Veeco(US:VECO)2024-11-07 01:38Financial Data and Key Metrics Changes - Revenue for Q3 2024 totaled $185 million, up 4% year-over-year and 5% sequentially, exceeding guidance [6][23] - Non-GAAP operating income was $31 million, with non-GAAP EPS at $0.46 [6][25] - Gross margin was approximately 44%, consistent with guidance [25] - Cash and short-term investments increased to $321 million, a sequential rise of $16 million [26] Business Line Data and Key Metrics Changes - Semiconductor business achieved record revenue, accounting for 67% of total revenue, with a 26% year-over-year increase and 13% sequentially [6][23] - Compound semiconductor revenue declined to $16 million, representing 8% of total revenue [23] - Data storage revenue slightly decreased to $33 million, making up 18% of total revenue [23] - Scientific and other segments contributed 7% to total revenue [23] Market Data and Key Metrics Changes - Revenue from Asia Pacific (excluding China) was 33%, while the U.S. accounted for 32% [24] - Revenue from China decreased to 30% due to a decline in semiconductor sales, with expectations to normalize around 33% for the full year [24] Company Strategy and Development Direction - The company is focused on advanced packaging and wet processing systems, which are key growth drivers for the semiconductor business in 2024 and beyond [7][14] - Investments in core technologies are aimed at enabling industry inflections in advanced logic and memory, with expectations to outperform wafer fab equipment (WFE) growth for four consecutive years [15][36] - The company anticipates expanding its serviceable addressable market (SAM) in laser annealing and ion beam deposition, targeting over $1 billion and $350 million respectively [16][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in long-term growth despite near-term headwinds in the data storage business, projecting a reduction in revenue of $60 million to $70 million in 2025 [30][33] - The semiconductor market is expected to grow significantly, driven by AI and high-performance computing, with the company seeing opportunities for revenue growth in 2025 [30][44] - The company is cautious about the Chinese market, expecting a decline in revenue as customers digest capacity, but anticipates a return to normalized rates by late 2025 or 2026 [40][52] Other Important Information - The company has received over $50 million in orders for wet processing systems, primarily driven by AI applications [7][48] - The evaluation program is crucial for penetrating new opportunities in the front-end semiconductor market, with several systems currently under evaluation with Tier-1 customers [20][21] Q&A Session Summary Question: Impact of ASML's forecast on the company - Management indicated that their outlook aligns with ASML's, expecting a similar range of system sales and potential new application wins for revenue growth [38][39] Question: Factors driving the decline in Chinese revenue - The decline is primarily due to moderation in recent customer engagements, with expectations for a return to normalized rates in 2025 [40][41] Question: Guidance for different business segments in 2025 - Management provided qualitative insights, indicating growth in the semiconductor business driven by AI, while expecting a reduction in data storage revenue [42][44] Question: Breakdown of the $50 million orders in wet processing - The orders are primarily from leading foundries and high-bandwidth memory manufacturers, with strong growth anticipated in 2025 [48][49] Question: Expectations for evaluation systems contributing to revenue - Management is optimistic about follow-on orders from evaluation systems in late 2025 and 2026, with several evaluations ongoing [53][56]