NVMI - Earnings call transcript Q4 2024

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Operator

Good day, and welcome to the Nova Limited Fourth Quarter and Full Year 2024 Results Conference Call. [Operator Instructions]

I would now like 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 Year you Call. XXXX to Quarter Nova's like Full and Financial would all to of Fourth I Results Conference us CFO. today CEO; line on Waisman, With and President are and Gaby Kizner, Guy the

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

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

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

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

Gabriel Waisman

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

Guy commentary, my financial and quarterly detail. Following in review results will annual the

fiscal profitability the ended year with high indices. note industry Nova outperforming revenue a and on record

Our reached revenues $XXX.X income grew XX%. net non-GAAP XX% grew million, while year-over-year and

a our cemented evolving numerous product market have our across penetrations position including achieved segments device segments strategic milestones new and leading in share. lines, manufacturers across position into and and multiple growing We

to and continues strategic agile higher Our model operational enabling to our generate us while growing focus our value relentlessly shareholders, profitability drive to business.

coupled Our performance this a growing with metrology sales, across year our adoption segments. record by was driven solutions market materials

market of underscores ability broad-based importance our our processes Additionally, on portfolio growth of packaging strength our and capitalize the the diversified chemical to growing from revenue solutions. multiple highlights the dimensional metrology This advanced opportunities. and

the revenue end of results. profitability. and and of growth. fourth our quarter We sixth our Turning in record consecutive to non-GAAP guidance quarter top exceeded the

evolving underline saw gate-all-around meet our revenue to due results in was by that and sales was maintain by stand-alone Our advanced These applications. the their needs success sales and ability ELIPSON customers the demand of and of Metrion record our edge OCD packaging to record of solutions augmented unique our platforms. heightened market. competitive dimensional This robust our VeraFlex, the quarterly driven capabilities in the

transition Looking poised architectures. forward, Nova advanced leverage manufacturing and into to processes is the

differentiated expect new sustained driver nodes it momentum We power demand surge significant XXXX, necessitates in drive and as into growth memory we've the our to advanced exposure has the to processing been continuing computing built. market market portfolio for demand solutions. segments of our The growing energy-efficient and accelerates AI-related our and a

to our more leap the growing number positioned XD steps layers and in wafers, which number well smaller The Our for solutions, complex transition at including tolerance larger customers complexity which catalysts that are drives to and require metrology dives the architectures, leading a business, into a of higher multiple Nova for translates of the is the of need process error. high-quality for a much increasing provide. number

some share from me recent and XXXX the highlights Let quarter.

optical dimensions, broad manufacturers Logic widespread First, with ability chemical underscores complex and solutions manufacturing associated the of most integrating from processes. are This semiconductor materials by around encouraged portfolio. address cable and foundries, nodes. challenges increasingly multiple the portfolios our adoption across comprehensive With leading we are advanced memory and Nova's the to high-bandwidth metrology Memory Nova metrology adoption our

current the X.X enabling for achieve and Our efficiency to unique and customers technologies. applications precision and solutions XD next-generation in pivotal for structure our are required

this doubled to and revenue more revenue than year, importance XX% its product packaging of reaching growing advanced Our Nova. signifying

packaging our share advanced solutions been manufacturers by the Our adopted segment market X OCD of integrated in the top stand-alone while grew metrology have X significantly.

into further. packaging technology into advanced Sentronics our us additional With beyond growing wafer-level the XXX-millimeter devices silicon of and packaging applications with modular we dimensional wafer to of we metrology can the wafers. multisensor sizes offering field our and for rapidly the and to range expect advanced of both offer addition we Sentronics, can enable of a recent will customers types grow revenues and diversify software and front-end stand-alone sold. back-end integrated applications rich proprietary critical with sensors extend portfolio modular Nova's builds Along in platforms highly that optical and fabrication metrology CD processes. specialty Sentronics

are advanced that and examples workage. key Some variation, packaging bow critical roughness thickness includes total for and wafer measurements to topographies

