PART I - FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents Axcelis Technologies' unaudited consolidated financial statements, including operations, comprehensive income, balance sheets, equity, and cash flows, with detailed notes [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) Total revenue decreased by 6.4% and net income by 17.4% for the three months ended June 30, 2024, with similar declines for the six-month period | Metric (in thousands) | Three months ended June 30, 2024 | Three months ended June 30, 2023 | Six months ended June 30, 2024 | Six months ended June 30, 2023 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total Revenue | $256,512 | $273,970 | $508,883 | $527,990 | | Gross Profit | $112,409 | $119,703 | $228,460 | $223,722 | | Income from Operations| $52,810 | $63,708 | $109,349 | $115,065 | | Net Income | $50,866 | $61,579 | $102,460 | $109,276 | | Basic EPS | $1.56 | $1.88 | $3.14 | $3.34 | | Diluted EPS | $1.55 | $1.86 | $3.12 | $3.29 | - Total revenue decreased by **6.4%** for the three months ended June 30, 2024, and by **3.6%** for the six months ended June 30, 2024, compared to the respective prior year periods[5](index=5&type=chunk) - Net income decreased by **17.4%** for the three months ended June 30, 2024, and by **6.2%** for the six months ended June 30, 2024, compared to the respective prior year periods[5](index=5&type=chunk) [Consolidated Statements of Comprehensive Income](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Comprehensive income for the three months ended June 30, 2024, was **$49.96 million**, a decrease from **$60.57 million** in the prior year, primarily due to lower net income and foreign currency translation adjustments | Metric (in thousands) | Three months ended June 30, 2024 | Three months ended June 30, 2023 | Six months ended June 30, 2024 | Six months ended June 30, 2023 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net Income | $50,866 | $61,579 | $102,460 | $109,276 | | Foreign Currency Translation Adjustments | $(913) | $(1,011) | $(2,644) | $(961) | | Amortization of actuarial net gain and other adjustments from pension plan, net of tax | $5 | — | $10 | — | | Total Other Comprehensive Loss | $(908) | $(1,011) | $(2,634) | $(961) | | Comprehensive Income | $49,958 | $60,568 | $99,826 | $108,315 | - Comprehensive income decreased by **17.5%** for the three months ended June 30, 2024, and by **7.8%** for the six months ended June 30, 2024, compared to the respective prior year periods[7](index=7&type=chunk) [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2024, total assets increased slightly to **$1.288 billion**, while total liabilities decreased by **15.2%** to **$353.46 million**, and total stockholders' equity increased by **8.1%** to **$934.95 million** | Metric (in thousands) | June 30, 2024 | December 31, 2023 | | :-------------------- | :------------ | :---------------- | | **ASSETS** | | | | Cash and cash equivalents | $145,166 | $167,297 | | Short-term investments | $403,143 | $338,851 | | Accounts receivable, net | $188,080 | $217,964 | | Inventories, net | $283,090 | $306,482 | | Total current assets | $1,078,327 | $1,079,991 | | Total assets | $1,288,405 | $1,281,967 | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | Total current liabilities | $244,179 | $285,129 | | Total liabilities | $353,457 | $417,085 | | Total stockholders' equity | $934,948 | $864,882 | - Total liabilities decreased by **$63.6 million (15.2%)** from December 31, 2023, to June 30, 2024[10](index=10&type=chunk) - Total stockholders' equity increased by **$70.07 million (8.1%)** from December 31, 2023, to June 30, 2024[10](index=10&type=chunk) [Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) Stockholders' equity increased from **$864.88 million** at December 31, 2023, to **$934.95 million** at June 30, 2024, driven by net income and stock-based compensation, partially offset by share repurchases | Metric (in thousands) | December 31, 2023 | June 30, 2024 | | :-------------------- | :---------------- | :------------ | | Total Stockholders' Equity | $864,882 | $934,948 | | Net Income | N/A | $102,460 | | Stock-based compensation expense | N/A | $10,159 | | Repurchase of common stock | N/A | $(29,995) | | Foreign currency translation adjustments | N/A | $(2,644) | - Net income contributed **$102.46 million** to retained earnings for the six months ended June 30, 2024[11](index=11&type=chunk) - The company repurchased common stock totaling **$29.995 million** during the six months ended June 30, 2024[11](index=11&type=chunk) [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2024, net cash provided by operating activities increased to **$82.29 million**, while net cash used in investing activities decreased to **$61.29 million**, and financing activities remained stable at **$40.66 million** | Metric (in thousands) | Six months ended June 30, 2024 | Six months ended June 30, 2023 | | :-------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $82,290 | $67,274 | | Net cash used in investing activities | $(61,294) | $(73,238) | | Net cash used in financing activities | $(40,656) | $(40,080) | | Net decrease in cash, cash equivalents and restricted cash | $(22,134) | $(47,191) | | Cash, cash equivalents and restricted cash at end of period | $151,817 | $139,156 | - Operating cash flow increased by **$15.02 million (22.3%)** year-over-year for the six months ended June 30, 2024[12](index=12&type=chunk) - Share repurchases accounted for **$29.995 million** of cash used in financing activities during the first six months of 2024[117](index=117&type=chunk) [Notes to Consolidated Financial Statements (Unaudited)](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements%20(Unaudited)) The notes provide detailed disclosures on the company's business, accounting policies, stock-based compensation, leases, revenue, and other financial details [Note 1. Nature of Business](index=10&type=section&id=Note%201.