Q1 2026 Amtech Systems Inc Earnings Call

February 5, 2026

Speaker #1: Good day, everyone, and welcome to the AMTECH SYSTEMS fiscal first quarter 2026 earnings call. Please note that this call is being recorded, simultaneously webcast.

Operator: Good day, everyone, and welcome to the Amtech Systems Fiscal Q1 2026 earnings call. Please note that this call is being recorded and simultaneously webcast. I would now like to turn the call over to Jordan Darrow of Darrow Associates Investor Relations. Please go ahead.

Speaker #1: I would now like to turn the call over to Jordan Darrow of Darrow Associates Investor Relations. Please go ahead.

Jordan Darrow: Thank you, and good afternoon, everyone. We appreciate you joining us for the Amtech Systems Fiscal 2026 first quarter conference call and webcast. With me today on the call are Bob Daigle, Chairman and Chief Executive Officer, and Mark Weaver, Interim Chief Financial Officer. After close of market today, Amtech released its financial results for the first quarter of 2026. The earnings release is posted on the company's website at www.amtechsystems.com in the Investors section. Before we begin, I'd like to remind everyone that safe harbor disclaimer in our public filings cover this call and the webcast. Some of the comments to be made during today's call will contain forward-looking statements and assumptions that are subject to risks and uncertainties, including, but not limited to, those contained in our SEC filings, all of which are posted in the Investors section of our corporate website.

Speaker #2: afternoon, everyone. We appreciate you joining us for the AMTECH SYSTEMS fiscal Thank you, and good 2026 first quarter conference call and webcast. With me today on the call are Bob Daigle, Chairman and Chief Executive Officer, and Mark Weaver, Interim Chief Financial Officer.

Q1 2026 Amtech Systems Inc Earnings Call

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Amtech Systems

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Q1 2026 Amtech Systems Inc Earnings Call

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Thursday, February 5th, 2026 at 10:00 PM

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Speaker #2: Amtech Systems Inc. released its financial results for the first quarter of 2026 after close of market today. The earnings release is posted on the company's website at www.amtechsystems.com in the Investors section.

Speaker #2: Before we begin, I'd like to remind everyone that safe harbor disclaimer in our public filings cover this call and the webcast. Some of the comments to be made during today's call will contain forward-looking statements and assumptions that are subject to risks and uncertainties, including but not limited to those contained in our SEC filings.

Jordan Darrow: Some of the comments to be made during today's call will contain forward-looking statements and assumptions that are subject to risks and uncertainties, including, but not limited to, those contained in our SEC filings, all of which are posted in the Investors section of our corporate website.

Speaker #2: Investors section of our corporate All of which are posted in the website. The company assumes no obligation to update any such forward-looking statements, you are cautioned not to place undue reliance on forward-looking statements which speak only as of today.

Jordan Darrow: The company assumes no obligation to update any such forward-looking statements. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of today. These statements are not a guarantee of future performance, and actual results could differ materially from current expectations. Among the important factors which could cause actual results to differ materially from those in forward-looking statements are changes in technologies used by customers and competitors, change in volatility and the demand for products, the effect of changing worldwide political and economic conditions, including trade sanctions, and the effect of overall market conditions, including equity and credit markets and market acceptance risks, ongoing logistics, supply chain, and labor matters, and capital allocation plans. Other risk factors are detailed in our SEC filings, including our Form 10-K and Form 10-Q.

Speaker #2: These statements are not a guarantee of future performance, and actual results could differ materially from current expectations. Among the important factors which could cause actual results to differ materially from those in forward-looking statements are changes in technologies used by customers and competitors, change in volatility and the demand for products, the effect of changing worldwide political and economic conditions, including trade sanctions, and the effect of overall market conditions, including equity and credit markets and market acceptance risks ongoing logistics, supply chain, and labor matters and capital allocation plans.

Jordan Darrow: the effect of changing worldwide political and economic conditions, including trade sanctions, and the effect of overall market conditions, including equity and credit markets and market acceptance risks, ongoing logistics, supply chain, and labor matters, and capital allocation plans. Other risk factors are detailed in our SEC filings, including our Form 10-K and Form 10-Q.

Speaker #2: Other risk factors are detailed in our SEC filings, including our Form 10-K and Form 10-Q. Additionally, in today's conference call, we will be referencing non-GAAP financial measures as we discuss the financial results for the first quarter.

Jordan Darrow: Additionally, in today's conference call, we will be referencing non-GAAP financial measures as we discuss the financial results for Q1. You will find a reconciliation of those non-GAAP measures to our actual GAAP results included in the press release issued today. I will now turn the call over to Amtech's Chief Executive Officer, Bob Daigle.

Speaker #2: find a reconciliation of those You will non-GAAP measures to our actual GAAP results, included in the press release issued today. I will now turn the call over to AMTECH Chief Executive Officer Bob

Speaker #2: Daigle.

