Veeco Instruments Inc. (VCO) Q1 2022 Earnings Conference Call May 9, 2022 5:00 PM ET Company Representatives Bill Miller - Chief Executive Officer John Kiernan - Chief Financial Officer Anthony Bencivenga - Investor Relations Conference Call Participants Patrick Ho - Stifel Rick Schafer - Oppenheimer Gus Richard - Northland Mark Miller - Benchmark Company David Duley - Steelhead Securities Operator Good day! And welcome to the Veeco Instruments Incorporated, Corporate Hosted Q1 2022 Earnings Call. At this t ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 0-16244 VEECO INSTRUMENTS INC. (Exact Name of Registrant as Specified in Its Charter) Delaware 11-2989601 (State or Other Jurisdiction of Incorporat ...

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Commission file number 0-16244 Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 VEECO INSTRUMENTS INC. (Exact Name of Registrant as Specified in Its Charter) Delaware 11-2989601 (State or Other Jurisdiction of Incorporation o ...

Financial Data and Key Metrics Changes - Revenue for the full year 2021 was $583 million, representing a 28% increase over 2020, driven by semiconductor and data storage performance [14][20] - Non-GAAP operating income for 2021 was $87 million, a 65% increase from $52 million in 2020, with diluted non-GAAP EPS increasing 66% to $1.43 [32][14] - Cash flow from operations was $68 million, a 58% increase over 2020 [15] - Q4 2021 revenue was $153 million, exceeding guidance, with diluted non-GAAP EPS at $0.43 [16][17] Business Line Data and Key Metrics Changes - Semiconductor revenue for 2021 was $247 million, a 49% increase year-over-year, accounting for 43% of total revenue [20] - Data Storage revenue was $169 million, a 37% increase over the prior year, making up 29% of total revenue [23] - Compound semiconductor revenue was $107 million, flat from 2020, but underlying growth was noted after normalizing for one-time sales [21] - In Q4, semiconductor market contributed 43% of revenue, compound semiconductor market contributed 23%, and data storage market contributed 24% [25] Market Data and Key Metrics Changes - The United States accounted for 38% of total revenue in 2021, driven by data storage customers, while Asia Pacific (excluding China) made up 35% [24] - In Q4, the United States represented 37% of total revenue, Asia Pacific (excluding China) contributed 26%, and China accounted for 25% [27] Company Strategy and Development Direction - The company views 2021 as an inflection point, completing its transformation and focusing on growth strategies, including R&D projects in laser annealing and MOCVD for power electronics [10][12] - The company aims to expand its served available market through the adoption of laser annealing technology and is engaged with leading customers for advanced applications [49][51] - The company is committed to improving governance and corporate responsibility while enhancing service capabilities to support customer needs [13][60] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2022, expecting significant growth in semiconductor and compound semiconductor markets, with a revenue outlook between $640 million and $680 million [45][41] - The company anticipates challenges from supply chain issues and inflation but expects to maintain gross margins around 42% to 44% [29][34] - Management noted that the data storage market is expected to decline in 2022 but anticipates recovery in 2023 as demand from cloud and data center applications increases [58][96] Other Important Information - The company ended 2021 with a backlog of $440 million, a 20% increase from 2020, with semiconductor backlog more than doubling [33] - The company has entered into a $150 million revolving credit facility to enhance financial flexibility [41] Q&A Session Summary Question: Can you expand on the repeat multi-systems orders? - Management indicated that laser annealing is expected to be the largest business in 2022, with nearly 50% growth anticipated [66] Question: What specific applications are driving MOCVD adoption? - Management noted traction in power electronics and multiple applications for the Lumina platform, including micro LED and edge-emitting lasers [70] Question: What is the outlook for gross margins? - Management expects gross margins to improve to 43% in 2022, despite ongoing supply chain challenges [76] Question: Are you seeing traction in advanced packaging processes? - Management confirmed opportunities in heterogeneous integration while also maintaining business in traditional packaging processes [80] Question: What is the expected revenue progression throughout 2022? - Management anticipates higher revenue in the second half of 2022 compared to the first half, with a year-on-year growth of 13% to 14% [91]

