Core Viewpoint - Kulicke and Soffa Industries, Inc. has launched ACELON™, a next-generation precision dispensing solution aimed at semiconductor, SMT, and automotive assembly applications, leveraging its established machine architecture in wire bonding [1][4]. Group 1: Product Features - ACELON™ addresses advanced dispense challenges with enhanced process stability, suitable for critical production environments [2]. - The system features a significantly expanded working area, allowing for flexibility in handling larger substrates and complex assembly configurations [2]. - It offers industry-leading precision with sub-20µm wet accuracy, ensuring consistent material placement for applications with strict dimensional tolerances [2][3]. Group 2: Technological Advancements - Key advancements include automatic calibration functions that streamline setup and reduce operator intervention [8]. - An optional Twin Valve/Dual Valve capability enhances throughput and configuration flexibility in high-volume production settings [8]. - AI-powered Auto Parameter Tuning (APT) optimizes system parameters based on process results and historical data, improving quality and throughput [8]. Group 3: Market Positioning - The company emphasizes that ACELON™ combines the reliability of its wire bonding architecture with ultra-precision dispensing capabilities and AI-driven optimization, setting a new benchmark for performance and reliability [4]. - ACELON™ will debut at the SEMICON Taiwan Trade Show from September 10 to September 12, 2025, with general availability expected by March 2026 [5].

Company Performance - Kulicke and Soffa (KLIC) reported quarterly earnings of $0.07 per share, exceeding the Zacks Consensus Estimate of $0.06 per share, but down from $0.35 per share a year ago, representing an earnings surprise of +16.67% [1] - The company posted revenues of $148.41 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 2.35%, but down from $181.65 million year-over-year [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 30.7% since the beginning of the year, contrasting with the S&P 500's gain of 7.1% [3] - The current consensus EPS estimate for the upcoming quarter is $0.12 on revenues of $155.6 million, and for the current fiscal year, it is $0.09 on revenues of $628.6 million [7] Industry Outlook - The Electronics - Manufacturing Machinery industry, to which Kulicke and Soffa belongs, is currently ranked in the bottom 9% of over 250 Zacks industries, indicating a challenging environment [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Kulicke and Soffa's stock performance [5]

Financial Data and Key Metrics Changes - The company reported revenue of $148.4 million for the quarter, with a GAAP loss per share of $0.06 and non-GAAP earnings per share of $0.07 [5][16] - Gross margin was reported at 46.7%, with total operating expenses at $75.3 million on a GAAP basis and $68 million on a non-GAAP basis [16] - The company anticipates a sequential revenue increase of approximately 15% to $170 million for the next quarter, with gross margins expected to be around 47% [18] Business Line Data and Key Metrics Changes - The automotive and industrial markets experienced order hesitation, impacting revenue, but the company remains optimistic about long-term growth opportunities in these sectors [6][7] - There was strong sequential demand increase in the memory sector, driven by improving conditions and emerging packaging formats [9] - The company is focusing on advanced dispense, vertical wire, and thermal compression bonding technologies to capture market share in high-power semiconductor applications [10][11][12] Market Data and Key Metrics Changes - Overall utilization rates are reported at approximately 81%, with general semiconductor utilization at around 83% and memory at about 80% [33] - The automotive sector's utilization remains below 70%, indicating ongoing challenges in that market [33] - The company expects the EV charging infrastructure market to exceed a 20% CAGR over the next five years, indicating strong growth potential [7] Company Strategy and Development Direction - The company is focused on extending market access through technology transitions and is cautiously optimistic about gradual core market improvements [4][5] - There is an emphasis on driving share gain and expanding reach into DRAM applications with new packaging capabilities [9] - The company plans to introduce new advanced dispense capabilities at Semicon Taiwan, indicating a commitment to innovation and product development [10] Management's Comments on Operating Environment and Future Outlook - Management acknowledges uncertainty in global trade affecting near-term visibility but remains confident in the long-term growth potential driven by technology transitions [5][6] - The company expects automotive headwinds to persist but anticipates a gradual recovery in the semiconductor market overall [19] - Management is optimistic about the upcoming quarters, citing improvements in regional utilization and pricing dynamics [18][19] Other Important Information - The company has repurchased approximately 668,000 shares, representing 1.3% of diluted shares, as part of its strategy to enhance shareholder value [17] - The company has deployed over $270 million in dividend payments and share repurchases over the past seven quarters [17] Q&A Session Summary Question: Revenue guidance for December - Management indicated that December revenues are expected to be flattish, based on high utilization rates and increased order intake [42][45] Question: Impact of Intel's CapEx cuts - Management acknowledged that while revenue compared to the previous year may be down, engagements with customers remain healthy [26][28] Question: Utilization rates and growth drivers - Overall utilization rates are about 81%, with general semiconductor and memory markets showing the highest growth [33][34] Question: Thermal compression business potential - The company targets significant growth in the thermal compression market, projecting a market size of $1 billion by 2028 [35][36] Question: Market share gain strategies - The company plans to gain market share through products like clip attach and pin welder, focusing on high-power semiconductor applications [56][57]

