Amtech Systems(ASYS) - 2025 Q3 - Quarterly Results

Third Quarter Fiscal 2025 Results Overview Amtech Systems exceeded Q3 FY2025 expectations with 26% sequential revenue growth, strong advanced packaging, and significant annual cost savings Executive Summary and Key Highlights Amtech Systems announced better-than-expected third-quarter fiscal 2025 results, with revenue increasing 26% sequentially, driven by strong performance in advanced packaging and stable demand in mature node semiconductor markets, alongside significant annual cost savings from operational optimization - Third-quarter results exceeded expectations, with revenue increasing 26% sequentially[5] - Advanced packaging market remains strong, with stable demand in the mature node semiconductor market[5] - Operational model optimization over the past 18 months resulted in $13 million in annual savings[5] Third Quarter Fiscal 2025 Key Financial Metrics | Metric | Amount (million USD) | | :-------------------------------- | :-------------- | | Net Revenue | 19.6 | | Operating Cash Flow | 2.5 | | GAAP Net Income | 0.1 | | Non-GAAP Net Income | 0.9 | | Adjusted EBITDA | 2.2 | | Customer Orders | 21.7 | | Backlog Orders | 21.2 | CEO Commentary CEO Bob Daigle expressed satisfaction with the better-than-expected third-quarter performance, highlighting progress in operational model optimization and product development, which are expected to lay the foundation for future profitable growth - CEO expressed satisfaction with third-quarter results exceeding expectations, with revenue reaching $19.6 million, a 26% sequential increase[5] - Both Thermal Processing Solutions and Semiconductor Fabrication Solutions business segments exceeded expectations[5] - The company has made significant progress in operational model optimization, achieving $13 million in annual savings, and believes structural changes and investments in product and application development will drive future profitable growth[5] Consolidated Financial Performance The company reported Q3 FY2025 GAAP and non-GAAP financial results, showing significant sequential revenue growth and improved non-GAAP profitability GAAP and Non-GAAP Financial Summary The company reported GAAP and non-GAAP financial data for the third quarter of fiscal 2025, showing significant sequential revenue growth but a year-over-year decrease, with improved gross margin and net income on a non-GAAP basis reflecting enhanced operational efficiency and the exclusion of specific non-cash expenses Third Quarter Fiscal 2025 Consolidated Financial Summary | Metric | Q3 FY2025 (million USD) | Q2 FY2025 (million USD) | Q3 FY2024 (million USD) | | :-------------------------------- | :------------------- | :------------------- | :------------------- | | Net Revenue | 19.6 | 15.6 | 26.7 | | GAAP Gross Profit | 9.1 | (0.3) | 9.8 | | GAAP Gross Margin | 46.7% | -2.1% | 36.5% | | Non-GAAP Gross Profit | 9.1 | 5.7 | 9.8 | | Non-GAAP Gross Margin | 46.7% | 36.3% | 36.5% | | GAAP Net Income (Loss) | 0.1 | (31.8) | 0.4 | | GAAP Diluted EPS (Loss) | 0.01 | (2.23) | 0.03 | | Non-GAAP Net Income (Loss) | 0.9 | (2.3) | 1.1 | | Non-GAAP Diluted EPS (Loss) | 0.06 | (0.16) | 0.08 | Revenue Analysis Net revenue for the third quarter of fiscal 2025 increased 26% sequentially, primarily driven by strong demand for AI application reflow ovens in Asia, but decreased 27% year-over-year due to continued weakness in the mature node semiconductor market, partially offset by increased sales of advanced packaging solutions - Net revenue increased 26% sequentially, primarily driven by strong demand for AI application reflow ovens in Asia[8] - Net revenue decreased 27% year-over-year, mainly due to continued weakness in the mature node semiconductor market, leading to lower sales of related equipment[8] - Growth in advanced