AXCELIS TECHNOLOGIES INC Q1 FY2025 earnings call

• Revenue of $193 million and earnings per diluted share of $0.88 exceeded outlook, with strong gross margins and disciplined cost control. Non-GAAP earnings per share were $1.04.
• Bookings grew sequentially to $110 million, with a book-to-bill of 0.8x, the highest since Q4 2023.
• Addressed global tariff situation, with plans in place to mitigate impact, including diversified supply chain and global manufacturing footprint.
• Discussed segment trends: Power shipments of silicon carbide applications declined but long-term drivers remain; silicon IGBTs muted due to auto market softness; general mature segment sees pockets of increased tool utilization; advanced logic engages with customers on evaluation units; memory saw sequential improvement in DRAM sales but NAND remains muted.
• Introduced non-GAAP measures, with GAAP gross margins at 46.1% and non-GAAP at 46.4%, driven by lower warranty and installation costs, favorable mix, and cost controls.

In the first quarter, revenue was $193 million. Systems revenue was $138 million and CS&I was $55 million, both slightly above expectations. Sales to mature node applications, particularly power and general mature, were the lion's share. China's share of shift system sales declined sequentially to 37% in the quarter, but was expected to fluctuate quarter-to-quarter. Ship system sales to the U.S. grew to 23% and Korea improved to 20% due to DRAM shipments. Bookings were $110 million, a sequential increase, resulting in a book-to-bill of 0.8x.

• Expect Q2 revenue of approximately $185 million. Non-GAAP gross margins expected to be ~42% due to mix and volume. Full-year non-GAAP operating expenses expected to be relatively flat. Adjusted EBITDA in Q2 expected to be ~$29 million. Non-GAAP diluted earnings per share in Q2 estimated at ~$0.73.
• Anticipate revenue in second half to remain relatively consistent with first half levels, with gross margins in second half similar to Q2 levels inclusive of tariff impact.

• Dynamic tariff and macroeconomic environment poses uncertainty. Tariffs could impact demand and margins, though Axcelis has plans to mitigate direct impact.

Q: About CS&I's momentum into the back half of the year and order intensity 2Q to date?

A: CS&I has opportunity for incremental upgrade, relatively sticky, mix is driver of margin. Bookings up, but premature to call inflection point, with bookings from general mature and power.

Q: Granularity of margin 600 basis points and 400 basis point decline?

A: Mix was largest contributor, mix can shift quickly within quarter, deferred revenue also impacts mix. Second quarter not expected to have same positive mix benefit, but cost actions continue to benefit margins.

Q: Impact of tariffs on margin and U.S. revenue strength?

A: Tariff impact relatively small, upside also small. U.S. revenue strength due to general mature, power (silicon carbide), and other business, fluctuates with customer delivery schedules.

Q: Backlog composition and Japan presence?

A: Backlog predominantly general mature and power. Japan has progress with tools in silicon power, silicon carbide power, expecting repeat orders as utilization rates move up.

Q: Book-to-bill, memory shipments, and OpEx guidance?

A: Book-to-bill mirrors revenue splits, memory shipments from DRAM, NAND muted. OpEx flat due to investment in R&D, capital allocation for organic growth, and preparing for market recovery.