Company Performance - Veeco Instruments reported quarterly earnings of $0.37 per share, exceeding the Zacks Consensus Estimate of $0.32 per share, but down from $0.45 per share a year ago, representing an earnings surprise of 15.63% [1] - The company posted revenues of $167.29 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 1.39%, but down from $174.48 million year-over-year [2] - Over the last four quarters, Veeco has surpassed consensus EPS estimates three times and topped consensus revenue estimates four times [2] Stock Outlook - Veeco shares have declined approximately 28.4% since the beginning of the year, compared to a decline of 4.7% for the S&P 500 [3] - The company's earnings outlook will be crucial for future stock performance, with current consensus EPS estimates at $0.34 for the coming quarter and $1.35 for the current fiscal year [7] Industry Context - The Electronics - Manufacturing Machinery industry, to which Veeco belongs, is currently ranked in the bottom 6% of over 250 Zacks industries, indicating potential challenges ahead [8]

Financial Data and Key Metrics Changes - Revenue for the quarter totaled $167 million, which is above the midpoint of guidance, but down 4% year-over-year and 8% sequentially [5][17] - Non-GAAP operating income was $24 million, and non-GAAP EPS was $0.37, exceeding the high end of guidance [5] - Gross margin was approximately 42%, in line with guidance, while operating expenses were approximately $46 million, below guidance [20][23] Business Line Data and Key Metrics Changes - The Semiconductor business grew 10% sequentially and 3% year-over-year, representing 74% of total revenue [17] - Advanced Packaging saw significant growth, with expectations to double revenue to about $150 million in 2025 [28] - Revenue from the Compound Semiconductor market declined to $14 million, accounting for 9% of total revenue [18] Market Data and Key Metrics Changes - Revenue from China customers was flat in Q1 compared to Q4, increasing their share of total revenue from 39% to 42% [19] - Revenue from the Asia Pacific region (excluding China) increased from 31% to 36%, driven by sales to semiconductor customers in Taiwan [19] - The United States accounted for 15% of revenue, while EMEA contributed 7% [19] Company Strategy and Development Direction - The company aims to capitalize on long-term semiconductor industry growth, focusing on laser annealing and ion beam deposition technologies [10][12] - Strategic wins include being awarded Intel's 2025 EPYC supplier award, which validates the company's position in the semiconductor industry [6] - The company is focused on expanding its served available market (SAM) in laser annealing and advanced packaging due to increasing demand driven by AI and high-performance computing [12][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in long-term strategy despite uncertainties from recently enacted tariffs, which are causing some customers to delay shipments [9][22] - The company anticipates that gate all around and advanced packaging revenue could double in 2025 compared to 2024 [24] - Management noted that while there are headwinds from the mature node business in China, there are still growth opportunities in leading-edge investments [24] Other Important Information - Cash and short-term investments at the end of the quarter were $353 million, an increase from $345 million [21] - The company is monitoring tariff impacts closely and is working with customers to mitigate potential disruptions [22] Q&A Session Summary Question: Could you elaborate on the advanced packaging orders for your lithography tools? - The company announced $35 million in lithography orders, driven by advanced packaging and AI applications, with expectations for significant year-over-year growth in 2025 [28] Question: What is driving the recent strength in the lithography business? - The growth is primarily due to capacity buys from customers, particularly OSATs and IDMs, driven by demand for AI and high bandwidth memory [31] Question: Can you discuss the impact of tariffs on shipments to China? - Some customers are delaying shipments due to tariffs, with an anticipated $15 million impact on Q2 guidance [32][22] Question: What parts of the semiconductor business are expected to grow in 2025? - The company expects growth in advanced packaging and high bandwidth memory, which could offset declines in other areas [36][64] Question: Are there any updates on GaN power applications? - The company is making progress with a customer for GaN power applications, with plans to start pilot production in 2026 [50] Question: What is the outlook for the second half of the year? - The company anticipates that second half revenue could be flattish, with strength in gate all around and advanced packaging potentially offsetting headwinds from China [56]

