Axcelis Technologies Q1 2025 Earnings Call Transcript

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May 6, 2025
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Operator

Good day, ladies and gentlemen, and welcome to the Axcelis Technologies call to discuss the company's results for the first quarter twenty twenty five. My name is Sean Otmer, and I will be your coordinator for today. I would now like to turn the presentation over to your host for today's call, David Ryzhik, senior vice president of investor relations and corporate strategy. Please proceed.

David Ryzhik
David Ryzhik
Senior Vice President of Investor Relations and Corporate Strategy at Axcelis

Thank you, operator. This is David Ryzhik, Senior Vice President of Investor Relations and Corporate Strategy. And with me today is Russell Lowe, President and CEO and Jamie Koogan, Executive Vice President and CFO. If you have not seen a copy of our press release issued earlier today, it is available on our website. In addition, we have prepared slides accompanying today's call and you can find those on our website as well.

David Ryzhik
David Ryzhik
Senior Vice President of Investor Relations and Corporate Strategy at Axcelis

Playback service will also be available on our website as described in our press release. Please note that comments made today about our expectations for future revenues, profits and other results are forward looking statements under the SEC's Safe Harbor provision. These forward looking statements are based on management's current expectations and are subject to the risks inherent in our business. These risks are described in detail in our Form 10 ks annual report and other SEC filings, which we urge you to review. Our actual results may differ materially from our current expectations.

David Ryzhik
David Ryzhik
Senior Vice President of Investor Relations and Corporate Strategy at Axcelis

We do not assume any obligation to update these forward looking statements. As we mentioned on our previous earnings call, we have decided to add non GAAP measures to our first quarter results and those going forward. As a result, during this call, we will be discussing various non GAAP financial measures. Please refer to our press release and accompanying materials for information regarding our non GAAP financial results and a reconciliation to our GAAP measures. Now I'll turn the call over to President and CEO, Russell Lowe.

David Ryzhik
David Ryzhik
Senior Vice President of Investor Relations and Corporate Strategy at Axcelis

Russell?

Russell Low
Russell Low
CEO, President & Director at Axcelis

Good morning and thank you for joining us for our first quarter twenty twenty five earnings call. Beginning on slide number four, we executed well during the first quarter with revenue of $193,000,000 and earnings per diluted share of $0.88 both exceeding our outlook with particular strength in our gross margins and disciplined cost control. On a non GAAP basis, we delivered earnings per share of $1.04 Jamie will discuss our financial results in further detail, including non GAAP measures, which we're introducing today. Within overall revenue, both systems and CS and I sales were slightly better than our expectations. In the first quarter, we generated $110,000,000 in bookings, reflecting a sequential increase compared to fourth quarter levels.

Russell Low
Russell Low
CEO, President & Director at Axcelis

This translates into a book to bill of 0.8 times, the highest level we've seen since Q4 of twenty twenty three. While we're encouraged by the improvement in bookings in the first quarter, we believe bookings can fluctuate from quarter to quarter as we move through 2025. Before I turn to providing more detail on the trends we are seeing by market segment, I'd like to touch on the global tariff situation and how this impacts Exelis. To date, while the tariff and macroeconomic environment is dynamic, Axcelis has not seen any meaningful change in demand from our customers as a result of the announced tariffs. Moreover, Axcelis has plans in place to lessen the direct tariff impact.

Russell Low
Russell Low
CEO, President & Director at Axcelis

From a supply chain perspective, as many of you know, Axcelis possesses a global supply base with partners inside and outside of The United States. And over the past several years, we've made significant progress in diversifying our supply chain to drive better resilience in our sourcing. From a manufacturing perspective, our corporate headquarters and primary manufacturing facility is located in Massachusetts. However, several years ago, we invested in a new Asian operations center capable of supporting our global customers. Our locations and facilities allow us to be highly adaptive to the rapidly changing policy environment.

Russell Low
Russell Low
CEO, President & Director at Axcelis

We are executing well in developing solutions so we can continue to support our customers across the world, lessen the impact associated with the tariffs to support our gross margin goals while maintaining our focus on innovation to capture long term growth opportunities that lie ahead. With that, let me add some additional color on the trends we're seeing by market segment. Turning to slide five, in the quarter, sales to mature node applications remained the lion's share of our business, in particular Power and General Mature. As we noted on fourth quarter earnings call, beginning with first quarter results, Shipt system sales to the image sensor market will now be included in our overall general mature category to simplify our disclosure. Now, on slide six, let me review our trends by end market.

Russell Low
Russell Low
CEO, President & Director at Axcelis

Within our power business, shipments of silicon carbide applications declined sequentially in the quarter, consistent with expectations as customers are moderating investments due to softer end demand. From a regional perspective, we are seeing continued pockets of investment in China, while the rest of the world is managing through a broader digestion of capacity. While companies in China have made significant progress with the production of silicon carbide wafers, we believe our customers are earlier in their journey on silicon carbide device manufacturing, where ion implantation is foundational. In fact, on a global basis, despite an overall moderation in investments into silicon carbide, we are seeing strong engagement in technology transitions, which includes increased customer pull for us to support them in the transition from 150 to 200 millimeter wafers, as well as the transition from planar to trench device architecture and also growing collaboration on superjunction devices. All these trends play to Exelis' core strengths.

Russell Low
Russell Low
CEO, President & Director at Axcelis

We are the market leader of ion implantation for silicon carbide, with the largest installed base and extensive application know how. We're also the global market leader in high energy implant, which is increasingly relevant for next generation device architectures in silicon carbide. And finally, we have robust product and service upgrade offerings that allow customers to enhance their solutions to the latest generation of implant technology within the existing factory footprint, and this is a key driver for long term growth in CS and I revenue. As we think about this business over the next several quarters, we see continued pockets of investments that are remaining at more muted levels compared to 'twenty three and 'twenty four. Over the long term, however, we believe that the drivers for silicon carbide remain intact, namely rising penetration of EVs and silicon carbide content within those EVs, particularly as 800 volt models and above are introduced to enable superfast charging.

Russell Low
Russell Low
CEO, President & Director at Axcelis

Growing adoption of silicon carbide in data center applications, given the critical need for more power efficiency. And finally, proliferation of silicon carbide across a wide array of other industrial and commercial applications. For example, HVAC systems which globally consume a significant amount of electricity. This can be an interesting application of silicon carbide, giving its ability to drive better power efficiency, which ultimately can lead to less strain on our power grid. Turning to silicon IGBTs, revenue was muted as a result of continued cyclical softness in the auto end market combined with the secular impact of growing adoption of silicon carbide.

