NVMI - Earnings call transcript Q2 2024

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Operator

Good Day, and welcome to the Nova Limited Second Quarter 2024 Results Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would like now to turn the conference over to Miri Segal, CEO of MS-IR. Please go ahead.

Miri Segal-Scharia

Thank you, operator, and good day to everybody. welcome Results you Conference to Quarter Nova's like Financial XXXX Call. would all to of Second I With us on President and the line today and Kizner, are Guy CFO. CEO; Gaby Waisman,

certain contain forward-looking call. and may our I today's Before outlined harbor statements, on pertains earnings we may listeners release the begin, also that call this information statement remind in safe provided this to

Gaby of it received begin website. you of view of overview Investor copy with not call Guy business will please a followed in have the Relations the section If release, the the the by financials. company's an the update, with

will call We for session. the open the then question-and-answer

over CEO. now go ahead. the call Nova's Waisman, Gaby, to I'll please and President turn Gaby

Gabriel Waisman

I performance the second Thank summarizing our will highlights. by you, and us start you Miri, call quarter thank all for today. joining

in commentary, the my results financial strong detail. Following Officer, Financial Kizner, end board. record Chief high the of and quarter, Guy will an quarterly review guidance results across Nova revenue exceptionally exceeding profit the delivered with in Nova's the

propelled our and and exposure nodes customers technology dimensional and Nova's throughout manifested metrology performance by portfolio. chemical Our across geographies, was materials

Our revenue profitability our another levels and cash XX% grew and Furthermore, record million. record. at sequentially reserves reached $XXX year-over-year, overall approximately unprecedented set XX%

on outstanding flexible execution. results to relying maximize consistent market operational The attests strong momentum model and the results our benefits. These leverage the while performance opportunities also from our our to to ability

fab year, XXXX significantly equipment. first wafer the the of picture, revenue just current last broader half higher the than forecast higher million, a at than under came Looking same period rate for $XXX XX%

the in confident market. we Given our quarter guidance, our ability third to outperform remain

performance customers advanced led increase steady nodes this for quarter leading-edge forward, our threefold. The and including by gate-all-around Korea see packaging-related and Going Taiwan, to U.S. the demand is upside we in processes in a

Nova faster-than-expected processes. gate-all-around rate X advanced strong a performance from adoption the resulted packaging First, platform's PRISM in and

in solutions for packaging front-end-of-line driven record high logic by and increasing Chemical processes. our our results, Metrology division delivered bandwidth Second, demand memory,

to Finally, based contribution by value-added business sales, year-over-year services rates contract secure grew utilization the increasing our and Service up stellar XX% for this quarter. leveraging the rounding

stand our broad diversity portfolio divisions. with customers the revenue multiple in of performance out, relies product all new these presence, market While streams and our on

A industry's Nova to a solid that myriad from succeed this in and deep ability company's nature has ebb complement stems built flow. inherent partnerships revenue dynamic compensate our of through foundation having and through streams to plan. our confident with our leverage customers, every of flexible and we on our long-term realize thrive strategic us challenge journey that and operations teams. makes opportunity can dedication unwavering our any address It and

is intelligence the boost training the materials core and digital advanced scaling Scaling and through in stages. of reshaping efficiency to designs performance of language X avenues, Artificial our power circuits models packaging. agents which and are and expediting manifested inference more in is large integrated complex through at world enabling implementation dimensions,

needed to dies is per impact It size of number and bandwidth of in ratio, you the dies developments yield must supply our high the in the of demand such industry the lower number to wafers These a memory. as the secure required manufactured dies and in profitability also wafer. profoundly solutions number of with manifested obtain in in

needs trends you years. and are performance. We Couple architecture coming have their complexity and already portfolio There our in that customer materials of that the can indications portfolio differentiated well our structured in of and echoed to process with the address and challenges. multiple these growth growing control meet Nova's the is drivers see

gate-all-around mentioned the advanced surge PRISM materials the example for production. of a The by of engaged our rapid and solutions. entry is sales the nodes architecture earlier most of and adoption in critical I solutions demand of X advanced great in based drives gate-all-around dimensions manufacturers our already

revenue This tools. multiple quarter, X we for recognized PRISM

Demand metrology material platforms. is high advanced consistently XPS for our and metrology integrated also

are with will gate-all-around add the production developing the XX% we transition lines, to metrology estimate and all number customers of engaged steps. We XX% to

