CYBE - Earnings call transcript Q2 2021

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Operator

Good day and welcome to the CyberOptics Second Quarter 2021 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Dr. Subodh Kulkarni, President and CEO of CyberOptics. Please go ahead.

Subodh Kulkarni

you. Thank thanks quarter CyberOptics of and for conference participating second the XXXX. for afternoon earnings in call Good

forward-looking Joining outlook me some Regulation keeping is statements which XX, These then at Operating for forward-looking overview of discussions Officer, our you outlook the a Jeff made our FD, this will of the Bertelsen, in our will results, release. of afternoon's regarding our ended answer statements factors. are our XXXX, we risk XX-K CFO reflect for future be filings urge with to review conclusion pleased our Securities is have number results your performance. review of with in recent December earnings other detail to the my year Form who to and following these our subject and We and questions We discussed Exchange Chief risks that in In remarks. Commission.

performance. earnings or of quarter. million diluted for of increase to second up year-over-year for take the quarter or second share lines. sales, advantage was our $X.XX million from record. Turning inspection of sales electronics million year's effect, now an income per quarter environment by ended guidance, $XX.X CyberOptics the record products sensing $X.X from quarterly of from capital the XX% allowing diluted metrology share, our quarter quarter of are each our an robust and in this growth to industry-leading double-digit which targeted strong $X.XX previously This reported and $XX to June driven Net year-earlier all-time spending per came performance significantly In XXXX marked We issued XX, sales markets. million $X.X recent of semiconductor CyberOptics XXXX. product our the exceeded optimum second second in of our in

and by growth which This for of product in will applications. million, second sales the from XD post XXXX. XX% by year-over-year year-over-year to rose performance $X.X driven quarter are million quarter our review XD metrology family. high strong XD OEM semiconductors I and Sensor sensors, third Now MRS growth was sensors minutes, Sales year-over-year ongoing the second in of to to of end sales next XXXX. increased quarter reflecting electronics customers inspection robust of forecasted the demand XX% and for $X.X few

Demand part million. strong and the forecasted yield fabs. this generated sensors quarter building of are process improvement of year-over-year XXXX. for to semiconductor new third quarter by being metrology the inspection million. and increased Sales year-over-year XX% product to the systems SQXXXX sales in XX% systems inspection for $X.X both believe of quarter rose XXXX increased our inspection We our sensors. products in While second to new semiconductor quarterly are MRS speaking I packaging XD year-over-year consisting MRS of of system customer and sensors, want to product, growth capitalize for and upon $X.X Sales of add applications, longer-term sensors WXXXXX XX% incorporates the continuing metrology a mainly multifunction of Within of Sales XXXX. $XX.X demonstrations that year-over-year the products post in CyberOptics of to for as growth record sensors, of well that wafer of advanced NanoResolution WaferSense are to NanoResolution positioning second quarter significant second million is in category, opportunities. WaferSense as this

year's in XD customer inspection million systems million Second $X.X of memory acceptances benefited third for of Customer expected MXXXXX systems. this $X.X of are from quarter. also quarter system sales MXXXXX module acceptances

for XD acceptance first $X.X order of MXXXXX for of second module Customer first Following received CyberOptics placed million the end multifunction XD is of SQXXXX CyberOptics XD for system. totaling slated quarter, existing systems this customer inspection metrology. system system this inspection for memory quarter, existing orders its three MXXXX a customers its and second quarter year's LED mini and XXXX. In the from for new

outlook and remains inspection for Our long-term mini metrology growth LED applications promising.

inspection We manufacturing also XXXX XX, at and backlogs for of a recently and received processes. follow-on year-over-year on printer at up sensors, record inline SQXXXX of XD sensors. systems strong backlog third million and XX, for basis. XXXX forecasted order quarter SQXXXX MXXXXX metrology Sales grow component a cartridge and $XX.X CyberOptics in in semiconductor totaled metrology of June $X.X reflecting totaling million, MRS from orders inspection to million March systems $XX.X multifunction are the systems XXXX, solidly

quarter As products. revenues XX, a from third ending third due of It's $XX quarterly of to for systems of to MX will result, the we quarter million in million sales the forecasting million there no $XX.X XXXX. module the quarter September memory fourth XXXX these anticipated $XX compared in XXXX, of be variability normal to of that sales are in

sales in reason, a be the fourth are quarterly sequential basis. this For XXXX expected on lower quarter of to

by is capital driven company's growth record and environment. for quarter spending fourth sales the of year-over-year strong However, anticipated robust XXXX, backlog

Looking positive will foreseeable market to into CyberOptics performance future. ahead, the continue we believe conditions benefit

MRS strong us industry-leading spending advantage to capital technology platforms optimum are environment. WaferSense enabling and take Our of the

we about CyberOptics' prospects are optimistic going reasons, forward. these Thank For you.

