UCTT - Earnings call transcript Q2 2024 | Ultra Clean Holdings, Inc.

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Operator

Good afternoon, ladies and gentlemen, and welcome to the Ultra Clean Technology Q2 2024 Earnings Call and Webcast. [Operator Instructions] This call is being recorded on Thursday, July 25, 2024. And I would now like to turn the conference over to Rhonda Bennetto, Investor Relations. Please go ahead.

Rhonda Bennetto

Thank you, operator. Good afternoon, everyone, and thank you for joining us. Jim Officer. Executive are Savage, and today Financial Chief me Scholhamer, Officer; Chief Sheri With begin some review, will call risks will open Jim and with the contains follow and the up are with Sheri forward-looking business, uncertainties. statements the subject for financial call and that we'll prepared then questions. Today's remarks to about

as we on of to For please non-GAAP our to refer on financial in no in on results will All be filings. I'll SEC can are with A update more this be to based section today's GAAP over them and presented information, turn call. forward-looking of projections estimates, website. And of Jim? release obligation to assumptions call posted a our Discussion Jim. reconciliation found and press our assume the basis. non-GAAP that, Risk today, statements after Factors the

James Scholhamer

the and with second on will Hello, summary of broader everyone, up seeing. afternoon. inclusive by this the award and I financial important financial another a call I'll before results thank Sheri turning call you a are the review opening industry some highlighting thoughts high-level our then before over questions. share more close joining for to trends operating for we for call start for our quarter, the

advanced across customers applications. of supporting and Services perform China market guided and range. domestic XXXX, continue bandwidth and strength supplying packaging equipment geographies with end both for spending in high memory the particular, well elevated Products high our the We earnings We to second and and AI quarter equipment at within revenue in in saw all

stages providing and we have we content, of diversified build-out industry our the fab through all the from to unique equipment broadening base. and participate, the a several platforms construction applications installed Over with in edge supporting competitive and growth, engage past expanded where us years,

participate us for chips in in breakthrough is servers signs of uniquely AI further a memory at uneven where elevated elevated customers AI data chips, rally that This broader recovery the installed we computing whole supply could start with are early innovation. AI some leading investment a wafer of requirements capability running and supporting hotspots recovery later chips, momentum for positioned they capacity. favorable meaningful adjustments, tracking with increased further a segments now are order that on the chain, to our increase year seeing inventories, and edge. Other technology pricing XXXX. The speed will instead these shipments to of as driving this by an high-volume production, collaboration particularly deeper towards include rebalancing we pointing closely capitalize move of industry at migration metrics and earlier, and fab at of semiconductor ecosystem. which and be has center and throughout front however, early demand era, this indicate of in capacity high-performance drive that cycle growth, computing AI core. UCT other of to the and content experiencing technical advanced creating ecosystem devices training operational leading-edge Our semiconductor chips our data most wave industry broad will the increased requires AI our most are surge world's We high-performance the to technological AI-enabled significant the engagement enabled next center spurring some of the investment expansion. the leading demand, be its believe are

which technology, for another. UCT manner one that aligned expansion new by industry with is in fab belief by increasing purchases, device grow architectures the next supports increased wafer sales all demand the intelligence leading-edge marketing should least and or of introduction year, driven internal capacity mid-teens Our at equipment of

offerings again, the next outperform to, footprint market upturn. well and in Our the global expanded us suite of position

we that plan noting some from that Malaysia of and automation including has remains production priority, Our it's as and lower-cost the the strategy, regions and efficiencies innovation and in we investments to of site quarter our capacity of optimization made focus manufacturing to fourth on facility track. qualifications customers' have operational next-generation from a worth efficiencies site in support ramping our shift flagship expansion revenue Part technologies. other road doubled The on and ramp. that is map their advance

to Partner Piotech we our that continue happy operations last Lastly, I'm Texas in our were today. to month. China of last We ago quarter, XX drive to dedicated we have the XXX over very Outstanding awards grown Instrument to and proud who announce employees received and Award addition in from the excellence of recipient started China years Intel the success

honored We us. and thankful Piotech's for recognition this in are are confidence by continued

grow, As for our meeting around at of ensure our to preparing world executing who want high continue next cycle. level I very the the to employees to are a current and all accomplishments thank list demand up we are

our maintaining our manufacturer to a points significant we capitalizing has ability leading some instrumental a Our summary, driving industry. industry. In the what position customer on early in inflection persevere of in transformation in success are be as and will been

our at high prudently in gains, future throughout success. And secure and the customers' major ensure meet excellence to Sheri we call are meet share ramp financial very to to a with the our over and of so review. for demand available to level that, capacity, quality performing with ready increases Sheri? turn are investing We while the products next current operational I'll to demand services

