Amtech Systems, Inc. Q4 FY2025 earnings call

• Fourth quarter revenue was $19.8 million, above the guidance range of $17 million to $19 million. Adjusted EBITDA was $2.6 million, about 13% of revenue.
• Thermal Processing Solutions saw strength in advanced semiconductor packaging driven by AI infrastructure investments. Semiconductor Fabrication Solutions, despite weak mature node market, slightly exceeded expectations.
• Over the past 18 months, optimized operating model with cost reduction initiatives, including elimination of unprofitable products and outsourcing some products, resulting in $13 million of annualized savings. Consolidated manufacturing footprint from 7 sites to 4 sites.
• Board of Directors authorized a share repurchase program of up to $5 million of common stock for a 1-year period.

For the Thermal Processing Solutions segment, in the fourth quarter, revenue from equipment used for AI infrastructure accounted for over 30% of its revenue versus 25% in the prior quarter. It generated about 60% of revenue from capital equipment and 40% from reoccurring revenue, including consumables, parts and services. For the Semiconductor Fabrication Solutions segment, demand for front-end equipment and consumables tied to mature node semiconductor applications in industrial and automotive markets remained weak, but its performance slightly exceeded expectations in the quarter.

• For the first quarter ending December 31, 2025, expects revenue in the range of $18 million to $20 million.
• Anticipates adjusted EBITDA margins in the high single digits due to AI-related equipment sales and structural/operational cost reductions.
• Remains focused on driving further efficiency gains and cost optimization across all operations.

• Changes in technologies used by customers and competitors.
• Change in volatility and demand for products.
• Effect of changing worldwide political and economic conditions, including trade sanctions.
• Effect of overall market conditions, including equity and credit markets and market acceptance risks.
• Ongoing logistics, supply chain and labor matters.
• Changes in the value of foreign currencies in relation to the United States dollar.

Q: Can you talk a little bit about your visibility with AI customers?

A: Broadly seeing strong demand. Most equipment in pipeline in existing facilities, some new facilities being built. Visibility and backlog for back-end equipment is such that for most part, can book and ship in same quarter, with some orders with delivery in future quarters.

Q: Can you frame out for us what the sublet savings could be from the underutilized facilities?

A: Combined, probably looking at $700,000 to $1 million in annualized savings associated with subletting underutilized facilities in both segments.

Q: Can you talk a little bit about the opportunity in the service area?

A: Focused on high-value niche opportunities in medical and defense areas. Leveraging foundry service for contract development and qualifying products with OEMs for reoccurring revenue stream. Takes time to develop but has nice margin profile and sticky business.

Q: Was that for both the Thermal Processing and the Semi Fab sales? Or was it some differences there?

A: Overall, majority of Semi Fabrication Solutions are consumables parts service. For Thermal Processing Solutions segment, roughly 80% equipment, 20% reoccurring side.

Q: What does it look like in terms of the margin profile of your existing backlog?

A: Basically cleaned up most of it, with majority of backlog being of high quality now.

Q: Do you guys expect any effect from the ramp-up of Blackwell versus Hopper and also kind of the ramp-up of these custom ASICs like TPUs, et cetera?

A: From perspective, using similar processes and equipment capabilities, to extent ramp is beneficial, but no significant technology differences impactful at this stage if mix shifts.

Q: Any update on any new products for '26 and new initiatives?

A: On Thermal Process Solutions side, focusing on enabling continuous processing for higher density devices with higher ASP. On SFS side, investing in consumables, particularly chemicals business leveraging foundry and R&D capabilities. R&D efforts are line of sight with customer engagement to convert to revenue quickly.

Q: Has there been any change in the competitive landscape in thermal area?

A: Nothing visible to be aware of in the thermal area