[PART I - FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This part provides the unaudited consolidated financial statements and management's discussion and analysis of financial condition and results of operations [Item 1. FINANCIAL STATEMENTS (Unaudited)](index=4&type=section&id=Item%201.%20FINANCIAL%20STATEMENTS%20(Unaudited)) This section presents the unaudited consolidated financial statements, including balance sheets, operations, comprehensive income, equity, cash flows, and detailed notes [Consolidated Condensed Balance Sheets](index=6&type=section&id=Consolidated%20Condensed%20Balance%20Sheets) This statement provides a snapshot of the company's financial position, detailing assets, liabilities, and shareholders' equity at period end Consolidated Condensed Balance Sheets (in thousands) | Metric | June 28, 2025 (in thousands) | September 28, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :-------------------------------- | | **Total Assets** | $1,124,896 | $1,240,162 | | **Total Liabilities** | $287,370 | $296,153 | | **Total Shareholders' Equity** | $837,526 | $944,009 | - Total assets decreased by **$115.266 million** from September 28, 2024, to June 28, 2025, primarily driven by reductions in short-term investments, accounts receivable, and inventories[10](index=10&type=chunk) - Total shareholders' equity decreased by **$106.483 million**, mainly due to treasury stock repurchases and net losses[10](index=10&type=chunk) [Consolidated Condensed Statements of Operations](index=8&type=section&id=Consolidated%20Condensed%20Statements%20of%20Operations) This statement details financial performance for the three and nine months, highlighting net revenue, gross profit, operating expenses, and net income or loss Consolidated Condensed Statements of Operations (in thousands) | Metric | Three months ended June 28, 2025 (in thousands) | Three months ended June 29, 2024 (in thousands) | Nine months ended June 28, 2025 (in thousands) | Nine months ended June 29, 2024 (in thousands) | | :-------------------------------- | :------------------------------------------ | :------------------------------------------ | :----------------------------------------- | :----------------------------------------- | | **Net revenue** | $148,413 | $181,650 | $476,523 | $524,913 | | **Gross profit** | $69,243 | $84,730 | $196,711 | $181,097 | | **Operating expenses** | $75,337 | $76,453 | $200,823 | $276,282 | | **(Loss) / Income from operations** | $(6,094) | $8,277 | $(4,112) | $(95,185) | | **Net (loss) / income** | $(3,289) | $12,264 | $(6,166) | $(81,123) | | **Basic EPS** | $(0.06) | $0.22 | $(0.12) | $(1.45) | | **Diluted EPS** | $(0.06) | $0.22 | $(0.12) | $(1.45) | - Net revenue decreased by **18.3%** for the three months and **9.2%** for the nine months ended June 28, 2025, compared to the prior year periods[13](index=13&type=chunk) - The company reported a net loss of **$3.289 million** for the three months and **$6.166 million** for the nine months ended June 28, 2025, a significant shift from net income in the prior three-month period and a reduced loss from the prior nine-month period[13](index=13&type=chunk) [Consolidated Condensed Statements of Comprehensive Income](index=9&type=section&id=Consolidated%20Condensed%20Statements%20of%20Comprehensive%20Income) This statement presents net income or loss and other comprehensive income components, including foreign currency adjustments, for the reporting periods Consolidated Condensed Statements of Comprehensive Income (in thousands) | Metric | Three months ended June 28, 2025 (in thousands) | Three months ended June 29, 2024 (in thousands) | Nine months ended June 28, 2025 (in thousands) | Nine months ended June 29, 2024 (in thousands) | | :-------------------------------- | :------------------------------------------ | :------------------------------------------ | :----------------------------------------- | :----------------------------------------- | | **Net (loss) / income** | $(3,289) | $12,264 | $(6,166) | $(81,123) | | **Total other comprehensive income / (loss)** | $2,149 | $(1,597) | $(7,760) | $1,953 | | **Comprehensive (loss) / income** | $(1,140) | $10,667 | $(13,926) | $(79,170) | - Comprehensive loss for the three months ended June 28, 2025, was **$1.140 million**, a decrease from comprehensive income of **$10.667 million** in the prior year period[16](index=16&type=chunk) - For the nine months ended June 28, 2025, comprehensive loss was **$13.926 million**, an improvement from the **$79.170 million** comprehensive loss in the prior year period[16](index=16&type=chunk) [Consolidated Condensed Statements of Changes in Shareholders' Equity](index=10&type=section&id=Consolidated%20Condensed%20Statements%20of%20Changes%20in%20Shareholders'%20Equity) This statement outlines changes in shareholders' equity components, including common stock, treasury stock, retained earnings, and comprehensive loss Consolidated Condensed Statements of Changes in Shareholders' Equity (in thousands) | Metric | As of September 28, 2024 (in thousands) | As of June 28, 2025 (in thousands) | | :-------------------------------- | :------------------------------------ | :------------------------------- | | **Common Stock Amount** | $596,703 | $612,332 | | **Treasury Stock** | $(881,830) | $(957,392) | | **Retained Earnings** | $1,242,558 | $1,203,768 | | **Accumulated Other Comprehensive (loss)** | $(13,422) | $(21,182) | | **Total Shareholders' Equity** | $944,009 | $837,526 | - Total shareholders' equity decreased from **$944.009 million** as of September 28, 2024, to **$837.526 million** as of June 28, 2025[20](index=20&type=chunk) - Repurchases of common stock amounted to **$80.1 million** for the nine months ended June 28, 2025, contributing to the decrease in equity[20](index=20&type=chunk)[214](index=214&type=chunk) [Consolidated Condensed Statements of Cash Flows](index=14&type=section&id=Consolidated%20Condensed%20Statements%20of%20Cash%20Flows) This statement summarizes cash flows from operating, investing, and financing activities, illustrating cash generation and usage Consolidated Condensed Statements of Cash Flows (in thousands) | Metric | Nine months ended June 28, 2025 (in thousands) | Nine months ended June 29, 2024 (in thousands) | | :-------------------------------- | :----------------------------------------- | :----------------------------------------- | | **Net cash provided by (used in) operating activities** | $106,159 | $(582) | | **Net cash provided by (used in) investing activities** | $26,161 | $(20,518) | | **Net cash used in financing activities** | $(114,564) | $(141,729) | | **Changes in cash and cash equivalents** | $19,334 | $(162,485) | | **Cash and cash equivalents at end of period** | $246,481 | $366,917 | - Net cash provided by operating activities significantly increased to **$106.159 million** for the nine months ended June 28, 2025, compared to a net cash used of **$0.582 million** in the prior year, primarily due to non-cash adjustments and favorable changes in operating assets and liabilities[24](index=24&type=chunk)[212](index=212&type=chunk) - Net cash provided by investing activities was **$26.161 million**, a positive shift from net cash used of **$20.518 million** in the prior year, driven by net maturity of short-term investments and disposal of a subsidiary[24](index=24&type=chunk)[214](index=214&type=chunk) [Notes to Consolidated Condensed Financial Statements](index=15&type=section&id=Notes%20to%20Consolidated%20Condensed%20Financial%20Statements) These notes provide detailed explanations and disclosures for the financial statements, covering accounting policies, balance sheet components, and business cessation impacts [NOTE 1. BASIS OF PRESENTATION](index=15&type=section&id=NOTE%201.