packaging solutions sales partially offset the decline in the mature node market[8] Gross Profit and Margin Analysis GAAP gross profit increased by $9.5 million sequentially, primarily due to the absence of a $6.0 million non-cash inventory write-down from the previous quarter, while a year-over-year decrease of $0.6 million was attributed to lower sales volume, with this quarter's gross margin benefiting from a $1.0 million Employee Retention Credit (ERC) refund, resulting in a normalized gross margin of 41.5% excluding ERC, a significant improvement from 36.5% in the prior year - GAAP gross profit increased by $9.5 million sequentially, primarily due to the absence of a $6.0 million non-cash inventory write-down from the previous quarter[9] - GAAP gross profit decreased by $0.6 million year-over-year, mainly due to lower sales volume resulting from weak demand in the mature node semiconductor market[9] - This quarter's gross margin benefited from a $1.0 million Employee Retention Credit (ERC) refund[9] - Excluding ERC, the normalized gross margin was 41.5%, higher than 36.5% in the third quarter of fiscal 2024[9] Operating Expenses (SG&A, R&D) Selling, General and Administrative (SG&A) expenses increased by $0.3 million sequentially due to higher third-party consulting costs, but decreased by $0.8 million year-over-year, benefiting from ERC refunds and fixed cost structure reductions, while Research and Development (R&D) expenses decreased by $0.5 million sequentially due to project procurement timing and ERC refunds, and by $0.3 million year-over-year, reflecting ERC benefits and non-recurring development work in the Semiconductor Fabrication Solutions segment - SG&A expenses increased by $0.3 million sequentially, primarily due to higher third-party consulting costs[10] - SG&A expenses decreased by $0.8 million year-over-year, mainly due to ERC refunds and fixed cost structure reductions[10] - R&D expenses decreased by $0.5 million sequentially, primarily due to project procurement timing and ERC refunds[11] - R&D expenses decreased by $0.3 million year-over-year, reflecting ERC benefits and non-recurring development work in the Semiconductor Fabrication Solutions segment[11] Net Income and Earnings Per Share GAAP net income for the third quarter of fiscal 2025 was $0.1 million, or $0.01 per share, a significant improvement from the previous quarter's GAAP net loss of $31.8 million ($2.23 per share), but lower than the prior year's GAAP net income of $0.4 million ($0.03 per share), while non-GAAP net income was $0.9 million, or $0.06 per share, also an improvement from the previous quarter's non-GAAP net loss of $2.3 million ($0.16 per share), but lower than the prior year's non-GAAP net income of $1.1 million ($0.08 per share) Consolidated Net Income and Earnings Per Share | Metric | Q3 FY2025 | Q2 FY2025 | Q3 FY2024 | | :-------------------------------- | :-------- | :-------- | :-------- | | GAAP Net Income (million USD) | 0.1 | (31.8) | 0.4 | | GAAP Diluted EPS | 0.01 | (2.23) | 0.03 | | Non-GAAP Net Income (million USD) | 0.9 | (2.3) | 1.1 | | Non-GAAP Diluted EPS | 0.06 | (0.16) | 0.08 | Segment Performance Both Thermal Processing Solutions and Semiconductor Fabrication Solutions segments reported strong Q3 FY2025 revenue, gross margins, and healthy order backlogs Thermal Processing Solutions Segment The Thermal Processing Solutions segment achieved net revenue of $14.208 million in the third quarter of fiscal 2025, with a GAAP gross margin of 45% and operating income of $2.907 million, maintaining healthy levels of new orders and backlog orders Thermal Processing Solutions Segment Key Financial Metrics | Metric | Q3 FY2025 (thousand USD) | Q2 FY2025 (thousand USD) | Q3 FY2024 (thousand USD) | | :------------------- | :----------------- | :----------------- | :----------------- | | Net