Axcelis reported GAAP gross margin of 47% and non-GAAP gross margin of 47.3% , above its outlook, driven by a higher mix of CS&I and a favorable mix of upgrades. Non-GAAP operating expenses were $62 million , above outlook due largely to higher variable compensation associated with better-than-expected performance. GAAP EPS was $1.10 and non-GAAP EPS was $1.49 .CFO Jamie Coogan added that fourth-quarter systems revenue was $156 million , while Customer Support & International (CS&I) revenue reached a quarte ...

Financial Data and Key Metrics Changes - The company reported Q4 revenue of $238 million and non-GAAP earnings per diluted share of $1.49, both exceeding expectations [5][23] - For the full year, non-GAAP gross margins increased by 30 basis points year-over-year, despite a decline in overall revenue [15][24] - GAAP diluted earnings per share for the full year was $3.80, while non-GAAP diluted earnings per share was $4.88 [24] Business Line Data and Key Metrics Changes - Systems revenue for Q4 was $156 million, while CS&I revenue reached a record $82 million, driven by strong demand for upgrades [18][19] - CS&I revenue grew 14% year-over-year, primarily due to strategic initiatives to enhance adoption of upgrades and service contracts [19] - In the memory market, demand improved sequentially for DRAM and HBM applications, with expectations for continued momentum into 2026 [12][16] Market Data and Key Metrics Changes - Revenue from China decreased to 32% of total revenue in Q4, down from 46% in the prior quarter, reflecting customer digestion of previous investments [19] - For the full year, revenue from China accounted for 42% of total revenue, while the U.S. contributed 16% and Korea 13% [20] - The company anticipates flat to slightly down revenue from China in 2026, as customers continue to build out capacity [71][72] Company Strategy and Development Direction - The company is focused on advancing technology roadmaps and executing disciplined strategies to capitalize on secular trends driven by AI and electrification [31] - The pending merger with Veeco is expected to unlock significant long-term opportunities and enhance the combined company's market position [7][31] - The company aims to balance investments in product innovation while maintaining cost discipline [30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about long-term demand for silicon carbide driven by trends in electric vehicles and other applications [10][17] - The company expects memory business growth, particularly in DRAM, as customers invest in capacity to meet AI-driven demand [16][28] - Management noted that while general mature and power markets may see slight declines, improved utilization rates are encouraging [46][47] Other Important Information - The company generated approximately $4 million in other income in Q4, primarily due to foreign currency [23] - Free cash flow for the full year was robust at $107 million, despite a decline in revenue [25] - The company repurchased approximately $121 million of shares in 2025, reflecting a strong balance sheet with $557 million in cash and equivalents [25] Q&A Session Summary Question: Insights on memory market and capacity expansion - Management indicated that DRAM demand is increasing, driven by AI, but cleanroom space is currently a limiting factor for capacity expansion [34][35] Question: Strong bookings and segment growth - Bookings have matched historical trends, with general mature and power markets being the main contributors, despite a recent uptick in memory [45] Question: Future outlook for power and general mature markets - Management expects slight declines in these markets, but rising utilization rates are seen as a positive sign for future capacity investments [46][47] Question: Demand intensity from China in 2026 - Demand from China is expected to remain durable, with ongoing capacity build-out to meet self-sufficiency goals [71][72] Question: Gross margin expectations for Q1 - The anticipated decline in gross margins is attributed to a higher mix of memory systems and seasonal moderation in CS&I volume [73][74]