%20BASIS%20OF%20PRESENTATION) This note outlines the basis for financial statement preparation, including fiscal year, industry context, management estimates, and new accounting pronouncements - The company operates in the highly volatile semiconductor industry, manufacturing and selling capital equipment and tools for semiconductor device assembly, with operating results dependent on capital expenditures of IDMs, OSATs, and other electronics manufacturers[29](index=29&type=chunk) - On March 25, 2025, the Board approved a strategic plan to cease its Electronics Assembly (EA) equipment business to prioritize core semiconductor assembly opportunities, with wind-down activities expected to be substantially completed by the first half of fiscal 2026[30](index=30&type=chunk)[170](index=170&type=chunk) - New accounting pronouncements, ASU 2023-07 (Segment Reporting) and ASU 2023-09 (Income Taxes), will be effective for the company's fiscal year 2025 and 2026, respectively, with early adoption permitted for some[36](index=36&type=chunk)[38](index=38&type=chunk) [NOTE 2. BALANCE SHEET COMPONENTS](index=18&type=section&id=NOTE%202.%20BALANCE%20SHEET%20COMPONENTS) This note details significant balance sheet accounts, including inventories, property, plant and equipment, and accrued liabilities Balance Sheet Components (in thousands) | Account | June 28, 2025 (in thousands) | September 28, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :-------------------------------- | | **Inventories, net** | $158,330 | $177,736 | | - Inventory reserves | $(67,795) | $(31,784) | | **Property, plant and equipment, net** | $59,534 | $64,823 | | **Accrued expenses and other current liabilities** | $98,928 | $90,802 | | - Severance | $10,497 | $2,407 | | - Accrued adverse purchase commitments | $9,700 | $1,836 | - Inventory reserves significantly increased from **$31.784 million** to **$67.795 million**, primarily due to write-downs related to the cessation of the EA equipment business[42](index=42&type=chunk)[138](index=138&type=chunk) - Accrued expenses and other current liabilities increased, with notable increases in severance (**$8.09 million**) and accrued adverse purchase commitments (**$7.864 million**) linked to the EA equipment business wind-down[42](index=42&type=chunk)[141](index=141&type=chunk)[145](index=145&type=chunk) [NOTE 3. GOODWILL AND INTANGIBLE ASSETS](index=19&type=section&id=NOTE%203.%20GOODWILL%20AND%20INTANGIBLE%20ASSETS) This note details goodwill and intangible assets, including impairment tests related to the EA equipment business cessation - A goodwill impairment charge of **$19.2 million** was recorded for the nine months ended June 28, 2025, within the APS reportable segment and 'All Others' category, triggered by the intended cessation of the EA equipment business[49](index=49&type=chunk)[52](index=52&type=chunk) - An impairment charge of **$15.7 million** was recorded on developed technology within the APS reportable segment and 'All Others' category in the previous quarter ended March 29, 2025, also due to the EA equipment business cessation[54](index=54&type=chunk) Goodwill and Intangible Assets (in thousands) | Metric | As of June 28, 2025 (in thousands) | As of September 28, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :-------------------------------- | | **Total Goodwill** | $69,522 | $89,748 | | **Total Net Intangible Assets** | $5,908 | $25,239 | [NOTE 4. CASH, CASH EQUIVALENTS, AND SHORT-TERM INVESTMENTS](index=21&type=section&id=NOTE%204.%20CASH,%20CASH%20EQUIVALENTS,%20AND%20SHORT-TERM%20INVESTMENTS) This note breaks down cash, cash equivalents, and short-term investments, including their fair values and classifications Cash, Cash Equivalents, and Short-Term Investments (in thousands) | Metric | June 28, 2025 (in thousands) | September 28, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :-------------------------------- | | **Cash and cash equivalents** | $246,481 | $227,147 | | **Short-term investments** | $310,000 | $350,000 | | **Total cash, cash equivalents, and short-term investments** | $556,481 | $577,147 | - Total cash, cash equivalents, and short-term investments decreased by **$20.666 million** from September 28, 2024, to June 28, 2025[211](index=211&type=chunk) - Cash equivalents include mutual funds (Level 1 assets) and time deposits, with fair values approximating cost basis[58](index=58&type=chunk)[61](index=61&type=chunk) [NOTE 5. EQUITY INVESTMENTS](index=22&type=section&id=NOTE%205.%20EQUITY%20INVESTMENTS) This note details equity investments, primarily non-marketable securities in a private equity fund valued using NAV Non-marketable Equity Securities (in thousands) | Metric | June 28, 2025 (in thousands) | September 28, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :-------------------------------- | | **Non-marketable equity securities** | $6,107 | $3,143 | - The company has funded **$5.8 million** into an affiliated private equity fund and recognized a cumulative unrealized fair value gain of **$0.3 million** as of June 28, 2025[62](index=62&type=chunk) [NOTE 6. FAIR VALUE MEASUREMENTS](index=23&type=section&id=NOTE%206.%20FAIR%20VALUE%20MEASUREMENTS) This note explains the fair value measurement hierarchy for financial assets and liabilities, and cost basis for non-financial assets - Fair value measurements are categorized into Level 1 (quoted prices in active markets), Level 2 (observable inputs other than Level 1), and Level 3 (unobservable inputs)[64](index=64&type=chunk) - No transfers between fair value measurement levels occurred during the three and nine months ended June 28, 2025[65](index=65&type=chunk) [NOTE 7. DERIVATIVE FINANCIAL INSTRUMENTS](index=23&type=section&id=NOTE%207.%20DERIVATIVE%20FINANCIAL%20INSTRUMENTS) This note describes the use of foreign exchange forward contracts to hedge foreign currency exposure from international operations - The company uses foreign exchange forward contracts with cash flow hedge accounting designation to hedge exposures to variability in U.S. dollar equivalent of forecasted non-U.S. dollar-denominated operating expenses, primarily in Singapore[68](index=68&type=chunk)[69](index=69&type=chunk) Derivative Financial Instruments (in thousands) | Metric | June 28, 2025 (in thousands) | September 28, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :-------------------------------- | | **Notional Amount of Foreign exchange forward contracts** | $47,632 | $46,234 | | **Fair Value Asset Derivatives** | $1,429 | $1,521 | - For the three months ended June 28, 2025, a net gain of **$1.847 million** was recognized in OCI from foreign exchange forward contracts, with a net loss of **$0.260 million** reclassified into income[73](index=73&type=chunk) [NOTE 8. LEASES](index=24&type=section&id=NOTE%208.