Core Insights - Amtech Systems (ASYS) and Applied Materials (AMAT) are pivotal players in the semiconductor ecosystem, with ASYS focusing on thermal processing and silicon wafer equipment, while AMAT provides a broader range of tools for major chipmakers [1][2] Amtech Systems (ASYS) - ASYS has identified advanced packaging as a significant growth opportunity, particularly in AI infrastructure, with equipment sales for AI applications increasing fivefold year-over-year, constituting about 25% of Thermal Processing Solutions' revenues [3][4] - The company projects revenues of $17-$19 million for Q4 fiscal 2025, driven by AI-related equipment sales, despite a forecasted decline of 24.4% in fiscal 2025 revenues, with a recovery expected in fiscal 2026 at an estimated growth of 4.6% [5][6] - ASYS has restructured operations to enhance cost efficiency, reducing its manufacturing sites from seven to four, resulting in annual savings of $13 million [7][8] - The stock trades at a forward sales multiple of 1.66X, indicating a discounted valuation compared to AMAT's 4.60X [16] Applied Materials (AMAT) - AMAT is a leader in semiconductor fabrication equipment, with strong long-term growth prospects due to its advancements in AI-driven semiconductor technology [9][10] - The company has seen significant revenue generation from its Sym3 Magnum etch system, exceeding $1.2 billion since its launch, and anticipates over 50% revenue growth from DRAM customers in fiscal 2025 [11] - However, AMAT faces challenges from U.S. government restrictions on selling advanced semiconductor equipment to Chinese manufacturers, impacting its sales and growth outlook, with projected year-over-year revenue growth of 4.5% and 2.7% for fiscal 2025 and 2026, respectively [12][13] Price Performance and Valuation - Year-to-date, ASYS shares have appreciated by 69.6%, while AMAT shares have gained only 3.2% [14] - The valuation metrics indicate that ASYS is more reasonably priced compared to AMAT, making it a more attractive investment option at this time [16] Conclusion - ASYS is currently viewed as a more compelling investment opportunity compared to AMAT, given its faster momentum in AI-related equipment sales and operational improvements, alongside a more attractive valuation [18][19][20]

Core Viewpoint - Amtech Systems is a small-cap semiconductor equipment maker that plays a crucial role in the artificial intelligence boom, providing essential tools and consumables for advanced chip production [1][9]. Company Performance - Amtech reported a fiscal Q3 revenue of $19.6 million, a 26% increase from the previous quarter, and achieved a profit of $0.06 per share, reversing a prior loss of $0.16 per share [4]. - AI-related sales surged fivefold year-over-year, now accounting for approximately 25% of Thermal Processing Solutions revenue, indicating a shift in AI from a secondary tailwind to a primary growth driver for the company [5]. Market Position and Outlook - Analysts have raised estimates for Amtech, earning it a Zacks Rank 1 (Strong Buy), which has boosted investor confidence and led to a significant increase in ASYS shares [6]. - The demand for AI infrastructure is accelerating, as highlighted by Oracle's earnings report, which indicates that both major players like Nvidia and niche infrastructure companies like Amtech will benefit from this trend [2][9]. Industry Context - Amtech operates through subsidiaries focusing on thermal processing, chemical-mechanical polishing, and advanced chip packaging, which are essential for manufacturing high-performance devices like GPUs and silicon carbide power semiconductors [3]. - The ongoing investment by hyperscalers and enterprises in AI infrastructure is expected to drive further demand for the specialized tools and materials provided by companies like Amtech [9][10].

Core Viewpoint - Amtech Systems (ASYS) has experienced a significant share price increase of 67.1% over the past month, outperforming the Zacks Semiconductor - General industry's decline of 6.7%, primarily due to better-than-expected third-quarter results for fiscal 2025 [1][2]. Financial Performance - The third-quarter revenues reached $19.6 million, exceeding the Zacks Consensus Estimate of $16 million, while the non-GAAP EPS was 6 cents, surpassing the consensus mark of a loss of 8 cents, boosting investor confidence [2][9]. - The Zacks Consensus Estimate for fiscal 2025 is a loss of 6 cents per share, an improvement from a projected loss of 63 cents 60 days ago, with fiscal 2026 earnings estimated at 15 cents per share, indicating a year-over-year growth of 350% [13]. Market Position and Competitors - Amtech Systems has outperformed industry peers such as NVIDIA (NVDA), STMicroelectronics (STM), and Texas Instruments (TXN), with STMicroelectronics and Texas Instruments gaining only 4.7% and 0.7% respectively, while NVIDIA shares declined by 4.8% [3]. - ASYS is currently trading at a forward 12-month price-to-sales (P/S) ratio of 1.42X, significantly lower than the industry's 13.96X and also below competitors like NVIDIA (17.07X), STMicroelectronics (1.85X), and Texas Instruments (8.98X) [9][16]. Growth Opportunities - The advanced semiconductor packaging industry is projected to grow from $51.62 billion in 2025 to $89.89 billion by 2030, with a CAGR of 11.73%, indicating strong long-term prospects for Amtech Systems [6]. - The company has identified advanced packaging, particularly within AI infrastructure, as a significant growth opportunity, with sales of AI-related equipment increasing fivefold year-over-year, contributing to 25% of Thermal Processing Solutions' revenues [7][8]. Strategic Initiatives - Amtech Systems has made substantial progress in restructuring operations to enhance cost efficiency, reducing its manufacturing sites from seven to four and adopting a semi-fabless manufacturing model, resulting in $13 million in annual savings [11]. - The company has proactively adjusted pricing strategies to improve product margins and is focusing on a stronger mix of AI-related equipment and recurring revenues from consumables and services [12]. Conclusion - Amtech Systems is well-positioned for growth, driven by rising demand for advanced packaging and capital equipment, supported by strategic investments and a favorable industry outlook, making it a compelling buying opportunity for investors [17].