Bob Daigle: Thank you, Jordan, and welcome to everyone joining our call today. Before I provide commentary on the quarter and recent developments, I'd like to introduce Mark Weaver, our interim CFO. Mark joined us on 16 December to help us with our CFO transition until we appoint a permanent CFO. While we are making progress in our search, I'm confident we are in terrific hands with Mark. I had the privilege of having him as a colleague when he served as the chief accounting officer and corporate controller of Rogers Corporation. Among other senior financial roles, he was the chief accounting officer of NXP Semiconductors. We're very pleased to have someone with his experience assist us during this transition. Now, on to my review of the quarter.

Speaker #3: joining our call today. Before I provide commentary on the quarter Thank you, Jordan, and welcome to everyone and recent developments, I'd like to introduce Mark Weaver, our Interim CFO.

Speaker #3: Mark joined us on December 16th to help us with our CFO transition until we appoint a permanent CFO. While we are making progress in our search, I'm confident we are in terrific hands with Mark.

Speaker #3: I had the privilege of having him as a colleague when he served as the Chief Accounting Officer and Corporate Controller of Rogers Corporation. Among other senior financial roles, he was the Chief Accounting Officer of NXP Semiconductors.

Bob Daigle: Among other senior financial roles, he was the chief accounting officer of NXP Semiconductors. We're very pleased to have someone with his experience assist us during this transition. Now, on to my review of the quarter.

Speaker #3: We're very pleased to have someone with his experience assist us during this transition. Now, onto my review of the quarter. Revenue for the quarter was $19 million.

Bob Daigle: Revenue for the quarter was $19 million at the midpoint of our guidance, and our Adjusted EBITDA was $1.4 million, also within our guidance range. The quarter benefited from strength and demand for AI-related products, which accounted for 35% of revenue for our thermal processing solutions segment in Q1, up from about 30% in Q4. Another highlight is that our bookings were strong for the quarter. Our overall book-to-bill ratio was 1.1, driven by performance of our thermal processing solutions segment due to strength in AI equipment orders. We have the ability to deliver the majority of this equipment in Q2 due to our short lead times, but customers have requested some deliveries in Q3 to align with their factory build-outs.

Speaker #3: At the midpoint of our guidance, and our adjusted EBITDA was $1.4 million, also within our guidance range. The quarter benefited from strength in demand for AI-related products, which accounted for 35% of revenue for our thermal processing solutions segment in the first quarter, up from about 30% in the fourth quarter.

Speaker #3: Another highlight is that our bookings were strong for the quarter. Our overall book-to-book-to-bill ratio was our thermal processing solutions segment due to strength in AI equipment orders.

Bob Daigle: We have the ability to deliver the majority of this equipment in Q2 due to our short lead times, but customers have requested some deliveries in Q3 to align with their factory build-outs.

Speaker #3: We have the ability to deliver the majority of this equipment in the second quarter due to our short lead times, but customers have requested some deliveries in the third quarter to align with their factory buildouts.

Speaker #3: As broadly reported, semiconductor OEMs and OSATs continue to increase investments to expand capacity to support strong AI infrastructure demand. We expect demand for the applications to continue to increase in the equipment we produce for AI third and fourth quarters.

Bob Daigle: As broadly reported, semiconductor OEMs and OSATs continue to increase investments to expand capacity to support strong AI infrastructure demand. We expect demand for the equipment we produce for AI applications to continue to increase in Q3 and Q4. In addition to traditional advanced packaging bookings, I'm pleased to report that we received initial orders from multiple industry leaders for panel-level packaging equipment during the quarter. Panel-level packaging is an emerging technology that provides cost and throughput advantages that should drive broader adoption and is expected to lead to future growth. We're also continuing to invest in next-generation equipment for high-density packaging to support emerging customer requirements. We believe this next-generation equipment will provide the opportunity to significantly increase our addressable market beyond 2026.... We are currently processing samples from multiple customers.

Speaker #3: to traditional advanced packaging In addition bookings, I'm pleased to report that we received initial orders from multiple industry leaders for panel-level packaging equipment during the quarter.

Bob Daigle: Panel-level packaging is an emerging technology that provides cost and throughput advantages that should drive broader adoption and is expected to lead to future growth. We're also continuing to invest in next-generation equipment for high-density packaging to support emerging customer requirements. We believe this next-generation equipment will provide the opportunity to significantly increase our addressable market beyond 2026.... We are currently processing samples from multiple customers.

Speaker #3: Panel-level packaging is an emerging technology that provides cost and throughput advantages that should drive broader adoption, and is expected to lead to future growth.

Speaker #3: We're also continuing to invest in next-generation equipment for high-density packaging to support emerging customer requirements. We believe this next-generation equipment will provide the opportunity to significantly increase our addressable market beyond 2026.

