ACM Research (ACMR) Q2 2026 Earnings: A 46% Beat, And 70% Of It Wasn’t Operating

ACM Research (ACMR) Q2 2026 — Q2 2026 (quarter ended June 30, 2026): revenue $292.9M vs a $269.3M bar - a beat, up 36.0% y/y. Non-GAAP diluted EPS $0.61 vs a $0.4186 bar - a 46% beat. GAAP diluted EPS $1.23 vs $0.44. The 8-K was accepted 7:37am ET Fri Aug 7, BEFORE the open, so Friday IS the reaction: the stock opened $91.14 (+15.4%) and CLOSED $83.80, up 6.10%, giving back more than half the pop. ACM Research beat by 46% and raised its full-year guidance, and its non-GAAP OPERATING margin was 19.2% against 19.3% a year ago - flat, on revenue up 36%. Non-GAAP pre-tax profit rose $27.5M, and $19.3M of that (70%) came from one line: income from equity method investments, which the 10-Q attributes mainly to a gain on disposal of securities held by an investee. THE CALL: AVOID (3/5, THE BEAT WAS REAL, AND ALMOST NONE OF IT WAS OPERATING) — base-case value ~$58.0 vs ~$83.8 today. KEY METRICS: - CALL: AVOID 3/5, fair value $58 vs the $83.80 close on Fri Aug 7 (-30.8%). Operations-only model: the FY2026 guide midpoint of $1,150M at the 18.7% non-GAAP operating margin ACM delivered in H1 = $215M, plus $20M net interest, less $22M currency/other, less 19% tax, less 25% to minority interests = $130M core attributable earnings, or $1.81/share. 26x plus $11.90 of LOOK-THROUGH net cash = $58.96. Bull $78.80, bear $44.66. A 2028-exit cross-check lands at $57. - THE PRINT: revenue $292.9M beat $269.3M, up 36.0% y/y. Non-GAAP diluted EPS $0.61 beat $0.4186, up 10.9% from $0.55. GAAP diluted EPS $1.23 vs $0.44. EPS BASIS PROVEN: FY2025 quarters 0.46+0.54+0.36+0.25 = $1.61, exactly the printed FY2025 non-GAAP diluted figure. Gross margin 46.0% vs 48.5%, down 255bps. Non-GAAP operating margin 19.2% vs 19.3% - FLAT. GAAP operating margin only 'expanded' because stock comp fell from $9.77M to $6.58M. - THE ANGLE: non-GAAP pre-tax income $72.7M vs $45.2M, up $27.5M. Income from equity method investments was $21.1M vs $1.77M, up 1,090% - 70% of the entire increase - and the 10-Q says it was mainly a gain on disposal of available-for-sale securities held by an investee. The beat was worth $13.7M ($0.1914 x 71.84M shares); the swing in that one line was $19.3M, bigger than the whole beat. ACM excludes a $69.6M gain on its OWN portfolio but keeps this one. - OWNERSHIP + CASH: ACM Research owns just 73.2% of ACM Shanghai (SSE STAR 688082), down from 74.6% at Dec 31, while its own shares rose 6.1% to 69,643,173 - a 7.6% fall in look-through claim in six months. An approved Hong Kong H-share listing of up to 7% would take it to about 68%. H1 operating cash flow was NEGATIVE $35.9M and FCF NEGATIVE $123.7M; $332.6M of financing inflow built the cash pile. Inventory $783.1M, about 506 days. Street: Buy, $110 target. What to watch: UP: revenue grew 36.0% and beat, with electroplating/furnace revenue up 167.7% and advanced packaging up 153.3% as the 2,000th ECP chamber shipped; the FY2026 range rose to $1,125-1,175M, still 25-30% growth off a verified $901.3M base; $1.0B of consolidated net cash; Oregon operations begin in H2 2026. DOWN: gross margin fell 255bps to 46.0%; H1 operating cash flow was NEGATIVE $35.9M for a second straight year; H1 non-GAAP EPS fell 5.0%. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.