%20Nature%20of%20Business) Axcelis Technologies, Inc. produces ion implantation equipment for semiconductor chip fabrication and provides extensive worldwide aftermarket service and support - Axcelis Technologies, Inc. produces ion implantation equipment for semiconductor chip fabrication and provides aftermarket service and support globally[15](index=15&type=chunk) [Note 2. Significant Accounting Policies](index=10&type=section&id=Note%202.%20Significant%20Accounting%20Policies) The company adopted a new accounting policy for derivative financial instruments in 2024 to mitigate foreign currency exchange rate risks, with **$111 million** in open forward exchange contracts - The company adopted a new accounting policy for derivative financial instruments in 2024 to mitigate foreign currency exchange rate risks[17](index=17&type=chunk)[18](index=18&type=chunk) - As of June 30, 2024, Axcelis had open forward exchange contracts with a notional value of **$111 million**, resulting in an unrealized loss of approximately **$323 thousand**[18](index=18&type=chunk) - Gains of **$2.3 million** and **$3.8 million** from forward currency exchange contracts were recorded for the three and six months ended June 30, 2024, respectively[18](index=18&type=chunk) [Note 3. Stock-Based Compensation](index=10&type=section&id=Note%203.%20Stock-Based%20Compensation) Stock-based compensation expense increased to **$5.5 million** for the three months and **$10.2 million** for the six months ended June 30, 2024, compared to the prior year periods | Metric (in millions) | Three months ended June 30, 2024 | Three months ended June 30, 2023 | Six months ended June 30, 2024 | Six months ended June 30, 2023 | | :------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Stock-based compensation expense | $5.5 | $4.7 | $10.2 | $7.9 | - The company issued **0.2 million** shares of common stock upon vesting of RSUs and purchases under the 2020 ESPP for both the three and six months ended June 30, 2024[22](index=22&type=chunk)[23](index=23&type=chunk) [Note 4. Leases](index=12&type=section&id=Note%204.%20Leases) The company holds operating leases for various facilities and a finance lease for its corporate headquarters, with total leased assets of **$44.91 million** and total lease liabilities of **$73.42 million** as of June 30, 2024 | Metric (in thousands) | June 30, 2024 | December 31, 2023 | | :-------------------- | :------------ | :---------------- | | Operating lease assets | $28,918 | $30,716 | | Finance lease assets | $15,989 | $16,632 | | Total leased assets | $44,907 | $47,348 | | Total lease liabilities | $73,422 | $75,887 | | Lease Cost (in thousands) | Three months ended June 30, 2024 | Three months ended June 30, 2023 | Six months ended June 30, 2024 | Six months ended June 30, 2023 | | :------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total operating lease cost | $2,685 | $2,614 | $5,282 | $4,858 | | Total finance lease cost | $1,508 | $1,541 | $3,027 | $3,091 | | Total lease cost | $4,193 | $4,155 | $8,309 | $7,949 | - The weighted-average remaining lease term for operating leases is **11.5 years** with a discount rate of **5.5%**, and for finance leases is **12.6 years** with a discount rate of **10.5%** as of June 30, 2024[33](index=33&type=chunk) [Note 5. Revenue](index=15&type=section&id=Note%205.%20Revenue) Total revenue for the three months ended June 30, 2024, was **$256.51 million**, with Systems revenue at **$198.65 million** and Aftermarket revenue at **$57.87 million**, with Asia Pacific remaining the largest geographic market | Revenue Category (in thousands) | Three months ended June 30, 2024 | Three months ended June 30, 2023 | Six months ended June 30, 2024 | Six months ended June 30, 2023 | | :------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Systems | $198,645 | $215,174 | $394,076 | $410,372 | | Aftermarket | $57,867 | $58,796 | $114,807 | $117,618 | | Total Revenue | $256,512 | $273,970 | $508,883 | $527,990 | | Geographic Market (in thousands) | Three months ended June 30, 2024 | Three months ended June 30, 2023 | Six months ended June 30, 2024 | Six months ended June 30, 2023 | | :------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | North America | $34,373 | $37,918 | $79,876 | $83,084 | | Asia Pacific | $196,159 | $205,941 | $384,376 | $397,044 | | Europe | $25,980 | $30,111 | $44,631 | $47,862 | | Total Revenue | $256,512 | $273,970 | $508,883 | $527,990 | | Contract Liabilities (in thousands) | June 30, 2024 | December 31, 2023 | | :---------------------------------- | :------------ | :---------------- | | Contract liabilities | $174,011 | $210,885 | [Note 6. Receivables and Allowances for Credit Losses](index=16&type=section&id=Note%206.%20Receivables%20and%20Allowances%20for%20Credit%20Losses) Trade receivables are reported net of allowances for credit losses, with **$0.5 million** in recovery of bad debt expense recorded for the six months ended June 30, 2024 - The company recorded **$0.5 million** in recovery of bad debt expense for the six-month period ended June 30, 2024[47](index=47&type=chunk) - No credit losses or recoveries were incurred for the three-month period ended June 30, 2024, or for the six-month period ended June 30, 2023[47](index=47&type=chunk) [Note 7. Computation of Net Earnings per Share](index=18&type=section&id=Note%207.%20Computation%20of%20Net%20Earnings%20per%20Share) Basic EPS for the three months ended June 30, 2024, was **$1.56**, and diluted EPS was **$1.55**, with similar figures for the six-month period | Metric | Three months ended June 30, 2024 | Three months ended June 30, 2023 | Six months ended June 30, 2024 | Six months ended June 30, 2023 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Basic EPS | $1.56 | $1.88 | $3.14 | $3.34 | | Diluted EPS | $1.55 | $1.86 | $3.12 | $3.29 | | Basic weighted average shares | 32,598 | 32,775 | 32,618 | 32,759 | | Diluted weighted average shares | 32,771 | 33,189 | 32,848 | 33,237 | - Diluted weighted average shares of common stock outstanding for the three and six months ended June 30, 2024, did not include **22,983** and **20,639** common equivalent shares, respectively, as their effect would have been anti-dilutive[49](index=49&type=chunk) [Note 8. Accumulated Other Comprehensive Loss](index=19&type=section&id=Note%208.