Veeco(VECO) - 2021 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenue for Q3 2021 was $150 million, representing a 34% year-on-year increase and a 3% sequential increase [23] - Non-GAAP gross margin was 42.6%, up 1 percentage point from the previous quarter [26] - Non-GAAP operating income was$ 24.3 million, a 14% sequential increase and a 72% increase year-on-year [26] - Non-GAAP EPS was $0.40 on a diluted share count of 51.7 million shares [26] - Year-to-date revenue growth was 37%, driven by a 67% increase in semiconductor sales [9] Business Line Data and Key Metrics Changes - Semiconductor revenue reached a record$ 76 million, accounting for 51% of total revenue, with a 42% sequential increase and a 127% year-on-year increase [23] - Data storage revenue was $39 million, making up 26% of revenue, reflecting a 6% year-on-year increase but a 25% sequential decline [24] - Compound semiconductor revenue was relatively flat at$ 23 million, representing 15% of revenue [24] - Scientific and other revenue was $11 million, accounting for 8% of total revenue [24] Market Data and Key Metrics Changes - The Asia-Pacific region (excluding China) accounted for 40% of total sales, driven by ion beam and laser annealing systems [25] - The United States contributed 33% of revenue, primarily from ion beam systems shipped to data storage customers [25] - China represented 18% of revenue, mainly from semiconductor systems [25] - EMEA accounted for 9% of total revenue [25] Company Strategy and Development Direction - The company is focused on transforming to leverage global megatrends, with a commitment to sustainability and improving operational transparency [10] - The semiconductor market is expected to grow at a CAGR of approximately 23%, significantly outpacing long-term wafer fab equipment growth [11] - Investments in evaluation systems and service infrastructure are aimed at supporting growth in 2022 and beyond [20] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges from global supply chain disruptions but emphasized proactive measures to mitigate impacts [19] - The company expects to achieve over 25% revenue growth in 2021 and is on track to meet long-term financial targets [20] - For Q4, revenue is expected to be between$ 140 million and $160 million, with full-year revenue projected at approximately$ 580 million, a 28% year-on-year increase [30][32] Other Important Information - The company plans to adopt a new accounting standard for convertible debt in Q1 2022, which will affect non-GAAP EPS calculations [33] - The company is experiencing increased logistics costs, which had a 1 percentage point impact on gross margin in Q3 [85] Q&A Session Summary Question: Update on tools shipped and new wins - The company has shipped nine out of ten planned tools for the year, with positive feedback from customers on the tools deployed [38][41] Question: Semiconductor business performance - Record revenues were driven by all three segments: laser annealing, EUV tools, and advanced packaging [43][45] Question: Advanced packaging market applications - The market is broadening beyond mobile applications to include heterogeneous integration opportunities [50] Question: Supply chain management - The company has successfully mitigated supply chain challenges through close supplier collaboration and proactive inventory management [52][53] Question: Advanced packaging market size - The advanced packaging market is expected to grow over 20% in 2022, with the company anticipating an increase in market share [59] Question: Data storage market outlook - Revenue for data storage is expected to decline in 2022, but long-term prospects remain strong due to data proliferation [69]