Group 1 - The semiconductor industry is crucial for the growth of Axcelis Technologies, driven by the demand for advanced processors, memory devices, and back-end chips [1] - Increased production of semiconductor products by manufacturers is essential for meeting the rising demand in the market [1] Group 2 - The company employs long/short equity strategies and conducts deep fundamental analysis to identify undervalued stocks for long positions and overvalued stocks for short positions [1] - Detailed financial models are built using discounted cash flow (DCF), relative valuation, and scenario analysis to assess company fundamentals and growth potential [1] - The company monitors market trends, sector dynamics, and macroeconomic factors to adjust strategies and optimize portfolio performance in real time [1]

Company Performance - Axcelis Technologies (ACLS) ended the recent trading session at $67.93, showing a -4% change from the previous day's closing price, which is a lag compared to the S&P 500's daily loss of 0.27% [1] - Over the past month, shares of Axcelis have appreciated by 12.57%, outperforming the Computer and Technology sector's gain of 11.99% and the S&P 500's gain of 6.9% [1] Upcoming Earnings - The upcoming earnings release is expected to report an EPS of $0.73, which is a decrease of 52.9% from the prior-year quarter [2] - The Zacks Consensus Estimate for revenue is projecting net sales of $185.2 million, down 27.8% from the year-ago period [2] Full Year Projections - For the full year, the Zacks Consensus Estimates project earnings of $3.29 per share and revenue of $751.1 million, representing changes of -46.5% and -26.21%, respectively, from the prior year [3] Analyst Estimates - Recent modifications to analyst estimates for Axcelis Technologies are important as they indicate changing near-term business trends, with positive revisions signaling optimism about the business outlook [4] Zacks Rank and Performance - The Zacks Rank system, which ranges from 1 (Strong Buy) to 5 (Strong Sell), currently ranks Axcelis Technologies at 3 (Hold), with the consensus EPS projection remaining stagnant over the past 30 days [6] - Historically, 1 ranked stocks have generated an average annual return of +25% since 1988 [6] Valuation Metrics - Axcelis Technologies is trading at a Forward P/E ratio of 21.51, which is a discount compared to the industry average Forward P/E of 21.87 [7] - The company has a PEG ratio of 3.92, while the Electronics - Manufacturing Machinery industry had an average PEG ratio of 1.78 [7] Industry Context - The Electronics - Manufacturing Machinery industry is part of the Computer and Technology sector and currently holds a Zacks Industry Rank of 226, placing it in the bottom 9% of all 250+ industries [8] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [8]

Technical Analysis - Axcelis Technologies (ACLS) has reached a significant support level and is considered a good pick for investors from a technical perspective [1] - ACLS recently broke through the 20-day moving average, indicating a short-term bullish trend [1] - The 20-day simple moving average is a popular tool among traders, providing insights into short-term price trends and trend reversals [2] Price Movement - ACLS has moved 5.9% higher over the last four weeks, suggesting potential for further gains [5] - A positive trend is indicated when a stock's price is above the 20-day moving average, while a price below it signals a downward trend [3] Earnings Estimates - The bullish case for ACLS is strengthened by positive earnings estimate revisions, with no estimates decreasing in the past two months and three increasing [5] - The consensus estimate for ACLS has also increased, further supporting the positive outlook [5][6]

