Q1 2026 Axcelis Technologies Inc Earnings Call

May 7, 2026

Speaker #1: My name is Rivka, and I'll be your coordinator for today. I would now like to turn the presentation over to your host for today's call, David Ryzhik, Senior Vice President and Interim Chief Financial Officer, please go ahead.

Speaker #2: Thank you, Operator. This is David Ryzhik, Senior Vice President and Interim Chief Financial Officer, and with me today is Russell Low, President and CEO.

Speaker #2: If you have not seen a copy of our press release issued earlier today, it is available on our website. In addition, we have prepared slides accompanying today's call.

Speaker #2: And you can find those on our website as well. Playback service will also be available on our website, as described in our press release.

Operator: Good day, ladies and gentlemen, welcome to the Axcelis Technologies call to discuss the company's results for Q1 2026. My name is Rivka, and I'll be your coordinator for today. I would now like to turn the presentation over to your host for today's call, David Ryzhik, Senior Vice President and Interim Chief Financial Officer. Please go ahead.

Speaker #2: Please note that comments made today about our expectations for future revenues, profits, and other results are forward-looking statements under the SEC's Safe Harbor provision.

Speaker #2: These forward-looking statements are based on management's current expectations and are subject to the risks inherent in our business. These risks are described in detail in our annual report on Form 10-K and other SEC filings, which we urge you to review.

David Ryzhik: Thank you, operator. This is David Ryzhik, Senior Vice President and Interim Chief Financial Officer, and with me today is Russell Low, President and CEO. If you have not seen a copy of our press release issued earlier today, it is available on our website. In addition, we have prepared slides accompanying today's call, and you can find those on our website as well. Playback service will also be available on our website as described in our press release. Please note that comments made today about our expectations for future revenues, profits, and other results are forward-looking statements under the SEC safe harbor provision. These forward-looking statements are based on management's current expectations and are subject to the risks inherent in our business. These risks are described in detail in our annual report on form 10-K and other SEC filings, which we urge you to review.

Speaker #2: Our actual results may differ materially from our current expectations. We do not assume any obligation to update these forward-looking statements. Given the pending merger with VICO, we will not be addressing questions related to the transaction.

Speaker #2: During this call, we will be discussing various non-GAAP financial measures unless otherwise noted all income statement-related financial measures will be non-GAAP other than revenue and other income.

Speaker #2: Please refer to our press release and accompanying materials for information regarding our non-GAAP financial results and a reconciliation to our GAAP measures. Now I'll turn the call over to President and CEO Russell Low.

Speaker #3: Thank you, David. Good afternoon, everyone, and thank you for joining us for our first quarter 2026 earnings call. Before I get into our results today, I'd like to briefly address the change in our finance organization leadership, which we announced in March.

David Ryzhik: Our actual results may differ materially from our current expectations. We do not assume any obligation to update these forward-looking statements. Given the pending merger with Veeco, we will not be addressing questions related to the transaction. During this call, we will be discussing various non-GAAP financial measures. Unless otherwise noted, all income statement related financial measures will be non-GAAP other than revenue and other income. Please refer to our press release and accompanying materials for information regarding our non-GAAP financial results and a reconciliation to our GAAP measures. Now, I'll turn the call over to President and CEO, Russell Low.

Speaker #3: Jamie Coogan, who served as our Chief Financial Officer, left the company to pursue an opportunity in the aerospace industry. I'm grateful to him for his contributions in building a strong finance organization driving operational discipline and positioning AXELIS well for sustained value creation.

Speaker #3: I'm confident he'll continue to succeed in his new role. The transition has been very smooth thanks to David stepping in seamlessly as our Interim CFO.

Speaker #3: David has deep industry experience and strong knowledge of the business, and he's been instrumental in advancing our work to complete the pending merger with VICO.

Russell Low: Thank you, David Duley. Good afternoon, everyone, and thank you for joining us for our Q1 2026 earnings call. Before I get into our results today, I'd like to briefly address the change in our finance organization leadership, which we announced in March. Jamie Coogan, who served as our Chief Financial Officer, left the company to pursue an opportunity in the aerospace industry. I'm grateful to him for his contributions in building a strong finance organization, driving operational discipline, and positioning Axcelis well for sustained value creation. I'm confident he'll continue to succeed in his new role. The transition has been very smooth thanks to David Ryzhik stepping in seamlessly as our interim CFO. David Ryzhik has deep industry experience and strong knowledge of the business, and he's been instrumental in advancing our work to complete the pending merger with Veeco.

Speaker #3: We are grateful to have a leader of David's caliber to serve in this role, while we progress our search process for a permanent CFO.

Speaker #3: With that, I'll dive into our first quarter performance. We delivered revenue of $199 million and earnings per diluted share of $72, slightly above our expectations.

Speaker #3: This includes a one-time impact associated with a $5 million customer settlement. Absent this settlement, our revenue gross margin and earnings per share would have been even higher in the quarter.

Speaker #3: In the quarter, while our CS&I revenue moderated on a sequential basis, it came in better than we expected and grew more than 30% on a year-over-year basis.

Speaker #3: CS&I has been a deliberate multi-year strategic focus for AXELIS, and we're pleased to see momentum build with our expanded install base increased utilization rates and continued product innovation.

Russell Low: We are grateful to have a leader of David's caliber to serve in this role while we progress our search process for a permanent CFO. With that, I'll dive into our Q1 performance. We delivered revenue of $199 million and earnings per diluted share of $0.72, slightly above our expectations. This includes a one-time impact associated with a $5 million customer settlement. Absent this settlement, our revenue, gross margin, and earnings per share would have been even higher in the quarter. In the quarter, while our CS&I revenue moderated on a sequential basis, it came in better than we expected and grew more than 30% on a year-over-year basis. CS&I has been a deliberate multi-year strategic focus for Axcelis, and we are pleased to see momentum build with our expanded installed base, increased utilization rates, and continued product innovation.

Speaker #3: In addition, we saw a strong sequential increase in systems shipments to the memory market, which reached the highest level since the fourth quarter of 2023.

Speaker #3: We're also encouraged to see a consistent rate of bookings on a sequential basis marking the second consecutive quarter of year-over-year growth on the trailing 12-month basis.

Speaker #3: Strengthened quarterly bookings was driven by an increase in memory and silicon carbide demand offset by softer general mature. As a reminder, bookings can fluctuate from quarter to quarter.

Speaker #3: Turning to slide five, sales to mature node applications accounted for a majority of systems shipments, particularly in power and general mature. We also saw a notable uptick in sales to the memory market as anticipated.

