VECO - Earnings call transcript Q3 2024

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Operator

Good day, ladies and gentlemen and welcome to the Veeco Instruments Q3 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I'd now like to turn the conference over to Anthony Pappone, the Head of Investor Relations. Thank you and you may proceed, sir.

Anthony Bencivenga

Thank you and good afternoon, everyone.

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

William Miller

Veeco above income, and and delivered non-GAAP top operating EPS solid $XX quarter of Thank totaled million, Revenue $X.XX. of midpoint you, guidance. non-GAAP the Anthony. $XXX third results million line bottom our

record delivered business across in product and customers XX% to increasing by an semiconductor Our increase XX% sequentially, shipments lines. several leading-edge year-over-year highlighted revenue,

leading foundry, over As announced today's our manufacturer in AI. press release, million XXXX, in OSATs systems in placed in processing HBM a $XX wet for orders driven by

lower key visibility orders road meet requires Veeco's manufacturing process extending budgets critical requirements and level an driver shrinking technologies new enhanced steps. in architectures of on technologies Key our solutions advanced growth for the are semiconductor a XXXX. I'll semiconductor surface annealing driving an The several leading-edge of are packaging to with XXXX Veeco well include advanced semi process capabilities increasingly business geometries. key business and thermal from precision. performance capabilities in manufacturing and map semi processing as in today. Our recent is wet now update role business as overview into provide

annealing as a our thermal time, annealing to memory as laser tool annealing and incumbent challenging. Veeco systems most Equally during scaling enable opportunity is laser shipments with dwell expanding more as the our and the technology DRAM of our result, with for industry annealing qualified logic expanding even at capabilities becomes budget LSA logic customers' in a nodes. As important, is leader the technology next-generation for device quarter lower nanosecond to record production an edge laser achieves several advanced potentially nanosecond customers. inflections leading market and

EUV deposition Veeco leader. beam EUV blanks. films defect-free deposition for blanks, to of system Turning for mask the mask making enables ion IBD market Veeco's EUV

Our ion EUV beam growing deposition technology enabler a is position support strong for map of the we're in road lithography. to a key industry's and demand

system the provides application. mask EUV the expanding for growth quarter, win we semi leading in new example the a additional use During This IBD ion to of a for blank is deposition the shipped EUV in market. years for coming beam and cases foundry logic great an opportunity a

to the of The deposition new road map optimize performance materials excited consumption. front-end and the leader ion technology, is turning in technologies semi Veeco and market. adoption is to As scale semi and to beam power expand

improved recently through As its and itself metals resistivity and device logic evaluate to low memory Tier-X thin in customers with traditional technologies to to differentiates properties achieve memory. solutions. requirements, new incumbent technologies resistivity are critical from film geometries continue and challenged shrink, Veeco's to IBDXXX logic driving ability launched achieve system

trajectory our advanced Heterogeneous for foundry, IDM in wet on XD a of from are activity, strong Based advanced packaging order high-value spectrum manufacturer we're continue and pickup the materials wet driven for closely its in and integration lithography, challenges. In gaining confidence Looking driving customers and AI activity and leading growth our packaging, to is XXXX. order across packaging recent business quoting ahead, mobile. In of continue and tool with OSAT HBM at customers we're applications. solve we're growth. by processing select excited AI a to production seeing expansion processing can their year-over-year system OSATs working our capacity record Tier-X for foundry,

million laser gate-all-around opportunity more ion As technologies logic, in result, anneals are a beam resulting as we and precise inflections grow semi materials driving enable compute over XD tighter challenges. In deposition, budgets. In targeting logic to address as need outperformance SAM in In in critical to backside semi $XXX and architectures applications high-value recovery expand this memory, in SAM for visibility have X years shrinks new extend growth devices a to address thermal business technologies to our and increasing steps The is and intensity, and new business memory. forecasting high-bandwidth opportunity expect to $XXX billion, and consecutive requiring technologies inflections device to enabled XXXX. In are for into adopt map laser performance. annealing for annealing, semi performance. investments to a core as have $X WFE our driven new requiring fourth such million half in from energy-efficient turning continued annealing to of film road new technologies such year we're delivery front-end our memory outperform recent architectures growing the and first industry customers the and of to we by we power leading-edge orders XXXX. Veeco's has

EUV resistivity deposition road EUV systems for and EUV one their DRAM leading IBD for achieve HBM our film critical memory to The of logic can ion potentially be integral as Our to mask maps. schemes every logic industry EUV has metals, IBDXXX improved new high-NA system enabling EUV future XX to thin blanks, systems and future required shipped. as properties ASML well integration historically at scaling beam through for lithography expect lower nodes. In XX customers lithography