Summary of Axcelis (ACLS) FY Conference June 04, 2025 Company Overview - Axcelis was founded in 1978 and has approximately 1,500 employees - The company reported total revenue of about $1 billion in 2024, which includes system sales and aftermarket services [1][19] Industry Context - Axcelis operates in the ion implantation market, a critical step in semiconductor manufacturing, alongside Applied Materials, which holds the number one position [3][16] - The overall market size for ion implantation has grown from about $1 billion to approximately $2.5 to $3 billion, driven by the proliferation of foundational technology devices [10][24] Core Technology and Products - Ion implantation modifies the physical properties of silicon, silicon carbide, or GaN wafers, essential for device performance [2][8] - The market is segmented into high current (50%), medium current (25%), and high energy (25%) tools [7][10] - Axcelis is the number one provider in the power segment and high energy tools, and the second overall globally [16][39] Market Trends and Growth Drivers - Key growth drivers include the introduction of image sensors in automotive applications, RF technology devices, and power semiconductors like silicon carbide [11][12] - The demand for silicon carbide is increasing due to its applications in automotive electrification and industrial sectors [15][25][38] - The company is focusing on expanding its presence in underrepresented markets, particularly Japan and advanced logic segments [17][28][30] Financial Performance - Axcelis has seen significant financial growth, with a gross margin increase from below 40% to around 46% by Q1 2025 [40][41] - The company generated $673 million in cash from 2020 to 2024, indicating strong financial health and the ability to invest during downturns [48][49] - The aftermarket business has become a durable and profitable segment, contributing to overall revenue stability [46] Research and Development - The company plans to invest over $100 million in R&D in 2025 to enhance its technology and expand its patent portfolio [47] - Axcelis is exploring new implant applications in middle and back-end processes, which could open new market opportunities [19][47] Strategic Initiatives - The company is working on qualifying its tools for advanced logic applications, which currently represent a small market share [30][34] - Axcelis aims to leverage its technology advancements to penetrate the advanced logic market and improve its competitive position [35][36] Conclusion - Axcelis is well-positioned to capitalize on long-term secular trends in the semiconductor industry, particularly in power management and electrification [52] - The company maintains a strong balance sheet, allowing for continued investment in core business areas while navigating market challenges [52]

Core Insights - Axcelis Technologies experienced a 10% increase in share price over the past week, driven by a bottom-line beat in its inaugural quarter of 2025 [1] Financial Performance - For the first quarter, Axcelis reported revenue of $192.6 million, a significant decline from over $252 million in the same period of 2024 [2] - Non-GAAP net income fell to $33.8 million ($1.04 per share) from $55.2 million in the previous year [2] - Analysts had anticipated higher revenue of $221.6 million and adjusted earnings of $1.00 per share, indicating a mixed quarter for the company [3] Future Outlook - The company provided optimistic guidance, projecting revenue of approximately $185 million and adjusted net income of $0.73 per share for the second quarter [5] - Analysts expect slightly higher revenue of over $189 million but lower adjusted profitability estimates of $0.50 per share [5] - The semiconductor industry is currently volatile, but the company is seen as capable of navigating challenges and potentially thriving [6]

Revenue Performance - For the three months ended March 31, 2025, total revenue decreased to $192.6 million, down 23.7% from $252.4 million in the same period of 2024[84]. - Product revenue was $182.8 million, representing 94.9% of total revenue, a decrease of 24.9% compared to $243.4 million in the prior year[85]. - Services revenue increased to $9.7 million, or 5.1% of total revenue, up 8.8% from $9.0 million in the same period of 2024[87]. - Systems revenue for the three months ended March 31, 2025, was $137.6 million, down from $195.5 million in the same period of 2024[88]. - The company’s ten largest customers accounted for 67.3% of total revenue for the three months ended March 31, 2025[78]. Profitability and Expenses - Gross profit margin for the three months ended March 31, 2025, was 46.1%, slightly up from 46.0% in the prior year[90]. - Research and development expenses rose to $27.1 million, accounting for 14.1% of revenue, an increase of 5.7% from $25.7 million in the same period of 2024[96]. - Operating expenses totaled $59.6 million, representing 31.0% of revenue, compared to 23.6% in the prior year[93]. - General and administrative expenses increased to $17.4 million for the three months ended March 31, 2025, up by $1.0 million or 5.8% from $16.4 million in the same period of 2024[100]. - Other income rose to $3.9 million for the three months ended March 31, 2025, compared to $2.5 million in the prior year, reflecting a $1.5 million increase primarily due to a decrease in net foreign exchange losses[102]. Taxation - The income tax provision decreased to $4.5 million for the three months ended March 31, 2025, down by $2.9 million or 39.2% from $7.4 million in the same period of 2024[103]. - The effective tax rate (ETR) for the three months ended March 31, 2025 was 13.6%, compared to 12.5% for the same period in 2024, primarily due to a decrease in pre-tax book income[104]. Cash Flow and Liquidity - As of March 31, 2025, the company had $184.0 million in unrestricted cash and cash equivalents and $403.1 million in short-term investments, indicating strong liquidity[105]. - Cash generated from operating activities was $39.8 million for the three months ended March 31, 2025, compared to $42.2 million in the same period of 2024[107]. - Investing activities generated cash of $40.5 million for the three months ended March 31, 2025, with $297.9 million related to maturities and sales of short-term investments[109]. - Financing activities resulted in cash usage of $20.1 million for the three months ended March 31, 2025, including $18.2 million for stock repurchases[110]. - The company believes its existing cash and cash equivalents will be sufficient to meet anticipated cash requirements for both the short- and long-term[111]. Market Environment - The geopolitical environment surrounding trade and tariffs did not have a meaningful impact on financial results during the reporting period[80]. - There have been no material changes to the quantitative information about market risk as of March 31, 2025[113].