Now, performance detail. our will quarter greater review Jeff Bertelsen in second

Jeff Bertelsen

Thanks, Subodh.

our backlog quarter of million mentioned our the Roughly for XX to million March scheduled million. our XX record for XX at scheduled As XX% third than is press was a after Slightly shipments backlog stood today's XX XXXX. in June release, OEM in XXXX. $X backlog of ship June after About June backlog periods more relating OEM to of of is our XXXX. $XX.X $XX customers

shipment MX in receive to for started have we XXXX. early addition, In orders

expected are orders progresses. MX as Additional XXXX

us ship for in QX $XX revenue of confident revenue additional third quarter guidance million. making usual, $XX million expected are to progresses, orders today's as As book

which The stood decrease quarter in module margin second percentage MXXXXX in this gross million Our of period. XX% from the memory at systems expected year's in mix. second quarter, XX% the was year-earlier given was $X.X sales the down

margins basis percentage be that X by our to due the from to year's any in X mainly this period. expect is third gross higher MXXXXX this expecting we quarter quarter time, again the expected second about quarter, sequential in margin XXXX, MXXXXX percentage fourth lower we given of to gross sales. improvement aren't At revenues Our a on for the in points

quarter bears and travel COVID to operating XX% place due margin upon million. mix, percentage balance low for other expenses XXXX second pandemic. of the gross WaferSense dependent It particularly volumes were to expenses to quarter XD increased for heavily product that roughly year-over-year second Total bans, XXXX the the shelter in higher of margin mandates $X.X sales sensors. operating in Our be of related unusually will measures of and MRS products noting the XXXX

operating and our quarter, XXXX, revenue quarter incentive financial the increased that near expenses from the year's forecasted the benefit affected expenses or due job quarter be Singapore $XXX,XXX. may mainly mainly program expense up In XX% in improved Total and second third recall realized expense levels. in we are XXXX. to amortization Depreciation stock Operating support our addition, second level this expense significant a of roughly quarter XXXX were second you R&D the other at to a favorably that forms of revenue by of third-party a sales of because performance. in quarter, second came our sequential we in exceeded period. than in commissions, revenue compensation include basis commission, for the and totaled Higher our impacted to and more QX sequential compensation growth on due channel costs $XXX,XXX and original the in the expectation XX% guidance to

quarter, the balance working questions. effective achieving at six stock, you. rate of be income inventories restricted year's growth benefits vesting a the capital excess but forecasting in first our This may end rate receivables. would any was objectives. million marketable later from impact your Cash $XX for down from this second capital our of tax And and to stock tax decline quarter, the exercises tax of in to year. the roughly totaled Our believe We XXXX. cash of requirements which the XX%. first $XX.X take XXXX year's was for million at of at option up sequential the this securities .X the end are occur Thank for million or attributable for happy year, similar and of from end $XX of now months are the we adequate resources excluding We

Operator

[Operator to Greg Group. first Capital of go will And Craig-Hallum Palm we Instructions].

Greg Palm

the could help quarter you growth. really here. semi understand us cap good manufacturing. starting off on XX% I Maybe end you year-over-year. Congrats on guess market equipment electronics not think I'm maybe both growing what just for guessing it's and is growth

from the is is guess share gains, my remaining coming applications, et sort some cetera. new growth So, of

helpful be little just get what's to really the here. So, on driving broader sense a growth it'd

Subodh Kulkarni

tracked semi cap XXXX, in and Electronic based depending looks have on in to look sources semi you keep semi the markets. as them to coming right fairly in analyst it we XX% expected carefully. well cap growing they the inspection few like But is range numbers on Greg, looks neighborhood well seen, differences the publicized which now, It like, different not are we track cap some XX% about XX% of grow because from it's range. at. is as

market that and say will So, you our now. XX% to partly we say if be at we of cap sort can right growing partly XX% are about in electronics, semi overall in

share. we now. we compete, SQ, in got the we we growing So, MX, compete, but are we speak correctly we areas is the with on don't better more clearly, growth But don't as them at not are we we getting placements the seeing is AOI second clearly are penetration. WaferSense, again, as and observed. customer compete. we in gaining really market. The share XD getting XX%, like big are really With right you market gaining where

gaining growing superlative XX%. market seeing that, And at numbers to our So, right share, growth very now. you're within XX% rate which healthy, such composite is we a of are is why

