Semiconductor quality control company Nova (NASDAQ: NVMI) announced better-than-expected revenue in Q1 CY2026, with sales up 10.3% year on year to $235.3 million. On top of that, next quarter’s revenue guidance ($250 million at the midpoint) was surprisingly good and 3.8% above what analysts were expecting. Its non-GAAP profit of $2.33 per share was 6.2% above analysts’ consensus estimates.
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Nova (NVMI) Q1 CY2026 Highlights:
- Revenue: $235.3 million vs analyst estimates of $227.4 million (10.3% year-on-year growth, 3.5% beat)
- Adjusted EPS: $2.33 vs analyst estimates of $2.19 (6.2% beat)
- Adjusted Operating Income: $80.46 million vs analyst estimates of $72.19 million (34.2% margin, 11.5% beat)
- Revenue Guidance for Q2 CY2026 is $250 million at the midpoint, above analyst estimates of $240.9 million
- Adjusted EPS guidance for Q2 CY2026 is $2.41 at the midpoint, above analyst estimates of $2.34
- Operating Margin: 30.1%, in line with the same quarter last year
- Free Cash Flow Margin: 15.3%, down from 28% in the same quarter last year
- Inventory Days Outstanding: 163, down from 177 in the previous quarter
- Market Capitalization: $16.01 billion
"This was a record quarter for Nova across every dimension," said Gaby Waisman, President and CEO.
Company Overview
Headquartered in Israel, Nova (NASDAQ: NVMI) is a provider of quality control systems used in semiconductor manufacturing.
Revenue Growth
A company’s long-term performance is an indicator of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Luckily, Nova’s sales grew at an incredible 25.3% compounded annual growth rate over the last five years. Its growth surpassed the average semiconductor company and shows its offerings resonate with customers, a great starting point for our analysis. Semiconductors are a cyclical industry, and long-term investors should be prepared for periods of high growth followed by periods of revenue contractions (which can sometimes offer opportune times to buy).
We at StockStory place the most emphasis on long-term growth, but within semiconductors, a half-decade historical view may miss new demand cycles or industry trends like AI. Nova’s annualized revenue growth of 30.8% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated. 
This quarter, Nova reported year-on-year revenue growth of 10.3%, and its $235.3 million of revenue exceeded Wall Street’s estimates by 3.5%. Despite the beat, this was its third consecutive quarter of decelerating growth, potentially indicating a coming cyclical downturn. Company management is currently guiding for a 13.6% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 21.8% over the next 12 months, a deceleration versus the last two years. Despite the slowdown, this projection is above average for the sector and suggests the market sees some success for its newer products and services.
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Product Demand & Outstanding Inventory
Days Inventory Outstanding (DIO) is an important metric for chipmakers, as it reflects a business’ capital intensity and the cyclical nature of semiconductor supply and demand. In a tight supply environment, inventories tend to be stable, allowing chipmakers to exert pricing power. Steadily increasing DIO can be a warning sign that demand is weak, and if inventories continue to rise, the company may have to downsize production.
This quarter, Nova’s DIO came in at 163, which is 19 days below its five-year average. At the moment, these numbers show no indication of an excessive inventory buildup.
Key Takeaways from Nova’s Q1 Results
We were impressed by how significantly Nova blew past analysts’ adjusted operating income expectations this quarter. We were also glad its EPS outperformed Wall Street’s estimates. Zooming out, we think this was a solid print. The stock traded up 5.7% to $531.25 immediately following the results.
Sure, Nova had a solid quarter, but if we look at the bigger picture, is this stock a buy? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).