Russell Low
Russell Low
CEO, President & Director at Axcelis

Nonetheless, we anticipate silicon IGBTs to remain a sizable SAM for our implant solutions over the long term, requiring our proprietary technology. In our general mature segment, customers continue to manage their capacity investments given the current demand environment in auto, industrial and consumer electronics. As a reminder, our general mature segment spans a broad array of planar devices with process modes of 28 nanometers and above. While we expect the overall market to remain in a digestion period through 2025, following several years of strong build out, we are seeing some pockets of increased tool utilization, which, if it continues, is an important step forward towards a recovery in implant investments. It is also important to note that the general mature market is ubiquitous to almost every aspect of our lives, including our phones, computers, cars, home appliances, TVs and factories to name a few.

Russell Low
Russell Low
CEO, President & Director at Axcelis

As the world becomes more connected and digitized, we expect demand for these foundational technologies to grow accordingly, and we are well positioned as a critical enabler, especially given the higher intensity of implant required. Turning to slide seven, in advanced logic, we continue to engage closely with customers on their evaluation units as we work to expand this initiative, And as noted on our prior call, we anticipate a follow on order from a customer that we added last year. Moving to memory, we saw a nice sequential improvement in sales to the memory market, specifically for DRAM. In NAND, customers are focusing on technology transitions to higher layer counts such as 1xx to 2xx and beyond to drive better bit density rather than wafer capacity additions, which would be more impactful to ion implantation demand. As a result, we expect demand from NAND applications to remain muted over the balance of the year.

Russell Low
Russell Low
CEO, President & Director at Axcelis

On Slide eight, let me wrap up my thoughts prior to handing the call over to Jamie. We are adapting to the rapidly evolving macroeconomic landscape, particularly as it relates to tariffs, and our primary focus is to continue to serve our customers to the best of our ability while striving to control costs and drive resilience in our global operations. Despite the macroeconomic and cyclical backdrop and uncertainty associated with tariffs, we are seeing robust engagement with customers on the next generation roadmaps across power, general mature memory and advanced logic. We believe that the long term secular drivers of the semiconductor industry remain intact, with iron plantation being an enabling process step for every single chip that is manufactured in the world today. In fact, it happens to be one of the most complex technologies used in the semiconductor manufacturing process.

Russell Low
Russell Low
CEO, President & Director at Axcelis

At its core, ion implantation is a particle accelerator at scale. It requires the complexity of advanced nuclear physics, combined with the throughput, quality and extreme precision demanded for semiconductor manufacturing. Each implant can boast more than 10,000 unique part numbers and more than 5,000,000 lines of software code. We're able to deliver up to 15,000,000 electron volts of energy in an ion beam. Our solutions are designed to implant more than 50 ions per square centimeter of a wafer, and this has to be done with half of 1% uniformity across the whole wafer.

Russell Low
Russell Low
CEO, President & Director at Axcelis

And finally, our solutions are designed to implant pretty much any element in the periodic table into a wafer. All of this is the culmination of almost fifty years of expertise, know how, close collaboration, and trial and error with nearly every semiconductor manufacturer in the world today. As a result, with the world needing more than $1,000,000,000,000 of semiconductor devices by 02/1930 across all different categories, we expect the market for implant will continue to grow through the cycles, and we believe we are well positioned to capitalize on this opportunity that differentiated and highly proprietary technology. With that, let me turn the call over to Jamie for a closer look at our results and outlook. Jamie?

James Coogan
James Coogan
Executive VP & CFO at Axcelis

Thank you, Russell, and good morning, everyone. I'll start with some additional detail on our first quarter before turning to our outlook for Q2. Starting on Slide nine, first quarter revenue was $193,000,000 with systems revenue at $138,000,000 and CS and I at $55,000,000 both slightly above our expectations for the quarter. From a geographic perspective, as expected, China declined sequentially to 37% of total shift system sales, down from 49% in the prior quarter. While we anticipate revenue from China in 2025 to be down on a year over year basis as customers digest the robust investments they've made into mature node capacity, we expect revenue from China to fluctuate from quarter to quarter.

James Coogan
James Coogan
Executive VP & CFO at Axcelis

Case in point, we currently estimate the mix of Shift Systems revenue to China to increase sequentially in the second quarter. Turning to the other regions, we saw ship system sales to The U. S. Grow to 23% of the total, while Korea also improved to 20%, which was mainly due to improved shipments for DRAM in Korea. As Russell mentioned, we are pleased to see bookings grow nicely on a sequential basis to $110,000,000 and we exited the first quarter with backlog of $618,000,000 Turning to Slide 10, let me share some additional detail on our GAAP and non GAAP results.

James Coogan
James Coogan
Executive VP & CFO at Axcelis

As we previously announced, we're introducing non GAAP measures in 2025 following a thorough review of our peer group. These non GAAP measures reflect adjustments for the impact of share based compensation expense and certain items related to restructuring and severance and any other associated adjustments. For more information on our GAAP to non GAAP reconciliation, I can refer you to the appendix of this slide presentation as well as the tables in our earnings release. With that, we delivered strong GAAP gross margins of 46.1% in the quarter, exceeding our outlook of 40. Our non GAAP gross margins were 46.4%.

James Coogan
James Coogan
Executive VP & CFO at Axcelis

Our better than expected margins were primarily due to lower than expected warranty and installation costs, favorable mix for our deferred revenue recognized as well as more favorable mix within our CS and I business. In addition, our gross margins were benefiting from our continued focus on managing our expenses. We expect gross margins in the second quarter to moderate, primarily due to mix. In addition, as Russell noted, we have plans in place to lessen the impact from tariffs. GAAP operating expenses totaled $59,600,000 below our outlook of $63,000,000 primarily due to lower employee related costs associated with variable compensation and benefit expenses as well as prudent cost controls.

James Coogan
James Coogan
Executive VP & CFO at Axcelis

In the quarter, we took a number of additional actions to reduce expenses for the balance of the year, which resulted in a restructuring charge of $1,100,000 On a non GAAP basis, operating expenses were $54,100,000 As a result, GAAP operating profit was $29,200,000 reflecting a 15.1% operating margin. Our non GAAP operating margin was 18.3%. As part of our introduction of non GAAP measures, we are also including adjusted EBITDA as one of the key metrics we track. In the first quarter, adjusted EBITDA was $39,500,000 reflecting a 20.5% margin. Despite the softer revenue on a quarter over quarter and year over year basis, we are pleased with the execution of the team to deliver strong operating profitability.