%20Accumulated%20Other%20Comprehensive%20Loss) Accumulated other comprehensive loss increased to **$(4.48) million** as of June 30, 2024, from **$(1.85) million** at December 31, 2023, primarily due to foreign currency translation adjustments | Component (in thousands) | December 31, 2023 | June 30, 2024 | | :----------------------- | :---------------- | :------------ | | Foreign currency | $(1,956) | $(4,600) | | Defined benefit pension plan | $110 | $120 | | Total | $(1,846) | $(4,480) | - The increase in accumulated other comprehensive loss was mainly driven by foreign currency translation adjustments, which moved from **$(1,956) thousand** to **$(4,600) thousand**[50](index=50&type=chunk) [Note 9. Cash, cash equivalents and restricted cash](index=19&type=section&id=Note%209.%20Cash,%20cash%20equivalents%20and%20restricted%20cash) As of June 30, 2024, total cash, cash equivalents, and restricted cash amounted to **$151.82 million**, with **$6.65 million** in restricted cash for various collateral purposes | Metric (in thousands) | June 30, 2024 | December 31, 2023 | | :-------------------- | :------------ | :---------------- | | Cash and cash equivalents | $145,166 | $167,297 | | Long-term restricted cash | $6,651 | $6,654 | | Total cash, cash equivalents and restricted cash | $151,817 | $173,951 | - Restricted cash of **$6.7 million** as of June 30, 2024, includes **$5.9 million** for the headquarters lease, **$0.7 million** for workers' compensation insurance, and **$0.1 million** for customs activity[52](index=52&type=chunk) [Note 10. Inventories, net](index=19&type=section&id=Note%2010.%20Inventories,%20net) Net inventories decreased to **$283.09 million** as of June 30, 2024, from **$306.48 million** at December 31, 2023, primarily due to reductions in raw materials and finished goods | Component (in thousands) | June 30, 2024 | December 31, 2023 | | :----------------------- | :------------ | :---------------- | | Raw materials | $220,910 | $231,200 | | Work in process | $40,481 | $45,373 | | Finished goods (completed systems) | $21,699 | $29,909 | | Inventories, net | $283,090 | $306,482 | - Inventory reserves are established based on forecasted sales, product end-of-life dates, market value, and new product introductions to reduce inventory carrying value to net realizable value[53](index=53&type=chunk) [Note 11. Product Warranty](index=19&type=section&id=Note%2011.%20Product%20Warranty) The standard product warranty liability increased to **$16.42 million** as of June 30, 2024, from **$10.49 million** at January 1, 2023, reflecting new warranties and changes in estimates | Metric (in thousands) | Six months ended June 30, 2024 | Six months ended June 30, 2023 | | :-------------------- | :----------------------------- | :----------------------------- | | Balance at January 1 | $16,757 | $10,487 | | Warranties issued during the period | $5,755 | $5,616 | | Settlements made during the period | $(5,653) | $(4,834) | | Changes in estimate of liability for pre-existing warranties during the period | $(444) | $1,552 | | Balance at June 30 | $16,415 | $12,821 | - The company generally offers a one-year warranty for all systems, accruing estimated costs at shipment[54](index=54&type=chunk) [Note 12. Fair Value Measurements](index=21&type=section&id=Note%2012.%20Fair%20Value%20Measurements) As of June 30, 2024, cash equivalents and short-term investments, primarily U.S. Government Securities, totaled **$507.78 million** (Level 1), while forward currency exchange contracts (Level 2) had an unrealized loss of **$323 thousand** | Asset (in thousands) | Level 1 (June 30, 2024) | Level 2 (June 30, 2024) | Total (June 30, 2024) | | :------------------- | :---------------------- | :---------------------- | :-------------------- | | Cash equivalents | $104,958 | — | $104,958 | | Short-term investments | $402,820 | — | $402,820 | | Mark-to-market adjustment on forward exchange contracts | — | $(323) | $(323) | | Total | $507,778 | $(323) | $507,455 | - Forward currency exchange contracts, initiated in February 2024 to mitigate foreign currency fluctuations, are measured at fair value using observable market inputs and classified within Level 2 of the valuation hierarchy[63](index=63&type=chunk) [Note 13. Financing Arrangements](index=22&type=section&id=Note%2013.%20Financing%20Arrangements) The company has a financing lease obligation of **$44.5 million** as of June 30, 2024, related to the 2015 sale-leaseback of its corporate headquarters, secured by a **$5.9 million** cash collateralized letter of credit - As of June 30, 2024, Axcelis had a financing obligation of **$44.5 million** from the sale-leaseback of its corporate headquarters[64](index=64&type=chunk) - A **$5.9 million** cash collateralized letter of credit is held as a security deposit for the headquarters lease, classified as long-term restricted cash[66](index=66&type=chunk) [Note 14. Income Taxes](index=24&type=section&id=Note%2014.%20Income%20Taxes) Income tax expense increased to **$6.4 million** for the three months and **$13.8 million** for the six months ended June 30, 2024, primarily due to a decrease in stock compensation deduction | Metric (in millions) | Three months ended June 30, 2024 | Three months ended June 30, 2023 | Six months ended June 30, 2024 | Six months ended June 30, 2023 | | :------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Income tax expense | $6.4 | $3.0 | $13.8 | $8.2 | - The increase in income tax expense was primarily due to a decrease in stock compensation deduction[67](index=67&type=chunk) - The effective tax rate was less than the U.S. statutory rate of **21%** due to a forecasted Foreign Derived Intangible Income deduction, Federal R&D tax credits, and a favorable discrete item related to equity compensation[67](index=67&type=chunk) [Note 15. Concentration of Risk](index=24&type=section&id=Note%2015.