Core Viewpoint - The article discusses the current state and future prospects of the photomask industry, highlighting the challenges faced by domestic companies in China and the potential for growth driven by increasing demand in downstream applications such as semiconductors and flat panel displays [2][3][4]. Group 1: Photomask Industry Overview - Photomasks are critical materials in microelectronics manufacturing, serving as templates for transferring circuit designs onto substrates or wafers [2][5]. - The global photomask market has been growing steadily, reaching a size of $5.2 billion by 2022 [2]. - The domestic photomask industry in China is currently lagging, with reliance on foreign imports for upstream equipment and materials [3][35]. Group 2: Market Dynamics - The demand for photomasks is driven by the growth of downstream industries, particularly in consumer electronics and semiconductor manufacturing [35][48]. - The photomask industry exhibits a counter-cyclical property, where sales can increase during downturns in the panel industry as manufacturers invest in new product development [3][48]. - The semiconductor photomask market is dominated by companies from the US and Japan, with a significant portion of the market share held by firms like Intel, Samsung, and TSMC [3][4]. Group 3: Domestic Companies and Development - Domestic companies such as Qingyi Optoelectronics and Luwei Optoelectronics are making strides in the photomask sector, with advancements in technology and market share [4][30]. - The article emphasizes the importance of mergers and acquisitions for domestic firms to enhance their technical capabilities and compete with established international players [4][30]. - The shift of panel and semiconductor production capacity to mainland China presents an opportunity for local photomask manufacturers to grow [4][65]. Group 4: Technological and Market Trends - The photomask production process involves several complex steps, requiring high precision and advanced technology [17][21]. - The industry is witnessing a trend towards larger and more sophisticated display panels, which in turn increases the demand for advanced photomasks [52][65]. - The market for photomasks is expected to continue growing, with projections indicating a rise in the domestic market size from 7.412 billion yuan in 2019 to 12.436 billion yuan in 2023 [48][49].

BROOKFIELD, Conn., May 14, 2025 (GLOBE NEWSWIRE) -- Photronics, Inc. (Nasdaq: PLAB), a worldwide leader in photomask technologies and solutions, is scheduled to announce financial results for the second quarter of fiscal 2025 on Wednesday, May 28, 2025, before the market opens. For Further Information: Ted Moreau VP, Investor Relations 469.395.8175 tmoreau@photronics.com About Photronics Photronics is a leading worldwide manufacturer of integrated circuit (IC) and flat panel display (FPD) photomasks. High p ...

Group 1 - Photronics, Inc. announced its participation in several upcoming financial conferences, including TD Cowen's 53rd Annual Technology, Media & Telecom Conference on May 29, D.A. Davidson's 1st Annual Technology & Consumer Conference on June 10, Three Part Advisors East Coast IDEAS Conference on June 11, and Singular Research Investor Conference on June 18 [1] - The company is a leading worldwide manufacturer of integrated circuit (IC) and flat panel display (FPD) photomasks, which are essential in the manufacturing process of ICs and FPDs [2] - Photronics has been a trusted photomask supplier for over 55 years and operates 11 strategically located manufacturing facilities across Asia, Europe, and North America [2]

Stock Research Platform (SRP) is run by an experienced full-time CFO and equity investor with a passion for researching stocks to find asymmetric investment opportunities. SRP is screening the market for companies with a strong balance sheet, a sustainable growth pathway, and a valuation that offers significant upside potential with limited downside risk. SRP articles reflect the author's personal opinion on stocks at the time of research, and are not investment advice. Everyone’s investment goals and risk ...

