VECO - Earnings call transcript Q2 2024

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Operator

Greetings, and welcome to the Veeco Q2 2024 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Anthony Pappone. Thank you.

You may begin.

Anthony Bencivenga

Thank you, and good afternoon, everyone.

call John Bill Officer. Kiernan, the Executive Veeco's on and Officer; our me today Miller, are Chief Joining Chief Financial materially earnings otherwise website. To presentation available slide future revenues, call release today's market for Today's is conditions, earnings, and webcast or management's from results discusses to expectations on are subject and statements future, forward-looking these expectations actual extent made. about the accompany Veeco statements cause statements future the that make the current uncertainties risks the to could differ this are based the on and that to These risks annual detail our filings. report Form are XX-K discussed in SEC and other in or undertake made date of circumstances statements, any not management update to such including statements. Unless does otherwise on any address to those call, results. noted, non-GAAP financial forward-looking events after Veeco this will the obligation future reflect reconciliation the refer which end release you of to Miller. you We over the that, to our find call to and in can results, CEO, encourage GAAP press Bill earnings will I our a and turn non-GAAP the presentation. With at between

William Miller

second of Veeco line operating you, $XXX $XX non-GAAP results non-GAAP guidance. Revenue quarter with delivered top totaled million, and Anthony. income and million in $X.XX. Thank line EPS bottom our

customer's support our technologies we and available expansion. I'll DRAM, expansion driving served follow-on leading by gate-all-around Our and our orders our provide strategy. a planned today, market in an investment revenue receive architecture. follow-on memory. received record semiconductor advanced to business And In strong customers of business and business continue now overview remains highlighted for orders logic annealing in laser new the to LSA logic, we opportunities

creating for customers. device our and challenges New scaling shrinking are architectures geometries

their the and for is are mask architecture. market are As gate-all-around blanks, EUV defect-free required LSA capabilities for Veeco In leading all to annealing systems a logic beam ion films. for highest-performing customers result, deposition chips, manufacture qualified at the our new leader

road maps, our and a support is for strong position enabler to demand we're deposition beam growing ion a key Our in customer's of technology lithography. EUV

new advanced high our our expanding driving are Moving forward, and In demand to focused growth on in business systems, processing capacity. blank customers mask applications. our wet we're expanding bandwidth memory for is packaging,

have to growth in past semiconductor advanced logic outperform years. our enabled WFE business three over and Our memory the investments

Looking billion, substantial Beginning spike to core opportunity we're laser ahead, investing technologies annealing today our SAM expand of million driven and available in introduction of our adoption from grow have by we annealing. laser the over served in nanosecond $XXX $X a to to market. annealing, with memory

is we're system X qualified we're with X at customer, equally other applications. advanced annealing spike excited In DRAM new laser expand and annealing, the Tier to Our leaders. as to making nanosecond progress

opportunity ion a semi for also most of metals beam where We is within $XXX market, focused have low-resistance in significant applications grow deposition on we're to the front-end million long-term and SAM photonics. And critical. power electronics in our a semi to opportunities deposition compound

an shipped to architecture, annealing long-term solving and growth are Tier a technology the and broaden in Scaling early evaluation capabilities, new laser XXXX. in the our high-value annealing in of a We largest customer adoption deposition substantial And ion and also need deeper DRAM we the our applications is opportunities sites a annealing budget annealing in challenges evaluation surface are progressing take a to system system solutions. We're our the X a making most shipment shorter recently for our laser customer device semiconductor the power wafer, new system's potentially level and such for problems. compound silicon anneal nanosecond towards in additional of opportunity targeting power applications. achieve to element This X and like our advanced only semi versus on our shipments enables ideal systems Due XXX-millimeter program X increase key we're to precision leading today's time dwell core GaN with to early now annealing This nanosecond Tier as a thermal at customer and strategy. In new progress delivery evaluation on market. I'd investments technologies focused continue into well, modify to customers' XD supporting evaluation driving for second semiconductor the XXXX. market. lower offers backside to the dive to in can market, LSA a devices. evaluation beam a shallow we

