Axcelis Technologies, Inc. Q3 FY2025 earnings call

• Q3 results: Revenue $214M, non-GAAP EPS $1.21, both exceeding outlook. Record CS&I revenue and better-than-expected system revenue. • Merger with Veeco: Expected to position combined company as a leader in semiconductor equipment, with cross-sell synergy, market complementarity, and enhanced aftermarket services. • Market trends: In Power, Chinese Silicon Carbide customers adding capacity vs non-Chinese doing node transitions; product announcements like Purion Power Plus series and GSD Ovation ES. In Memory, expected sequential increase in Q4. In General Mature, seeing some improvement in utilization rates but still challenging. • CS&I: Benefiting from focused aftermarket strategy, with 9% Y/Y growth in first 9 months of 2025 despite moderated capital equipment investments.

In the third quarter, Axcelis generated revenue of $214 million. Systems revenue was $144 million, and CS&I revenue reached a record $70 million. By market segment: In Power, Silicon Carbide revenue is expected to be down sequentially in Q4; other Power segment system revenue grew sequentially. General Mature revenue declined sequentially. Advanced Logic had revenue from a previously booked system. Memory revenue was muted in Q3 but expected to increase in Q4. Revenue contribution: Systems and CS&I are key segments, with CS&I at a record $70 million contributing significantly.

• Fourth quarter revenue expected ~$215 million. • Non-GAAP gross margins expected ~43% in Q4, driven by more favorable mix. • Non-GAAP operating expenses expected ~$56 million in Q4. • Adjusted EBITDA in Q4 expected ~$41 million. • Non-GAAP diluted EPS in Q4 estimated ~$1.12. • First quarter 2026 revenues expected to be relatively similar to Q4 2025 levels.

• Tariff impacts: Need to manage global manufacturing footprint to mitigate tariff-related costs, with potential impact in 2026 as tariff costs move into P&L. • Geopolitical factors: China demand depends on end demand environment and chip self-sufficiency targets, with geopolitics potentially affecting business. • Cyclical nature: Markets are cyclical, and actual results may differ from forward-looking statements due to inherent business risks described in SEC filings.

Q: Could you describe the dynamics in other power categories and tariff impacts?

A: Russell Low said power overall in H2 2025 better than H1, Chinese Silicon Carbide customers adding capacity vs non-Chinese doing node transitions; non-silicon carbide power products are differentiated. James Coogan said managing tariff environment, with potential more impact in 2026 as tariff costs move into P&L.

Q: How to think about China demand in 2026 and memory market?

A: Russell Low said too early to say much about 2026 China demand, depends on end demand and chip self-sufficiency; memory expected to improve, with DRAM and HBM seeing demand, NAND still quiet.

Q: Memory capacity cycle and General Mature recovery?

A: Russell Low said for 100,000 wafer starts, ~45-55 implanters needed; General Mature driven by macro climate, still mixed with pockets of high utilization but some excess capacity.

Q: CS&I revenue and bookings?

A: James Coogan said CS&I saw increased consumables and service revenue, bookings expected to improve in Q4 across customers, memory typically builds to forecast.

Q: Silicon Carbide in EVs and beyond?

A: Russell Low said Silicon Carbide demand remains healthy, penetration in EVs and hybrids increasing, with new applications like AC compressor in cars; James Coogan said design cycles for autos are multiyear, more penetration room in auto market.

Q: Bookings, backlog, and China revenue?

A: James Coogan said Power General Mature softer in Q3 bookings, full year bookings lower than high days but Q4 expected higher; Russell Low said backlog at $485 million, China revenue expected down in Q4 as per expectations.

Q: Gross margin and Silicon Carbide adoption outside EVs?

A: James Coogan said gross margin impacted by systems mix and product mix, some systems pulled into Q3 from Q4; Russell Low said Silicon Carbide adoption in other end markets like data centers and grid technologies expected to contribute more significantly.