FormFactor (NASDAQ: FORM) shares surged 6.61% in pre-market trading on Thursday following the company's impressive first-quarter 2025 financial results and optimistic second-quarter guidance. The semiconductor test equipment manufacturer's performance exceeded analyst expectations, demonstrating resilience in a challenging market environment.

FormFactor reported adjusted earnings per share (EPS) of $0.23 for Q1, significantly outperforming the analyst consensus estimate of $0.19. This represents a 21.05% surprise to the upside and a 27.78% increase compared to the same period last year. Revenue for the quarter also surpassed expectations, reaching $171.36 million versus the analyst estimate of $169.98 million, translating to a modest 1.6% year-over-year increase.

Adding to the positive sentiment, FormFactor provided an upbeat outlook for the second quarter, forecasting revenue of $190 million, plus or minus $5 million. This guidance suggests continued growth and confidence in the company's near-term prospects. CEO Mike Slessor commented on the results, stating, "As expected, FormFactor reported sequentially lower first-quarter revenue and profitability due to anticipated reductions in demand for both DRAM probe cards and Systems." However, the strong Q2 outlook indicates a potential rebound in these areas.

The company highlighted strong demand for high bandwidth memory (HBM) DRAM probe cards, driven by investments in generative AI. Additionally, FormFactor completed the acquisition of FICT Limited, enhancing access to multilayer organic substrates crucial for advanced packaging. Despite these positive developments, the company faces challenges from tariffs and geopolitical issues, which are causing revenue and gross margin reductions.

Analysts have responded favorably to FormFactor's results, with the current average rating on the shares being "buy." The company's ability to exceed expectations in a challenging semiconductor market environment has bolstered investor confidence, contributing to the significant stock price increase observed in pre-market trading.