Financial Data and Key Metrics Changes - Revenue totaled $167 million, above the midpoint of guidance, down 4% year-over-year and 8% sequentially [16] - Non-GAAP operating income was $24 million, and non-GAAP EPS was $0.37, exceeding the high end of guidance [4] - Gross margin was approximately 42%, in line with guidance, while operating expenses were approximately $46 million, below guidance [19] Business Line Data and Key Metrics Changes - The Semiconductor business grew 10% sequentially and 3% year-over-year, representing 74% of total revenue [16] - Advanced Packaging saw significant growth, with expectations to double revenue to about $150 million in 2025 [28] - Compound Semiconductor revenue declined to $14 million, accounting for 9% of total revenue [17] Market Data and Key Metrics Changes - Revenue from China customers was flat in Q1, increasing their share from 39% to 42% of total revenue [18] - Revenue from the Asia Pacific region (excluding China) increased from 31% to 36%, driven by sales to semiconductor customers in Taiwan [18] - The United States accounted for 15% of revenue, while EMEA represented 7% [18] Company Strategy and Development Direction - The company aims to capitalize on long-term semiconductor industry growth, focusing on laser annealing and ion beam deposition technologies [8] - Strategic wins include being awarded Intel's 2025 EPYC supplier award, validating the company's position in the semiconductor industry [5] - The company is expanding its served available market (SAM) in laser annealing and advanced packaging, driven by demand for AI and high-performance computing [12][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in long-term strategy despite uncertainties from recently enacted tariffs affecting customer shipments and costs [7][21] - The company anticipates growth in 2025, particularly in gate all around and advanced packaging, potentially doubling revenue in these areas [23][24] - Management noted that while there are headwinds in the mature node business in China, opportunities exist in GaN power and scientific research areas [24] Other Important Information - Cash and short-term investments at the end of the quarter were $353 million, with cash flow from operations totaling $20 million [20] - The company is monitoring tariff impacts closely and is working with customers to mitigate potential disruptions [21] Q&A Session Summary Question: Could you elaborate on the advanced packaging orders for lithography tools? - The company announced $35 million in lithography orders, driven by advanced packaging and AI applications, expecting significant year-over-year growth in 2025 [28][29] Question: What is the impact of tariffs on shipments to China? - Some customers are delaying shipments due to tariffs, with an anticipated $15 million impact on Q2 guidance [33][34] Question: What parts of the semiconductor business are expected to grow in 2025? - The company expects growth in advanced packaging and high bandwidth memory, potentially offsetting declines in other areas [36][65] Question: Are there any updates on GaN power applications? - The company is making progress with a customer for GaN power, with plans to start pilot production in 2026 [51] Question: What is the outlook for second-half revenue? - The company anticipates second-half revenue to be flattish, with strengths in advanced packaging and gate all around potentially offsetting challenges in China [56][57]

Financial Performance - Total net sales for Q1 2025 were $167.3 million, a decrease of 4% from $174.5 million in Q1 2024 [121]. - Gross profit for Q1 2025 was $68.5 million, representing a gross margin of 41%, down from 43% in Q1 2024 [121]. - Operating income for Q1 2025 was $14.1 million, a decrease of 36% from $22.0 million in Q1 2024 [121]. - Net income for Q1 2025 was $11.9 million, down 45% from $21.9 million in Q1 2024 [121]. Revenue Breakdown - Semiconductor revenue increased by 3% year-over-year in Q1 2025, accounting for 74% of total revenue, driven by system shipments in Advanced Packaging and HBM manufacturing [107]. - Sales in the Data Storage market declined by 63% year-over-year to $6.7 million in Q1 2025, while Scientific & Other market sales increased by 48% to $22.4 million [122]. - The Compound Semiconductor market saw a 31% decline in sales to $14.4 million in Q1 2025 compared to $21.0 million in Q1 2024 [122]. - Approximately 86% of net sales for the three months ended March 31, 2025, were to customers outside the United States, up from 84% in the prior year [144]. - Sales denominated in currencies other than the U.S. dollar represented approximately 6% of total net sales for the three months ended March 31, 2025, compared to 3% in 2024 [144]. Expenses and Cost Management - Research and development expenses decreased by 4% to $28.5 million in Q1 2025, reflecting cost management initiatives [124]. - The tax expense for the three months ended March 31, 2025, was $3.0 million, up from $0.9 million in the prior period, with an effective tax rate aligned with the U.S. statutory rate [130]. Cash Flow and Liquidity - Cash and cash equivalents increased to $174.9 million as of March 31, 2025, from $145.6 million at December 31, 2024, while total cash resources reached $353.5 million [131]. - Net cash provided by operating activities was $20.0 million for the three months ended March 31, 2025, compared to $9.4 million in the same period of 2024, driven by net income of $11.9 million [133]. - Cash flows from investing activities resulted in a net inflow of $14.5 million for the three months ended March 31, 2025, compared to $20.7 million in 2024 [134]. Debt and Financing - The company has $25.0 million of 3.75% convertible senior notes maturing on June 1, 2027, and $230.0 million of 2.875% convertible senior notes maturing on June 1, 2029 [136]. - The company increased its revolving credit facility from $150 million to $225 million on August 2, 2024, with no immediate plans to draw down [137]. Market Outlook - The company anticipates a decline in revenue from China in 2025 due to moderated customer engagement and ongoing tariff impacts [114]. Investment Portfolio - A 100 basis point increase in interest rates would decrease the fair value of the investment portfolio by $1.2 million, based on a fair value of approximately $178.4 million [140]. - The company had $23.0 million of accumulated undistributed earnings from non-U.S. subsidiaries, with $10.6 million subject to foreign withholding taxes if distributed [131].

