[Company Overview](index=1&type=section&id=Company%20Overview) This section provides an overview of Kulicke & Soffa, including its official information, market positioning as a global leader in semiconductor assembly technology, and investor contact details [Company Information](index=1&type=section&id=Company%20Information) This section provides the official names, addresses, and contact details for Kulicke & Soffa Pte. Ltd. and Kulicke and Soffa Industries, Inc., along with their website and Q3 Fiscal 2025 earnings announcement - Company Name: Kulicke and Soffa Industries, Inc. (NASDAQ: KLIC)[2](index=2&type=chunk) - U.S. Headquarters: 1005 Virginia Drive, Fort Washington, PA 19034 USA[1](index=1&type=chunk) - Singapore Office: 23A Serangoon North Ave 5, Singapore 554369[1](index=1&type=chunk) [About Kulicke & Soffa](index=3&type=section&id=About%20Kulicke%20%26%20Soffa) Kulicke & Soffa, established in 1951, is a global leader in semiconductor assembly technology, dedicated to enhancing device performance and delivering long-term value across automotive, computing, industrial, storage, and communications markets through technology and opportunity - Company Positioning: Global leader in semiconductor assembly technology[15](index=15&type=chunk) - Market Coverage: Automotive, computing, industrial, storage, and communications markets[15](index=15&type=chunk) - Core Strategy: Creating long-term value through technological innovation to address dynamic process challenges[15](index=15&type=chunk) [Contact Information](index=3&type=section&id=Contact%20Information) This section provides investor relations contact information, specifically Joseph Elgindy from the finance department - Contact Person: Joseph Elgindy[17](index=17&type=chunk) - Department: Finance[17](index=17&type=chunk) - Phone: +1-215-784-7518[17](index=17&type=chunk) [Third Quarter Fiscal 2025 Financial Performance](index=1&type=section&id=Third%20Quarter%20Fiscal%202025%20Financial%20Performance) This section details Kulicke & Soffa's Q3 Fiscal 2025 financial performance, including GAAP and non-GAAP results, management commentary, and key financial highlights such as cash flow and stock repurchases [Executive Summary of Q3 2025 Results](index=1&type=section&id=Executive%20Summary%20of%20Q3%202025%20Results) Kulicke & Soffa reported net revenue of **$148.4 million** in Q3 Fiscal 2025, with a GAAP net loss of **$3.3 million** (diluted EPS of **$0.06**) and non-GAAP net income of **$3.8 million** (diluted non-GAAP EPS of **$0.07**) Q3 2025 Financial Summary | Metric | Q3 2025 (GAAP) | Q3 2025 (Non-GAAP) | | :----- | :------------- | :----------------- | | Net Revenue | $148.4 million | $148.4 million | | Net (Loss) / Income | $(3.3) million | $3.8 million | | EPS – Diluted | $(0.06) | $0.07 | [Management Commentary](index=2&type=section&id=Management%20Commentary) President and CEO Fusen Chen highlighted the company's ongoing progress in multiple technology transitions, expanding new opportunities in general semiconductor, memory, automotive, and industrial markets, while being encouraged by market feedback on latest solutions and order momentum in high-volume regions - The company continues to advance multiple technology transitions and expand new opportunities in general semiconductor, memory, automotive, and industrial markets[7](index=7&type=chunk) - Positive market feedback on the latest solutions and growing order momentum in high-volume regions are encouraging[7](index=7&type=chunk) [GAAP Financial Results](index=1&type=section&id=GAAP%20Financial%20Results) In Q3 Fiscal 2025, GAAP net revenue decreased **18.3%** year-over-year and **8.4%** quarter-over-quarter to **$148.4 million**, resulting in a net loss of **$3.3 million** (diluted EPS of **$0.06**), a significant decline from Q3 Fiscal 2024 net income of **$12.3 million**, while gross margin slightly increased by **10 basis points** to **46.7%** GAAP Financial Performance | Metric | Fiscal Q3 2025 | Change vs. Fiscal Q3 2024 | Change vs. Fiscal Q2 2025 | | :------------------ | :------------- | :------------------------ | :------------------------ | | Net Revenue | $148.4 million | down 