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]

[Q2 2025 Financial Performance Summary](index=1&type=section&id=Kulicke%20%26%20Soffa%20Reports%20Second%20Quarter%202025%20Results) Kulicke & Soffa's Q2 2025 performance shows a revenue decline and significant GAAP net loss, largely due to business cessation charges, despite positive cash flow [Q2 2025 Key Financial Results](index=1&type=section&id=Quarterly%20Results) Q2 2025 saw a 5.9% year-over-year net revenue decline to $162.0 million, a GAAP net loss of $84.5 million, and a non-GAAP net loss of $27.9 million, despite positive cash flow Q2 2025 GAAP Financial Performance | | Fiscal Q2 2025 | Change vs. Fiscal Q2 2024 | Change vs. Fiscal Q1 2025 | | :--- | :--- | :--- | :--- | | Net Revenue | $162.0 million | down 5.9% | down 2.5% | | Gross Margin | 24.9% | up 1530 bps | down 2750 bps | | Loss from Operations | $(84.7) million | up 19.5% | down 197.7% | | Net Loss | $(84.5) million | up 17.7% | down 203.5% | | EPS – Diluted | $(1.59) | up 13.1% | down 205.3% | Q2 2025 Non-GAAP Financial Performance | | Fiscal Q2 2025 | Change vs. Fiscal Q2 2024 | Change vs. Fiscal Q1 2025 | | :--- | :--- | :--- | :--- | | Loss from Operations | $(27.4) million | up 45.4% | down 245% | | Net Loss | $(27.9) million | up 47.7% | down 237.8% | | EPS – Diluted | $(0.52) | up 45.3% | down 240.5% | - The company generated **$79.9 million** in GAAP cash flow from operations and **$78.0 million** in adjusted free cash flow during the quarter[13](index=13&type=chunk) - As of March 29, 2025, cash, cash equivalents, and short-term investments totaled **$581.5 million**[13](index=13&type=chunk) - The company repurchased **0.5 million shares** of common stock for **$21.3 million** in Q2 2025[13](index=13&type=chunk) [Strategic Business Updates](index=1&type=section&id=Strategic%20Business%20Updates) The Board approved ceasing the Electronics Assembly equipment business, incurring approximately **$86.6 million** in Q2 2025 pre-tax charges, primarily from impairments - On March 31, 2025, the Board of Directors approved a plan to cease the Electronics Assembly (EA) equipment business[3](index=3&type=chunk) - During Q2 2025, the company incurred pre-tax charges of approximately **$86.6 million** related to this intended cessation, primarily from impairments[3](index=3&type=chunk) [Management Commentary](index=2&type=section&id=Management%20Commentary) Management noted cautious order activity in Southeast Asia but remains focused on accelerating growth through key technology transitions in core markets - Management noted more cautious order activity specific to certain Southeast Asia markets[8](index=8&type=chunk) - The company remains prepared to accelerate growth through technology transitions in Vertical Wire, Power-Semiconductor, Advanced Dispense, and Thermo-Compression[8](index=8&type=chunk) [Business Outlook](index=2&type=section&id=Third%20Quarter%20Fiscal%202025%20Outlook) The company provides its financial guidance for the third quarter of fiscal 2025, including revenue and earnings per share projections [Q3 2025 Financial Guidance](index=2&type=section&id=Third%20Quarter%20Fiscal%2025%20Outlook) Q3 2025 guidance projects net revenue of approximately **$145 million** (+/- **$10 million**), a GAAP diluted loss per share of **$(0.09)**, and non-GAAP diluted earnings per share of **$0.05** Q3 2025 Outlook | Metric | Guidance | | :--- | :--- | | Net Revenue | $145 million +/- $10 million | | GAAP Diluted EPS | $(0.09) +/- 10% | | Non-GAAP Diluted EPS | $0.05 +/- 10% | - The difference between GAAP and Non-GAAP EPS guidance is primarily due to adjustments for equity-based compensation, amortization, and restructuring expenses, totaling an impact of **$0.14 per share**[32](index=32&type=chunk) [Consolidated Financial Statements](index=4&type=section&id=CONSOLIDATED%20CONDENSED%20STATEMENTS%20OF%20OPERATIONS) This section presents the company's consolidated financial statements, including the income statement, balance sheet, and cash flow statement [Consolidated Condensed Statements of Operations (Income Statement)](index=4&type=section&id=CONSOLIDATED%20CONDENSED%20STATEMENTS%20OF%20OPERATIONS) For Q2 2025, net revenue was **$162.0 million**, with a gross profit of **$40.4 million**, leading to an operating loss of **$84.7 million** and a net loss of **$84.5 million** Statement of Operations Highlights (Three Months Ended, in