Speaker #3: We are currently processing samples for multiple customers. For our semiconductor fabrication solutions segment, I'm pleased to report our first win for a specialty chemical product that we developed for a medical device semiconductor application.

Bob Daigle: For our Semiconductor Fabrication Solutions segment, I'm pleased to report our first win for a specialty chemical product that we developed for a medical device semiconductor application. We produced and delivered initial product in Q1. Strong customer engagement and a robust opportunity pipeline for our specialty chemicals is validating our strategy to overserve underserved customers, with technically demanding, high-value applications. We also had improved bookings for our Entrepix and BTU parts and services businesses during the quarter, as a result of a more proactive approach to business development and improvements we've made in service levels. Unfortunately, weak demand for our PR Hoffman products negatively impacted overall SFS results for the quarter and offset bookings gains at Entrepix. Demand at PR Hoffman continues to be impacted by weakness in the mature node semiconductor market and severe cost pressures at major silicon carbide semiconductor customers.

Speaker #3: We produced and delivered initial product in the first quarter. Strong customer engagement and a robust opportunity pipeline for our specialty chemicals is validating our strategy to overserve, underserved customers with technically demanding, high-value applications.

Bob Daigle: We also had improved bookings for our Entrepix and BTU parts and services businesses during the quarter, as a result of a more proactive approach to business development and improvements we've made in service levels. Unfortunately, weak demand for our PR Hoffman products negatively impacted overall SFS results for the quarter and offset bookings gains at Entrepix. Demand at PR Hoffman continues to be impacted by weakness in the mature node semiconductor market and severe cost pressures at major silicon carbide semiconductor customers.

Speaker #3: improved bookings for our Entrafix We also had NBTU parts and services businesses during the quarter, as a result of a more proactive approach to business development and improvements we've made in service levels.

Speaker #3: Unfortunately, weak demand for our pure Hoffman products negatively impacted overall SFS results for the quarter. An offset bookings gains at Entrafix. Demand at pure Hoffman continues to be node semiconductor market and impacted by weakness in the mature severe cost pressures at major silicon carbide semiconductor customers.

Speaker #3: 2026 will be an overserve the underserved, but we expect double-digit growth and meaningful profits from these sticky reoccurring revenue streams beyond 2026. We believe the strong operating leverage and working capital efficiency that has resulted from our product line rationalization efforts and a migration to a semi-fabulous manufacturing model over the past two years will result in continued strong cash flow and further increases in gross margins as revenues increase.

Bob Daigle: 2026 will be an investment year at SFS as we execute on our strategy to overserve the underserved, but we expect double-digit growth and meaningful profits from these sticky recurring revenue streams beyond 2026. We believe the strong operating leverage and working capital efficiency that has resulted from our product line rationalization efforts and a migration to a semi-fabless manufacturing model over the past 2 years, will result in continued strong cash flow and further increases in gross margins as revenues increase. This was our ninth consecutive quarter of positive operating cash flow. Cash generated from operations was $4.1 million for Q1, and we ended the quarter with a cash balance of $22.1 million, without debt.

Speaker #3: This was our ninth consecutive quarter of positive operating cash flow. Cash generated from operations was $4.1 million for the first quarter, and we ended the quarter with a cash balance of $22.1 million, without debt.

Bob Daigle: Cash generated from operations was $4.1 million for Q1, and we ended the quarter with a cash balance of $22.1 million, without debt.

Speaker #3: Adoption of semi-fabulous model which included the consolidation of our manufacturing footprint from seven facilities to four should also allow us to significantly increase revenue with minimal capital expenditures.

Bob Daigle: Adoption of a semi-fabless model, which included the consolidation of our manufacturing footprint from seven facilities to four, should also allow us to significantly increase revenue with minimal capital expenditures. We expect capital expenditures for the year to be below $1 million. In summary, growth opportunities driven by AI, AI infrastructure investments, and our differentiated capabilities, combined with strong operating leverage as a result of our asset-light semi-fabless business model, position us very well to deliver meaningful shareholder value. Now, for further details on our financial results, I'll pass the call to Mark.

Speaker #3: expect capital expenditures for the year to be below $1 We million. In summary, growth opportunities driven by AI infrastructure investments, and our differentiated capabilities combined with strong asset-light operating leverage as a result of our semi-fabulous business model, position us very well to deliver meaningful shareholder value.

Speaker #3: Now for further details on our financial results, I'll pass the call to Mark.

Bob Daigle: Now, for further details on our financial results, I'll pass the call to Mark.

Mark Weaver: Great. Thank you, Bob. It really is a pleasure to be working with you again, even if it's for a short period of time. Now, on to my review of the financials for the fiscal 2026 Q1. For proper perspective, net revenues of $19 million in the Q1 of 2026 do not represent a meaningful comparison to the prior year period. This is due to the company's product line rationalization that began two years ago. For these periods, the only perspective worth noting is for AI-related demand, which grew year-over-year. You'll see in a moment the benefits of this rationalization to date when I address AI revenues as part of our TPS segment, and when I talk about our consolidated gross margin as a percentage of revenues and other improvements in the company's operating performance, cash flow generation, and balance sheet.

