Core Insights - Demand for advanced chipmaking equipment is rapidly increasing due to advancements in semiconductors for AI, electric vehicles, and high-performance computing, leading investors to focus on companies like ACM Research (ACMR) and Applied Materials (AMAT) [1] Company Overview - Applied Materials has a market capitalization exceeding $134 billion and is a leader in materials engineering, focusing on innovations such as gate-all-around transistors and advanced memory [2] - ACM Research, with a market cap of $1.37 billion, is expanding in wafer cleaning and advanced packaging, particularly in Asia, while also scaling globally [2] Stock Performance - In 2025, ACM Research's shares have increased by 60.8%, significantly outperforming Applied Materials' 2.1% gain, reflecting ACMR's strong revenue momentum and growing influence in the Chinese market [3] - AMAT's slower stock performance is attributed to U.S. export controls affecting its China business, despite its leadership in advanced technologies [3] Strategic Positioning - ACM Research is strategically positioned in the Chinese semiconductor market, benefiting from local manufacturing and customer relationships amid China's push for self-reliance in chipmaking [5] - ACMR's gross margin for Q1 2025 was 48.2%, exceeding its long-term target range of 42% to 48%, supported by a favorable product mix and disciplined cost controls [6] Financial Health - ACMR's net cash increased to $271 million in Q1 2025, up from $259 million at the end of 2024, with positive operating cash flow of $5.3 million compared to a negative $9 million a year earlier [7] - Applied Materials reported an adjusted EPS of $2.39 in Q2 2025, exceeding estimates, with a gross margin of 49.2%, the highest in over two decades [11] Market Challenges - The Trump administration's 25% semiconductor tariffs pose significant challenges for both AMAT and ACMR, potentially inflating costs and disrupting supply chains [13] Valuation Comparison - ACM Research is trading at a forward P/E of 17.09X, below its 5-year median of 21.70X, indicating it is attractively valued compared to Applied Materials, which is trading at a forward P/S of 17.09X, aligning with its historical average [14] Price Targets - Analysts project an average price target of $199.33 for Applied Materials, suggesting a 20.1% upside, while ACM Research has an average price target of $34.43, implying a 45.45% upside [15][19] Investment Outlook - ACMR is gaining momentum with strong margins and relevance in China's chip self-reliance, while AMAT benefits from AI-driven demand and shareholder returns, though its slower growth and higher valuation limit near-term upside [21]