Financial Data and Key Metrics Changes - Revenue for Q3 2021 was $150 million, representing a 34% year-on-year increase and a 3% sequential increase [23] - Non-GAAP gross margin was 42.6%, up 1 percentage point from the previous quarter [26] - Non-GAAP operating income was $24.3 million, a 14% sequential increase and a 72% increase year-on-year [26] - Non-GAAP EPS was $0.40 on a diluted share count of 51.7 million shares [26] - Year-to-date revenue growth was 37%, driven by a 67% increase in semiconductor sales [9] Business Line Data and Key Metrics Changes - Semiconductor revenue reached a record $76 million, accounting for 51% of total revenue, with a 42% sequential increase and a 127% year-on-year increase [23] - Data storage revenue was $39 million, making up 26% of revenue, reflecting a 6% year-on-year increase but a 25% sequential decline [24] - Compound semiconductor revenue was relatively flat at $23 million, representing 15% of revenue [24] - Scientific and other revenue was $11 million, accounting for 8% of total revenue [24] Market Data and Key Metrics Changes - The Asia-Pacific region (excluding China) accounted for 40% of total sales, driven by ion beam and laser annealing systems [25] - The United States contributed 33% of revenue, primarily from ion beam systems shipped to data storage customers [25] - China represented 18% of revenue, mainly from semiconductor systems [25] - EMEA accounted for 9% of total revenue [25] Company Strategy and Development Direction - The company is focused on transforming to leverage global megatrends, with a commitment to sustainability and improving operational transparency [10] - The semiconductor market is expected to grow at a CAGR of approximately 23%, significantly outpacing long-term wafer fab equipment growth [11] - Investments in evaluation systems and service infrastructure are aimed at supporting growth in 2022 and beyond [20] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges from global supply chain disruptions but emphasized proactive measures to mitigate impacts [19] - The company expects to achieve over 25% revenue growth in 2021 and is on track to meet long-term financial targets [20] - For Q4, revenue is expected to be between $140 million and $160 million, with full-year revenue projected at approximately $580 million, a 28% year-on-year increase [30][32] Other Important Information - The company plans to adopt a new accounting standard for convertible debt in Q1 2022, which will affect non-GAAP EPS calculations [33] - The company is experiencing increased logistics costs, which had a 1 percentage point impact on gross margin in Q3 [85] Q&A Session Summary Question: Update on tools shipped and new wins - The company has shipped nine out of ten planned tools for the year, with positive feedback from customers on the tools deployed [38][41] Question: Semiconductor business performance - Record revenues were driven by all three segments: laser annealing, EUV tools, and advanced packaging [43][45] Question: Advanced packaging market applications - The market is broadening beyond mobile applications to include heterogeneous integration opportunities [50] Question: Supply chain management - The company has successfully mitigated supply chain challenges through close supplier collaboration and proactive inventory management [52][53] Question: Advanced packaging market size - The advanced packaging market is expected to grow over 20% in 2022, with the company anticipating an increase in market share [59] Question: Data storage market outlook - Revenue for data storage is expected to decline in 2022, but long-term prospects remain strong due to data proliferation [69]

MAKING A MATERIAL DIFFERENCE | --- | --- | --- | --- | |-------|-------------------|-------|-------| | | | | | | | | | | | | Q3 2021 | | | | | Financial Results | | | | | Conference Call | | | | Veeco | (Nasdaq: VECO) | | | | | November 2, 2021 | | | Safe Harbor This presentation contains "forward-looking statements", within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, as amended, that are based on management's expectations, estimates, projections a ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 0-16244 VEECO INSTRUMENTS INC. (Exact Name of Registrant as Specified in Its Charter) Delaware 11-2989601 (State or Other Jurisdiction of Incorp ...

MAKING A MATERIAL DIFFERENCE Q2 2021 Financial Results Conference Call Veeco (Nasdaq: VECO) August 3, 2021 Safe Harbor This presentation contains "forward-looking statements", within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, as amended, that are based on management's expectations, estimates, projections and assumptions. Words such as "expects," "anticipates," "plans," "believes," "scheduled," "estimates" and variations of these words and similar ...

Financial Data and Key Metrics Changes - Revenue for Q2 2021 was $146 million, representing a 9% sequential increase and a 48% year-over-year increase [24] - Non-GAAP gross margin was 41.6%, flat compared to the previous quarter [27] - Non-GAAP operating income increased by 32% sequentially to $21.3 million, more than doubling from the same quarter last year [27] - Diluted non-GAAP EPS was $0.35, based on a diluted share count of 51.8 million shares [27] - Cash and short-term investments at the end of the quarter were $330 million, a sequential increase of $2 million [28] Business Line Data and Key Metrics Changes - Semiconductor revenue increased by 43% to $54 million, accounting for 37% of total revenue, driven by Laser Annealing and Lithography products [25] - Data Storage revenue increased by 84% to $52 million, making up 35% of total revenue, driven by capacity and technology additions [25] - Compound Semiconductor revenue increased by 37% to $24 million, representing 17% of total revenue, driven by wet processing systems for RF applications [25] Market Data and Key Metrics Changes - The U.S. region accounted for 46% of total revenue, driven by Ion Beam systems shipped to Data Storage customers [26] - The Asia-Pacific region (excluding China) made up 34% of revenue, while China accounted for 14% [26] - Wafer fab equipment spending is forecasted to be approximately $18 billion for 2021, with long-term forecasts predicting spending up to $100 billion annually [13] Company Strategy and Development Direction - The company is focused on four priorities: improving culture, enhancing profitability, achieving revenue growth, and investing in evaluation systems and service infrastructure [21][22] - The strategic rationale for the Ultratech acquisition is now serving as a cornerstone for the overall growth strategy [10] - The company is expanding its manufacturing footprint for Laser Annealing and Lithography products to meet increasing demand [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the remainder of 2021, with near-term growth plans unfolding as expected [8] - The company anticipates a digestion period in Data Storage equipment in 2022 but expects to offset this with growth in Semiconductor and Compound Semiconductor markets [43] - Management highlighted strong momentum in the semiconductor market, particularly in Laser Annealing and Advanced Packaging [10][16] Other Important Information - The company plans to host a Virtual Analyst Day in September to share more details about its strategy, markets, and technologies [33] - The company expects Q3 revenue to be between $135 million and $155 million, with non-GAAP gross margin between 41% and 43% [30] Q&A Session Summary Question: Update on equipment wins and evaluation tools - The company has shipped eight out of ten planned evaluation tools, with strong performance in Laser Annealing and Compound Semiconductor applications [36][37] Question: Data Storage market outlook - The company has a significant backlog in Data Storage and expects continued growth despite a potential slowdown in the market [40][42] Question: Sources of second-half upside - The company is seeing strength in its Semiconductor business and higher service revenue, which may provide upside in the second half of the year [50] Question: Supply chain constraints - The company is experiencing supply chain constraints but has successfully mitigated risks through proactive measures [59][60] Question: Advanced Packaging business demand - The Advanced Packaging business is seeing broad-based demand, particularly in heterogeneous integration applications [74][76]