Q1 2025 Performance - Revenue reached $167 million, exceeding the midpoint of guidance[7, 8] - Non-GAAP operating income was $24 million[8] - Diluted Non-GAAP EPS was $0.37[8] - Semiconductor revenue was $124 million, showing sequential and year-over-year growth[18] - Data Storage revenue declined to $7 million in Q1 2025[18] Strategic Wins and Market Expansion - Veeco was awarded Intel's 2025 EPIC Supplier Award[8] - LSA system orders were secured for Gate-all-around (GAA) and High-Bandwidth Memory (HBM) applications[8] - The company is targeting a 2025-2029 CAGR in Semi SAM, driven by industry inflections[13] Financial Outlook - Q2 2025 revenue is projected to be between $135 million and $165 million[21] - Q2 2025 Non-GAAP diluted earnings per share are expected to be $0.12 to $0.32[21] Regional Performance - China and APAC accounted for $71 million and $60 million in revenue, respectively[18] - Revenue from the United States was $24 million[18]

Revenue Performance - Revenue for Q1 2025 was $167.3 million, a decrease of 4.1% from $174.5 million in Q1 2024[2] - The company expects Q2 2025 revenue to be in the range of $135 million to $165 million[9] - The company provided guidance for the three months ending June 30, 2025, projecting net sales between $135 million and $165 million, with expected gross margins of 39% to 41%[31] Net Income and Earnings Per Share - GAAP net income for Q1 2025 was $11.9 million, or $0.20 per diluted share, down from $21.9 million, or $0.37 per diluted share in Q1 2024[3] - Non-GAAP net income for Q1 2025 was $22.2 million, or $0.37 per diluted share, compared to $26.4 million, or $0.45 per diluted share in Q1 2024[3] - The diluted net income per common share was $0.37 under GAAP and $0.45 on a non-GAAP basis for Q1 2024, showing an increase in earnings per share[27] Operating Income - Operating income for Q1 2025 was $24.3 million on a Non-GAAP basis, down from $29.4 million in Q1 2024[2] - For the upcoming quarter, the company anticipates an operating income of $8 million to $22 million on a non-GAAP basis, indicating a positive outlook for profitability[34] - Operating income for the same period was reported at $22.045 million, while non-GAAP operating income was $29.360 million, reflecting a significant adjustment for share-based compensation and other factors[23] Gross Profit Margin - Veeco reported a gross profit margin of 40.9% for Q1 2025, which improved to 41.7% on a Non-GAAP basis[17] - For the three months ended March 31, 2024, net sales were $174.484 million, with a gross profit of $75.419 million, resulting in a gross margin of 43.2%[23] - The company expects to maintain a strong gross profit margin of 40% to 42% in the upcoming quarter, indicating effective cost management strategies[31] Assets and Financial Position - Total assets increased to $1,278.8 million as of March 31, 2025, compared to $1,251.6 million at the end of 2024[13] Awards and Recognition - The company received Intel's 2025 EPIC supplier award, indicating strong performance in the Semiconductor business[2] Adjustments and Incentives - The company reported a total of $5.384 million in non-GAAP adjustments for Q1 2024, primarily due to changes in contingent consideration and non-cash interest expenses[25] - The adjustments for share-based compensation in Q1 2024 amounted to $8.082 million, highlighting the company's investment in employee incentives[29]