%20LEASES) This note outlines operating and finance lease agreements, detailing expenses, cash flows, weighted-average terms, and future payments Lease Expenses and Cash Flows (in thousands) | Metric | Nine months ended June 28, 2025 (in thousands) | Nine months ended June 29, 2024 (in thousands) | | :-------------------------------- | :----------------------------------------- | :----------------------------------------- | | **Operating lease expense** | $6,956 | $7,725 | | **Operating cash outflows from operating leases** | $7,909 | $7,867 | Lease Obligations (as of June 28, 2025) | Metric | As of June 28, 2025 | | :-------------------------------- | :-------------------- | | **Weighted-average remaining lease term** | 7.0 years | | **Weighted-average discount rate** | 7.1 % | | **Present value of lease obligations** | $36,349 (in thousands) | [NOTE 9. DEBT AND OTHER OBLIGATIONS](index=25&type=section&id=NOTE%209.%20DEBT%20AND%20OTHER%20OBLIGATIONS) This note provides information on debt and other obligations, including bank guarantees and credit facility termination - As of June 28, 2025, the company had an outstanding bank guarantee of **$5.0 million** with Citibank[80](index=80&type=chunk) - The **$150.0 million** overdraft facility with MUFG Bank, Ltd. was terminated on June 6, 2025, with no outstanding amounts or early termination penalties[81](index=81&type=chunk)[82](index=82&type=chunk) [NOTE 10. SHAREHOLDERS' EQUITY AND EMPLOYEE BENEFIT PLANS](index=27&type=section&id=NOTE%2010.%20SHAREHOLDERS'%20EQUITY%20AND%20EMPLOYEE%20BENEFIT%20PLANS) This note details changes in shareholders' equity, including share repurchases, dividends, and equity-based compensation plans - The company completed its Prior Share Repurchase Program and authorized a New Program to repurchase up to **$300 million** of common stock through December 2, 2029[86](index=86&type=chunk)[87](index=87&type=chunk) - Under the New Program, the company repurchased approximately **668.0 thousand shares** for **$21.6 million** during the three months ended June 28, 2025, and **1,322.0 thousand shares** for **$49.5 million** during the nine months ended June 28, 2025[88](index=88&type=chunk)[226](index=226&type=chunk) - A quarterly dividend of **$0.205 per share** was declared on June 5, 2025, with total dividends paid of **$10.9 million** and **$32.7 million** for the three and nine months ended June 28, 2025, respectively[91](index=91&type=chunk)[229](index=229&type=chunk) Equity-Based Compensation Expense (in thousands) | Metric | Three months ended June 28, 2025 (in thousands) | Nine months ended June 28, 2025 (in thousands) | | :-------------------------------- | :------------------------------------------ | :----------------------------------------- | | **Total equity-based compensation expense** | $7,092 | $20,726 | [NOTE 11. REVENUE AND CONTRACT BALANCES](index=29&type=section&id=NOTE%2011.%20REVENUE%20AND%20CONTRACT%20BALANCES) This note explains revenue recognition policy based on performance obligations and provides details on contract liabilities - Revenue is recognized when performance obligations are satisfied, typically from product sales and service revenue recognized over time[99](index=99&type=chunk) Contract Liabilities (in thousands) | Metric | June 28, 2025 (in thousands) | September 28, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :-------------------------------- | | **Contract liabilities** | $17,834 | $18,646 | - Contract liabilities decreased slightly, with **$15.0 million** recognized in revenue from amounts included as of September 28, 2024[103](index=103&type=chunk) [NOTE 12. EARNINGS PER SHARE](index=30&type=section&id=NOTE%2012.%20EARNINGS%20PER%20SHARE) This note reconciles shares used in basic and diluted EPS computation, highlighting restricted stock and anti-dilutive share impact Earnings Per Share | Metric | Three months ended June 28, 2025 | Three months ended June 29, 2024 | Nine months ended June 28, 2025 | Nine months ended June 29, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | **Basic EPS** | $(0.06) | $0.22 | $(0.12) | $(1.45) | | **Diluted EPS** | $(0.06) | $0.22 | $(0.12) | $(1.45) | | **Weighted average shares outstanding - Basic** | 52,692 (in thousands) | 55,280 (in thousands) | 53,265 (in thousands) | 56,028 (in thousands) | - Restricted stock was excluded from diluted EPS calculation for periods with net losses (three and nine months ended June 28, 2025, and nine months ended June 29, 2024) because their effect would be anti-dilutive[104](index=104&type=chunk)[107](index=107&type=chunk) [NOTE 13. INCOME TAXES](index=31&type=section&id=NOTE%2013.%20INCOME%20TAXES) This note presents the provision for income taxes and effective tax rate, explaining changes from business cessation and Project W cancellation Provision for Income Taxes (in thousands) | Metric | Three months ended June 28, 2025 (in thousands) | Three months ended June 29, 2024 (in thousands) | Nine months ended June 28, 2025 (in thousands) | Nine months ended June 29, 2024 (in thousands) | | :-------------------------------- | :------------------------------------------ | :------------------------------------------ | :----------------------------------------- | :----------------------------------------- | | **Provision for income taxes** | $3,171 | $4,053 | $19,941 | $12,685 | | **Effective tax rate** | (2,687.3)% | 24.8 % | 144.8 % | (18.5)% | - The significant change in provision for income taxes and effective tax rate for the three and nine months ended June 28, 2025, was primarily due to the tax effects of the intended cessation of the EA equipment business and the reimbursement from Project W cancellation[108](index=108&type=chunk)[109](index=109&type=chunk) [NOTE 14. SEGMENT INFORMATION](index=32&type=section&id=NOTE%2014.