18.3% | down 8.4% | | Gross Margin | 46.7% | up 10 bps | up 2180 bps | | Loss from Operations | $(6.1) million | down 173.6% | up 92.8% | | Net Loss | $(3.3) million | down 126.8% | up 96.1% | | EPS – Diluted | $(0.06) | down 127.3% | up 96.2% | [Non-GAAP Financial Results](index=1&type=section&id=Non-GAAP%20Financial%20Results) Non-GAAP net income for Q3 Fiscal 2025 was **$3.8 million**, a **80.5%** year-over-year decrease, with diluted EPS of **$0.07**, and non-GAAP operating margin was **1.1%**, down **760 basis points** year-over-year but significantly improved by **1800 basis points** quarter-over-quarter Non-GAAP Financial Performance | Metric | Fiscal Q3 2025 | Change vs. Fiscal Q3 2024 | Change vs. Fiscal Q2 2025 | | :------------------ | :------------- | :------------------------ | :------------------------ | | Income from Operations | $1.6 million | down 90.0% | up 105.8% | | Operating Margin | 1.1% | down 760 bps | up 1800 bps | | Net Income | $3.8 million | down 80.5% | up 113.5% | | Net Margin | 2.5% | down 810 bps | up 1970 bps | | EPS – Diluted | $0.07 | down 80.0% | up 113.5% | [Key Financial Highlights](index=2&type=section&id=Key%20Financial%20Highlights) Beyond core revenue metrics, K&S reported GAAP operating cash flow of **$7.4 million** and adjusted free cash flow of **$5.4 million**, maintaining a strong cash position of **$556.5 million** in cash, cash equivalents, and short-term investments, while repurchasing **$21.6 million** of common stock - GAAP cash flow from operating activities: **$7.4 million**[13](index=13&type=chunk) - Adjusted free cash flow: **$5.4 million**[13](index=13&type=chunk) - Total cash, cash equivalents, and short-term investments amounted to **$556.5 million** as of June 28, 2025[13](index=13&type=chunk) - Common stock repurchases: **$21.6 million** in total, repurchasing **0.7 million** shares[13](index=13&type=chunk) [Fourth Quarter Fiscal 2025 Outlook](index=2&type=section&id=Fourth%20Quarter%20Fiscal%202025%20Outlook) K&S anticipates Q4 Fiscal 2025 net revenue to be approximately **$170 million** (+/- **$10 million**), with GAAP diluted EPS projected at approximately **$0.08** (+/- **10%**) and non-GAAP diluted EPS at approximately **$0.22** (+/- **10%**) Q4 2025 Outlook | Metric | Q4 2025 Outlook (GAAP) | Q4 2025 Outlook (Non-GAAP) | | :------------------ | :--------------------- | :------------------------- | | Net Revenue | $170 million +/- $10 million | $170 million +/- $10 million | | Diluted EPS | $0.08 +/- 10% | $0.22 +/- 10% | [Use of Non-GAAP Financial Measures](index=2&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) This section defines Kulicke & Soffa's non-GAAP financial measures, which exclude items like goodwill amortization, restructuring costs, and equity-based compensation, used by management to analyze operating performance and enhance investor understanding and comparability, while acknowledging their limitations relative to GAAP - Non-GAAP exclusions include amortization of intangible assets from business combinations, restructuring and severance charges, equity-based compensation expenses, acquisition and integration costs, impairment charges, and related income tax effects[12](index=12&type=chunk) - Purpose of use: To enhance investor understanding of the company's underlying operating performance, facilitate comparisons of financial results across periods, and assess overall performance against competitors[12](index=12&type=chunk) - Limitations: Non-GAAP financial measures are not prepared in accordance with GAAP, may differ from non-GAAP measures used by other companies, and exclude expenses that could significantly impact the company's reported financial results[14](index=14&type=chunk) [Cautionary Statement Regarding Forward-Looking Statements](index=3&type=section&id=Cautionary%20Statement%20Regarding%20Forward-Looking%20Statements) This section serves as a disclaimer for forward-looking statements in the press release, emphasizing that actual results may differ materially due to various risks and uncertainties, including macroeconomic headwinds, inflation, interest rates, geopolitical tensions, new product development, and