Veeco(US:VECO)2025-05-07 20:30Financial 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].