thousands) | Metric | March 29, 2025 | March 30, 2024 | | :--- | :--- | :--- | | Net revenue | $161,986 | $172,074 | | Gross profit | $40,384 | $16,471 | | (Loss)/income from operations | $(84,667) | $(105,155) | | Net loss | $(84,519) | $(102,680) | | Diluted net loss per share | $(1.59) | $(1.83) | - For the six months ended March 29, 2025, net revenue was **$328.1 million**, and the net loss was **$2.9 million**[19](index=19&type=chunk) [Consolidated Condensed Balance Sheets](index=5&type=section&id=CONSOLIDATED%20CONDENSED%20BALANCE%20SHEETS) As of March 29, 2025, total assets were **$1.15 billion**, a decrease from **$1.24 billion** in fiscal 2024, with total liabilities at **$281.1 million** and equity at **$864.2 million** Balance Sheet Highlights (in thousands) | Metric | March 29, 2025 | September 28, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $286,519 | $227,147 | | Short-term investments | $295,000 | $350,000 | | Inventories, net | $155,655 | $177,736 | | TOTAL ASSETS | $1,145,264 | $1,240,162 | | TOTAL LIABILITIES | $281,098 | $296,153 | | TOTAL SHAREHOLDERS' EQUITY | $864,166 | $944,009 | [Consolidated Condensed Statements of Cash Flows](index=6&type=section&id=CONSOLIDATED%20CONDENSED%20STATEMENTS%20OF%20CASH%20FLOWS) Q2 2025 saw **$79.9 million** in net cash from operating activities, a turnaround from the prior year, with total cash and investments ending at **$581.5 million** Cash Flow Highlights (Three Months Ended, in thousands) | Metric | March 29, 2025 | March 30, 2024 | | :--- | :--- | :--- | | Net cash provided by / (used in) operating activities | $79,877 | $(20,148) | | Net cash provided by / (used in) investing activities | $(38,415) | $3,429 | | Net cash used in financing activities | $(33,506) | $(47,672) | | Change in cash and cash equivalents | $8,194 | $(64,912) | - Total cash, cash equivalents, and short-term investments at the end of Q2 2025 was **$581.5 million**, compared to **$634.7 million** at the end of Q2 2024[24](index=24&type=chunk) [Reconciliation of GAAP to Non-GAAP Financial Measures](index=7&type=section&id=Reconciliation%20of%20U.S.%20GAAP%20to%20Non-GAAP) This section provides reconciliations of GAAP financial measures to their non-GAAP counterparts, detailing adjustments for various items [Reconciliation of Income from Operations](index=7&type=section&id=Reconciliation%20of%20U.S.%20GAAP%20to%20Non-GAAP%20Income%20from%20Operations%20and%20Operating%20Margin) Q2 2025 GAAP operating loss of **$84.7 million** was reconciled to a non-GAAP operating loss of **$27.4 million**, primarily by adjusting for impairment and restructuring charges Q2 2025 Reconciliation of Income from Operations (in thousands) | Metric | Amount | | :--- | :--- | | U.S. GAAP loss from operations | $(84,667) | | **Pre-tax non-GAAP items:** | | | Amortization related to intangible assets | $1,171 | | Restructuring | $8,806 | | Equity-based compensation | $7,493 | | Impairment charges | $39,817 | | **Non-GAAP loss from operations** | **$(27,380)** | [Reconciliation of Net Income and EPS](index=8&type=section&id=Reconciliation%20of%20U.S.%20GAAP%20Net%20Income%20to%20Non-GAAP%20Net%20Income) Q2 2025 GAAP net loss of **$84.5 million** (or **$(1.59)** per share) was reconciled to a non-GAAP net loss of **$27.9 million** (or **$(0.52)** per share) Q2 2025 Reconciliation of Net Income (in thousands) | Metric | Amount | | :--- | :--- | | U.S. GAAP net loss | $(84,519) | | **Total non-GAAP adjustments** | **$56,648** | | Non-GAAP net loss | $(27,871) | Q2 2025 Reconciliation of Diluted EPS | Metric | Amount | | :--- | :--- | | U.S. GAAP net loss per share | $(1.59) | | Non-GAAP adjustments per share | $1.07 | | **Non-GAAP net loss per share** | **$(0.52)** | [Reconciliation of Adjusted Free Cash Flow](index=9&type=section&id=Reconciliation%20of%20U.S.%20GAAP%20Cash%20provided%20by%20Operating%20Activities%20to%20Non-GAAP%20Adjusted%20Free%20Cash%20Flow) Q2 2025 adjusted free cash flow totaled **$78.0 million**, derived from GAAP net cash provided by operating activities less net capital expenditures Q2 2025 Reconciliation of Adjusted Free Cash Flow (in thousands) | Metric | Amount | | :--- | :--- | | U.S. GAAP net cash provided by operating activities | $79,877 | | Purchases of property, plant and equipment | $(1,954) | | Proceeds from sales of property, plant and equipment | $60 | | **Non-GAAP adjusted free cash flow** | **$77,983** |