and improve performance can system to door steps. structure modification material the Our device, by the of changing also properties NSA new opening the

logic As ahead, from we look orders for XXXX. customers manufacturing initial potential high-volume in we see

advanced core now density XXX-millimeter beam deposition in EUV and technologies technology, performance. geometries enabler disk wafer deposition decades. drive to to level end the for Lower for applications. direct increasingly struggling Veeco leader device ion device This production industry has are shrink, resistivity. maintaining beam semiconductor metals are in to enables hard driving mask aerial also growth Turning as industry traditional deposition front critical semiconductor blank a is applicability is over to technology in which continue resistance And the ion manufacturing. key lower

films its X ideal on through beam low-resistance films beam ion of scaling In it Tier performance technology demonstrating data, line tungsten ion maintaining while bit properties, resistance to advanced technology. customer compared deposition and Our to ruthenium deposition where deposited enables film device. for differentiates the this achieve ability making electrical are our thin tungsten lower DRAM, applications critical. Based are itself superior traditional

technologies nodes. I'd the touch Veeco chip manufacturing integration the For is AI in schemes to advanced plays intelligence role process. AI future logic, of Growth to the requiring like most now and can metallization upon artificial higher-performance chips. new ruthenium enable manufacture at

we ahead. As look

technologies growth AI. Veeco several expect We to from in benefit

used most all Our at customers nodes. LSA systems logic transistor for GPU CPU are and formation leading for advanced production

advanced on IBD enables peripheral HBM blank die. our and our HBM production beam our we GPUs the system In processing, For wet DRAM. Equally our LSA packaging both In solutions future well DRAM, and customers, has DRAM die micro at processes. for systems memory logic annealing as similar AI see as HBM beam each each. our enabling opportunities support and packaging for customer by logic of with mask OSATs the ion as nanosecond clean foundry important, flux system ion both and leading bumps for first for adopted for deposition, deposition

Looking ahead, financial continue customer's our expansions. With I'll planned a John we're for it over excited to to supporting turn update. that,

John Kiernan

Thank you, Bill.

Revenue first from our the Turning at sequentially. quarter. came million $XXX and up year with in for X% revenue guidance, X% our in line to the prior

quarter, in QX. revenue, a Semiconductor X% record business of declined the from semiconductor performed laser led annealing. during well comprising XX% Our by revenue record

line expectations, XX% the revenue other made semiconductor data to in $XX revenue increased In up increased XX% compound million, comprising revenue. year-over-year. with quarter the half $XX However, prior the of totaling scientific market, first declined In to storage XX%. X%. from And and million, lastly,

revenue R&D an high quarter tax effective by Tax guidance, approximately gears XX%. from revenue quarterly The percentage of total sales during non-GAAP margin million was States China $XX of approximately investments. the our customers. above totaled rate $X primarily to quarter, excluding Operating expense of the quarter, to EMEA and guidance. by our timing at quarterly expenses Gross semiconductor with XX% to XX% turning XX% QX, end Asia toward United XX%, for region. resulting Pacific the of the region, XX%. Switching in was Revenue Now, line China, to in from due results. in million, prior totaled led the the

$XX Lastly, came shares. approximately diluted on net was income $X.XX at EPS in million, and million XX

diluted This from X by share notes. shares count diluted share QX. count Veeco share our a higher QX increased with increased million was the XXXX approximately which in associated driven by Our primarily convertible price,

million. moving a and accounts sequential $XXX From investments by CapEx balance declined ended the a increase We in Cash $XXX liabilities capital our to Inventory $X operations increased $XX to $X slightly million million, sheet $XX million receivable sheet million. Now, highlights. to Customer flow declined to of at and $XX $X the declined with from to million. by $X of $X working perspective, quarter by million million cash by accounts short-term cash million. $XX within contract came deposits payable and flow million the balance and included million. on $XX million,

