Axcelis(US:ACLS)2025-08-05 21:19PART I - FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Axcelis Technologies reported a Q2 2025 year-over-year decline in revenue and net income, with total assets at $1.32 billion and H1 operating cash flow at $79.5 million Consolidated Statements of Operations Highlights (Q2 & H1 2025 vs 2024) (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $194,544 | $256,512 | $387,107 | $508,883 | | Gross Profit | $87,343 | $112,409 | $176,111 | $228,460 | | Income from Operations | $28,965 | $52,810 | $58,124 | $109,349 | | Net Income | $31,376 | $50,866 | $59,955 | $102,460 | | Diluted EPS | $0.98 | $1.55 | $1.87 | $3.12 | Consolidated Balance Sheet Highlights (as of June 30, 2025) (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current Assets | | | | Cash and cash equivalents | $173,649 | $123,512 | | Short-term investments | $376,193 | $447,831 | | Accounts receivable, net | $138,841 | $203,149 | | Inventories, net | $310,768 | $282,225 | | Total Assets | $1,323,486 | $1,348,781 | | Current Liabilities | $177,107 | $207,522 | | Total Liabilities | $301,103 | $335,991 | | Total Stockholders' Equity | $1,022,383 | $1,012,790 | Consolidated Statements of Cash Flows Highlights (Six Months Ended June 30) (in thousands) | Cash Flow Category | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $79,522 | $82,290 | | Net cash provided by (used in) investing activities | $35,856 | $(61,294) | | Net cash used in financing activities | $(67,097) | $(40,656) | | Net increase (decrease) in cash | $50,216 | $(22,134) | - The company operates as a single business segment, producing ion implantation equipment for the semiconductor industry, and provides aftermarket services and support globally2176 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations System sales declined in H1 2025 due to moderated customer investments, offset by improved gross margin and strong liquidity of over $580 million Overview - System sales in the first half of 2025 were down year-over-year as customers moderated investments in mature process node technologies84 - The mature process segment constituted 92% of shipped systems revenue, with power devices making up 47% of total systems revenue84 - The company's ten largest customers accounted for 55.5% of total revenue for the first six months of 2025, indicating significant customer concentration83 Results of Operations Revenue Breakdown (Q2 2025 vs Q2 2024) (in thousands) | Revenue Type | Q2 2025 | Q2 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Product | $183,402 | $245,380 | $(61,978) | (25.3)% | | Services | $11,142 | $11,132 | $10 | 0.1% | | Total Revenue | $194,544 | $256,512 | $(61,968) | (24.2)% | - The decrease in product revenue for Q2 and H1 2025 was primarily driven by a decline in system sales9193 Gross Profit and Margin (Q2 2025 vs Q2 2024) | Category | Q2 2025 Gross Profit (in thousands) | Q2 2025 Gross Margin | Q2 2024 Gross Profit (in thousands) | Q2 2024 Gross Margin | | :--- | :--- | :--- | :--- | :--- | | Product | $87,940 | 47.9% | $110,621 | 45.1% | | Services | $(597) | (5.4)% | $1,788 | 16.1% | | Total | $87,343 | 44.9% | $112,409 | 43.9% | - Product gross margin increased in Q2 2025 to 47.9% from 45.1% in Q2 2024, primarily due to improved margins on Purion systems and a favorable mix of parts and upgrades. Conversely, services gross margin decreased significantly due to changes in the mix of service contracts99100 Operating Expenses (Q2 2025 vs Q2 2024) (in thousands) | Expense Category | Q2 2025 | Q2 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Research and development | $27,064 | $25,786 | $1,278 | 5.0% | | Sales and marketing | $15,003 | $17,230 | $(2,227) | (12.9)% | | General and administrative | $16,311 | $16,583 | $(272) | (1.6)% | | Total Operating Expenses | $58,378 | $59,599 | $(1,221) | (2.0)% | - The effective tax rate for Q2 2025 was 10.3%, down from 11.2% in Q2 2024. The decrease in income tax provision was primarily due to lower pre-tax income and an increased Foreign Derived Intangible Income deduction68119 Liquidity and Capital Resources Liquidity Position as of June 30, 2025 (in thousands) | Category | Amount (in thousands) | | :--- | :--- | | Unrestricted cash and cash equivalents | $173,649 | | Short-term investments | $376,193 | | Long-term investments | $31,114 | | Total Cash & Investments | $580,956 | - The company generated $79.5 million in cash from operating activities during the first six months of 2025, compared to $82.3 million in the same period of 2024123 - Financing activities used $67.1 million in cash in H1 2025, primarily driven by $63.5 million used for common stock repurchases125 - Management believes existing cash and cash equivalents are sufficient to satisfy anticipated short- and long-term cash requirements127 Item 3. Quantitative and Qualitative Disclosures About Market Risk The company states that as of June 30, 2025, there have been no material changes to the quantitative and qualitative disclosures about market risk previously reported in its 2024 Form 10-K - There have been no material changes to the market risk disclosures from the company's 2024 Form 10-K129 Item 4. Controls and Procedures Management concluded the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2025130 - There were no material changes in the company's internal control over financial reporting during the second quarter of 2025131 PART II - OTHER INFORMATION Item 1. Legal Proceedings The company is not currently a party to any litigation that it believes would have a material adverse effect on its business operations - The company reports no material legal proceedings that would adversely affect its business134 Item 1A. Risk Factors There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes to the risk factors from the 2024 Form 10-K were reported as of June 30, 2025135 Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities The company continued its share repurchase program in Q2 2025, repurchasing 826,000 shares after an additional $100 million authorization, leaving $167 million available - In March 2025, the Board of Directors approved an additional $100 million for the company's share repurchase program72136 Share Repurchase Activity (Q2 2025) (in thousands) | Period | Total Shares Purchased (thousands) | Average Price Paid per Share | Approximate Dollar Value Remaining ($ thousands) | | :--- | :--- | :--- | :--- | | April 2025 | 360 | $46.42 | $195,124 | | May 2025 | 297 | $57.87 | $177,921 | | June 2025 | 169 | $64.34 | $167,031 | | Total Q2 | 826 | N/A | $167,031 |