Core Insights - Amtech Systems (ASYS) reported strong third-quarter results for fiscal 2025, with revenues of $19.6 million, a 26% increase from the previous quarter, and earnings per share of 6 cents on a non-GAAP basis, compared to a net loss of 16 cents in the prior quarter [1][4]. Revenue Drivers - The primary growth driver was the demand from the artificial intelligence (AI) market, with sales of AI infrastructure equipment increasing fivefold year-over-year, contributing approximately 25% to Thermal Processing Solutions' revenues [2][9]. - Management indicated that bookings during the third quarter suggest sustained strong demand for AI-related products moving forward [2]. Business Segments - Despite the growth in AI, demand for products related to older semiconductor nodes, particularly in automotive and industrial markets, remained weak [3]. - To mitigate this, Amtech is focusing on recurring revenues from consumables, spare parts, and services, which accounted for about 40% of total sales in the third quarter [3]. Cost Management - The company has been actively working on cost reduction, having decreased its manufacturing footprint from 7 sites to 4, and shifting some production to partners, resulting in annual savings of $13 million [4]. Future Outlook - For the fourth quarter of fiscal 2025, Amtech expects revenues between $17 million and $19 million, with growth in AI-related equipment sales anticipated to be the main growth catalyst [4]. Competitive Landscape - Amtech Systems faces competition from larger companies like Applied Materials (AMAT) and Lam Research (LRCX), which are also focusing on AI-related chip packaging [5]. - In the fourth quarter of fiscal 2025, Lam Research reported revenues of $5.17 billion, a 34% year-over-year increase, driven by strong demand for its etch and deposition tools used in AI chip production [5]. - Applied Materials generated revenues of $7.3 billion in the third quarter of fiscal 2025, reflecting a 7.7% year-over-year growth, attributed to demand for its advanced packaging tools for AI chips [6]. Stock Performance and Valuation - Year-to-date, Amtech Systems' shares have increased by 45.5%, outperforming the Zacks Semiconductor - General industry, which grew by 22.8% [7]. - Amtech trades at a forward price-to-sales ratio of 1.15X, significantly lower than the industry average of 13.89X [10]. Earnings Estimates - The Zacks Consensus Estimate for Amtech Systems' fiscal 2025 is a loss of 6 cents per share, which has been revised upward over the past 30 days [13]. - For fiscal 2026, the earnings estimate is 15 cents per share, indicating a year-over-year growth of 350% [13].

Core Viewpoint - Momentum investing focuses on "buying high and selling higher," contrasting with traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Characteristics - Momentum investing can be risky as stocks may lose momentum when their valuations exceed future growth potential, leading to potential losses for investors [2] - Investing in bargain stocks that exhibit recent price momentum can be a safer strategy, utilizing tools like the Zacks Momentum Style Score to identify promising stocks [3] Group 2: Amtech Systems (ASYS) Analysis - Amtech Systems (ASYS) has shown significant price momentum, with a four-week price change of 15.7% and a 12-week gain of 31.1%, indicating strong investor interest [4][5] - ASYS has a beta of 1.59, suggesting it moves 59% more than the market, reflecting its fast-paced momentum [5] - The stock has a Momentum Score of B, indicating a favorable entry point for investors looking to capitalize on its momentum [6] Group 3: Earnings Estimates and Valuation - ASYS has received upward revisions in earnings estimates, earning a Zacks Rank 1 (Strong Buy), which typically attracts more investor interest and drives price increases [7] - The stock is currently trading at a Price-to-Sales ratio of 0.93, suggesting it is undervalued, as investors pay only 93 cents for each dollar of sales [7] Group 4: Additional Investment Opportunities - Besides ASYS, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting additional investment opportunities [8]

Financial Data and Key Metrics Changes - The company reported revenue of $19.6 million for the third fiscal quarter of 2025, representing a 26% increase over the prior quarter, but a 27% decrease compared to the same period last year [5][12] - Adjusted EBITDA was $2.2 million, benefiting from a nonrecurring employee retention credit, while normalized gross margin improved to 41.5% from 36.5% in the previous year [5][13] - GAAP net income for the quarter was $100,000 or $0.01 per share, compared to a net loss of $31.8 million or $2.23 per share in the preceding quarter [14] Business Line Data and Key Metrics Changes - The Thermal Processing Solutions segment saw significant growth, particularly in AI-related equipment, which accounted for about 25% of its revenue, with a fivefold increase in revenue from AI equipment year-over-year [6][7] - The Semiconductor Fabrication Solutions segment experienced weak demand for front-end equipment tied to mature node applications, although performance modestly exceeded expectations due to improved demand for consumables [8][9] Market Data and Key Metrics Changes - Revenue growth was primarily driven by strong demand in Asia for reflow ovens used in AI applications, while the mature node semiconductor market continued to show weakness [12] - The company expects continued strength in AI-related equipment sales to partially offset the softness in mature node product lines in the upcoming quarter [15][16] Company Strategy and Development Direction - The company is focused on expanding recurring revenue streams while capitalizing on opportunities in AI infrastructure, with ongoing investments in next-generation semiconductor packaging equipment [7][10] - Structural changes have been made to improve operating leverage, including consolidating manufacturing sites and optimizing the operating model, which are expected to enhance profitability [10][16] Management's Comments on Operating Environment and Future Outlook - Management noted that the near-term environment remains dynamic, with strong demand for AI-related products but weak demand for mature node products [10] - The company anticipates improved operating leverage and adjusted EBITDA margins in the mid-single digits due to previously implemented cost reductions [16] Other Important Information - The company has achieved $13 million in annualized savings through cost reduction initiatives over the past eighteen months [10] - Unrestricted cash and cash equivalents increased to $15.6 million as of June 30, 2025, compared to $11.1 million at the end of the previous fiscal year [15] Q&A Session Summary Question: No questions were raised during the Q&A session - There were no questions from participants during the call, and the session concluded without any inquiries [18]

