Veeco Instruments Inc. Q4 FY2025 earnings call

Ricoh executed well in 2025, with growth in semiconductor business, rapid expansion in order activity for compound semiconductor and data storage customers. Announced an all-stock merger agreement with Excellus Technologies in October 2025. New products gaining traction due to AI and high-performance computing demand. Semiconductor business revenue record in 2025 driven by laser annealing, wet processing, ion beam EUV technology. Advanced packaging business doubled in 2025. Compound semiconductor new products gaining traction with orders for Propel 300-millimeter Ganon silicon system. Data storage market saw increased orders in Q3 and Q4 2025. Continued investment in next-generation technologies. Merger with Excellus approved by shareholders, regulatory approvals secured in several jurisdictions, anticipation of completing transaction in second half of 2026.

In 2025, the semiconductor business reached a record revenue, accounting for 72% of total revenue for the full year. Fourth quarter semiconductor revenue was 67% of total revenue. Compound semiconductor revenue in 2025 was $60 million, representing 9% of revenue; fourth quarter compound semiconductor revenue was $20 million, 12% of revenue. Data storage revenue in 2025 was $39 million, 6% of revenue; fourth quarter data storage revenue was $10 million, 6% of revenue. Scientific and other revenue in 2025 was $89 million, 13% of revenue; fourth quarter scientific and other revenue was $24 million, 15% of revenue. The order backlog ended the year at $555 million, a 35% increase from the prior year.

Q1 2026 revenue forecasted between $150 and $170 million, gross margin between 37 and 38%, OPEX between $48 and $50 million, net income between $9 and $15 million, diluted EPS between 14 and 24 cents. Full-year 2026 revenue forecast between $740 and $800 million, gross margin between 41 and 43%, OPEX between $205 and $220 million, net income between $94 and $115 million, diluted EPS between $1.50 and $1.85. Semiconductor market expected growth driven by AI and high-performance computing, compound semiconductor business growth weighted in second half, data storage business expected to double in 2026.

Tariff headwind, running about 100 basis points of gross margin headwind in second half of 2025, and slightly higher tariff regime baked into 2026 forecast.

Q: For the outlook for 2026, what's the expected growth in semi-business, compound semi-business, and data storage business?

A: 2026 revenue guide is $740 to $800 million, up 16% midpoint. Semiconductor expected to grow ~15%, compound semiconductor to be up about a third to ~$80 million, data storage to double to ~$80 million.

Q: On the Propel tool, what's the revenue production outlook in 2026 and 2027?

A: Received a pilot line order for shipment in 2026, potentially more orders in second half of 2026 for 2027 shipment.

Q: About gross margins, any tariff headwind factored in?

A: Tariff regime running about 100 basis points of gross margin headwind in second half of 2025, and slightly higher tariff regime in 2026 forecast.