Greg Palm

was for The it $X.X both that orders LED you new I existing million in for customer. mentioned mini think inspection, and

application So, technology that maybe that's right? the implies that at guess there's customer for additional least additional purposes. or using that Is inspection now I

Subodh Kulkarni

and products being are And since yeah, legally there Asia. manufacturers commercialized say to have about those But, to products now. careful as right we we speak are systems exact our what subcontractors, disclose in We multiple bound not be going. using EMS what applications which different products are customer we are what

which So, products they or anything orders names, companies, end we EMS those user which when from those different don't to want are get say demands. but driving about are we

Greg Palm

XXXX. MX recent had I we that the of rec any in think QX orders terms or don't also orders, seeing additional the tape. recall right? product placement mentioned on rev I is for think I receiving line, that In you're guess as And I speak, you

aren't bit can on going what's us sizable. those give there. maybe detail just Maybe a more little you So, on

Subodh Kulkarni

so far. the we We that the you ordering order correct. MXXXXX if two say been received systems started Number did will, customer, it heard has You one from customers MXXXX who MXXXXX. with number

the one who we number the MXXXXX, customer in order have ordered So, hand.

and deliver will in believe, We XXXX get QX time accepted, period. we

forward, Going they to committed MXXXXX. are buying

customers two effectively have we MXXXXXs. So buying

Greg Palm

how of have this say you you that point? hand? is that at Or an not additional order meaningful Can is much it in

Subodh Kulkarni

because that system. We of can really information. disclose to gives And want customers, that have now to careful price two use that that they be not we the number that

So we don't of usually that disclose the size the order to want for reason.

Operator

Ryan And Colliers. of we'll hear next from Dick

Richard Ryan

that number orders, on stay customer the year. XD one systems your I of ordered If significant has the pretty Subodh, over amount MXXXXX

and Now, they is their for to this committed evaluate to look XD a be take forward? have to or the going going XD applications converting just let's

Subodh Kulkarni

see is are demand Dick, right hot, lines. the and memory for reports now, happening, from a memory from increasing what's Samsung, lot There's is can of So, number they as Hynix now. you of Micron. Right

so, lines. new they building are And

under first and delivered the MXXXX go So, new systems will so customer operational. The one to our is have MXXXX They our already. upgrading for time. being Over the MXXXXX for. lines lines used putting customer committed existing then MXXXXX due to of They manufacturing. in where time, fully in are XX course is MXXXXX we or number are new

Richard Ryan

have their to can lines you the to itself? – Or the When new configuration to old is it do sensors new they upgrade buy XD, in system by will a issue old MXXXXX put whole you have systems? XD that they just a

Subodh Kulkarni

use. buy technology. have XD, new we fundamental we will call on because MXXXXX whole to XD, architecture. the MXXXX of use and we of we In stop different a The scan they technology fly what shoot architecture the and is In use believe very We system. inspection

out. make it just fundamental existing convert to the to MXXXX differences sensor MXXXXX the architectural an very by So, difficult swapping

from So, we believe they will a to switch have new whole XD purchase XD. to to system

Richard Ryan

ticking be side? Since up will gross are on gross you the MX volume issues customer kind drag able there has the and been time, over on assuming line – margins other a increases gross with orders on margin get of through? that to margins more this with Or coming product

Subodh Kulkarni

be by we expensive right Time able Over big we will right market improve meet want the a we definitely margins. believe now, buying assistance their handicapped kind needs. time, extremely is, to away. obviously, to all of They concern, to are But too. automation

us it believe be So, vendor, the we out go expensive. for buy delivering improve automation and makes margins to existing most is in efficient systems take will in MX way automation cost which the we able off-the-shelf automation, time, to to Over MX. about the

Richard Ryan

from for housekeeping. want Jeff, us months? the six to quarter operations? to of couple on you flow Either give A if was or what cash a it

