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Company Performance - Veeco Instruments reported quarterly earnings of $0.36 per share, exceeding the Zacks Consensus Estimate of $0.28 per share, but down from $0.46 per share a year ago, representing an earnings surprise of +28.57% [1] - The company posted revenues of $165.88 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 3.68%, but down from $184.81 million year-over-year [2] - Over the last four quarters, Veeco has consistently surpassed consensus EPS and revenue estimates [2] Stock Outlook - Veeco shares have increased by approximately 8.4% since the beginning of the year, compared to the S&P 500's gain of 15.1% [3] - The company's earnings outlook will be crucial for future stock performance, with current consensus EPS estimates at $0.27 for the coming quarter and $1.27 for the current fiscal year [7] Industry Context - The Electronics - Manufacturing Machinery industry, to which Veeco belongs, is currently ranked in the bottom 26% of over 250 Zacks industries, indicating potential challenges ahead [8] - The performance of Veeco's stock may be influenced by the overall industry outlook and trends in earnings estimate revisions [5][8]

Financial Data and Key Metrics Changes - Third-quarter revenue was $166 million, exceeding the midpoint of prior guidance of $160 million, with non-GAAP operating income at $23 million and non-GAAP diluted earnings per share at $0.36, above the prior guidance midpoint of $0.28 [4][12] - Gross margin for the quarter was approximately 42%, at the top end of guidance, favorably impacted by higher volume and improved product mix [13] - Net income was approximately $22 million, with diluted EPS of $0.36 on 61 million shares [14] Business Line Data and Key Metrics Changes - Semiconductor business reported $118 million, a decline of 5% quarter over quarter, accounting for 71% of total revenue, driven by LSA, IBD EUV for mask blanks, and advanced packaging wet processing systems [12] - Compound semiconductor market revenue was $11 million, down from the prior quarter, totaling 7% of revenue [12] - Scientific and other revenue increased to $27 million, totaling 16% of revenue, driven by an increase in optical deposition systems [12] Market Data and Key Metrics Changes - Revenue from the Asia-Pacific region, excluding China, was 49%, a decrease from 59% in the prior quarter, driven by customers in Taiwan [12] - Revenue from China customers was 28%, an increase from 17% in Q2, primarily driven by LSA and optical deposition systems [13] - The United States accounted for 16% of revenue, while EMEA was 7% [12] Company Strategy and Development Direction - The company announced a definitive agreement to merge with Accellis Technologies, aiming to create a leading semiconductor equipment company with a combined served-available market of over $5 billion on a pro forma 2024 basis [5][6] - The merger is expected to provide growth synergies, expand the product portfolio, and enhance R&D capabilities [6][7] - The company continues to focus on advanced semiconductor technologies, particularly in AI and high-performance computing, with significant opportunities in gate-all-around, high-bandwidth memory, and advanced packaging [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's performance and the strategic merger with Accellis, which is expected to drive sustainable value creation [5][46] - The company anticipates revenue growth in the semiconductor market for 2025 compared to 2024, driven by demand in gate-all-around and advanced packaging [16] - The compound semiconductor market is expected to see revenue growth opportunities in GaN power, photonics, and solar for 2026 [16][17] Other Important Information - The company ended the quarter with cash and short-term investments of $369 million, a sequential increase of $14 million [14] - Cash flow from operations totaled $16 million, with CapEx of $3 million during the quarter [14] Q&A Session Summary Question: Is there new adoption in the 300-millimeter GaN order activity? - Management confirmed successful evaluations with a leading power IDM and a follow-on multi-chamber order for pilot line tools for data center applications [20][21] Question: Why is GaN being adopted in data centers now? - The efficiency of power conversion in data centers is a limiting issue, making materials that convert electricity more efficiently desirable [22] Question: Can you elaborate on the gross margin guidance? - The anticipated decline in gross margin for Q4 is due to product mix changes, including evaluation sign-offs at favorable pricing and increased business in advanced packaging [23][24] Question: What is the expected trajectory of the advanced packaging business in 2026? - The advanced packaging business has doubled, and while growth is expected, visibility for 2026 is limited due to shorter lead times [26] Question: How are the ordering patterns in the HDD market? - Lead times are approaching a year, with orders received in Q3 for ion beam and wet processing equipment, expected to ship in the second half of 2026 [30] Question: Was the strength in the scientific segment driven by Chinese customers? - Some strength was attributed to Chinese customers, along with demand for optical deposition tools for general industrial applications [31] Question: Is NSA adoption possible for memory customers? - Yes, there is interest from memory customers due to the technology's ability to anneal thin layers, conducive to material modification and 3D stacking [32] Question: Update on thin metal films with IBD evaluations? - Progress is being made in introducing new deposition technology, with customer engagement and evaluations ongoing [36] Question: Will margins improve in the future? - Management expects margin improvement in 2026 over 2025, with good visibility for data storage orders and new product orders [41]

