ACMR - Earnings call transcript Q3 2024

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Operator

Good day, ladies and gentlemen. Thank you for standing by, and welcome to the ACM Research Fiscal Third Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, we are recording today's call.

If you have any objections, you may disconnect at this time.

Now I'll turn the call over to Mr. of Group. Director Managing Dvorchak, the Blueshirt Gary Gary, ahead. please go

Gary Thomas Dvorchak

opened Thank for day, our remarks. reference released to from is Newswire market supplemental well discuss of also deck website Good on before The us our our during available U.S. services. we third you section as which we'll posted joining prepared to everyone. website as Investors release that results, quarter the a There's today. slide XXXX the

are operating our Mark today Dr. Shanghai. the David Feng, CFO, me On call our CEO, McKechnie; the Wang; with CFO subsidiary, Lisa and of our ACM

Before we please to Slide X. continue, turn

Let me ACM's for the information may other that call remind might future. be current this judgment These you represent remarks during considered predictions, statements or made include estimates forward-looking. that forward-looking

risks this this date on non-GAAP forward-looking they the call. an with and statements. on undue basis, investments. uncertainties results excludes are loss risks which opinion in Please statements, of not short-term is and under subject only provide However, to cause reflect update not differ of be you to on Certain the ACM's do of financial we stock-based to compensation that these call actual materially. ACM's that obliged to will Securities elsewhere and forward-looking any on and Those on are revisions these ACM results Commission. as filings Risk which a unrealized gain Factors described Exchange the reliance could place

the of website XX to earnings amounts, should results Slide For Slide refer reconciliations non-GAAP section and to and our our on which posted XX. our release, you on refer between and GAAP and is GAAP IR

will Slide call now Wang, David David? begin turn me to over Let with X. the who

David Wang

Please everyone, Hello, X. to Slide Call. turn XXXX Thanks, Research Conference to Quarter and ACM Earnings Third Gary. welcome

We a cash XX%. ended operating million, gross For the XX.X%. were XX%. approximately with $XXX margin XX.X% margin the cash of and flow of is was good and up $XXX.X quarter, from $XXX positive revenue a share up for was deposit of million, million up Profitability of contribution were with Revenue significant We the $XXX ACM growth million, Shipments third quarter this the with demonstrate for was shipments XX%. year $XXX.X market from X Year-to-date product months for gain believe million, a quarter. up and cycle. operations first new the XX%. the time

or than cleaning global estimate cleaning of available ACM to provide QX portfolio. close XX% and Now on products Tahoe steps process and grew the total product. Slide in manufacturing. logic $X both bottom turn Revenue product XX% semi-critical memory I detail Please and to market XX% in X. from top cleaning single-wafer We supporting offers cleaning comprehensive ACM and total more is revenue. TAM represented will to of all for billion cleaning, the

Our factor or market mixing continued led share increased gain STM our infer for cleaning. to proxy have target confidence in toward

been our As process cleaning estimate to a but front-end total XX% of small so about reminder, contributor represent has far, it business. we SPM a market,

Recall solution. high-temperature we announced progress STM. service other technical During in STM only high-temperature cleaning that the supplier tool prior report, a for one our major market

During us enable second reported could the breakthrough player. our quarter be technical first I a to that call,

meeting is platform STM have than C segment. The middle cleaning. XX customers, the process. press issued Tahoe nano acid tool. particle up world STM to additional in saving alone also now We process a a particle throughput cleaning in and evaluation enhanced X we commercial with less single Today, a to manufacturing. reduced for filtering in among patented achieved not and removing to cost of STM now benefit environment delivered the from hybrid Ultra disposal. hybrid first applications with of to system. from the The cleaning a The supplier batch $XXX,XXX The cost supporting sulfuric marking breakthrough Tahoe's high consumption. capability YX combine performance single accounts Tahoe, nanoparticle major acid average smaller architecture the cleaning size, logic node ACM's at per up second advanced at high estimates treatment capable on of number of the flexibility stand-alone advanced architecture That's process stringent the same Tahoe for of chemical environment tool become is advanced particle are to of late-stage low key requirement release, and STM for reduction performance and low-temperature ACM wafer are the wafer year achieved in performance, tool temperature the the and XX% chamber the sulfuric into additional solution most cleaning industry wafer all. we and for memory committed and high-temperature with

ACM increased expect advanced environmental With on is environment. environment. increase to believe manufacturing. consumer footprint of team the but how good chips, demonstrate Ultra innovation information the forefront way, customers customers and Tahoe chip another the AI of good is semiconductor public positioned rise for for planet. can Tahoe world-class ACM Ultra another a We protect C R&D of and the excellency of Tahoe the and of we impact production well example AI with achieve Put We help on attention mind, is to innovation C the reduced and economy from believe the

customers. Tahoe now today Ultra several announced additional also China the that under in at upgrade customer facility mass is and at high-volume C production evaluation and in We logic memory