Speaker #2: It is really a pleasure to be working with you again, even if it's for a Great. Thank you, Bob. short period of time. Now, onto my review of the financials for the fiscal '26 first quarter.

Speaker #2: For proper perspective, net revenues of $19 million in the first quarter of '26 do not represent a meaningful comparison to the prior year period.

Speaker #2: This is due to the company's product line rationalization that began two years ago. For these periods, the only perspective worth noting is for AI-related demand, which grew year over year.

Speaker #2: You'll see in a moment the benefits of this rationalization. To date, when I address AI revenues as part of our TPS segment and when I talk about our consolidated gross margin, as a percentage of revenues, and other improvements in the company's operating performance, cash flow generation, and balance sheet.

Mark Weaver: You'll see in a moment the benefits of this rationalization to date when I address AI revenues as part of our TPS segment, and when I talk about our consolidated gross margin as a percentage of revenues and other improvements in the company's operating performance, cash flow generation, and balance sheet.

Speaker #2: But back to the discussion on revenues. A more appropriate comparison is to the fourth quarter. Total revenues were positively influenced by growth in AI product demand within the TPS segment.

Mark Weaver: But back to the discussion on revenues. A more appropriate comparison is to the fourth quarter. Total revenues were positively influenced by growth in AI product demand within the TPS segment. AI revenues contributed approximately 35% of TPS revenue, versus 30% in Q4. The increase was approximately 10% on a sequential basis. Bookings for AI applications remain strong. Other areas of TPS and SFS sales offset this growth on a consolidated basis, which is attributable to general weakness in non-AI areas of the semiconductor industry, in particular for mature node semiconductors used in the automotive electronics industry. Circling back to the benefits of the company's transformation, gross margin as a percentage of sales increased in the first quarter of 2026 sequentially from the fourth quarter and year-over-year from the first quarter of last year.

Speaker #2: AI revenues contributed approximately 35% of TPS revenue, versus 30% in Q4. The increase was approximately 10% on a sequential basis. Bookings for AI applications remained strong.

Speaker #2: Other areas of TPS and SFS sales offset this growth on a consolidated basis, which is attributable to general weakness in non-AI areas of the semiconductor industry, in particular for mature node semiconductors used in the automotive electronics industry.

Mark Weaver: Other areas of TPS and SFS sales offset this growth on a consolidated basis, which is attributable to general weakness in non-AI areas of the semiconductor industry, in particular for mature node semiconductors used in the automotive electronics industry. Circling back to the benefits of the company's transformation, gross margin as a percentage of sales increased in the first quarter of 2026 sequentially from the fourth quarter and year-over-year from the first quarter of last year.

Speaker #2: Circling back to the benefits of the company's transformation, gross margin as a percentage of sales increased in the first quarter of '26 sequentially, from the fourth quarter and year over year from the first quarter of last year.

Speaker #2: Importantly, the increase in gross margin was achieved on lower sales volume. Gross margin as a percentage of sales increased to 44.8% in the first quarter of '26, from 38.4% in the same period of the prior year, and 44.4% in the fourth quarter.

Mark Weaver: Importantly, the increase in gross margin was achieved on lower sales volume. Gross margin as a percentage of sales increased to 44.8% in Q1 2026, from 38.4% in the same period of the prior year, and 44.4% in the fourth quarter. Selling, general, and administrative expenses increased $500,000 sequentially from the prior quarter, but decreased by $1.2 million as compared to Q1 2025. The increase from the prior quarter is primarily due to incentive compensation, professional fees, and insurance. The decrease from the prior year period is primarily due to cost reduction efforts and structural changes to reduce fixed costs. Research, development, and engineering expenses increased by $0.3 million sequentially from the prior quarter and were relatively flat compared to the same prior year period.

Speaker #2: Selling, general and administrative expenses increased $500,000 sequentially from the prior quarter, but decreased by $1.2 million as compared to the first quarter of '25.

Speaker #2: The increase from the prior quarter is primarily due to incentive compensation, professional fees, and insurance. And the decrease from the prior year period is primarily due to cost reduction efforts and structural changes to reduce fixed costs.

Mark Weaver: The decrease from the prior year period is primarily due to cost reduction efforts and structural changes to reduce fixed costs. Research, development, and engineering expenses increased by $0.3 million sequentially from the prior quarter and were relatively flat compared to the same prior year period.

Speaker #2: Research, development, and engineering expenses increased by 0.3 million sequentially from the prior quarter, and were relatively flat compared to the same prior year period.