Russell Low: In addition, we saw a strong sequential increase in system shipments to the memory market, which reached the highest level since Q4 of 2023. We are also encouraged to see a consistent rate of bookings on a sequential basis, marking the second consecutive quarter of year-over-year growth on the trailing 12-month basis. Strength in the quarterly bookings was driven by an increase in memory and silicon carbide demand, offset by softer general mature node. As a reminder, bookings can fluctuate from quarter to quarter. Turning to slide 5, sales to mature node applications accounted for a majority of system shipments, particularly in power and general mature node. We also saw a notable uptick in sales to the memory market as anticipated. On slide 6, let me review our trends by end market.

Russell Low: In addition, we saw a strong sequential increase in system shipments to the memory market, which reached the highest level since Q4 of 2023. We are also encouraged to see a consistent rate of bookings on a sequential basis, marking the second consecutive quarter of year-over-year growth on the trailing 12-month basis. Strength in the quarterly bookings was driven by an increase in memory and silicon carbide demand, offset by softer general mature node. As a reminder, bookings can fluctuate from quarter-to-quarter. Turning to slide five, sales to mature node applications accounted for a majority of system shipments, particularly in power and general mature node. We also saw a notable uptick in sales to the memory market as anticipated. On slide six, let me review our trends by end market.

Speaker #3: Now on slide six, let me review our trends by end market. The power business, while shipments to silicon carbide moderated on a sequential basis, we are beginning to see encouraging demand signals reflecting stronger bookings and increased engagement with customers on their capacity plans and technology roadmaps.

Speaker #3: As semiconductor China in March silicon carbide was a prominent area of focus, particularly around superjunction development and high-energy implant requirements. We also had more robust customer discussions around channeling capabilities and the transition to 200 millimeters, which reinforces our view that technology inflections are progressing.

Speaker #3: We are seeing improvements in silicon carbide end markets as well, while the rate of growth in global electric vehicle sales has moderated, we are seeing increased penetration of silicon carbide within the EV market as well as greater content per vehicle.

Change the slide 5 sales to mature node applications accounted for a majority of assistance shipments, particularly in power and general mature. We also saw a notable uptick in sales, so memory Market as anticipated,

Russell Low: In our power business, while shipments of silicon carbide moderated on a sequential basis, we are beginning to see encouraging demand signals reflecting stronger bookings and increased engagement with customers on their capacity plans and technology roadmaps. At SEMICON China in March, silicon carbide was a prominent area of focus, particularly around super junction development and high energy implant requirements. We also had more robust customer discussions around channeling capabilities and the transition to 200 mm, which reinforces our view that technology inflections are progressing. We are seeing improvements in silicon carbide end markets as well. While the rate of growth in global electric vehicle sales has moderated, we are seeing increased penetration of silicon carbide within the EV market, as well as greater content per vehicle. Discussions with customers also point to increasing adoption in a wide array of commercial goods such as HVAC, refrigerators, and washing machines.

Russell Low: In our power business, while shipments of silicon carbide moderated on a sequential basis, we are beginning to see encouraging demand signals reflecting stronger bookings and increased engagement with customers on their capacity plans and technology roadmaps. At SEMICON China in March, silicon carbide was a prominent area of focus, particularly around super junction development and high energy implant requirements. We also had more robust customer discussions around channeling capabilities and the transition to 200mm, which reinforces our view that technology inflections are progressing. We are seeing improvements in silicon carbide end markets as well. While the rate of growth in global electric vehicle sales has moderated, we are seeing increased penetration of silicon carbide within the EV market, as well as greater content per vehicle. Discussions with customers also point to increasing adoption in a wide array of commercial goods such as HVAC, refrigerators, and washing machines.

now on slide 6, let me, let me review at Trends by End Market,

Speaker #3: Discussions with customers also point to increasing adoption in a wider array of commercial goods such as HVAC, refrigerators, and washing machines. In addition, customers are increasingly focused on the emerging opportunity in AI data centers, given the unique benefits that compound semiconductors provide for efficient power conversion.

That power business while shipment of silicon carbide. Moderated on a sequential basis. We are beginning to see encouraging demand signals reflecting stronger, bookings and increasing engagement with customers on their capacity plans and Technology road maps.

Speaker #3: In short, we are well positioned to benefit from the higher demand from our customers once capital spending in this market recovers. There are other power market segments, while demand remains muted, we believe silicon power will remain a foundational part of the overall power semiconductor market, especially across auto, industrial, commercial, and data center markets.

A semicon China in March, silicon carbide was a problem area of focus, particularly around super Junction development and high energy implant requirements.

We also had more robust customer discussions, around channeling capabilities and the transition to 200 millimeters which reinforces our view that technology inflections are progressing.

Speaker #3: In general, mature customers continue to manage their capacity amidst stabilizing auto and recovering industrial volumes, along with growing demand associated with AI data center applications.

We are seeing improvements in silicon carbide and markets as well. While the rate of growth in global electric vehicle sales is moderated. We are seeing increased penetration of silicon carbide within the EV Market as well as greater content per vehicle.

Speaker #3: In fact, we saw a continued improvement in spares and consumables in this market, which is a reflection of higher tool utilization rates. At the same time, we are building on our continued progress in the high-current market.

Russell Low: In addition, customers are increasingly focused on the emerging opportunity in AI data centers, given the unique benefits that compound semiconductors provide for efficient power conversion. In short, we are well-positioned to benefit from the higher demand from our customers once capital spending in this market recovers. Now, our other power market segment, while demand remain muted, we believe silicon power will remain a foundational part of the overall power semiconductor market, especially across auto, industrial, commercial, and data center markets. In general mature, customers continue to manage their capacity amid stabilizing auto and recovering industrial volumes, along with growing demand associated with AI data center applications. In fact, we saw a continued improvement in spares and consumables in this market, which is a reflection of higher tool utilization rates. At the same time, we are building on our continued progress in the high current market.

Discussions with customers also point to increasing adoption in a wide array of commercial Goods, such as HVAC refrigerators and washing machines.

Speaker #3: In the first quarter, we introduced our next-generation high-current product, the Purion H6. And our engaging with multiple customers on this product. In addition, we secured a high-current win with a new customer in China.

In addition, customers are increasingly focused on the emerging opportunity in AI data centers. Given the unique benefits that compound semiconductors provide for efficient power conversion,

Capital spending in this market recovers.

Speaker #3: Turning to slide seven, in advanced logic, we did not generate system revenue in the first quarter. However, we shipped a system early in the second quarter for a materials modification application for two-nanometer production, and are actively working with this customer on the next-generation technology roadmap.

Now, other power market segments while demand remained muted, We Believe silicon power will remain a foundational part of the overall power, semiconductor Market, especially across Auto industrial, commercial and data center markets.

Speaker #3: Moving to our memory market, both revenue and bookings increased meaningfully in the first quarter driven by strong demand in DRAM and high-bandwidth memory applications as customers ramp up investment in capacity investments to support AI-driven demands.

In general mature, customers continue to manage their capacity, amidst stabilizing Auto and recovering industrial volumes along with growing demand associated with AI data center applications.

In fact, we saw a continuous Improvement in spares and consumables in this market which is a reflection of higher tool utilization rates.