Financial Performance - Revenue for Q1 2025 was $172.347 million, a 13.2% increase from $152.191 million in Q1 2024[21] - Gross profit for Q1 2025 was $82.550 million, compared to $79.121 million in Q1 2024, reflecting a gross margin improvement[21] - Net income attributable to ACM Research, Inc. for Q1 2025 was $20.380 million, up 16.4% from $17.433 million in Q1 2024[21] - Net income for Q1 2025 was $25,013,000, an increase of 13.7% compared to $22,092,000 in Q1 2024[26] - The company reported a basic net income per share of $0.32 for Q1 2025, up from $0.28 in Q1 2024[21] - Comprehensive income attributable to ACM Research, Inc. was $21.806 million for Q1 2025, compared to $11.857 million in Q1 2024[21] - Basic net income per share increased to $0.32 for the three months ended March 31, 2025, up from $0.28 in the same period of 2024, reflecting a growth of 14.3%[61] Assets and Liabilities - Total current assets increased to $1.548 billion as of March 31, 2025, from $1.483 billion as of December 31, 2024[17] - Total assets reached $1.934 billion as of March 31, 2025, compared to $1.856 billion at the end of 2024[17] - Total liabilities were $778.415 million as of March 31, 2025, up from $759.815 million at the end of 2024[17] - Stockholders' equity increased to $949.146 million as of March 31, 2025, from $904.625 million at the end of 2024[18] Cash Flow and Investments - Cash provided by operating activities was $5,282,000 in Q1 2025, compared to cash used of $9,649,000 in Q1 2024[26] - Total cash, cash equivalents, and restricted cash at the end of Q1 2025 was $467,826,000, up from $212,113,000 at the end of Q1 2024[27] - The fair value of cash and cash equivalents as of March 31, 2025, was $76,510,000, an increase from $50,967,000 as of December 31, 2024[58] - The company purchased property and equipment totaling $16,726,000 in Q1 2025, compared to $25,419,000 in Q1 2024[27] - Proceeds from the exercise of stock options amounted to $22,729,000 in Q1 2025, significantly higher than $4,799,000 in Q1 2024[27] Research and Development - Research and development expenses for Q1 2025 were $27.503 million, compared to $23.918 million in Q1 2024, indicating a focus on innovation[21] Inventory and Receivables - Total inventories, net, increased to $609,567 thousand as of March 31, 2025, from $597,984 thousand as of December 31, 2024[76] - The allowance for credit losses decreased slightly to $18,338 thousand as of March 31, 2025, from $18,347 thousand at the end of 2024[75] - Accounts receivable as of March 31, 2025, totaled $387,849 thousand, slightly up from $387,045 thousand as of December 31, 2024[75] - Revenue recognized from contract liabilities at the beginning of the year was $62,119 thousand for the three months ended March 31, 2025, compared to $29,188 thousand for the same period in 2024, representing a 112.5% increase[74] Borrowings and Interest - Total short-term borrowings decreased to $24,951 thousand as of March 31, 2025, from $32,814 thousand as of December 31, 2024[82] - As of March 31, 2025, total long-term borrowings amounted to $134,540 million, an increase of 27.5% from $105,525 million as of December 31, 2024[90] - Interest expense related to long-term borrowings for the three months ended March 31, 2025, was $1,365 million, compared to $570 million for the same period in 2024, reflecting a 139.5% increase[96] Tax and Compliance - The income tax expense for the three months ended March 31, 2025, was $2,153,000, a decrease from $4,369,000 in the same period of 2024, reflecting a reduction of approximately 51%[128] - The company is currently evaluating the provisions of ASU No. 2023-09, which requires additional disclosures on income tax rates and payments, effective for annual periods beginning after December 15, 2024[69] Stock and Equity - The company recognized a provision for inventory of $4,523 thousand in cost of revenue for the three months ended March 31, 2025, compared to $1,025 thousand in the same period of 2024[77] - The company issued option grants for 32,000 shares to employees and board members during the three months ended March 31, 2025[118] - The total carrying amount of long-term loans was $202,475 million as of March 31, 2025, compared to an estimated fair value of $189,779 million[95] Other Financial Metrics - The company had total unrecognized tax benefits of $16,774,000 as of March 31, 2025, with no expected reversal in the next 12 months[130] - The company’s effective interest in its subsidiaries remained stable at approximately 81.1% as of March 31, 2025[30] - The company invested $16,737 million in Ninebell Co., Ltd., increasing its ownership to 36.2%[102]