STM takes overall XX% cleaning see put Stiffel, ACM opportunity supercritical portfolio, about good world-class for year. cleaning by front-end our customer end in tool quite of temperature we COX with is solid furnace XX% to as the low for is year-to-date. and gain remains tools. thus and expect believe we performance. what middle China, The share of for also by both more market ACM's than international for STM market XX% We status. QX in it pleased Tahoe, the market. scale total and from and revenue. in tools units major noted of Revenue category markets. grew in technology other and furnace market the total large with and SAPS, I opportunity Mainland ECP We and have ECP semi-critical together to are confident I'm represented the continued plating including Tahoe grew the Momentum more dry for the revenue deliver XX% of We shipment that back-end XX%

traction logic the year. end customers. this of last by cycle X and product furnace is having the furnace up from also of at XX end other Our customers with gaining anticipate we now memory Overall, year,

tool, parts. and represented growth QX advanced in believe packaging. was offers contribution also accelerate exclude wet was for wet tool low. the to advanced XXXX. market the category, products including service to spare the packaging. of ACM that ECP, to full advanced of furnace revenue is by and expect packaging trend. Revenue next to from X% participate We Year-to-date, generation slower attribute service declined advanced of revenue. includes to We broader a exposed this from X% and XX% We new polish of etchers and scrubber, for plating more we of but in a who growth set spare up are end technology packaging are of only sweeper cover China-based packaging, tool and and range one and coater, exploring and year-to-date tools, This packaging firms including for PR And company developer, which

orders announced center. packaging. We purchasing early U.S. are XXXX. for does tool scheduled for not the from X packaging half and tools tool R&D this These advanced also know September, for In U.S. category in include first we delivery level ECP wafer our of customer

packaging optimistic We very fan-out tools. panel are about our level

flux tool ACM tool packaging packaging and panel market. a for offer chiplet, announced tools, bevel including to address makes We X panel the tool. the plating clean This advanced strong have tool by X vacuum recently panel-level etch level new horizontal

We this to believe technology years and now us. have market been the coming developing is for

pitch, a relevant GPU opportunity on large major packaging applicable packaging. bandwidth especially packaging choosing density to have solution. chip several global high AI memory, is the high-density, Finish technology product. as HBM. for high-temperature, This Our micro are their order see We panel AI high of at leaders to up

these Track making design are throughput. allow have flexibility our for platforms. and PECVD process Both progress innovation, platform and high products differentiated with a of We good and

and We have a solid evaluation Track and PECVD. list both of for ongoing demonstration

further and progress for with year Track both expect PECVD no more and over beyond. We XXXX XXXX the next late and likely in in contribution revenue

solid we company PECVD. scheduled plating competitive target saw share for multiproduct and we the market in Moving X. X world-class steady Track pipeline evaluation QX, have furnace, broader cleaning with period, demand XX% and mentioned In fall turn to on for delivery make continue have additional the to a a revenue. we for already have we In We customer in represent believe WLP and U.S., the logic, we in had XX% gains. We the for and foundry, memory. tools of for power, become China, market the position customer. I order a to the leading progress. product XXXX. Please for a In Slide

have To cleaning Lingang on In ceremony addition, manufacturer stage we we supplier year our center subsidiary, engaged customer we of a and made Slide customers, later production progress. TEBO in of QX activity R&D Please the China in In to SAPS of process. regions. qualification qualification, and Europe, gathering already an tools. expansion officials. X. Korea, to etch to for have In this the to the our continues remainder C and employees, with our the we turn in in progress delivered SAPS-V are Both of tool moved And supplier, qualification the China, the tool, achieved ACM and XX, Shanghai, with which production of growth, we later major global of local hosted stage October major of support Ultra backside XXXX. and on is remain the our qualification. for that In facility of opening range with a supply semiconductor other U.S. also tools customer are

has automation floor, operation. The modern first X been of manufacturing system state-of-the-art initial including of and

move to evaluation. strong in own room lab tools tools XXXX R&D provide several U.S., the major easier for customers to a our deliver access ACM including we clean third building in is new advanced to U.S. the turn engineering the also Please for headquarters. outlook. and to this Science in growth team. We opportunity team. early plan working moved Shanghai Zhanjiang purchasing year. October the offer our into we is to great a completed environment in X,XXX Shanghai cleaning next quarter, our In including High-tech the the We feet Park ACM The square During which in great room. plan of participate semiconductor. XX. provide Oregon U.S., market Slide I facility a the X, our facility, growing now see to also on service and of the footprint new We will

