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].

Core Viewpoint - Photronics, Inc. reported its financial results for the first quarter of fiscal year 2025, indicating a slight decline in revenue but an increase in net income compared to the previous year [1][8]. Financial Performance - Revenue for the first quarter was $212.1 million, down 2% year-over-year and 5% sequentially [8]. - 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 the first quarter of 2024 [8]. - 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 the first quarter of 2024 [8]. - Integrated Circuits (IC) revenue was $154.0 million, down 2% year-over-year and 6% sequentially, while Flat Panel Display (FPD) revenue was $58.1 million, down 1% from the same quarter last year and 1% sequentially [8]. Market Insights - The company observed favorable demand for high-end products in the IC and FPD markets, particularly for photomasks supporting node migration and memory [2]. - The most mature mainstream masks were affected by general market softness, leading to a cautious outlook for 2025 [2]. Guidance - For the second quarter of fiscal 2025, Photronics expects revenue to be between $208 million and $216 million, with non-GAAP net income attributable to shareholders projected to be between $0.44 and $0.50 per diluted share [4]. Cash Flow and Investments - Cash generated from operating activities was $78.5 million, with $35.2 million invested in organic growth through capital expenditures [8]. - Cash returned to shareholders through share repurchases amounted to $4.6 million, and cash at the end of the quarter was $642.2 million [8]. Company Overview - Photronics is a leading manufacturer of photomasks for integrated circuits and flat panel displays, operating 11 manufacturing facilities globally [6].

Core Viewpoint - Photronics (PLAB) is expected to report its first-quarter fiscal 2025 results on February 26, with anticipated revenues between $208 million and $216 million and non-GAAP earnings between 43 cents and 19 cents [1][2]. Group 1: Financial Performance Expectations - For the upcoming quarter, PLAB's performance is likely to benefit from strong sales in the Integrated Circuit (IC) and Flat Panel Display (FPD) segments, with a notable 21% increase in high-end IC mask sales in the previous quarter [2][3]. - The demand for high-end photomasks is expected to be driven by growth in nodes such as 22-28 nanometers and sub-14 nanometers, particularly in the specialty Extreme Ultraviolet business [4]. - The FPD segment is also projected to see strong demand due to the increased adoption of AMOLED and LTPS display technologies, which require advanced photomasks [4][5]. Group 2: Market Dynamics and Challenges - Despite the anticipated growth, PLAB's first-quarter performance may be negatively impacted by seasonal factors, including the Chinese New Year slowdown and reduced demand for advanced mobile displays [5]. - Year-to-date, PLAB shares have declined by 7.6%, underperforming the Zacks Computer & Technology sector, which has seen a return of 0.9% [6]. - The company has outperformed peers such as Hoya and Dai Nippon Printing, which have experienced larger declines of 16.8% and 13.6%, respectively, as well as the Semiconductor Equipment - Photomasks industry peer Fujifilm, which has seen a 23.6% drop [7]. Group 3: Investment Outlook - Despite strong sales in high-end IC and growth in the FPD segment, PLAB faces challenges from sluggish semiconductor industry trends, geopolitical uncertainties, and macroeconomic headwinds that may affect financial performance [8]. - Currently, Photronics holds a Zacks Rank 3 (Hold), suggesting that investors should wait for a more favorable time to accumulate the stock [9].

Core Viewpoint - Photronics, Inc. is set to announce its financial results for the first quarter of fiscal 2025 on February 26, 2025, before market opening [1] Company Overview - Photronics is a leading global manufacturer of photomasks for integrated circuits (IC) and flat panel displays (FPD), utilizing high precision quartz plates that contain microscopic images of electronic circuits [3] - The company has been a trusted supplier for over 55 years and operates 11 strategically located manufacturing facilities across Asia, Europe, and North America [3] Upcoming Events - A public conference call will be held on the same day as the financial results announcement at 8:30 a.m. Eastern time, where management will address questions regarding financial performance, business conditions, and industry outlook [2] - The call will be broadcast live and available on-demand on the Photronics website, with registration suggested 15 minutes prior to the start time for those wishing to participate in the Q&A [2]

Core Viewpoint - Photronics (PLAB) is currently trading at a significant discount, with a Value Score of A, and a forward 12-month Price/Earnings ratio of 10.6X, which is lower than its median of 11.53X and the sector average of 26.99X [1][2]. Group 1: Financial Performance and Guidance - PLAB's shares have declined 17.5% over the trailing 12 months, underperforming the broader sector's appreciation of 29.5% [5]. - For Q1 fiscal 2025, PLAB expects revenues between $208 million and $216 million, with an operating margin of 23% to 25% and earnings between 43 cents and 49 cents per share [8]. - The Zacks Consensus Estimate for fiscal 2025 earnings is $2.30 per share, reflecting a 4.5% increase over the past 60 days and a 12.2% year-over-year growth [9]. Group 2: Market Trends and Demand - Despite sluggish semiconductor industry trends, the demand for PLAB's chips in AI, IoT, 5G, and consumer products is expected to improve in 2025 [2]. - The increasing demand for high-end chips supporting AI is anticipated to drive growth for PLAB, particularly in complex advanced leading-edge nodes [11]. - PLAB has seen improved demand for high-end integrated circuits (ICs) in Q4 fiscal 2024, primarily driven by high-end designs in Asia [12]. Group 3: Strategic Developments - PLAB is expanding its footprint in China with new facilities, capitalizing on the region's growth in semiconductor and display production [14]. - The company plans to invest $200 million in 2025 to expand U.S. IC manufacturing capacity, supported by improved liquidity with cash and short-term investments totaling $640.7 million [16]. - PLAB has returned $130 million to shareholders since 2018, with $100 million remaining under the current share repurchase authorization [17]. Group 4: Conclusion - Photronics is positioned for growth with an expanding global presence and strong market share, making it attractive for investors due to its undervaluation [18].

Core Viewpoint - Photronics, Inc. has appointed George Macricostas as Executive Chairman, effective January 6, 2025, marking a significant leadership transition within the company [1][2]. Company Leadership - George Macricostas has over 30 years of experience in technical and management roles, having been on the Photronics Board since 2002 and previously serving as Chairman of the Compensation Committee [2]. - With this appointment, David Garcia will succeed Macricostas in his committee roles, and both George and Constantine Macricostas will no longer be considered independent directors, leaving a Board of Directors of nine members, six of whom are independent [2]. Background of George Macricostas - George Macricostas was the Founder, Chairman, and CEO of RagingWire Data Centers, guiding the company through a two-stage sale to NTT of Japan in 2014 and 2018 [3]. - He previously held a senior vice president position at Photronics, overseeing the company's IT infrastructure [3]. Company Overview - Photronics is a leading manufacturer of photomasks for integrated circuits (IC) and flat panel displays (FPD), with over 50 years of experience in the industry [5]. - The company operates 11 manufacturing facilities strategically located in Asia, Europe, and North America [5].

Company Overview - Photronics, Inc. is a leading worldwide manufacturer of photomasks for integrated circuits (IC) and flat panel displays (FPD) [2] - The company has been a trusted supplier for over 50 years, founded in 1969 [2] - Photronics operates 11 strategically located manufacturing facilities across Asia, Europe, and North America [2] Upcoming Event - Photronics is scheduled to present at the 27th Annual Needham Growth Conference on January 14, 2025, at 4:30 p.m. Eastern Time [1] - The event will take place at the Lotte NY Palace hotel in New York City [1] - The presentation will be accessible via a live and on-demand webcast on the company's website [1]