Sheri Brumm

I be Thanks good In today's will joining Jim, Thanks, only. numbers everyone. afternoon, to us. for non-GAAP referring and discussion,

domestic Jim company-wide As revenue in market. all up quarter-over-quarter total geographies customers, major was mentioned, and the notably across most China

at end quarter. packaging, Revenue as Bandwidth to was XX.X% Margins guided compared to was XX.X% us margin AI range. Total revenue the in million Products XX.X% compared last compared in Memory $XXX.X in margin to the came quarter in the million million at to quarter. variances Services Total to million and gross compared second mix $XXX.X advanced million revenue in $XXX.X in well material expense increased quarter. prior high to manufacturing compared so $XX.X in additional region transportation costs, volume, saw million $XX.X from fluctuations $XX.X will for be of QX. also compared XX.X% supporting QX. Products for second and quarter XX.X% $XX.X was quarter-to-quarter. Operating Services was million $XXX.X revenue by came with the quarter, influenced the put our can which and High and at quarter equipment for for million gross be XX.X% prior in the to there last compared QX. as We

revenue, improvements Margin for division from X.X% compared was to margin were net X.X% XX.X% driven million revenue. Based compared was Products a to of first prior compared expense XX.X% flat Total of XX.X% QX. in and by to margin decreased Operating the to $X.XX $X.XX the volumes. on our prior quarter in compared quarter. in income QX, net shares outstanding, due increased million for increased XX.X% in percentage largely the As holding relatively $XX.X compared quarter. on on quarter the margin share OpEx XX.X quarter to of earnings to operating income the X% were operating on to in higher to Services million per X.X% $XX.X

XX.X% effective XX.X% tax from increased year-to-date rate this of a representing tax XX.X%. rate to quarter, quarter last Our

now our higher in we to the tax Given we've in for XXXX Republic, rate growth tax the experienced jurisdictions low be China expect the Czech and like XXs.

the Turning to sheet. balance

to Cash improved million $XX.X million of in driven quarter, million compared flow were from cash and to equivalents Our results and payments. $XXX operations was million compared QX. timing last operating $X.X $XXX.X cash by

project For the quarter, million $XXX million. we third between $XXX and total revenue

call with the I'd to over We to for $X.XX like operator to expect turn $X.XX. And EPS in that, the questions. range of the

Operator

from Cowen. [Operator question comes Instructions] line TD of Sankar Your first from Krish the

Sreekrishnan Sankarnarayanan

had of I them, Jim a or Sheri. couple

China First increasing expect of you one, that of to continue low saw, that as go on digits forward? Or do revenues? kind the strength you is still domestic it you single

James Scholhamer

here. $XX a but we're Jim Krish, it site Yes. to quarter coming low that used of million single for be million those out at to Yes, looking customers. now digits, $XX

Sreekrishnan Sankarnarayanan

And these domestic are right? semi China cap companies, the

James Scholhamer

Correct.

Sreekrishnan Sankarnarayanan

end that the like you're Got seeing is? do it. ] then side? it. into in the where [ that plating application the Got is mainly get HBM, on you Or color how And ascent

James Scholhamer

piece, the trickle in also is areas. plating seen we've Definitely applications other but and Yes. other biggest like ALD through it

Sreekrishnan Sankarnarayanan

like -- months cycle Are today kind same? your And then ago? Jim, are it. Got question. of or to compared X the times still last like my lead they it's times final where

James Scholhamer

sorry, you repeat can Krish, I'm that?

Sreekrishnan Sankarnarayanan

for Where are your these gas are today your shipping boxes? cycle times times lead today? Or

James Scholhamer

right Basically, very it. Cycle order times short are after they these days.

Sreekrishnan Sankarnarayanan

kind So pretty that So much right? of the hasn't changed, it's same.

James Scholhamer

but there's all it's Yes. a back No, through pipeline, chain. Yes, the it's inventory it in -- way the hasn't. the of supply lot obviously, still

is part I really what So makes ability as turn our of us well. around mean special quickly things to

some an for enabler us that's take these so been advantage of things. And really of to

Operator

Needham. of line the from comes question next Charles from your Shi And

Yu Shi

revenue on retaking few total to Congrats I XXXX, guess, seen we right? consistent execution. glad $XXX on quarter I'm a since, that see that Well, asked. the to I want the million. follow just up Krish fourth that But things haven't

thing know you somewhere around your China. that's XX% direct First China China, about exposure talked I sounds about like. that

the business any this decline? or what any Do Going you off, growth, this there, forward? seeing point is to how that consistent, business What's the you're going half into see more to from second the half-over-half scenario to of trend? see level start year, inflection, chance in China maybe and

James Scholhamer

we have. whole us diversified think huge rest really off. move suppliers business also that year. it's we China Charles. high sure, it do not And this in of have China the unusual for us benefit forward. see But Yes, in We're a we level parts not really continue don't our mean, story. quarter, But other of last said in that's I've strength expect do most to kind footprint Yes. to as I this of the seeing the tailing really have been I business that's through of helping that

think So when not at we're or what might you degrade, that. about looking detractors

looking to areas at a forward. staying we're much go at things potential more they and upside we think I as looking we're are, how pretty certain