delivery month, Following teams the tighten integration diligently activities on deal closing and execution, post-merger and the maintaining goals. collaboration align business to working meeting announced are time focus lines while last

review Now division. segments our securing new product and share In multiple let leadership. and our including expanding the metrology metrology in advanced the packaging and our some market from me market HBM, integrated our highlights dimensional of division, TAM

customers. stand-alone solutions digits this by year-over-year, high with had Our due demand and high their share our unique year The driven platform at and Nova high customers increased numerous PRISM advanced engagements sales productivity, and double packaging market OCD offering. both from precision grew front-end a with to record multiple

generation the is platform's Logic demand, the have tools. in These that and features our the configuration of unique highest customers. successful productivity next Velocity, stand-alone by the expected highlight a the productivity ability innovative to velocity solutions launched Nova driven market. dual and in for of for MMSR, speed enables demand been deliver market robustness we a to leading manufacturer, cater meet improvements our who The chamber increasing the recently needs platform the achievements To purchase that a platform tools adopted factor deciding to and yield multiple high productivity

annual materials Next, record and our portfolio metrology quarterly delivered results.

most R&D full we wafer Metrion early high-volume of measurements selected manufacturing ability As based with on January, NAND lines. as sensitivity for well to high perform layers DRAM adopted Metrion epitaxial and platform DRAM in was precision. by global its leading the shared as a its customer and was memory advanced

additional customer. receive to expect We orders this from

X customers. customers. platform we performed generation and ELIPSON record this tool platform broad fourth memory in new its well leading and and of from receiving platform the memory In with evaluated Logic, year VeraFlex addition, saw Nova leading memory a this a transition penetrating market the to currently year. orders Foundry X orders of from them adoption major top becoming of the is by repeat and being The anticipate and X customers later several customer for The

Looking metrology ahead, our for planning of foundries we attached measurement. role platform manufacturing. to the their concentration portfolio in materials to use The of the solutions performance and strain already critical advanced strategic have semiconductor and material value our

highlights division metrology the customers customers market chemical in Significant for record ancolyzer the a at HBM. and ancosys proliferation growth high with rate. Our front-end had growth year a double-digit share include memory

we Foundry Additionally, we evaluations which customers, expect year. later materialize have with and this memory to ongoing

year-over-year, with capacity for growing quarter increasing XX% record yield demand XXXX Finally, revenues driven our by service division year delivered another and improvements. and

AI of and market terms a at driven investments In market by mobile in momentum, continues an outlook, capacity matching our advanced for building packaging. nodes, in demand the Logic DRAM upward advanced industry end and and

demand. at digits customers well-established increase leading to and driven in processes, adjacent applications. summary, additional edge In expect We will year, grow fundamentals and help new us critical new markets this mid-single by WFE our exposure to opportunities

continue In Our partnering intact remain territories. our expect long-term strategic road by WFE. our market and with position, on by to continuous enhanced capitalize created across priorities with map the growth trajectory all opportunities outperformed investment customers we our our XXXX, in and

on you all upcoming at and strategy to and our vision Day on elaborate there. will Investor virtual seeing our XX, March we We forward look

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

Guy Kizner

And for thank for XXXX reviewing everyone, our XXXX, provide financial day, the for call. full Good performance and Gaby. guidance quarter finally, the then of fourth Thanks, will I the our quarter you our of begin conference achievements year. for first joining quarter XXXX. fourth summarize by

guidance ability a Foundry revenue demonstrate product and approximately Memory. market customers Total $XXX.X respond anticipate, to reached which performance more growth of quarter and company's strong revenues XX% XX% quarter-over-quarter million, increase was revenues. contributed included third In of consecutive X and a the for XXXX, X year-over-year. results. XX% distribution Logic revenue the This to quarter record XX% These it Product each Product fourth X% achievements to approximately the making of and and territories, or from capture demand. high evolving our record-breaking exceeded reflecting