Revenue | 14,208 | 10,575 | 18,038 | | GAAP Gross Profit | 6,325 | 350 | 6,313 | | GAAP Gross Margin | 45% | 3% | 35% | | Non-GAAP Gross Profit | 6,325 | 3,912 | 6,313 | | Non-GAAP Gross Margin | 45% | 37% | 35% | | Operating Income (Loss) | 2,907 | (8,401) | 1,690 | | New Orders | 14,057 | 10,562 | 10,801 | | Backlog Orders | 15,164 | 15,315 | 27,673 | Semiconductor Fabrication Solutions Segment The Semiconductor Fabrication Solutions segment achieved net revenue of $5.349 million in the third quarter of fiscal 2025, with a GAAP gross margin of 52% and operating income of $0.878 million, also showing growth in new orders and backlog orders Semiconductor Fabrication Solutions Segment Key Financial Metrics | Metric | Q3 FY2025 (thousand USD) | Q2 FY2025 (thousand USD) | Q3 FY2024 (thousand USD) | | :------------------- | :----------------- | :----------------- | :----------------- | | Net Revenue | 5,349 | 5,005 | 8,711 | | GAAP Gross Profit (Loss) | 2,807 | (675) | 3,445 | | GAAP Gross Margin | 52% | (13)% | 40% | | Non-GAAP Gross Profit | 2,807 | 1,749 | 3,445 | | Non-GAAP Gross Margin | 52% | 35% | 40% | | Operating Income (Loss) | 878 | (21,077) | 1,621 | | New Orders | 7,598 | 5,139 | 8,013 | | Backlog Orders | 6,052 | 3,804 | 4,164 | Financial Position and Cash Flow The company's cash and cash equivalents increased significantly due to strong operating cash generation and effective receivables collection Balance Sheet Highlights As of June 30, 2025, the company's cash and cash equivalents increased to $15.6 million, primarily driven by operating cash generation, strong accounts receivable collection, and Employee Retention Credits Cash and Cash Equivalents | Metric | June 30, 2025 (million USD) | September 30, 2024 (million USD) | | :------------------- | :----------------------- | :----------------------- | | Cash and Cash Equivalents | 15.6 | 11.1 | - Cash increase primarily attributed to operating cash generation, strong accounts receivable collection, and Employee Retention Credits[14] Cash Flow Activities For the nine months ended June 30, 2025, operating activities provided $5.609 million in net cash, investing activities used $0.692 million in net cash, and financing activities provided $0.080 million in net cash, with cash and cash equivalents at the end of the period totaling $15.563 million Nine-Month Cash Flow Summary | Cash Flow Type | June 30, 2025 (thousand USD) | June 30, 2024 (thousand USD) | | :------------------- | :--------------------- | :--------------------- | | Net Cash from Operating Activities | 5,609 | 8,963 | | Net Cash from Investing Activities | (692) | (2,610) | | Net Cash from Financing Activities | 80 | (6,640) | | Effect of Exchange Rate Changes | (520) | 337 | | Net Increase in Cash and Cash Equivalents | 4,477 | 50 | | Cash and Cash Equivalents at End of Period | 15,563 | 13,183 | Business Outlook The company provided Q4 FY2025 revenue guidance, anticipating growth in AI-related sales and improved operating leverage from cost reductions Q4 Fiscal 2025 Guidance The company expects revenue for the fourth quarter of fiscal 2025 to be between $17 million and $19 million, with growth in AI-related equipment sales anticipated to partially offset continued weakness in the mature node semiconductor product line, and higher operating leverage and mid-single-digit adjusted EBITDA margins expected due to implemented structural and operational cost reductions Q4 Fiscal 2025 Revenue Expectation | Metric | Expected Range (million USD) | | :--- | :------------------ | | Revenue | 17 - 19 | - Growth in AI-related equipment sales is expected to partially offset continued weakness in the mature node semiconductor product line[17] - Higher operating leverage and mid-single-digit adjusted EBITDA margins are anticipated due