Axcelis Technologies, Inc. Q4 FY2025 earnings call

• Russell Low mentioned solid fourth quarter results with revenue and non-GAAP earnings per diluted share exceeding outlook, driven by stronger CS&I aftermarket revenue and improved bookings. Update on pending merger with Veeco, progress made towards approvals. - Jamie Coogan provided details on fourth quarter and full year results, including revenue breakdown by region, GAAP and non-GAAP financials, cash flow, and share repurchases. Outlook for first quarter and 2026, expecting memory business growth, power and general mature markets slightly lower revenue but long-term potential, and advanced logic relatively similar revenue levels.

Fourth quarter revenue was $238 million. Systems revenue was $156 million and CS&I revenue was $82 million, a quarterly record. For the full year, CS&I revenue grew 14% year-over-year led by upgrades and services. In end markets: Power business - shipments to silicon carbide moderated, select Chinese customers expanding silicon carbide device capacity, others focused on next-gen tech; other power market segment ship system revenue moderated due to muted silicon IGBT demand. General mature - revenue improved sequentially with improved implant tool utilization rates. Advanced logic - generated revenue on follow-on order and worked on next-gen tech needs. Memory market - DRAM and HBM demand improved, secured order from North American memory manufacturer, NAND demand muted near term but pricing improvements encouraging.

• Expect first quarter 2026 revenue of approximately $195 million, non-GAAP gross margins of approx. 41%, non-GAAP operating expenses of approx. $59 million, adjusted EBITDA of approx. $26 million, and non-GAAP diluted earnings per share of approx. $0.71. - Anticipate full year 2026 revenue to be relatively flat compared to 2025, second half weighted, with memory growth offsetting power and general mature decline. Full year 2026 non-GAAP gross margins estimated low to mid-40%, modest year-over-year tariff impact less than 100 basis points, tax rate approx. 15%.

Q: Congrats on Q4. In memory market, color on new customer high current order and ramping up.

A: Russell Low said memory demand up due to AI, cleanroom space limited, large DRAM manufacturers plan new fabs, momentum to continue into 2027.

Q: On CS&I and silicon carbide, percentage of 150 mm to 200 mm conversion.

A: Russell Low said only very small part of installed base has gone to 200 mm, still transition phase, leaders outside China trying to get there first, ample opportunity for upgrades.

Q: Regarding strong bookings, which segments driving growth.

A: Russell Low said bookings match prior, memory has bump up but typically books and ships same quarter, general mature and power main parts of bookings.

Q: Outlook for 2026 flat revenue, strength in DRAM, weakness in general mature and power.

A: James Coogan said general mature slightly down with improving utilization rates, power slightly down, encouraging signs in utilization but not yet order rate pickup.

Q: Memory, capital intensity for 100,000 wafer starts.

A: Russell Low said for DRAM, about $150 million to $200 million worth of capital for implants, mix of high energy, high current, medium current.

Q: China mature foundry, utilization and demand.

A: Russell Low said utilization rates vary by customer, high utilization drives CapEx, China wanting self-sufficiency, still high utilization and demand for growth.

Q: Q1 guide $195 million, puts and takes.

A: James Coogan said combo of some pull-in in CS&I and pushout of systems.

Q: 2026 outlook second half weighted, what's giving visibility.

A: Russell Low said incremental memory volume in back half, systems volume weighted to back half, CS&I uptick with upgrades.

Q: Memory growth in 2026 and 2027.

A: James Coogan said not giving specific number yet, 2026 growth healthy, 2027 expected acceleration.

Q: High current systems demand, reason.

A: Russell Low said memory business turning on, broader base in memory, general mature and power, testament to tool value