gross range fourth basis and quarter upper million XX% on on technology XX% innovation basis. XX%. effective non-GAAP directed portion our a significant a GAAP the A well Operating of were quarter, the surpassing with basis basis, per $X.XX margin $XX.X model achieving increased margin of in earnings aligned basis, expenses expanding high on the our exceeding XX%. guidance, increase a a and was ahead basis on our of a of per Operating end approximately stay XX.X% blended The non-GAAP to GAAP XX% GAAP GAAP towards within model and XX%. In our quarter was range the the target quarter non-GAAP Earnings share, non-GAAP $X.XX on a fourth XX% were fourth in on per a the guidance. XX% to per tax and we leadership. on fourth target a basis R&D in of on in our efforts, ensuring fourth rate diluted XX% share the reached share share, diluted and quarter basis

XX%, this for results business ability was XX%. other The was revenue bring basis at calendar scale effectiveness of of Taiwan was contributed model, on year and in geographic non-GAAP of X%. XX% XXXX. was margin long-term GAAP a the XX%, growth, the the the XXXX the XX% space of end Korea target customers high annual increased XX% In Gross year-over-year. the territories year China our XX% at we the our moderate on a at a for basis, to where model XX%, the on Moving U.S. XX%. the company's as to remaining experienced to was came our industry and in the follows: and Revenue year demonstrate value strength strategy. split

year and basis. continued at supply operational profitability basis basis. a Earnings robust on pressures discipline GAAP efficiencies, cost solutions. an and per annual on focus dynamics, bottom our on converting XX% Operating record GAAP a chain growth basis this margin in Despite expansion effectively for EPS drive basis top share a pricing underscore non-GAAP came through on and in the on a $X.XX on industry-wide we a year XX% at the Achieving higher-value maintain value. into high profitable by to line line non-GAAP diluted came and ability $X.XX

model reflects sustained and execution, business to strong us has while allowed operational shareholders. financial strength efficiencies disciplined of our investments to to strategic Our and milestone value scale our approach deliver performance. commitment to our This the maintain

the sheet. bank to cash $XXX securities. with in XXXX marketable deposits We and balance million cash, equivalents, Turning ended

cash the During free generated flow $XXX management. capital company related and in XXXX, healthy parameters presented million working to

balance cash addition, approximately paid our settled of in X% following. outstanding to company $XX remaining buybacks In was million facilitate the paramount deployed was $XX.X million notes, conversion and approximately convertible for Approximately of cash the share shares. deployed as $XX.X in early deployed million and the in the with

of At January acquisition in completed end the deploying transaction. for Sentronics the approximately $XX million Metrology, cash of XXXX, we the

February and As results our non-GAAP starting with aligns Sentronic's acquisition months. growth basis a expect on it will financial consolidated to we be Nova be a XX XXXX. result, The accretive within strategic in priorities, into

of Our combination. guidance reflects impact this the

which the to million. following: Now is to XXXX XX% currently increase quarter first in similar fourth a be guidance the to to acquisition. to that non-GAAP share income At million. between anticipate basis of $X.XX expenses basis a expected quarter Operating for let's diluted $XXX basis non-GAAP non-GAAP factors per range expenses to $X.XX. from to approximately on our midpoint Effective to XX% Financial margins revenue million we to approximately Operating GAAP $XX the the quarter. earnings the GAAP $XXX on per move to increase $X estimates, We of earnings basis be approximately on a $XX a and from to $X.XX. gross million. Non-GAAP rate to on diluted a basis. approximately remain approximately our XX%. expect GAAP share tax range of to on and

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

Operator

first [Operator Citi. Instructions] question comes Atif The Malik with from

Atif Malik

Gaby, advanced question the on first packaging.

for your advanced of your Can sales doubled about metrology last sales. the ancosys talk XX% year, products. driven were majority a packaging assume year? by sales your So the current for you you chemical I sales aspirations of product