Revenue and Profitability - Revenue for Q1 FY25 was $212.1 million, a decrease of 4.7% compared to Q4 FY24 and a decrease of 1.9% compared to Q1 FY24, primarily due to seasonal softness and mainstream weakness in Asia and Europe [110]. - Gross profit for Q1 FY25 was $75.5 million, resulting in a gross margin of 35.6%, down from 37.0% in Q4 FY24, primarily due to a revenue decrease of 4.7% [113]. - Net income attributable to Photronics, Inc. shareholders was 20.2% in Q1 FY25, an increase from 15.3% in Q4 FY24 [104]. - Non-GAAP net income attributable to shareholders for Q1 FY25 was $32.4 million, compared to $29.9 million in Q1 FY24 [134]. Expenses - Selling, general, and administrative expenses were $19.1 million in Q1 FY25, a decrease from $21.0 million in Q4 FY24, attributed to lower compensation and professional fees [115]. - Research and development expenses decreased to $4.3 million in Q1 FY25 from $5.3 million in Q4 FY24, primarily due to reduced qualification activities in Asia [116]. Cash Flow and Investments - As of February 2, 2025, cash and cash equivalents totaled $642.2 million, an increase from $598.5 million on October 31, 2024 [122]. - Net cash provided by operating activities increased by $37.0 million in Q1 FY25, totaling $78.5 million compared to $41.5 million in Q1 FY24 [128]. - Net cash flows provided by investing activities improved by $49.0 million in Q1 FY25, driven by an additional maturity of short-term investments of $39.0 million [129]. - The company repurchased 195,079 shares for $4.6 million during Q1 FY25, with $95.4 million remaining under the share repurchase authorization [125]. Tax and Other Income - The effective income tax rate for Q1 FY25 was 24.5%, down from 26.6% in Q4 FY24, primarily due to changes in the jurisdictional mix of earnings [118]. - Other income increased to $25.0 million in Q1 FY25 from a loss of $1.0 million in Q4 FY24, driven by favorable foreign currency impacts [117]. Market Conditions and Future Outlook - The backlog for IC photomasks can expand to as long as two to three months due to demand exceeding supply capacity [100]. - The company anticipates continued transitions and cycles in the semiconductor industry, which will affect its business and financial condition [101]. - The company estimates capital expenditures for fiscal year 2025 to be approximately $200 million, primarily in Asia and the U.S. [124]. - The company plans to continue investing in its business and is ready to pursue mergers, acquisitions, or strategic partnerships if suitable opportunities arise [123]. Foreign Currency and Commitments - A 10% adverse movement in foreign currencies would have resulted in a net unrealized pre-tax loss of $62.7 million as of February 2, 2025 [141]. - Outstanding capital commitments as of February 2, 2025, were approximately $170.3 million, with accrued liabilities related to capital equipment purchases of approximately $13.9 million [124]. - The company has CNY 200 million (approximately $27.7 million) of borrowing capacity in China to support local operations [122].

Financial Performance (FQ1 2025) - Revenue was $212.1 million, a decrease of 2% year-over-year and 5% quarter-over-quarter[5] - Operating margin was 24.6%, a decrease of 200 basis points year-over-year and 50 basis points quarter-over-quarter[5] - Diluted EPS was $0.68, an increase of 62% year-over-year and 26% quarter-over-quarter[5] - Non-GAAP Diluted EPS was $0.52, an increase of 8% year-over-year and a decrease of 12% quarter-over-quarter[5] - Operating cash flow was $78.5 million, an increase of 89% year-over-year and 15% quarter-over-quarter[5] - Cash and short-term investments totaled $642.2 million, an increase of 23% year-over-year and 0% quarter-over-quarter[5] Revenue by Product Line (FQ1 2025) - IC High-End revenue was $60.1 million, a decrease of 1% year-over-year and 0% quarter-over-quarter[9] - IC Mainstream revenue was $93.9 million, a decrease of 3% year-over-year and 9% quarter-over-quarter[9] - FPD High-End revenue was $49.7 million, a decrease of 2% year-over-year and an increase of 3% quarter-over-quarter[10] - FPD Mainstream revenue was $8.5 million, an increase of 5% year-over-year and a decrease of 19% quarter-over-quarter[10] Guidance (FQ2 2025) - Revenue is expected to be between $208 million and $216 million[14] - Operating margin is expected to be between 23% and 25%[14] - Diluted non-GAAP EPS is expected to be between $0.44 and $0.50[14] - Full-year Capex is expected to be approximately $200 million[14]