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $172 million, up 13% year-over-year [13][27] - Shipments were $157 million, down 36% compared to Q1 2024 [13][27] - Gross margin was 48.2%, exceeding the targeted range of 42% to 48% [14][28] - Net cash increased to $271 million from $259 million at the end of 2024 [14][31] Business Line Data and Key Metrics Changes - Revenue from single wafer cleaning tools grew 18%, representing 75% of total revenue [15] - Revenue for ECP, furnace, and other technologies grew 7%, accounting for 16% of total revenue [16] - Revenue from advanced packaging, excluding ECP, was down 10.5%, representing 9% of revenue [19] Market Data and Key Metrics Changes - In China, the company estimates its market share in wafer cleaning and plating exceeded 25%, translating to over 9% globally for each category [7] - The company is expanding its business into the global market, particularly in the U.S. [11] Company Strategy and Development Direction - The company aims to develop world-class tools and establish R&D and production in key countries [9] - Investment in the Oregon facility is intended to reduce tariff uncertainty and establish production close to customers [12] - The long-term revenue target is $3 billion, with equal contributions expected from China and the global market [21] Management's Comments on Operating Environment and Future Outlook - The management acknowledged a shifting global trade environment with new tariffs and evolving policies [9] - The company maintains its 2025 revenue outlook in the range of $850 million to $950 million, implying 15% year-over-year growth at the midpoint [24] - Management expressed confidence in continued market share growth despite a plateau in the WFE market in China [47][50] Other Important Information - The Lingang production and R&D center is nearing completion, with a potential annual production capacity of $3 billion [22] - The Oregon facility is being developed to support global customers with a demo lab and clean room [23] Q&A Session Summary Question: Shipment figures and full-year growth expectations - Management expects shipments to grow in 2025 but acknowledges that the growth rate may not exceed last year's high levels [37][38] Question: Impact of tariffs on profitability - Management believes the impact of tariffs is minimized as they are sourcing more parts locally and from third-party countries [44] Question: Thoughts on 2026 growth and market conditions - Management indicated that while the WFE market may plateau, they expect to continue gaining market share through innovation and new products [47][50] Question: Domestic competition and potential consolidation in the semiconductor sector - Management expressed confidence in their technology and innovation, stating that local competitors cannot easily replicate their products [56][59]

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $172 million, an increase of 13% compared to Q1 2024 [12][27] - Shipments were $157 million, down 36% year-over-year, attributed to strong demand in Q1 2024 [12][27] - Gross margin was 48.2%, exceeding the target range of 42% to 48% [13][28] - Net cash increased to $271 million from $259 million at the end of 2024 [13][30] Business Line Data and Key Metrics Changes - Revenue from single wafer cleaning tools grew 18%, representing 75% of total revenue [14] - Revenue from ECP, furnace, and other technologies grew 7%, accounting for 16% of total revenue [15] - Revenue from advanced packaging, excluding ECP, was down 10.5%, representing 9% of total revenue [18] Market Data and Key Metrics Changes - In China, the company estimates its market share in wafer cleaning and plating exceeded 25%, translating to over 9% globally for each category [7] - The company is expanding its business into the global market, particularly in the U.S. with investments in an Oregon facility [10][11] Company Strategy and Development Direction - The company aims to develop world-class tools and establish R&D and production in key countries to mitigate tariff uncertainties [8][10] - The long-term revenue target is set at $3 billion, with equal contributions expected from China and the global market [21] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the shifting global trade environment and emphasized the importance of their established strategy [8] - The company maintains its 2025 revenue outlook in the range of $850 million to $950 million, implying a 15% year-over-year growth at the midpoint [24] Other Important Information - The Oregon facility is being developed to support global customers and reduce tariff impacts [10][23] - The Lingang production and R&D center is nearing completion, with a potential annual production capacity of $3 billion [22] Q&A Session Summary Question: Shipment figures and full-year growth expectations - Management expects shipments to grow in 2025 compared to last year, but the growth rate may not exceed last year's high levels [36][37] Question: Impact of tariffs on profitability - Management indicated that tariffs on U.S. imports do not significantly impact the company, as they are sourcing more parts locally and from third countries [44] Question: Thoughts on 2026 market growth and competition - Management believes that while the market may plateau, they will continue to gain market share due to innovative products and strong customer demand [48][50] - The company is confident in its technology leadership and IP protection, which differentiates it from local competitors [56][58]