Gabriel Waisman

the Definitely. question. you for much so Thank

had the our both packaging So advanced first, division. well as the contribution dimensional chemical metrology division from metrology as

advanced platform. X adoption We we have the a have stand-alone our manufacturers, PRISM significant our integrated metrology OCD and top in all of of packaging

this continue we by that to expect So it's do this growth. divisions to year double-digit expect And to and growth. grow contributed both

and as I'd growth of mission -- Perhaps addition [indiscernible] in the add Sentronics, that with that thing grow move do is with more there one open customers well. with over like adoption as to platform expect additional we their we this fuel the to to our

Atif Malik

Great. growth. very a services And growth one for Guy, on last XX% the year, strong

about year, growth slowdown more muted because Some services China. of XXX-millimeter this a in talked equipment of primarily your have peers

services well came talk system can last the you to from restrictions year? if growth So or any about that services as this year impact outlook as the the sales late this for year on

Guy Kizner

Yes, of course.

year, as our and was of in utilization to between growth XX% we're mentioned, This to by service XX%. XXXX by ahead, for expect looking model XXXX. this grow grow to assumed XXXX well. So increasing what you service fueled businesses When the XX%, compared the for also we as this is tools

Atif Malik

impact the And on restrictions?

Guy Kizner

from see significant the a don't services restriction We part. around impact the

Operator

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

Unknown Analyst

curious Foundry, XXXX? [indiscernible] Memory demand And On is on how expect segment grow thinking you faster? This into Logic, which versus do I'm you're the behalf about of Vivek. to

Gabriel Waisman

you. Thank

XXXX the advanced logic lead as with advanced of part the We and packaging advanced well. the growth. the But advanced segment in with metrology as HBM bottom it's the pack expect the line do packaging definitely is we packaging. So intensity logic growing advanced to see definitely and

Unknown Analyst

And margins. it. then Got into QX. high long-term recovery that's one also I the your at on of range. Obviously, end a but gross

again? that the take it And talk point expansion are you for to what you about reach above could in drivers would the QX? So then driving XX%

Guy Kizner

heading our to continue So gross given we the that dynamics, we our we model gross into target to margins. believe anticipate margin, strong remain demonstrate will business committed XXXX, and

operational sustain Our our customers differentiated we reflect healthy technology, execution bring strong ability margin and to through to value the gross efficiencies.

market due dynamics may intact. margin market conditions, be and to mix remain fluctuation quarter-to-quarter there our are some long-term we and product that confident portfolio While

will mentioned above unknown target how XX% we we due our it's main product basis, mainly basically challenging, product to forth. as quarter-over-quarter can -- before, model, so new is the the is changes But we with an on be fluctuate So the annual but successful mix. on reaching and be will

have. our and dictates the is model -- we So the current business reflects dynamics that

Operator

] question with [ from Weiner Ezra comes next The Jefferies.

Unknown Analyst

market long HBM Two stories of quick you seeing your competitive China. How have we're of peers. capacity coming there? down? of build the and is ones. do kind obviously, a revenue out different kind are X amount high pretty seeing of term see do One, that then there of a second the your guys And you China, What you see come peers as from lot

Gabriel Waisman

HBM. So in terms of

there's stages is us. to very And all, the our regards at at portfolio. of majority our We're advanced And definitely that the dimensional first as packaging see which there dimensional both process So with But mentioned, we metrology of the growing we with HBM. advanced significantly have growing over business appeal is I for instant the with packaging with and the side a well, moment chemical architectures. higher logic intensity a buildup as to X.X our the on portfolio. means control

about high-bandwidth the manufacturing Could question we see China? repeat So do in growth as you well.

Unknown Analyst

Yes.

exposure of come these old guys their China sales peers China up. your seeing you as a Just down come of pretty in have lot exposure high are and some

what China seeing 'XX? [indiscernible] in know to you're want Just

Gabriel Waisman

Sure.

share So there due of XX%. from year China China see line In is share the that strength was advanced fact of the we declining. overall peers. XXXX, in sales the will nodes, our this with to growth the And in come industry our

Operator

question next Shrotre Evercore comes with The from Vedvati ISI.