Speaker #2: The company continues to maintain a more focused approach to its innovation investments, including next-generation products targeting the AI supply chain and our specialty chemicals business.

Mark Weaver: The company continues to maintain a more focused approach to its innovation investments, including next-generation products targeting the AI supply chain and our specialty chemicals business. GAAP net income for the first quarter of fiscal 2026 was $0.1 million, or $0.01 per share. This compares to GAAP net income of $1.1 million, or $0.07 per share, for the preceding quarter, and GAAP net income of $0.3 million, or $0.02 per share, for the first quarter of fiscal 2025. Unrestricted cash and cash equivalents at 31 December 2025 were $22.1 million, compared to $17.9 million at 30 September 2025, due primarily to the company's focus on operational cash generation, working capital optimization, strong accounts receivable collections, and accounts payable management.

Speaker #2: GAP net income for the first quarter of fiscal 2000 to '26 was 0.1 million, or 1 cent per share. This compares to GAP net income of 1.1 million, or 7 cents per share, for the preceding quarter, and GAP net income of 0.3 million, or 2 cents per share, for the first quarter of fiscal 2025.

Mark Weaver: This compares to GAAP net income of $1.1 million, or $0.07 per share, for the preceding quarter, and GAAP net income of $0.3 million, or $0.02 per share, for the first quarter of fiscal 2025. Unrestricted cash and cash equivalents at 31 December 2025 were $22.1 million, compared to $17.9 million at 30 September 2025, due primarily to the company's focus on operational cash generation, working capital optimization, strong accounts receivable collections, and accounts payable management.

Speaker #2: Unrestricted cash and cash equivalents at December 31, 2025, were 22.1 million dollars, compared to 17.9 million dollars at September 30, 2025. Due primarily to the company's focus on operational cash generation, working capital accounts receivable collections, and accounts payable management.

Speaker #2: In the past 12 months, through December 31, 2025, cash increased by 67%, or $8.9 million, while the company has remained without debt. As for the stock repurchase program, the company did not use any cash for this, as no shares were repurchased, since the plan was put in place on December 9.

Mark Weaver: In the past 12 months through 31 December 2025, cash increased by 67% or $8.9 million, while the company has remained without debt. As for the stock repurchase program, the company did not use any cash for this, as no shares were repurchased since the plan was put in place on 9 December. Now, turning to our outlook. For Q2, ending 31 March 2026, the company expects revenue in the range of $19 million to $21 million. At the midpoint of this range, our guidance is a sequential increase from our reported revenue for Q1. AI-related equipment sales for the thermal processing solutions segment is anticipated to drive the majority of our revenue growth.

Speaker #2: Now turning to our outlook. For the second fiscal quarter ending March 31, 2026, the company expects revenue in the range of $19 million to $21 million.

Speaker #2: At the midpoint of this range, our guidance is a sequential increase from our reported revenue for the first quarter. AI-related equipment sales for the thermal processing solutions segment is anticipated to drive the majority of our revenue growth.

Mark Weaver: AI-related equipment sales for the thermal processing solutions segment is anticipated to drive the majority of our revenue growth.

Mark Weaver: With the benefit of previously implemented structural and operational cost reductions, Amtech expects to continue delivering solid operating leverage, resulting in adjusted EBITDA margins once again coming in at high single digits. The outlook provided during our call today and in our earnings press release is based on an assumed exchange rate between the United States dollar and foreign currencies. Changes in the value of foreign currencies in relation to the United States dollar could cause actual results to differ from expectations. Now I will turn the call over to the operator for questions.

Speaker #2: previously implemented With the benefit of structural and operational cost reductions, AMTEC expects to continue delivering solid operating leverage resulting in adjusted EBITDA margins once again coming in at high single digits.

Speaker #2: during our call today and in our The outlook provided earnings press release is based on an assumed exchange rate between the United States dollar and foreign currencies.

Speaker #2: in relation to the United States Changes in the value of foreign currencies dollar could cause actual results to differ from expectations. And now I will turn the call over to the operator for questions.

Speaker #3: Ladies and gentlemen, at this time, we'll begin that question and answer session. If you would like to ask a question, you may press star and then one using a touch-to-and-telephone.

Operator: Ladies and gentlemen, at this time, we'll begin that question-and-answer session. If you would like to ask a question, you may press star and then one using a touch-tone telephone. To withdraw your questions, you may press star and two. If you are using a speakerphone, we do ask that you please pick up the handset prior to pressing the keys to ensure the best sound quality. So again, that is star and then one to join the question queue. We'll pause momentarily to assemble the roster. Our first question today comes from George Marema from Pareto Ventures. Please go ahead with your question.

Speaker #3: and two. If you are To withdraw your questions, you may press star using a speakerphone, we do ask that you please pick up the handset prior to pressing the keys.

Speaker #3: quality. Again, that is star and To ensure the best sound then one to join the question queue. We'll pause momentarily to assemble the roster.

