Financial Data and Key Metrics Changes - Nova achieved record quarterly revenue of $224.6 million in Q3 2025, reflecting a robust 25% year-over-year growth and a 2% quarter-over-quarter increase [3][10] - Blended gross margins were 57% on a GAAP basis and 59% on a non-GAAP basis, aligning with guidance [10][11] - Operating expenses increased to $63.5 million on a GAAP basis, with operating margin reaching 28% on a GAAP basis and 32% on a non-GAAP basis [11][12] - Earnings per share were $1.90 on a GAAP basis and $2.16 on a non-GAAP basis [12] - Free cash flow generated in Q3 was approximately $67 million, totaling about $170 million for the first three quarters of 2025 [12][13] Business Line Data and Key Metrics Changes - Revenue from memory devices reached record levels, driven by strong demand for advanced DRAM and high bandwidth memory [3][6] - Advanced logic revenue also saw records, primarily due to demand for gate all-around manufacturing processes [7] - Advanced packaging solutions experienced increased demand, particularly for critical dimension measurements [8][9] Market Data and Key Metrics Changes - The company expects wafer fab equipment (WFE) growth in the mid-single digits for 2026, with potential upside from AI-driven demand [5][18] - Revenue from China is expected to be nominally higher year-over-year, but its share of overall business is projected to decrease from 39% to around 30%+ [27][28] Company Strategy and Development Direction - Nova's strategy focuses on leveraging advanced technology to address challenges in AI applications and complex manufacturing processes [4][9] - The company is committed to expanding its footprint in the semiconductor process control market, with a focus on R&D investments and potential M&A opportunities [13][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to outperform WFE growth, citing strong growth engines and a favorable market environment [18][36] - The outlook for 2026 is expected to be second-half weighted, with both memory and advanced logic driving growth [36][42] Other Important Information - Nova opened a new production facility in Mannheim, Germany, which will triple its production capacity for advanced packaging optical metrology solutions [9] - The company completed a $750 million convertible notes offering, enhancing its financial flexibility for strategic growth initiatives [13] Q&A Session Summary Question: Can you walk us through the upside case to the wafer fab equipment outlook? - Management believes they have the right growth engines to outperform the mid-single digit WFE growth, with expectations for a more second-half weighted year in 2026 [18] Question: Can you discuss the gross margins and any impact from China restrictions? - Gross margins were reported at 59%, with guidance for 58% in the next quarter, and no significant impact from China restrictions was noted [20][21] Question: What are the moving pieces in Foundry and Logic versus memory sales? - Memory sales increased significantly, with DRAM driving the majority of that business, while Foundry and Logic saw a decline [24] Question: What is the company's positioning in the NAND cycle? - NAND remains muted, but management expects growth towards the second half of next year, with a strong position in the market [38] Question: What is the expected contribution from advanced packaging for 2025? - Advanced packaging is expected to contribute approximately 20% of revenues in 2025, up from 15% the previous year [37]

Financial Data and Key Metrics Changes - Nova achieved record quarterly revenue of $224.6 million in Q3 2025, reflecting a robust 25% year-over-year growth and a 2% increase quarter-over-quarter [3][10] - Blended gross margins were 57% on a GAAP basis and 59% on a non-GAAP basis, aligning with guidance [10][11] - Operating expenses increased to $63.5 million on a GAAP basis, reflecting investments in R&D and strategic evaluations [11] - Earnings per share were $1.90 on a GAAP basis and $2.16 on a non-GAAP basis [12] - Free cash flow generated was approximately $67 million for the quarter, totaling around $170 million for the first three quarters of 2025 [12][13] Business Line Data and Key Metrics Changes - Product revenue distribution was approximately 70% from logic and foundry and 30% from memory, with memory sales driven by strong demand for advanced DRAM and high bandwidth memory [10][3] - Record sales in memory were achieved, with significant contributions from Veriflex and Prism platforms [6][7] - Advanced logic sales were also at record levels, primarily due to demand for gate all-around manufacturing processes [7] - Advanced packaging solutions saw increased demand, particularly for critical dimension measurements [8] Market Data and Key Metrics Changes - The company expects wafer fab equipment (WFE) growth in the mid-single digits for 2026, with potential upside from AI-driven demand [5][4] - Revenue from China is expected to be nominally higher year-over-year, but the share of overall business from China is projected to decrease from 39% to around 30% [27][28] Company Strategy and Development Direction - Nova's strategy focuses on addressing unique process control challenges in manufacturing integrated circuit devices for AI applications [4] - The company is well-positioned to support customers with differentiated, scalable, and innovative solutions as the industry evolves [9] - Nova is actively pursuing inorganic growth opportunities in the semiconductor area, particularly in process control [32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to outperform the WFE growth and highlighted the importance of memory and advanced logic in driving future growth [18][36] - The company anticipates continued growth