Vedvati Shrotre

for expect your term? Difficulty] the do like longer questions. -- [Technical what's have X big versus I then your from rates you are this this the acquisition, portfolio of [Technical what Sentronics growth target margin what And the Difficulty], contributions the portfolio? profile So year? And

Gabriel Waisman

a is line broken for that. the bit So

hope TAM a question XX% million $XXX Sentronics I market. about year the understood overall, But last I of So correctly. had

growth Sentronics main the on closed the relative period progress already Our see very the under engineering and We solutions level report deal will XX. we with an fast we that the and integration, Nova. forecast as includes first do are revenue expect by January the we materialize the we Sentronics And post-merger upside from quarter of in to enthusiastic markets. of the

Guy Kizner

regarding model. And financial question the about the

our is stated, well previously financial Sentronics we to which model, with process our we our any positively it And deal one as to results. the our of for aligned expect acquisition. So due criteria contribute is and financial accretive, diligence in

financial I as less and terms operating our fee would to So of say or well. model margins more margins it's gross in

Vedvati Shrotre

And you're there, chemical on -- Understood. manufacturing of your the then footprint, quantified those how the metrology, what could the increasing on the would potential from the you revenue kind -- facilities? -- get you have

Gabriel Waisman

facility, under able division new expect capacities forward. Germany. continues completely also friendly a is business the up opened in the environmentally just be Metrology This business Chemical Urach accordingly. its will is do Bad host we units X to the the drive capacity we've on and So state-of-the-art We upward adjust in all different building. the roof which momentum, of as to Obviously, a the facility

Operator

from The with next ] Matthew question Prisco [ comes Cantor.

Unknown Analyst

walk -- across 'XX? strong million the I the million, quarter. into the revenues through of move guess, quarters, sustainable first, $XX you per and including us over then $XX contribution And what drivers acquisition as maybe Sentronics increases is? sequential products increasing market can end few past and those we through been Are of sequential the types growth roughly you've XQ

Gabriel Waisman

entire the So expect give to we but forecast outperform we don't WFE. year, do for

definitely growth in order a we investments to logic position as translate industry very advanced we our year. well those especially are acquainted in that fundamental end continued the into the think advanced driving HPC our all the AI as strong markets markets advanced over have or see the both whether as fundamentals And I we nodes, and with packaging. across support a it's to mobile, there to

Unknown Analyst

Sentronics you're what where that is? on color the strength? anything And the seeing on contribution XQ And

Gabriel Waisman

from deduct Nova. you will from at the quarter of XX% business that Sentronics year mentioned, $XXX forecast relative of the has market report as the we that -- first in include expect And period first last quarter. least at the especially in TAM can the the as Sentronics fact the to revenues level -- million Also, I about under in

Unknown Analyst

as us wins metrology design you translation through to Perfect. follow-up, material walk And help then the can these of a revenue.

For shipping And the that does think fab and proliferate mean tools about high-volume into what's then fabs? the recent across instance, opportunity expanding the number a the quickly that color modeling typical how Metrion's can how process by for timing of then to Just selection of better And tool we forward? memory per going tool did production? fab? X customers manufacturer, any leading

Gabriel Waisman

very of that recent focusing on first is So all, for NAND. expect well to profile of R&D moment, we are as XD this do this about believe excited at We areas additional fact have multiple market, which drive and this the into evaluations that materialize the customer. manufacturing later to we And DRAM layers we measuring adoption for key kind high-volume We and with manufacturers this as we proliferation memory in continue expect to mentioned of that the these year. the adoption. with logic

is this tool. in-line of since the And an first such introduction

to to per adopted expect fab about applications we of more adoption years XX we and XPS will with the number was utilization start experienced when higher of then, tool per the tools as fab tool We increase of course, -- X happen. ago and the as