QX QX and the we remaining levels expect expected semiconductor markets. sequentially similar for and to million. million non-GAAP in revenue By is growth guidance. revenue market, turning of $XXX $XXX between Now,

our expect Net income we're to We million million. and diluted between $X.XX XXXX gross $XX the on between now from that, the $XX $X.XX to million. through tightening full halfway $XXX turn to from our And now margin of $X.XX XX% and the QX OpEx $XXX per between and prior range guidance to as and and our prior share. With million EPS to $XX XX to shares. And diluted million up correspondingly, color year. range million non-GAAP for $XXX million, between $X.XX year for over beyond between per $XXX open $XX $X.XX of and call $X.XX revenue some we share additional We're now expect operator I'll million the Q&A. million XX%. EPS

Operator

Schafer first & Company. have Rick is we The of from Oppenheimer Instructions] [Operator question

Richard Schafer

is bandwidth about but think, in Bill, out growth I asking supporting kind And, I eval just roughly that evals previously. given of is thought a ago I thinking you if had finite, believe from, see year, XX you're you that I'm How curious [Technical mean, to and terms you've against ultimate years that annually. rate I'm realize opportunities I'm a is believe, a level up design you high the I new. I costs, one. you're your questions. I XXX% decided that. the basically of win you've And if converting X to correct couple about ever But success rate Difficulty] do but first, wrong, And had. few how high weigh the know X of to me support I a there

William Miller

in actually, hate field. the round but that for right, us thoughtful logic. quarter success on just you're of annealing evals beam in say ion the question, with X Clearly, last I fourth wood. systems the Rick, evaluations in confidence we had I into did lot put We deposition Yes, we knock place a and the and systems of nanosecond to X think gives XXX%, place field. memory as We

laser a annealing have field We the memory in customer. for a system out second

our lot XXXX. more of planning And the we're of the of irons we evaluations fire. a the So in widening at have year in and breadth end

some and to support support that responsive to us to give in our the does in confidence it us, we the for customers. these how tools how know the think field, be I factory

gives As some you confidence. us said,

our John manage growth. it probably and aggressively, the I on to think there we're problem governor that that out a if that governor get need too attack a we a a is at effectively to time the on of kind That's which is of the some limited. thing type I one need not resource many is, evals, bit

do we we're good the think being with catalyst. with the industry not leaders That's ourselves getting the and overextended. of managing, working I working situation in but a and into job closely aggressive, where them, a

Richard Schafer

guide it. to I all I That around follow-up. of with appreciate, tightened lower curious, don't really makes then I'm but the John, end about really just I'm end range. if been the could yet, you given the you've midpoint, high tracking a sense. guess, And now that in which the can for XQ Got know the I And let's the again new curious versus you've sort XQ, range we hitting you year. guess, say, quick in the or puts what terms we exceeding, of are of see -- I

John Kiernan

Yes.

question, Rick. additional for the thanks So,

we're I is expectations here, say our we've I haven't compared the semi of year. slightly the our significantly changed initial to halfway by expectations So, would that because range markets. say, the view, through stronger. narrowed would various sort the

full digits. high year lower semi, were down. from so, we're compound flip side, in the it be semi where low We to to to And up see And I'd that compare space digits, on slightly last flat we there. we thinking double we're flat now saying say when year, slightly slightly now for to the contribution single up

Operator

of Charles next question is we from & Shi Company. Needham The have

Yu Shi

want you timing the can Is the How any I sounds really I assume received my you the it from the question that way to like Tier there -- LSA. X probably turn you is the about about. Because that want is bullish and But DRAM What's revenue? you first to expectation? color order, ask, only into order to do of something since but X ramp order? that's want customer, the But people have some business the us? I follow-on the is for you characterize qualified when the of -- are HBM big only I will have ramp. the size received customer. kind on