%20SEGMENT%20INFORMATION) This note provides detailed financial information by the company's four reportable segments and disaggregates revenue by end markets - The company has four reportable segments: Ball Bonding Equipment, Wedge Bonding Equipment, Advanced Solutions, and Aftermarket Products and Services (APS), with an 'All Others' category for segments not meeting quantitative thresholds[112](index=112&type=chunk)[113](index=113&type=chunk)[114](index=114&type=chunk) Net Revenue by Segment (in thousands) | Segment | Net Revenue (3 months ended June 28, 2025, in thousands) | Net Revenue (9 months ended June 28, 2025, in thousands) | | :-------------------------------- | :--------------------------------------------------- | :-------------------------------------------------- | | **Ball Bonding Equipment** | $75,990 | $201,957 | | **Wedge Bonding Equipment** | $22,126 | $90,546 | | **Advanced Solutions** | $10,811 | $56,627 | | **APS** | $36,448 | $113,354 | | **All Others** | $3,038 | $14,039 | | **Total Net Revenue** | $148,413 | $476,523 | Net Revenue by End Market (in thousands) | End Market | Net Revenue (3 months ended June 28, 2025, in thousands) | Net Revenue (9 months ended June 28, 2025, in thousands) | | :-------------------------------- | :--------------------------------------------------- | :-------------------------------------------------- | | **General Semiconductor** | $79,381 | $235,624 | | **Automotive & Industrial** | $17,116 | $98,546 | | **Memory** | $15,468 | $28,999 | | **APS** | $36,448 | $113,354 | | **Total Revenue** | $148,413 | $476,523 | [NOTE 15. COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS](index=35&type=section&id=NOTE%2015.%20COMMITMENTS,%20CONTINGENCIES%20AND%20CONCENTRATIONS) This note details warranty expense, commitments, and significant customer concentrations, including revenue and accounts receivable percentages Product Warranty Reserve (in thousands) | Metric | Nine months ended June 28, 2025 (in thousands) | Nine months ended June 29, 2024 (in thousands) | | :-------------------------------- | :----------------------------------------- | :----------------------------------------- | | **Reserve for product warranty, end of period** | $7,611 | $10,365 | | **Provision for product warranty** | $6,476 | $9,856 | | **Utilization of reserve** | $(8,776) | $(9,948) | Customer Concentration - Net Revenue | Customer | Nine months ended June 28, 2025 (% of net revenue) | Nine months ended June 29, 2024 (% of net revenue) | | :-------------------------------- | :------------------------------------------------- | :------------------------------------------------- | | **Tianshui Huatian Technology Co., Ltd** | 10.1 % | * (less than 10%) | Customer Concentration - Accounts Receivable | Customer | As of June 28, 2025 (% of total accounts receivable) | As of June 29, 2024 (% of total accounts receivable) | | :-------------------------------- | :--------------------------------------------------- | :--------------------------------------------------- | | **Forehope Group** | 16.2 % | 23.8 % | | **Tianshui Huatian Technology Co., Ltd** | 18.0 % | 12.4 % | [NOTE 16. CESSATION OF BUSINESS](index=37&type=section&id=NOTE%2016.%20CESSATION%20OF%20BUSINESS) This note details financial impacts from Project W cancellation and the cessation of the EA equipment business, including charges and impairments - The company received **$86.2 million** in reimbursement from a customer for the cancellation of 'Project W', with **$15.1 million** included in Net Revenue and **$71.1 million** in 'Gain relating to cessation of business' for the nine months ended June 28, 2025[131](index=131&type=chunk)[172](index=172&type=chunk) - The intended cessation of the EA equipment business resulted in significant charges for the nine months ended June 28, 2025, including inventory write-downs (**$31.6 million**), goodwill and intangible asset impairments (**$34.9 million**), long-lived asset impairments (**$4.9 million**), employee termination benefits (**$8.2 million** accrued, with **$3.0-$5.0 million** expected), and adverse purchase commitments (**$10.3 million**)[137](index=137&type=chunk)[138](index=138&type=chunk)[139](index=139&type=chunk)[140](index=140&type=chunk)[141](index=141&type=chunk)[142](index=142&type=chunk)[145](index=145&type=chunk) - Wind-down activities for the EA equipment business are expected to be substantially completed by the first half of fiscal 2026, with some service support continuing for remaining customer obligations[133](index=133&type=chunk)[170](index=170&type=chunk) [Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=41&type=section&id=Item%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides management's perspective on financial condition, operations, key events, and liquidity, analyzing revenue, gross profit, and expenses [Forward-Looking Statements](index=41&type=section&id=Forward-Looking%20Statements) This subsection highlights forward-looking statements regarding future events and results, subject to risks and uncertainties - The report contains forward-looking statements about future revenue, capital allocation, product demand, R&D efforts, cost control, and operational flexibility, including the successful cessation of the EA equipment business[148](index=148&type=chunk) - These statements are subject to risks and uncertainties, such as changes in trade policies, macroeconomic headwinds, supply chain disruptions, and geopolitical tensions[148](index=148&type=chunk) [OVERVIEW](index=42&type=section&id=OVERVIEW) This section provides an overview of Kulicke and Soffa Industries, Inc. as a global leader in semiconductor assembly technology - Kulicke and Soffa Industries, Inc. is a global leader in semiconductor assembly technology, designing, developing, manufacturing, and selling capital equipment, consumables, and services for semiconductor and electronic devices[152](index=152&type=chunk)[153](index=153&type=chunk) - The company's strategic goal is to be the technology leader and most competitive supplier in its major product lines, achieved through investments in R&D and enhancing customer value via higher productivity systems and autonomous capabilities[154](index=154&type=chunk) - Reportable segments include Ball Bonding Equipment, Wedge Bonding Equipment, Advanced Solutions, and Aftermarket Products and Services (APS), serving IDMs, OSATs, foundry service providers, and other electronics manufacturers[155](index=155&type=chunk)[156](index=156&type=chunk)[157](index=157&type=chunk) [Business Environment](index=43&type=section&id=Business%20Environment) This section discusses the volatile semiconductor business environment, influenced by macroeconomic factors and revenue concentration in Asia/Pacific - The semiconductor business environment is highly volatile, driven by cyclical, seasonal, and macroeconomic forces, with long-term growth expected but persistent industry-wide volatility[158](index=158&type=chunk) - Approximately **92.1%** of net revenue for the three months ended June 28, 2025, and **88.4%** for the nine months ended June 28, 2025, were from shipments to customer locations outside the U.S., primarily in the Asia/Pacific region[159](index=159&type=chunk)[160](index=160&type=chunk) - Shipments to customers headquartered in China accounted for approximately **60.0%** of net revenue for the three months and **51.3%** for the nine months ended June 28, 