[Cautionary Statement Regarding Forward-Looking Statements](index=3&type=section&id=Cautionary%20Statement%20Regarding%20Forward-Looking%20Statements) This statement warns that forward-looking statements are subject to risks and uncertainties, and actual results may differ materially - Forward-looking statements are identified by words such as 'may,' 'plan,' 'anticipate,' 'seek,' 'will,' 'expect,' 'intend,' 'estimate,' 'believe,' 'continue,' 'predict,' 'potential,' 'project,' 'should,' 'would,' 'could,' 'likely,' 'future,' 'target,' 'forecast,' 'goal,' 'observe,' and 'strategy' or their negatives[8](index=8&type=chunk) - Key risk factors that could cause actual results to differ materially include future economic conditions, changes in tariffs/trade policies, demand for products/services, execution of growth initiatives, competition, cyclical nature of the semiconductor industry, pricing pressures, new technologies, regulatory developments, litigation, pandemics, cybersecurity incidents, and adverse developments affecting financial institutions[8](index=8&type=chunk) - The Company undertakes no obligation to update or publicly revise any forward-looking statement after the date of this Quarterly Report[10](index=10&type=chunk) [PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the company's condensed consolidated financial statements and management's discussion and analysis [Item 1. Condensed Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) Unaudited condensed consolidated financial statements are presented for the periods ended June 30, 2025, and September 30, 2024 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets and shareholders' equity decreased from September 2024 to June 2025, mainly due to goodwill impairment | (in millions) | June 30, 2025 (Unaudited) | September 30, 2024 | | :--------------------------------------- | :------------------------ | :------------------- | | **Assets** | | | | Cash and cash equivalents | $15.563 | $11.086 | | Accounts receivable, net | $19.047 | $21.989 | | Inventories | $19.620 | $26.867 | | Total current assets | $57.755 | $64.376 | | Property, Plant and Equipment - Net | $10.445 | $11.647 | | Right-of-Use Assets - Net | $17.856 | $16.596 | | Intangible Assets - Net | $1.135 | $4.004 | | Goodwill | $0.908 | $21.261 | | Total Assets | $89.464 | $118.953 | | **Liabilities and Shareholders' Equity** | | | | Accounts payable | $6.899 | $5.356 | | Contract liabilities | $6.399 | $8.965 | | Total current liabilities | $18.840 | $19.599 | | Total Liabilities | $37.746 | $36.595 | | Total Shareholders' Equity | $51.718 | $82.358 | | Total Liabilities and Shareholders' Equity | $89.464 | $118.953 | - Total Assets decreased by **$29.489 million** (24.8%) from **$118.953 million** at September 30, 2024, to **$89.464 million** at June 30, 2025[12](index=12&type=chunk) - Goodwill saw a significant decrease from **$21.261 million** to **$0.908 million**, reflecting impairment charges[12](index=12&type=chunk) - Total Shareholders' Equity decreased by **$30.640 million** (37.2%) from **$82.358 million** to **$51.718 million**, largely due to an increase in retained deficit[12](index=12&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company reported a net loss for the nine months ended June 30, 2025, driven by impairment charges, despite a quarterly net income | (in millions, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Revenues, net | $19.557 | $26.749 | $59.522 | $77.102 | | Gross profit | $9.132 | $9.758 | $18.169 | $26.428 | | Operating income (loss) | $0.915 | $0.816 | $(30.328) | $(6.755) | | Goodwill impairment | — | — | $20.353 | $6.370 | | Intangible asset impairment | — | — | $2.569 | $0.430 | | Net income (loss) | $0.106 | $0.438 | $(31.394) | $(7.950) | | Net income (loss) per basic share | $0.01 | $0.03 | $(2.20) | $(0.56) | - Net revenues decreased by **27%** for the three months ended June 30, 2025, and by **23%** for the nine months ended June 30, 2025, compared to the respective prior year periods[13](index=13&type=chunk) - Operating income for the three months ended June 30, 2025, increased to **$0.915 million** from **$0.816 million** in the prior year, while operating loss for the nine months ended June 30, 2025, significantly widened to **$(30.328) million** from **$(6.755) million**[13](index=13&type=chunk) [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) Comprehensive income was reported for the quarter, but a substantial comprehensive loss for the nine months due to net loss | (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :------------------------------ | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Net income (loss) | $0.106 | $0.438 | $(31.394) | $(7.950) | | Foreign currency translation adjustment | $0.239 | $(0.099) | $(0.357) | $0.120 | | Comprehensive income (loss) | $0.345 | $0.339 | $(31.751) | $(7.830) | - Comprehensive income for the three months ended June 30, 2025, was **$0.345 million**, slightly up from **$0.339 million** in the prior year[15](index=15&type=chunk) - Comprehensive loss for the nine months ended June 30, 2025, was **$(31.751) million**, a significant increase from **$(7.830) million** in the prior year, mainly due to the increased net loss[15](index=15&type=chunk) [Condensed Consolidated Statements of Shareholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity) Shareholders' equity significantly decreased over nine months due to net loss, partially offset by stock compensation | (in millions) | September 30, 2024 | June 30, 2025 | | :------------------------------ | :----------------- | :------------ | | Common Stock | $0.143 | $0.143 | | Additional Paid-In Capital | $128.466 | $129.577 | | Accumulated Other Comprehensive Loss | $(0.720) | $(1.077) | | Retained Deficit | $(45.531) | $(76.925) | | Total Shareholders' Equity | $82.358 | $51.718 | - Total Shareholders' Equity decreased by **$30.640 million** from **$82.358 million** at September 30, 2024, to **$51.718 million** at June 30, 2025[17](index=17&type=chunk) - The Retained Deficit increased by **$31.394 million**, from **$(45.531) million** to **$(76.925) million**, reflecting the net loss for the period[17](index=17&type=chunk) - Additional Paid-In Capital increased by **$1.111 million**, primarily due to stock compensation expense and stock options exercised[17](index=17&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow decreased, investing activities used less cash,