see including The of demand $XXX adoption processes, By million opportunity XXXX, demand new deliveries an over to is technologies. gate-all-around, and such driven of by XX% this nodes. growth also our in in see we of of control from for Nova advanced XPS the limited of not record nodes. we for in equipment process the a end resulted which gate-all-around platforms metrology VeraFlex capacity booking FinFET had quarter,

stem PRISM with packaging where a a specific and filtering as advanced revenue Advanced and advantage underlayers. Approximately record Via, unique packaging booking bookings from processes, is accelerant such has in chemical information X of significant revenue Through-Silicon metrology. half from in dimensional PRISM

dedicated evaluation one also our There this portfolio of in of foundries and creating advanced the platform. chemical and clear platform is by a use at integrated a need. of alongside address early to case tools is leading world's respond were under to nodes, The the end front-end back we metrology

upside my conditions, industry cycle remain ability the by to with our nodes. on and prepared promise confident the the market. that a coming across summarize strength second looking growth outperform so divisions. to booking potential into and want primarily We half a logic into X vigilant all for moving and in see notes the deliver in We changes see -- we across indicators XXXX, a is of I from diversified saying robust encouraging to market our

call Guy. more on let hand the to the for details Now financials, over me

Guy Kizner

It forward to a call. this and incredible day, for address I conference today our has success Financial to organization, continuing look our Thanks, Chief joining Gaby. quarter role. and to you everyone, in this second as been of of duly privilege part appointed to to contribute Good XXXX you I'm be excited thank Officer Nova.

performance a the let's by financial the faster-than-anticipated million, strong This second exceeding quarter, XX% level revenues second and driven company our XX% acceptance of reflecting Total review of for the by product processes quarter. was guidance quarter Now customers. highlights record high business the and demand and reached the our for of XXXX quarter-over-quarter year-over-year. growth in $XXX.X for

distribution contributed more and that reflecting each approximately from and includes position logic product diversified revenue or revenues, from was Product and territories revenue regions customers. X XX% the across and X XX% Product approximately XX% foundry memory. company's customers to

in company quarter topping favorable higher second margin a non-GAAP model a the basis, of to XX% with volume margin were target quarter growth. the on basis the XX%. on coupled high XX% XX% gross in revenue was GAAP and attributed Blended gross product mix, to The

to the the the company expect basis. gradually annual expect -- gross growth on end model with quarter, margin of in high an coming We aligning normalize we target

the on and the basis operational and exceeding excellent company model basis in non-GAAP and to GAAP margins Operating $XX.X quarter expense on company's XX% quarter XX%. increased high second $XX on This model. end margins a healthy came XX% million target As expected, the basis, GAAP was operating the million the basis. a second in in at a of a of XX% robust gross driven and by result on non-GAAP quarter a were

remained yields second income share on guidance, elevated diluted per GAAP on $X.XX diluted in non-GAAP and our tax share, following third a quarter came were the a The higher Financial consecutive were and reflecting for end cash a of quarter share at second record $X.XX basis exceeding earnings per per per the high the share, second approximately effective basis in million. quarter quarter. reserves in XX%. rate $X.X on quarter the Earnings the was in

from $X.XX guidance of diluted XXXX. the the earnings $XXX to quarter revenue be share third to like Currently, per Finally, expect $X.XX. million $X.XX million. and between I to share quarter would earnings details from diluted we share the to for range our range Non-GAAP per for to to $XXX $X.XX. GAAP of

to At increase a to expense we following: and the to a our non-GAAP million on income approximately basis. rate approximately Operating approximately of anticipate on and to the million. GAAP third of XXXX non-GAAP basis approximately on quarter tax increase effective XX% midpoint remain on estimates, is a XX%. approximately gross second XX% and expected basis basis be quarter $XX GAAP Financial the $XX to to margin to similar

company the cash healthy cash a I million of quarter of nonorganic This development the the the pursue and I of business company's the to approximately generated the to Before to provides organic my $XXX free required during $X XXXX. of executing record flexibility like remarks, towards second or million following: half company end flow grew that conclude activities XXXX, would first revenue at the level reserve cash note XX% billion $XXX of plan. strategic

take With that, to will pleased your we questions. be Operator?

Operator

of [Operator Instructions] comes Our from Blayne first question Curtis Jefferies.