operational challenges, as detailed in SEC filings, with no obligation for the company to update these statements - Statements regarding future events and results are 'forward-looking' and subject to risks and uncertainties[16](index=16&type=chunk) - Key risks include: failures or delays related to labor negotiations, regulatory or judicial review, macroeconomic headwinds (inflation, interest rates, market sentiment, recession), ability to develop and market new products, and ability to operate the business in accordance with business plans[16](index=16&type=chunk) - The company undertakes no obligation to update or revise forward-looking statements[16](index=16&type=chunk) [Consolidated Financial Statements (Unaudited)](index=4&type=section&id=Consolidated%20Financial%20Statements%20%28Unaudited%29) This section presents the unaudited consolidated financial statements, including statements of operations, balance sheets, and cash flows, detailing the company's financial position and performance for the reported periods [Consolidated Condensed Statements of Operations](index=4&type=section&id=Consolidated%20Condensed%20Statements%20of%20Operations) The unaudited consolidated condensed statements of operations show a net loss of **$3.3 million** for Q3 Fiscal 2025, compared to a net income of **$12.3 million** in Q3 Fiscal 2024, with a net loss of **$6.2 million** for the nine months ended June 28, 2025, an improvement from the **$81.1 million** net loss in the prior year period Consolidated Condensed Statements of Operations (in thousands) | Metric (in thousands) | Three months ended June 28, 2025 | Three months ended June 29, 2024 | Nine months ended June 28, 2025 | Nine months ended June 29, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Net revenue | $148,413 | $181,650 | $476,523 | $524,913 | | Gross profit | $69,243 | $84,730 | $196,711 | $181,097 | | (Loss) / Income from operations | $(6,094) | $8,277 | $(4,112) | $(95,185) | | Net (loss) / income | $(3,289) | $12,264 | $(6,166) | $(81,123) | | Diluted EPS | $(0.06) | $0.22 | $(0.12) | $(1.45) | | Cash dividends declared per share | $0.205 | $0.20 | $0.615 | $0.60 | | Number of employees | 2,625 (as of June 28, 2025) | 2,790 (as of June 29, 2024) | N/A | N/A | [Consolidated Condensed Balance Sheets](index=5&type=section&id=Consolidated%20Condensed%20Balance%20Sheets) As of June 28, 2025, total assets were **$1.1249 billion**, down from **$1.2402 billion** as of September 28, 2024, primarily due to decreases in short-term investments, accounts receivable, inventory, goodwill, and intangible assets, while total liabilities also slightly decreased from **$296.2 million** to **$287.4 million** Consolidated Condensed Balance Sheets (in thousands) | Metric (in thousands) | As of June 28, 2025 | As of September 28, 2024 | | :-------------------- | :------------------ | :----------------------- | | Total Assets | $1,124,896 | $1,240,162 | | Total Liabilities | $287,370 | $296,153 | | Total Shareholders' Equity | $837,526 | $944,009 | | Cash and cash equivalents | $246,481 | $227,147 | | Short-term investments | $310,000 | $350,000 | | Goodwill | $69,522 | $89,748 | | Intangible assets, net | $5,908 | $25,239 | [Consolidated Condensed Statements of Cash Flows](index=6&type=section&id=Consolidated%20Condensed%20Statements%20of%20Cash%20Flows) For the three months ended June 28, 2025, net cash provided by operating activities was **$7.4 million**, down from **$26.9 million** in the prior year period, with net cash used in investing activities at **$17.5 million** and financing activities at **$32.6 million**, while for the nine months, operating activities provided **$106.2 million** in cash, a significant improvement from a **$0.6 million** net cash use in the prior year Consolidated Condensed Statements of Cash Flows (in thousands) | Metric (in thousands) | Three months ended June 28, 2025 | Three months ended June 29, 2024 | Nine months ended June 28, 2025 | Nine months ended June 29, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Net cash provided by / (used in) operating activities | $7,380 | $26,897 | $106,159 | $(582) | | Net cash provided by / (used