AMTECH SYSTEMS INC Q2 FY2025 earnings call

Key Points

• Revenue shortfall in Q2 due to a $4.9 million shipment delay in Thermal Processing Solutions and mature node semiconductor market softness.
• Recorded a $22.9 million impairment charge and $6 million inventory write-off in Semiconductor Fabrication Solutions.
• Advanced packaging equipment bookings strong, exceeding fiscal 2024 total.
• Focus on driving operational efficiency, broadening customer and application base, and expanding reoccurring revenue streams.
• Executed site consolidations and workforce adjustments, anticipating incremental EBITDA savings of $1 million per quarter starting Q4 2025, with total annualized savings of $11 million.

The Thermal Processing Solutions segment had a shipment delay of approximately $4.9 million due to a customer dispute. The Semiconductor Fabrication Solutions segment saw broad softening in demand within the mature node semiconductor market, leading to an impairment charge of $22.9 million and a $6 million inventory write-off. Advanced packaging equipment bookings, particularly for AI applications, were strong, with Q2 bookings exceeding total fiscal 2024 bookings. Net revenue for the second fiscal quarter of 2025 was $15.6 million, a decrease from prior periods due to the mentioned factors.

Forward-Looking Statements

• Expect Q3 2025 revenues in the range of $16.9 million with adjusted EBITDA nominally neutral.
• Strategic optimization efforts to deliver an additional $1 million per quarter in cost reductions starting Q4 2025.
• Adjusted EBITDA breakeven expected to be approximately $16 million in revenue with similar product mix once cost reductions are fully realized.

Risks

• Changes in technologies used by customers and competitors.
• Volatility and demand for products.
• Worldwide political and economic conditions, including trade sanctions.
• Equity and credit market conditions, market acceptance risks.
• Logistics, supply chain, and labor challenges.
• Currency exchange rate impacts (Renminbi vs. USD).

Q: Comment on tariffs and U.S. manufacturing repatriation impact on Amtech.

A: Tariffs had limited impact on Semiconductor Fabrication Solutions as products are mostly U.S.-produced. U.S. manufacturing repatriation could be a long-term opportunity, with potential tailwinds if tariffs ease.

Q: Talk about programs in silicon carbide power semiconductor and diamond wafers.

A: Amtech is a technology leader in CMP consumables and processing. Leveraging CMP foundry service to help customers solve leading-edge problems, with long-term potential for new growth drivers in advanced packaging.

Q: Margin profile of existing backlog.

A: Legacy backlog had low margins; current bookings have margin profiles near historic levels. As volume increases and fixed costs are leveraged, margin accretion expected.

Q: Specific products seeing strong AI demand.

A: Strong demand for reflow equipment used in advanced packaging, primarily in Thermal Processing Solutions.

Q: Revenue from spares and service.

A: Roughly 25% of Thermal Process Solutions segment and primarily consumables parts/service in Semiconductor Fab Solutions, with equipment component small due to low fab utilization in mature node.