Blayne Curtis

have just commentary talk balanced. memory. people results. on you through Can you outlook, could lumpiness in down your bookings in a maybe that? It through, just seen few And walk great then some the pretty And bit. a sound Maybe was

to outlook the for just the I'm So of second the recover segment in kind half? memory curious

Gabriel Waisman

Yes.

comment Blayne. the for and you So thank question,

obviously level reducing, at So high least of request, and had We that's ratio in orders the HX, memory large it significant of advanced overall coming out is we course, and that some this that approximately increasing also that expect in overall, demand a fact memory. DRAM share the of we we the ramp of the in and we But a because up. maintain that's from shifted logic quarter, third that Last bit. X to was XX% which a expect mostly see quarter, quarter, packaging, of pot. logic and see

Blayne Curtis

gross margin. I then on And ask the wanted to

the drops Can back it You've to terms in drivers go you Like of new mix? of been is back remind the driver the range? more It is end mix? for above And the couple range market this the just for Or products? me a into what's about quarters. margin in. the

Guy Kizner

Yes.

couple margin, a gross the of regarding there So factors that. are to

the to fact with margin and such and such for quarterly we our as and ratio Given this software the in revenues the ASP high have sensitivity higher profiles And acceptances a quarter. customers product products, different anticipated, we product the revenue that fact product we have faster is fluctuation. a that quarter, than such gross portfolio environment as within new high, in diversified mix relatively saw have we from

less increasing, For X% XX%. annual the of plus we to target And sensitive be as the at basis are the within specific as model on third we mentioned And in this quarter. of gross revenue our believe minus for point margin our will high deals. quarter, third end XX% we the that be

Operator

question from Arya The from of comes next America. Vivek Bank

Unknown Analyst

guide. from and question the results of think saw from guide curious pull This is in you on both this type of you Congrats San [ on any if sustainable? do in of Doug level And is, is quarters? customers in My QX behalf any any ] I'm nice strong Vivek. geographies

Gabriel Waisman

question, the as third the -- for quarter. expect outlook San Doug for obviously We it we you fourth as but the quarter the ]. strong [ do thank yet, don't be So provide to

as from In Korea, coming strong and we U.S. of business saw terms geographies, indicated, Taiwan the we

Unknown Analyst

on based it feed sustainable $X into to manufacturing current billion just -- constantly your your to you Got footprint, Or then to it. the get And model? CapEx? and do enough is have

Guy Kizner

Yes.

of we $X introduced the So order this in plan we as -- XXXX, plan. we invested that in have part to the -- our support facilities strategic in billion

in facilities and we of the facilities have So Israel in we U.S. our plan. capacity -- year, Germany the And in practically, billion will by invested $X enough to in production this support end

Unknown Analyst

Got it. tied your If and a cut sort of I was guess, butter. is bread significantly. most to there may that I large Recently, CapEx of just IDM/Foundry that more. I and assume have U.S.-based leading-edge packaging one

of impacted your kind as pressure idiosyncratic more industry? do see or way? curious any is this if in you that And the across it sign I'm a So of outlook

Gabriel Waisman

the continue in and favor of phenomenon. X-year expect in on of accordingly this All AI-related chips. to also plan And a not reflecting both cases, production that X accelerating nodes spoke Nova. the And think to we they they the works this be cross in have. industry So I that focus about is all, to to statements

Operator

Our Charles Shi Needham of Company. question next from & comes

Yu Shi

to China similar question little little the year, us going a of a be higher I year, What's XX% level the many XXXX? of WFE to ask China a want this total actually maintain thought? revenue. think China -- than for Last was running that at or the to about given stronger seems outlook bit Do a is bit you or China.

Gabriel Waisman

Yes.

is So overall robust we year throughout terms this this of a bit to some share. the a expected still than one. be already projects scheduled higher year see year demand for in and last the next And

Yu Shi

Nova? throughout -- I you -- contribution QX the were opposite, see than may have mean of down in slightly of they peers actually higher China second first seeing Do But and from it. some -- see half peaked peers What's view other being to your half. trending the some the Got year. some

Gabriel Waisman

leading-edge as pick the nodes So declining the the we second see and ratio half up pace.