William Miller

I think order pilot you're QX, tools those either a X-system gate-all-around we for believe press line. And scheduled John? are talking to was release. about for the announced in I X-nanometer our order in a QX QX, ship That

John Kiernan

Yes.

may is shipping bringing about And to X we be follow-on customer leading from I Charles orders $X receive for we tools. handful there. a to have X our of into the in tools for our sort we spike So annealing in up we and a asking business it's an And to that that, been continuing the And We've million that presented said in $X tools customer. orders. They're think typically when comes laser DRAM range. DRAM of LSA, chunk a that scripted had win see laser million we remarks HBM million application $XX HBM million yes, just here. What we where their continue are of customer, that $XX for at we've ongoing customer. business, we win receive customer of from future that These typically we've production product. a follow-on for their annealing application in

at intensity of that at the at seen logic of we're this we've But in in the at logic, progressing the that similar foundry stages laser point least a early of in is annealing level So intensity DRAM. adoption. adoption typically

William Miller

customer add expanded logic I'll with to originally starts. multi-level which John. more device, each started that wafer stack now just of on HBM peripheral just obviously the logic guess, base one the I the die, drives the We of comment, and we've winning

Yu Shi

some -- repeat is half? events? timing XXXX of more Or orders is the there revenue like the second is in So this

John Kiernan

year, We've having of new taking towards half we've shipping tools actually been and -- well. a year. We've No. revenue this been as started order shipping they the back last tools been

So it's sort of ongoing.

I over period these million what X of laser it's here million XX-month we're ramping So customer. of to think XX- level to business, as activity that we're chunks type And using that is $XX their production that, when typically, Charles, of $XX getting for seeing highlighting they're a time. annealing particular we're

Yu Shi

The we of I should to business growth, lumpiness? think revenue just think into question. how QX. storage second half a that Or good for and does year that? going the very some expect Maybe the data revenue about to second the about how quarterly Okay. storage -- have data appear full Is should year-on-year the

John Kiernan

Charles. Sure, Yes.

the storage quarter-to-quarter. So I in data that typically ASPs see we with was revenue anticipated. I was high do second think, our we from for tools, the in quarter we're look the Revenue as year, equal we The at an achieved lumpiness expecting And lower first then of quarter there, upon think to of the the QX QX timing falloff shipment. based in sort just half in scheduled of a And second the quarter. QX.

backlog is our that, view scheduled So full the is this for revenue exactly year systems of the coming releases the year planned in there. as

to the for saying about last our to X% it year's what if volumes. revenue XX% full year, storage is, up year data be then compare is to expectation we're So this you

Operator

Dave is Securities. The Duley Steelhead next of from we question have

David Duley

have questions. I guess, couple of I a

from a really to the guy will Veeco? to We've CapEx I'm big Just take how in sure just exposed of, Could is that the are party. summary, seen to couple the back. upon join in increases of a DRAM you you from going step guys? CapEx increases Or kind help really third in touch how guys. DRAM

William Miller

DRAM equipment as said, talked high a has ago, memory. few us. as gone our they're LSA -- we've from now won a bandwidth Dave, in few now with customer John from and exposure years X we've just times, X And taking in practically for

DRAM a early customer with second evaluation shipping an goal our and system demonstrations -- 'XX evaluation is planning are agreement X have the we're players an under kind to as and landing drive We next system in to timeframe. second first other evaluation doing customer that XXXX with of our of step would a the now expanding probably in the revenue on customer an

is in in exposure bandwidth high wet we business. area processing have other memory The our

for are makers, some that's a And really stool. leg significant HBM HBM. foundry sales type as that we this have logic business, in as DRAM seeing that driven on We the to from year well pretty OSATs applications second a people, uptick

