Veeco Instruments Inc. Q2 FY2025 earnings call

• Veeco delivered strong financials: revenue reached $166 million, non-GAAP operating income was $23 million, and non-GAAP EPS was $0.36. • The semiconductor business was robust, with advanced packaging systems seeing record revenue due to growing demand from AI. Ion beam deposition systems for EUV mask blanks and laser spike annealing systems for leading customers were also highlighted. • Veeco is a market leader in laser annealing and EUV mask blank deposition. The next-generation nanosecond annealing system and IVD300 system are being evaluated by customers. • Advanced packaging wet processing systems are production tools of record, and advanced packaging lithography is expected to drive growth in2025. • Balance sheet highlights: cash and short-term investments were $355 million; convertible senior notes were retired; the revolving credit facility was amended to $250 million.

Revenue totaled $166 million. The semiconductor business was a significant segment, representing 75% of total revenue, with strong performance including record revenue for advanced packaging systems driven by AI demand. Compound semiconductor revenue was $14 million, accounting for9% of total revenue. Data storage revenue was $12 million (7% of total), and scientific and other revenue was $16 million (9% of total). Regionally, revenue from Asia Pacific excluding China was59%, China was17%, the United States was13%, and EMEA was11%.

• Q3 revenue is expected to be between $150 million and $170 million. • Gross margin is projected to be between40% to42%, assuming a100 basis point impact from tariffs. • OpEx is expected to be between $48 million and $49 million; net income is expected to be between $12 million and $21 million; diluted EPS is expected to be between $0.20 and $0.35 on approximately60 million shares. • Semiconductor market has growth potential in AI and high-performance computing; compound semiconductor expected to decline in2025 but grow in2026; data storage service revenue has increased; scientific market is strong in quantum computing.

• Global trade dynamics pose risks. - Tariffs are impacting costs from imported materials, with an approximately100 basis point impact in Q2 and expected similar impact in Q3. Veeco is working with supply chain partners to mitigate these impacts.

Q: Thomas O'Malley asked about China shipments and geographic exposure.

A: Delayed shipments due to tariffs at the start of the quarter were rescheduled during Q2 as tariffs were reduced. China revenue was expected to be down in Q2 compared to Q1 and came in as expected; China revenue is expected to be ~20% of the second half of the year.

Q: Rich Schafer inquired about U.S. IDM caution and GaN power evaluation.

A: The IDM pivot is not impacting Veeco's short or midterm business; they continue to partner with the IDM. The GaN on silicon evaluation system is progressing well, with pilot line business expected to start in '26.

Q: Charles Shi asked about GaN competitive dynamics and China commentary.

A: Veeco has differentiated in MOCVD product lines with better productivity and cost of ownership. China business is ongoing but not at the prior year's pace; China revenue is expected to be ~20% of the second half of the year.

Q: Mark Miller asked about tariffs impacting components suppliers.

A: Veeco has seen tariffs on imports from Europe and Southeast Asia causing a ~100 basis point impact in Q2, and expects a similar impact in Q3; they are working with suppliers to mitigate impacts from tariff increases.

Q: Gus Richard asked about hot technologies and data storage outlook.A: AI, high-performance computing, and advanced packaging are driving activity. In data storage,service revenue has increased, and there are positive signs of future orders from customers.