Jeff Bertelsen

needs. was Yeah, about a flow the for lot just $XXX,XXX. for the capital of And cash from was quarter, that working just operations,

operations receivables the $XXX,XXX. and CapEx jump with in $XXX,XXX. was from quarter So, was big second $XXX,XXX. And was flow increase, depreciation so in cash just amortization the sales

Richard Ryan

– give and wanted related double just number. combined a WaferSense XD of MRS percent total you the check And revenue, that to as

Jeff Bertelsen

In little a it quarter, the more second was XX%. than

Operator

Instructions]. [Operator

We our will go next Lake question. from next Jaeson of Schmidt that Street. is And to

Jaeson Schmidt

chain overall standpoint. Just just constraint curious or a from what seeing you're supply

Jeff Bertelsen

an seeing those From – It there detectors now. things way been the supply. or than different difficulties And seeing some are that The we're tight navigate date, see area a to effort any to disruption any a putting certainly it isn't secure ability in there. to as right or products. chain into supply of able are what attention go work of lot of manner supply other a don't our our in way that getting are really chain To is lot is it, out some lot to that, hear of And tight put or other so work through significant we been what timely lot we've into. to news. our what the effort that a our is we to causing perspective, on and a chips customers, into in far pay through but and deliver are we've it. now, our of but continue things we a certainly able Right we companies

Jaeson Schmidt

significant you any change on Just guys' Have up following your that. seen times? in lead

Jeff Bertelsen

terms in to to about talking Jaeson? you're assume of customers, ability our I our deliver

Jaeson Schmidt

Correct.

Jeff Bertelsen

It's ability any gotten deliver. at bit significant think points time. there's been various a delays in in our little elongated I to don't

been. of gets a there's But a par most maybe by for or little again, it tight on I bit don't to chain and part, think the I the But of right kind we're now. is week longer anything kind we've two. the supply with where Or back chain now. supply think significant all right

Operator

Slade go Acme next will We Eric [ph] [ph]. of Analytics to

Unidentified Participant

have I those three for some same is they'll a That but There's been joining quarter numbers. And guys guys. breakout the think. in the you Congratulations. keep hitting always to call, us, be people would

Here's questions. a couple

did read a correct? like two, when the release of get XD Is you XD. you thought just then any memory looked second happen I the going first you side, from third I it kind did number I and the yet? have to to customer, On know time. it's transitioning customer that looked,

Subodh Kulkarni

Correct.

customer. have today, MX, the believe we I the third large saying, to Over for switch manufacturer continue was memory buy of our they our our have we large memory don't SQ They yet As as as but we over customer systems to MX. manufacturer time, [indiscernible]. as will don't third

Unidentified Participant

evaluating I've get, it's I that the making or XD big ever reason? why and customer XD don't that the think reason third to you that's is transition that they a are clarified. Is still

Subodh Kulkarni

holding reasons are not why We're they the quite are up. or what sure

believe question of it's as over not received yet. haven't a when, just, It's But any we they in now, we know, to if. opinion, MXXXXX. we will of our as far orders right switch As

Unidentified Participant

It won't sounds correct? in another But what getting to fourth that up like, like orders Jeff be sounded quarter. you the Is they're described, that memory for orders quarter that starting XXXX. it – for stack for

Subodh Kulkarni

that's what Yeah, basically said. is That correct. we

see We starting XXXX. to QX in acceptances of are coming

as time the QX acceptances QX, timeline a expecting be those But more along. would orders the period. goes in MX all are XXXX building given in We involved product,

Unidentified Participant

the through booked it exactly I XXXX, I [indiscernible] Now, mini – was through million, how right? Jeff, the half? first believe had much micro you up have is, other $X.X question

Jeff Bertelsen

Are Eric? revenue, you about asking our

Unidentified Participant

through guess. announced you've bookings half, that first in the Yeah, I

Jeff Bertelsen

far micro. $X.X orders mini for million Yeah. It's of announced year this so

Unidentified Participant

Hey, great a quarter.