Speaker #3: question today comes And our first from George Marima from Pareto Ventures. Please go ahead with your

Speaker #3: question. Hi,

George Marema: Hi, Bob. Good afternoon.

Speaker #4: Bob. Good afternoon. Hello,

Mark Weaver: Hello, George. Good afternoon.

Bob Daigle: Hello, George. Good afternoon.

Speaker #4: Hi. So I was George.

George Marema: So, I was curious on this, you discussed in the call about this panel level business. Could you elaborate a little bit on what that is? A little more color on that?

Speaker #4: curious on this you discussed in the call Good afternoon. about this panel-level business. Could you elaborate a little bit on what that is, a little more color on that?

Speaker #4: Yeah. Traditionally, chip packaging has been pretty discreet components, and the drive is really from a cost-effectiveness and throughput perspective, to start to produce packaging really in large panel formats and then basically dice them up later like they do with semiconductor wafers.

Mark Weaver: Yeah. Traditionally, chip packaging has been pretty discrete components, and the drive is really from a cost effectiveness and throughput perspective, to start to produce packaging really in large panel formats, and then, you know, basically dice them up later, like they do with semiconductor wafers. Our sense is this is really the future of advanced packaging. So it was important for us to, you know, really basically demonstrate that, again, we were in a position of process of record with the key OEMs and OSATs. So the variety of customer orders that we received for that technology in this quarter, I think was good validation about future demand.

Bob Daigle: Yeah. Traditionally, chip packaging has been pretty discrete components, and the drive is really from a cost effectiveness and throughput perspective, to start to produce packaging really in large panel formats, and then, you know, basically dice them up later, like they do with semiconductor wafers. Our sense is this is really the future of advanced packaging. So it was important for us to, you know, really basically demonstrate that, again, we were in a position of process of record with the key OEMs and OSATs.

Speaker #4: Our sense is this is really the future of advanced packaging. So it was important for us to really demonstrate, basically demonstrate that, again, we're in a position of process of record with the key OEMs and OSATs.

Speaker #4: So the variety of customer orders that we received for that technology in this quarter, I think, was good validation about future demand. And during 2025, you were talking about perhaps in 2026 fiscal, you may have some new products.

Bob Daigle: So the variety of customer orders that we received for that technology in this quarter, I think was good validation about future demand.

George Marema: And, during 2025, you were talking about, perhaps in 2026 fiscal, you may have some new products. Does this have anything to do with that, some new capabilities?

Speaker #4: Does this have anything to do with that, some new capabilities?

Mark Weaver: That's it. The new products are more around addressing higher density packaging requirements, not. Panel processing uses very similar technology to what we're providing today. And again, what I mentioned earlier is, you know, we've built equipment, we're processing samples for customers for this higher density packaging applications, but we're still. We still haven't, you know, we're still in the relatively early stages. This stage, I'm thinking, George, that you're looking at probably 2027 before we would see any meaningful demand from that next generation equipment.

Bob Daigle: That's it. The new products are more around addressing higher density packaging requirements, not. Panel processing uses very similar technology to what we're providing today. And again, what I mentioned earlier is, you know, we've built equipment, we're processing samples for customers for this higher density packaging applications, but we're still. We still haven't, you know, we're still in the relatively early stages. This stage, I'm thinking, George, that you're looking at probably 2027 before we would see any meaningful demand from that next generation equipment.

Speaker #5: The new products are more around addressing higher density packaging requirements, not panel processing uses very similar technology to what we're providing today. So again, what I mentioned earlier is we've built equipment, we're processing samples for customers for this higher density packaging applications.

Speaker #5: We haven't—we're still in the relatively early stages. At this stage, I'm—but we're still thinking, George, that you're looking at probably 2027 before we would see any meaningful demand from that next generation equipment.

Speaker #4: Okay. And I was happy to hear you got a win in the specialty chemical business. Are there any other qualifications underway in the services and chemicals businesses?

George Marema: Okay. And, I was happy to hear you got a win in the specialty chemical business. Are there any other qualifications underway in the services and chemical businesses?

Speaker #5: Yeah. We have a variety of active engagements right now. And again, as I mentioned in the commentary, I've been very pleased with the level of customer engagement and pull for these collaborative development efforts.

Mark Weaver: Yeah, we, we have a variety of active engagements right now. And, and again, as I mentioned in, in the commentary, I've, I've been very pleased with the level of customer engagement and pull for, for these collaborative development efforts. So I think we're, we're starting to get a sense that this, this, this business model that we've developed around addressing these niche applications, looks, looks very promising. Looks very promising in terms of developing, a, a pipeline of this recurring revenue streams.