Group 1 - Veeco Instruments Inc. has received over $35 million in orders for its AP300™ Lithography systems from various IDM and OSAT customers, with deliveries expected in 2025, supporting capacity expansions in AI and high-performance computing markets [1][2] - The AP300™ Lithography systems are designed for Advanced Packaging applications, offering lower total cost of ownership, high uptime, and process flexibility, which are crucial for next-generation advanced packaging processes [2][3] - Global megatrends such as AI and high-performance computing are driving demand for advanced packaging technologies, with customers seeking lithography platforms that provide best-in-class capabilities and cost efficiency [3] Group 2 - Veeco is recognized as an innovative manufacturer of semiconductor process equipment, with technologies that play a vital role in the fabrication and packaging of advanced semiconductor devices [4]

Financial Performance - Veeco Instruments Inc. reported Q1 2025 revenue of $167.3 million, a decrease from $174.5 million in Q1 2024, representing a year-over-year decline of approximately 7.0% [2][4] - GAAP net income for Q1 2025 was $11.9 million, or $0.20 per diluted share, down from $21.9 million, or $0.37 per diluted share in Q1 2024, indicating a decline of about 45.4% in net income [2][4] - Non-GAAP net income for Q1 2025 was $22.2 million, or $0.37 per diluted share, compared to $26.4 million, or $0.45 per diluted share in Q1 2024, reflecting a decrease of approximately 16.0% [2][4] Business Highlights - The company experienced sequential and year-over-year growth in its Semiconductor business, driven by advancements in Advanced Packaging [2] - Veeco received Intel's 2025 EPIC supplier award and achieved new application wins in Laser Annealing and Wet Processing, showcasing its ongoing execution and confidence in its long-term strategy [2] Guidance and Outlook - For Q2 2025, Veeco expects revenue to be in the range of $135 million to $165 million [5] - GAAP diluted earnings per share are anticipated to range from a loss of $0.05 to a profit of $0.17, while Non-GAAP diluted earnings per share are expected to be between $0.12 and $0.32 [5]

Veeco (NASDAQ: VECO) is an innovative manufacturer of semiconductor process equipment. Our laser annealing, ion beam, single wafer etch & clean, lithography, and metal organic chemical vapor deposition (MOCVD) technologies play an integral role in the fabrication and packaging of advanced semiconductor devices. With equipment designed to optimize performance, yield and cost of ownership, Veeco holds leading technology positions in the markets we serve. To learn more about Veeco's systems and service offerin ...

Core Insights - Veeco Instruments Inc. has been selected by two leading-edge logic customers for its Laser Spike Annealing Platform as the Production Tool of Record for new applications at their gate-all-around nodes, indicating a strong demand for advanced semiconductor manufacturing solutions [1][2] - The Laser Spike Annealing (LSA) system is recognized as the optimal solution for low thermal-budget applications, which is increasingly critical as device geometries and performance requirements evolve at advanced nodes [2] - Veeco's strategy focuses on expanding its Served Available Market by investing in leading-edge technologies, which is validated by the recent customer wins [2] Company Overview - Veeco is an innovative manufacturer of semiconductor process equipment, with technologies including laser annealing, ion beam, single wafer etch & clean, lithography, and metal organic chemical vapor deposition (MOCVD) [3] - The company's equipment is designed to optimize performance, yield, and cost of ownership, positioning Veeco as a leader in the semiconductor manufacturing market [3] Technology Insights - Laser spike annealing is a millisecond annealing technology used in front-end semiconductor manufacturing to activate dopants and lower the resistance of key transistor structures [2] - Veeco's LSA system allows for high-temperature annealing while maintaining reduced thermal budgets, which is essential for advanced devices at leading-edge nodes [2] - The Laser Annealing portfolio also includes the NSA500 system, which extends capabilities to low thermal budget applications, crucial for various advanced node processes [2]