James Coogan
James Coogan
Executive VP & CFO at Axcelis

This is a testament to the proprietary nature of our products, the value we create for our customers and our disciplined approach to managing costs. We generated approximately $3,900,000 in other income and our tax rate was 14% in the first quarter on both a GAAP and non GAAP basis. For the balance of the year, we estimate our tax rate to be at the 15% level. Our weighted average diluted share count in the quarter was 32,300,000.0 shares and this all translates into GAAP diluted earnings per share of $0.88 which exceeded our outlook of $0.38 The higher than expected EPS was primarily due to better than expected revenue and gross margins. Finally, non GAAP diluted earnings per share was $1.04 Moving to our cash flow and balance sheet data shown on Slide 11, we generated $35,000,000 of free cash flow in the first quarter as we benefited from better than expected profitability as well as robust working capital management.

James Coogan
James Coogan
Executive VP & CFO at Axcelis

Turning to our share repurchases, on March 12, we announced that the Board of Directors approved a $100,000,000 increase to our share repurchase authorization, which reflects our continued confidence in the attractive long term fundamentals of our business. In the first quarter, we repurchased $18,000,000 of shares and exited the quarter with $212,000,000 remaining in share repurchase authorization. To date, in the second quarter, as of market close on May 5, we have already repurchased $23,000,000 in shares and we plan on continuing to repurchase at an elevated level over the balance of the quarter relative to our prior quarterly spend. Looking ahead, we intend to continue to deploy capital to share repurchases while ensuring we maintain a strong balance sheet that gives us added flexibility to invest in our business while also evaluating inorganic growth opportunities. In fact, we exited the first quarter with a strong balance sheet consisting of $587,000,000 of cash, cash equivalents, short term investments on hand with no debt.

James Coogan
James Coogan
Executive VP & CFO at Axcelis

With that, let me discuss our second quarter outlook on slide 12. All measures will be non GAAP with the exception of revenue. We expect revenue in the second quarter of approximately $185,000,000 As we look into the second half, while the dynamic macroeconomic and tariff related environment has created some uncertainty, our discussions with our customers indicate that they intend to continue making investments and executing on their technology roadmaps. As a result, we currently anticipate revenue in the second half to remain relatively consistent with first half levels. We expect non GAAP gross margins of approximately 42%.

James Coogan
James Coogan
Executive VP & CFO at Axcelis

The sequential decline is primarily due to mix as well as slightly lower volumes. In addition, this includes the impact from tariffs, which we estimate to be relatively small. Beyond the second quarter, non GAAP gross margins may fluctuate based on volume and mix, but we would expect gross margins in the second half to be relatively similar to second quarter levels, inclusive of the estimated impact of tariffs. We expect non GAAP operating expenses of approximately $54,000,000 And for the full year, we anticipate non GAAP operating expenses to be relatively flat on a year over year basis. Adjusted EBITDA in the second quarter is expected to be approximately $29,000,000 And finally, we estimate non GAAP diluted earnings per share in the second quarter of approximately $0.73 In summary, we are pleased with our execution in the first quarter as we maintain strong profitability amidst a muted demand environment and this reflects the resilience of our operating model.

James Coogan
James Coogan
Executive VP & CFO at Axcelis

We exited the quarter with a strong cash position and no debt. We repurchased shares in a disciplined but opportunistic manner and are ensuring that we continue to invest in our business to emerge in a stronger position once end markets recover. With that, let me hand the call back to Russell for closing remarks. Russell?

Russell Low
Russell Low
CEO, President & Director at Axcelis

Thank you, Jamie. We are navigating a dynamic environment, but one thing remains very clear to us, the world's need for semiconductors will continue to grow and this can't be possible without the highly complex and priority equipment that is required to manufacture them. And that's what we do. We believe that Exelis is well positioned with a global and resilient operational footprint, leading technology in iron implantation with a relentless focus on innovation and a deeply ingrained customer first culture. We believe all of which will position Exelis to drive long term growth and value creation for shareholders.

Russell Low
Russell Low
CEO, President & Director at Axcelis

I want to thank our customers, employees, shareholders, and partners for their continued support and trust in Xelis. With that, operator, we are ready to take your questions.

Operator

Thank you. And at this time, we will conduct the question and answer session. To ask a question, you will need to press 11 on your telephone and wait for your name to be announced. To withdraw your question, please press 11 again. We ask that you limit yourself to one question and one follow-up.

Operator

At this, please hold on while we complete the Q and A roster. And our first question comes from Craig Ellis with B. Riley Securities. Your line is now open.

Craig Ellis
Director of Research at B Riley Financial

Yeah, thanks for taking the question and guys congratulations on the real robust gross margin. Wanted to start Yeah, you're welcome. I wanted to start the inquiry on some of the things that are contributing to that. So we're in a period, which is our first you know, period of macro troubles where we really have a substantial Purion installed base.

Craig Ellis
Director of Research at B Riley Financial

So as you look at the installed base of Purion systems and as we think about the propensity of customers to often upgrade in periods where there's better capacity availability and they can flex changes more easily than when capacities fall. How are you feeling about CS and I's momentum into the back half of the year from what's been a real strong last few quarters and looks like a real strong 2Q?

James Coogan
James Coogan
Executive VP & CFO at Axcelis

Yes. No, I appreciate the question, Craig. As we look at it, Q1 for CS and I really the mix here was around spares. We had a higher volume of higher margin spare sales in the periods. So there's still opportunity here for us to see incremental upgrade opportunities as we move through the course of the year as people take care of the sort of their tool system and planning during these periods of lower utilization.

James Coogan
James Coogan
Executive VP & CFO at Axcelis

I think you hit the nail on the head, though. The CS and I business is relatively sticky, right? We saw systems volume come down year over year, while CS and I remained sort of relatively flat on a year over year basis from Q1 of last year to Q1 of this year, despite the lower utilization. And we think that that's benefited by the increase in the installed base around period. Relative to margins overall, mix is always going to be a primary driver of margin performance within that period.

James Coogan
James Coogan
Executive VP & CFO at Axcelis

And so as I noted on CS and I, that higher volume of higher margin spare sales, we also saw a little bit of systems benefit in our systems margin as well from the favorable deferred revenue recognition in the period. And I think most importantly, we have a focus, we put a focus in 2024 on making sure we drive margins towards our long term goals that we've discussed previously. One of those was around installation and warranty and driving that cost down. And as I mentioned in the prepared remarks, we actually saw some benefit of that in Q1 as well at a higher rate than what we had anticipated and a little bit sooner coming into model. So I think we're well positioned to continue to drive margin performance.

James Coogan
James Coogan
Executive VP & CFO at Axcelis

As we look to the second quarter, we do see that moderation. And as we said in our prepared remarks, the second half margin should be relatively in line with what we see in the back half of the year, inclusive of the tariff impacts. But overall, we are really well positioned to see margin appreciation on return to volume in market recovery.