Russell Low: In Q1, we introduced our next generation high current product, the Purion H6, and are engaging with multiple customers on this product. We secured a high current win with a new customer in China. Turning to slide 7, in advanced logic, we did not generate system revenue in Q1. We shipped a system early in Q2 for a materials modification application for 2 nanometer production and are actively working with this customer on the next generation technology roadmap. Moving to our memory market, both revenue and bookings increased meaningfully in Q1, driven by strong demand in DRAM and high bandwidth memory applications as customers ramp up investment in capacity investments to support AI-driven demand. We continue to execute well in our strategy to expand our penetration to the memory market.

Speaker #3: We continue to execute well in our strategy to expand our penetration of the memory market. As you recall from last quarter, we highlighted a new order for our Purion high-current system with a leading North American memory manufacturer, since then we've completed our systems evaluation and continue to work with this customer to drive adoption of our technology across technology nodes and regions.

at the same time, we are building on our continued progress in the high current market

In the first quarter, we introduced our next Generation, High current product with pure and H6, and are engaging with multiple customers on this product.

In addition we secured a high current win with a new customer in China.

Speaker #3: While revenue and bookings can fluctuate from quarter to quarter throughout the year, we continue to expect strong growth in memory for the full year 2026 with momentum entering into 2027.

Turn to slide 7 in advanced logic, we did not generate system Revenue in the first quarter. However, we shipped a system early in the second quarter from a materials modification application for 2, nanometer production, and are actively working with this customer, in the Next Generation technology of road map.

Speaker #3: On slide eight, let me wrap up my thoughts and provide our perspectives on the remainder of 2026. We executed well in the quarter, and are especially pleased with the strength of our CS&I business delivering another quarter of year-over-year growth.

Moving to a memory Market, both revenue and bookings. Increase meaningfully in the first quarter driven by strong demand in dram and high bandwidth, memory applications as customers ramp up investment in capacity Investments to support AI driven demands.

Speaker #3: From a market segment perspective, our memory market is on track to strong growth in 2026 offset by a continued digestion of capacity in general mature and power, albeit with some encouraging signs in silicon carbide.

Russell Low: As you recall from last quarter, we highlighted a new order for our Purion high current system with a leading North American memory manufacturer. Since then, we've completed our systems evaluation and continue to work with this customer to drive adoption of our technology across technology nodes and regions. While revenue and bookings can fluctuate from quarter to quarter throughout the year, we continue to expect strong growth in memory for full year 2026, with momentum entering into 2027. On slide 8, let me wrap up my thoughts and provide our perspectives on the remainder of 2026. We executed well in the quarter and are especially pleased with the strength of our CS&I business, delivering another quarter of year-over-year growth.

We continue to execute well in our strategy to expand our penetration of the memory Market.

as you recall from last quarter, we highlighted a new order for our Pure High current system with a leading North American memory manufacturer

Speaker #3: Taking this all together, we continue to expect 2026 revenue to be relatively flat year-over-year, but with improving trends across multiple markets set in the stage for a return to growth in 2027.

since then, we've completed our systems evaluation and

if you need to work this customer,

Across technology knows and regions.

Speaker #3: We continue to anticipate our pending merger with Vico to close in the second half of 2026, and we are working closely with the state administration of market regulation in China to obtain regulatory approval, which is the only approval remaining to close the transaction.

While revenue and bookings can fluctuate from quarter to quarter throughout the year. We continue to expect strong growth in memory for a full year 2026 with momentum entering into 2027.

On slide, 8, let me wrap up my thoughts and provide our prospectus on the remainder of 2026.

Speaker #3: We remain excited about the opportunity to bring our two companies together, unlock the full potential of the combined organization, and drive long-term value creation for all stakeholders.

Russell Low: From a market segment perspective, our memory market is on track for strong growth in 2026, offset by a continued digestion of capacity in general mature and power, albeit with some encouraging signs in silicon carbide. Taking this all together, we continue to expect 2026 revenue to be relatively flat year-over-year, but with improving trends across multiple markets, setting the stage for a return to growth in 2027. We continue to anticipate our pending merger with Veeco to close in H2 2026, and we are working closely with the State Administration for Market Regulation in China to obtain regulatory approval, which is the only approval remaining to close the transaction. We remain excited about the opportunity to bring our two companies together, unlock the full potential of the combined organization, and drive long-term value creation for all stakeholders.

we executed 1 in the quarter and are especially pleased with the strength of our CSI business, delivering, another quarter of year-over-year growth

Speaker #3: I want to thank our customers, employees, partners, and shareholders for their continued support and trust in AXCELIS. With that, let me turn the call over to David for a closer look at our results and outlook.

from a market segment perspective and memory Market is on track to strong growth in 2026 offset by a continued digestion of capacity in general mature and power orbit with some encouraging signs in Silicon carbides,

Speaker #1: Thank you, Russell. I'll first start with the financial details of the first quarter. Before turning to our outlook for the second quarter. Starting on slide nine, first quarter revenue was $199 million, with system revenue at approximately $126 million and CS&I revenue at $73 million.

Taking us all together. We continue to expect 2026 Revenue to be relatively flat year-over-year. What is improving Trends across multiple markets set in the stage for a return to growth in 2027.

Speaker #1: As Russell mentioned, this result includes a one-time impact associated with a customer settlement in the quarter. Which resulted in a headwind to system revenue of $5 million, gross margins of approximately 70 basis points, and EPS of $0.09 per share.

We continue to anticipate our pending modules Eco to close in the second half of 2026. And we are working closely with the state administration of Market regulation and China to obtain regulatory approval, which is the only approval remaining to close the transaction.

Russell Low: I want to thank our customers, employees, partners, and shareholders for their continued support and trust in Axcelis. With that, let me turn the call over to David for a closer look at our results and outlook.

We remain excited about the opportunity to bring our 2 companies together, unlock the full potential of the combined organization, and drive long-term value creation for all stakeholders.

Speaker #1: CS&I exceeded our expectations this quarter, driven by service and consumables, along with robust demand for system upgrades. By geography, revenue in China increased sequentially to 40%, up from 32% in the prior quarter.

And on the same, our customers employees partners, and shareholders for their continued support and Trust in excellus.

With that, let me turn the call over to David for a closer look at our results and outlook.

David Ryzhik: Thank you, Russell. I'll first start with the financial details of Q1 before turning to our outlook for Q2. Starting on slide 9, Q1 revenue was $199 million, with system revenue at approximately $126 million and CS&I revenue at $73 million. As Russell mentioned, this result includes a one-time impact associated with the customer settlement in the quarter, which resulted in a headwind to system revenue of $5 million, gross margins of approximately 70 basis points, and EPS of $0.09 per share. CS&I exceeded our expectations this quarter, driven by service and consumables, along with robust demand for system upgrades. By geography, revenue in China increased sequentially to 40%, up from 32% in the prior quarter.