Veeco Instruments Q3 2025 Financial Results Conference Call November 5th, 2025 Disclaimer No Offer or Solicitation This communication is not intended to and shall not constitute an offer to purchase or the solicitation of an offer to buy or sell any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdic ...

Financial Performance - Total net sales for Q3 2025 were $165.881 million, a decrease of 10% from $184.807 million in Q3 2024[133]. - Gross profit for Q3 2025 was $67.703 million, down 15% from $79.211 million in Q3 2024, with gross margins decreasing from 43% to 41%[133][135]. - Net sales for the nine months ended September 30, 2025, were $499.3 million, a decrease of 7% compared to $535.2 million in the prior year[144]. - Gross profit for the same period decreased to $204.9 million, representing a gross margin of 41%, down from 43% in the prior year[144]. - Net interest income for the nine months ended September 30, 2025, was $3.1 million, an increase of 138% from $1.3 million in the prior year[153]. - Income tax expense for the nine months ended September 30, 2025, was $5.2 million, compared to $5.7 million in the prior year, reflecting a favorable effective tax rate[154]. Revenue Breakdown - Semiconductor revenue decreased by 5% year-over-year in Q3 2025, accounting for 71% of total revenue, primarily driven by system shipments of Laser Spike Annealing, Ion Beam Deposition EUV, and Advanced Packaging wet processing[119]. - The Compound Semiconductor market saw a 30% decline in sales, from $15.556 million in Q3 2024 to $10.912 million in Q3 2025[134]. - Data Storage revenue dropped significantly by 70%, from $32.750 million in Q3 2024 to $9.971 million in Q3 2025[134]. - The Scientific & Other market experienced a 116% increase in sales, rising from $12.358 million in Q3 2024 to $26.676 million in Q3 2025[134]. Expenses - Research and development expenses decreased by 10% to $28.988 million in Q3 2025 from $32.216 million in Q3 2024[133][136]. - Selling, general, and administrative expenses increased by 8% to $27.263 million in Q3 2025, influenced by costs related to the Merger Agreement[133][137]. - Research and development expenses were $89.1 million, a decrease of 5% from $93.6 million in the prior year, due to reduced personnel-related costs[144][149]. - Selling, general, and administrative expenses increased to $76.2 million, up 2% from $74.6 million in the prior year, primarily due to costs associated with a Merger Agreement[144][150]. Cash and Investments - Cash and cash equivalents increased to $193.2 million as of September 30, 2025, compared to $145.6 million at the end of 2024[157]. - Net cash provided by operating activities was $44.6 million for the nine months ended September 30, 2025, compared to $35.4 million in the prior year[159]. - Capital expenditures for the nine months ended September 30, 2025, were $12.9 million, consistent with $12.9 million in the prior year[160]. - The investment portfolio had a fair value of approximately $176.1 million as of September 30, 2025, with a potential decrease of $1.2 million in value for a 100 basis point increase in interest rates[166]. Merger and Future Outlook - The company entered into a Merger Agreement with Axcelis Technologies, with the merger subject to stockholder and regulatory approvals[112]. - The convertible senior notes will be assumed by Axcelis in connection with the merger[164]. - Industry analysts forecast long-term growth in the Semiconductor industry, driven by trends such as artificial intelligence and high-performance computing, with 2024 sales estimated at around $650 billion[113][114]. Foreign Sales and Currency Risk - Net sales to customers outside the United States represented approximately 84% and 85% of total net sales for the three and nine months ended September 30, 2025, respectively[169]. - Sales denominated in currencies other than the U.S. dollar accounted for approximately 3% and 5% of total net sales for the three and nine months ended September 30, 2025, respectively[169]. - A 10% change in foreign exchange rates would have an immaterial impact on the consolidated results of operations since most sales outside the United States are denominated in U.S. dollars[170]. - The company uses derivative financial instruments to mitigate currency exchange risk, executing transactions with highly rated financial institutions[168]. - Changes in currency exchange rates could affect foreign currency denominated monetary assets and liabilities, impacting forecasted cash flows[167].

