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Financial Data and Key Metrics Changes - The company reported third-quarter revenue of $214 million and non-GAAP earnings per diluted share of $1.21, both exceeding expectations [5][19] - GAAP gross margin was 41.6%, while non-GAAP gross margin was 41.8%, below the expected 43% due to a mix of low-margin system installations [21][22] - The company generated approximately $43 million in free cash flow during the third quarter, reflecting better-than-expected profitability [23] Business Line Data and Key Metrics Changes - Systems revenue was $144 million, and CS&I revenue reached a record of $70 million, driven by strong demand for spares and consumables [19] - Bookings in the third quarter declined to $52 million, primarily due to softer power and general mature bookings, but an improvement in memory bookings was noted [5][20] - Revenue from silicon carbide applications grew sequentially, while general mature revenue declined as customers managed capacity investments [10][14] Market Data and Key Metrics Changes - Sales to China decreased sequentially to 46% of total sales, down from 55% in the prior quarter, as customers digested previous investments [20] - The U.S. accounted for 14% of sales, while Korea declined to 10% [20] - The company anticipates revenue from China to decline sequentially in the fourth quarter [20] Company Strategy and Development Direction - The pending merger with Veeco is expected to create a leading semiconductor equipment company, enhancing capabilities and market reach [6][10] - The combined company aims to leverage strengths in silicon carbide and gallium nitride to address growing demand in electrification and AI [7][9] - The company is focused on product development and customer engagement while maintaining cost control [18] Management's Comments on Operating Environment and Future Outlook - Management noted that the second half of 2025 has shown slight improvement in demand compared to the first half, particularly in silicon carbide [29] - There is cautious optimism regarding memory market recovery in 2026, driven by increased DRAM and HBM investments [17][34] - The company expects bookings to improve sequentially in the fourth quarter, with a strong backlog of $484 million [20][51] Other Important Information - The company implemented a one-time voluntary retirement program, with additional expenses expected in the fourth quarter [22] - The company exited the third quarter with a strong balance sheet, consisting of $593 million in cash and marketable securities [24] Q&A Session Summary Question: Dynamics in the other power category - Management indicated that the second half of 2025 has been slightly better than the first half, with Chinese customers adding capacity while non-Chinese customers are not transitioning [29] Question: China demand outlook for 2026 - Management stated that 2025 has been a year of digestion, and future demand will depend on end demand environments and progress on chip self-sufficiency targets in China [32] Question: Memory market outlook - Management noted that demand is currently coming from DRAM and HBM, with expectations for new greenfield capacity to be brought online [34] Question: CS&I revenue sustainability - Management indicated that the current level of CS&I revenue is expected to be sustainable, driven by improved utilization rates and customer restocking activities [38] Question: Bookings expectations for Q4 - Management expects bookings to increase across all customer segments in Q4, with a buildup of pressure leading to purchase orders [39] Question: Silicon carbide adoption outside of EVs - Management highlighted potential applications in the electric grid and data centers, indicating a growing market for silicon carbide beyond electric vehicles [60]