Financial Data and Key Metrics Changes - The company reported Q4 2025 revenue of $238 million and non-GAAP earnings per diluted share of $1.49, both exceeding expectations [5][23] - For the full year 2025, GAAP gross margin was 44.9% and non-GAAP gross margin was 45.2%, reflecting a 30 basis point increase year-over-year despite lower revenue [24] - Free cash flow for the full year 2025 was $107 million, indicating strong cash generation capabilities [25] Business Line Data and Key Metrics Changes - Systems revenue in Q4 was $156 million, while CS&I revenue reached a record $82 million, driven by strong demand for upgrades [18] - CS&I revenue grew 14% year-over-year for the full year, supported by strategic initiatives to enhance adoption of upgrades and service contracts [19] - In the memory market, demand improved sequentially for DRAM and HBM applications, with expectations for continued momentum into 2026 [12] Market Data and Key Metrics Changes - Revenue from China decreased to 32% of total revenue in Q4, down from 46% in the prior quarter, as customers digested previous investments [19] - For the full year 2025, revenue from China was 42% of total revenue, while the U.S. accounted for 16% and Korea for 13% [20] - The company anticipates flat to slightly down revenue from China in 2026, as customers continue to build out capacity [72] Company Strategy and Development Direction - The company is focused on integration planning with Veeco, expecting to close the merger in the second half of 2026, which is anticipated to unlock greater value for stakeholders [7][31] - Long-term strategies include capitalizing on secular trends driven by AI and electrification, with expectations for growth in memory and power semiconductor markets [17][31] - The introduction of the Purion H6, a next-generation high current ion implanter, is part of the company's strategy to enhance product offerings [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in long-term demand for silicon carbide applications, particularly in electric vehicles and other sectors [10] - The company expects memory business growth driven by AI-related demand, while power and general mature markets may see slightly lower year-over-year revenue [16][28] - Management highlighted the importance of improving utilization rates among customers as a positive sign for future capacity investments [48] Other Important Information - The company repurchased approximately $121 million of shares in 2025, with $110 million remaining under the share repurchase program [25] - The anticipated tax rate for the full year 2026 is approximately 15% [30] Q&A Session Summary Question: Insights on memory market and capacity expansion - Management noted that DRAM demand is increasing, driven by AI, but clean room space is currently a limiting factor for capacity expansion [34][35] Question: Details on CS&I and silicon carbide conversion - Only a small part of the installed base has transitioned from 150mm to 200mm, indicating significant market potential for upgrades [38] Question: Strong bookings and segment growth - Bookings have matched historical trends, with general mature and power markets being the main contributors, despite a recent bump in memory [46] Question: Revenue outlook for 2026 - Management expects flat to slightly down revenue year-over-year, with memory growth offsetting declines in other segments [47][72] Question: Impact of long-term contracts on order patterns - The company typically operates on short order cycles but receives multi-quarter forecasts from customers, which are generally reliable [89]

Axcelis Technologies (NasdaqGS:ACLS) Q4 2025 Earnings call February 17, 2026 05:00 PM ET Speaker9Good day, ladies and gentlemen, and welcome to the Axcelis Technologies call to discuss the company results for the fourth quarter and full year 2025. My name is Victor, and I'll be your coordinator for today. I'd like to turn the presentation over to your host for today's call, David Ryzhik, Senior Vice President of Investor Relations and Corporate Strategy. Please proceed.Speaker3Thank you, operator. This is D ...

Core Viewpoint - Axcelis Technologies reported strong financial results for Q4 and full year 2025, exceeding expectations, with a focus on growth in the semiconductor equipment market and a pending merger with Veeco Instruments that is expected to enhance their market position [1][2]. Financial Performance - Q4 2025 revenue was $238 million, down from $252 million in Q4 2024, while full year revenue was $839 million, a decrease from $1,018 million in 2024 [1][3]. - GAAP diluted earnings per share (EPS) for Q4 2025 was $1.10, compared to $1.54 in Q4 2024, and for the full year, GAAP EPS was $3.80, down from $6.15 in 2024 [1][3]. - Non-GAAP diluted EPS for Q4 2025 was $1.49, compared to $1.71 in Q4 2024, and for the full year, it was $4.88, down from $6.84 in 2024 [1][3]. Margins and Growth - GAAP gross margin for Q4 2025 was 47.0%, up from 46.0% in Q4 2024, while full year gross margin was 44.9%, slightly up from 44.7% in 2024 [1][3]. - Non-GAAP gross margin for Q4 2025 was 47.3%, compared to 46.3% in Q4 2024, and for the full year, it was 45.2%, up from 44.9% in 2024 [1][3]. - The company achieved double-digit growth in CS&I (Customer Support & Integration) for the full year, reflecting operational discipline and a favorable product mix [1][2]. Cash Flow and Shareholder Returns - Axcelis generated over $100 million in free cash flow for the year and returned more than $120 million to shareholders [1][2]. - The company reported a net cash used in operating activities of $6.6 million for Q4 2025, compared to $12.8 million provided in Q4 2024 [3]. Business Outlook - For Q1 2026, Axcelis expects revenues of approximately $195 million, with GAAP EPS of about $0.38 and non-GAAP EPS of approximately $0.71 [1][4]. - The company remains optimistic about improving demand trends in the Memory market and anticipates continued momentum into 2026 [1][2].