Axcelis(US:ACLS)2025-02-11 14:30Financial Data and Key Metrics Changes - Revenue for Q4 2024 was $252 million, with earnings per diluted share of $1.54, slightly better than expectations due to strong demand in aftermarket CS and I sales [5][19] - Full year 2024 revenue totaled $1.02 billion, consisting of $783 million in systems revenue and $235 million in CS and I revenue [19] - Gross margins for Q4 were 46%, exceeding the outlook of 42.5%, driven by stronger CS and I revenue [21] - Full year gross margins were 44.7%, a 120 basis point increase year over year despite lower revenue volume [23] Business Line Data and Key Metrics Changes - Mature node applications accounted for the majority of sales, particularly in power and general mature segments [6] - Revenue from the power market was 51% of the mix, down from 57% in Q3 2024, while silicon carbide system sales grew approximately 6% year over year [6][7] - Image sensor revenue moderated in Q4 following a large customer order in Q3, with expectations for flattish revenue in Q1 2025 [11] - Memory sales improved sequentially in Q4, particularly in DRAM, with expectations for consistent sales in Q1 2025 [12] Market Data and Key Metrics Changes - China remained the strongest region, accounting for 49% of total shipped system sales, although there was a sequential decline due to lower image sensor sales [20] - System sales to Korea improved to 11% in Q4 from 1% in Q3, mainly due to improved shipments in memory [20] - The company anticipates a decline in revenue from silicon carbide in Q1 2025 as customers undergo a digestion period, but long-term drivers remain intact [8][30] Company Strategy and Development Direction - The company is focused on capturing growth opportunities through product innovation, cost management, and customer engagement on technology roadmaps [31] - Long-term growth drivers include the increasing demand for silicon carbide in power applications and market recovery in memory and general mature segments [17][18] - The company plans to continue organic investments, execute share buybacks, and evaluate inorganic growth opportunities [25] Management's Comments on Operating Environment and Future Outlook - Management expects overall revenue in 2025 to decline year over year, with a slight uptick anticipated in the second half of the year based on backlog and customer discussions [28][36] - The company is monitoring the impact of new U.S. government restrictions on revenue from China, estimating a potential impact of $20 million to $50 million in 2025 [30] - Management remains optimistic about the long-term growth potential in silicon carbide and memory markets despite short-term challenges [17][18] Other Important Information - The company received 22 customer awards in 2024, reflecting a significant increase compared to 2023, highlighting its commitment to customer satisfaction [18] - The company will begin including image sensor revenue as part of its general mature category starting in Q1 2025 to simplify disclosures [27] Q&A Session Summary Question: Factors for a stronger second half in 2025 - Management believes the second half will be stronger based on backlog, customer conversations, and stabilized bookings [34][36] Question: Memory revenue expectations for 2025 - Management expects the majority of memory revenue in 2025 to come from DRAM, with NAND remaining muted due to capacity issues [39][41] Question: Impact of export control on revenue from China - Management revised the estimated impact of export controls to the low end of the previously guided range, based on new information received [44][45] Question: Near-term dynamics and digestion in China - Management noted that digestion in China is not solely due to oversupply but also involves technology ramping and yield optimization [50][52] Question: Silicon carbide revenue and geographic exposure - Management indicated that while silicon carbide revenue is expected to be down in 2025, it remains a robust business with diverse customer engagement [66][68]