Speaker #1: Korea was our second-largest revenue-generating region in the first quarter, and notably 28% of our total revenues as a result of higher memory sales. In our other regions, Europe was 16%, the United States 12%, while Taiwan and Japan were both at 1%.

Thank you, Russell. I'll first start with the financial details of the first quarter before turning to our outlook for the second quarter.

Starting on slide 9, first quarter Revenue was 199 million with system Revenue at approximately 126 million and csni revenue at 73 million.

Speaker #1: We generated 2% of our revenue from the rest of the world in the first quarter. Bookings were roughly flat on a sequential basis at $128 million but marked our second consecutive quarter of firming first quarter with a backlog of $453 million.

Past mentioned this result includes a 1-time impact associated with the customer settlement in the quarter, which resulted in a headwind to system revenue of 5 million, gross, margins of approximately, 70, basis points and EPS of 9 cents per share.

Speaker #1: Now turning to slide 10, I'd like to share some additional detail on our results. Gross margin was 40.7%, which came in slightly below our outlook of 41%, primarily due to the customer settlement discussed earlier.

CSN. I exceeded our expectations, this quarter driven by service and consumables along with robust demand for system upgrades.

David Ryzhik: Korea was our second-largest revenue-generating region in Q1, and notably, 28% of our total revenues as a result of higher memory sales. In our other regions, Europe was 16%, the US 12%, while Taiwan and Japan were both at 1%. We generated 2% of our revenue from the rest of world in Q1. Bookings were roughly flat on a sequential basis at $128 million but marked our second consecutive quarter of firming order rates. We exited Q1 with a backlog of $453 million. Now turning to slide 10, I'd like to share some additional detail on our results. Gross margin was 40.7%, which came in slightly below our outlook of 41%, primarily due to the customer settlement discussed earlier.

My geography Revenue in China, increased sequentially to 40% up from 32% in the prior quarter.

Speaker #1: First quarter operating expenses were $57.7 million, slightly below our outlook of $59 million. Tying it all together, our operating margin was $11.7%. First quarter adjusted EBITDA was $27.7 million, 13.9%.

Korea was our second, largest revenue generating region in the first quarter and notably 28% of our total revenues as a result of higher memory sales.

We generated 2% of our revenue, from the rest of the world in the first quarter.

Speaker #1: Other income of $2.7 million was lower on a sequential basis as a result of lower interest income, as well as foreign exchange-related losses. The tax rate was 14%, relatively in line with our expectations.

Bookings were roughly flat on a sequential basis at 128 million, but marked our second consecutive quarter affirming order rates we exited the first quarter with the backlog of 453 million.

Speaker #1: And finally, first quarter earnings per diluted share was $72. Moving to our cash flow on balance sheet data shown on slide 11, in the first quarter, free cash flow was $16 million, our cash flow includes $12 million in cash transaction expenses associated with the pending Vico merger.

Now, turning to slide 10, I'd like to share some additional detail on our results.

David Ryzhik: Q1 operating expenses were $57.7 million, slightly below our outlook of $59 million. Tying it all together, our operating margin was 11.7%. Q1 adjusted EBITDA was $27.7 million, reflecting an adjusted EBITDA margin of 13.9%. Other income of $2.7 million was lower on a sequential basis as a result of lower interest income as well as foreign exchange-related losses. The tax rate was 14%, relatively in line with our expectations. Finally, Q1 earnings per diluted share was $0.72. Moving to our cash flow and balance sheet data shown on slide 11. In Q1, free cash flow was $16 million. Our cash flow includes $12 million in cash transaction expenses associated with the pending Veeco merger.

Gross margin was 40.7% which came in slightly below or Outlook of 41%, primarily due to the customer settlement discussed earlier.

First quarter operating expenses were 57.7 million slightly below our Outlook of 59 million.

Speaker #1: We did not repurchase any shares in the first quarter. We exited the first quarter with a strong balance sheet, consisting of $570 million of cash, cash equivalents, and marketable securities on hand.

Tying it all together. Our operating margin was 11.7%.

Speaker #1: This includes $203 million of long-term securities. With that, let me discuss our second quarter outlook on slide 12. We expect revenue in the second quarter of approximately $205 million.

First quarter adjusted ibida was 27.7 Million reflecting an adjusted, Eon margin of 13.9%.

Other income of 2.7 million was lower on a sequential basis, as a result of lower interest income, as well as foreign exchange related losses.

Speaker #1: We expect a higher mix of revenue from general mature offset by a lower mix of revenue from memory and silicon carbide. We expect gross margins of approximately 43%.

The tax rate was 14% relatively in line with our expectations.

And finally, first quarter earnings per diluted chair was 72 cents.

Speaker #1: The sequential improvement in gross margin is primarily due to more favorable mix in the quarter, as well as the absence of non-recurring items that impacted our first quarter.

David Ryzhik: We did not repurchase any shares in Q1. We exited Q1 with a strong balance sheet consisting of $570 million of cash equivalents, and marketable securities on hand. This includes $203 million of long-term securities. With that, let me discuss our Q2 outlook on slide 12. We expect revenue in Q2 of approximately $205 million. We expect a higher mix of revenue from general mature, offset by a lower mix of revenue from memory and silicon carbide. We expect gross margins of approximately 43%. The sequential improvement in gross margin is primarily due to more favorable mix in the quarter, as well as the absence of non-recurring items that impacted our Q1. We expect operating expenses of approximately $59 million in Q2.

Speaker #1: We expect operating expenses of approximately $59 million in the second quarter. Adjusted EBITDA is expected to be approximately $34 million. And finally, we estimate net earnings per diluted share in the second quarter of approximately $0.90.

Moving to our cash flow and balance sheet data shown on slide. 11 in the first quarter free cash, flow was 16 million. Our cash flow includes 12 million in cash. Transaction expenses associated with the pending Vico merger.

We did not purchase any shares in the first quarter. We exited the first quarter with a strong balance sheet, consisting of 570 million of cash, cash equivalents and marketable, securities on hand.

This includes 203 million of long-term security.

Speaker #1: We continue to expect full year 2026 revenue to be approximately flat compared to 2025 levels. We expect revenue to be second half weighted driven by an improvement in silicon carbide revenue and a continuation of strength in memory.

With that, let me discuss our second quarter outlook on slide 12.

We expect Revenue in the second quarter of approximately 205 million.

Speaker #1: We continue to anticipate full year gross margins to be in the low to mid 40% range, with some quarterly variation based on mix. We expect operating expenses for the balance of the year to be approximately $60 million per quarter.

We expect the higher mix of revenue from General mature, upset by a lower mix of revenue from memory and silicon carbide.

We expect gross, margins of approximately 43%. The sequential Improvement in gross margin is primarily due to more favorable mix in the quarter as well as the absence of non-recurring items that impacted our first quarter.