Financial Data and Key Metrics Changes - The company reported Q1 2025 revenue of $193 million and earnings per diluted share of $0.88, both exceeding expectations, with non-GAAP earnings per share at $1.04 [6][19] - Bookings for the quarter were $110 million, reflecting a sequential increase compared to Q4 2024, resulting in a book-to-bill ratio of 0.8, the highest since Q4 2023 [7][19] - GAAP gross margins were 46.1%, exceeding the outlook of 40%, while non-GAAP gross margins were 46.4% [22][23] Business Line Data and Key Metrics Changes - Systems revenue was $138 million, and CS&I revenue was $55 million, both slightly above expectations [19] - Sales to mature node applications remained dominant, particularly in Power and General Mature segments [9] - Revenue from silicon carbide applications declined sequentially due to moderated customer investments, while engagement in technology transitions remained strong [10][11] Market Data and Key Metrics Changes - Revenue from China declined to 37% of total shift system sales, down from 49% in the prior quarter, with expectations for fluctuations in 2025 [19][20] - Shipments to the U.S. grew to 23% of total sales, while Korea improved to 20%, mainly due to increased DRAM shipments [19] - The company anticipates that China revenue will be lower year-over-year in 2025 compared to 2024, despite potential quarterly fluctuations [19][66] Company Strategy and Development Direction - The company is focused on innovation and cost control to capture long-term growth opportunities while mitigating tariff impacts [7][9] - Plans are in place to lessen the direct impact of tariffs, leveraging a diversified global supply chain [8][50] - The company aims to maintain strong profitability and invest in R&D to prepare for future market recovery [86][87] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term drivers of the semiconductor industry, despite current macroeconomic challenges [16][29] - The company expects revenue in Q2 2025 to be approximately $185 million, with non-GAAP gross margins around 42% [27] - Management noted that while the macroeconomic environment is uncertain, customer discussions indicate continued investments in technology roadmaps [27][28] Other Important Information - The company generated $35 million in free cash flow in Q1 2025 and exited the quarter with $587 million in cash and no debt [26] - A $100 million increase in share repurchase authorization reflects confidence in long-term business fundamentals [26] Q&A Session Summary Question: What contributed to the robust gross margin? - Management indicated that higher margin spare sales and favorable deferred revenue recognition contributed to the strong gross margin performance [33][35] Question: What is the order intensity for Q2? - Management noted that Q1 bookings reflected a good profile for future business, primarily from general mature and power segments [40][41] Question: Can you provide granularity on the margin performance? - The largest contributor to margin performance was the mix of sales, with expectations for moderation in the second quarter [44][47] Question: What is the outlook for China revenue? - Management anticipates that China revenue will be lower year-over-year in 2025, with fluctuations expected in quarterly performance [101][103] Question: What is the company's strategy regarding R&D spending? - The company plans to maintain R&D investments to capitalize on future market recovery and ensure readiness with innovative products [84][86]

Core Insights - Axcelis Technologies (ACLS) reported quarterly earnings of $1.04 per share, significantly exceeding the Zacks Consensus Estimate of $0.39 per share, although down from $1.57 per share a year ago, resulting in an earnings surprise of 166.67% [1] - The company achieved revenues of $192.56 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 4.29%, but down from $252.37 million year-over-year [2] - Axcelis has consistently surpassed consensus EPS estimates over the last four quarters [2] Earnings Outlook - The sustainability of Axcelis' stock price movement will largely depend on management's commentary during the earnings call and future earnings expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.57 on revenues of $193.3 million, and for the current fiscal year, it is $2.39 on revenues of $778.8 million [7] Industry Context - The Electronics - Manufacturing Machinery industry, to which Axcelis belongs, is currently ranked in the bottom 9% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Axcelis' stock performance [5] Stock Performance - Axcelis shares have declined approximately 25.5% since the beginning of the year, contrasting with the S&P 500's decline of 3.9% [3] - The estimate revisions trend for Axcelis is currently unfavorable, resulting in a Zacks Rank 4 (Sell), indicating expected underperformance in the near future [6]

