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Veeco(VECO) - 2024 Q2 - Earnings Call Transcript
VECOVeeco(VECO)2024-08-07 02:25
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Financial Data and Key Metrics Changes - Revenue for Q2 2024 totaled 176million,up9176 million, up 9% year-over-year and 1% sequentially, in line with guidance [4][11] - Non-GAAP operating income was 28 million, with a non-GAAP EPS of 0.42[4][12]−Grossmarginwasapproximately440.42 [4][12] - Gross margin was approximately 44%, at the high end of guidance, while operating expenses were 49 million, above guidance due to R&D investments [12] - Net income was approximately 25million,withadilutedsharecountincreasingbyabouttwomillionsharesfromQ1[12]BusinessLineDataandKeyMetricsChanges−Semiconductorbusinessaccountedfor6325 million, with a diluted share count increasing by about two million shares from Q1 [12] Business Line Data and Key Metrics Changes - Semiconductor business accounted for 63% of revenue, with record laser annealing revenue, although it declined 9% from Q1 [11] - Compound semiconductor revenue was 18 million, making up 10% of total revenue, while data storage revenue increased to 34million,comprising1934 million, comprising 19% [11] - Scientific and other revenue made up 8% of total revenue [11] Market Data and Key Metrics Changes - Revenue from China was 37%, consistent with the prior quarter, driven by semiconductor customer sales [11] - Revenue from Asia Pacific (excluding China) was 25%, the United States contributed 24%, and EMEA accounted for 14% [11] Company Strategy and Development Direction - The company is focused on expanding its served available market (SAM) in laser annealing from 600 million to over 1billion,drivenbynewapplications[6]−Investmentsincoretechnologiesareaimedatsupportinglong−termgrowthandaddressinghigh−valueproblemsforTier1customers[6]−Thecompanyisalsotargetinggrowthinionbeamdepositionforfront−endsemiconductorapplications,withaSAMgrowthtargetof1 billion, driven by new applications [6] - Investments in core technologies are aimed at supporting long-term growth and addressing high-value problems for Tier 1 customers [6] - The company is also targeting growth in ion beam deposition for front-end semiconductor applications, with a SAM growth target of 350 million [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the semiconductor market, noting strong demand for new annealing capabilities due to scaling challenges [7][10] - The company anticipates continued growth in AI chip manufacturing, with several technologies expected to benefit from this trend [10] - Management tightened the 2024 revenue guidance to 690to690 to 730 million, reflecting a slight increase in semiconductor expectations but lower contributions from the compound semiconductor space [14] Other Important Information - Cash and short-term investments at the end of the quarter were 305million,withaslightincreaseinaccountsreceivableandinventory[12]−ThecompanyexpectsQ3revenuebetween305 million, with a slight increase in accounts receivable and inventory [12] - The company expects Q3 revenue between 170 million and 190million,withgrossmarginbetween43190 million, with gross margin between 43% and 44% [13] Q&A Session Summary Question: High-level growth opportunities and evaluation systems - Management noted a high success rate with evaluation systems and plans to increase the number of evaluations in 2025 while managing resources effectively [15][17] Question: Follow-on business from DRAM customers - Management confirmed ongoing orders from a leading DRAM customer, with revenue typically coming in chunks of 25 million to $35 million over 12 to 18 months [20][23] Question: Data storage revenue expectations - Management indicated that data storage revenue is expected to be up about 5% to 10% year-over-year, with some quarterly lumpiness anticipated [25] Question: Impact of increased CapEx from DRAM customers - Management highlighted exposure to DRAM growth through existing customers and ongoing evaluations with other players in the market [26][27] Question: Expectations for China market - Management expects China to remain about a third of the business, with strong activity from customers despite a decrease in customer deposits [34][35] Question: Q4 expectations and seasonal trends - Management indicated that there are no significant changes in expectations for Q4, with revenue guidance remaining consistent [36][37] Question: Compound semiconductor progress - Management reported progress in silicon carbide and GaN evaluations, with plans to place additional systems in early 2025 [40]