Veeco Instruments (NasdaqGS:VECO) Q4 2025 Earnings call February 25, 2026 05:00 PM ET Company ParticipantsAlex Delacroix - Head of Investor RelationsBill Miller - CEODavid Duley - Managing PrincipalDenis Pyatchanin - Equity Research AssociateJohn Kiernan - SVP and CFOOperatorGreetings, welcome to the Veeco fourth quarter and full year 2025 earnings call. At this time, all participants are in a listen-only mode. It's now my pleasure to introduce your host, Alex Delacroix, Head of Investor Relations. Thank yo ...

Veeco Instruments (NasdaqGS:VECO) Q4 2025 Earnings call February 25, 2026 05:00 PM ET Company ParticipantsAlex Delacroix - Head of Investor RelationsBill Miller - CEODavid Duley - Managing PrincipalDenis Pyatchanin - Equity Research AssociateJohn Kiernan - SVP and CFOOperatorGreetings, welcome to the Veeco fourth quarter and full year 2025 earnings call. At this time, all participants are in a listen-only mode. It's now my pleasure to introduce your host, Anthony Pappone, Head of Investor Relations. Thank y ...

Financial Data and Key Metrics Changes - Fourth quarter revenue was $165 million, and EPS was $0.24, both at the midpoint of guidance [9] - Full year revenue totaled $664 million, a decline of 7% from the prior year, with EPS at $1.33 [16] - Semiconductor business revenue reached $477 million, up 2% year-over-year, accounting for 72% of total revenue [16] - Gross margin for the full year was 41%, with operating income of $84 million and net income of $80 million [18] Business Line Data and Key Metrics Changes - Semiconductor business drove revenue growth, primarily from laser annealing, wet processing, and ion beam EUV technology [5] - Advanced packaging business doubled year-over-year, reaching $150 million in 2025 [12] - Compound semiconductor revenue was $60 million, a decline from the prior year, representing 9% of total revenue [16] - Data storage revenue totaled $39 million, also declining from the prior year, comprising 6% of revenue [16] Market Data and Key Metrics Changes - Asia Pacific region accounted for 50% of total revenue, with China contributing 27% [17] - Revenue from the Asia Pacific increased to 54% in Q4 due to higher semiconductor sales [19] - Order backlog at year-end was $555 million, a significant increase of $145 million from the prior year, reflecting a 35% growth [17] Company Strategy and Development Direction - Company aims to expand its presence in the memory market, focusing on AI-driven architectures and advanced packaging [10] - The merger with Axcelis is expected to enhance R&D scale and broaden the product platform [8] - Company is strategically investing in next-generation technologies to meet customer demands [4] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in revenue growth for 2026, forecasting between $740 million and $800 million [22] - Anticipated growth in semiconductor business driven by AI and high-performance computing [22] - Management noted that the semiconductor market is projected to grow to over $1 trillion, with AI accounting for more than half of sales [24] Other Important Information - The company is fully booked for system orders in 2026, with multiple orders extending into 2027 [32] - Gross margins are expected to improve in the second half of 2026, reaching targets of 45% [41] - Tariff impacts are factored into the 2026 guidance, with a headwind of about 100 basis points [43] Q&A Session Summary Question: Outlook for 2026 revenue growth across segments - Company expects overall revenue for 2026 to be between $740 million and $800 million, with semiconductor revenue projected to grow around 15% [30] Question: Capital expenditure trends in the hard disk drive business - Company noted increasing CapEx from customers due to HAMR adoption, indicating a multi-year increase in business [34] Question: Revenue potential for the Propel GaN-on-Silicon tool - Company anticipates incremental business approaching $15 million from pilot line orders in 2026, with potential for additional orders in 2027 [36] Question: Gross margin expectations for Q1 and beyond - Company expects Q1 gross margins to be similar to Q4, with improvements anticipated in the second half of 2026 [40] Question: Impact of tariffs on gross margins - Company indicated that tariffs are expected to create a headwind of about 100 basis points compared to pre-tariff levels [43]