Craig Ellis
Director of Research at B Riley Financial

Thanks for that, Jamie. And then the follow-up question, I'll combine a couple of things. So we had a really nice increase in orders quarter on quarter, almost 30%. Can you talk about the level of order intensity 2Q to date? And on a headline basis, it looks like there's not a significant mix change in the business in the second half versus what we see in 2Q.

Craig Ellis
Director of Research at B Riley Financial

But can you talk about any expectations you'd have for a shift either within the mature foundry business or just within memory, which seems very DRAM weighted? Thank you.

Russell Low
Russell Low
CEO, President & Director at Axcelis

Hey, Craig. It's Russell. Thanks for the question. So, yes, we had a nice bookings quarter. And like we said on the call, in the prepared remarks, you know, it was a point 8.8 multiplier compared to basically the average for 2024 was about 0.5.

Russell Low
Russell Low
CEO, President & Director at Axcelis

So it was a good uptick. I would say that, you know, obviously, we're very pleased and encouraged by that, but it's a bit premature. The premature to call that an inflection point. Looking a little bit more closely into the bookings that we had in Q1, you're right. They do match pretty much the profile of our business going forward.

Russell Low
Russell Low
CEO, President & Director at Axcelis

So general mature and power would be where all of those bookings came from.

Craig Ellis
Director of Research at B Riley Financial

Thanks, guys. I'll hop back in the queue.

Russell Low
Russell Low
CEO, President & Director at Axcelis

Thanks, Greg.

Operator

And our next question comes from Jed Dorsheimer with William Blair. Hi,

Jed Dorsheimer
Group Head–Energy and Sustainability at William Blair

thanks for taking my question and congrats on the better than expected, particularly in the margins in bookings. I just want to come at the margin question maybe slightly differently and maybe you answered this and it wasn't as clear to me. But can you just break help me with the granularity of the 600 basis points and kind of the 400 that you're looking into? And what I'm trying to get at is really around in terms of mix and the predictive analytics of sort of what you're seeing during the quarter. Like it seems like that mix shifted rapidly in the quarter to your benefit.

Jed Dorsheimer
Group Head–Energy and Sustainability at William Blair

And so I'm just trying to gauge how much of that 600 was specific to that and what's kind of going against the headwind in the 400 basis point decline?

James Coogan
James Coogan
Executive VP & CFO at Axcelis

Yes. And so Jed, as we think about the mix, the largest contributor of that was mix. And as we go through the period, right, we'll see periods of buying volume, specifically on the CS and I side that can shift and move throughout the quarter. You know, so we obviously, we pull together plans and forecasts relative to what we anticipate. But as customer requests come in, we'll satisfy those as as required, and that can change the mix within a period, pretty quickly, depending on what is bought and what is procured in that period of time.

James Coogan
James Coogan
Executive VP & CFO at Axcelis

In addition to that, on the deferred revenue base, that really is just, we'll call it cleanup of prior system sales as we deliver and execute against our commitments associated with system sales. And so we can see that mix shift within a period given, you know, cost sign offs from customers and and how they look at, you know, the the completion of system installations and and related activities can result in a shift in deferred revenue relative to expectations as well. As we think about what's driving, we're we're we don't anticipate the same level of mix, positive mix benefit in the second quarter as we look at what we see today versus our systems and related CS and I volumes. But we do anticipate to be able to continue to benefit from some of the cost actions and other activities, which is giving us confidence to increase margins relative to our prior expectations.

Jed Dorsheimer
Group Head–Energy and Sustainability at William Blair

Got it. And then as my follow-up, maybe just a slightly different angle on the tariffs. So I know that you've done a great job in terms of mitigating the potential impact. But I think Secretary Bessen has talked about 14 deals in the next few weeks to be signed. So assuming that if we maybe exclude China, how much is sort of constrained from a margin perspective on the tariff side that I'm trying to get to what the potential impact would be positively if you see those come to more normal type of trade relations.

James Coogan
James Coogan
Executive VP & CFO at Axcelis

Yeah, I think there could be some on the margin side. I think. Yeah, ex China. Right? I think there could

James Coogan
James Coogan
Executive VP & CFO at Axcelis

be some

James Coogan
James Coogan
Executive VP & CFO at Axcelis

opportunity on the upside. I think too early to tell. And as you know, it's been very volatile over the last few weeks trying to take the puts and takes in the daily news readings. And the team has been sort of working through the various iterations and permutations here for us to be able to size the potential impact. We had developed plans, though, that largely mitigated a significant portion of that by leveraging our global supply base, and I think more importantly, our global manufacturing footprint.

James Coogan
James Coogan
Executive VP & CFO at Axcelis

You know, we we did make those investments in our Asian operations center a number of years ago, which provides us with an opportunity to continue to serve our customers across the globe. It also provides us an opportunity to to mitigate a potential impact associated with the geopolitical tensions and and and the trade. In addition to that, we have a large portion of our sales base, which is exportable. And so, although not all of the proposed tariffs are drawbackable, a large significant portion of them are for us. And so we have processes in place that allow us to also draw back tariffs that we do pay on the exported goods.

Russell Low
Russell Low
CEO, President & Director at Axcelis

And this is Russell. So we did say that the impact was relatively small. So obviously, the upside would also be relatively small as well. But kind of like Jamie did give the numbers for the remainder of the year inclusive of tariffs.

Jed Dorsheimer
Group Head–Energy and Sustainability at William Blair

Understood. Thanks, guys.

Russell Low
Russell Low
CEO, President & Director at Axcelis

Thanks.

Operator

And our next question comes from Charles Hsieh with Needham and Company.

Charles Shi
Senior Analyst at Needham & Company

Hey, hey, good morning, Russell and Jamie. Maybe the first question is about the composition of the backlog. First off, I think you guys did a good job getting the very decent bookings for Q1, but that also leads to a backlog that is still roughly speaking four to five times of your system revenue run rate. That's a pretty high number. I would just say, compared to historical norm.

Charles Shi
Senior Analyst at Needham & Company

It's it should have been somewhere between one to two times of the system revenue run rate. But wonder what is the composition of the backlog there? Maybe one way I would like to look at or maybe you can provide some color on is what's the mix of the backlog between your China versus non China customers? And if I look at your revenue, China has been somewhere between 40 to 60% of the total revenue for the company. But China slightly over represented in that $618,000,000 backlog or underrepresented or roughly in line with that?

Russell Low
Russell Low
CEO, President & Director at Axcelis

Hey, Charles, it's Russell. So yes, we are pleased to have a large backlog. Obviously, as as you note, historically, we've been running at, say, you know, two quarters worth of backlog, which is today's run rate of systems. That's probably like in the 303 hundred million kind of regime, and we're we're we're two x that. So I do expect those numbers to come down with time.