John Kiernan

in on have say, technology for metal. now we right Bill, X field we'd also for our low-resistance the I would deposition systems ion comment -- beam evaluation

revenue ion the and DRAM the bringing that for the hasn't for that been for growth future advanced in technology and there the storage and data for but area been to So bringing out are beam application us an first blanks any deposition market, an semiconductor metal in in first area our for ion in previous mask out used manufacturing important area in traditionally space. low-resistance DRAM evals has that's beam and technology and us EUV

David Duley

a are bandwidth high in those follow-on, As low-resistive memory? used films

William Miller

beneficial the device would all to but They overall. resistance, be the lower higher high the the speed bandwidth, of memory, the obviously

unreasonable So in be high first I think a would be would to bandwidth entry wouldn't memory. think it

David Duley

Okay.

really of new another that's So this that's driven high... area by kind

William Miller

Yes, we're have and expect from we're ion we'd systems. in follow-on I successful evaluation successful those would here, yes, orders and deposition Dave, if if -- 'XX beam

John Kiernan

have we leading customers. memory X X And the of

David Duley

Those guys are Korea? in

William Miller

David. on, Come

David Duley

I try. had to

from think the question from orders My see drive I start would business Charles or about would up Okay. AI disk would you at going consumption and environment? show And nice some to is that you incremental -- improving or forward, point a to final talked another, data would some an year-over-year uptick business follow-on I hard is, a from expect XX%. when thinking storage? business center just you guess, being on X% earlier

John Kiernan

expect at signs historically long-term their of range. customers the the Dave, industry. I XX% mean, But data improvement. to is for exabyte still side, are XX% our utilization at levels. seeing are are in positive we fabs storage growth continuing And CAGR still in invest I which new technologies, to So, say, would the they on

about also customers and adding capacity Our are of bringing up additional until are But additional are they cautious being think signaling customers are right talking signs about capacity. improvement higher. rates that now I utilization

think as based do we're 'XX order year, first like be half in to utilization upon here business I we today year half lower this have of we're next customers. So our through the compared will visibility the improved sort the sitting and activity, what the looks systems of halfway the despite and it 'XX, first of for into

Operator

Barclays. we O'Malley next is have question The of Thomas from

Thomas O'Malley

here. couple a have I

So the China. just first on one is

semi the longer. for a look down. little you when your across come space, think a little way I deposits, Could But I in at cap hanging hearing you're China stronger to... equipment just customer talk they've

John Kiernan

we us. you [indiscernible] So had you some there? you clear what noise? if to saying It mind there, were background don't repeating wasn't

Thomas O'Malley

Sure Yes. thing.

So semi And talk first your But the come prints, look of half this of deposits, when of a stronger any back half back your you saying what are I at for the longer. in cap in they've about down China? equipment is seen Could year kind year, customer one. bit. hanging was across the you've seeing are China expectations I for kind weakening you of into the

John Kiernan

first a of stronger said our still half. this would our about bit expectation. be So, as out playing be the year. we this We at sort That's point We into that half got see China still of the is second that year. expected of I good X/X China second business than would said say, half currently. Tom, that visibility we've would and We

pretty projects to this the customer new continue point in activity our by strong still We time. customer is at in investments see with

But And storage. for it also deposits. directly come X Customer the wouldn't region. necessarily correlate down. example, in backlog deposits data You say have data the question any We've say customers typically, deposits. and I asked an that given about to would have storage customer shipped I

and not that this year backlog. As same in shipping this have against I had mentioned, we've replaced We're been those just the pace at at deposits backlog, point.

Thomas O'Malley

EPS December in the follow-up least then Helpful. it years, of shifted and But when obviously, the the look parts at year. because kind downtick normally talk pieces last Could like December at full the of around for it at, seasonal I the get narrowed more tighten year, of kind looks is you is kind Any moving you some to midpoint a things the your QX? And seems there? that of just couple on range guys. the that broader for we of Just look I there moving you've this were And market you around. final quarter When the now just have your guidance, range. and you flattish. expectations rev

So you've been that help would us Anything narrow pretty there. December? specific in on

John Kiernan

to. happy Be Sure.