Core Viewpoint - Kulicke and Soffa Industries, Inc. is set to announce its second fiscal quarter 2025 financial results on May 6, 2025, with a conference call scheduled for May 7, 2025, to discuss these results and the company's business outlook [1][2]. Group 1: Financial Results Announcement - The company will release its second fiscal quarter 2025 financial results on the evening of May 6, 2025, at approximately 4:00 pm ET [2]. - A conference call to discuss the financial results and business outlook is scheduled for May 7, 2025, at 8:00 am ET [1]. Group 2: Accessing the Conference Call - Interested parties can access the conference call by calling +1-877-407-8037 or internationally +1-201-689-8037 [2]. - A live webcast and replay of the conference call will be available at investor.kns.com [2]. Group 3: Replay Information - A replay of the conference call will be available approximately one hour after the call's completion until May 14, 2025, by calling +1-877-660-6853 or internationally +1-201-612-7415, using the replay ID number 13750874 [3]. Group 4: Company Overview - Kulicke and Soffa is a global leader in semiconductor assembly technology, focusing on enhancing device performance across various markets including automotive, compute, industrial, memory, and communications [4]. - Founded in 1951, the company is positioned to address dynamic process challenges and create long-term value by aligning technology with market opportunities [4].

Core Viewpoint - The Zacks Electronics - Manufacturing Machinery industry is currently facing challenging macroeconomic conditions and high inventory levels, but companies like Kulicke and Soffa Industries, Axcelis Technologies, and Veeco Instruments are benefiting from increased capital spending in high-performance computing, AI, and other advanced technologies [1][2]. Industry Overview - The industry comprises companies providing solutions for wafer processing, device packaging, and semiconductor manufacturing, including thin-film processing systems and advanced packaging lithography [3]. - There is a growing emphasis on contamination-free transportation and storage of materials, highlighting the importance of micro-contamination control products [4]. Trends Influencing the Industry - Miniaturization in semiconductor manufacturing is driving demand for advanced packaging and new device architectures, which enhances prospects for industry participants [5]. - The complexity of semiconductor manufacturing processes is increasing due to the demand for faster and more energy-efficient semiconductors, driven by cloud computing, IoT, and AI [7][8]. - Strong demand for NAND and DRAM, particularly in data centers and cloud segments, is a positive indicator for the industry [9]. Industry Performance and Valuation - The Zacks Electronics - Manufacturing Machinery industry ranks 234, placing it in the bottom 5% of over 250 Zacks industries, indicating bearish near-term prospects [10][11]. - The industry has underperformed the broader Zacks Computer and Technology sector and the S&P 500, declining 47.2% over the past year compared to the S&P 500's growth of 6.7% [14]. - The current trailing 12-month EV/EBITDA ratio for the industry is 9.59X, significantly lower than the S&P 500's 15.82X and the sector's 14.68X [15]. Company Highlights - **Kulicke and Soffa Industries (KLIC)**: This company designs and manufactures capital equipment for semiconductor assembly. Its new Fluxless Thermo-Compression system is expected to enhance throughput and capture advanced logic customers. The consensus estimate for fiscal 2025 earnings is $1.49 per share, with shares down 35.4% year to date [16][17]. - **Axcelis Technologies (ACLS)**: Specializes in ion implantation and processing equipment, benefiting from strong demand in the silicon carbide market, particularly for EV applications. The consensus estimate for 2025 earnings is $2.55 per share, with shares down 32% year to date [18][19]. - **Veeco Instruments (VECO)**: Expected to benefit from improving demand for its laser annealing and wet processing systems. The consensus estimate for 2025 earnings is $1.35 per share, with shares down 28.2% year to date [19].