%20Concentration%20of%20Risk) For the three months ended June 30, 2024, one customer accounted for **11.5%** of total revenue, and one customer represented **11.3%** of accounts receivable at period-end - One customer accounted for **11.5%** of total revenue for the three months ended June 30, 2024[68](index=68&type=chunk) - No individual customer accounted for greater than **ten percent** of total revenue for the six months ended June 30, 2024[68](index=68&type=chunk) - One customer accounted for **11.3%** of accounts receivable at June 30, 2024[68](index=68&type=chunk) [Note 16. Share Repurchase](index=24&type=section&id=Note%2016.%20Share%20Repurchase) During the six months ended June 30, 2024, the company repurchased **0.3 million** shares at an average cost of **$114.07** per share under its **$200 million** stock repurchase program - The Board of Directors approved an additional **$200 million** for the stock repurchase program in August 2023[69](index=69&type=chunk) - During the six months ended June 30, 2024, **0.3 million** shares were repurchased at an average cost of **$114.07** per share[69](index=69&type=chunk) [Note 17. Contingencies](index=24&type=section&id=Note%2017.%20Contingencies) The company is not currently involved in any litigation expected to have a material adverse effect on its business, and no material costs have been incurred for intellectual property indemnification provisions - The company is not currently involved in any litigation that is expected to have a material adverse effect on its business operations[70](index=70&type=chunk)[125](index=125&type=chunk) - System sales agreements include intellectual property indemnification provisions, but no material costs have been incurred or accrued[72](index=72&type=chunk) [Note 18. Recent Accounting Guidance](index=26&type=section&id=Note%2018.%20Recent%20Accounting%20Guidance) The company is evaluating the impact of recently issued FASB Accounting Standards Updates: ASU 2023-07 (Segment Reporting) and ASU 2023-09 (Income Taxes), effective for fiscal years beginning after December 15, 2023, and December 15, 2024, respectively - ASU 2023-07 (Segment Reporting) is effective for fiscal years beginning after December 15, 2023, and aims to enhance disclosures for significant segment expenses[73](index=73&type=chunk) - ASU 2023-09 (Income Taxes) is effective for annual periods beginning after December 15, 2024, and seeks to improve income tax disclosures, particularly for rate reconciliation and taxes paid[74](index=74&type=chunk) - The company is currently evaluating the impact of both ASUs on its future consolidated financial statements and related disclosures[73](index=73&type=chunk)[74](index=74&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance, highlighting revenue trends, gross profit, operating expenses, and liquidity, noting strong demand in the mature process segment [Overview](index=27&type=section&id=Overview) Axcelis Technologies, a leading producer of ion implantation equipment, saw strong demand in the first half of 2024, with **98%** of shipped systems revenue from the mature process segment, primarily power devices - Axcelis is a primary producer of ion implantation equipment for semiconductor chips and provides extensive worldwide aftermarket service and support[77](index=77&type=chunk) - The first six months of 2024 exhibited continued strong demand for capital equipment, with the mature process segment representing **98%** of shipped systems revenue[78](index=78&type=chunk) - Power device shipments comprised **59%** of total systems revenue, general mature **36%**, and image sensors **4%**[78](index=78&type=chunk) - Demand from silicon carbide customers within the power segment is expected to remain healthy in the second half of 2024, with DRAM and NAND spending projected to pick up in 2025[78](index=78&type=chunk) [Critical Accounting Estimates](index=27&type=section&id=Critical%20Accounting%20Estimates) Management's financial reporting relies on continuous evaluation of estimates and judgments, with no material changes identified since the 2023 Form 10-K - The preparation of financial statements requires management to make estimates and judgments that affect reported amounts[79](index=79&type=chunk) - No material changes have been made to critical accounting estimates and judgments as described in the 2023 Form 10-K[80](index=80&type=chunk) [Results of Operations](index=29&type=section&id=Results%20of%20Operations) This section details the company's financial performance, including revenue breakdown by product and service, gross profit margins, and operating expenses, highlighting a decrease in product revenue but an increase in service revenue [Revenue](index=29&type=section&id=Revenue) Total revenue decreased by **6.4%** to **$256.51 million** for the three months and by **3.6%** to **$508.88 million** for the six months ended June 30, 2024, primarily due to a decrease in system sales, while services revenue increased significantly | Revenue Category (in thousands) | Three months ended June 30, 2024 | Three months ended June 30, 2023 | Period-to-Period Change ($) | Period-to-Period Change (%) | | :------------------------------ | :------------------------------- | :------------------------------- | :-------------------------- | :-------------------------- | | Product | $245,380 | $265,673 | $(20,293) | (7.6)% | | Services | $11,132 | $8,297 | $2,835 | 34.2% | | Total revenue | $256,512 | $273,970 | $(17,458) | (6.4)% | | Revenue Category (in thousands) | Six months ended June 30, 2024 | Six months ended June 30, 2023 | Period-to-Period Change ($) | Period-to-Period Change (%) | | :------------------------------ | :----------------------------- | :----------------------------- | :-------------------------- | :-------------------------- | | Product | $488,798 | $511,680 | $(22,882) | (4.5)% | | Services | $20,085 | $16,310 | $3,775 | 23.1% | | Total revenue | $508,883 | $527,990 | $(19,107) | (3.6)% | - The decrease