Financial Data and Key Metrics Changes - The company achieved first quarter sales of $212 million, in line with expectations and normal seasonal trends [8] - Diluted GAAP EPS attributable to shareholders was $0.68, while non-GAAP EPS was $0.52, above the high end of guidance [21][22] - Total revenue declined 5% sequentially, with IC revenue down 6% quarter over quarter to $154 million [17] - Operating margin was 25%, at the high end of guidance, while gross margins slightly declined to 36% due to lower sales volumes [20] Business Line Data and Key Metrics Changes - Within the IC segment, mainstream revenue declined 9% year over year, reflecting broader semiconductor industry softness, while high-end IC showed strength, particularly in the 14 to 22 nanometer geometry ranges [9][18] - FPD revenue remained stable at $58 million, with the company maintaining market leadership due to technological superiority [19] - High-end business represented 39% of ASPs in Q1 of fiscal year 2025, up from 36% in fiscal year 2024 [18] Market Data and Key Metrics Changes - The IC market experienced a 2% year-over-year decline, primarily due to weakness in Asia and Europe [9] - The FPD market saw slight declines year over year, but demand from customers in China remained strong [10] - The company recognized its first orders for G8.6% AMOLED displays, which require advanced masks with higher ASPs [11] Company Strategy and Development Direction - The company is focusing on high-end segments to improve blended ASPs and leverage competitive strengths [30] - Investments in regional capacity close to customer locations are aimed at buffering potential tariff impacts [14] - The company plans to spend $200 million in CapEx in 2025, focusing on capacity, capability, and end-of-life tool initiatives [23] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the outlook for 2025 due to current market conditions and limited visibility [27] - The semiconductor industry is expected to benefit from AI adoption, which is seen as a long-term growth driver [12] - The company anticipates that demand for products will remain uneven and difficult to predict, with a typical backlog of one to three weeks [25] Other Important Information - The company generated $78 million in operating cash flow, representing 37% of total revenue [22] - Total cash at the end of the quarter was $642 million, with a modest $3 million of debt remaining [25] - The company is committed to maintaining a capital allocation strategy that includes normal CapEx, M&A activities, and share repurchases [45] Q&A Session Summary Question: Why is the guidance flat quarter over quarter? - Management indicated that weakness in the low-end mainstream business, particularly from 6-inch wafer fabs, is impacting revenue outlook [30] Question: How is the supply-demand equation in mainstream? - Management noted that while pricing remains firm, the overall demand in the mainstream business appears smaller due to weakness in automotive and industrial applications [34] Question: Is there increased competition from local Chinese suppliers? - Management acknowledged increased competition but emphasized a focus on middle and high-end segments to maintain stable ASPs [36] Question: What challenges were faced in scaling up to Gen 8.6% AMOLED screens? - The challenges included scaling specifications and integrating advanced mask technologies onto larger substrates [38] Question: What is the current mindset on buybacks versus acquisitions? - Management stated that the capital allocation strategy remains unchanged, with a cautious approach to M&A and share repurchases depending on market conditions [46] Question: How is AI demand impacting the business? - Management noted positive trends in IC business driven by AI applications, particularly in support chips for the AI ecosystem [62] Question: What are the top risks for 2025? - Management identified macroeconomic conditions and geopolitical tensions as the top two risks [80]

Financial Data and Key Metrics Changes - The company achieved first quarter sales of $212 million, in line with expectations and normal seasonal trends [8] - Diluted GAAP EPS attributable to Photronics shareholders was $0.68, while non-GAAP EPS was $0.52, above the high end of guidance [21][22] - Total revenue declined 5% sequentially, with IC revenue down 6% quarter over quarter to $154 million [17] - Operating margin was 25%, at the high end of guidance, while gross margins declined slightly to 36% due to lower sales volumes [20] Business Line Data and Key Metrics Changes - Within the IC segment, mainstream revenue declined 9% year over year, reflecting overall semiconductor industry softness, while high-end IC showed strength, particularly in the 14 to 22 nanometer geometry ranges [9][18] - FPD revenue remained stable at $58 million, with the company maintaining its market leadership due to technological superiority [19][20] - The high-end business represented 39% of ASPs in Q1 2025, up from 36% in FY 2024 [18] Market Data and Key Metrics Changes - The IC market experienced a 2% year-over-year decline, primarily due to weakness in Asia and Europe [9] - The FPD market saw slight declines year over year, but demand from customers in China remained strong [10] Company Strategy and Development Direction - The company is focusing on high-end segments to improve blended ASPs and leverage competitive strengths [30] - Investments are being made in regional capacity close to customer locations to mitigate potential tariff impacts [14] - The company plans to spend $200 million in CapEx in 2025, focusing on capacity, capability, and end-of-life tool initiatives [23][24] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the outlook for 2025 due to current market conditions and limited visibility [27] - The AI landscape is seen as a long-term growth driver, with expectations for increased photomask demand from AI-related applications [12][63] - The automotive and industrial sectors remain weak, with no significant signs of recovery [68] Other Important Information - The company generated $78 million in operating cash flow, representing 37% of total revenue [22] - Total cash at the end of the quarter was $642 million, with a modest $3 million of debt remaining [25] Q&A Session Summary Question: Why is the guidance flat quarter over quarter? - Management indicated weakness in the low-end mainstream business, particularly from 6-inch wafer fabs, impacting revenue outlook [30] Question: How is the supply-demand equation in mainstream? - Pricing remains firm, but the overall market size appears smaller due to weakness in automotive and industrial applications [34] Question: Is there increased competition from local Chinese suppliers? - Yes, there is increased competition, but the company is focusing on middle and high-end segments to maintain stable ASPs [36] Question: What challenges were faced in scaling up to Gen 8.6% AMOLED screens? - Challenges included scaling specifications and integrating advanced mask technologies onto larger substrates [38] Question: What is the current mindset on buybacks versus acquisitions? - The company remains cautious but has a war chest for potential M&A opportunities while also considering share repurchases [46] Question: How is the demand for 22 and 28 nanometer nodes trending? - There is positive traction from AI-driven business, particularly in support chips for the AI ecosystem [62] Question: What are the top risks for 2025? - The top risks identified are macroeconomic conditions and geopolitical tensions [80]