Operator

And we'll Orin go Partners. question to from our AIGH next Hirschman Investment of

Orin Hirschman

Two questions.

that, from mentioned lay of XX,XXX you And You is micro does land customer? than now like on three I'm customers sure more give on micro what before? one us one just what's of had really customers view two pipeline on going the production, additional on micro Can on a LED side. or that in if look side? had foot LED kind you a not the LED? the And

Subodh Kulkarni

legally without the at micro I'll be It's LCD used LED high a details into because displays details. technology. getting for bound we new LED, a to all answer right level now. of very backlight not are disclosing is being Mini

market commercial in those been quarter, QX. or just has Just products the that the this is quarter earlier good. first phenomenally came reception consumer products of Public last

are to getting out two are But the step is which six of right is less for demanding steps, is capable now. getting most remaining the systems accepted, steps doing steps, as the technology are going two getting SQ deployed. inspection six SQ steps, what The four, are being – we computation now. sold SQ. right now. demanding of we And but So, six essentially, all of out right with for SQ used an we

the products of best to backlight. it's launched in next Essentially, be year of worlds. with two We LED, mini micro or expect a lot the both commercial

some are there drawbacks. display, LCD an at look you If

very OLED point. LED, both best LED good are a If price is micro drawbacks. worlds of with backlight LCD you the Mini look there at some at display, an

to with display LCD switch most displays now. we next we clearly, very to right two a definitely mini expect LED So, over a position of have years. the three SQ backlight good And

growth are whole on significant this just now. started. we from It counting So, area right

As the QX products launched I XXXX. said, first of got in

electronics So, from one And and no different IP we consumer announcements more more on this has with technology. area. definitely expect companies lock any this

year consumer jump than the in going space companies more one to or definitely, two. this next are So, into two electronics or

a excited different growth. I actual question addressed quite get orders at level. it we from mentioned The are your from about We Hopefully, that Asia. the high earlier, subcontractors

LED received have Jeff. micro we customers is now. more seven of number even the like or orders more, Maybe for mini So, six probably

Jeff Bertelsen

customers nine it's now. Yeah,

Subodh Kulkarni

customers. Nine

Orin Hirschman

Just there, clarification customers. nine one customers? nine it's It's

nine repeat product at it Just are that point. again. actually It's in customers that using this

Subodh Kulkarni

Correct.

Orin Hirschman

Just pipeline in increase? the those additional terms And three, of is of adding terms beyond you in customers it seeing that of accelerating the interest? are pipeline

Subodh Kulkarni

Yeah. growing. interest is Definitely, the

As launched. I just said, the received got well. being technology is very It

SKUs be with will So, quarters few the LED more mini next backlight. launched in

is So, the interest growing.

consumer launching. to three We products the expect to And this more years. five continue will be next thing over

in this growing So, whole yeah, area. interest is

Orin Hirschman

can In terms – your of say whatever you here.

terms are look point? from reworked OSATs, that year. in really those – feedback I what's you In customer betas going? complete going to more know that's But system customers now can. for you're the customer to sell whole you What's for that sensor-based of like beta Is be for – the at whatever system how feedback be us there area this new potential next a So, the hoping the to they're test has product? Tell a where that with lot in like?

Subodh Kulkarni

wafer asking that are believe about Is system. inspection you WXXXXX I our correct?

Orin Hirschman

Yeah. Yeah.

Subodh Kulkarni

to We packaging things WXXXXX do multiple we shipped going a in take As NanoResolution sensors in we well as advanced to well our These demonstrating this interest. in speak. are Asia long remarks, space, MRS as as systems things customers are different time. Good my have different video, mentioned customers I

which are have high. these this And is go who technology anytime they doing through typical want for now. or few or months been new vendor, those any a But the of fabs takes a interest time. systems, have layers choose several a for the We of customers OSATs, qualifications, to new to

who right the because market matter the in in really orders XX are through there's this we After But – shrinks much quite customers here in We close been consolidation few that's to industry. XX, once now. So, quarters. dramatically hopefully the going industry. what semiconductor that, next expect some so there's

So, the win a getting you big chunk every of is market. a big are win because

will two good take hope from looks or quarters has Feedback to very So, here. can it I in get time. then, wins the grow good. we there. one few [indiscernible] very and been data And does next say general. to But continue in it

Operator

call And there back this for are presenters other our time. closing comments. or the questions the queue. in At any additional no I'll turn to

Subodh Kulkarni

for results. to after and your look you again. you interest Thank QX you updating our questions. Thank earnings forward We

Operator

We that So, conclude to thank for like would participation. does the your call. everyone

You may now disconnect.

Cyberoptics (CYBE) 29 Jul 212021 Q2 Earnings call transcript