Financial Data and Key Metrics Changes - The company reported third-quarter revenue of $214 million and non-GAAP earnings per diluted share of $1.21, both exceeding expectations [6][21] - GAAP gross margin was 41.6%, while non-GAAP gross margin was 41.8%, below the expected 43% due to product mix [23][24] - GAAP operating margin was 11.7%, and non-GAAP operating margin was 18.2% [25] - The company generated approximately $43 million in free cash flow during the third quarter [27] Business Line Data and Key Metrics Changes - Systems revenue was $144 million, while CS and I revenue reached a record $70 million, driven by strong demand for spares and consumables [21][22] - Bookings in the third quarter declined to $52 million, with a backlog of $484 million at the end of the quarter [22][28] - Revenue from the power business grew sequentially, particularly in silicon carbide applications, while general mature revenue declined [11][16] Market Data and Key Metrics Changes - Sales to China decreased sequentially to 46% of total sales, down from 55% in the prior quarter [22] - The company anticipates a decline in revenue from China in the fourth quarter, consistent with previous expectations [22][45] - Sales to the U.S. accounted for 14% of total sales, while Korea accounted for 10% [22] Company Strategy and Development Direction - The company announced a merger with Veeco, aiming to create a leading semiconductor equipment company and capitalize on trends in AI and electrification [7][10] - The merger is expected to enhance cross-sell synergies and optimize technology advancements [8][9] - The company is focused on maintaining a strong aftermarket strategy and growing its installed base to support profitability and cash flow [20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about bookings improving sequentially in the fourth quarter, driven by encouraging quoting activity [6][10] - The company is navigating a cyclical digestion period across markets while remaining disciplined on cost control [19] - Management noted that while 2025 has been a year of digestion, they see potential growth opportunities in 2026, particularly in memory and power markets [45][50] Other Important Information - The company implemented a one-time voluntary retirement program, with additional expenses expected in the fourth quarter [24] - The company exited the third quarter with a strong balance sheet, including $593 million in cash and marketable securities [27] Q&A Session Summary Question: Dynamics in the other power category - Management noted that Chinese customers are adding capacity in silicon carbide, while non-Chinese customers are not transitioning significantly [35] Question: Tariff impacts on the business - The company is managing through the tariff environment and expects potential impacts in 2026 as tariff costs move into the P&L [38] Question: China demand outlook for 2026 - Management indicated that China demand will depend on end demand environments and progress on chip self-sufficiency targets [45] Question: Memory market outlook - Management highlighted that demand is currently coming from DRAM and HBM, with expectations for new greenfield capacity to be brought online [50] Question: CS and I revenue sustainability - Management confirmed that the current level of CS and I revenue is expected to be sustainable, driven by improved utilization rates [66] Question: Bookings expectations for Q4 - Management anticipates bookings to increase across all customer segments, with a build-up of pressure leading to purchase orders [70] Question: Adoption of silicon carbide outside of electric vehicles - Management mentioned potential applications in the electric grid and data centers, indicating a growing market for silicon carbide [116]

Core Insights - Axcelis Technologies (ACLS) reported quarterly earnings of $1.21 per share, exceeding the Zacks Consensus Estimate of $1.01 per share, but down from $1.49 per share a year ago, resulting in an earnings surprise of +19.80% [1] - The company achieved revenues of $213.61 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 6.65%, although this is a decline from $256.56 million in the same quarter last year [2] - Axcelis has consistently outperformed consensus EPS and revenue estimates over the last four quarters [2] Earnings Outlook - The future performance of Axcelis shares will largely depend on management's commentary during the earnings call and the subsequent revisions of earnings estimates [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.97 on revenues of $201 million, while for the current fiscal year, the estimate is $4.13 on revenues of $788.45 million [7] Industry Context - The Electronics - Manufacturing Machinery industry, to which Axcelis belongs, is currently ranked in the bottom 29% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Axcelis's stock performance [5]

Q3 2025 EARNINGS PRESENTATION NOVEMBER 4, 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 ...

Financial Performance - Revenue for Q3 2025 was $213.6 million, a decrease of 16.7% from $256.6 million in Q3 2024[6] - GAAP Gross Margin for Q3 2025 was 41.6%, down from 42.9% in Q3 2024[6] - GAAP Diluted Earnings Per Share (EPS) for Q3 2025 was $0.83, compared to $1.49 in Q3 2024, representing a decline of 44.4%[6] - Non-GAAP Diluted EPS for Q3 2025 was $1.21, down from $1.72 in Q3 2024, a decrease of 29.7%[6] - Axcelis reported a net income of $25.986 million for Q3 2025, a decline of 46.5% from $48.576 million in Q3 2024[6] - Non-GAAP operating margin for Q3 2025 was 18.2%, down from 21.7% in Q3 2024[6] - Adjusted EBITDA for Q3 2025 was $43.202 million, compared to $59.674 million in Q3 2024, reflecting a decrease of 27.5%[6] - Non-GAAP gross profit for the three months ended September 30, 2025, was $89,305 thousand, a decrease of 19.1% from $110,324 thousand in the prior year[27] - Non-GAAP operating income for the three months ended September 30, 2025, was $38,874 thousand, down 30.3% from $55,768 thousand in the same period of 2024[27] - Cash, cash equivalents, and restricted cash at the end of the period increased to $195,127 thousand from $126,719 thousand year-over-year[20] - Total liabilities decreased slightly to $331,796 thousand as of September 30, 2025, from $335,991 thousand at December 31, 2024[17] Future Projections - The company expects Q4 2025 revenues to be approximately $215 million, with GAAP EPS projected at $0.76 and non-GAAP EPS at $1.12[7] - GAAP diluted EPS for the three months ended December 31, 2025, is $0.76[34] - Non-GAAP diluted EPS for the same period is $1.12, reflecting adjustments for transaction and integration costs, restructuring, and stock-based compensation[34] Mergers and Acquisitions - Axcelis announced a merger with Veeco Instruments, aiming to enhance capabilities in the semiconductor equipment sector[4] - The company announced a merger agreement with Veeco Instruments on October 1, 2025, which will incur transaction and integration costs[28] - Transaction and integration costs related to the merger agreement with Veeco Instruments amount to $0.19 per share[35] - Restructuring costs, primarily for early retirement programs and severance, contribute $0.05 per share due to global cost-saving initiatives[35] - The adjusted tax rate used for non-GAAP adjustments is 14%, impacting the income tax effect by $(0.06) per share[34] Shareholder Actions - The company has over $590 million in cash and investments, providing flexibility for strategic initiatives[4] - The company repurchased common stock amounting to $32,335 thousand during the three months ended September 30, 2025[20]

