Transaction Overview - Axcelis and Veeco are combining to create an industry-leading semiconductor equipment company[1,29,55] - The transaction is an all-stock deal where Veeco shareholders will receive 03575 Axcelis shares for each Veeco share[52] - The combined company will be headquartered in Beverly, Massachusetts and assume a new name and ticker symbol[52] - The transaction is expected to close in the second half of 2026, subject to shareholder and regulatory approvals[52] Financial Highlights - The combined company will have a pro forma cash position exceeding $900 million[24,28,30,52,56] - The combined company's 2024 revenue is approximately $17 billion[27,36] - The combined company's non-GAAP gross margin is 44%[27,30,56] - The combined company's adjusted EBITDA is approximately $387 million[28,30] - The combined company expects to realize $35 million in annual run-rate cost synergies within 24 months after closing[52,53] Strategic Rationale - The combination expands the addressable market opportunity to over $5 billion[30,56] - The merger creates a broader product portfolio and complementary end markets[22,23,25,30,35,36,41,42,44,45] - The combined company will have a robust R&D and innovation engine[23]

Transaction Overview - Axcelis and Veeco are combining to create an industry-leading semiconductor equipment company[1] - The transaction is an all-stock deal where Veeco shareholders will receive 03575 Axcelis shares for each Veeco share[52] - The combined company will have an estimated enterprise value of approximately $44 billion[52] - Pro forma ownership at closing is estimated to be approximately 58% Axcelis shareholders and 42% Veeco shareholders[52] - The transaction is expected to close in the second half of 2026[52] Financial Highlights - The combined company is expected to have over $900 million in cash[24, 27, 30, 52] - The combined company had approximately $17 billion in pro-forma 2024 revenue[27, 36] - The combined company had a 44% non-GAAP gross margin in FY24[27, 30, 53] - The combined company had approximately $230 million in combined R&D spend in FY24[27] - The combined company had approximately $387 million in adjusted EBITDA in FY24[27, 53]

Financial Data and Key Metrics Changes - The company reported Q1 2025 revenue of $193 million and earnings per diluted share of $0.88, both exceeding expectations, with non-GAAP earnings per share at $1.04 [6][19] - Bookings for the quarter were $110 million, reflecting a sequential increase compared to Q4 2024, resulting in a book-to-bill ratio of 0.8, the highest since Q4 2023 [7][19] - GAAP gross margins were 46.1%, exceeding the outlook of 40%, while non-GAAP gross margins were 46.4% [22][23] Business Line Data and Key Metrics Changes - Systems revenue was $138 million, and CS&I revenue was $55 million, both slightly above expectations [19] - Sales to mature node applications remained dominant, particularly in Power and General Mature segments [9] - Revenue from silicon carbide applications declined sequentially due to moderated customer investments, while engagement in technology transitions remained strong [10][11] Market Data and Key Metrics Changes - Revenue from China declined to 37% of total shift system sales, down from 49% in the prior quarter, with expectations for fluctuations in 2025 [19][20] - Shipments to the U.S. grew to 23% of total sales, while Korea improved to 20%, mainly due to increased DRAM shipments [19] - The company anticipates that China revenue will be lower year-over-year in 2025 compared to 2024, despite potential quarterly fluctuations [19][66] Company Strategy and Development Direction - The company is focused on innovation and cost control to capture long-term growth opportunities while mitigating tariff impacts [7][9] - Plans are in place to lessen the direct impact of tariffs, leveraging a diversified global supply chain [8][50] - The company aims to maintain strong profitability and invest in R&D to prepare for future market recovery [86][87] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term drivers of the semiconductor industry, despite current macroeconomic challenges [16][29] - The company expects revenue in Q2 2025 to be approximately $185 million, with non-GAAP gross margins around 42% [27] - Management noted that while the macroeconomic environment is uncertain, customer discussions indicate continued investments in technology roadmaps [27][28] Other Important Information - The company generated $35 million in free cash flow in Q1 2025 and exited the quarter with $587 million in cash and no debt [26] - A $100 million increase in share repurchase authorization reflects confidence in long-term business fundamentals [26] Q&A Session Summary Question: What contributed to the robust gross margin? - Management indicated that higher margin spare sales and favorable deferred revenue recognition contributed to the strong gross margin performance [33][35] Question: What is the order intensity for Q2? - Management noted that Q1 bookings reflected a good profile for future business, primarily from general mature and power segments [40][41] Question: Can you provide granularity on the margin performance? - The largest contributor to margin performance was the mix of sales, with expectations for moderation in the second quarter [44][47] Question: What is the outlook for China revenue? - Management anticipates that China revenue will be lower year-over-year in 2025, with fluctuations expected in quarterly performance [101][103] Question: What is the company's strategy regarding R&D spending? - The company plans to maintain R&D investments to capitalize on future market recovery and ensure readiness with innovative products [84][86]