2025, subject to heightened risks from trade and export control policies[159](index=159&type=chunk)[160](index=160&type=chunk)[161](index=161&type=chunk) [Key Events in Fiscal 2025 to Date](index=44&type=section&id=Key%20Events%20in%20Fiscal%202025%20to%20Date) This section summarizes key fiscal 2025 events, including the Israel-Iran War, EA business cessation, Project W cancellation, and macroeconomic headwinds - The Israel-Iran War, which began on June 13, 2025, has not materially impacted the company's manufacturing operations in Haifa, Israel, or its trade routes and suppliers as of the report date[167](index=167&type=chunk)[168](index=168&type=chunk) - The Board approved the strategic cessation of the Electronics Assembly (EA) equipment business on March 25, 2025, to prioritize core semiconductor assembly, with wind-down activities ongoing and expected to complete by H1 fiscal 2026[170](index=170&type=chunk) - The company received an **$86.2 million** reimbursement from a customer for the cancellation of 'Project W', with **$71.1 million** recognized as a gain relating to cessation of business[171](index=171&type=chunk)[172](index=172&type=chunk) - Macroeconomic headwinds, including high logistics costs, inflation, labor shortages, and declining consumer sentiment, continue to exacerbate inventory buildup in the semiconductor industry, leading to reduced customer order rates[173](index=173&type=chunk)[176](index=176&type=chunk) [RESULTS OF OPERATIONS](index=46&type=section&id=RESULTS%20OF%20OPERATIONS) This section analyzes financial performance for the three and nine months, covering net revenue, gross profit margin, operating expenses, and income taxes [Net Revenue](index=46&type=section&id=Net%20Revenue) Net revenue decreased for both periods, primarily due to lower volumes in Ball Bonding, APS, and 'All Others', partially offset by other segments Net Revenue by Segment (in thousands) | Segment | 3 Months Ended June 28, 2025 (in thousands) | 3 Months Ended June 29, 2024 (in thousands) | % Change | | :-------------------------------- | :------------------------------------------ | :------------------------------------------ | :------- | | **Ball Bonding Equipment** | $75,990 | $93,254 | (18.5)% | | **Wedge Bonding Equipment** | $22,126 | $26,144 | (15.4)% | | **Advanced Solutions** | $10,811 | $20,953 | (48.4)% | | **APS** | $36,448 | $38,059 | (4.2)% | | **All Others** | $3,038 | $3,240 | (6.2)% | | **Total Net Revenue** | $148,413 | $181,650 | (18.3)% | Net Revenue by Segment (in thousands) | Segment | 9 Months Ended June 28, 2025 (in thousands) | 9 Months Ended June 29, 2024 (in thousands) | % Change | | :-------------------------------- | :------------------------------------------ | :------------------------------------------ | :------- | | **Ball Bonding Equipment** | $201,957 | $261,432 | (22.7)% | | **Wedge Bonding Equipment** | $90,546 | $72,364 | 25.1 % | | **Advanced Solutions** | $56,627 | $46,401 | 22.0 % | | **APS** | $113,354 | $119,967 | (5.5)% | | **All Others** | $14,039 | $24,749 | (43.3)% | | **Total Net Revenue** | $476,523 | $524,913 | (9.2)% | - Ball Bonding Equipment net revenue decreased due to lower customer purchases in general semiconductor and memory end markets[184](index=184&type=chunk) - Wedge Bonding Equipment net revenue increased for the nine-month period, driven by higher customer purchases in general semiconductor, despite a decrease in the three-month period due to lower automotive market purchases[185](index=185&type=chunk)[186](index=186&type=chunk) [Gross Profit Margin](index=48&type=section&id=Gross%20Profit%20Margin) Gross profit margin showed mixed changes across segments, influenced by product mix, pricing, and inventory write-downs Gross Profit Margin by Segment | Segment | 3 Months Ended June 28, 2025 | 3 Months Ended June 29, 2024 | Basis Point Change | | :-------------------------------- | :--------------------------- | :--------------------------- | :----------------- | | **Ball Bonding Equipment** | 50.8 % | 46.3 % | 450 | | **Wedge Bonding Equipment** | 43.2 % | 44.3 % | (110) | | **Advanced Solutions** | 46.8 % | 42.7 % | 410 | | **APS** | 43.4 % | 54.5 % | (1,110) | | **All Others** | 6.9 % | 9.5 % | (260) | | **Total gross profit margin** | 46.7 % | 46.6 % | 10 | Gross Profit Margin by Segment | Segment | 9 Months Ended June 28, 2025 | 9 Months Ended June 29, 2024 | Basis Point Change | | :-------------------------------- | :--------------------------- | :--------------------------- | :----------------- | | **Ball Bonding Equipment** | 50.0 % | 47.0 % | 300 | | **Wedge Bonding Equipment** | 44.2 % | 48.5 % | (430) | | **Advanced Solutions** | 65.7 % | (97.8)% | 16,350 | | **APS** | 48.6 % | 55.3 % | (670) | | **All Others** | (260.4)% | 8.5 % | (26,890) | | **Total gross profit margin** | 41.3 % | 34.5 % | 680 | - Advanced Solutions gross profit margin significantly increased for the nine-month period due to prior year inventory write-down charges from Project W cancellation and a favorable product mix[195](index=195&type=chunk) - APS and 'All Others' gross profit margins decreased due to lower volumes, unfavorable pricing, and inventory write-down charges related to the EA equipment business cessation[196](index=196&type=chunk)[197](index=197&type=chunk) [Operating Expenses](index=50&type=section&id=Operating%20Expenses) Operating expenses varied, with SG&A increasing, R&D decreasing, and significant impacts from business cessation gain and impairment charges Operating Expenses (in thousands) | Expense Category | 3 Months Ended June 28, 2025 (in thousands) | 3 Months Ended June 29, 2024 (in thousands) | % Change | | :-------------------------------- | :------------------------------------------ | :------------------------------------------ | :------- | | **Selling, general and administrative** | $39,596 | $38,516 | 2.8 % | | **Research and development** | $35,741 | $37,937 | (5.8)% | | **Total Operating Expenses** | $75,337 | $76,453 | (1.5)% | Operating Expenses (in thousands) | Expense Category | 9 Months Ended June 28, 2025 (in thousands) | 9 Months Ended June 29, 2024 (in thousands) | % Change | | :-------------------------------- | :------------------------------------------ | :------------------------------------------ | :------- | | **Selling, general and administrative** | $126,224 | $119,359 | 5.8 % | | **Research and development** | $110,769 | $112,451 | (1.5)% | | **Gain relating to cessation of business** | $(75,987) | $0 | N/A | | **Impairment charges** | $39,817 | $44,472 | (10.5)% | | **Total Operating Expenses** | $200,823 | $276,282 | (27.3)% | - A **$75.987 million** gain relating to cessation of business was recorded for the nine months ended June 28, 2025, primarily from the Project W reimbursement and disposal of a