Amtech Systems Q2 Earnings Call Highlights

Key Points

• AI-driven demand is powering the Thermal Processing Solutions segment — AI-related sales were over 30% of TPS revenue in Q2 and management expects that share to exceed 40% in Q3, with strong bookings and new higher-density packaging products planned for SEMICON Taiwan.
• Solid financials: revenue was $20.5 million (up >30% YoY, +8% sequentially), adjusted EBITDA was $2.5 million (~12% of sales) and gross margin approached ~48%; Q3 revenue is guided to $20.5–$22.5 million with adjusted EBITDA expected in the low double-digits.
• Healthy balance sheet and leadership moves: cash of $24.4 million with no debt, a priority on growth and R&D (with potential M&A or shareholder returns depending on opportunities), and two additions — Tom Sabol as CFO and Guy Shechter as President/COO.

Amtech Systems NASDAQ: ASYS reported fiscal 2026 second-quarter results that management said reflected strengthening demand tied to artificial intelligence infrastructure investments, particularly within the company’s Thermal Processing Solutions (TPS) segment. Chairman and CEO Bob Daigle said revenue totaled $20.5 million, up more than 30% from the year-ago quarter and up 8% sequentially.

Daigle said adjusted EBITDA was $2.5 million, representing about 12% of sales. He noted the result exceeded the company’s expectations after Amtech had guided to “high single-digit EBITDA margins.” He attributed the outperformance primarily to higher gross margins, which he said approached 48% in the quarter, up from 45% in the prior quarter.

AI-driven demand and advanced packaging focus

Daigle said AI-related sales accounted for “over 30%” of TPS segment revenue in the second quarter, and he described bookings as “very strong.” He said the company expects the share of TPS revenue tied to AI applications to exceed 40% in the fiscal third quarter based on bookings and quoting activity.

In prepared remarks, Daigle emphasized advanced packaging’s role in supporting AI processors and highlighted the company’s positioning in capital equipment used for those applications. He said demand has been strong for Amtech’s advanced packaging equipment and AI server board assembly equipment, citing differentiated capabilities such as “TrueFlat technology” and “market-leading temperature uniformity,” which he said enable high yields for complex products.

While Daigle said visibility remains limited due to short lead times, he said Amtech’s “channel checks” support management’s view that demand will remain “very strong for the foreseeable future.” He also said the company is seeing increased quoting activity and bookings for panel-level packaging, which he characterized as more demanding technologies with process requirements that align well with Amtech’s capabilities.

Daigle said Amtech plans to launch its first products for “higher density packaging” at the SEMICON trade show in Taiwan in early September, adding that he believes the next-generation equipment can increase the company’s addressable market and support growth beyond 2026.

Margin expansion and operating leverage

Interim CFO Mark Weaver said gross margin increased to 47.7% of sales in the second quarter, up nearly 300 basis points from 44.8% in the fiscal first quarter. Weaver attributed the improvement to product line rationalization, a focus on higher-margin product lines including AI advanced packaging solutions, and growth in recurring parts and services, “particularly as we are benefiting from greater scale.”

Weaver said year-over-year gross margin comparisons were not meaningful because the second quarter of fiscal 2025 included a $6 million non-cash inventory write-down that drove margins into negative territory.

On expenses, Weaver said selling, general and administrative costs increased $0.3 million sequentially and were relatively flat year-over-year, with the sequential increase primarily due to expanding business activities as well as tax and IT consulting fees. He said research, development and engineering expenses were relatively flat, and that the company continues to invest in R&D with a “measured yet opportunistic” approach, including next-generation products targeting the AI supply chain and the specialty chemicals business.

During the question-and-answer session, Daigle responded to an analyst question about improved gross margins in the Semiconductor Fabrication Solutions (SFS) segment by pointing to the impact of incremental revenue and product mix, adding there were no meaningful structural changes quarter-over-quarter in that segment. He also reiterated the company’s operating leverage following structural changes made over the past two years.