Financial Data and Key Metrics Changes - The company reported Q1 2025 revenue of $193 million and earnings per diluted share of $0.88, both exceeding expectations, with non-GAAP earnings per share at $1.04 [5][19] - Bookings for the quarter were $110 million, reflecting a sequential increase compared to Q4 2024, resulting in a book-to-bill ratio of 0.8, the highest since Q4 2023 [6][19] - GAAP gross margins were 46.1%, exceeding the outlook of 40%, while non-GAAP gross margins were 46.4% [21][22] - GAAP operating profit was $29.2 million, reflecting a 15.1% operating margin, with non-GAAP operating margin at 18.3% [23] Business Line Data and Key Metrics Changes - Systems revenue was $138 million, and CS and I revenue was $55 million, both slightly above expectations [19] - Sales to mature node applications remained dominant, particularly in Power and General Mature segments [8][10] - Revenue from silicon carbide applications declined sequentially due to moderated customer investments, while engagement in technology transitions remained strong [10][12] Market Data and Key Metrics Changes - China accounted for 37% of total shift system sales, down from 49% in the prior quarter, with expectations for fluctuations in revenue from China throughout 2025 [19][20] - The U.S. saw an increase in shift system sales to 23% of total, while Korea improved to 20%, mainly due to DRAM shipments [19] - The company anticipates a decline in revenue from China on a year-over-year basis as customers digest previous investments [19][20] Company Strategy and Development Direction - The company is focused on innovation and cost control to capture long-term growth opportunities while mitigating tariff impacts [6][8] - Plans are in place to lessen the direct impact of tariffs, leveraging a diversified global supply chain [6][7] - The company aims to maintain strong profitability and invest in R&D to prepare for market recovery [26][85] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term drivers of the semiconductor industry, despite current macroeconomic challenges [16][28] - The company expects revenue in Q2 2025 to be approximately $185 million, with non-GAAP gross margins around 42% [26] - Management noted that while bookings improved, it is premature to call it an inflection point, and they expect continued fluctuations in bookings [39][40] Other Important Information - The company generated $35 million in free cash flow in Q1 2025 and exited the quarter with $587 million in cash and no debt [25][28] - A $100 million increase in share repurchase authorization reflects confidence in long-term business fundamentals [25] Q&A Session Summary Question: What contributed to the robust gross margin? - Management indicated that higher margin spare sales and favorable deferred revenue recognition contributed to the strong gross margin performance [33][35] Question: What is the order intensity for Q2? - Management noted that while bookings increased significantly, it is too early to declare it an inflection point, with most bookings coming from general mature and power segments [39][40] Question: Can you break down the margin performance? - The largest contributor to margin performance was the mix of sales, with expectations for moderation in the second quarter [46] Question: What is the impact of tariffs on margins? - Management acknowledged that while tariffs have a small impact, they have plans in place to mitigate these effects through a global supply base [50][51] Question: What is the composition of the backlog? - The backlog is predominantly general mature, with expectations for it to decrease over time as the company returns to a more standard book-to-bill ratio [56][58] Question: What is the outlook for Japan? - Management expressed optimism about Japan, noting progress in placing tools and anticipating repeat orders as utilization rates improve [70][72] Question: How are technology transitions impacting the business? - The transitions from 150mm to 200mm wafers and from planar to trench devices are expected to benefit the company, particularly in high-energy technology [73][75] Question: What is the outlook for memory business recovery? - The memory business saw an uptick primarily in DRAM, with expectations for broadening out in the future [103]

Core Viewpoint - Small-cap companies, defined as those with market capitalizations between $250 million and $2 billion, are increasingly engaging in share buybacks, which can significantly impact their earnings per share and share prices, despite the smaller scale compared to large-cap companies [1][2]. Group 1: Buyback Announcements - Fresh Del Monte Produce announced a share buyback authorization of $150 million, representing over 11% of its $1.42 billion market capitalization, with no set end date for the program [4][5]. - Axcelis Technologies revealed a buyback authorization of $100 million, bringing its total buyback capacity to $215 million, which is 12% of its $1.8 billion market cap [6][8]. - Fiverr International announced a second $100 million buyback program, equal to just under 11% of its $922 million market capitalization, following the full utilization of its first buyback authorization in 2024 [9][10]. Group 2: Company Performance and Financials - Fresh Del Monte's revenue is heavily driven by bananas, which accounted for 34% of total revenue in 2024, and the company has averaged $48 million in annual share repurchases over the past decade [4][5]. - Axcelis Technologies experienced a 10% revenue drop in 2024, but had previously seen revenue growth of over 23% from 2021 to 2023, with 41% of its revenue in 2024 coming from silicon carbide-based wafers [7][8]. - Fiverr International has seen a 365% increase in revenue since its IPO in 2019, although its annual revenue growth rate has significantly decreased from 77% during the COVID peak to just 8% in 2024 [10].