subsidiary[203](index=203&type=chunk) - Impairment charges for the nine months ended June 28, 2025, were **$39.8 million**, related to the EA equipment business cessation, compared to **$44.5 million** in the prior year from Project W cancellation[204](index=204&type=chunk) [Loss from Operations](index=51&type=section&id=Loss%20from%20Operations) Loss from operations varied across segments, reflecting changes in revenue, gross profit, and expenses, with Advanced Solutions improving Loss from Operations by Segment (in thousands) | Segment | 3 Months Ended June 28, 2025 (in thousands) | 3 Months Ended June 29, 2024 (in thousands) | % Change | | :-------------------------------- | :------------------------------------------ | :------------------------------------------ | :------- | | **Ball Bonding Equipment** | $23,480 | $27,751 | (15.4)% | | **Wedge Bonding Equipment** | $2,065 | $4,149 | (50.2)% | | **Advanced Solutions** | $(10,692) | $(9,785) | (9.3)% | | **APS** | $7,346 | $11,443 | (35.8)% | | **All Others** | $(6,179) | $(8,317) | 25.7 % | | **Corporate Expenses** | $(22,114) | $(16,964) | (30.4)% | | **Total (loss)/income from operations** | $(6,094) | $8,277 | (173.6)% | Loss from Operations by Segment (in thousands) | Segment | 9 Months Ended June 28, 2025 (in thousands) | 9 Months Ended June 29, 2024 (in thousands) | % Change | | :-------------------------------- | :------------------------------------------ | :------------------------------------------ | :------- | | **Ball Bonding Equipment** | $56,203 | $80,617 | (30.3)% | | **Wedge Bonding Equipment** | $17,681 | $12,696 | 39.3 % | | **Advanced Solutions** | $61,753 | $(140,201) | 144.0 % | | **APS** | $17,304 | $36,275 | (52.3)% | | **All Others** | $(84,637) | $(25,945) | (226.2)% | | **Corporate Expenses** | $(72,416) | $(58,627) | (23.5)% | | **Total loss from operations** | $(4,112) | $(95,185) | 95.7 % | - Advanced Solutions saw a significant improvement in loss from operations for the nine-month period, shifting from a loss of **$140.201 million** to an income of **$61.753 million**[206](index=206&type=chunk) [Interest Income and Expense](index=51&type=section&id=Interest%20Income%20and%20Expense) Interest income decreased for both periods, primarily due to a lower weighted interest rate on cash and short-term investments Interest Income and Expense (in thousands) | Metric | 3 Months Ended June 28, 2025 (in thousands) | 3 Months Ended June 29, 2024 (in thousands) | % Change | | :-------------------------------- | :------------------------------------------ | :------------------------------------------ | :------- | | **Interest income** | $6,008 | $8,060 | (25.5)% | | **Interest expense** | $(32) | $(20) | (60.0)% | Interest Income and Expense (in thousands) | Metric | 9 Months Ended June 28, 2025 (in thousands) | 9 Months Ended June 29, 2024 (in thousands) | % Change | | :-------------------------------- | :------------------------------------------ | :------------------------------------------ | :------- | | **Interest income** | $17,982 | $26,807 | (32.9)% | | **Interest expense** | $(95) | $(60) | (58.3)% | [Provision for Income Taxes](index=52&type=section&id=Provision%20for%20Income%20Taxes) The provision for income taxes and effective tax rate changed significantly due to EA business cessation and Project W reimbursement Provision for Income Taxes (in thousands) | Metric | 3 Months Ended June 28, 2025 (in thousands) | 3 Months Ended June 29, 2024 (in thousands) | % Change | | :-------------------------------- | :------------------------------------------ | :------------------------------------------ | :------- | | **Provision for income taxes** | $3,171 | $4,053 | (21.8)% | | **Effective tax rate** | (2,687.3)% | 24.8 % | (2,712.1)% | Provision for Income Taxes (in thousands) | Metric | 9 Months Ended June 28, 2025 (in thousands) | 9 Months Ended June 29, 2024 (in thousands) | % Change | | :-------------------------------- | :------------------------------------------ | :------------------------------------------ | :------- | | **Provision for income taxes** | $19,941 | $12,685 | 57.2 % | | **Effective tax rate** | 144.8 % | (18.5)% | 163.3 % | - The effective tax rate for the three and nine months ended June 28, 2025, differed from the U.S. federal statutory rate due to foreign subsidiary earnings, tax incentives, credits, valuation allowance changes, global intangible low-taxed income, and discrete items related to business cessation and Project W reimbursement[209](index=209&type=chunk)[210](index=210&type=chunk) [LIQUIDITY AND CAPITAL RESOURCES](index=52&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) This section discusses the company's liquidity, cash flow, and capital resources, including share repurchases, dividends, and contractual obligations Liquidity and Capital Resources (in thousands) | Metric | June 28, 2025 (in thousands) | September 28, 2024 (in thousands) | $ Change | | :-------------------------------- | :----------------------------- | :-------------------------------- | :------- | | **Total cash, cash equivalents, and short-term investments** | $556,481 | $577,147 | $(20,666) | | **Percentage of total assets** | 49.5% | 46.5% | 3.0% | | **Net cash provided by (used in) operating activities (9 months)** | $106,159 | $(582) | $106,741 | | **Net cash used in financing activities (9 months)** | $(114,564) | $(141,729) | $27,165 | - The company expects fiscal 2025 capital expenditures to be between **$8.0 million** and **$12.0 million**, with **$7.6 million** incurred through the third quarter, primarily for R&D, manufacturing enhancements, IT security, ERP implementation, and leasehold improvements[218](index=218&type=chunk) - The company believes existing cash, cash equivalents, short-term investments, and anticipated cash flows from operations are sufficient to meet liquidity and capital requirements for at least the next twelve months and beyond, despite macroeconomic headwinds[221](index=221&type=chunk) - The company repurchased approximately **1,322.0 thousand shares** for **$49.5 million** under the New Share Repurchase Program during the nine months ended June 28, 2025, with **$250.5 million** remaining authorization[226](index=226&type=chunk)[228](index=228&type=chunk) - Contractual obligations as of June 28, 2025, include **$133.373 million** in inventory purchase obligations and **$11.811 million** in U.S. one-time transition tax payable[233](index=233&type=chunk) [Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=57&type=section&id=Item%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section discusses the company's exposure to market risks, specifically interest rate and foreign currency risks, and management strategies - The company's exposure to interest rate changes on available-for-sale securities is limited, with an average life to maturity target of less than 18 months, and is not expected to have a material impact[238](index=238&type=chunk) - Foreign currency risk arises from international operations, particularly non-U.S. dollar-denominated operating expenses, and is hedged using foreign exchange forward contracts, which generally mature within twelve months[239](index=239&type=chunk)[241](index=241&type=chunk) - As of June 28, 2025, a **10.0%** fluctuation in foreign currency exchange rates could impact financial position, results of operations, or cash flows by **$5.0 million to $6.0 million**[240](index=240&type=chunk) [Item 4. CONTROLS AND PROCEDURES](index=58&type=section&id=Item%204.