Group 1: Earnings Performance - ACM Research, Inc. reported quarterly earnings of $0.46 per share, exceeding the Zacks Consensus Estimate of $0.37 per share, but down from $0.52 per share a year ago, representing an earnings surprise of 24.32% [1] - The company has surpassed consensus EPS estimates for four consecutive quarters [2] - ACM Research's revenues for the quarter ended March 2025 were $172.35 million, exceeding the Zacks Consensus Estimate by 6.06% and up from $152.19 million year-over-year [2] Group 2: Stock Performance and Outlook - ACM Research shares have increased approximately 32.7% since the beginning of the year, contrasting with the S&P 500's decline of -4.3% [3] - The future performance of the stock will depend on management's commentary during the earnings call and the company's earnings outlook [4][6] - The current consensus EPS estimate for the upcoming quarter is $0.49 on revenues of $226.22 million, and for the current fiscal year, it is $2.15 on revenues of $928.32 million [7] Group 3: Industry Context - The Semiconductor Equipment - Material Services industry is currently ranked in the top 38% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact stock performance [5]

Note Regarding Presentation of Non-GAAP Financial Measures. Information presented below under "Q1 2025 Summary" and "Q1 2025 Financial Results" includes certain "non-GAAP financial measures" as defined in Regulation G under the Securities Exchange Act of 1934, including non-GAAP gross margin, non-GAAP operating income, non-GAAP basic and diluted EPS, and non-GAAP gross profit. These supplemental measures exclude the effect of stock-based compensation and unrealized gain or loss on short term investments, wh ...

Financial Performance - ACM Research announced preliminary unaudited revenue for Q1 2025, indicating a significant increase compared to the previous quarter[5]. - The company reported a gross margin of 45% for Q1 2025, maintaining strong profitability despite rising material costs[5]. Revenue Growth and Guidance - Future guidance suggests revenue growth of 15% to 20% for the full year 2025, driven by increased demand in the semiconductor industry[5]. Product Development and Innovation - ACM Research is focusing on expanding its product line, with plans to introduce three new technologies by the end of 2025[5]. - R&D expenditures are projected to increase by 30% in 2025 to support new product development and innovation[5]. Market Expansion and Partnerships - The company is exploring strategic partnerships to enhance market presence in Asia, aiming for a 25% market share in the region by 2026[5]. - Customer base expanded by 10% in Q1 2025, with notable new contracts in the automotive semiconductor sector[5]. Operational Efficiency - ACM Research plans to enhance its supply chain efficiency, targeting a 15% reduction in lead times by mid-2025[5]. Strategic Growth Initiatives - ACM Research is considering potential acquisitions to bolster its technology portfolio and accelerate growth[5]. - The company reported a total of 1,200 units shipped in Q1 2025, reflecting a 20% increase year-over-year[5].

Core Viewpoint - ACM Research, Inc. reported a strong start to 2025 with a 13% year-over-year revenue growth, solid profitability, and positive cash flow from operations, highlighting its technology leadership in semiconductor processing and advanced packaging applications [2][3]. Financial Performance - Revenue for the first quarter of 2025 was $172.3 million, up 13.2% from $152.2 million in the same quarter of 2024 [11][23]. - Gross margin decreased to 47.9% from 52.0% year-over-year, while non-GAAP gross margin was 48.2% compared to 52.5% [11][24]. - Operating income was $25.8 million, a 2.2% increase from $25.2 million in the previous year, with an operating margin of 15.0% [11][20]. - Net income attributable to ACM was $20.4 million, up from $17.4 million, with diluted EPS of $0.30 compared to $0.26 [11][20]. Strategic Milestones - ACM achieved several strategic milestones, including the qualification of its high-temperature SPM tool by a leading logic customer in China and receiving the 2025 3D InCites Technology Enablement Award for its Ultra ECP ap-p tool [2][6]. - The company is investing in its Oregon facility to support customer evaluations and technology development [2]. Outlook - ACM maintains its revenue guidance for fiscal year 2025 in the range of $850 million to $950 million, considering factors such as international trade policy and customer spending scenarios [3][11]. - The company anticipates incremental revenue contributions from various tools and expects a return to year-on-year growth in total shipments for the second quarter of 2025 [6][11]. Product and Regional Performance - Total shipments in Q1 2025 were $157 million, down from $245 million in Q1 2024, attributed to customer pull-ins in the previous quarter [6]. - Revenue from single wafer cleaning, Tahoe, and semi-critical cleaning equipment was $129.6 million, while ECP and other technologies contributed $27.6 million [23]. - Revenue from mainland China was $169.1 million, compared to $152.1 million in the previous year [23].