Tom. So,

in million the numbers revenue halfway there. revenue QX down. about $XXX for first way at take We of are. for we're We've of X through there's of year year had out, at guide the million half And year-to-date any yes, half of don't into range we our year midpoint expectation the for narrowed range year. I full that's called the and you the type So, think point the in our initially our the and change and sort guide $XXX any this quarters you where of as material of and year. second in the of roughly the in consideration guide, Once range our QX guide similar QX. midpoint

much or say -- yes, I So, there's there really of highlight. anything to a change not would really

Operator

of is Capital. Gus The next from have question Richard Northland we

Auguste Richard

you've some of steps to into. with backside got you Can that talk the X-nanometer? going on around gate all that line and compared you're that X-nanometer and nanosecond how LSA LSA, the logic power number getting Just about

William Miller

that, ship and did say step understanding we -- received is orders X the are plan have at place that X our customers. the we this would to quarter I those this at both moment all X And year. we and later at nanometer, some application --

Auguste Richard

established the And got just how in coming in an than haven't into Okay. that you gotten you've weak other eval any silicon wondering traction And GaN X quarter. power along. Have I'm other carbide's then compound in on you the was set semi, going again touched small really type?

William Miller

made we've of a in silicon fair we the carbide. -- during quarter, amount Yes, progress

evaluation way to 'XX of end year meeting And the say, in That's on either carbide. would goal our about requirements say, getting to end progressing We systems this running we're for is early very market would place to update very to remained all customer close there. or that to just of is are the I them X in our of silicon you getting, installation hopefully silicon, their start qualification of turning the the GaN XXX-millimeter the over midst wafers. I same. the the well, for on evaluation and the mentioned tool is kind in

that I to off think start-up start. is good a

Operator

we Miller The is of Benchmark. next question from Mark have

Mark Miller

like feel their back utilization, I'd mid-XXs factory and terms go talk your upper with in to about data current to you XXs? of storage. What do customers

William Miller

rate sure we We've I'm historic in historically bit. a But commenting see back at pick to I seen a terms historical run be will in rates up their service wouldn't from said, business. we saw standpoint. of reduction their from say we're our service they've at look what say that a rates. if norms we utilization not on And utilization were low should that that But definitely I what levels. you

Mark Miller

Digital I reported strong asked sales Western come that that question nearline very because recently, significantly. very up most Seagate had

that's I upgrades for Are you materials new was why lead So down or to the the in thin fabrication film new of there that changes, opportunities for coming process terms any curious. equipment head could pipe? of

William Miller

working has industry for on been recording energy-assisted time. The magnetic some

it deposition And against helps edge and for grows, will because more industry it much fabrication there us cost steps lot an the density the head. actually adopted aerial gets more as that opportunity well. for on are the are the more the hand heads because As be complex a one be broadly, as healthy it competitive also of industry memory will flash in be and

term, soft. the thing in a run, here So, long the I think overall it's bit seems in it a just short good

Mark Miller

of and ramping Digital So or even hammer ahead Seagate is heads. a Western more little

this opportunity. you out think second year as next the in plays So of half an

William Miller

us hard visibility to see yet. It's that the of for

with wait going energy-assisted longer devices. the adoption is successful little broader to these of to how see I the recording have we're think to industry a

Operator

the back like Miller and we closing would session. any end Ladies turn of to the over And comments. call the Bill I reached gentlemen, to question-and-answer for have

William Miller

team the Have I'd thank support for shareholders continued evening. journey. in our like customers our to along with and great United a Veeco our their

Operator

call. Thank today's joining concludes That conference you us. for

your You now disconnect lines. may

Veeco Instruments (VECO) 6 Aug 242024 Q2 Earnings call transcript