Veeco(US:VECO)2025-11-05 21:31Financial Performance - Total net sales for Q3 2025 were $165.881 million, a decrease of 10% from $184.807 million in Q3 2024[133]. - Gross profit for Q3 2025 was $67.703 million, down 15% from $79.211 million in Q3 2024, with gross margins decreasing from 43% to 41%[133][135]. - Net sales for the nine months ended September 30, 2025, were $499.3 million, a decrease of 7% compared to $535.2 million in the prior year[144]. - Gross profit for the same period decreased to $204.9 million, representing a gross margin of 41%, down from 43% in the prior year[144]. - Net interest income for the nine months ended September 30, 2025, was $3.1 million, an increase of 138% from $1.3 million in the prior year[153]. - Income tax expense for the nine months ended September 30, 2025, was $5.2 million, compared to $5.7 million in the prior year, reflecting a favorable effective tax rate[154]. Revenue Breakdown - Semiconductor revenue decreased by 5% year-over-year in Q3 2025, accounting for 71% of total revenue, primarily driven by system shipments of Laser Spike Annealing, Ion Beam Deposition EUV, and Advanced Packaging wet processing[119]. - The Compound Semiconductor market saw a 30% decline in sales, from $15.556 million in Q3 2024 to $10.912 million in Q3 2025[134]. - Data Storage revenue dropped significantly by 70%, from $32.750 million in Q3 2024 to $9.971 million in Q3 2025[134]. - The Scientific & Other market experienced a 116% increase in sales, rising from $12.358 million in Q3 2024 to $26.676 million in Q3 2025[134]. Expenses - Research and development expenses decreased by 10% to $28.988 million in Q3 2025 from $32.216 million in Q3 2024[133][136]. - Selling, general, and administrative expenses increased by 8% to $27.263 million in Q3 2025, influenced by costs related to the Merger Agreement[133][137]. - Research and development expenses were $89.1 million, a decrease of 5% from $93.6 million in the prior year, due to reduced personnel-related costs[144][149]. - Selling, general, and administrative expenses increased to $76.2 million, up 2% from $74.6 million in the prior year, primarily due to costs associated with a Merger Agreement[144][150]. Cash and Investments - Cash and cash equivalents increased to $193.2 million as of September 30, 2025, compared to $145.6 million at the end of 2024[157]. - Net cash provided by operating activities was $44.6 million for the nine months ended September 30, 2025, compared to $35.4 million in the prior year[159]. - Capital expenditures for the nine months ended September 30, 2025, were $12.9 million, consistent with $12.9 million in the prior year[160]. - The investment portfolio had a fair value of approximately $176.1 million as of September 30, 2025, with a potential decrease of $1.2 million in value for a 100 basis point increase in interest rates[166]. Merger and Future Outlook - The company entered into a Merger Agreement with Axcelis Technologies, with the merger subject to stockholder and regulatory approvals[112]. - The convertible senior notes will be assumed by Axcelis in connection with the merger[164]. - Industry analysts forecast long-term growth in the Semiconductor industry, driven by trends such as artificial intelligence and high-performance computing, with 2024 sales estimated at around $650 billion[113][114]. Foreign Sales and Currency Risk - Net sales to customers outside the United States represented approximately 84% and 85% of total net sales for the three and nine months ended September 30, 2025, respectively[169]. - Sales denominated in currencies other than the U.S. dollar accounted for approximately 3% and 5% of total net sales for the three and nine months ended September 30, 2025, respectively[169]. - A 10% change in foreign exchange rates would have an immaterial impact on the consolidated results of operations since most sales outside the United States are denominated in U.S. dollars[170]. - The company uses derivative financial instruments to mitigate currency exchange risk, executing transactions with highly rated financial institutions[168]. - Changes in currency exchange rates could affect foreign currency denominated monetary assets and liabilities, impacting forecasted cash flows[167].