to structural and operational cost reductions[17] Market and Operational Factors The company's operating performance may be significantly affected by order timing, system shipments, logistical challenges, and the financial performance of semiconductor manufacturers, as the semiconductor equipment industry is cyclical and influenced by market demand changes, with fluctuations in the RMB to USD exchange rate also potentially causing actual results to differ from expectations - Operating performance is significantly affected by order timing, system shipments, logistical challenges, and the financial performance of semiconductor manufacturers[16] - The semiconductor equipment industry is cyclical and influenced by changes in market demand[16] - Fluctuations in the RMB to USD exchange rate may cause actual results to differ from expectations[18] Company Information Amtech Systems, Inc. provides equipment and services for semiconductor manufacturing and packaging, with a focus on investor communication and forward-looking statements About Amtech Systems, Inc. Amtech Systems, Inc. provides equipment, consumables, and services for semiconductor wafer fabrication and device packaging, with its products used in manufacturing silicon carbide (SiC) and silicon (Si) power devices, digital and analog devices, power electronics packaging, advanced semiconductor packaging, and electronic assemblies, primarily sold to semiconductor device and module manufacturers in Asia, North America, and Europe - Amtech Systems provides equipment, consumables, and services for semiconductor wafer fabrication and device packaging[21] - Products are used in manufacturing SiC and Si power devices, digital and analog devices, power electronics packaging, advanced semiconductor packaging, and electronic assemblies[21] - Primary sales markets include Asia, North America, and Europe[21] Cautionary Note Regarding Forward-Looking Statements This press release contains forward-looking statements concerning the company's future financial performance, growth, business strategies, costs, and product development, which are not guarantees of future performance and involve risks, uncertainties, and assumptions that are difficult to predict, and investors should refer to the "Risk Factors" section in the company's Form 10-K and Form 10-Q filings with the SEC - This press release contains forward-looking statements regarding future financial performance, growth, business strategies, costs, and product development[22] - Forward-looking statements are not guarantees of future performance and involve difficult-to-predict risks, uncertainties, and assumptions[22] - Investors should refer to the "Risk Factors" section in the company's Form 10-K and Form 10-Q filings with the SEC[22] Investor Relations and Contacts Amtech Systems will host a conference call on August 6, 2025, to discuss its third-quarter financial results, providing dial-in information and a webcast link, along with investor relations contact details - The company will host a conference call on August 6, 2025, at 5:00 PM ET to discuss third-quarter financial results[19] - Conference call and webcast replay information has been provided[19][20] - Investor relations contacts include Wade M. Jenke (CFO) and Sapphire Investor Relations[23] Detailed Financial Statements and Reconciliations This section presents comprehensive GAAP and non-GAAP financial statements, including segment details, balance sheets, cash flows, and various reconciliations Summary Financial Information (Segment Details) This section provides a detailed financial summary for Amtech Systems and its two main segments (Thermal Processing Solutions and Semiconductor Fabrication Solutions), including GAAP and non-GAAP data for revenue, gross profit, operating income, new orders, and backlog