Bob Daigle: Yeah, we, we have a variety of active engagements right now. And, and again, as I mentioned in, in the commentary, I've, I've been very pleased with the level of customer engagement and pull for, for these collaborative development efforts. So I think we're, we're starting to get a sense that this, this, this business model that we've developed around addressing these niche applications, looks, looks very promising. Looks very promising in terms of developing, a, a pipeline of this recurring revenue streams.

Speaker #5: So I think we're starting to get a sense that this business model that we've developed niche around addressing these applications looks very promising, looks very promising in terms of developing a pipeline of this reoccurring revenue streams.

Speaker #4: Okay. It's great to hear. Thanks, Bob.

George Marema: ... Okay, it's great to hear. Thanks, Bob.

Speaker #5: All right. Thank you, George.

Bob Daigle: All right, thank you, George.

Speaker #3: Our next question comes from Gary DiStefano from Titan Partners. Please go ahead with your question.

Operator: Our next question comes from Gary DiStefano from Titan Partners. Please go ahead with your question.

Speaker #6: Yeah. Hey, Bob. Congrats on the very solid—

Gary DiStefano: Yeah. Hey, Bob. Congrats on the very solid quarter.

Speaker #6: quarter. Yeah.

Speaker #5: Thank you,

Bob Daigle: Yeah. Thank you, Gary.

Speaker #5: Gary. No problem.

Gary DiStefano: No problem. Listen, just a quick macro question level for me. Listen, given the growing backlog, customer orders, you know, consistent operating cash flow, you know, continued customer engagement, what, you know, what are you most encouraged about here as you move through fiscal 2026?

Speaker #6: Listen, just a quick macro question, level for me. Given the growing backlog, customer orders, consistent operating cash flow, and continued customer engagement, what are you most encouraged about here as you move through fiscal?

Speaker #6: 2026?

Speaker #5: Yeah. I think the two

Bob Daigle: Yeah, I think the two areas that are strong bookings, and as I-- the commentary, right? We have short-- we've talked about this before, short lead times on the equipment we provide for AI packaging. So we had a very solid booking quarter. Some of it stretches into Q3, but at least based on our channel checks and what we're hearing from the you know out in the field, we're seeing you know we're seeing continued strong demand, and what we're hearing is we should continue to see strength that goes into third quarter, fourth quarter as well. Because there's always been the question of you know how long's the demand gonna continue?

Speaker #5: areas that are strong bookings and, as I the commentary right, we have short we've talked about this before, short lead times on the equipment we provide for AI packaging.

Speaker #5: So, we had a very solid booking quarter. Some of it stretches into Q3, but at least based on our channel checks and what we're hearing from out in the field, we're seeing continued strong demand. What we're hearing is we should continue to see strength that goes into third quarter and fourth quarter as well.

Bob Daigle: Because there's always been the question of you know how long's the demand gonna continue?

Speaker #5: Because there's always been the question of how long, what's the demand going to continue? And we're getting continued evidence that we've got better visibility out to a few quarters now, which gives us some comfort.

Bob Daigle: And we're getting continued evidence that, you know, we've got better visibility out to a few quarters now, which gives us some comfort. As I mentioned, you know, this being process of record for panel-level packaging also gives us some, you know, comfort in terms of driving future demand, because we do think that's gonna be a key part of where the industry is going. And I'd say the third area, which, you know, George explored earlier, is really the evidence that we're, you know, that both the win with the customer, but also the strength of the pipeline we're seeing for our specialty chemicals; I think puts us in a position where, you know, in terms of visibility towards growth and increasing confidence about growth, we're in a good place.

Speaker #5: mentioned, As I being process of record for panel-level packaging also gives us some comfort in terms of driving future demand because we do think that's going to be a key part of where the industry is going.

Speaker #5: And I'd say the third area, which George explored earlier, is really the evidence that we're that both the win with a customer, but also the strength of the pipeline we're seeing for our specialty chemicals.

Speaker #5: I think puts us in a puts us in a position where in terms of visibility towards growth and increasing confidence about growth, we're in a good place.

Bob Daigle: I think puts us in a position where, you know, in terms of visibility towards growth and increasing confidence about growth, we're in a good place.

Speaker #5: And again, the fact that we continue to see as we see this revenue flow through, the margin profile continues to strengthen, which is what we anticipated.

Bob Daigle: And again, the fact that we continue to see, as we, you know, see this revenue flow through, the margin profile continues to strengthen, which is what we anticipated, but, you know, ultimately, we needed to see it in our results, and we are seeing it.

Speaker #5: But seeing

Speaker #5: it. That makes sense.

Gary DiStefano: That makes sense. I appreciate you taking the question, Bob. Thank you.

Speaker #6: I appreciate you taking the question, Bob. Thank

Speaker #5: All right. Thank you.

Bob Daigle: Thank you.

Speaker #3: Once again, if you would like to ask a question, please press star, and then one. To withdraw your questions, you may press star, and two.