in product revenue for both periods was primarily driven by a decrease in system sales[84](index=84&type=chunk)[87](index=87&type=chunk) [Aftermarket and Systems Revenue](index=33&type=section&id=Aftermarket%20and%20Systems%20Revenue) For the three months ended June 30, 2024, Aftermarket revenue was **$57.9 million**, a slight decrease from **$58.8 million** in the prior year, while Systems revenue decreased to **$198.6 million** from **$215.2 million** - Aftermarket revenue for the three months ended June 30, 2024, was **$57.9 million**, compared to **$58.8 million** in the prior year[90](index=90&type=chunk) - Systems revenue for the three months ended June 30, 2024, was **$198.6 million**, down from **$215.2 million** in the prior year[90](index=90&type=chunk) - Aftermarket revenue for the six months ended June 30, 2024, was **$114.8 million**, compared to **$117.6 million** in the prior year[91](index=91&type=chunk) - Systems revenue for the six months ended June 30, 2024, was **$394.1 million**, compared to **$410.4 million** in the prior year[91](index=91&type=chunk) [Gross Profit / Gross Margin](index=33&type=section&id=Gross%20Profit%20%2F%20Gross%20Margin) Total gross profit decreased by **6.1%** to **$112.41 million** for the three months but increased by **2.1%** to **$228.46 million** for the six months, with improved product and services gross margins due to favorable mix changes | Metric | Three months ended June 30, 2024 | Three months ended June 30, 2023 | Six months ended June 30, 2024 | Six months ended June 30, 2023 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Product Gross Profit (in thousands) | $110,621 | $118,932 | $226,128 | $222,168 | | Product Gross Margin (%) | 45.1% | 44.8% | 46.3% | 43.4% | | Services Gross Profit (in thousands) | $1,788 | $771 | $2,332 | $1,554 | | Services Gross Margin (%) | 16.1% | 9.3% | 11.6% | 9.5% | | Total Gross Profit (in thousands) | $112,409 | $119,703 | $228,460 | $223,722 | | Total Gross Margin (%) | 43.9% | 43.7% | 44.9% | 42.4% | - The increase in product gross margin was primarily due to a favorable mix of system revenue[93](index=93&type=chunk)[96](index=96&type=chunk) - The increase in services gross margin was attributable to changes in the mix of service contracts[94](index=94&type=chunk)[96](index=96&type=chunk) [Operating Expenses](index=35&type=section&id=Operating%20Expenses) Total operating expenses increased by **6.4%** to **$59.6 million** for the three months and by **9.6%** to **$119.11 million** for the six months ended June 30, 2024, primarily due to higher personnel costs | Operating Expense (in thousands) | Three months ended June 30, 2024 | Three months ended June 30, 2023 | Six months ended June 30, 2024 | Six months ended June 30, 2023 | | :------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development | $25,786 | $24,130 | $51,448 | $47,903 | | Sales and marketing | $17,230 | $15,537 | $34,675 | $29,681 | | General and administrative | $16,583 | $16,328 | $32,988 | $31,073 | | Total operating expenses | $59,599 | $55,995 | $119,111 | $108,657 | - Personnel costs, the largest expense, increased due to higher wages and headcount, partially offset by a decrease in bonus expense[98](index=98&type=chunk) [Research and Development](index=35&type=section&id=Research%20and%20Development) Research and development expense increased by **6.9%** to **$25.8 million** for the three months and by **7.4%** to **$51.4 million** for the six months ended June 30, 2024, primarily due to higher personnel expenses | Metric (in thousands) | Three months ended June 30, 2024 | Three months ended June 30, 2023 | Six months ended June 30, 2024 | Six months ended June 30, 2023 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development | $25,786 | $24,130 | $51,448 | $47,903 | - The increase in R&D expense is primarily due to higher personnel expenses associated with increases in wages and headcount[101](index=101&type=chunk) [Sales and Marketing](index=37&type=section&id=Sales%20and%20Marketing) Sales and marketing expense increased by **10.9%** to **$17.2 million** for the three months and by **16.8%** to **$34.7 million** for the six months ended June 30, 2024, mainly due to higher personnel expenses | Metric (in thousands) | Three months ended June 30, 2024 | Three months ended June 30, 2023 | Six months ended June 30, 2024 | Six months ended June 30, 2023 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Sales and marketing | $17,230 | $15,537 | $34,675 | $29,681 | - The increase in sales and marketing expense is primarily due to higher personnel expenses associated with increases in wages and headcount[103](index=103&type=chunk) [General and Administrative](index=37&type=section&id=General%20and%20Administrative) General and administrative expense increased by **1.6%** to **$16.6 million** for the three months and by **6.2%** to **$33.0 million** for the six months ended June 30, 2024, driven by higher personnel expenses | Metric (in thousands) | Three months ended June 30, 2024 | Three months ended June 30, 2023 | Six months ended June 30, 2024 | Six months ended June 30, 2023 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | General and administrative | $16,583 | $16,328 | $32,988 | $31,073 | - The increase in G&A expense is primarily due to higher personnel expenses associated with an increase in headcount, offset by a decrease in bonus expense for the three-month period[105](index=105&type=chunk)[107](index=107&type=chunk) [Other Income (Expense)](index=39&type=section&id=Other%20Income%20(Expense)) Total other income significantly increased to **$4.5 million** for the three months and **$6.9 million** for the six months ended June 30, 2024, primarily due to higher interest income and foreign exchange gains | Metric (in thousands) | Three months ended June 30, 2024 | Three months ended June 30, 2023 | Six months ended June 30, 2024 | Six months ended June 30, 2023 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total other income | $4,455 | $908 | $6,914 | $2,453 | - The **$3.5 million** increase in other income for the three months was primarily due to a **$1.7 million** increase in interest income and **$2.3 million** in foreign exchange gains from forward currency exchange contracts, partially offset by **$2.5 million** in foreign exchange losses[109](index=109&type=chunk) - The **$4.5 million** increase in other income for the six months was primarily due to a **$3.3 million** increase in interest income and **$3.8 million** in foreign exchange gains from forward currency exchange contracts, partially offset by **$5.9 million** in foreign exchange losses[109](index=109&type=chunk) [Income Tax Provision](index=39&type=section&id=Income%20Tax%20Provision) Income tax expense increased to **$6.4 million** for the three months and **$13.8 million** for the six months ended June 30, 2024, primarily due to a decrease in stock compensation deduction, with the effective tax rate remaining below the U.S. statutory rate of **21%** | Metric (in thousands) | Three months ended June 30, 2024 | Three months ended June 30, 2023 | Six months ended June 30, 2024 | Six months ended June 30, 2023 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Income tax provision | $6,399 | $3,037 | $13,803 | $8,242 | - The increase in income tax expense was primarily due to a decrease in stock compensation deduction[110](index=110&type=chunk) - The effective tax rate was less than the U.S. statutory rate of **21%** due to a forecasted Foreign Derived Intangible Income deduction, Federal R&D tax credits, and a favorable discrete item related to equity compensation[111](index=111&type=chunk) [Liquidity and Capital Resources](index=41&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2024, Axcelis maintained strong liquidity with **$145.2 million** in unrestricted cash and cash equivalents and **$403.1 million** in short-term investments, with operating activities generating **$82.3 million** in cash - As of June 30, 2024, the company had **$145.2 million** in unrestricted cash and cash equivalents and **$403.1 million** in short-term investments[114](index=114&type=chunk) - Net cash provided by operating activities was **$82.3 million** for the six months ended June 30, 2024, an increase from **$67.3 million** in the prior year[115](index=115&type=chunk) - Investing activities resulted in **$61.3 million** in cash outflows, including **$3.6 million** for capital expenditures and **$249.0 million** for short-term investments, partially offset by **$191.3 million** from maturities of short-term investments[116](index=116&type=chunk) - Financing activities used **$40.7 million**, primarily for common stock repurchases (**$30.0 million**) and tax withholdings on restricted stock grants (**$11.2 million**)[117](index=117&type=chunk) - Management believes current cash and cash equivalents are sufficient to meet anticipated short- and long-term cash requirements[118](index=118&type=chunk) [Commitments and Contingencies](index=41&type=section&id=Commitments%20and%20Contingencies) Significant commitments and contingencies as of June 30, 2024, remain consistent with those disclosed in the 2023 Form 10-K - Significant commitments and contingencies at June 30, 2024, are consistent with those discussed in the 2023 Form 10-K[119](index=119&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=27&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As of June 30, 2024, there have been no material changes to the quantitative and qualitative disclosures about market risk previously reported in the 2023 Form 10-K - No material changes to market risk disclosures have occurred as of June 30, 2024, compared to the 2023 Form 10-K[120](index=120&type=chunk) [Item 4. Controls and Procedures](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2024, with no material changes in internal control over financial reporting identified during the quarter - Disclosure controls and procedures were evaluated and deemed effective as of June 30, 2024[122](index=122&type=chunk) - No material changes in internal control over financial reporting were identified during the three months ended June 30, 2024[123](index=123&type=chunk) PART II - OTHER INFORMATION [Item 1. Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any litigation that is expected to have a material adverse effect on its business operations - The company is not presently a party to any litigation that is believed to have a material adverse effect on its business operations[125](index=125&type=chunk) [Item 1A. Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) As of June 30, 2024, there have been no material changes to the risk factors described in the company's 2023 Form 10-K - No material changes to the risk factors described in Item 1A of the 2023 Form 10-K have occurred as of June 30, 2024[126](index=126&type=chunk) [Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities](index=29&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities,%20Use%20of%20Proceeds,%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's Board of Directors approved a **$200 million** additional funding for its stock repurchase program in August 2023, with **141 thousand** shares repurchased during the three months ended June 30, 2024 - The Board of Directors approved an additional **$200 million** for the stock repurchase program in August 2023, with no expiration date[126](index=126&type=chunk) | Period (three months ended June 30, 2024) | Total Number of Shares Purchased (in thousands) | Average Price Paid per Share | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (in thousands) | | :---------------------------------------- | :---------------------------------------------- | :--------------------------- | :------------------------------------------------------------------------------------------ | | April 1 through April 30 | 78 | $103.33 | $166,999 | | May 1 through May 31 | 63 | $110.03 | $160,011 | | June 1 through June 30 | — | — | $160,011 | | Total | 141 | N/A | N/A | [Item 3. Defaults Upon Senior Securities](index=29&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities during the period - No defaults upon senior securities occurred[129](index=129&type=chunk) [Item 4. Mine Safety Disclosures](index=29&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Mine Safety Disclosures are not applicable to the company[129](index=129&type=chunk) [Item 5. Other Information](index=29&type=section&id=Item%205.