orders, covering the third and second quarters of fiscal 2025, as well as the third quarter and nine months of fiscal 2024 Amtech Systems Consolidated Financial Summary | Metric | Q3 FY2025 (thousand USD) | Q2 FY2025 (thousand USD) | Q3 FY2024 (thousand USD) | 9 Months FY2025 (thousand USD) | 9 Months FY2024 (thousand USD) | | :------------------- | :----------------- | :----------------- | :----------------- | :-------------------- | :-------------------- | | Net Revenue | 19,557 | 15,580 | 26,749 | 59,522 | 77,102 | | GAAP Gross Profit (Loss) | 9,132 | (325) | 9,758 | 18,169 | 26,428 | | Non-GAAP Gross Profit | 9,132 | 5,661 | 9,758 | 24,155 | 27,725 | | GAAP Gross Margin | 47% | (2)% | 36% | 31% | 34% | | Non-GAAP Gross Margin | 47% | 36% | 36% | 41% | 36% | | Operating Income (Loss) | 915 | (31,583) | 816 | (30,328) | (6,755) | | New Orders | 21,655 | 15,701 | 18,814 | 55,426 | 61,690 | | Backlog Orders | 21,216 | 19,119 | 31,837 | 21,216 | 31,837 | Consolidated Statements of Operations This section provides Amtech Systems' consolidated statements of operations, detailing revenue, cost of sales, gross profit, various operating expenses (SG&A, R&D, impairment, etc.), operating income (loss), interest income/expense, foreign exchange gains/losses, income tax expense, and ultimately net income (loss) and earnings per share for the third quarter and nine months of fiscal years 2025 and 2024 Consolidated Statements of Operations Summary | Metric (thousand USD) | Q3 FY2025 | Q3 FY2024 | 9 Months FY2025 | 9 Months FY2024 | | :-------------------------------- | :-------- | :-------- | :----------- | :----------- | | Net Revenue | 19,557 | 26,749 | 59,522 | 77,102 | | Cost of Sales | 10,425 | 16,991 | 41,353 | 49,825 | | Gross Profit | 9,132 | 9,758 | 18,169 | 26,428 | | Selling, General and Administrative Expenses | 7,387 | 8,209 | 22,553 | 25,028 | | Research and Development Expenses | 364 | 693 | 2,070 | 3,202 | | Operating Income (Loss) | 915 | 816 | (30,328) | (6,755) | | Net Income (Loss) | 106 | 438 | (31,394) | (7,950) | | Diluted EPS (Loss) | 0.01 | 0.03 | (2.20) | (0.56) | Consolidated Balance Sheets This section provides Amtech Systems' consolidated balance sheets as of June 30, 2025, and September 30, 2024, detailing the composition of current assets, non-current assets, current liabilities, non-current liabilities, and stockholders' equity Consolidated Balance Sheets Summary | Metric (thousand USD) | June 30, 2025 | September 30, 2024 | | :------------------- | :------------- | :------------- | | Cash and Cash Equivalents | 15,563 | 11,086 | | Total Current Assets | 57,755 | 64,376 | | Total Assets | 89,464 | 118,953 | | Total Current Liabilities | 18,840 | 19,599 | | Total Liabilities | 37,746 | 36,595 | | Total Stockholders' Equity | 51,718 | 82,358 | Consolidated Statements of Cash Flows This section provides Amtech Systems' consolidated statements of cash flows for the nine months ended June 30, 2025, and 2024, detailing cash flows from operating, investing, and financing activities, as well as the effect of exchange rate changes on cash and cash equivalents Consolidated Statements of Cash Flows Summary | Cash Flow Type (thousand USD) | 9 Months FY2025 | 9 Months FY2024 | | :------------------- | :----------- | :----------- | | Net Cash from Operating Activities | 5,609 | 8,963 | | Net Cash from Investing Activities | (692) | (2,610) | | Net Cash from Financing Activities | 80 | (6,640) | | Effect of Exchange Rate Changes | (520) | 337 | | Net Increase in Cash and Cash Equivalents | 4,477 | 50 | | Cash and Cash Equivalents at End of Period | 15,563 | 13,183 | GAAP to Non-GAAP Gross Profit Reconciliation This section provides a reconciliation table from GAAP gross profit to non-GAAP gross profit for Amtech Systems and its two segments (Thermal Processing Solutions