Speaker #1: And finally, we continue to anticipate our tax rate to be approximately 15% for the full year. In summary, we executed well in the first quarter, and remained focused on disciplined cost management while continuing to make targeted investments to capture the attractive growth opportunities ahead of us.

David Ryzhik: Adjusted EBITDA is expected to be approximately $34 million. Finally, we estimate net earnings per diluted share in Q2 of approximately $0.90. We continue to expect full year 2026 revenue to be approximately flat compared to 2025 levels. We expect revenue to be H2-weighted, driven by an improvement in silicon carbide revenue and a continuation of strength in memory. We continue to anticipate full-year gross margins to be in the low to mid-40% range with some quarterly variation based on mix. We expect operating expenses for the balance of the year to be approximately $60 million per quarter.

We expect operating expenses of approximately 59 million in the second quarter.

Adjusted ebita is expected to be 34 million.

And finally, we estimate net, net chair in the second quarter of approximately 90 cents.

Speaker #1: This is supported by strong balance sheet and healthy free cash flow, which provide a solid foundation as we navigate an exciting period for the semiconductor industry.

Speaker #1: With that, Operator, we are ready to take questions.

We continue to expect full year 2026 Revenue to be approximately flat compared to 2025 levels. We expect Revenue to be second half weighted driven by an improvement in silicon carbide, revenue and a continuation of strength in memory.

Speaker #2: Thank you. At this time, we will conduct the question-and-answer session. To ask a question, you will need to press star 11 on your telephone and wait for your name to be announced.

We continue to anticipate full year gross. Margins to be in the low to mid 40% range with some quarterly variation based on mix

Speaker #2: We ask that you please only ask one question and one follow-up. Please stand by while we compile the Q&A roster. Our first question comes from the line of Jed Dorsheimer of William Blair.

David Ryzhik: Finally, we continue to anticipate our tax rate to be approximately 15% for the full year. In summary, we executed well in Q1 and remain focused on disciplined cost management while continuing to make targeted investments to capture the attractive growth opportunities ahead of us. This is supported by strong balance sheet and healthy free cash flow, which provide a solid foundation as we navigate an exciting period for the semiconductor industry. With that, operator, we are ready to take questions.

We expect operating expenses for the balance of the year to be approximately 60 million per quarter.

And finally, we continue to anticipate our tax rate to be approximately, 15% for the full year.

Speaker #2: Your line is now open.

Speaker #3: Hey, thanks, guys. I was just wondering, Russell, maybe you could I know that Gallium Nitride and Indium Phosphide are mostly deposition, which makes your merger that much more exciting.

In summary, we executed well in the first quarter and remained focused on discipline cost management. While continuing to make targeted Investments to capture the attractive growth opportunities ahead of us.

Speaker #3: But there is some implant associated with containment, etc. So I was wondering if you might just spend a minute just talking about that opportunity and then I have a follow-up.

Operator: Thank you. At this time, we will conduct the question and answer session. To ask a question, you will need to press star one one on your telephone and wait for your name to be announced. We ask that you please only ask 1 question and 1 follow-up. Please stand by while we compile the Q&A roster. Our first question comes from the line of Jed Dorsheimer of William Blair. Your line is now open.

This is supported by strong balance sheet and healthy free cash flow which provide a solid foundation as we navigate an exciting period for the semiconductor industry with that operator, we are ready to take questions.

Thank you. At this time. We will conduct the question and answer session.

Speaker #3: Thanks.

Speaker #1: Yeah, hi, Jed. So are you talking about the implant opportunity in silicon photonics, particularly in data centers? Is that where you're heading?

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Speaker #3: Yes. Well, yeah, that's where I'm heading. But specifically around Indium Phosphide and then Gallium Nitride on the power side.

We ask that you please only ask 1 question and 1 follow-up.

Please stand by while we compile the Q&A roster.

Speaker #1: Sure. So there's not really many but there are a couple of implants in Gallium Nitride, but they're not significant. What I would say, when you think about data center and optical transmission, we don't partake especially in the laser manufacturing part.

Jed Dorsheimer: Hey, thanks, guys. Was just wondering, Russell, maybe you could, I know that gallium nitride and indium phosphide are mostly deposition, which makes your merger that much more exciting. There is some implant associated with containment, et cetera. I was wondering if you might just, you know, spend a minute just talking about that opportunity, and then I have a follow-up. Thanks.

Our first question comes from the line of Jed dorsheimer of William, Blair, your line is now open.

Speaker #1: But to put the data to encode the laser with the data, that requires a modulation unit. And that modulation unit is a silicon unit, and that does require implantation.

Speaker #1: I think it's essentially an isolation implant, but it's doing so again, it's not a massive use of our implantation, but it's definitely an application in silicon photonics for that particular area.

Russell Low: Yeah. Hi, Jed. Are you talking about the implant opportunity in silicon photonics, particularly in data centers? Is that where you're heading?

Hey, thanks, guys. Um, I was just wondering, Russell, maybe you could, um—I know the gallium nitride and indium phosphide are mostly deposition, which makes your, uh, merger that much more exciting. Um, but there is some implant associated with containment, etc. So I was wondering if you might just, uh, uh, you know, spend a minute just talking about that opportunity. And then I have a follow-up. Thanks.

Jed Dorsheimer: Yes. Well, yeah, that's where I'm heading. You know, specifically around indium phosphide and then gallium nitride on the power side.

Speaker #3: Got it. Thanks. So it'll mostly be on the Vico product line post-merger, correct?

Russell Low: Sure. There's not really many, but there are a couple of implants in gallium nitride, but they're not significant. What I would say when you think about data center and optical transmission, we don't partake, especially, in the laser manufacturing part. To put the data, to encode the laser with the data, that requires a modulation unit. That modulation unit is a silicon unit, and that does require, you know, implantation. I think it's essentially an isolation implant that it's doing. Again, it's not a massive use of ion implantation, but it's definitely an application in certain photonics for that particular area.

Opportunity in Silicon photonics, particularly in data centers. Is that where you're heading? Yes. Well yeah, that's where I'm heading but, you know, specifically around Indian phosphide and and then gallium nitride on the power side.

Speaker #1: Yeah, I think that's true. I think they have I think you're on their call. They have the MOCVD and the thin-film capability for the optical components.

Speaker #3: Thank you. I'll jump back in queue.

Speaker #1: Thanks.

Speaker #2: One moment for our next question. Our next question comes from the line of Dennis Pyatchanin at Needham & Company. Your line is now open.

Speaker #3: Great. Thank you very much. So without the look, it sounds like you're seeing some strength in power site C and memory, but general mature remains weaker, so maybe getting even weaker.

Speaker #3: Can you discuss in some more detail what you're seeing in general mature? I mean, it seems like this quarter that some IDM business is picking up globally for some of the mature products, but it doesn't seem like you're seeing any of that.