Financial Data and Key Metrics Changes - The company achieved first quarter sales of $212 million, in line with expectations and normal seasonal trends [6] - Non-GAAP diluted EPS was $0.52, exceeding the high end of guidance, with a GAAP EPS of $0.68 [17] - Total revenue declined 5% sequentially, primarily due to a 6% decline in IC revenue [13] - Operating cash flow was $78 million, representing 37% of total revenue, with total cash at the end of the quarter at $642 million [18][20] Business Line Data and Key Metrics Changes - IC revenue was $154 million, with mainstream IC declining 9% year-over-year due to industry softness [13][15] - High-end IC business increased from 30% of total IC revenue in FY2023 to 39% in Q1 FY2025, with strength in the 14nm to 22nm geometry ranges [15] - FPD revenue remained stable at $58 million, maintaining market leadership despite market headwinds [16] Market Data and Key Metrics Changes - The semiconductor industry is experiencing increased costs from tariffs, but the company’s strategy to invest in regional capacity is expected to mitigate this impact [10] - Demand for photomasks is driven by AI applications, particularly at advanced nodes, while mainstream demand is weak due to low utilization in automotive and industrial applications [10][28] Company Strategy and Development Direction - The company is focusing on high-end business to improve ASPs and is expanding capacity in projected growth regions like the U.S. [11][20] - Investments are driven by specific customer opportunities, with a commitment to $200 million in CapEx for 2025 [19] - The company is cautious about the economic outlook for 2025 but remains confident in its long-term growth drivers [21] Management Comments on Operating Environment and Future Outlook - Management expressed caution regarding the flat revenue guidance for Q2, attributing it to weakness in mainstream IC and uncertainty in the economic environment [26] - The company anticipates a clearer picture of fiscal 2025 by the end of Q2, with ongoing focus on high-end segments [26][72] - The geopolitical landscape and macroeconomic conditions are seen as top risks for 2025 [72] Other Important Information - The company has a modest $3 million of debt remaining and continues to build a strong cash position for financial flexibility [20] - The company is monitoring its capital allocation strategy, balancing between CapEx, M&A opportunities, and share repurchases [39] Q&A Session Summary Question: Why is the guidance flat quarter-over-quarter? - Management indicated that weakness in the low-end mainstream market, particularly in Asia and Europe, is impacting revenue outlook [25][26] Question: How is the supply-demand equation in mainstream? - The company maintains firm pricing in mainstream but notes a smaller overall market size due to low utilization in automotive and industrial applications [28] Question: Are there increased competition from local Chinese suppliers? - Yes, there is increased competition, but the company is focusing on the middle and high-end segments to maintain stable ASPs [30] Question: What challenges were faced in scaling up to Gen 8.6 AMOLED screens? - Challenges included scaling specifications and integrating advanced technologies, but the company is well-prepared for production [32][34] Question: What is the current mindset on buybacks versus M&A? - The company remains cautious but has the capacity to act on M&A opportunities if they are accretive, while also considering share repurchases [39] Question: How much of the U.S. IC capacity is tied to long-term purchase agreements? - The current investments are primarily driven by organic demand rather than the CHIPS Act [55][60] Question: What are the top risks for 2025? - The top risks identified are macroeconomic conditions and geopolitical tensions [72]

Financial Performance - Revenue for Q1 Fiscal 2025 was $212.1 million, down 2% year-over-year and 5% sequentially[6]. - GAAP Net income attributable to Photronics, Inc. shareholders was $42.9 million, or $0.68 per diluted share, compared to $26.2 million, or $0.42 per diluted share, in Q1 2024[6]. - Non-GAAP Net income attributable to Photronics, Inc. shareholders was $32.4 million, or $0.52 per diluted share, compared to $29.9 million, or $0.48 per diluted share in Q1 2024[6]. - Integrated Circuits (IC) revenue was $154.0 million, down 2% year-over-year and 6% sequentially[6]. - Flat Panel Display (FPD) revenue was $58.1 million, down 1% year-over-year and 1% sequentially[6]. Cash Flow and Investments - Cash generated from operating activities was $78.5 million, with $35.2 million invested in organic growth through capital expenditures[6]. - Cash at the end of the quarter was $642.2 million, with total debt of $2.7 million[6]. Future Outlook - For Q2 Fiscal 2025, revenue is expected to be between $208 million and $216 million, with non-GAAP Net income per diluted share projected between $0.44 and $0.50[5]. - The company remains cautious about 2025 while managing costs and optimizing product mix to deliver margins[3]. Operational Overview - Photronics operates 11 manufacturing facilities globally, strategically located in Asia, Europe, and North America[8].