%20Other%20Information) During the quarter ended June 30, 2024, no director or officer adopted or terminated any Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements - No director or officer adopted or terminated any Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements during the quarter ended June 30, 2024[130](index=130&type=chunk) [Item 6. Exhibits](index=30&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including organizational documents, certifications from executive officers, and iXBRL formatted financial statements - Exhibits include Restated Certificate of Incorporation, Certificate of Amendment, Bylaws, and certifications from Principal Executive Officer and Principal Financial Officer under Exchange Act Rule 13a-14(a)/15d-14(a) and Section 1350 of Chapter 63 of title 18 of the United States Code[132](index=132&type=chunk) - The financial statements (Consolidated Statements of Operations, Comprehensive Income, Balance Sheets, Cash Flows, and Notes) are filed in inline eXtensible Business Reporting Language (iXBRL) format[132](index=132&type=chunk) SIGNATURES

Financial Data and Key Metrics Changes - The company reported Q2 2024 revenue of $257 million, exceeding the previous outlook of $245 million, with earnings per diluted share of $1.55, significantly above the prior estimate of $1.30 [7][16][20] - Gross margins for Q2 were 43.8%, slightly above the expected 43.5%, driven by better volumes and a favorable systems mix [18] - Operating profit was $53 million, reflecting a 20.6% operating margin, impacted by restructuring charges of approximately $1.4 million [19] Business Line Data and Key Metrics Changes - Systems revenue totaled $199 million, with the Mature segment comprising 98% of total system revenue, driven by strong demand for silicon carbide applications [7][8] - Advanced Logic revenue was only 2% of total system revenue, but the company made significant progress in this area, including closing a Purion Dragon evaluation unit [10] - No systems revenue was generated from the memory market in Q2, but initial spending for DRAM is expected as the year progresses [11] Market Data and Key Metrics Changes - China accounted for 55% of total system sales, remaining the strongest region for the company [17] - Demand for silicon carbide applications is expected to remain healthy, particularly in the EV market, while demand for silicon IGBT applications was soft [8][9] - Image Sensor demand was robust in China but subdued elsewhere, with signs of growth as customer quoting activity increased [9] Company Strategy and Development Direction - The company aims to capitalize on secular growth in power applications, particularly silicon carbide, which is projected to grow at a 25% CAGR from 2023 to 2029 [13] - The company is focused on geographic expansion in Japan and increasing penetration in the market while leveraging customer relationships [15] - The long-term growth model targets approximately $1.6 billion by 2027, driven by advancements in AI, electrification, and increased semiconductor demand [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in a slight revenue increase in the second half of 2024, with momentum expected to build into 2025 [12][28] - The company is closely monitoring macroeconomic conditions and their impact on customer spending patterns, particularly in the General Mature segment [27] - Management remains optimistic about long-term opportunities, particularly in the power segment and the eventual recovery of memory spending [32] Other Important Information - The company ended Q2 with $548 million in cash and generated $38 million in free cash flow [20] - The systems backlog was approximately $1 billion, with system bookings totaling $105 million in Q2 [17] Q&A Session Summary Question: Changes in Power Business Outlook - Management indicated that expectations for the full year have not materially changed, with continued strength in silicon carbide and a slight moderation expected in General Mature [26][27] Question: Pathways to 2025 Revenue Model - Management acknowledged that achieving the $1.3 billion model in 2025 is possible but will require a step-up in demand across segments, particularly in Memory and General Mature [31][32] Question: Backlog and Bookings Clarification - Management confirmed that the backlog fell due to revenue load and bookings, with no significant cancellations noted [36][37] Question: Key End Markets for General Mature Business - Management highlighted consumer spending as a key driver for General Mature, with automotive and industrial sectors lagging behind [39] Question: NAND Recovery Expectations - Management expects NAND demand to improve in 2025, following a recovery in DRAM [54] Question: Customer Profile and Pull-in Activity - Management clarified that the pull-in activity was beneficial, allowing for quicker closure of evaluation units and meeting customer production needs [58] Question: IGBT Market Dynamics - Management noted that while IGBT demand is currently soft, there is potential for recovery, particularly as silicon carbide continues to gain market share [70]

Q2 EARNINGS PRESENTATION AUGUST 1, 2024 2 SAFE HARBOR STATEMENT This presentation and discussion contain forward-looking statements, including our expectations for the future market for our products, revenues, profits, and other results that are forward-looking statements under the SEC's safe harbor provision. These forward-looking statements are based on management's current expectations and are subject to the risks inherent in our business. These risks are described in detail in our Form 10-K annual repor ...