Financial Performance - Revenue for Q3 2025 was $165.9 million, a decrease of 10.4% from $184.8 million in Q3 2024[2] - GAAP net income for Q3 2025 was $10.6 million, down 51.8% from $22.0 million in Q3 2024, resulting in diluted earnings per share of $0.17 compared to $0.36[3] - Non-GAAP net income for Q3 2025 was $21.8 million, a decline of 23.0% from $28.3 million in Q3 2024, with diluted earnings per share of $0.36 compared to $0.46[3] - Operating income for Q3 2025 was $10.55 million, down 56.7% from $24.34 million in Q3 2024[13] - Net income for Q3 2025 was $10,596 thousand, with Non-GAAP net income reaching $21,773 thousand, indicating a significant increase in profitability[19] - The company reported a basic net income per share of $0.18 (GAAP) and $0.36 (Non-GAAP) for Q3 2025, reflecting strong earnings performance[23] Future Projections - The company expects Q4 2025 revenue to be in the range of $155 million to $175 million[8] - GAAP diluted earnings per share for Q4 2025 are projected to be between ($0.07) and $0.05, while Non-GAAP diluted earnings per share are expected to range from $0.16 to $0.32[8] - The company anticipates Q4 2025 net sales guidance between $155 million and $175 million, with a projected Non-GAAP operating income of $11 million to $22 million[32] - Gross margin for Q4 2025 is expected to be between 36% and 39%, indicating a focus on maintaining profitability amid market fluctuations[32] Market and Product Development - The semiconductor market is experiencing strong momentum driven by AI and High-Performance Computing, contributing to new product traction in the MOCVD business[2] - Veeco has secured multiple orders for its 300mm Gallium Nitride single wafer and Arsenide Phosphide batch systems, indicating growth in product demand[2] - The pending merger with Axcelis is anticipated to expand technology and market opportunities for Veeco[2] - The company plans to continue investing in new product development and market expansion strategies to drive future growth[16] Expenses and Assets - Research and development expenses for Q3 2025 were $28.99 million, compared to $32.22 million in Q3 2024, reflecting a decrease of 10.3%[13] - Total assets increased to $1,289,911 thousand as of September 30, 2025, up from $1,251,577 thousand at December 31, 2024, representing a growth of approximately 3.1%[15] - Current liabilities decreased to $151,186 thousand in Q3 2025 from $192,282 thousand in Q4 2024, showing improved liquidity management[15] - Total stockholders' equity rose to $875,970 thousand as of September 30, 2025, compared to $770,770 thousand at the end of 2024, marking an increase of approximately 13.6%[15]

Core Insights - Veeco Instruments Inc. reported a decline in revenue and net income for Q3 2025 compared to Q3 2024, with revenue at $165.9 million, down from $184.8 million, and net income at $10.6 million, down from $22.0 million [2][5] - The company highlighted strong performance in the semiconductor market, driven by AI and High-Performance Computing, and noted new product traction in its MOCVD business [2][5] - A pending merger with Axcelis Technologies is expected to enhance technology and market opportunities for Veeco [2][5] Financial Performance - GAAP revenue for Q3 2025 was $165.9 million, a decrease of 10.4% from $184.8 million in Q3 2024 [2][5] - GAAP net income for Q3 2025 was $10.6 million, representing a 51.8% decline from $22.0 million in Q3 2024 [2][5] - Diluted earnings per share (EPS) for Q3 2025 were $0.17, down from $0.36 in Q3 2024 [2][5] - Non-GAAP net income for Q3 2025 was $21.8 million, compared to $28.3 million in Q3 2024, with diluted EPS at $0.36 versus $0.46 [2][5] Guidance and Outlook - For Q4 2025, Veeco expects revenue in the range of $155 million to $175 million [6] - GAAP diluted EPS is anticipated to be between ($0.07) and $0.05, while Non-GAAP diluted EPS is expected to range from $0.16 to $0.32 [6] Strategic Initiatives - The CEO emphasized the importance of the merger with Axcelis as a strategic move to expand technology and market opportunities [2][5] - The company has secured multiple orders for its 300mm Gallium Nitride single wafer and Arsenide Phosphide batch systems, indicating positive traction in its product offerings [2][5]