%20CONTROLS%20AND%20PROCEDURES) This section confirms the effectiveness of disclosure controls and procedures, with no material changes to internal control over financial reporting - The company's disclosure controls and procedures were evaluated as effective as of June 28, 2025, providing reasonable assurance that required information is recorded, processed, summarized, and reported timely[242](index=242&type=chunk) - No material changes to internal control over financial reporting were identified during the three months ended June 28, 2025[244](index=244&type=chunk) [PART II - OTHER INFORMATION](index=46&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This part provides other information, including legal proceedings, risk factors, equity security sales, and various disclosures [Item 1. LEGAL PROCEEDINGS](index=59&type=section&id=Item%201.%20LEGAL%20PROCEEDINGS) This section states the company is involved in routine litigation, not expecting material adverse effects on financial condition or operations - The company is party to ordinary, routine litigation incidental to its business[245](index=245&type=chunk) - Resolution of any currently pending legal matters is not expected to have a material adverse effect on the company's business, financial condition, or operating results[245](index=245&type=chunk) [Item 1A. RISK FACTORS](index=59&type=section&id=Item%201A.%20RISK%20FACTORS) This section updates risk factors, emphasizing international operations, trade regulations, currency fluctuations, and export control risks - Substantially all sales, distribution channels, and manufacturing operations are located outside the U.S., primarily in the Asia/Pacific region, subjecting the company to risks from changes in trade regulations, currency fluctuations, and political instability[246](index=246&type=chunk)[248](index=248&type=chunk) - Approximately **51.3%** of net revenue for the nine months ended June 28, 2025, was from shipments to customers headquartered in China, exposing the company to risks from U.S.-China trade tensions, tariffs, and export controls[246](index=246&type=chunk)[253](index=253&type=chunk) - U.S. export controls, particularly those related to advanced computing semiconductors and manufacturing equipment, impact some of the company's advanced packaging products, requiring compliance measures and potential export licenses[257](index=257&type=chunk)[258](index=258&type=chunk)[259](index=259&type=chunk)[260](index=260&type=chunk) - The potential for conflict and instability in the relationship between Taiwan and China could disrupt operations of customers, suppliers, and the company's manufacturing in the region[250](index=250&type=chunk) [Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=62&type=section&id=Item%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) This section summarizes the company's common stock repurchases under publicly announced plans during the quarter Common Stock Repurchases (in thousands) | Period | Total Number of Shares Purchased (in thousands) | Average Price Paid Per Share | | :-------------------------------- | :------------------------------------------ | :--------------------------- | | **March 30, 2025 to April 26, 2025** | 218 | $30.34 | | **April 27, 2025 to May 31, 2025** | 256 | $32.73 | | **June 1, 2025 to June 28, 2025** | 194 | $34.19 | | **For the three months ended June 28, 2025** | 668 | - | - As of June 28, 2025, approximately **$250.5 million** remained authorized for repurchase under the New Program, which permits purchases through December 2, 2029[262](index=262&type=chunk)[263](index=263&type=chunk) [Item 3. DEFAULTS UPON SENIOR SECURITIES](index=63&type=section&id=Item%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) This section states that there were no defaults upon senior securities - There were no defaults upon senior securities[264](index=264&type=chunk) [Item 4. MINE SAFETY DISCLOSURES](index=63&type=section&id=Item%204.%20MINE%20SAFETY%20DISCLOSURES) This section states that there are no mine safety disclosures - There are no mine safety disclosures[265](index=265&type=chunk) [Item 5. OTHER INFORMATION](index=63&type=section&id=Item%205.%20OTHER%20INFORMATION) This section confirms no directors or officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements - No directors or officers adopted, modified, or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the fiscal quarter ended June 28, 2025[266](index=266&type=chunk) [Item 6. EXHIBITS](index=64&type=section&id=Item%206.%20EXHIBITS) This section lists all exhibits filed with the Form 10-Q, including articles, by-laws, certifications, and XBRL documents - Exhibits include the company's Amended and Restated Articles of Incorporation, Amended and Restated By-Laws, certifications from the CEO and CFO, and various Inline XBRL documents[267](index=267&type=chunk)

Q3F25 Financial Performance - Revenue for Q3F25 was $148.4 million, a decrease of 8.4% quarter-over-quarter [9, 16] - Net loss for Q3F25 was $(3.3) million, while non-GAAP net income was $3.8 million [9] - EPS was $(0.06), and non-GAAP EPS was $0.07 [9] - Gross margin was 46.7%, an increase of 2180 bps quarter-over-quarter [18] - Operating expenses were $75.3 million, a decrease of $(49.7) million quarter-over-quarter [18] Outlook for Q4F25 - The company anticipates revenue of $170 million, with a potential variance of +/- $10 million [21] - The company expects operating expenses of $68.0 million, with a potential variance of +/- 2% [21] - The company projects diluted EPS of $0.22, with a potential variance of +/- 10% [21] Strategic Focus and Market Dynamics - The company is internally focused on efficiency, customer engagement, and new product execution [11] - Macro order hesitation, primarily affecting Auto/Industrial demand, contributed to the sequential revenue change [11] - Technology and capacity-related order activity are driving General Semi & Memory recovery [11] - Vertical Wire is positioned well for mobile-HBM, and new Wedge solutions are enabling more capable & efficient Power-Semi [11]

[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].