Q1 2025 EARNINGS PRESENTATION MAY 6, 2025 SAFE HARBOR STATEMENT This presentation contains, and the conference call will contain, forward-looking statements under the Private Securities Litigation Reform Act safe harbor provisions. These statements, which include our expectations for spending in our industry and guidance for future financial performance, are based on management's current expectations and should be viewed with caution. They are subject to various risks and uncertainties that could cause actu ...

Financial Data and Key Metrics Changes - The company reported Q1 2025 revenue of $193 million and earnings per diluted share of $0.88, both exceeding expectations, with non-GAAP earnings per share at $1.04 [5][19] - Bookings for the quarter were $110 million, reflecting a sequential increase compared to Q4 2024, resulting in a book-to-bill ratio of 0.8, the highest since Q4 2023 [6][19] - GAAP gross margins were 46.1%, exceeding the outlook of 40%, while non-GAAP gross margins were 46.4% [21][22] - GAAP operating profit was $29.2 million, reflecting a 15.1% operating margin, with non-GAAP operating margin at 18.3% [23] Business Line Data and Key Metrics Changes - Systems revenue was $138 million, and CS and I revenue was $55 million, both slightly above expectations [19] - Sales to mature node applications remained dominant, particularly in Power and General Mature segments [8][10] - Revenue from silicon carbide applications declined sequentially due to moderated customer investments, while engagement in technology transitions remained strong [10][12] Market Data and Key Metrics Changes - China accounted for 37% of total shift system sales, down from 49% in the prior quarter, with expectations for fluctuations in revenue from China throughout 2025 [19][20] - The U.S. saw an increase in shift system sales to 23% of total, while Korea improved to 20%, mainly due to DRAM shipments [19] - The company anticipates a decline in revenue from China on a year-over-year basis as customers digest previous investments [19][20] Company Strategy and Development Direction - The company is focused on innovation and cost control to capture long-term growth opportunities while mitigating tariff impacts [6][8] - Plans are in place to lessen the direct impact of tariffs, leveraging a diversified global supply chain [6][7] - The company aims to maintain strong profitability and invest in R&D to prepare for market recovery [26][85] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term drivers of the semiconductor industry, despite current macroeconomic challenges [16][28] - The company expects revenue in Q2 2025 to be approximately $185 million, with non-GAAP gross margins around 42% [26] - Management noted that while bookings improved, it is premature to call it an inflection point, and they expect continued fluctuations in bookings [39][40] Other Important Information - The company generated $35 million in free cash flow in Q1 2025 and exited the quarter with $587 million in cash and no debt [25][28] - A $100 million increase in share repurchase authorization reflects confidence in long-term business fundamentals [25] Q&A Session Summary Question: What contributed to the robust gross margin? - Management indicated that higher margin spare sales and favorable deferred revenue recognition contributed to the strong gross margin performance [33][35] Question: What is the order intensity for Q2? - Management noted that while bookings increased significantly, it is too early to declare it an inflection point, with most bookings coming from general mature and power segments [39][40] Question: Can you break down the margin performance? - The largest contributor to margin performance was the mix of sales, with expectations for moderation in the second quarter [46] Question: What is the impact of tariffs on margins? - Management acknowledged that while tariffs have a small impact, they have plans in place to mitigate these effects through a global supply base [50][51] Question: What is the composition of the backlog? - The backlog is predominantly general mature, with expectations for it to decrease over time as the company returns to a more standard book-to-bill ratio [56][58] Question: What is the outlook for Japan? - Management expressed optimism about Japan, noting progress in placing tools and anticipating repeat orders as utilization rates improve [70][72] Question: How are technology transitions impacting the business? - The transitions from 150mm to 200mm wafers and from planar to trench devices are expected to benefit the company, particularly in high-energy technology [73][75] Question: What is the outlook for memory business recovery? - The memory business saw an uptick primarily in DRAM, with expectations for broadening out in the future [103]