What happened

In response to the company's strong second-quarter earnings, shares of FormFactor (NASDAQ:FORM), a leading provider of semiconductor testing equipment, rose by 11% as of 11:12 a.m. EDT on Thursday.

So what

Here's a review of the highlights from the second-quarter report that has traders feeling bullish today:

  • Revenue jumped 73% to $144 million. The eye-popping growth is largely a result of last year's Cascade Microtech acquisition. On a sequential basis, revenue rose 12%. This number was above management's guidance range and met Wall Street's expectation.
  • Adjusted gross margin improved 500 basis points sequentially to 47.6%. Management said that the big jump was attributable to favorable product mix and sales leverage.
  • Adjusted earnings per share were $0.40, which was much better than management's guidance range. It also blew past the $0.27 that market watchers had expected.
  • The company ended June with $131 million in cash.

Management credited the upbeat results to strong demand from data centers, mobile, and automotive end markets.

The good times are expected to continue into the third quarter, too. Management offered investors the following guidance for the upcoming quarter:

  • Revenue will land between $136 million to $144 million.
  • Adjusted gross margin between 43% to 46%.
  • Adjusted earnings per share of $0.29 to $0.35.

For comparison purposes, market watchers were expecting third-quarter revenue of only $134 million and EPS of $0.27.

Given the expectation-topping results and guidance, it is easy to understand why the market is cheering today.

man in suit giving thumbs-up

Image source: Getty Images.

Now what

FormFactor is on a roll. The company has reported better-than-expected EPS for several quarters in a row now, and revenue, margins, and profits all continue to head in the right direction. This consistency should give investors some confidence that the company will be able to realize all the benefits promised from its monster Cascade Microtech acquisition last year.

Looking ahead, business shows no signs of slowing down and the company looks well-positioned to deliver on its long-term financial goals.

Brian Feroldi has no position in any stocks mentioned. The Motley Fool recommends FormFactor. The Motley Fool has a disclosure policy.