Russell Low
Russell Low
CEO, President & Director at Axcelis

So I think you're gonna see that coming down, and then you'll start to see the book to bill get more more standard. Regarding the the kind of the the backlog composition, as you can imagine, it looks awful lot like our business in the sense that it's it's gonna be predominantly general mature. So it's gonna be a mature foundry and and power. So, you know, that's what you're going to see. I think last year, we kind of saw quarter to quarter at Chinese revenue being in the 40 to 60%.

Russell Low
Russell Low
CEO, President & Director at Axcelis

I think overall, you're see that balancing around in 2025, but I think it will be going lower as a mix. So you will you will see the China percentage throughout 2025 becoming less than it was say in 2024.

Charles Shi
Senior Analyst at Needham & Company

Hey, Russell. Maybe I wasn't very clear. Yeah, I got your point that China revenue percentage is going to come down this year. But in the backlog, is China still in that 40% to 60% range or higher or lower in the backlog? I'm not talking about your expected revenue this year.

Russell Low
Russell Low
CEO, President & Director at Axcelis

So, Charles, we don't really give that information. That's not something we provided. But I would say that our bookings and our backlog match very much our revenue profile that we've shared with you for Q1.

Charles Shi
Senior Analyst at Needham & Company

Thank you. Maybe a very quick clarification, if you can provide some color. U. S. Revenue had a very decent has some decent sequential growth in the March.

Charles Shi
Senior Analyst at Needham & Company

Wonder if you can provide some color. What's the application for the strength of that particular geography? Thank you.

Russell Low
Russell Low
CEO, President & Director at Axcelis

Okay. So, obviously, when we talk about US revenue, it's landed US revenue. Right? So you can be multinationals from other countries building out inside that location. And I'd say that it's actually quite broad.

Russell Low
Russell Low
CEO, President & Director at Axcelis

It's been we've we've got general mature. It's been power, certain car by specifically. And I'd say there's also been a little bit of, you know, other other business tucked in there as well. But, ultimately, it's it's nice to see The US domestic coming on stronger. And, you know, it's basically general mature as you'd imagine.

James Coogan
James Coogan
Executive VP & CFO at Axcelis

Yes. And as we look quarter to quarter, right, that's going to fluctuate over time, both The U. S. Load just given the customer delivery schedules and timing of orders expected out of backlog. From period to period, we're going to see both The U.

James Coogan
James Coogan
Executive VP & CFO at Axcelis

S. Fluctuate. We'll see our memory business fluctuate from period to period. As you know today, that's primarily serving the Korean memory makers today. And we'll also see our China revenue fluctuate.

James Coogan
James Coogan
Executive VP & CFO at Axcelis

So as Russell said, although we expect revenues on a year over year for China to be down relative to 2024, we do expect from quarter to quarter that that could move up. And specifically in Q2, we could see China as a higher proportion of sales in the second quarter. But overall, on a year to year basis, it will be lower.

Operator

Our next question comes from Tom Diffely with D. A. Davidson and Company.

Tom Diffely
Director Of Institutional Research at D.A. Davidson Companies

Yes, good morning and thank you

Tom Diffely
Director Of Institutional Research at D.A. Davidson Companies

for taking the questions. So maybe along the same lines as Charles' last question, Japan, we used to talk about Japan as a pretty nice growth driver, and I'm just surprised it hasn't had any activity for the last couple of quarters. Maybe just a quick update on on your presence there.

Russell Low
Russell Low
CEO, President & Director at Axcelis

Right. So I think regarding Japan, we've actually had quite a good, you know, amount of progress there. So we have placed tools into silicon power, silicon carbide power. And I think there's there's also some some kind of like general mature as well. And I think, we're we're just beginning to see people having their utilization rates move up and to see the repeat orders.

Russell Low
Russell Low
CEO, President & Director at Axcelis

So I'm actually optimistic that we'll see those areas go up as a percentage of our total revenue towards the back end of this year. So we've kind of like put the seeds in there, and now we're waiting for the repeat orders. And as we kind of talked about, all of our customers are in a slightly different place right now. So if you looked at power, for example, some are looking to optimize their processes and improve their yields and reduce their costs. Other looking to do a node change.

Russell Low
Russell Low
CEO, President & Director at Axcelis

So they might take one machine or two machines. Yeah. So we do see people taking, like, high energy machines in order to help them in their transition from, say, planar to to trench devices. So the revenue is relatively low, but the future opportunities are relatively high because once they're successful with those devices, you start to see the ramp. But, yeah, I I actually feel relatively positive about Japan.

Tom Diffely
Director Of Institutional Research at D.A. Davidson Companies

Yep.

Tom Diffely
Director Of Institutional Research at D.A. Davidson Companies

Okay. Yeah. And your your answer there kind of spurred my next question. So, Russell, when you look at the three technology transitions that your clients are using right now, you know, the one fifty to 200, planar to trench, and superjunction, how do each of those transitions specifically impact you and your business?

Russell Low
Russell Low
CEO, President & Director at Axcelis

Right. So, the one fifty to 200, we so, you know, obviously, we have we can ship 200 millimeter machines, and we can also do upgrades. We actually have a large installed base of silicon carbide tools across the entire Purion power portfolio. So that's the high energy, the high current, and the medium current. And all of those tools would be eligible for upgrades.

Russell Low
Russell Low
CEO, President & Director at Axcelis

There's a great opportunity for upgrades. Regarding the transition from planar to to trench, those devices require high energy. So it moves the market even closer to where we've historically been very strong, which is in high energy. And one of the things we're seeing is that they're going to even higher energy. So as you go from, say, trench to superjunction, we're actually seeing some customers, going up into the the the multiple mega electron volt energies.

Russell Low
Russell Low
CEO, President & Director at Axcelis

So that's playing really well to our our high energy technology. So we see an opportunity to capture more of the business as as those devices transition. And all of this, Tom, you know, is, you know, increasing, you know, the the wafer size and kind of reducing device sizes, increasing the number of devices and obviously reducing the cost. And we see this as the early innings of silicon carbide with lots new of new applications being switched on as the cost continues to fall. So we're kind of excited by this, and, obviously, we we benefit as well.

Tom Diffely
Director Of Institutional Research at D.A. Davidson Companies

So we'll see this activity both in new systems as well as CSNI for some of the upgrades?

Russell Low
Russell Low
CEO, President & Director at Axcelis

So I think, you know, what we see is that many of our customers are making their money out of a 50 millimeters. So consequently, they're gonna wanna continue to do that. Then I think pretty much most customers, particularly the non Chinese customers have moved on to, you know, 200 millimeter. And the start they start with obviously the r and d, get the process down pat. And I think some of them are waiting for the yields to come.