[Third Quarter Fiscal 2025 Results Overview](index=1&type=section&id=Third%20Quarter%20Fiscal%202025%20Results%20Overview) Amtech Systems exceeded Q3 FY2025 expectations with 26% sequential revenue growth, strong advanced packaging, and significant annual cost savings [Executive Summary and Key Highlights](index=1&type=section&id=1.1.%20Executive%20Summary%20and%20Key%20Highlights) Amtech Systems announced better-than-expected third-quarter fiscal 2025 results, with revenue increasing 26% sequentially, driven by strong performance in advanced packaging and stable demand in mature node semiconductor markets, alongside significant annual cost savings from operational optimization - Third-quarter results exceeded expectations, with revenue increasing **26% sequentially**[5](index=5&type=chunk) - Advanced packaging market remains strong, with stable demand in the mature node semiconductor market[5](index=5&type=chunk) - Operational model optimization over the past 18 months resulted in **$13 million in annual savings**[5](index=5&type=chunk) Third Quarter Fiscal 2025 Key Financial Metrics | Metric | Amount (million USD) | | :-------------------------------- | :-------------- | | Net Revenue | 19.6 | | Operating Cash Flow | 2.5 | | GAAP Net Income | 0.1 | | Non-GAAP Net Income | 0.9 | | Adjusted EBITDA | 2.2 | | Customer Orders | 21.7 | | Backlog Orders | 21.2 | [CEO Commentary](index=1&type=section&id=1.2.%20CEO%20Commentary) CEO Bob Daigle expressed satisfaction with the better-than-expected third-quarter performance, highlighting progress in operational model optimization and product development, which are expected to lay the foundation for future profitable growth - CEO expressed satisfaction with third-quarter results exceeding expectations, with revenue reaching **$19.6 million**, a **26% sequential increase**[5](index=5&type=chunk) - Both Thermal Processing Solutions and Semiconductor Fabrication Solutions business segments exceeded expectations[5](index=5&type=chunk) - The company has made significant progress in operational model optimization, achieving **$13 million in annual savings**, and believes structural changes and investments in product and application development will drive future profitable growth[5](index=5&type=chunk) [Consolidated Financial Performance](index=2&type=section&id=Consolidated%20Financial%20Performance) The company reported Q3 FY2025 GAAP and non-GAAP financial results, showing significant sequential revenue growth and improved non-GAAP profitability [GAAP and Non-GAAP Financial Summary](index=2&type=section&id=2.1.%20GAAP%20and%20Non-GAAP%20Financial%20Summary) The company reported GAAP and non-GAAP financial data for the third quarter of fiscal 2025, showing significant sequential revenue growth but a year-over-year decrease, with improved gross margin and net income on a non-GAAP basis reflecting enhanced operational efficiency and the exclusion of specific non-cash expenses Third Quarter Fiscal 2025 Consolidated Financial Summary | Metric | Q3 FY2025 (million USD) | Q2 FY2025 (million USD) | Q3 FY2024 (million USD) | | :-------------------------------- | :------------------- | :------------------- | :------------------- | | Net Revenue | 19.6 | 15.6 | 26.7 | | GAAP Gross Profit | 9.1 | (0.3) | 9.8 | | GAAP Gross Margin | 46.7% | -2.1% | 36.5% | | Non-GAAP Gross Profit | 9.1 | 5.7 | 9.8 | | Non-GAAP Gross Margin | 46.7% | 36.3% | 36.5% | | GAAP Net Income (Loss) | 0.1 | (31.8) | 0.4 | | GAAP Diluted EPS (Loss) | 0.01 | (2.23) | 0.03 | | Non-GAAP Net Income (Loss) | 0.9 | (2.3) | 1.1 | | Non-GAAP Diluted EPS (Loss) | 0.06 | (0.16) | 0.08 | [Revenue Analysis](index=2&type=section&id=2.2.%20Revenue%20Analysis) Net revenue for the third quarter of fiscal 2025 increased 26% sequentially, primarily driven by strong demand for AI application reflow ovens in Asia, but decreased 27% year-over-year due to continued weakness in the mature node semiconductor market, partially offset by increased sales of advanced packaging solutions - Net revenue increased **26% sequentially**, primarily driven by strong demand for AI application reflow ovens in Asia[8](index=8&type=chunk) - Net revenue decreased **27% year-over-year**, mainly due to continued weakness in the mature node semiconductor market, leading to lower sales of related equipment[8](index=8&type=chunk) - Growth in advanced packaging solutions sales partially offset the decline in the mature node market[8](index=8&type=chunk) [Gross Profit and Margin Analysis](index=2&type=section&id=2.3.%20Gross%20Profit%20and%20Margin%20Analysis) GAAP gross profit increased by $9.5 million sequentially, primarily due to the absence of a $6.0 million non-cash inventory write-down from the previous quarter, while a year-over-year decrease of $0.6 million was attributed to lower sales volume, with this quarter's gross margin benefiting from a $1.0 million Employee Retention Credit (ERC) refund, resulting in a normalized gross margin of 41.5% excluding ERC, a significant improvement from 36.5% in the prior year - GAAP gross profit increased by **$9.5 million sequentially**, primarily due to the absence of a **$6.0 million non-cash inventory write-down** from the previous quarter[9](index=9&type=chunk) - GAAP gross profit decreased by **$0.6 million year-over-year**, mainly due to lower sales volume resulting from weak demand in the mature node semiconductor market[9](index=9&type=chunk) - This quarter's gross margin benefited from a **$1.0 million Employee Retention Credit (ERC) refund**[9](index=9&type=chunk) - Excluding ERC, the normalized gross margin was **41.5%**, higher than **36.5%** in the third quarter of fiscal 2024[9](index=9&type=chunk) [Operating Expenses (SG&A, R&D)](index=2&type=section&id=2.4.%20Operating%20Expenses%20(SG%26A%2C%20R%26D)) Selling, General and Administrative (SG&A) expenses increased by $0.3 million sequentially due to higher third-party consulting costs, but decreased by $0.8 million year-over-year, benefiting from ERC refunds and fixed cost structure reductions, while Research and Development (R&D) expenses decreased by $0.5 million sequentially due to project procurement timing and ERC refunds, and by $0.3 million year-over-year, reflecting ERC benefits and non-recurring development work in the Semiconductor Fabrication Solutions segment - SG&A expenses increased by **$0.3 million sequentially**, primarily due to higher third-party consulting costs[10](index=10&type=chunk) - SG&A expenses decreased by **$0.8 million year-over-year**, mainly due to ERC refunds and fixed cost structure reductions[10](index=10&type=chunk) - R&D expenses decreased by **$0.5 million sequentially**, primarily due to project procurement timing and ERC refunds[11](index=11&type=chunk) - R&D expenses decreased by **$0.3 million year-over-year**, reflecting ERC benefits and non-recurring development work in the Semiconductor Fabrication Solutions segment[11](index=11&type=chunk) [Net Income and Earnings Per Share](index=2&type=section&id=2.5.