And mask to than for applications, have Given plan supporting computing for high-performance opportunity SAM wins the packaging, capacity SAM for in expansion the adoption. EUV advanced number double expand technology see we we as new million. ASML's blank to our and to well in $XXX as wet more AI enabling for of opportunity processing years, recent high-NA and coming an our increased over applications

look than portfolio grow is for we and program importance enabling capturing As now our additional to inflections drive our in WFE. I'd of faster we of opportunities. semiconductor our key SAM positioned largest well technologies evaluation like ahead, believe our on to to detail provide its several

market been penetrating and Our memory with opportunities Tier-X essential evaluation to program have evaluation and in we systems front-end several the has semiconductor logic outstanding new customers.

targeting can business result Many beam annealing per starts ahead, win, application million between Looking to in in applications, ion and deposition $XX largest assuming evaluations capture to several $XX increasing which follow-on per are we're laser our our programs wafer SAM month. investment million XXX,XXX opportunities.

customer I'll to by adoption about value a update. turn and we're proposition market over will of focused the financial timing on vary, technologies it offer our executing. With highly excited is the While John team that, and system, our for

John Kiernan

Thank revenue $XXX you, for the midpoint at million, X% prior came the our Bill. Starting up year with guidance, from Revenue and above the of quarter. sequentially. in X%

quarter, million, million, several other from revenue business storage by semiconductor Data Our In semiconductor the XX%. the made up record the $XX revenue totaling delivered strength comprising slightly declined of to scientific prior across revenue, and declined XX% lines. $XX compound product to X%. quarter of market, comprising led X% And revenue revenue. during lastly,

and United line from in Revenue came XX%. at expectations, China Pacific sales. revenue Asia excluding the region, decreased was quarterly of to semiconductor China, by States Turning the to in revenue with to decline XX% region. percentage due from XX% In a

XX to full year for the continue Gross guidance. expect $XX expenses resulting an lastly, XX%. guidance. approximately to Net non-GAAP at effective tax Operating XX%, $X with our and expense And line shares. million margin diluted came revenue. approximately million, EPS of line to approximately $XX in income X%. Switching in approximately revenue rate gears China tax was also totaled totaled We $X.XX in million, was million around results. XX% quarterly be in was with EMEA Income of on

quarter Epiluvac gain GAAP acquisition. from the $X in $X our to by change estimate a approximately related a million at Looking expenses Operating due the to results. prior declined from million

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

revenue QX million. outlook. full and Turning to between XXXX QX our $XXX and expected million $XXX year is

levels in revenue expect in QX. record semiconductor decline We to from QX

outperforming at the by customers. compound in Looking we increase XXXX, XX%, semiconductor high and our we forecast year photonics a driven full WFE In the original approximately the year X% XX%. the our expectation growth in QX end grow market, business for at coming for fourth and between solar growth of shipments to semiconductor expect sequential revenue consecutive to to

business. including QX scientific, quantum in increase storage in expect decline a Turning execute we to for several as to shipments is shipment in forecasted to customers, And our in shipments Revenue backlog. data an computing. we

share. And Correspondingly, million year $X.XX million $XXX for million, prior guide, million and beyond XX% diluted beginning our to between million net non-GAAP per $XXX million. with gross QX our between $X.XX $XX for million XX%, $X.XX $XX $XXX QX and to the $X.XX $XX of market. revenue now guidance million now semiconductor we our between results XX margin some between is share and prior and year-to-date from diluted $XX shares. Based on EPS $X.XX expect million of from We between range and our to range $X.XX OpEx color now to XXXX on the per $XXX full narrowed and additional EPS expect income and

adoption and power XXXX, slowdown China, resulted memory investment. power computing, XXX-millimeter GaN gate-all-around, customers invest manufacturers customers and semiconductor in carbide XD the While packaging, exciting adoption long-term we're on while seeing engagement silicon In continue EV expectations electronic in demand high-bandwidth has In use in for cases continues, in recent revenue from silicon moderated, market, in photonics. In silicon production delaying China AI demand the providing of driven weaker XXX-millimeter opportunity. emerging increased a some have China in is GaN Outside growth in in decline XXXX. in been investment and transition consider the to resulting which has for for in to opportunities strong an traditional market, of opportunity electronics power, the production, to XXXX. compound a from has revenue high-performance we including in

and also in We photonics. opportunities are seeing solar

Turning to the data storage market.