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Company Overview - Axcelis Technologies specializes in designing and manufacturing ion implantation equipment and related processing tools used in semiconductor chip fabrication, offering a product suite that includes high energy, high current, and medium current implanters, as well as aftermarket lifecycle services [5][6] - The company generates revenue primarily through direct equipment sales and ongoing aftermarket services, including spare parts, upgrades, maintenance, and training [5] Recent Developments - On October 28, 2025, REINHART PARTNERS, LLC disclosed a purchase of 91,788 shares of Axcelis Technologies, valued at approximately $7.39 million, increasing its stake to 1,610,332 shares worth $157.23 million [1][2] - This acquisition raised Axcelis Technologies' stake to 5.1% of the fund's reportable assets under management (AUM), making it the fund's largest holding [2][3] Financial Performance - As of October 27, 2025, Axcelis Technologies had a market capitalization of $2.58 billion, with a trailing twelve months (TTM) revenue of $896.09 million and a TTM net income of $158.49 million [4] Market Position and Competitive Edge - Axcelis Technologies focuses exclusively on ion implantation tools, a critical step in chip production that influences semiconductor performance, giving it a competitive edge over broader equipment peers [8][9] - The company is well-positioned to benefit from the increasing demand for power semiconductors used in electric vehicles, charging networks, and industrial equipment, supported by its broad installed base and steady service offerings [10]

Core Viewpoint - Axcelis Technologies is experiencing a decline in stock performance and is expected to report lower earnings and revenue in its upcoming earnings disclosure on November 4, 2025 [2][3]. Company Performance - In the latest trading session, Axcelis Technologies closed at $82.29, reflecting a -1.15% change from the previous day, underperforming the S&P 500's gain of 0.23% [1]. - Over the past month, shares of Axcelis Technologies have depreciated by 13.91%, contrasting with the Computer and Technology sector's gain of 6.04% and the S&P 500's gain of 3.57% [1]. Earnings Estimates - The upcoming earnings report is projected to show earnings of $1.01 per share, representing a year-over-year decline of 32.21%, with quarterly revenue expected to be $200.3 million, down 21.93% from the previous year [2]. - Full-year Zacks Consensus Estimates predict earnings of $4.13 per share and revenue of $788.45 million, indicating year-over-year changes of -32.85% and -22.54%, respectively [3]. Analyst Sentiment - Changes in analyst estimates for Axcelis Technologies are crucial as they reflect short-term business trends, with positive revisions indicating analyst optimism [4]. - The Zacks Rank system currently assigns Axcelis Technologies a rank of 4 (Sell), suggesting a negative outlook based on stagnant EPS estimates over the past month [6]. Valuation Metrics - Axcelis Technologies is trading at a Forward P/E ratio of 20.17, which is a discount compared to the industry average Forward P/E of 29.13 [7]. - The Electronics - Manufacturing Machinery industry, which includes Axcelis Technologies, ranks in the bottom 26% of all industries according to the Zacks Industry Rank [7][8].

Core Insights - Axcelis Technologies, Inc. will release its financial results for the third quarter of 2025 on November 4, 2025, before market opening [1] - A conference call to discuss the results will take place on the same day at 8:30 a.m. ET, accessible via webcast [2] Company Overview - Axcelis, headquartered in Beverly, Massachusetts, has been a key player in providing innovative ion implantation solutions for the semiconductor industry for over 45 years [2] - The company focuses on developing enabling process applications through the design, manufacture, and lifecycle support of ion implantation systems, which are critical in integrated circuit manufacturing [2]