We the $XXX million prior point, our revenue be have million the to XXXX of million. range in range middle million our of At outlook versus raised $XXX to $XXX to $XXX XX% year-over-year continue revised revenue the outlook growth remains growth compared growth rate represents to year previously. to we outpace a full expect the rate. and Shipment XX% to shipment strong, activity

the the tools customers. to a our for the From visibility market driven customer spending Our qualification the to order previously high and and of with its our range Mainland end year current perspective, of by a is remain evaluation acceptance believe book the consumption. of largely remainder we shipped China country production as continues match level at in on will WFE goal capacity

to in localization expanding in business new other to increased focus Korea, objective and market are customers market. gain, growth we the our We new on continue Europe Taiwan, our drive and China to markets. U.S., share Further, Asian product

of of outside is from target revenue to generate long-term China. Our half our

Mark, our of turn who me will CFO, Mark? review results. let over third details the Now to call quarter our

Mark McKechnie

Please up investments. and the I'll the XX% months the short-term Thank gain/loss measures million, of with XX%. it by Good which exclude XX% packaging, our This quarter, turn shipments furnace third of Reconciliation included X.X%. quarter year, Revenue margin XX.X% these long-term quarter for GAAP and margin XX% XXXX. financial the Tahoe Gross front-end semi-critical up Also, otherwise technologies unrealized release. excluding XX. ECP, for now ECP, quarter stock-based $XXX other the services cleaning of for was $XXX exceeded versus note X the spares $X.X single-wafer but are day, cleaning, million, up first was non-GAAP David. I Slide unless XX.X%. our was in $XX.X was compensation highlights. for I'll financial Unless non-GAAP target comparisons of advanced you, Revenue XX.X%. grew refer $XXX packaging, million to to figures million, everyone. was comparable and to measures, up refer third Revenue noted, down and were for XX.X%. otherwise, following of earnings Revenue for is measures Total gross million, provide third XXXX to the on to XX%.

gross our for expectation in full This the the is For high QX. margins XX% of XX% due range. of of margins the year, we year-to-date XX% expect and to the gross our for range end above upper about target margin our gross end to

We million to was vary from million, million, $XX.X $XX.X was million margin million million. $XX.X million, period expenses such period $XX.X volume, to continue was marketing product variety $XX.X were G&A versus impacts. due expect and to and mix versus and R&D currency million, gross factors to of $XX.X $XX.X Operating as a up from $X.X versus sales Sales

XX.X% and for Operating versus X% sales $X.X from XX.X%. $X.X million. marketing G&A unrealized $X the Operating earnings. is in versus million. income versus plan sale the not we in versus of For X% to million to $XX.X range, and investments R&D margin non-GAAP range, the was million was Income tax the gain in XXXX, million. full Recall gain was XX% X% Realized to range. expense $XX.X was in million included $X.X short-term XX% that X% the year,

income plan $XX.X now was $X.XX tax we year, million. the range. in XX% diluted share rate per XX% $X.XX. full non-GAAP the attributable Net income $XX.X on was an Net versus For versus for Research million to ACM income to effective pretax

will $X.XX sequentially excluded QX inventory of end Stock-based million compensation at SBC evaluations amortization option fourth in and to and raw stock the It mainly $XXX.X under per goods first for customers. the to included end our Our Inventory $XX.X of in restricted last $XXX.X versus at also quarter. $XXX.X facilities. million Finished equivalents, stock-based expense. due declined non-GAAP in tools includes materials million quarter net $XXX.X million. at of $XXX.X grants, flow expense accelerated I or compensation $XXX.X Shanghai ACM again ended the we income million net quarter. last expect now selected Cash, quarter. time items. finished cash goods the in finished share This and cash the deposits decline the at versus process inventory and cash, review ACM's work sheet goods third for year. the at balance million includes of third Cash was third months Capital quarter from million the flow was $XX.X first operations of were for X the the the quarter, $XX.X million $XX year. million and months X expenditures for million the first for of $XX.X million and

XXXX, For expenditures. prepared million the to full expect spend about year remarks. $XXX That concludes we our in capital

call Operator, any the go questions may have. open you Let's ahead. that please for

Operator

from first of Our Shi Company. Charles Needham & question Instructions] comes [Operator line the of

Yu Shi

specifically market, of product XD XXX% that talking coverage to on Maybe number about clean includes the you which right the all percentage ask NAND devices. think heard But wet first XD kinds I Are like? you what's applications? to I of clean able have question, wet covers all the portfolio cover now XX% I look want overall you of worldwide the NAND,