in) investing activities | $(17,463) | $36,594 | $26,161 | $(20,518) | | Net cash used in financing activities | $(32,606) | $(55,933) | $(114,564) | $(141,729) | | Cash and cash equivalents, end of period | $246,481 | $366,917 | $246,481 | $366,917 | | Total cash, cash equivalents and short-term investments | $556,481 | $601,917 | $556,481 | $601,917 | [Reconciliation of GAAP to Non-GAAP Financial Measures](index=7&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Financial%20Measures) This section provides detailed reconciliations between GAAP and non-GAAP financial measures for operating income, net income, EPS, adjusted free cash flow, and the Q4 Fiscal 2025 outlook, highlighting the impact of various adjustments [Reconciliation of Income from Operations and Operating Margin](index=7&type=section&id=Reconciliation%20of%20Income%20from%20Operations%20and%20Operating%20Margin) The reconciliation shows a GAAP operating loss of **$6.1 million** for Q3 Fiscal 2025, adjusted to a non-GAAP operating income of **$1.6 million** by adding back non-GAAP items such as intangible asset amortization, restructuring costs, and equity-based compensation, resulting in a non-GAAP operating margin of **1.1%** compared to GAAP's **(4.1%)** Reconciliation of Income from Operations and Operating Margin (in thousands) | Metric | June 28, 2025 (GAAP) | June 28, 2025 (Non-GAAP) | Non-GAAP Adjustments (Q3 2025) | | :---------------------------------- | :------------------- | :----------------------- | :----------------------------- | | (Loss) / Income from operations | $(6,094) | $1,593 | | | Operating margin | (4.1)% | 1.1% | | | Amortization related to intangible assets | | | $308 | | Restructuring | | | $287 | | Equity-based compensation | | | $7,092 | [Reconciliation of Net Income, Net Margin, and EPS](index=8&type=section&id=Reconciliation%20of%20Net%20Income%2C%20Net%20Margin%2C%20and%20EPS) For Q3 Fiscal 2025, GAAP net loss of **$3.3 million** was adjusted to a non-GAAP net income of **$3.8 million**, leading to a non-GAAP diluted EPS of **$0.07** compared to GAAP's **($0.06)**, with total non-GAAP adjustments amounting to **$7.1 million**, primarily from equity-based compensation Reconciliation of Net Income, Net Margin, and EPS (in thousands) | Metric | June 28, 2025 (GAAP) | June 28, 2025 (Non-GAAP) | Non-GAAP Adjustments (Q3 2025) | | :---------------------------------- | :------------------- | :----------------------- | :----------------------------- | | Net (loss) / income | $(3,289) | $3,772 | | | Net margin | (2.2)% | 2.5% | | | Diluted EPS | $(0.06) | $0.07 | | | Total non-GAAP adjustments | | | $7,061 | | Key adjustments: | | | | | - Amortization related to intangible assets | | | $308 | | - Restructuring | | | $287 | | - Equity-based compensation | | | $7,092 | | - Net income tax benefit on non-GAAP items | | | $(626) | [Reconciliation of Adjusted Free Cash Flow](index=9&type=section&id=Reconciliation%20of%20Adjusted%20Free%20Cash%20Flow) For Q3 Fiscal 2025, GAAP net cash provided by operating activities was **$7.4 million**, which, after deducting purchases of property, plant, and equipment and adding proceeds from sales, resulted in a non-GAAP adjusted free cash flow of **$5.4 million** Reconciliation of Adjusted Free Cash Flow (in thousands) | Metric (in thousands) | Three months ended June 28, 2025 | | :---------------------------------------- | :------------------------------- | | U.S. GAAP net cash provided by operating activities | $7,380 | | Purchases of property, plant and equipment | $(2,090) | | Proceeds from sales of property, plant and equipment | $147 | | Non-GAAP adjusted free cash flow | $5,437 | [Reconciliation of Fourth Quarter Fiscal 2025 Outlook](index=10&type=section&id=Reconciliation%20of%20Fourth%20Quarter%20Fiscal%202025%20Outlook) The Q4 Fiscal 2025 outlook provides both GAAP and non-GAAP projections, with GAAP diluted EPS of **$0.08** adjusted to a non-GAAP outlook of **$0.22** by adding back **$0.14** in non-GAAP adjustments, primarily for equity-based compensation and amortization Reconciliation of Fourth Quarter Fiscal 2025 Outlook | Metric | GAAP Outlook | Adjustments | Non-GAAP Outlook | | :------------------ | :----------- | :---------- | :--------------- | | Net revenue | $170 million +/- $10 million | — | $170 million +/- $10 million | | Operating expenses | $75.5 million +/- 2% | $7.5 million | $68.0 million +/- 2% | | Diluted EPS | $0.08 +/- 10% | $0.14 | $0.22 +/- 10% | | Key adjustments for EPS: | | | | | - Equity-based compensation (Cost of sales) | | $0.4 | | | - Equity-based compensation (SG&A and R&D) | | $7.2 | | | - Amortization related to intangible assets | | $0.3 | | | - Net income tax effect of the above items | | $(0.6) | |