Cash position, balance sheet, and capital allocation comments

Daigle said cash on hand at quarter-end was $24.4 million, up $2.3 million from the prior quarter and up $11 million from a year ago. Weaver said unrestricted cash and cash equivalents were $24.4 million at March 31, 2026, compared with $22.1 million at December 31 and $13.4 million a year ago, and he said the company’s cash increase was driven by operational cash generation, working capital optimization, strong accounts receivable collections, and accounts payable management.

Weaver also noted the company “continues to have no debt.” He said Amtech did not repurchase any shares under its $5 million stock repurchase program that was put in place on Dec. 9.

Asked how management is thinking about capital allocation, Daigle said growth is the top priority, pointing to the company’s operating leverage and ongoing investments in next-generation equipment and resources to build out the SFS opportunity pipeline and specialty chemicals recurring revenue streams. He said he does not expect those initiatives to have a meaningful impact on cash needs and highlighted the company’s “semi-fabless model” as enabling scale without significant capital expenditures. Daigle added the company would consider acquisitions if it finds opportunities that “generate real meaningful value,” and said returning cash to shareholders would be considered if there are not better uses for cash.

Segment commentary: parts and service growth and SFS headwinds

Daigle cited growth in the TPS parts and service business as a quarter highlight, saying revenue increased 10% sequentially and 56% year-over-year. He attributed the performance to customer outreach initiatives.

For SFS, Daigle said the company continues to use its foundry service and technical capabilities to pursue applications and customers “not well supported in the industry,” and said Amtech has built an opportunity pipeline and is expanding efforts to replicate successes and grow sales of legacy products. He said overall revenue in the company’s IDI Chemicals business increased 15% year-over-year and that parts and service revenue at Entrepix rose about 40% year-over-year.

However, Daigle said progress in SFS has been “masked” by weak sales of PR Hoffman products due to weak demand from major silicon carbide customers. He reiterated that 2026 is expected to be an “investment year” for the SFS business as the company executes its strategy to “overserve the underserved,” and said management believes the initiatives will deliver recurring revenue streams with meaningful profits beyond 2026.

In response to an analyst question about silicon carbide demand, Daigle said he views silicon carbide’s major demand driver as electric vehicles and noted much of that growth is currently in mainland China, which he said is less of an opportunity for Amtech than Western markets. He said AI infrastructure could drive some silicon carbide demand, but he does not currently emphasize it as a major growth driver compared with AI packaging and assembly and building the specialty chemicals annuity business.

Outlook and leadership updates

Weaver provided fiscal third-quarter guidance, saying Amtech expects revenue in a range of $20.5 million to $22.5 million for the quarter ending June 30, 2026. He said AI-related equipment sales within TPS are anticipated to drive the majority of the company’s revenue growth and could represent as much as 40% of TPS sales in the third quarter. Weaver said Amtech expects to leverage continued top-line growth and “sustainable improvements in structural and operational cost reductions” to deliver adjusted EBITDA margins in the “low double digits” range.

Daigle also announced two leadership additions. He said Tom Sabol has been appointed CFO and will join Amtech on May 14, and he thanked Weaver for serving as interim CFO. Daigle also said Guy Shechter will join Amtech on May 19 as President and Chief Operating Officer in a newly created role, citing Shechter’s experience in semiconductor equipment and advanced packaging as important as Amtech expands solutions for AI applications.

About Amtech Systems NASDAQ: ASYS

Amtech Systems, Inc is a global supplier of capital equipment and aftermarket parts for the solar photovoltaic and semiconductor industries. The company's solutions support key steps in wafer and cell production, offering both new machinery and spares designed to optimize yield, throughput and energy efficiency. Amtech operates through two primary segments: solar manufacturing and semiconductor & electronics packaging.

In its solar segment, Amtech provides diffusion furnaces, epitaxy reactors and plasma-enhanced chemical vapor deposition (PECVD) systems used in high-volume solar cell fabrication.

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