David Wang

almost process we Charles, I only actually, very this wafer say the Well, not I in and single good said, question. typical XX% as phosphoric want yet. cleaning, market asset our put have to we moment, the cover

TEBO Via And production. are other the phosphoric of putting right, the and and also we and with and for temperature customer rest process, of the the etching also NAND STM even basically, the we're So process. this all either high in most tool R&D XD including of the

fully engaged wet I pretty process, this XD NAND So regarding cleaning. we're call

Yu Shi

XD engaged would is to well? apply there as gaps, but some comment So NAND you're this basically, still

David Wang

we production of all we this put qualifying and year, process including Yes. should be say process. should probably in the existing end I already by

a we lot So have made of progress.

Yu Shi

remain question think second said next WFE, question. will The at you year. I you China level a There's a have, that I X-part think high it

obviously, a That's year's range pretty comment rules at a high administration question, of of So the when number I the uncertain Or But this tightening up? election any from new at already you level, understand to expected one, the but the the of year's today? all any of But to couple of the with are pretty say go. the U.S. here? one at the obviously, remain in at there, terms this happened other does it's include this remain what's you trade flat point expecting impact new same the to of you're that part, level, international control policy U.S. days part. as can high the export where remain want ago that or a level, you the change potential of assuming

David Wang

question. the strong can WFE Let's years, would see growing quite the the last market. come years, still the first say we China probably to next have I you should in say market demand And X few I China steadily.

lot logic there While still is a also building for the the foundry there's still process of memory fab. and IGBT market,

may So to at give still next in up, to to we low, be years, it's little year, We really building strong you to think and might to that process the number. really moment. be will few little hard going. this keep a (indiscernible) say come and next the really hard bit predict I But the bit want a

they is utilization You're their of line all up have foundry pretty looking other the at time, heavy. business,

growing want before second one to I say Any I So question the the about China very question? your in answer we're still positive for first market.

Yu Shi

continue. Please please. Yes,

David Wang

X This hard is to day. only It's predict.

out all of new We all customer come key really a all of And we're the the support production basically, ramping in or have global. the rule the changing. to countries, regulation to follow going

Operator

comes the next Company. Mark line the question of from of Benchmark Our Miller

Mark Miller

end this down quarter. gross to margins like high December range the posting range come they in sounds were of above to consistently year. been for your I'm the It back just margins you've expecting the wondering, target

are to to XXXX in range backlog, gross we margins? for your at go going your Looking back target

Mark McKechnie

It And I with good do lot on our of you mix and year-to-date, yes, front. really another has did, product quarter differentiation, above XX%. we've well to think done QX, that a and just have we

for guidance, helped. XX% change given XX%. can term, we're that exchange a remains longer going give in product longer and obviously, line. next But to general, to And broad Foreign target our has But not term, year.

good. the too they're that pretty backlog, healthy. pretty much, giving margins Our for without They're

Mark. leave we'll so at it that, And

think I XX% target. to we're to sticking our XX%

Mark Miller

next terms in of to of delivery the expect customer You that year? significantly orders outside we your sales of year. half in China? first announced Is U.S. can for where on from Any next a thoughts increasing be the going

Mark McKechnie

Yes.

I think been focus. has our Mainland a we is expand the that going where We really China. our this The and scale activities business spending that business customers, corporate some it's of have outside of model alone that China, and from it have up near planning on in obviously, larger these in good is the really been on, we're the year. scaled believe into up next customers lot We've you. of global with projects what the stage their company. status. It's a later a evaluation China got growth International the few And and markets. where focus are see and in depends for demos then and our they

clean Oregon commitment. in this think a room I good is

we'll the But some give contribution now, we'd expect from non-China markets. next give say want outlook I our mix, but when right that Anything think some. range, next when year to to year, exactly add, So we David? don't we XXXX we probably much how include early

David Wang

our also can interest customers XX%. we a acid some tool and big obviously Well, to SAPS we especially see tool. potential, cleaning mechatronic up saving do and Tahoe copper actually, plating sulfuric Yes. which this also into our see that And

and opportunity product into the see a of getting So market. we our global differential lot for

product will So customer in to be we're getting their outside accelerating, of expecting different China. the state those

Mark McKechnie

with spoken looking good. other customers Europe, the and I pretty other about activity know for here. team of all so orders, in good-sized that I but would number engaged we're add, a heavily Mark, we we're we've haven't got is U.S., areas, pretty a

Operator

next Our line the [Operator comes ROTH from question Desilva of of Capital. Instructions] Suji