Axcelis Technologies (ACLS) came out with quarterly earnings of $1.55 per share, beating the Zacks Consensus Estimate of $1.39 per share. This compares to earnings of $1.86 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 11.51%. A quarter ago, it was expected that this semiconductor services company would post earnings of $1.26 per share when it actually produced earnings of $1.57, delivering a surprise of 24.60%.Over the last ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): July 9, 2024 Axcelis Technologies, Inc. (Exact name of registrant as specified in its charter) Delaware 000-30941 34-1818596 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 108 Cherry Hill Drive, Beverly, Massachusetts 01915 (Address of ...

Financial Performance - Axcelis Technologies reported second quarter revenue of $256.5 million, an increase from $252.4 million in the first quarter of 2024, with a gross margin of 43.8% compared to 46.0% in the previous quarter [1][2] - The operating profit for the second quarter was $52.8 million, down from $56.5 million in the first quarter, while net income was $50.9 million, or $1.55 per diluted share, compared to $51.6 million, or $1.57 per diluted share in the first quarter [1][2] Business Outlook - For the third quarter ending September 30, 2024, Axcelis expects revenues of approximately $255 million and earnings per diluted share of approximately $1.43 [3] - The company anticipates that revenue for the second half of the year will be slightly better than the first half, with momentum expected to build into 2025 [2] Management Commentary - President and CEO Russell Low highlighted strong financial results driven by better-than-expected conversion of evaluation units into revenue and robust demand in the Power segment, particularly in silicon carbide [2] - Executive Vice President and CFO Jamie Coogan expressed satisfaction with the second quarter results, noting that revenue, operating margin, and earnings per share exceeded guidance, alongside healthy cash flow [2]

Axcelis Technologies Inc (ACLS) is slated to report second-quarter 2024 results on Jul 31.ACLS recently announced its preliminary second-quarter results, per which, now it expects revenues of more than $252 million while earnings per share (EPS) are projected to be more than $1.38. This compares with previously issued revenue guidance of $245 million and EPS of $1.30. The Zacks Consensus Estimate for second-quarter revenues is pegged at $252.4 million, which suggests a decline of 7.9% from a year ago. The c ...

Core Viewpoint - Wall Street anticipates a year-over-year decline in earnings for Axcelis Technologies (ACLS) due to lower revenues, with a consensus EPS estimate of $1.35, reflecting a -27.4% change, and revenues expected at $252.4 million, down 7.9% from the previous year [1][2]. Earnings Estimates - The consensus EPS estimate has remained unchanged over the last 30 days, indicating stability in analyst expectations [3]. - The Most Accurate Estimate for Axcelis is higher than the Zacks Consensus Estimate, resulting in a positive Earnings ESP of +2.97%, suggesting a bullish outlook from analysts [6]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive Earnings ESP is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1 (Strong Buy) [5]. - Axcelis currently holds a Zacks Rank of 1, enhancing the likelihood of beating the consensus EPS estimate [6]. Historical Performance - In the last reported quarter, Axcelis exceeded the expected EPS of $1.26 by delivering $1.57, resulting in a surprise of +24.60% [7]. - The company has consistently beaten consensus EPS estimates over the last four quarters [7]. Conclusion - While an earnings beat may not solely dictate stock movement, Axcelis is positioned as a compelling candidate for an earnings surprise, with a positive Earnings ESP and a strong Zacks Rank [8].

BEVERLY, Mass., July 17, 2024 /PRNewswire/ -- Axcelis Technologies, Inc. (Nasdaq: ACLS), a leading supplier of enabling ion implantation solutions for the semiconductor industry will release financial results for the second quarter 2024 on Wednesday, July 31, 2024, at 4:00 p.m. ET. The Company will host a call to discuss the results for the second quarter 2024 on Thursday, August 1, 2024, at 8:30 a.m. ET. The call will be available to interested listeners via an audio webcast that can be accessed through th ...

Looking for a stock that has been consistently beating earnings estimates and might be well positioned to keep the streak alive in its next quarterly report? Axcelis Technologies (ACLS) , which belongs to the Zacks Electronics - Manufacturing Machinery industry, could be a great candidate to consider.This semiconductor services company has an established record of topping earnings estimates, especially when looking at the previous two reports. The company boasts an average surprise for the past two quarters ...