Company Overview - Kulicke and Soffa Industries, Inc. is a global leader in semiconductor assembly technology, focusing on enhancing device performance across various markets including automotive, compute, industrial, memory, and communications [3] Upcoming Financial Results - The company will announce its third fiscal quarter 2025 financial results on August 6, 2025, at approximately 4:00 pm ET [1] - A conference call to discuss these results and the business outlook is scheduled for the same day at 4:30 pm ET [1] Accessing the Conference Call - Interested parties can access the conference call by calling +1-877-407-8037 (toll-free) or +1-201-689-8037 (international) [2] - A live webcast and replay will be available at investor.kns.com, with a replay accessible from one hour after the call until August 14, 2025 [2]

Core Insights - Kulicke and Soffa Industries, Inc. has formed a strategic partnership with Lavorro Inc. to enhance smart manufacturing solutions in the semiconductor industry, focusing on actionable insights and scalable knowledge reuse [1][2][3] Group 1: Partnership Details - The collaboration aims to integrate Kulicke and Soffa's existing solutions, such as APTURA™ equipment and KNeXt™ connectivity, with Lavorro's generative AI platform to improve factory performance and reduce operational costs [2] - Lavorro's platform includes tools like FabAssist.ai™ and ToolAssist.ai™, which utilize natural language processing and machine learning to provide virtual assistants that enhance diagnostics, recipe optimization, and maintenance workflows [2][3] Group 2: Benefits and Implementation - The partnership is expected to deliver significant value by improving mean-time-to-repair (MTTR) and mean-time-between-failures (MTBF), while also formalizing expert knowledge to accelerate onboarding and decision-making [2][3] - Solutions from this collaboration are available for early adoption, supporting both on-premise and cloud-based environments, with anticipated rapid return on investment through improved tool uptime and enhanced yield [3] Group 3: Company Backgrounds - Kulicke and Soffa is recognized as a global leader in semiconductor assembly technology, serving various markets including automotive and communications, and has a history of innovation since its founding in 1951 [4] - Lavorro specializes in Generative AI for semiconductor manufacturing, providing knowledge-driven decision support and automation solutions that are trusted by fabs and equipment manufacturers globally [5]

Core Viewpoint - Kulicke and Soffa Industries (NASDAQ: KLIC) has experienced a rebound in stock performance due to the recent easing of trade and tariff disputes, following a period where the stock reached a multi-year low [1] Group 1: Company Overview - Kulicke and Soffa Industries is a supplier of equipment and solutions for the semiconductor and LED industries [1] Group 2: Market Context - The easing of trade and tariff disputes has positively impacted the company's stock performance, which had previously fallen to a new multi-year low [1]

Core Viewpoint - Kulicke & Soffa Industries, Inc. is conducting its Q2 2025 earnings conference call, highlighting the participation of key executives including the CEO and CFO [1][2]. Financial Information - The company emphasizes the importance of non-GAAP financial measures, which should be considered alongside GAAP financial information [3]. Future Outlook - The remarks during the call will include forward-looking statements that are subject to risks and uncertainties, potentially affecting actual results and financial conditions [4].