Yu Shi

of obviously, course. yes, part that of know other UCT core the course, business, I Yes, still kind ASML, of of Lam, with those with Applied, suppliers. the

HBM, ask side. similar I'm more going one So question the follow-up advanced maybe the packaging a in to at fashion.

expect quarter any you upside this opportunities at your The last mean, And numbers an this question -- do year? you half? you ALD, upside upside obvious been second like for through has from business of are it the helpful. the be see plating can the do for the you this year? going will I for how some going in would about of rest the level of stay So again to those packaging, is to quarter. of into anything more once -- be the business us broadened-out that AI-related Or and kind next part and tell there Or still much either contributor

James Scholhamer

see at. we're levels definitely We the that operating Sure.

that And market ago. systems few For only a on the major a that do ] going what's is watching next And is the see we things of think where a to years example, one to layers and are this see than one the [ of our going, if X we the at was factories, year. level into through year. Xx which I lot of upside higher contributors in you're it chip weld continuing interconnect

Yu Shi

upside, well. all Great. this want Only as is hear we to the what

Okay.

But does why buying in to this of thinking I it seem because your the a to Applied, from should is than about numbers, to your did are pickup. in maybe some service remarks some revenue doesn't general QX the of customers sounds it like is like back So flat revenue there. I know to your in mean relative QX. of guide market, it top already expecting it QX but in the QX, said Seems sign little Lam, you a are prepared pickup more from see there, sounds PowerPoint. growth I -- like seems include QX this like bit you some you you I bit that's WFE, going OEM-related QX, a X like more the but reason in little tying be ask only what your mean,

James Scholhamer

Yes.

mean, indications I anyone area we've gets we it done -- who's the long goes in better, seeing could think hard. of sure. that this a up time a course, are gas lot ready. And fast, in to a get broader goes of up hit, I work be been remain think it industry knows that for for I early QX we when

bring capacity of done to work starts it of up to we've lot take when go. So our to a advantage

still we So QX? all signs some when but We're broader slight, early comes us come, yes, many seeing think -- it know in what seeing that does of are fast. of we but improvement, it I

of in improvements bottoms-up So we're we're by we're anticipating into. quarter, fact very kind encouraged and small what that that the seeing turn the fourth some might

Yu Shi

little that do used you I has but business kind aggressive you recall do to lastly your that you stable, litho the I it then Maybe business. rather back. more a ask litho have of of me, a the sign cut will from yet? want said to And plan, see customer pickup any about build consistent bit for been

James Scholhamer

So maybe parts. I'd break that into X

and whole we going talking litho, what I what particular, litho over split our gains Cheryl share nice the the marketing maybe think made I in Knepfler, been new that expertise, have for have we she about, sees But to UCT market. equipment can out. in

turn litho us market as our equipment over third a seeing maybe as talk But and about uptick through to particular. -- it little So to as quarter that more general, the new what deeper that. would we that, the in our are we bit Cheryl far I the seeing in is as fourth whole and for to contribution the are

Cheryl Knepfler

Yes.

we as they're coming that different are and DRAM The as timing in. know we as is coming processes look in their litho. So expanding overall, qualifying is

So slowly we more translate are a into seeing seeing bit little orders forward. that dynamic going firm things and being are

be that forward. to solid for going we business a do So expect us

Operator

comes from Schwab line your Capital Group. Craig-Hallum Christian And of question from next the

Christian Schwab

Great. guys. Great quarter,

WFE exactly see you bit think So was wouldn't given type ordering those that, that. that that 'XX that billion then to are clarity, revenue numbers there type the Or in suggesting of approaching Is growth experts third-party 'XX? more that the there you're fact year. before make be out should in the case? a on way, type over with But also expectations to be as of line be potentially $XXX that WFE previous XX% play reason, your do other would of for, get a any who looking little as that paid north the of you you in well could mid-teens that want some

James Scholhamer

Yes, Christian.

go not mean, every So we of in like doldrums, and yes, -- segments. of X up November I but I the 'XX think if the of the the of years been market already think, since does right, in segment majority we've WFE,

significant do that also, exceed we potentially outgrown XXXX, the we traditionally in I in we growth broad numbers lot we absolutely, if margin, in have of see kind and of always WFE growth a So that XXXX. significantly had have could confidence that that by and a meet

Operator

the closing for I remarks. Thank you. today. That concludes our to back question-and-answer Mr. session for Jim hand will Scholhamer now call

James Scholhamer

our So with to everyone, joining thank quarter us you, conference today, we and Thank for look forward speaking you you. next again call. for

Operator

Thank call. conference for participating. today's concludes This you

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Ultra Clean (UCTT) 25 Jul 242024 Q2 Earnings call transcript