in advanced packaging, with a projected increase in revenue share from 15% to approximately 20% in 2025 [37] - Management noted that the business in China has normalized and expects this trend to continue into 2026 [43] Other Important Information - Nova opened a new production facility in Mannheim, Germany, which will triple production capacity for advanced packaging optical metrology solutions [9] - The company completed a $750 million convertible notes offering, enhancing its financial position for strategic investments [13] Q&A Session Summary Question: Wafer fab equipment outlook for next year - Management believes they have the right growth engines to outperform the mid-single digit WFE outlook, with expectations for a more second-half weighted year in 2026 [18] Question: Gross margins and impact from China restrictions - Gross margins for the quarter were reported at 59%, with guidance for 58% in the next quarter, and no significant impact from China restrictions was noted [20][21] Question: Foundry and Logic sales performance - Memory sales increased significantly, while Foundry and Logic saw a decline; however, leading-edge foundry sales hit a record [24][25] Question: Gate all-around business trajectory - The gate all-around business is expected to continue growing, with an aggregated business expectation of about $500 million from 2024 to 2026 [30][31] Question: Advanced packaging revenue contribution - Advanced packaging is expected to contribute approximately 20% of revenues in 2025, with continued growth anticipated in 2026 [37] Question: NAND cycle positioning - NAND revenues are currently muted but are expected to grow towards the second half of next year [38] Question: China market outlook - Management expects nominally solid business levels in China, with lower visibility for the second half of the year [45]

Financial Data and Key Metrics Changes - Nova achieved record quarterly revenue of $224.6 million in Q3 2025, reflecting a robust 25% year-over-year growth and a 2% increase quarter-over-quarter [3][11] - Blended gross margins were 57% on a GAAP basis and 59% on a non-GAAP basis, aligning with guidance [11] - Operating margin reached 28% on a GAAP basis and 32% on a non-GAAP basis, demonstrating the scalability of the business model [12] - Earnings per share were $1.90 on a GAAP basis and $2.16 on a non-GAAP basis [12] - Free cash flow generated was approximately $67 million for the quarter, totaling about $170 million for the first three quarters of 2025 [12][13] Business Line Data and Key Metrics Changes - Product revenue distribution was approximately 70% from logic and foundry and 30% from memory [11] - Record sales in memory devices were driven by strong demand for advanced DRAM and high bandwidth memory [3][5] - Advanced logic sales were also at record levels, primarily due to demand for gate all-around manufacturing processes [6] - Advanced packaging solutions saw increased demand, particularly for critical dimension measurements [7][8] Market Data and Key Metrics Changes - The company expects wafer fab equipment (WFE) growth in the mid-single digits for 2026, with potential upside from AI-driven demand [4][5] - Revenue from China is expected to be nominally higher year-over-year, but the share of overall business from China is projected to decrease [27][41] Company Strategy and Development Direction - Nova's strategy focuses on addressing unique process control challenges in manufacturing integrated circuit devices for AI applications [4][10] - The company is investing in R&D for long-term opportunities and strategic evaluations [12] - Nova is well-positioned to support customers with differentiated, scalable, and innovative solutions as the industry evolves [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to deliver long-term growth and value, with expectations for continued growth in advanced logic, advanced packaging, and DRAM [4][10] - The company anticipates a record year in 2025, with annual growth of approximately 30% [14][16] Other Important Information - Nova opened a new state-of-the-art production facility in Mannheim, Germany, which will triple production capacity for advanced packaging optical metrology solutions [9] Q&A Session Summary Question: Wafer fab equipment outlook for next year - Management believes they can outperform the mid-single digit WFE growth outlook, with improvements noted since September discussions [18][19] Question: Gross margins and impact from China restrictions - Gross margins were reported at 59% for the quarter, with guidance for 58% next quarter; no significant impact from China restrictions was noted [20][21] Question: Foundry and Logic sales performance - Memory sales increased significantly, while Foundry and Logic saw a decline; management expects continued growth in memory [24][25] Question: Gate all-around business trajectory - The gate all-around business is expected to grow significantly, with an aggregated business expectation of about $500 million from 2024 to 2026 [31][32] Question: M&A opportunities - The company is looking for inorganic growth opportunities primarily in semiconductor process control, with a dedicated team pursuing these opportunities [33][34] Question: Advanced packaging revenue contribution - Advanced packaging is expected to contribute approximately 20% of revenues in 2025, up from 15% the previous year [37] Question: NAND cycle positioning - NAND revenues are currently muted but expected to grow towards the second half of next year [38] Question: China market outlook - Business in China is expected to remain solid, with lower visibility for the second half of the year; normalization is anticipated to continue into the first half of 2026 [41][45]