Sure. So there's not really many. If there are a couple of implants in gallium nitride but they're not significant. Um, what I would say when you think about Data Center and Optical transmission, uh, we don't partake especially uh, in the laser manufacturing part. But to to put the data to encode, the laser with the data that requires a, a modulation unit and that modulation unit is a silicon unit and that does require, you know, uh, implantation. I think it's essentially an isolation implant that is doing. So again, it's not it's not a massive use of our own implantation, but it's definitely an application in certain photonics for that particular area.

Jed Dorsheimer: Got it. Thanks. It'll mostly be on the Veeco product line post-merger, correct?

Russell Low: Yeah, I think that's true. I think they have, you know, I think you're on their call. They have the MOCVD and the thin-film capability for the optical components.

Got it. Thanks. So it'll be mostly be on the Vico. Um, product line. Post merger, correct.

Speaker #3: Can you talk a little bit more, please, about what you're seeing in general mature?

Speaker #1: Yeah, Dennis, this is David. So I think we would agree that the end markets are picking up. I think oil is stabilizing. Industrial recovering.

Yeah, I think that's, that's true. I think that they have, you know, I think you're on their call. They have the, uh, the mo cvd and the thin film capability for the optical components

Jed Dorsheimer: Thank you. I'll jump back in queue.

Russell Low: Thanks.

Thank you. I'll jump back in too.

Operator: One moment for our next question. Our next question comes from the line of Dennis Patat-Patatsnin at Needham & Company. Your line is now open.

Speaker #1: And we're starting to see AI pick up for this general mature segment. When we talk about the Q1 bookings, yeah, we did see a little bit softer bookings in general mature.

1 moment for our next question.

Our next question comes from the line of Dennis. Pat.

Speaker #1: But the key takeaway there is that utilization rates are rising. And so for us, that's a really nice data point. We still expect 2026 general mature to be down year over year.

Dennis Patat-Patatsnin: Great. Thank you very much. On the outlook, it sounds like you're seeing some strength in power, SI/SO, and memory, but general mature remains weaker as it may be getting even weaker. Could you discuss in some more detail what you're seeing in general mature? I mean, it seems like this quarter that some IDM business is picking up globally for some of the mature products, but it doesn't seem like you're seeing any of that. Can you talk a little bit more, please, about what you're seeing in general mature?

Denis Pyatchanin: Great. Thank you very much. On the outlook, it sounds like you're seeing some strength in power, SI/SO, and memory, but general mature remains weaker as it may be getting even weaker. Could you discuss in some more detail what you're seeing in general mature? I mean, it seems like this quarter that some IDM business is picking up globally for some of the mature products, but it doesn't seem like you're seeing any of that. Can you talk a little bit more, please, about what you're seeing in general mature?

Petman at Neiman company, your line is now open.

Great, thank you very much. Um, so I'm about to look. It sounds like you're seeing some strength in, uh,

Speaker #1: But as we think about the business trending into 2027, we feel a little bit better today than we did three months ago in general mature.

Power. I see in memory but General mature means weaker, it may be getting even weaker. Could you discuss in some more detail? What you're seeing in general mature? I mean, it's seems like,

Speaker #1: And on the silicon carbide side, in Russell's prepared remarks, it was quite clear that we are seeing also relative to three months ago I would say encouraging signals from our customers conversations are very constructive there's a lot of inbound about technology, engagement, channeling, superjunction.

David Ryzhik: Yeah, Dennis, this is David. I think we would agree that the end markets are picking up. I think auto is stabilizing, industrial recovering, and we're starting to see, you know, AI pick up for this general mature segment. You know, when we talk about the Q1 bookings, yeah, we did see a little bit softer bookings in general mature. The key takeaway there is that utilization rates are rising. For us, that's a really nice data point. We still expect 2026 general mature to be down year over year. As we think about, you know, the business, you know, trending into 2027, we feel a little bit better today than we did 3 months ago in general mature.

This quarter that some IDM business is picking up globally for some of the mature products, but doesn't seem like you're seeing any of that. Can you talk a little bit more pleased about what you're seeing in general mature?

Speaker #1: And then you're starting to hear more and more about silicon carbide in the data center. So we think the combination of these things is pretty encouraging.

Speaker #1: And again, sets the stage for maybe some momentum into 2027. And from quarter to quarter, it can move around. But we're taking a bigger picture view that we think that next year looks a little better for these markets.

Yeah, Dennis, this is David. So so uh, I think we would agree that the end markets are picking up. Um, I think oil is is stabilizing industrial recovering and we're starting to see, you know, AI pick up for for this General mature segment. Um, you know, we when we talk about the q1 bookings. Yeah, we did see a little bit softer, bookings and general mature, uh, but the key takeaway there is that utilization rates are rising. Uh, and so for us, that's that's a really nice data point. Um, we still expect 2026, uh, General mature to be down year-over-year. Uh, but as we think about, you know the business, you know, trending into 2027, we feel a little bit better today.

David Ryzhik: On the silicon carbide side, in Russell’s prepared remarks, it was quite clear that we are seeing, also relative to 3 months ago, I would say encouraging signals from our customers. Conversations are very constructive. You know, there’s a lot of inbound about technology, engagement, channeling, super junction. You’re starting to hear more and more about silicon carbide in the data center. We think the combination of these things is pretty encouraging, and again, sets the stage for maybe some momentum into 2027. You know, from quarter to quarter, it can move around. You know, we’re taking a bigger picture view that we think that next year looks a little better for these markets.

Speaker #3: Great. And then for my follow-up, so on a related note, the book-to-bill for the quarter was up to about 1, I think up from 0.8.

And we did 3 months ago in January and on the silicon carbide side, uh, in Russell's prepared remarks. It was, it was quite clear that

Speaker #3: Could you share a little more about what you expect to see order-wise next quarter? How is the book-to-bill going to be the same or moving even higher?

Speaker #1: Yeah, we're not going to guide bookings per quarter. It can fluctuate. But we are encouraged that Q1 was relatively consistent with Q4, which was a big step up from earlier in 2025.

Speaker #1: So this is a good sign. But we're not going to be forecasting bookings on a quarterly basis.

Um, we are seeing uh, also relative to 3 months ago. Um, I would say, encouraging signals from our customers conversations are, are very constructive. Um, you know, there's a lot of inbound about technology engagement channeling, super Junction. Uh, and then you're starting to hear, um, more and more about silicon carbide in the data center. So we think the combination of these things, uh, is pretty encouraging. And again, sets the stage for maybe some momentum into 2027.

Speaker #3: Understood. Well, that's it for me. Thank you very much.

Speaker #1: Thanks, Jed.

Speaker #2: As a reminder to ask a question, please press star 11 on your phone and wait for your name to be announced. One moment for our next question.

Dennis Patat-Patatsnin: Great. For my follow-up. On a related note, the book-to-bill for the quarter was up to about 1, I think up from 0.8. Could you share a little more about what you expect to see order-wise next quarter? Is the book-to-bill gonna be the same or moving even higher?