Financial Data and Key Metrics Changes - The company reported revenue of $162 million for Q2 2025, with gross margins at 24.9%, which included $38.6 million in EA-related inventory and supply chain charges [22] - Total operating expenses were $125.1 million, including restructuring charges of $8.8 million and impairment charges of $39.8 million [22] - The company anticipates a revenue outlook of $145 million for Q3 2025, with gross margins projected at 46.5% [24] Business Line Data and Key Metrics Changes - The decision to discontinue the electronics assembly (EA) equipment business was announced, which is expected to improve overall competitiveness and align with long-term technology trends [6][20] - The automotive and industrial sectors saw a sequential decline of approximately 7% in Q2, but were up nearly 14% year-over-year due to ongoing demand improvements [11] - The APS business remains stable, with expectations for continued revenue consistency despite market fluctuations [12] Market Data and Key Metrics Changes - Southeast Asia experienced a significant slowdown, accounting for the majority of the company's Q2 to Q3 weakness, primarily due to concerns over potential tariff impacts on the automotive and industrial sectors [29][30] - In contrast, order activity increased in China and Taiwan, indicating a bifurcation in market dynamics [23][46] - Utilization rates in China are reported to be over 80%, while Taiwan's rates are just touching 80% [72] Company Strategy and Development Direction - The company plans to focus on vertical wire, power semiconductor, advanced dispense, and thermal compression technologies to strengthen growth prospects [10][17] - The restructuring effort aims to enhance long-term financial performance with anticipated improvements in gross margins [8] - The company is well-positioned to capitalize on emerging opportunities in the semiconductor market, particularly in advanced packaging and power semiconductor applications [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the semiconductor industry's resilience despite macroeconomic uncertainties and trade dynamics [9][19] - The company anticipates continued capacity digestion supported by improving utilization rates, with expectations for a return to incremental capacity growth in core markets [24] - Management noted that while some customers may delay capital expenditures, semiconductor unit growth is expected to improve through fiscal 2025 [23] Other Important Information - The company completed a share repurchase program with a $300 million authorization, repurchasing over 500,000 shares for $21.3 million during Q2 [23] - The EA business was generating annual revenue of approximately $25 million to $30 million, with gross profit ranging from $7 million to $11 million [40] Q&A Session Summary Question: Can you provide insights on June's dynamics? - Management indicated a pronounced Q3 slowdown in Southeast Asia, primarily due to concerns over potential tariff impacts on the automotive and industrial sectors [28][30] Question: What is the revenue run rate of the EA business being exited? - The EA business was generating revenue of about $25 million to $30 million annually, with gross profit around $7 million to $11 million [40] Question: What are the dynamics on the power semiconductor front? - The power semiconductor market is expected to grow rapidly, with new products being introduced to enhance market reach and align with global demand for electric vehicles [42]

Financial Data and Key Metrics Changes - The company reported revenue of $162 million for Q2 2025, with gross margins at 24.9% which included $38.6 million in EA-related inventory and supply chain charges [21] - Total operating expenses were $125.1 million, including restructuring charges of $8.8 million and impairment charges of $39.8 million [21] - The company anticipates a revenue outlook of $145 million for Q3 2025, with gross margins projected at 46.5% [23] Business Line Data and Key Metrics Changes - The decision to discontinue the electronics assembly (EA) equipment business was announced, which accounted for charges of $86.6 million primarily related to inventory write-downs and restructuring [21] - The automotive and industrial sectors saw a sequential decline of approximately 7% in Q2, but were up nearly 14% year-over-year due to ongoing demand improvements [10] - The APS business continues to provide stable revenue, with expectations for overall installed base and utilization trends to improve [11] Market Data and Key Metrics Changes - Southeast Asia experienced a significant slowdown, accounting for the majority of the company's Q2 to Q3 weakness, while order activity increased in China and Taiwan [22][28] - Utilization rates in China are over 80%, while Taiwan's utilization is just touching 80% [70] - The ongoing trade situation has created uncertainty in global markets, particularly affecting the automotive and industrial sectors [8] Company Strategy and Development Direction - The company intends to focus on vertical wire, power semiconductor, advanced dispense, and thermal compression technologies to enhance growth prospects [9] - The restructuring effort aims to improve long-term financial performance and gross margins [7] - The company is well-positioned to leverage its technology leadership in high-volume semiconductor markets [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the semiconductor industry's resilience despite