Russell Low
Russell Low
CEO, President & Director at Axcelis

Others are waiting for the price parity points. I think there's still a little bit of time for the the price to be more, you know, more attractive for 200 millimeters. And then I think what you're going to see is they'll ramp the 200 millimeters. So that probably be new machines. Once they've got that new 200 millimeter line up and running, there may be an opportunity to then retrofit the one fifty to make them more cost efficient.

Russell Low
Russell Low
CEO, President & Director at Axcelis

But I don't think you're going to see somebody take down their one fifty line for a couple of months as they transition it over, because they then kind of reduce reduce their their run rates. So I think you're gonna see this new tool systems going out and then ramping and then seeing the aftermarket. That that's that's my impression.

Tom Diffely
Director Of Institutional Research at D.A. Davidson Companies

Great. Very helpful. Looks like a multiyear transition. Thanks for the time.

Russell Low
Russell Low
CEO, President & Director at Axcelis

Yes, yes.

Operator

As a reminder, we ask that you limit yourself to one question and one follow-up. And our next question comes from Jack Egan with Charter Equity Research.

Jack Egan
Equity Research Analyst at Charter Equity Research, Inc.

Great, thanks for taking the questions. You saw a pretty good increase in your book to bill and memory shipments were pretty strong in the first quarter, but as you've said before, those customers usually give you pretty short lead times. So is it fair to assume that the bulk of that increase in your book to bill is from non memory segments, or are you getting better visibility from those memory customers?

James Coogan
James Coogan
Executive VP & CFO at Axcelis

Yeah, I think, again, no, the memory customers are still acting as they have historically in terms of we have some very robust conversations and discussions relative to their expected plans, but we still wait for purchase orders to arrive to make sure that we line everything up with the quarters and periods in which we expect to ship those devices relative to the expectations. What we did see in our book to bill though, and as Russell commented a little bit earlier, is it does largely mirror that of our revenue splits for the periods as well. And so that trend around where the orders are coming in from for the quarter really does look and feel a lot like our revenue splits that we saw relative to general mature and power.

Jack Egan
Equity Research Analyst at Charter Equity Research, Inc.

Got it. And then on OpEx for the guidance for the full year being basically flat, you're probably going to see a pretty material decline in full year revenue, but that spending is going to be still flat. So I guess what's the thinking there on keeping OpEx a bit elevated?

James Coogan
James Coogan
Executive VP & CFO at Axcelis

Yes, it's investing, So a large portion of that is going into our R D, right? We made some really meaningful and significant progress, and I can have Russell talk about some of the things that we're looking forward to in that space. But the goal here is to continue to invest in the base business. We've talked about our capital allocation strategy really focused on organic growth first. And so putting money into the business for R and D, CapEx and others to make sure that we're positioned coming out of the coming into the recovery to really make sure that we capitalize on the upswing and then partnering very closely with our customers during this period of time to make sure that we drive our technologies to their needs and requirements is going to be the most important part for us.

Russell Low
Russell Low
CEO, President & Director at Axcelis

Yeah, Jack. This is Russell. Just to kind of add more. So we know this is a cyclical industry, and I think it's been down a little bit longer than most of us would have anticipated. So, we believe we have great opportunities ahead of us, the secular growth of this industry in the cyclical recovery.

Russell Low
Russell Low
CEO, President & Director at Axcelis

So we're continuing to make sure we invest in our products and services, stay close to our customers So the when the market does start to recover, then we're ready with these new products. We want them to be differentiated, innovative, and we want to obviously, you know, continue to grow at our margins and revenue. So I think that's, know, it it would be, it would be a very bad idea to kinda like reduce significantly our OpEx given that we know there's a good you know, there's an upturn coming. And the other thing is, it takes a long time to train people Right?

Russell Low
Russell Low
CEO, President & Director at Axcelis

I mean, it can take easily between two to five years for people to become, like, expert level. So given that we have these cycles that are considerably smaller than that, then, you know, we we wanna make sure we maintain those people. And like we said, continue to do at our our, you know, execute on our product roadmaps.

Jack Egan
Equity Research Analyst at Charter Equity Research, Inc.

That makes sense. Thanks for the color.

Russell Low
Russell Low
CEO, President & Director at Axcelis

Thanks, Jack.

Operator

Thanks. Our next question comes from Duxong Yang with Bank of America Securities.

Duksan Jang
Duksan Jang
Research Analyst at Bank of America

Hi, good morning. Thank you for taking the question. I know earlier you said you do have some international manufacturing, but you still have a large portion of your products being manufactured out of The US and you obviously have a large share of the China mix. So I'm curious if you've seen any pull in activities from customers. And is that perhaps included in your outlooks?

Duksan Jang
Duksan Jang
Research Analyst at Bank of America

Thank you.

Russell Low
Russell Low
CEO, President & Director at Axcelis

Right. So I'd say that, so the the kind of the the the turmoil around tariffs kicked in kind of the second of of April. So, obviously, q one was closed pretty much at that stage. There was there was no activity to be talked about in q one. So really, it's about q two.

Russell Low
Russell Low
CEO, President & Director at Axcelis

I would say there hasn't really been any pull forwards of note. We've had the usual push pulls depending on where customers kind of like plans are, but I would say there hasn't been a what you consider a panic pull in. That's on the system side. But, you know, you think that might also happen. You you think you might get some activity on the aftermarket.

Russell Low
Russell Low
CEO, President & Director at Axcelis

And that, you know, one month into this quarter, we haven't seen that either. Our customers are behaving normally, and I think that's kind of because they they believe that we have a really good plan to support them going forward. And this is obviously globally as well. So, you know, we're very pleased to have built up over multiple years a global operations footprint, and that's allowing us to continue to serve our customers.

Duksan Jang
Duksan Jang
Research Analyst at Bank of America

Got it. Thank you for the color. Then excluding all the tariffs, are you what are you seeing overall in customer inventory and utilization out of silicon carbide tools? Because I think you said you're still seeing a little bit of demand out of China.

Russell Low
Russell Low
CEO, President & Director at Axcelis

Right. So I guess we've we've been talking about the green shoots and the opportunities for, you know, our our end markets to recover. And, you know, we are since we are quite, you know, focused on the general mature, then, you know, you're talking about consumer spending, industrial, and and automotive, yeah, preliminary, primarily. We're kind of expecting to see things to start to improve, although at this stage, it's hard to say there's any evidence of that. What are the second order effects of the tariffs though?

Russell Low
Russell Low
CEO, President & Director at Axcelis

Is I would say that it's actually caused a little bit of uncertainty in the market. That, you know, what might have been, you know, improvements have maybe caused a little bit, you know, more uncertainty, but we're definitely seeing pockets improved utilization, but it's not broad based yet. Jackson, you still there? Okay.