Core Viewpoint - ACM Research (ACMR) has shown strong preliminary first-quarter 2025 results, leading to positive market sentiment and a stock price increase of 5.1% due to robust revenue growth expectations [1][3]. Financial Performance - Preliminary revenue figures indicate a year-over-year growth of 8.4% to 11.7% for ACMR, driven by sustained customer demand and a favorable product mix [1]. - The company expects total revenues for 2025 to be between $850 million and $950 million, with an improved gross margin forecast of 42-48% [13]. Shipment and Market Dynamics - Despite anticipated shipment declines of 36% to 37%, ACMR attributes this to a temporary timing mismatch rather than a structural issue, with combined total shipments projected to increase by 8% to 9% year-over-year for Q4 2024 and Q1 2025 [2]. - Management expects shipment growth to resume in Q2 2025, supported by steady customer orders and ongoing expansion in the semiconductor industry [2]. Competitive Positioning - ACMR has outperformed its peers and the broader market, with a year-to-date stock increase of 28.6%, contrasting with declines in the Zacks Computer & Technology sector and the S&P 500 [3][4]. - The company holds a strong competitive position in the wafer cleaning market, generating $579 million in 2024, which accounts for 74% of total revenues and reflects a 43% growth over 2023 [10]. Market Expansion and Product Diversification - ACMR is strategically diversifying its product portfolio beyond core cleaning and plating segments, targeting a larger serviceable addressable market of $18 billion [12]. - New technologies such as Furnace, Track, PECVD, and LPCVD are gaining traction, with expectations for furnace revenues to grow in 2025 [12]. Valuation Metrics - ACMR shares are considered attractively valued, with a forward 12-month Price/Sales ratio of 1.16, significantly lower than the sector average of 5.60 [14]. - Compared to peers like Applied Materials and Lam Research, ACMR's valuation remains competitive, trading at a forward Price/Sales of 4X [14]. Earnings Estimates - The Zacks Consensus Estimate for Q1 2025 earnings is pegged at 37 cents per share, indicating a 28.9% decline year-over-year, although this figure has improved by 19 cents over the past 90 days [17].

Core Viewpoint - ACM Research (ACMR) is identified as a strong buy with a forward PE of less than 10x, making it attractive to investors despite a recent stock slide after Liberation Day [1] Company Overview - ACM Research, Inc. specializes in the development, manufacture, and sale of single-wafer wet cleaning equipment for semiconductor manufacturers, enhancing product yield by removing contaminants [2] Earnings History - The company has achieved four consecutive earnings beats with an average positive surprise of 97% over the last year, including a recent earnings print of $0.56 against a consensus of $0.26, resulting in a 115% positive surprise [4] Earnings Estimates Revisions - Earnings estimates for ACM Research have been revised upwards, with the current quarter estimate moving from $0.37 to $0.18, next quarter from $0.35 to $0.49, and full year 2025 from $1.80 to $2.15, while 2026 estimates increased from $2.30 to $2.50 [5] Growth Projections - Revenue for 2025 is projected to be around $928 million, reflecting an 18.7% growth, with next year's sales expected to exceed $1 billion, indicating a 16.3% growth; the most recent quarter showed a topline growth of 31% [6] Valuation Metrics - ACM Research's forward PE stands at 9.7x, significantly lower than the market multiple of 18x and the industry average of 26x; the price to book ratio is at 1.1x, and price to sales is just under 1.55x, with operating margins increasing from 12.31% to 13.12% [7]