued and outstanding) — — Ordinary shares ($ 0.0001 par value; 200,000,000 shares authorized; 34,377,891 and 33,859,542 shares outstanding, respectively; 38,815,330 and 38,296,981 shares issued, respectively) 3 3 Additional paid in capital 620,721 606,060 Treasury shares at cost ( 4,437,439 shares) ( 91,578 ) ( 91,578 ) Retained earnings 147,031 183,851 Total shareholders' equity 676,177 698,336 Total liabilities and shareholders' equity $ 966,583 $ 995,564 The accompanying notes are an integral part of these consolidated financial statements. 1 ICHOR HOLDINGS, LTD. Consolidated Statements of Operations (in thousands, except s

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (dollar figures in tables in thousands, except per share amounts) (unaudited) Note 1 – Basis of Presentation and Selected Significant Accounting Policies Basis of Presentation These consolidated unaudited financial statements have been prepared in accordance with generally accepted accounting principles in the U.S. ("GAAP"). All intercompany balances and transactions have been eliminated upon consolidation. All dollar figures presented in tables in the notes to the consolidated financial statements are in thousands, except per share amounts. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted as permitted by the U.S. Securities and Exchange Commission's rules and regulations for interim reporting. These consolidated financial statements should be read in conjunction with our audited financial statements and notes thereto included in our Annual Report on Form 10K for the year ended December 27, 2024. Year End We use a 52- or 53-week fiscal year ending on the last Friday in December. Our fiscal years ending December 26, 2025 and December 27, 2024 are each 52 weeks. References to 2025 and 2024 relate to the fiscal years then ended, respectively. The three-month periods ended September 26, 2025 and September 27, 2024 are each 13 weeks. References to the third quarter of 2025 and 2024 relate to the three-month periods then ended, respectively . Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods presented. We base our estimates and judgments on historical experience and on various other assumptions that w

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