Yu Shi

packaging. Got another question Maybe about it. advanced

year-on-year the any changed. you actually lot. I going think last wonder have could back it's numbers these And previously packaging be And your of to you XX% but I year. thought goes a top advanced then, XX%, line contribution maybe from up grow X mentioned if

Gabriel Waisman

So the packaging current of product indicated revenue revenue XX% product company's will the this booking be forecast at year. least

As so line our we've well, this with discussed as last projections is last time in quarter.

Operator

comes ISI. The from Shrotre next of question Evercore Vedvati

Vedvati Shrotre

wanted kind basis. on these sense But a out materials revenues us I -- versus splitting don't product could an you're seeing, dimensional provide details thing chemicals? to give One strong annual know I are given the a of the bookings you of how you versus

Gabriel Waisman

year. this it our Vedvati, would say from revenue overall, So unique with bit permission, that split be coming solutions your I XX% would will a I around different.

cetera, tools revenue about at So the that we'll et out if we're coming see space. of metrology, that the of material XX% looking new

Vedvati Shrotre

does Right. -- these. packaging versus the versus sort even of logic could And the packaging on HPM side, chemical split, dimension the or revenue metrology how of

Gabriel Waisman

Sure.

a is booking DMD is chemical our product, of half on which metrology PRISM for -- and packaging revenue. about the is ] side, memory. [ the So packaging and about OCD interestingly advanced stand-alone advanced enough, packaging half of And advanced about high-bandwidth packaging -- --

Vedvati Shrotre

That's Okay. a increase. big

I think and of you're more seeing PRISM now lot bookings. was XX% was last time kind a it chemicals

Gabriel Waisman

sure -- ahead. not go I'm last yes, sorry, time

Vedvati Shrotre

Sorry, ahead. yes, go

You were seeing.

Gabriel Waisman

that but Yes. last XX% not DMD an sure definitely mentioned, indicated mix. increase I'm the you as portion see, of we in in time, we

Vedvati Shrotre

Right.

gate-all-around opportunity the Nova? in is set? As Like here do expect to for puts revenue Could you so this for of million takes? revenue opportunity target characterize follow-up, What's share of be us you the give XXXX. helpful. $XXX sense a you and a the Anything capture would you here? What

Gabriel Waisman

Yes.

major FinFET. to in for So XX% advanced as us. power we We delivery increase to opportunity gate-all-around steps, see definitely including backside see a compared metrology XX%

our gate-all-around year. with are manufacturers, for for next portfolio engaged later technologies. multiple We including all across we delivery our including have already tools, this and the valuations the one, additional multiple orders And new

in opportunities that obviously and and increasing 'XX. see terms in We of 'XX business

And it a course, 'XX end opportunity the it of gate-all-around, as from evolves. divisions. $XXX is our to that aggregate overall, all So sales from of transition by we million which see of coming,

Operator

The next Benchmark comes the Mark question of from Company. Miller

Mark Miller

another I just want to quarter. congratulate on you strong

doing a of semi driven over better memory just number it you seem the are member wondering sales, sales? I'm of to terms In be XX% for of Is percent memories by memory? of sales than the firms. what being high bandwidth

Gabriel Waisman

you and maintain expect we and If QX comments, overall at the XX%. of the about and logic Mark. and see kind XX%, XX% QX that's, it of second Thank saw we we to for packaging. half, from memory. course, ratio that about in demand the at level see a because out of fact coming of share look coming and about And higher a the we look We advanced HX, of

that's do memory, revenue a XX% indicated would I product say, see for before. we ratio that stronger, of But high-bandwidth demand the of the I terms yes, part memory. packaging, relative In advanced

Mark Miller

Okay.

PRISM for PRISM ELIPSON during -- did about of the sales? terms quarter VeraFlex, also talked record in You and results ELIPSON how

Gabriel Waisman

Sure.

from the from So we those leading and foundries saw quarter, have were and already foundry well. leading X leading from X in as Tier memory both by customers. evaluations revenue manufacturers selected with of We and second we do foundries

the the We world's memory have PDR repeat also by for and customer. leading it became buys DRAM manufacturing

traction do overall, for So the ELIPSON. we see good

Operator

Gaby over closing question-and-answer any conference This would remarks. back to like for concludes session. turn to Mr. I Waisman our the

Gabriel Waisman

for operator, call you, Thank you all and our joining today. thank

Operator

for concluded. presentation. now attending today's Thank has you conference The

now disconnect. You may

Nova (NVMI) 8 Aug 242024 Q2 Earnings call transcript