Denis Pyatchanin: Great. For my follow-up. On a related note, the book-to-bill for the quarter was up to about 1, I think up from 0.8. Could you share a little more about what you expect to see order-wise next quarter? Is the book-to-bill gonna be the same or moving even higher?

And, you know, from quarter to quarter, it can, uh, move around. Uh, but you know, our, we we're taking a bigger picture of you that we think that. Um, next year, looks a little better for these markets.

Speaker #2: Our next question comes from the line of David Duley of Steelhead Securities. Your line is now open.

Speaker #4: Good afternoon and thanks for taking my questions. I last couple of conference calls. If you could elaborate on what you're seeing as far as silicon carbide adoption in other markets, specifically in the data center.

David Ryzhik: Yeah, we're not gonna guide bookings per quarter. It can fluctuate. We are encouraged that Q1 was relatively consistent with Q4, which was a big step up from, you know, earlier in 2025. This is a good sign, we're not gonna be forecasting bookings on a quarterly basis.

Great. And then for my follow-up. So On a related to note the book to bill for the quarter was up to about 1 I think up from 0.8. Could you share a little more about what you expect to see a orderwise next quarter has the book to Bill going to be the same or removing even higher.

Speaker #4: I think in the past, you've talked about voltage step-down applications. I was just wondering if you're getting closer to the rack or if there's other applications that you might be addressing inside the data center realm.

Yeah, we're not going to guide bookings per quarter, it can fluctuate, um, but we are encouraged that q1 was relatively consistent with Q4 which was a big step up from from, you know, earlier in 2025. So, this is a good sign. Um,

Dennis Patat-Patatsnin: Understood. Well, that's it for me. Thank you very much.

Denis Pyatchanin: Understood. Well, that's it for me. Thank you very much.

But we're not going to be uh forecasting bookings on a quarterly basis.

Speaker #3: Hey, Davis Russell. Thanks for the question. So yeah, obviously, data center is an application for it. I just want to start off with the electric vehicles.

David Ryzhik: Thanks.

Understood. Well, that's it for me. Thank you very much.

Operator: As a reminder, to ask a question, please press star one one on your phone and wait for your name to be announced. One moment for our next question. Our next question comes from the line of David Duley of Steelhead Securities. Your line is now open.

Thanks. Yeah.

Speaker #3: I think they're actually very exciting right now. A lot of the cars are going to 800-volt subsystems, which allows them to actually charge so much quicker.

As a reminder to ask a question. Please press star 1, 1 on your phone and wait, for your name to be announced.

1 moment for our next question.

Speaker #3: As well. So you're seeing that trend. And those are all using silicon carbide. And the first application would be the traction inverter. And you're seeing more and more of the silicon carbide cars now taking silicon sorry, of the electric vehicles now taking silicon carbide.

David Duley: Good afternoon, and thanks for taking my questions. I guess, I'll ask the question I think I've asked on the last couple of conference calls. If you could elaborate on what you're seeing as far as silicon carbide adoption in other markets, specifically in the data center. I think in the past you've talked about voltage step-down applications. I was just wondering if you're getting closer to the rack or if there's other applications that you might be addressing inside the data center realm.

Our next question comes from the line of David Dooley, a steel head security who our line is now open.

Speaker #3: But we're also seeing more and more silicon carbide per EV. So you have the traction inverter, which is typically the first device they take.

Um, good afternoon and thank you for taking my questions. Um I guess. Uh I'll ask the question. I think I've asked in the last couple of conference calls. Um, if you could elaborate on what you're seeing as far as silicon carbide, adoption and other markets specifically in the data center,

Speaker #3: Then you start to see the DC to DC step-downs. Also, the onboard charging. And of recent times, we're seeing the AC system, the compressor, having silicon carbide.

Russell Low: Hey, David, it's Russell. Thanks for the question. Yeah, obviously, data center is an application for it. I just want to start off with the electric vehicles. I think they're actually very exciting right now. A lot of the cars are going to 800 volt subsystems, which allows them to actually, you know, charge so much quicker as well. You're seeing that trend, and those are all using silicon carbide. The first application will be the traction inverter. You're seeing more and more of the electric vehicles now taking silicon carbide. We're also seeing more and more silicon carbide per EV.

Voltage, step down applications. I was just wondering if you're getting closer to the Rack or if there's, um, other applications that you might be addressing inside the data center Realm.

Speaker #3: So we're really seeing this next generation of cars much greater range and much faster charge times. So I think those are that's a really good trend.

Speaker #3: And although it may be a little bit soft now, the long-term trend is that's going to continue to grow. So that's kind of the electric vehicles.

Speaker #3: Like I mentioned before I get onto datacenters, that's actually surprised me when we were in China and we were told about these being in white goods.

Speaker #3: That really was surprising. But yeah, for many of these high-end systems that are running about a kilowatt, they need this to achieve their certification for power efficiency in multiple markets.

Russell Low: You have the traction inverter, which is typically the first device they take, and then you start to see the DC to DC step downs, also the onboard charging. Of recent times we're seeing the AC system, the compressor, having silicon carbide. We're really seeing this next generation of cars much greater range and much faster charge times. I think those are, you know, that's a really good trend. Although it may be a little bit soft now, the long term trend is that's going to continue to grow. That's kind of the electric vehicles. Like I mentioned, before I get onto data centers, that's actually, it surprised me when we were in China, and we were told about these being in white goods. That really was surprising.

Speaker #3: And then the data center, it was interesting. So maybe three to six months ago, we'd be talking about, is it going to be gallium nitride?

Speaker #3: Is it going to be silicon carbide? I think at this stage, it's becoming clearer that it's both. As the rack transitions to 800 volts, I think what you're going to see is gallium nitride inside the rack.

Speaker #3: That's a great sweet spot for gallium nitride. But as you drop down from the grid, which 13 kilovolts or more, that's going to be a great application of silicon carbide.

Hey, Dave, it's Russell. Uh, thanks for the question. So, yeah. Obviously, uh, data center is an application for. I just want to start off with the electric there because I think they're actually very exciting right now. A lot of the cars are going to 800 volt subsystems, which allows them to actually, you know, uh, charge so much quicker as well. So you're seeing that Trend and those are all using silicon carbide. And the first application will be the uh, the the traction inverter, and you're seeing more and more of the silicon carbide cars. Now, taking silica sorry of the electric vehicles now, taking silicon carbide, but we're also seeing more and more silicon carbide per EV. So you have the, the traction inverter, which is typically the first device that says, then you start to see the DC to DC step Downs. Also, the onboard charging, and a recent, uh, times we're seeing the AC system, the compressor, having silicon carbide. So, you know, we're, we're really seeing this next generation of cars, much greater range and much faster charge time. So I think those are, you know that that's a that's a

Speaker #3: So as it drops from the grid down towards the rack, you're going to see silicon carbide taking that opportunity as it really is a good application of that material.