Metrion, we're opportunity with of grow exact well a an unveils to than about X and number and room timing we anticipate the So XPS of of Metrion. capacity lot fabs that per as that or customers of eventually, the both rate growth with believe will as a adoption repeat of itself adoption with such we with excited X number have fab, of it we the with can't tools very we a the as more Metrion the hope but with as happened kind

Operator

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

Mark Miller

routine you on Let quarter. just becoming guys. you express another significant for share me gains, where markets? record my This just I was you're discuss seeing what wondering in if congratulations is could

Gabriel Waisman

you the comments. for Thank so much, Mark,

few which saw see we So gains. in a we share areas

XPS saw, share architectures gained side stand-alone as both packaging share well on saw terms and metrology, we as saw the obviously, metrology material the additional tools space, in all, adoption And the chemical also as at of integrated the of the We well we portfolio. packaging. advanced in share X.X in into first increase entered of and in the these manufacturing. metrology. high utilization manufacturing of on advanced in front-end Logic the We OCD, we especially as PRISM gains high-bandwidth both some advanced market in as So

Mark Miller

of memory? memory you bandwidth In were terms sales, could your what, the color NAND? percent more little terms if kind a sales of give any, in of from of seeing you're And member what high

Gabriel Waisman

So more I to a permission. HBM as need versus as with address DRAM we the NAND versus or that other think it architectures

HBM growth, higher than that of And HBM So Obviously, as we if DRAM NAND. course, in the DRAM. business. DRAM, respect of part then the in put the terms to was of majority that compared our stronger was Memory is

Operator

question next The with Needham. Shi Charles from comes

Yu Shi

outperformance would WFE in continue back believe little this really did the one. in year? are congrats that but to team year-on-year Nova on reason thought you in think that roughly [indiscernible] And buy if Congratulations for first can that me 'XX, ] I digit. I probably that, us WFE confidence that will results, to I best the rate guided you [ to outperformed what here. the let truly -- maybe expecting us ask guys have historically, you you a number, of the the reasons well XXXX. Of exceptional bit X.X mid-single growth back. XX% And question 'XX? a more for a questions, The X But outperformance QX were I course, any have imply clarify guidance,

Gabriel Waisman

the comments, Charles. Thank you for

have, we I that think technologies value the with think One the has that it driven the issues. major to X by position offer. we with is unique I especially a X do -- that --

exposed adoption. to ones our of to Sentronics are an customers the seeing and today. to well opportunity the drives expand the as us The course, is packaging that expanding than second as advanced And that which that one, one higher additional acquisition we position third into gives

that XXXX. a us position by strong of the gives and I have that would into we the that fact to have course, in in order growth logic all, grounds believe advanced infrastructure fundamentals, the the it we to drive top

Yu Shi

there's on you think another product most the peers single your Maybe are gate-all-around a of revenue. bit gate-all-around for mentioned guiding doubling Mind roughly as conducted $XX a was of XXXX guidance color 'XX more seems gate-all-around more like you reporting gate-all-around. color revenue digit where a very terms sounds little of question would from revenue helpful. tracking to well suggest doubling, the little you you're additional Based in I than in if guys? and provide bit that I but on Any cumulative believe high 'XX. the to revenue million-ish $XXX to be million your latest

Guy Kizner

to can I I'm we to the $XXX that committed are XXXX. fact until sure million not gate-all-around from add more the

our that We in position haven't respect. changed

to as making We this confidence Day of I lot Investor in tracking a our think terms try will March gives that color XX. the it on that give year during But well. more in -- number the

Operator

the question-and-answer concludes This turn CEO, Gaby conference over for President remarks. Waisman, like back to our closing session. would and to I Nova's

Gabriel Waisman

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

Operator

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

disconnect. now may You

Nova (NVMI) 13 Feb 252024 Q4 Earnings call transcript