and Semiconductor Fabrication Solutions), with key adjustments including inventory write-downs related to polishing equipment, mature node semiconductor product inventory write-downs, and intangible asset impairment Consolidated GAAP to Non-GAAP Gross Profit Reconciliation | Metric (thousand USD) | Q3 FY2025 | Q2 FY2025 | Q3 FY2024 | 9 Months FY2025 | 9 Months FY2024 | | :-------------------------------- | :-------- | :-------- | :-------- | :----------- | :----------- | | GAAP Gross Profit (Loss) | 9,132 | (325) | 9,758 | 18,169 | 26,428 | | Inventory Write-down for Mature Node Semiconductor Products | - | 5,986 | - | 5,986 | - | | Intangible Asset Impairment | - | - | - | - | 849 | | Non-GAAP Gross Profit | 9,132 | 5,661 | 9,758 | 24,155 | 27,725 | GAAP to Non-GAAP Net Income and EPS Reconciliation This section provides a reconciliation table from GAAP net income (loss) and earnings per share to non-GAAP net income (loss) and earnings per share for Amtech Systems, with adjustments including gain on sale of fixed assets, relocation expenses, inventory write-downs, amortization, share-based compensation expense, goodwill impairment, intangible asset impairment, and severance costs Consolidated GAAP to Non-GAAP Net Income Reconciliation | Metric (thousand USD) | Q3 FY2025 | Q2 FY2025 | Q3 FY2024 | 9 Months FY2025 | 9 Months FY2024 | | :-------------------------------- | :-------- | :-------- | :-------- | :----------- | :----------- | | GAAP Net Income (Loss) | 106 | (31,812) | 438 | (31,394) | (7,950) | | Inventory Write-down for Mature Node Semiconductor Products | - | 5,986 | - | 5,986 | - | | Amortization | 27 | 107 | 154 | 242 | 595 | | Share-based Compensation Expense | 338 | 290 | 488 | 961 | 1,155 | | Goodwill Impairment | - | 20,353 | - | 20,353 | 6,370 | | Intangible Asset Impairment | - | 2,569 | - | 2,569 | 1,279 | | Severance Costs | 421 | 184 | 40 | 678 | 350 | | Non-GAAP Net Income (Loss) | 892 | (2,323) | 1,120 | (605) | 281 | Consolidated GAAP to Non-GAAP Diluted EPS Reconciliation | Metric | Q3 FY2025 | Q2 FY2025 | Q3 FY2024 | 9 Months FY2025 | 9 Months FY2024 | | :-------------------------------- | :-------- | :-------- | :-------- | :----------- | :----------- | | GAAP Diluted EPS (Loss) | 0.01 | (2.23) | 0.03 | (2.20) | (0.56) | | Inventory Write-down for Mature Node Semiconductor Products | - | 0.42 | - | 0.42 | - | | Amortization | - | 0.01 | 0.01 | 0.02 | 0.04 | | Share-based Compensation Expense | 0.02 | 0.02 | 0.03 | 0.07 | 0.08 | | Goodwill Impairment | - | 1.43 | - | 1.42 | 0.45 | | Intangible Asset Impairment | - | 0.18 | - | 0.18 | 0.09 | | Severance Costs | 0.03 | 0.01 | 0.01 | 0.05 | 0.02 | | Non-GAAP Diluted EPS (Loss) | 0.06 | (0.16) | 0.08 | (0.04) | 0.02 | Net Income to EBITDA and Adjusted EBITDA Reconciliation This section provides a reconciliation table from net income to EBITDA and adjusted EBITDA for Amtech Systems, with adjustments including interest income/expense, income tax expense, depreciation and amortization expense, inventory write-downs, share-based compensation expense, goodwill impairment, intangible asset impairment, and severance costs Consolidated Net Income to EBITDA and Adjusted EBITDA Reconciliation | Metric (thousand USD) | Q3 FY2025 | 9 Months FY2025 | | :-------------------------------- | :-------- | :----------- | | GAAP Net Income (Loss) | 106 | (31,394) | | Interest Income | (88) | (119) | | Interest Expense | 5 | 19 | | Income Tax Expense | 799 | 1,516 | | Depreciation and Amortization Expense | 594 | 2,167 | | EBITDA | 1,416 | (27,811) | | Inventory Write-down for Mature Node Semiconductor Products | - | 5,986 | | Share-based Compensation Expense | 338 | 961 | | Goodwill Impairment | - | 20,353 | | Intangible Asset Impairment | - | 2,569 | | Severance Costs | 421 | 678 | | Adjusted EBITDA | 2,175 | 2,736 |