Sujeeva De Silva

is and there. Mark's on do Taiwan? geography The expect customers opportunity question in what following global you you contribute across up Europe, the think Korea, XXXX, near-term U.S., to that Maybe

David Wang

precisely obviously, a opportunity next have Yes. in shipping half We'll this we It's got now. year, you continue in opportunity. Asia. interest And one U.S. we're to see right first hard their evaluation we And product see that different have in partly as see packaging the of and we actually the tool other give step. customer, that already process we of advanced of tool And also, to year. logic the we X key the on

we on or we're customers. those with CapEx that plan. projection year, next engaged their So with going continue their And see

we're try to big engaging and those line. in outside production excited our guys in also really penetrate So China differential with product really the

and saving our get performance. yield same excellent tool big at I removing said, to the get the market will we a also improve As offer particle of lot the time, asset providing and a

So that, product for said, as market. the we'll our different I see (indiscernible)

Sujeeva De Silva

efficient? it compete then sounds the And throughput there there? on to can helpful. Is more you have would technical like you high-temperature the specific come or solutions, in SPM be are What color that with specs the advantage there. Any it incumbent

David Wang

let actually, way. this put Well, Yes. me

Our One can the before. chamber. we SPM did chemical this tool, higher SPM which handle breakthrough, X. have product control outside acid. And splash XXX-degree much high-temperature mentioned a as actually, our We sulfuric I tool single-wafer then is

environment So chamber cleaning therefore, much don't time cleaning spending the cleaning a our with on and need we better have chamber, itself. the we

give uptime will particle that So and performance. better, give good a also you

And middle single. one this real perform The batch their flagship has Tahoe remove real breakthrough lower tool. and and They're And efficiency. excellent second been this is is have SPM. particle temperature tool actually level of and year our we targeting combined the

As I particle about XX said, particle nano adding X only.

wafer to equivalent capability. definitely single that's So the process

nodes, system, filtering the all nano and right, into advanced is demand, logic. memory removing also really tool and Xx which and with say, can be particle, I'd used the this further DRAM, So the continued, improving for

in both that see market we work and the So also outside in tools China, China.

environment. very actually in also As headache process, sulfuric their everybody fab material acid treatment, about the handle they're this in with

I saving giving good environment, performance other it the in protection a the and fab we're for So also world. call really that's

for tool. opportunity see bigger we that So the our

Operator

Our next Lee from of question the comes Jefferies. Edison of line

Yu Lee

have a about that in leading a you be worried did China for slowing China. maybe whether spending indicator in actually advanced a question I that And China, in of think us is front-end packaging be should the China spending I down. slowdown mention help because whether just front-end packaging you understand market as can should quick result in we the advanced in

So how should think we that? about

David Wang

Well, first also Yes. I is year to half at the it's that say looking in really this want year, of last and slow.

However, orders we up. see that in a gradual we market look other foundry other they pickup in do QX, at the QX. have business, you so And coming pick

I the think packaging pick this spending. on, gradual now on from up advanced WFE

past. we say, QX are year. and next should I'm about But So I talking positive,

represented revenue Our tool months over is all the year, last really X and last shipping. the

packaging this view status. that's about So our advanced

Yu Lee

versus there? think equipment? is they requires packaging Do something companies like different are more that moving of actually HBM Chinese type they that the past? CoWoS What into the different moving happening you packaging Are doing or are into

David Wang

moving Well, packaging. obviously, to the quite the also the too. different high-density company moving this a And there's see company panel company. And certain we also, obviously,

the this of a the packaging, I work it's lot call So development. process and also advanced on technology

Operator

to [Operator me the turn Wang David in call Instructions] more let queue, remarks. closing no for the questions Seeing back

David Wang

Thank call support. for participating your you on and operator, you, all thank and for today's

upcoming please. our to is Relation Gary Before we close, events. Gary, mention going Investor

Gary Thomas Dvorchak

Thanks, David.

XX, Technology New at present November present ROTH present also conclude, Craig-Hallum X, XXth Annual we will Select in November AI December we Conference York. Technology give Scottsdale, Global New to we'll the And I On on York. and in Capital's everyone Arizona. UBS XX, at the in a On Annual Conference want we on at quick conferences. will investor Alpha Before our XXth just reminder upcoming Conference

the City XXth invitation York in Summit York. Finally, on the Attendance present NYC New by are conferences December at New we'll at XX, Annual only.

For management register investors, our representative meetings please schedule one-on-one to contact This the team. and with call. your concludes interested sales respective

now and good may You day. all disconnect, a have

ACM Research (ACMR) 7 Nov 242024 Q3 Earnings call transcript