Core Insights - Kulicke and Soffa Industries, Inc. has launched Asterion-PW, an advanced ultrasonic pin welding solution that enhances efficiency, precision, and reliability in power device applications [1][3] - The power module market, which relies on pin-based interconnects, is projected to grow at a compound annual growth rate of 12% through 2029, indicating strong demand in sectors like renewable energy and automotive [2] Company Developments - Asterion-PW utilizes market-leading ultrasonic technology, replacing traditional soldering methods, and offers environmental benefits by eliminating flux and solder paste [3] - The Asterion-PW platform is designed for high throughput and superior quality, emphasizing the importance of precision in driving innovation and cost efficiency [3][7] - Concurrently, the company has introduced ATPremier MEM PLUS™, a wafer-level packaging solution using innovative Vertical Wire technology aimed at advanced memory applications [4] Industry Context - The power module market is one of the fastest-growing segments within the semiconductor industry, highlighting the increasing reliance on advanced interconnect technologies [2] - Kulicke and Soffa's solutions are positioned to support technology transitions across various large-scale markets, including automotive, energy storage, and data storage [6]

Core Insights - Kulicke and Soffa Industries, Inc. has launched ATPremier MEM PLUS, a wafer-level packaging solution aimed at high-volume memory applications [1][2] - The new technology utilizes vertical wire technology to enhance memory density and performance, particularly for at-the-edge AI applications [2][4] - The company anticipates significant growth in advanced memory applications, projecting a compound annual growth rate exceeding 25% over the next five years [4] Company Developments - ATPremier MEM PLUS is designed to support advanced assembly requirements and offers an alternative to traditional copper pillar technology, addressing the limitations of two-dimensional packaging [6][9] - The technology includes proprietary processes such as ProVertical and ProCascade Loop, which enhance precision in wire bonding for memory applications [7] - The solution is expected to improve efficiency and throughput in high-volume environments by integrating with Auto Wafer Handlers or EFEM systems [8] Market Positioning - The ongoing demand for higher performance, greater power efficiency, and compact form factors in memory technology is driving the need for advanced semiconductor packaging solutions [4][5] - Kulicke and Soffa's ATPremier MEM PLUS and Asterion®-PW solutions are positioned to meet the evolving needs of the semiconductor market, particularly in memory and high computing applications [5][10] - The company aims to deliver significant impacts across broader integrated circuit applications, enhancing speed, capacity, and energy efficiency of memory products [9]

Company Overview - Kulicke and Soffa Industries, Inc. specializes in developing semiconductor and electronics assembly solutions aimed at enabling a smart and sustainable future [2] - The company offers a wide range of products and services that support growth and facilitate technology transitions across various large-scale markets, including advanced display, automotive, communications, compute, consumer, data storage, energy storage, and industrial [2] Dividend Announcement - The Board of Directors of Kulicke and Soffa has approved a quarterly dividend of $0.205 per share of common stock [1] - The dividend payment is scheduled for April 8, 2025, to shareholders of record as of March 20, 2024 [1]

Group 1 - Kulicke and Soffa Industries (NASDAQ: KLIC) reported mixed results on February 4, beating earnings estimates while expressing optimism about the current downturn in the semiconductor and LED industry [1] - The company continues to provide equipment and solutions for the semiconductor and LED sectors, indicating a focus on maintaining its market position despite challenges [1]