%20Net%20Income%20and%20Earnings%20Per%20Share) GAAP net income for the third quarter of fiscal 2025 was $0.1 million, or $0.01 per share, a significant improvement from the previous quarter's GAAP net loss of $31.8 million ($2.23 per share), but lower than the prior year's GAAP net income of $0.4 million ($0.03 per share), while non-GAAP net income was $0.9 million, or $0.06 per share, also an improvement from the previous quarter's non-GAAP net loss of $2.3 million ($0.16 per share), but lower than the prior year's non-GAAP net income of $1.1 million ($0.08 per share) Consolidated Net Income and Earnings Per Share | Metric | Q3 FY2025 | Q2 FY2025 | Q3 FY2024 | | :-------------------------------- | :-------- | :-------- | :-------- | | GAAP Net Income (million USD) | 0.1 | (31.8) | 0.4 | | GAAP Diluted EPS | 0.01 | (2.23) | 0.03 | | Non-GAAP Net Income (million USD) | 0.9 | (2.3) | 1.1 | | Non-GAAP Diluted EPS | 0.06 | (0.16) | 0.08 | [Segment Performance](index=6&type=section&id=Segment%20Performance) Both Thermal Processing Solutions and Semiconductor Fabrication Solutions segments reported strong Q3 FY2025 revenue, gross margins, and healthy order backlogs [Thermal Processing Solutions Segment](index=6&type=section&id=3.1.%20Thermal%20Processing%20Solutions%20Segment) The Thermal Processing Solutions segment achieved net revenue of $14.208 million in the third quarter of fiscal 2025, with a GAAP gross margin of 45% and operating income of $2.907 million, maintaining healthy levels of new orders and backlog orders Thermal Processing Solutions Segment Key Financial Metrics | Metric | Q3 FY2025 (thousand USD) | Q2 FY2025 (thousand USD) | Q3 FY2024 (thousand USD) | | :------------------- | :----------------- | :----------------- | :----------------- | | Net Revenue | 14,208 | 10,575 | 18,038 | | GAAP Gross Profit | 6,325 | 350 | 6,313 | | GAAP Gross Margin | 45% | 3% | 35% | | Non-GAAP Gross Profit | 6,325 | 3,912 | 6,313 | | Non-GAAP Gross Margin | 45% | 37% | 35% | | Operating Income (Loss) | 2,907 | (8,401) | 1,690 | | New Orders | 14,057 | 10,562 | 10,801 | | Backlog Orders | 15,164 | 15,315 | 27,673 | [Semiconductor Fabrication Solutions Segment](index=6&type=section&id=3.2.%20Semiconductor%20Fabrication%20Solutions%20Segment) The Semiconductor Fabrication Solutions segment achieved net revenue of $5.349 million in the third quarter of fiscal 2025, with a GAAP gross margin of 52% and operating income of $0.878 million, also showing growth in new orders and backlog orders Semiconductor Fabrication Solutions Segment Key Financial Metrics | Metric | Q3 FY2025 (thousand USD) | Q2 FY2025 (thousand USD) | Q3 FY2024 (thousand USD) | | :------------------- | :----------------- | :----------------- | :----------------- | | Net Revenue | 5,349 | 5,005 | 8,711 | | GAAP Gross Profit (Loss) | 2,807 | (675) | 3,445 | | GAAP Gross Margin | 52% | (13)% | 40% | | Non-GAAP Gross Profit | 2,807 | 1,749 | 3,445 | | Non-GAAP Gross Margin | 52% | 35% | 40% | | Operating Income (Loss) | 878 | (21,077) | 1,621 | | New Orders | 7,598 | 5,139 | 8,013 | | Backlog Orders | 6,052 | 3,804 | 4,164 | [Financial Position and Cash Flow](index=3&type=section&id=Financial%20Position%20and%20Cash%20Flow) The company's cash and cash equivalents increased significantly due to strong operating cash generation and effective receivables collection [Balance Sheet Highlights](index=3&type=section&id=4.1.%20Balance%20Sheet%20Highlights) As of June 30, 2025, the company's cash and cash equivalents increased to $15.6 million, primarily driven by operating cash generation, strong accounts receivable collection, and Employee Retention Credits Cash and Cash Equivalents | Metric | June 30, 2025 (million USD) | September 30, 2024 (million USD) | | :------------------- | :----------------------- | :----------------------- | | Cash and Cash Equivalents | 15.6 | 11.1 | - Cash increase primarily attributed to operating cash generation, strong accounts receivable collection, and Employee Retention Credits[14](index=14&type=chunk) [Cash Flow Activities](index=9&type=section&id=4.2.%20Cash%20Flow%20Activities) For the nine months ended June 30, 2025, operating activities provided $5.609 million in net cash, investing activities used $0.692 million in net cash, and financing activities provided $0.080 million in net cash, with cash and cash equivalents at the end of the period totaling $15.563 million Nine-Month Cash Flow Summary | Cash Flow Type | June 30, 2025 (thousand USD) | June 30, 2024 (thousand USD) | | :------------------- | :--------------------- | :--------------------- | | Net Cash from Operating Activities | 5,609 | 8,963 | | Net Cash from Investing Activities | (692) | (2,610) | | Net Cash from Financing Activities | 80 | (6,640) | | Effect of Exchange Rate Changes | (520) | 337 | | Net Increase in Cash and Cash Equivalents | 4,477 | 50 | | Cash and Cash Equivalents at End of Period | 15,563 | 13,183 | [Business Outlook](index=3&type=section&id=Business%20Outlook) The company provided Q4 FY2025 revenue guidance, anticipating growth in AI-related sales and improved operating leverage from cost reductions [Q4 Fiscal 2025 Guidance](index=3&type=section&id=5.1.%20Q4%20Fiscal%202025%20Guidance) The company expects revenue for the fourth quarter of fiscal 2025 to be between $17 million and $19 million, with growth in AI-related equipment sales anticipated to partially offset continued weakness in the mature node semiconductor product line, and higher operating leverage and mid-single-digit adjusted EBITDA margins expected due to implemented structural and operational cost reductions Q4 Fiscal 2025 Revenue Expectation | Metric | Expected Range (million USD) | | :--- | :------------------ | | Revenue | 17 - 19 | - Growth in AI-related equipment sales is expected to partially offset continued weakness in the mature node semiconductor product line[17](index=17&type=chunk) - Higher operating leverage and mid-single-digit adjusted EBITDA margins are anticipated due to structural and operational cost reductions[17](index=17&type=chunk) [Market and Operational Factors](index=3&type=section&id=5.2.