ACM Research, Inc. Q2 FY2025 earnings call

• Business results: Second quarter of 2025 delivered revenue of $215 million, up 25% sequential and 6% year-over-year; shipments $206 million, up 32% sequential, up 2% year-over-year; gross margin 48.7%. - New product developments: Announced major upgrade to Ultra C wb wet bench cleaning tool with proprietary nitrogen bubbling technology, received repeat orders; Tahoe, high-temperature SPM tool and panel-level packaging tool also in progress. - Production facilities: Lingang production and R&D center nearly completed, with 2 production buildings; Oregon facility upgrade on customer demo R&D lab underway, targeting middle of 2026 for commercial operations. - China market: Increased long-term revenue target for Mainland China to $2.5 billion based on updated China WFE market size and market share targets for product groups.

For the second quarter of 2025, revenue from single-wafer cleaning, Tahoe and semi-critical cleaning tools grew 1% and represented 72% of total revenue. Revenue from ECP, furnace and other technology grew 23% and represented 22% of total revenue. Revenue from advanced packaging, which excludes ECP but including service and spell was up 20% and represent 6% of revenue. Second quarter revenue was $215 million, up 25% sequential and 6% year-over-year. Shipments were $206 million, up 32% sequential, up 2% year-over-year. Gross margin was 48.7%, exceeding the target range of 42% to 48%.

• Maintained 2025 revenue outlook in the range of $850 million to $950 million, implying 15% year-over-year growth at midpoint. - Raised long-term revenue target for Mainland China to $2.5 billion and global long-term revenue target to $4 billion. - ACM Shanghai received approval for follow-on offering to raise up to USD 620 million. - Expected to spend about $70 million in capital expenditures in 2025.

• Supply chain risks due to potential export controls; company is taking measures like multi-source of components, seeking new components and suppliers in other countries and local suppliers in Mainland China to mitigate risks.

Q: First question on shipment, asked about shipment growth and comparison to previous expectations and China WFE upside.

A: Hui Wang responded that 2024 shipment was strong, Q3 and Q4 expected to be strong, and company is using multi-source for components.

Q: Mark Miller asked about long-term borrowings.

A: Mark A. McKechnie and Lisa Feng responded that long-term borrowing was stepped up, with consideration of capital from China capital raise and using lower interest rate borrowing.

Q: Suji Desilva asked about customer traction outside China.

A: Hui Wang and Mark A. McKechnie responded that company is working with key customers in US and Korea, with new tools going to US in Q3 and R&D center in Oregon active.

Q: Edison Lee asked about second quarter revenue growth being below full-year guidance and 3Q growth drivers.

A: Hui Wang responded that revenue can be lumpy, Q3 driven by cleaning and copper plating, and both memory and logic markets strong in China.

Q: Matthew Cook asked about difference in results between ACM Shanghai and ACMR.

A: Mark A. McKechnie responded that difference is due to revenue recognition under different accounting standards, with China GAAP recognizing upon installation and US GAAP under 606.

Q: Jimmy Hang asked about 2026 visibility, China WFE market for '25 and '26, and progress in Taiwan and Southeast Asia.

A: Hui Wang and Mark A. McKechnie responded that 2026 guidance not yet given, China WFE market expected to be $40 billion long-term, and panel level packaging tool making progress in Taiwan.