VEECO INSTRUMENTS INC Q1 FY2025 earnings call

• Veeco delivered solid top and bottom line results with revenue $167 million, non-GAAP operating income $24 million, and non-GAAP EPS of $0.37. • Semiconductor business had strong performance with growth in advanced packaging and laser annealing systems. • Received Intel's 2025 EPIC supplier award. • Secured laser annealing system orders from leading-edge logic customers and high-bandwidth memory customers. • Two leading logic customers designated Veeco's laser spike annealing platform as production-tool-of-record. • Announced IDM qualified wet processing platform for new applications and initial orders. • Addressed impact of tariffs causing customer delays and cost increases, but remain confident in long-term strategy. • Updates on technologies: market leader in laser annealing, ion beam deposition for EUV mask blanks, and growth in advanced packaging due to AI and high-performance computing.

Revenue for the quarter was $167 million. The Semiconductor business had another strong quarter, growing 10% sequentially and 3% year-over-year, representing 74% of total revenue. The Compound Semiconductor market had revenue of $14 million, totaling 9% of revenue. Data storage revenue was $7 million, totaling 4% of revenue. Scientific & Other revenue declined to $22 million, totaling 13% of revenue. Quarterly revenue by region: revenue from China customers was flat from Q4, with the percentage increasing to 42%; Asia-Pacific region excluding China was 36%, U.S. was 15%, EMEA was 7%.

• Q2 revenue is expected between $135 million and $165 million, midpoint assumes ~$15 million in shipments to China customers will be delayed. • Gross margin expected between 40% to 42%. • OpEx expected between $47 million and $48 million. • Net income expected between $7 million and $20 million. • Diluted EPS expected between $0.12 and $0.32 on approximately 60 million shares.

• Recently enacted tariffs causing some customers to delay shipments, impacting future end market demand. • Tariffs resulting in increase in certain costs from imported materials and domestic suppliers. • Uncertainty in macroeconomic environment from global trade uncertainty.

Q: Could you elaborate more on Advanced Packaging orders for lithography tools?

A: Veeco had $35 million in litho orders from IDM and OSATs recently, driven by AI and high performance computing, with Advanced Packaging business expected to double in 2025.

Q: Impact from China and mitigation strategies?

A: Some customers delay shipments, ~$15 million impact on Q2 guide; principally ship product from U.S., customers seeking tariff exemptions.

Q: Which parts of semi business will grow in 2025?

A: Advanced business tied to high bandwidth memory, gate-all-around, and advanced packaging, expected to offset headwinds in China.

Q: Wins in process tool of records?

A: Incremental business with existing customers in advanced logic gate-all-around, variable timing for HVM, likely in 2026 timeframe.

Q: Guidance midpoint down $15M and China related?

A: Q2 guide midpoint was adjusted due to China customers delaying shipments until tariffs resolved, previously guided Q2 similar to Q1 but now impacted by China delays.

Q: GaN Power process tool of record?

A: Continuing to work with customer, meeting performance needs, pilot in 2026, high volume manufacturing configured machine planned for ramp through 2027 and beyond.

Q: Second half revenue outlook?

A: Uncertain due to macro uncertainty, but strength in gate-all-around, advanced packaging, and high bandwidth memory provides opportunity, data storage system revenue not expected.

Q: Indirect tariff impacts?

A: Impact on demand outside China not seen, but Veeco as U.S. manufacturer imports parts subject to tariffs, leading to cost increases, mitigating by using logistics outside U.S. for parts procurement.