Operator

Our next question comes from David Dooley with Steelhead Securities.

David Duley
Managing Principal at Steelhead Securities

Thanks for taking my question and congratulations on the nice margin performance.

Russell Low
Russell Low
CEO, President & Director at Axcelis

Thanks Sure.

David Duley
Managing Principal at Steelhead Securities

My first question has to do with China. You mentioned, I think that China revenue percentage declined to 37% in the quarter and then might be up in Q2. Could you give us a guess as to where you think it declines to for the whole year? And I'm guessing that probably represents the bottom in Chinese revenue. Maybe I'm wrong, but maybe comment a little bit on that for us.

James Coogan
James Coogan
Executive VP & CFO at Axcelis

Yeah, so we haven't provided full year expectations necessarily for China just yet, but we do anticipate, like I said, we do anticipate it to increase here in the second quarter and then moderate through the rest of the year here. Based on what we understand today, we do anticipate China revenue being lower than what we saw in the for mix overall in 2024 versus 2025. And so, as a result of that, that's kind of all the commentary we're gonna provide We need to kind of see where the rest of the year flows out and what type of activity and opportunities may present themselves before we make any more meaningful comment on

James Coogan
James Coogan
Executive VP & CFO at Axcelis

that.

David Duley
Managing Principal at Steelhead Securities

Okay. And just to be clear, the comments that you have made, I think it would indicate that the 37% that you achieved in Q1 most likely for the year that that percentage would be down.

David Duley
Managing Principal at Steelhead Securities

Is that the message that you're trying to send us?

James Coogan
James Coogan
Executive VP & CFO at Axcelis

It's going to all depend on the mix in the back half of the year and the averages over those periods of time, Dave. But again, we expect it to be lower than what we saw. I can say definitively is as of right now, we do expect it to be lower than what we saw in 2024 overall. So year on year, we do expect that percentage to be lower.

David Duley
Managing Principal at Steelhead Securities

Okay. And as far as the memory business goes, I think it's been kind of uptick in the last few quarters. I was curious and coincidentally, the Korean revenue was up as well. I'm sure those are related. But I'm kind of wondering, has the memory business starting to broaden out?

David Duley
Managing Principal at Steelhead Securities

Is it all three customers? Or is it just one customer? Maybe some commentary on the breadth of the memory recovery.

Russell Low
Russell Low
CEO, President & Director at Axcelis

Okay. Hey, Dave. It's Russell. So if you look at the uptick we had in memory last quarter, it was a pretty good uptick. We have and but it was all DRAM.

Russell Low
Russell Low
CEO, President & Director at Axcelis

So, you know, addressing NAND first, we haven't seen orders from NAND for a long time. If you remember, if for us to receive NAND orders, it has to be an increase in number of wafer starts. And, you know, you're aware that the NAND guys are basically looking to go more and more vertical. So yes, one x x to two x x and beyond. So they're using this relatively quiet time to do a node change, which is very typical, and that's increasing a bit dramatically, but it's not actually increased the number of wave starts.

Russell Low
Russell Low
CEO, President & Director at Axcelis

Regarding DRAM, which is pretty much where all of our revenue came from, you know, we are seeing, multiple customers, look to grow their their DRAM. And, you know, obviously, there's some customers that are doing well on HBM, and and that's actually taking down capacity. And then there's other customers that are doing well on DRAM because of the DRAM capacity being taken down by HBM. So we would say that, you know, you know, DRAM is probably gonna be modest for around, you know, for 2025. It's bouncing around a little bit.

Russell Low
Russell Low
CEO, President & Director at Axcelis

But, you know, that that is really the story at this stage is is is DRAM.

David Duley
Managing Principal at Steelhead Securities

Thank you.

Russell Low
Russell Low
CEO, President & Director at Axcelis

Thank you.

Operator

And our next question comes from Christian Schwab with Craig Hallum Capital.

Christian Schwab
Senior Research Analyst at Craig-Hallum Capital Group LLC

Hey, good quarter guys. I just want to follow-up on the earlier line of questioning by Tom Diffely. Do you guys see increased capital intensity? In other words, obviously, impact on equipment sales per wafer starts as the industry upgrades from 150 to 200 and moving from planar to trench adding high energy, it seems that your dollar content per wafer start going forward should increase over time? Would you have any idea what percentage that would be?

Russell Low
Russell Low
CEO, President & Director at Axcelis

Hey, Christian. So I think, actually, that that's a great question. So as people go from planar, you know, to to trench, absolutely, it moves to a different tool set, and it's going to leverage the entire Purion platform. And that does actually increase the the the density of implants, particularly in the high energy. So you definitely see, yeah, I don't think there's method.

Russell Low
Russell Low
CEO, President & Director at Axcelis

There's no high energy implants in a planar device that I'm aware of. So it's moving to trench. You've now got to put the deeper implants in. And obviously, superjunction is the next level beyond that. And as as you also probably remember that, you know, there's basically no ability to diffuse dopant officially in silicon carbide.

Russell Low
Russell Low
CEO, President & Director at Axcelis

So if you wanna go deep, you now actually have to overlap a whole bunch of chained implants. So, yes, we are seeing an increase in intensity of implant steps in silicon carbide devices that they can go from mode to mode. I don't think we've actually quantified that at this stage. I think we've kind of had in in prior examples. We've talked about, you know, the rough number of machines you need for a hundred thousand wafer starts, because we were trying to compare to memory.

Russell Low
Russell Low
CEO, President & Director at Axcelis

So that's probably the closest we've come, but I think you're gonna see that, you know, you're gonna see a transition in machine types. And that's kind of what we've shown in the past as well as we used to start off just by shipping pure m tools, and then people started to take the h two hundreds and the XEs as they started to go into high volume manufacturing and make a device, transition. So yeah. I mean, does that answer your question, Christian?

Christian Schwab
Senior Research Analyst at Craig-Hallum Capital Group LLC

It it it does. Thank you. You know, my next question is, you know, of the silicon carbide, you know, production today, do you have a rough estimate of, you know, what percentage of the wafers are are planar today and and and expectation of of what percentage will move to trench over a given period of time.

Russell Low
Russell Low
CEO, President & Director at Axcelis

Okay. So I'd say that right now, I mean, this is kinda like the transitions going on from one fifty to 200 planar to trench. I can only think of one customer that's kind of like entrenched in planar. I think everybody else is looking to move to trench because it gives you a high performance device. It's also a lot smaller.

Russell Low
Russell Low
CEO, President & Director at Axcelis

So you can pack an awful lot more devices on a wafer and it's also going to have a high yield because it's less susceptible to crystal damage. So I think you're going to see, you know, people's capabilities grow, you will see this transition to a trench and then on to superjuncture. And you'll see this transition from 150 to 200. The most advanced companies are going to move much more quickly. And we've said before, we are the leaders in high energy.