%20Market%20and%20Operational%20Factors) The company's operating performance may be significantly affected by order timing, system shipments, logistical challenges, and the financial performance of semiconductor manufacturers, as the semiconductor equipment industry is cyclical and influenced by market demand changes, with fluctuations in the RMB to USD exchange rate also potentially causing actual results to differ from expectations - Operating performance is significantly affected by order timing, system shipments, logistical challenges, and the financial performance of semiconductor manufacturers[16](index=16&type=chunk) - The semiconductor equipment industry is cyclical and influenced by changes in market demand[16](index=16&type=chunk) - Fluctuations in the RMB to USD exchange rate may cause actual results to differ from expectations[18](index=18&type=chunk) [Company Information](index=4&type=section&id=Company%20Information) Amtech Systems, Inc. provides equipment and services for semiconductor manufacturing and packaging, with a focus on investor communication and forward-looking statements [About Amtech Systems, Inc.](index=4&type=section&id=6.1.%20About%20Amtech%20Systems%2C%20Inc.) Amtech Systems, Inc. provides equipment, consumables, and services for semiconductor wafer fabrication and device packaging, with its products used in manufacturing silicon carbide (SiC) and silicon (Si) power devices, digital and analog devices, power electronics packaging, advanced semiconductor packaging, and electronic assemblies, primarily sold to semiconductor device and module manufacturers in Asia, North America, and Europe - Amtech Systems provides equipment, consumables, and services for semiconductor wafer fabrication and device packaging[21](index=21&type=chunk) - Products are used in manufacturing SiC and Si power devices, digital and analog devices, power electronics packaging, advanced semiconductor packaging, and electronic assemblies[21](index=21&type=chunk) - Primary sales markets include Asia, North America, and Europe[21](index=21&type=chunk) [Cautionary Note Regarding Forward-Looking Statements](index=4&type=section&id=6.2.%20Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This press release contains forward-looking statements concerning the company's future financial performance, growth, business strategies, costs, and product development, which are not guarantees of future performance and involve risks, uncertainties, and assumptions that are difficult to predict, and investors should refer to the "Risk Factors" section in the company's Form 10-K and Form 10-Q filings with the SEC - This press release contains forward-looking statements regarding future financial performance, growth, business strategies, costs, and product development[22](index=22&type=chunk) - Forward-looking statements are not guarantees of future performance and involve difficult-to-predict risks, uncertainties, and assumptions[22](index=22&type=chunk) - Investors should refer to the "Risk Factors" section in the company's Form 10-K and Form 10-Q filings with the SEC[22](index=22&type=chunk) [Investor Relations and Contacts](index=3&type=section&id=6.3.%20Investor%20Relations%20and%20Contacts) Amtech Systems will host a conference call on August 6, 2025, to discuss its third-quarter financial results, providing dial-in information and a webcast link, along with investor relations contact details - The company will host a conference call on **August 6, 2025, at 5:00 PM ET** to discuss third-quarter financial results[19](index=19&type=chunk) - Conference call and webcast replay information has been provided[19](index=19&type=chunk)[20](index=20&type=chunk) - Investor relations contacts include Wade M. Jenke (CFO) and Sapphire Investor Relations[23](index=23&type=chunk) [Detailed Financial Statements and Reconciliations](index=6&type=section&id=Detailed%20Financial%20Statements%20and%20Reconciliations) This section presents comprehensive GAAP and non-GAAP financial statements, including segment details, balance sheets, cash flows, and various reconciliations [Summary Financial Information (Segment Details)](index=6&type=section&id=7.1.%20Summary%20Financial%20Information%20(Segment%20Details)) This section provides a detailed financial summary for Amtech Systems and its two main segments (Thermal Processing Solutions and Semiconductor Fabrication Solutions), including GAAP and non-GAAP data for revenue, gross profit, operating income, new orders, and backlog orders, covering the third and second quarters of fiscal 2025, as well as the third quarter and nine months of fiscal 2024 Amtech Systems Consolidated Financial Summary | Metric | Q3 FY2025 (thousand USD) | Q2 FY2025 (thousand USD) | Q3 FY2024 (thousand USD) | 9 Months FY2025 (thousand USD) | 9 Months FY2024 (thousand USD) | | :------------------- | :----------------- | :----------------- | :----------------- | :-------------------- | :-------------------- | | Net Revenue | 19,557 | 15,580 | 26,749 | 59,522 | 77,102 | | GAAP Gross Profit (Loss) | 9,132 | (325) | 9,758 | 18,169 | 26,428 | | Non-GAAP Gross Profit | 9,132 | 5,661 | 9,758 | 24,155 | 27,725 | | GAAP Gross Margin | 47% | (2)% | 36% | 31% | 34% | | Non-GAAP Gross Margin | 47% | 36% | 36% | 41% | 36% | | Operating Income (Loss) | 915 | (31,583) | 816 | (30,328) | (6,755) | | New Orders | 21,655 | 15,701 | 18,814 | 55,426 | 61,690 | | Backlog Orders | 21,216 | 19,119 | 31,837 | 21,216 | 31,837 | [Consolidated Statements of Operations](index=7&type=section&id=7.2.%20Consolidated%20Statements%20of%20Operations) This section provides Amtech Systems' consolidated statements of operations, detailing revenue, cost of sales, gross profit, various operating expenses (SG&A, R&D, impairment, etc.), operating income (loss), interest income/expense, foreign exchange gains/losses, income tax expense, and ultimately net income (loss) and earnings per share for the third quarter and nine months of fiscal years 2025 and 2024 Consolidated Statements of Operations Summary | Metric (thousand USD) | Q3 FY2025 | Q3 FY2024 | 9 Months FY2025 | 9 Months FY2024 | | :-------------------------------- | :-------- | :-------- | :----------- | :----------- | | Net Revenue | 19,557 | 26,749 | 59,522 | 77,102 | | Cost of Sales | 10,425 | 16,991 | 41,353 | 49,825 | | Gross Profit | 9,132 | 9,758 | 18,169 | 26,428 | | Selling, General and Administrative Expenses | 7,387 | 8,209 | 22,553 | 25,028 | | Research and Development Expenses | 364 | 693 | 2,070 | 3,202 | | Operating Income (Loss) | 915 | 816 | (30,328) | (6,755) | | Net Income (Loss) | 106 | 438 | (31,394) | (7,950) | | Diluted EPS (Loss) | 0.01 | 0.03 | (2.20) | (0.56) | [Consolidated Balance Sheets](index=8&type=section&id=7.3.%20Consolidated%20Balance%20Sheets) This section provides Amtech Systems' consolidated balance sheets as of June 30, 2025, and September 30, 2024, detailing the composition of current assets, non-current assets, current liabilities, non-current liabilities, and stockholders' equity Consolidated Balance Sheets Summary | Metric (thousand USD) | June 30, 2025 | September 30, 2024 | | :------------------- | :------------- | :------------- | | Cash and Cash Equivalents | 15,563 | 11,086 | | Total Current Assets | 57,755 | 64,376 | | Total Assets | 89,464 | 118,953 | | Total Current Liabilities | 18,840 | 19,599 | | Total Liabilities | 37,746 | 36,595 | | Total Stockholders' Equity | 51,718 | 82,358 | [Consolidated Statements of Cash Flows](index=9&type=section&id=7.4.