Core Insights - Veeco Instruments Inc. has received an order for a Propel®300 system from a major power semiconductor integrated device manufacturer for gallium nitride (GaN) epitaxy on 300mm silicon wafers, reinforcing its leadership in 300mm MOCVD technology [1][2] Industry Growth - The GaN device market is projected to grow at a 35% CAGR, increasing from $555 million in 2025 to $2.5 billion by 2030, driven by the demand for power efficiency in automotive, industrial, and data center applications [2] Technology Advancements - The Propel®300 system features Veeco's MOCVD TurboDisc technology, offering exceptional performance, automated wafer handling, and low cost of ownership per wafer due to its high productivity and low defectivity [3] Company Overview - Veeco is a manufacturer of semiconductor process equipment, specializing in technologies such as laser annealing, ion beam, and MOCVD, which are essential for the fabrication and packaging of advanced semiconductor devices [4]

Core Insights - Veeco Instruments Inc. has received multiple orders for advanced wet processing and lithography systems from a leading specialist foundry, aimed at supporting advanced packaging and silicon photonics applications in critical end markets such as AI, automotive, aerospace and defense, and communications [1][2] Company Overview - Veeco is a manufacturer of semiconductor process equipment, specializing in technologies such as laser annealing, ion beam, metal organic chemical vapor deposition (MOCVD), single wafer etch & clean, and lithography [3] - The company focuses on optimizing performance, yield, and cost of ownership, holding leading technology positions in the markets it serves [3] Product Highlights - The selected platforms for the recent orders include WaferStorm, WaferEtch, and AP300™, recognized for their best-in-class process performance and low cost of ownership [2] - WaferStorm solvent cleaning systems are noted for setting the industry standard for yield improvement, while WaferEtch systems enable precise interconnect and device definition [2] - Veeco's lithography systems support next-generation advanced packaging processes, including copper pillars for 2.5/3D packaging and high-density fan-out packaging [2] Market Position - The recent orders highlight Veeco's role as a trusted partner in enabling next-generation device manufacturing in high-growth markets such as artificial intelligence and high-performance computing [2] - The company remains committed to investing in new technologies and expanding its market reach through strategic partnerships and customer-driven innovation [2]

Core Viewpoint - Veeco Instruments Inc. is set to release its third quarter 2025 financial results on November 5, 2025, after market close, followed by a conference call to discuss these results [1]. Company Overview - Veeco Instruments Inc. (NASDAQ: VECO) is a manufacturer of semiconductor process equipment, specializing in technologies such as laser annealing, ion beam, single wafer etch & clean, lithography, metal organic chemical vapor deposition (MOCVD), and chemical vapor deposition (CVD) [3]. - The company focuses on optimizing performance, yield, and cost of ownership in the fabrication and packaging of advanced semiconductor devices, holding leading technology positions in its markets [3]. Conference Call Details - The conference call to review the financial results will begin at 5:00 PM ET on November 5, 2025 [1]. - Participants can join the call by dialing 1-877-407-8029 (toll-free) or 1-201-689-8029, and a live webcast will be available on Veeco's investor relations website [2]. - A replay of the webcast will be accessible starting at 8:00 PM ET on the same day [2]. Contact Information - Investor Relations contact is Alex Delacroix at (516) 528-1020 [5]. - Media contact is Brenden Wright at (516) 714-1202 [5].