customers have planning and remain they systems utilizations are they expand in in new to below a are invest from customer not few indicated capacity ago improving, levels While peak years XXXX. to

result, the pass a $XX in Bill. currently we As back as approximately revenue be QX Taking reduction similar expect comments into XXXX, million storage to now market a XXXX. I'll outlook to we million data consideration, expect we in to ahead $XX QX look revenue to an range to in XXXX. it

William Miller

John. near-term value can we storage data long-term in our our Thanks, for business, confident strategy deliver headwinds shareholders. Despite remain

of providers long-term some wafer the semi equipment to growth First, project for contributing trillion growth industry expectations in $X to time spending. equipment industry XXXX over analysts and frame, leading in fab the

for a portfolio of manufacturing process increasingly critical several are has technologies semi steps. Veeco that Second, leading-edge enabling

believe to core to areas gain growth grow strategy generate our shareholders. With advanced enable the expect for that, we industry our can exposure investing traction. to I'll in faster to to our inflections long-term and these value operator the in continues open technologies high-growth market of now SAM over to enable logic up WFE Third, of the finally, Veeco we memory call Fourth, turn Q&A. And to spending. than execution our in

Operator

The comes from Miller Mark Benchmark. Instructions] [Operator question from first

Mark Miller

And impact that that I'm forecast Recently, expectations. is concern from as was just a ASML their wondering equipment steps previously you're used below one as seeing that. not gave was being many any thought. process if somewhat

William Miller

for time Appreciate Mark. it. Thanks some us making Yes. for today,

shipments planning, industry [ or comfortable X scanner revenue for the very this I Our would so forward. 'XX, similar probably And in with opportunity beyond year in that. as every the of with system do view we expect wins so. X to going XX provide forward that. kind And system that's to they're we're our scanner ASML's very every of to our our expecting outlook application one systems increase year as some increase on new ] say for is flat, are potentially to looking obviously, X to ASML -- the continue to average to range. X growth X then range X to shipments. We parallel then And business that of But system as X a for still 'XX would outlook we've XX ASML needs also discussed

Mark Miller

China that or EV other be mentioned by slower factors You market primarily will that down there? Is driven somewhat. the

William Miller

our I'll semi shot. John can take largely fill is space. China Maybe the say market a I really would in in.

so say, really for strong And in has the I China 'XX. would demand been

our our we As remarks, China moderated prepared recent to John mentioned decline and digest in expect revenue customers engagements customer as capacity. have

So, it's about over a X how too see towards say We revenue decline. generally revenue early definitely time, rates. could China bit we more much have And moving months normalized to visibility. will

Operator

from comes Needham Ross from The Co. question Cole next &

Ross Cole

year of full XXXX for there. segments I the some was different at business maybe for quarter the least guidance directional wondering any if the first or for you could color provide

John Kiernan

a Sure. stab Ross. that, take I'll at

XXXX, look provide would markets detailed but we XXXX. say we I head as guidance, bit for year, we early the the qualitative commentary provide full certainly can as into to into a quantitative So on it's some

moderated You bit. And the just business market heard China our seeing wet our customer 'XX. accelerating engagements Bill describe recent semiconductor driven in XXXX, here, have see despite in includes business in we're a growth by customer growth we growing to semiconductor next the if that where for percent of engagements, from XX-plus XX% that talking view, AI I'm opportunity the year. that about in about into This processing recent business

lithography for recovery and are as been mobile. business in also AI light customers expansions We see capacity AP adding a our that's

We be and EUV our also wins opportunities mentioned, our logic excited in recent see business to well. LSA memory. both see as just And for as continue and Bill business we in mask

the customers electronic use the opportunity XXXX. If for traditional semi in market I emerging we semi some driven market, silicon cases we on in see power, compound have So GaN power see in to move adoption growth the XXX-millimeter production potential in in but activities side. SiC second power demand that, XXX-millimeter related the applications. in from manufacturers 'XX XXXX, one the investments these also resulted delaying early a half of and photonics that. The a on continues, in call XXXX weaker which market, silicon opportunities we We're several has And for transition for GaN solar is of we the to is too bit EV area data in a moving for phosphide, adoption while of consider opportunity. In extent exciting production, pretty slowdown a growth to given into see storage there. the seeing to to arsenic and some see headwind

from not that, as to but $XX about planning from XXXX to to our expand in XXXX. And a million they time invest capacity of customers' to year of a they're with And our reduction revenue compared new improving, in in XXXX. years with in $XX levels result we our storage with a about our in business systems work few expect data indicated So million customers. worth they've are And generally remain below a discussions utilizations customers, ago. peak lead we