Russell Low
Russell Low
CEO, President & Director at Axcelis

So as they move to trench and superjunction, that plays very nicely into our strengths.

Christian Schwab
Senior Research Analyst at Craig-Hallum Capital Group LLC

Great. And if I could just sneak in one last question. You guys mentioned inorganic growth opportunities. Can you give us an idea of is this bolt on acquisitions that you're looking at, if there is such a thing in an industry with only two people? Or are you looking for something that could be more transformative or something, you know, any kind of color of what that means, I guess, would be helpful.

James Coogan
James Coogan
Executive VP & CFO at Axcelis

Yeah, understood. Think the goal here is to, one, to keep the aperture as wide open as we possibly can, right? We want to leverage the fact of our expertise and experience in the semiconductor capital equipment space to the best of our ability. We've talked about leveraging our global footprint, the fact that we've got field service folks, inventory depots and operations next to all the sort of major customers throughout the world here. We believe there's opportunity for us to leverage that by potentially introducing new technologies into our ecosystem.

James Coogan
James Coogan
Executive VP & CFO at Axcelis

As you noted, implant is a little bit of a niche application today, and there aren't a ton of opportunities within that space to try to expand inorganically. So that's one of the reasons why we're looking as wide and broad as we are. As we go through it, though, we're going to continue to assess those opportunities relative to the other return characteristics we have, both on organic as well as shareholder return basis, and making decisions on how and when to execute that. Unfortunately, that's probably all I can say relative to our efforts at this point in time, but like I said, it's wide open.

Christian Schwab
Senior Research Analyst at Craig-Hallum Capital Group LLC

Great, thank you.

Russell Low
Russell Low
CEO, President & Director at Axcelis

Yep, thanks.

Operator

And our next question comes from Mark Miller with The Benchmark Company.

Mark Miller
Equity Research Analyst at The Benchmark Company LLC

Thank you for your question. Wonder if you can give us any additional color or what's going on with an image with your image customers?

Russell Low
Russell Low
CEO, President & Director at Axcelis

Sorry, Image sensor customers?

Mark Miller
Equity Research Analyst at The Benchmark Company LLC

Yes.

Russell Low
Russell Low
CEO, President & Director at Axcelis

Okay. So we we are so, again, it's it's very regional. We actually do have a customer.

Russell Low
Russell Low
CEO, President & Director at Axcelis

Sorry. That's actually adding significant capacity. I think, you know, obviously, the number one use of image sensors is is phones, which is by far away the biggest use followed by cars. We are seeing a lot of sensors going into cars. So I would say that one particular customer is adding significant cape capacity.

Russell Low
Russell Low
CEO, President & Director at Axcelis

And, you know, that's that's a little unusual. I don't think many of the other image sensor customers are adding much capacity at the moment. It's it's relatively quiet. I mean, again, mobile phones and automotive are the end markets and they are fairly muted.

James Coogan
James Coogan
Executive VP & CFO at Axcelis

Yep. Just as a point

James Coogan
James Coogan
Executive VP & CFO at Axcelis

of clarity for everyone, did, this quarter, we did embed image sensor sales as part of our general mature. I think we noted that in our prepared remarks, and so it won't be broken out on a go forward basis, but by all means happy to talk about the trends that we see within that space and the opportunities that present themselves.

Mark Miller
Equity Research Analyst at The Benchmark Company LLC

I was a little surprised with your comments about not seeing a lot from NIN because NIN CapEx for the first time in a couple of years is increasing. I assume most of it's for capacity additions. Are you seeing any quoting activity or is this still pretty dead?

Russell Low
Russell Low
CEO, President & Director at Axcelis

I would say that NAND is still pretty muted from our point of view. Remember, Mark, that we we need new wafer starts. So I'd say that NAND right now, it you know, they're beginning to build, you know, the Manhattan skylight. They're just going vertical. So that adds significant depth and edge.

Russell Low
Russell Low
CEO, President & Director at Axcelis

It adds significant bits per wafer. It doesn't add a lot of new wafers. And we need new wafers in order to drive new new new implanters.

Mark Miller
Equity Research Analyst at The Benchmark Company LLC

Thank you.

Russell Low
Russell Low
CEO, President & Director at Axcelis

Thanks.

Operator

And this concludes the question and answer session. I would now like to turn it back to David for closing remarks.

David Ryzhik
David Ryzhik
Senior Vice President of Investor Relations and Corporate Strategy at Axcelis

Thanks, operator. And I want to thank everyone for joining the call and your interest in Axcelis. Operator, you can close the call.

Operator

Thank you for participation in today's conference. This does conclude the program. You may now disconnect.

Executives
Analysts
    • David Ryzhik
      Senior Vice President of Investor Relations and Corporate Strategy at Axcelis
    • James Coogan
      Executive VP & CFO at Axcelis
    • Craig Ellis
      Director of Research at B Riley Financial
    • Jed Dorsheimer
      Group Head–Energy and Sustainability at William Blair
    • Charles Shi
      Senior Analyst at Needham & Company
    • Tom Diffely
      Director Of Institutional Research at D.A. Davidson Companies
    • Jack Egan
      Equity Research Analyst at Charter Equity Research, Inc.
    • Duksan Jang
      Research Analyst at Bank of America
    • David Duley
      Managing Principal at Steelhead Securities
    • Christian Schwab
      Senior Research Analyst at Craig-Hallum Capital Group LLC
    • Mark Miller
      Equity Research Analyst at The Benchmark Company LLC
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Key Takeaways

  • In Q1, Axcelis reported $193 million in revenue and GAAP EPS of $0.88 (non-GAAP EPS $1.04), both exceeding guidance thanks to 46.1% gross margins and disciplined cost control.
  • Bookings rose sequentially to $110 million (book-to-bill of 0.8×), the highest level since Q4 2023, although management cautioned that orders may fluctuate quarter to quarter.
  • The company stated that announced tariffs have had no meaningful impact on demand to date and highlighted its diversified supply chain and Asian operations center as mitigation strategies.
  • Market trends included continued strength in mature node applications (power and general mature), a sequential pick-up in DRAM sales, muted NAND demand, and a cautious pace of silicon carbide investments despite long-term secular drivers like EVs and data centers remaining intact.
  • Axcelis generated $35 million in free cash flow, exited Q1 with $587 million in cash and no debt, and accelerated its share repurchase program by repurchasing $18 million in Q1 (and $23 million so far in Q2).
A.I. generated. May contain errors.
Earnings Conference Call
Axcelis Technologies Q1 2025
00:00 / 00:00

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