macroeconomic uncertainties [8] - The company anticipates continued capacity digestion supported by improving utilization rates, with expectations for a return to incremental capacity growth in core markets [23] - Management noted that customer hesitation is primarily due to uncertainties surrounding tariffs and trade dynamics [60] Other Important Information - The company has nearly 120 systems installed across 10 different customers, demonstrating a strong market presence [19] - The vertical wire technology is expected to drive significant interest and potential production ramp by 2026 [12] Q&A Session Summary Question: Can you provide insights on June's dynamics and expectations beyond? - Management indicated a Q3 slowdown, particularly in Southeast Asia, with Q2 revenue at $162 million and Q3 guidance at $145 million, attributing the decline to tariff concerns in the automotive and industrial sectors [28][32] Question: What is the revenue run rate of the EA business being exited? - The EA business generated approximately $25 million to $30 million annually, with gross profits around $7 million to $11 million [38] Question: What are the dynamics on the power semiconductor front? - The power semiconductor market is expected to grow rapidly, with new products being introduced to enhance market share [41] Question: Can you elaborate on the utilization rates in Taiwan and China? - Utilization rates in China are over 80%, while Taiwan's are just touching 80%, with expectations for continued high utilization [70] Question: How is the company addressing customer hesitation due to trade policies? - The company manufactures in Singapore, avoiding direct tariff impacts, but acknowledges indirect costs and customer caution due to trade uncertainties [74]

Revenue and Financial Performance - For the three months ended March 29, 2025, approximately 86.3% of net revenue was from shipments to customer locations outside of the U.S., primarily in the Asia/Pacific region [150]. - Approximately 45.8% of net revenue for the three months ended March 29, 2025, was from customers headquartered in China [150]. - Net revenue for the three months ended March 29, 2025, decreased by $10,088 thousand (5.9%) to $161,986 thousand compared to $172,074 thousand for the same period in 2024 [167]. - For the six months ended March 29, 2025, net revenue decreased by $15,153 thousand (4.4%) to $328,110 thousand compared to $343,263 thousand for the same period in 2024 [170]. - Gross profit for the three months ended March 29, 2025, increased by $23,913 thousand (145.2%) to $40,384 thousand compared to $16,471 thousand for the same period in 2024 [167]. - The gross profit margin for the three months ended March 29, 2025, improved to 24.9%, up from 9.6% in the same period in 2024, representing a 1,530 basis point increase [176]. - Ball Bonding Equipment net revenue decreased by $15,627 thousand (19.1%) for the three months ended March 29, 2025, while Wedge Bonding Equipment increased by $13,436 thousand (59.0%) during the same period [169]. - The company reported a loss from operations of $84,667 thousand for the three months ended March 29, 2025, which is an improvement of $20,488 thousand (19.5%) compared to a loss of $105,155 thousand for the same period in 2024 [167]. - For the three months ended March 29, 2025, total loss from operations was $84,667,000, a decrease of 19.5% compared to the loss of $105,155,000 for the same period in 2024 [192]. - Advanced Solutions segment reported a significant improvement with a loss of $6,129,000 for the three months ended March 29, 2025, compared to a loss of $116,981,000 in the same period last year, reflecting a 94.8% change [192]. Expenses and Charges - Selling, general and administrative expenses for the three months ended March 29, 2025, increased by $8,564 thousand (21.7%) to $48,014 thousand compared to $39,450 thousand for the same period in 2024 [183]. - Research and development expenses for the three months ended March 29, 2025, decreased by $484 thousand (1.3%) to $37,220 thousand compared to $37,704 thousand for the same period in 2024 [183]. - Impairment charges for the three months ended March 29, 2025, were $39,817 thousand, a decrease of $4,655 thousand (10.5%) compared to $44,472 thousand for the same period in 2024 [183]. Cash and Investments - The total cash, cash equivalents, and short-term investments as of March 29, 2025, were $581.5 million, reflecting a $4.4 million increase from the prior fiscal year end [157]. - As of March 29, 2025, total cash, cash equivalents, and short-term investments amounted to $581,519,000, a slight increase of 0.8% from $577,147,000 as of September 28, 2024 [200]. - Net cash provided by operating activities for the six months ended March 29, 2025, was $98,779,000, a significant increase from a cash used of $27,479,000 in the same period last year [200]. - The company expects fiscal 2025 capital expenditures to be between $12,000,000 and $16,000,000, with approximately $4,800,000 incurred through the second quarter [207]. Shareholder Actions - The Company declared a quarterly dividend of $0.205 per share, totaling $11.0 million for the three months and $21.8 million for the six months ended March 29, 2025 [218]. - The Company authorized a new share repurchase program to buy back up to $300 million of its common stock, with approximately $272.1 million remaining under this authorization as of March 29, 2025 [214][217]. - During the