Operator

from question from Steelhead Dave [Operator Instructions] Securities. Duley next The comes

David Duley

the first business, it's $XX in on give the could between and processing orders DPUs worth cut guess, I of a million memory? us split high-bandwidth off, how you rough wet

William Miller

it it -- year It's is to strong memory see and processing in as -- high-bandwidth as lot leading this of and well And Dave, and I would as characterize of OSATs. this as 'XX. driver we're our as key Yes. say from well would seeing business a manufacturer clearly continuing foundry wet I it a it's business as in business

orders is about And asked that about business in business. you 'XX. getting orders be say. But OSATs discussions the And there. confident planned our about steps all mentioned on about we seeing plus year. systems that's AI-related of we foundry/logic, and from continuing business, will we're to just quite 'XX those clearly, HBM from business of we're have equipped exact strong So as John or in of in XX growing of those of that kind a of kind exposure our XX% And XX% XX to hard breakdown have whether

So exciting opportunity.

David Duley

a I'm of throughout you $XX the year? ongoing cumulative calling piece out has just timing, regarding this of orders? Or I you're been guess. the million split this got the curious just kind because big now if of Just

William Miller

Yes. we're it we would kind undersizing the I year. some I been into the around say getting visibility good were our It's opportunity ramping think the previously. now throughout of business And year. hands have and now next

David Duley

understand China then, I there Maybe was you Chinese buttons to is And is could to expect to other going and you Okay. what What there. And normal us -- help like hot be? you normalizing. XXXX. decline. happen for just normal? of one in everybody Chinese is expect sometime said be you it one characterized it as guess And is the about the sounds would to you revenue where revenue going comment exactly

So figure to go going to. to percentage going it's I'm equate just out kind to down, of trying it's what how much

William Miller

it's think us bit Clearly, the early for of to of nuanced it's too year. a than I kind Dave. kind that, more little call

only about have visibility. of We X months

would And normalized going the characterized 'XX, whether say as sure think we'll exactly of think get not over how to so 'XX say, to that's I John time probably rates. end what up, more or to over it's probably roll into time that's safe I'm -- I I

ran about you And our so XX% a years of go if minus back range plus few China or business.

right don't at back we probably say that we away rolling on. would point. to early we'd some think eventually normalized would I come rates off But see So that

David Duley

do start in curious, pretty was placed you as us you segments business you your I Or another then you expect, say, memory it systems and your these that's And any of some the detail the the in Great. XXXX for on contribute to high-bandwidth the maybe Okay. of far evaluation gave think to on And progress directions. first evaluation have just evaluation of let's system as revenue? good half systems me. to for your segment? do

William Miller

Dave. applications we I'll that you the in nanosecond give have actually a annealing multiple our had customers Thanks, Great. for being logic. some We're feedback. us in in Kind semi brief the are We've positive X of update. evaluations evaluating for. assessed

As follow-on for well the potential trying actually here. customer through there the memory evaluation third going 'XX resources a would strong kind at as that we're customer are a have fact, manage to I third for our a we're pull late rate of NSA as logic of matter say we on. orders in at

So very low-resistance there. And metals we would that making there. IBDXXX we're good the I the positive say progress applications, have in for memory tool in

customers X, follow-on continue to putting field We them first like trying downstream the put but also the evaluations them well. pull are helping deposition to of late here, considering technology X of to -- LSA And 'XX 'XX, the into technology we're work their at leading orders And again, integrate probably second as in strong 'XX. We're with integrate at more annealing eval we're in initial kind and in upstream once I X And least X processes. now the maybe evals logic customers. customer the with this looking fab think new to probably where this of probably planning point we're and laser and at working 'XX. from a would receiving memory fourth into out half we

some supporting in tools planned full pretty and we're investments here field of 'XX. the that a slate in incremental So

Operator

there question-and-answer for and remarks. Ladies turn are no you, back questions. I'd call closing Mr. as further to like session the Thank to reached Miller of now the gentlemen, Bill sir. end the have we

William Miller

evening. you United our wish continued for evening the thank to want Veeco and shareholders, with do along customers a I you. you. Thank their all great this team and support Thank

Operator

conference. us. you gentlemen, Thank conclude today's you. joining does for and Thank very Ladies much that

You may lines. now your disconnect

Veeco Instruments (VECO) 6 Nov 242024 Q3 Earnings call transcript