Operator: Once again, if you would like to ask a question, please press Star and then one. To withdraw your questions, you may press Star and two. Our next question comes from Craig Irwin from Roth Capital Partners. Please go ahead with your question.

Speaker #3: Our next question comes from Craig Irwin from Roth Capital Partners. Please go ahead with your question.

Craig Irwin: Thank you. Good evening. So Bob, I know you've worked so hard over the last, you know, several quarters to bring down your frictional costs, right? You know, downsizing the footprint, you know, adjusting your spending to, you know, your highest priority projects and customers. This quarter, we saw a $700,000 increase quarter over quarter on the SG&A and R&D lines combined. You know, I know you're not gonna be spending that much money unless you're very intentional about it. Can you maybe call out any items in there that you think are particularly interesting or, you know, projects, customers, or general areas of commitment? Is this AI or is this something, you know, for the broader semiconductor industry? Anything you could share.

Speaker #7: Thank you. Good evening. So, Bob, I know you've worked so hard over the last several quarters to bring down your frictional costs, right? Downsizing the footprint, adjusting your spending to your highest priority projects and customers.

Speaker #7: This quarter, we saw a $700,000 increase quarter over quarter on the SG&A and R&D lines combined. I know you're not going to be spending that much money unless you're very intentional about it.

Speaker #7: Can you maybe call out any items in there that you think are particularly interesting, or projects, or customers, or general areas of commitment? Is this AI, or is this something for the broader semiconductor industry?

Craig Irwin: Can you maybe call out any items in there that you think are particularly interesting or, you know, projects, customers, or general areas of commitment? Is this AI or is this something, you know, for the broader semiconductor industry? Anything you could share.

Speaker #7: Anything you could share.

Speaker #5: Yeah. No. The R&D increases are really in two categories. We are investing and have increased investments in the next generation packaging equipment for AI applications.

Bob Daigle: Yeah, no. The R&D increases are really in two, two categories. We are, we are investing, and have increased investments in the next generation, packaging equipment for, for AI applications. So being able to handle higher density, we increased investments really to move more quickly, and, and I thought that was important for us. It's, it's a huge opportunity for us that we need to capitalize on. And, and again, I think the, the commentary around the, semi-fab solutions, traction. Now we've seen some validation, so we have, we have increased resources a bit in that area, and really trying to build that momentum behind, growth in that business as well. On, on the, more the, the G&A side thing, it, you know, it's, there were consulting costs.

Speaker #5: So being able to handle higher density, we increased investments really to move more quickly. And I thought that was important for us. It's a huge opportunity for us that we need to capitalize on.

Speaker #5: the commentary around And again, I think the semi-FAB solutions traction, now we've seen some validation, so we have increased resources a bit in that area.

Bob Daigle: Now we've seen some validation, so we have, we have increased resources a bit in that area, and really trying to build that momentum behind, growth in that business as well. On, on the, more the, the G&A side thing, it, you know, it's, there were consulting costs.

Speaker #5: And really trying to build that momentum behind growth in that business as well. On the more G&A side, I think there were consulting costs.

Speaker #5: There's also some variable comp costs that were in the quarter that I think will be ongoing. I'm not so sure that the consulting costs, some of that could come down a bit as well in future quarters.

Bob Daigle: There's also some variable comp costs that were in the quarter that, you know, I think will be ongoing. I'm not so sure that the consulting costs, some of that could come down a bit as well, in future quarters. But, those were the main drivers for the differences, quarter-over-quarter.

Speaker #5: But those were the main differences quarter over drivers for the quarter.

Speaker #7: Understood. Thank you for that. Then the next thing is business momentum, right? I know we're kind of in a choppy environment. You've been climbing a set of stairs as far as your AI revenue—makes $25, $30, $35.

Craig Irwin: Understood. Thank you for that. Then the next thing is, you know, business momentum, right? I know we're kind of in a choppy environment. You know, you've been climbing a set of stairs as far as your AI revenue mix, you know, 25, 30, 35. That's awesome. Can you really do you have confidence that, that, that mix is likely to continue to increase over the next couple of quarters? And, you know, I know that there's not a whole lot of order visibility per se, given the fast book-and-burn nature of a lot of your business.

Speaker #7: That's awesome. Can you really do you have confidence that that makes this likely to continue to increase over the next couple of quarters? And I know that there's not a whole lot of order visibility, per se, given the fast book and burn nature of a lot of your business.

Speaker #7: One-to-one book-to-bill is great, but do you feel like the sort of general tempo of that base business is healthy and potentially accelerating to where we can see different growth than what we've had over the last couple of

Craig Irwin: You know, 1-to-1 book-to-bill is great, but do you feel like the sort of general tempo of that base business is healthy and potentially accelerating to where we can see, you know, different growth than what we've had over the last couple of quarters?

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Q1 2026 Amtech Systems Inc Earnings Call

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Q1 2026 Amtech Systems Inc Earnings Call

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