three months ended March 29, 2025, the Company repurchased approximately 518.0 thousand shares at a cost of $21.3 million, and for the six months, it repurchased 654.0 thousand shares at a cost of $27.9 million [215]. - The company repurchased approximately 657,000 shares of common stock at a cost of $30,300,000 during the three months ended December 28, 2024 [213]. Business Operations and Strategy - The intended cessation of the Electronics Assembly equipment business is expected to be substantially completed by the first half of fiscal 2026 [158]. - The Company received $86.2 million from a customer as reimbursement for costs related to a canceled project, with $15.1 million recognized in net revenue and $71.1 million in gain relating to cessation of business [160]. - The Company is focused on operational excellence and expanding product offerings through continuous research and development or acquisitions [156]. - The semiconductor industry is experiencing volatility and disruption due to inflationary pressures, existing and future tariffs, and declining consumer sentiment [165]. - The Company anticipates that the semiconductor industry's growth projections will normalize despite current macroeconomic conditions [165]. - The APS reportable segment has historically been less volatile and is more directly tied to semiconductor unit consumption rather than capacity requirements [155]. - The ongoing geopolitical tensions and macroeconomic factors have not materially impacted the Company's financial condition and operating results in fiscal 2025 to date [162]. Tax and Liabilities - The effective tax rate for the six months ended March 29, 2025, was 120.7%, compared to 10.2% for the same period in 2024, primarily due to discrete items related to business cessation and project cancellations [197]. - As of March 29, 2025, the Company had deferred tax liabilities of $35.2 million and unrecognized tax benefits of $20.2 million related to uncertain tax positions [220]. Inventory and Obligations - The Company has inventory purchase obligations totaling $102.5 million, with $60.7 million due within one year [222]. - The Company entered into an overdraft facility of up to $150.0 million for general corporate purposes, with no outstanding amounts as of March 29, 2025 [224]. Foreign Exchange and Interest Rate Exposure - The Company has foreign exchange forward contracts with a notional amount of $47.3 million outstanding as of March 29, 2025, to hedge against foreign currency risks [229]. - A 10.0% fluctuation in foreign currency exchange rates could impact the Company's financial position by $4.0 million to $5.0 million [228]. - The Company monitors its exposure to interest rate changes and targets an average life to maturity of less than 18 months for its available-for-sale securities [226]. - The Company’s stock repurchases are recorded as treasury stock using the FIFO method, with any excess amounts upon re-issuance credited to additional paid-in capital [216].

Q2F25 Financial Performance - Revenue for Q2F25 was $162.0 million[6], a decrease of 2.5% quarter-over-quarter[11] - The company reported a net loss of $(84.5) million[6] and a non-GAAP net loss of $(27.9) million[6] - Diluted EPS was $(1.59), while non-GAAP diluted EPS was $(0.52)[6] - Gross margin was 24.9%[13], operating loss was $(84.7) million[13], and non-GAAP operating loss was $(27.9) million[13] Business Operations and Strategy - Kulicke & Soffa announced its intent to secede EA Equipment on March 31, 2025[6] - The company is prioritizing long-term technology transitions, enhancing opportunities in Ball, Wedge & TCB, and expanding APS & Advanced Dispense[6] - Demand softened in US and SEA markets, while China & Taiwan showed utilization improvements and demand uptake[6] - EA-related charges in Q2F25 amounted to $86.6 million[11], with residual EA expense anticipated to be below $15 million[11] Q3F25 Outlook - The company expects Q3F25 revenue of $145 million, plus or minus $10 million[16] - Operating expenses are projected to be $68.0 million, plus or minus 2%[16] - Diluted EPS is expected to be $0.05, plus or minus 10%[16]

Financial Performance - Kulicke and Soffa reported a quarterly loss of $0.52 per share, significantly worse than the Zacks Consensus Estimate of $0.19, representing an earnings surprise of -373.68% [1] - The company's revenues for the quarter ended March 2025 were $161.99 million, missing the Zacks Consensus Estimate by 1.83%, and down from $172.07 million a year ago [2] - Over the last four quarters, Kulicke and Soffa has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Stock Performance - Kulicke and Soffa shares have declined approximately 29.8% since the beginning of the year, compared to a decline of -3.9% for the S&P 500 [3] - The current Zacks Rank for Kulicke and Soffa is 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.30 on revenues of $175.5 million, and for the current fiscal year, it is $1.41 on revenues of $692.8 million [7] - The estimate revisions trend for Kulicke and Soffa is mixed, and changes in earnings expectations may occur following the recent earnings report [6] Industry Context - The Electronics - Manufacturing Machinery industry, to which Kulicke and Soffa belongs, is currently ranked in the bottom 9% of over 250 Zacks industries, indicating potential challenges ahead [8] - The performance of Kulicke and Soffa's stock may be influenced by the overall outlook for the industry [8]