%20Consolidated%20Statements%20of%20Cash%20Flows) This section provides Amtech Systems' consolidated statements of cash flows for the nine months ended June 30, 2025, and 2024, detailing cash flows from operating, investing, and financing activities, as well as the effect of exchange rate changes on cash and cash equivalents Consolidated Statements of Cash Flows Summary | Cash Flow Type (thousand USD) | 9 Months FY2025 | 9 Months FY2024 | | :------------------- | :----------- | :----------- | | Net Cash from Operating Activities | 5,609 | 8,963 | | Net Cash from Investing Activities | (692) | (2,610) | | Net Cash from Financing Activities | 80 | (6,640) | | Effect of Exchange Rate Changes | (520) | 337 | | Net Increase in Cash and Cash Equivalents | 4,477 | 50 | | Cash and Cash Equivalents at End of Period | 15,563 | 13,183 | [GAAP to Non-GAAP Gross Profit Reconciliation](index=10&type=section&id=7.5.%20GAAP%20to%20Non-GAAP%20Gross%20Profit%20Reconciliation) This section provides a reconciliation table from GAAP gross profit to non-GAAP gross profit for Amtech Systems and its two segments (Thermal Processing Solutions and Semiconductor Fabrication Solutions), with key adjustments including inventory write-downs related to polishing equipment, mature node semiconductor product inventory write-downs, and intangible asset impairment Consolidated GAAP to Non-GAAP Gross Profit Reconciliation | Metric (thousand USD) | Q3 FY2025 | Q2 FY2025 | Q3 FY2024 | 9 Months FY2025 | 9 Months FY2024 | | :-------------------------------- | :-------- | :-------- | :-------- | :----------- | :----------- | | GAAP Gross Profit (Loss) | 9,132 | (325) | 9,758 | 18,169 | 26,428 | | Inventory Write-down for Mature Node Semiconductor Products | - | 5,986 | - | 5,986 | - | | Intangible Asset Impairment | - | - | - | - | 849 | | Non-GAAP Gross Profit | 9,132 | 5,661 | 9,758 | 24,155 | 27,725 | [GAAP to Non-GAAP Net Income and EPS Reconciliation](index=11&type=section&id=7.6.%20GAAP%20to%20Non-GAAP%20Net%20Income%20and%20EPS%20Reconciliation) This section provides a reconciliation table from GAAP net income (loss) and earnings per share to non-GAAP net income (loss) and earnings per share for Amtech Systems, with adjustments including gain on sale of fixed assets, relocation expenses, inventory write-downs, amortization, share-based compensation expense, goodwill impairment, intangible asset impairment, and severance costs Consolidated GAAP to Non-GAAP Net Income Reconciliation | Metric (thousand USD) | Q3 FY2025 | Q2 FY2025 | Q3 FY2024 | 9 Months FY2025 | 9 Months FY2024 | | :-------------------------------- | :-------- | :-------- | :-------- | :----------- | :----------- | | GAAP Net Income (Loss) | 106 | (31,812) | 438 | (31,394) | (7,950) | | Inventory Write-down for Mature Node Semiconductor Products | - | 5,986 | - | 5,986 | - | | Amortization | 27 | 107 | 154 | 242 | 595 | | Share-based Compensation Expense | 338 | 290 | 488 | 961 | 1,155 | | Goodwill Impairment | - | 20,353 | - | 20,353 | 6,370 | | Intangible Asset Impairment | - | 2,569 | - | 2,569 | 1,279 | | Severance Costs | 421 | 184 | 40 | 678 | 350 | | Non-GAAP Net Income (Loss) | 892 | (2,323) | 1,120 | (605) | 281 | Consolidated GAAP to Non-GAAP Diluted EPS Reconciliation | Metric | Q3 FY2025 | Q2 FY2025 | Q3 FY2024 | 9 Months FY2025 | 9 Months FY2024 | | :-------------------------------- | :-------- | :-------- | :-------- | :----------- | :----------- | | GAAP Diluted EPS (Loss) | 0.01 | (2.23) | 0.03 | (2.20) | (0.56) | | Inventory Write-down for Mature Node Semiconductor Products | - | 0.42 | - | 0.42 | - | | Amortization | - | 0.01 | 0.01 | 0.02 | 0.04 | | Share-based Compensation Expense | 0.02 | 0.02 | 0.03 | 0.07 | 0.08 | | Goodwill Impairment | - | 1.43 | - | 1.42 | 0.45 | | Intangible Asset Impairment | - | 0.18 | - | 0.18 | 0.09 | | Severance Costs | 0.03 | 0.01 | 0.01 | 0.05 | 0.02 | | Non-GAAP Diluted EPS (Loss) | 0.06 | (0.16) | 0.08 | (0.04) | 0.02 | [Net Income to EBITDA and Adjusted EBITDA Reconciliation](index=12&type=section&id=7.7.%20Net%20Income%20to%20EBITDA%20and%20Adjusted%20EBITDA%20Reconciliation) This section provides a reconciliation table from net income to EBITDA and adjusted EBITDA for Amtech Systems, with adjustments including interest income/expense, income tax expense, depreciation and amortization expense, inventory write-downs, share-based compensation expense, goodwill impairment, intangible asset impairment, and severance costs Consolidated Net Income to EBITDA and Adjusted EBITDA Reconciliation | Metric (thousand USD) | Q3 FY2025 | 9 Months FY2025 | | :-------------------------------- | :-------- | :----------- | | GAAP Net Income (Loss) | 106 | (31,394) | | Interest Income | (88) | (119) | | Interest Expense | 5 | 19 | | Income Tax Expense | 799 | 1,516 | | Depreciation and Amortization Expense | 594 | 2,167 | | EBITDA | 1,416 | (27,811) | | Inventory Write-down for Mature Node Semiconductor Products | - | 5,986 | | Share-based Compensation Expense | 338 | 961 | | Goodwill Impairment | - | 20,353 | | Intangible Asset Impairment | - | 2,569 | | Severance Costs | 421 | 678 | | Adjusted EBITDA | 2,175 | 2,736 |

Financial Data and Key Metrics Changes - For the fiscal second quarter of 2025, net revenue was $15.6 million, representing a decrease of 36% from fiscal Q1 and a decrease of 39% from the second quarter of fiscal 2024, primarily due to a customer dispute that delayed shipment of a $4.9 million order [17] - The GAAP net loss for the second quarter was $31.8 million or $2.23 per share, compared to a GAAP net income of $0.3 million or $0.02 per share for the preceding quarter [20] - Adjusted EBITDA was negative $1.4 million for fiscal Q2 2025, compared to $1.9 million for the preceding quarter [21] Business Line Data and Key Metrics Changes - The Thermal Processing Solutions segment experienced a shipment delay due to a customer dispute, impacting revenue [5] - The Semiconductor Fabrication Solutions segment saw stabilization with a book-to-bill ratio slightly above one, while demand for mature node applications remained weak [17][18] - Advanced packaging equipment bookings exceeded total bookings for all of fiscal 2024, driven by strong demand in AI applications [9] Market Data and Key Metrics Changes - There was a broader softening in demand within the mature node semiconductor market, affecting both equipment and consumables [6][7] - Orders for reflow equipment in the U.S. were weak due to high tariffs, but this was offset by strength in Asia for AI-related advanced packaging equipment [10] Company Strategy and Development Direction - The company is focusing on expanding recurring revenue streams, including consumables, parts, and services, which offer higher margins and more stable revenue [10][11] - Strategic optimization efforts are expected to yield incremental EBITDA savings of $1 million per quarter starting in Q4 2025, with total annualized savings anticipated to be $11 million [12][23] - The company aims to leverage its technologies to address challenges in adjacent applications and expand its customer base [11][14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about long-term growth despite near-term challenges, emphasizing the importance of operational efficiency and cost structure optimization [12][14] - The company is closely monitoring the evolving tariff and macroeconomic landscape, expecting potential benefits from U.S. manufacturing repatriation [9][33] Other Important Information - The company recorded an impairment charge of $22.9 million and an inventory write-off of $6 million in the second fiscal quarter due to prolonged weakness in the mature node semiconductor market [8][18] - Unrestricted cash and cash equivalents at the end of the quarter were $13.4 million, providing financial flexibility for strategic initiatives [21][23] Q&A Session Summary Question: Impact of U.S.-China trade disputes on business activity - Management noted that the impact of tariffs on the Semiconductor Fabrication Solutions business was minimal, as most products are produced in the U.S. [31] - For back-end equipment, weak orders were observed due to tariffs, but strong demand in Asia was noted [32][34] Question: Insights on R&D spending and technology contributions - Management highlighted the importance of advanced packaging and thermal management challenges, indicating a potential expansion of the addressable market for their technologies [36][37] - The company is actively engaged with customers to solve leading-edge problems, which could drive new growth opportunities [38] Question: Current margin profile of existing backlog - Management confirmed that the current margin profile of the existing backlog is above recent levels, with improved margins expected as volume increases [42][43] Question: Specific products driving strong demand for advanced packaging - The primary demand is for reflow equipment used in advanced packaging, particularly for AI applications [44][45] Question: Revenue from spares and service - Approximately 25% of the Thermal Process Solutions segment revenue comes from parts and service [46][47]

Financial Data and Key Metrics Changes - For the fiscal second quarter of 2025, net revenue was $15.6 million, representing a decrease of 36% from fiscal Q1 and a decrease of 39% from the second quarter of fiscal 2024, primarily due to a customer dispute that delayed shipment of a $4.9 million order [16][19] - GAAP net loss for the second quarter was $31.8 million or $2.23 per share, compared to a GAAP net income of $0.3 million or $0.02 per share for the preceding quarter [19] - Adjusted EBITDA was negative $1.4 million for fiscal Q2 2025, compared to $1.9 million for the preceding quarter [20] Business Line Data and Key Metrics Changes - The Thermal Processing Solutions segment experienced a shipment delay due to a customer dispute, impacting revenue [5] - The Semiconductor Fabrication Solutions segment saw stabilization with a book-to-bill ratio slightly above one, indicating improved order intake [16] - Advanced packaging equipment bookings exceeded total bookings for all of fiscal 2024, driven by strong demand in AI applications [9][16] Market Data and Key Metrics Changes - There was a broader softening in demand within the mature node semiconductor market, affecting both equipment and consumables [6] - Orders for reflow equipment in the U.S. were weak due to high tariffs, but this was offset by strength in Asia for AI-related advanced packaging equipment [10][31] - The company noted a sustained downturn in capital investment across industrial and automotive sectors [6] Company Strategy and Development Direction - The company is focusing on operational efficiency and broadening its customer and application base to navigate the current demand headwinds [6][11] - There is an emphasis on expanding recurring revenue streams, including consumables, parts, and services, which offer higher margins and more stable revenue [10][14] - The company is pursuing a semi fabless operating model, including headcount reductions and optimized manufacturing resources [21][22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about long-term growth despite near-term challenges, citing a strong cash position of $13.4 million and a disciplined financial strategy [12][20] - The company anticipates total annualized savings of $11 million on a run rate basis as it exits the fiscal year [12] - Management highlighted the potential benefits of U.S. policies aimed at repatriating semiconductor manufacturing, which could provide tailwinds for the business [32] Other Important Information - The company recorded an impairment charge of $22.9 million and an inventory write-off of $6 million in the second fiscal quarter due to prolonged weakness in the mature node semiconductor market [7][17] - Non-GAAP gross margin for the second quarter was 36%, compared to 34% in the same prior year period, driven by fixed cost reductions and product mix [17] Q&A Session Summary Question: Impact of U.S.-China trade disputes on business activity - Management noted that the impact of tariffs on the Semiconductor Fabrication Solutions segment was minimal, as most products are produced in the U.S. for the U.S. market [30] - There is hope for positive tailwinds from repatriating manufacturing to the U.S., which could benefit the company [32] Question: Insights on silicon carbide power semiconductor industry - Management discussed the potential for advanced packaging technologies to drive growth, particularly in thermal management challenges for AI GPUs [36][37] Question: Current margin profile of existing backlog - Management confirmed that the current margin profile of the existing backlog is near historic levels, indicating improved profitability potential [40][41] Question: Specific products driving strong demand for advanced packaging - The primary demand is for reflow equipment used in advanced packaging, particularly for AI applications [43] Question: Revenue from spares and service - Approximately 25% of the Thermal Process Solutions segment revenue comes from parts and service [45]