Russell Low: For many of these high-end systems that are running about 1 kW, they need this to achieve their certification for power efficiency in multiple markets. The data center it was interesting. Maybe 3 to 6 months ago, we'd be talking about is it going to be gallium nitride, is it going to be silicon carbide? I think at this stage it's becoming clearer that it's both. As the rack transitions to 800V, I think what you're going to see is gallium nitride inside the rack. That's a great sweet spot for gallium nitride. As you drop down from the grid, which, you know, 13kV or more, that's going to be a great application of silicon carbide.

Speaker #4: And as a follow-up or just a extension of that question, do you think this 800, the 800-volt rollout in the data centers, which I guess is kind of starts in the middle of this year, really gets going next year, is that when you might see more of a pickup in your silicon carbide implant business for that market?

Speaker #4: Or when will this start to hit in more significant way, I guess, is the best way to ask it.

Speaker #1: Yeah, Dave, that's a good question. It's still low volume relative to EVs. But I would say our conversations with customers, they're talking a little bit more about it.

Russell Low: As it drops from the grid down towards the rack, you're gonna see silicon carbide taking that opportunity, as it really is a good application of that material.

Speaker #1: And so we're paying attention. And this could be an application that over time could grow, whether it's the transformers or other parts of the data center power architecture.

Really good Trend, and although, it may be a little bit soft. Now, the long-term trend is that's going to continue to grow. So that's kind of the electric vehicles. Um, like I mentioned before I get on to Data Centers there, that's actually it surprised me when I, when we were in China and we were told about these big in white goods, that that really was surprising. Uh, but yeah, for for many of these high-end systems that are running about a kilowatt, they need this to achieve their certification for, for a, a power efficiency in multiple markets and then the data center is it was interesting. So, maybe 3 to 6 months ago, we'd be talking about. Is it going to be gallium 920? Is it going to be silicon carbide? I think at this stage it's becoming clearer that it's both as the rack transitions to 800 volts. I think what you're going to see is gallium nitride, inside the rack, that's a great sweet spot for gallium nitride. But as you drop down from the grid which, you know, 13, kilovolts or or more, that's going to be a great application of silicon carbide. So as it drops from the grid down towards the

David Duley: As a follow-up or just an extension of that question, do you think this, the 800, you know, the 800 volt rollout in the data centers, you know, which I guess is, you know, kind of starts in the middle of this year, really gets going next year. Is that when you might see more of a pickup in your silicon carbide implant business for that market? When will this start to hit a more significant way, I guess, is the best way to ask it?

Rack, you're going to see silicon carbide taking that opportunity, as it really is a good application of that material.

Speaker #1: So I think TBD, Dave, how big this could be. But I would say our customers are definitely paying a lot more attention to that.

Speaker #4: All right. That's good news. Thank you.

Speaker #1: Thanks.

Speaker #2: One moment for our next question. Our next question comes from the line of Duksan Jang of Bank of America Securities. Your line is now open.

And as the follow-up or just a extension of that question. Do you think there's 800? You know, the 800 volt roll out in the data centers? You know, which I guess is you know, kind of starts in the middle of this year, really just going next year is that when you might see more of a pickup in your silicon carbide, implant business,

for that market, or

David Ryzhik: Yeah, Dave, that's a good question. It's still, you know, low volume relative to EVs. I would say our conversations with customers, they're talking a little bit more about it, we're paying attention. You know, this could be an application that over time could grow, you know, whether it's the transformers or other parts of the data center power architecture. I think TBD, Dave, how big this could be. I would say our customers are definitely paying a lot more attention to that.

When will this start to hit a more significant way I guess. Is the best way to ask it.

Speaker #5: Hi. Thank you for taking the question. One on the full year 26 guide. I think you said you want to you're maintaining that flattish over-year guide.

Yeah, Dave that that's a good question. Um it's still you know, low volume relative to TVs.

Um but uh I would say, our conversations with customers. They are they're talking a little bit more about it.

Speaker #5: I'm just curious because clearly, memory sentiment and the new way for starts are likely much better than 90 days ago. And then at the same time, I think you said your bookings for the general mature and the power business are still doing pretty well.

And so, we're paying attention.

um, and um,

Speaker #5: So I'm curious why not raise that full-year guide. Thank you.

David Duley: All right. That's good news. Thank you.

Speaker #1: Yeah. So we feel comfortable with flat year-over-year. Absolutely, memory we expect to be a strong year for us in 2026. Offset by a digestion and power and general mature.

um, you know, this, this could be an application that over time, could grow, you know, whether it's the, the Transformers or other parts of the uh the data center power architecture. Um, so I think TBD Dave, how big this could be? Uh, but I would say, our customers are definitely paying a lot more attention to that.

David Ryzhik: Thanks.

All right, that's good news. Thank you.

Operator: One moment for our next question. Our next question comes from the line of Duksan Jang of Bank of America Securities. Your line is now open.

Thanks.

One moment for our next question.

Speaker #1: So we're seeing encouraging signs. We like what we saw in the bookings in Q1. One quarter is not a trend. But I think that some of that momentum is probably going to carry into 2027.

Duksan Jang: Hi. Thank you for taking the question. One on the full year at 2026 guide. I think you said you're maintaining that flat year-over-year guide. I'm just curious because, clearly memory sentiment and the new wafer starts are likely much better than 90 days ago. At the same time, I think, you said your bookings for the general mature and the power business are still doing pretty well, so I'm curious why not raise that full year guide. Thank you.

Our next question comes from the line of Duke and Chang of Bank of America Securities. Your line is now open.

Hi. Thank you for taking the question. Um, 1 on the full year of 26 guide, I think you said you want to

Speaker #1: For this year, based on our backlog, based on the schedule shipments that we have, we still feel that those markets are going to be down this year.

Um, your maintaining that, uh, flat issue over your guide. I'm just curious because

Speaker #1: And so net-net, you're going to get we expect about flat. But with the nice setup into 2027.

Speaker #5: Got it. And then a follow-up more specifically on the memory side. So I think at one point, you said memory is going to be up year-over-year and clearly, the trends are looking that way.

David Ryzhik: Yeah. We feel comfortable with flat year over year. You know, absolutely memory, we expect to be a strong year for us in 2026, offset by a digestion in power and general mature. We're seeing encouraging signs. We like what we saw in the bookings in Q1. One quarter is not a trend, but I think that some of that momentum is probably gonna carry into 2027. For this year, based on our backlog, based on, you know, the scheduled shipments that we have, we still feel that those markets are gonna be down this year. Net net, you're gonna get, you know, we expect about flat, but, you know, with a nice setup into 2027.

Uh, clearly memory sentiment and the new way for starts are likely much better than 90 days ago. And then at the same time, I think, um, you said you're booking for the general mature and the power business are still doing pretty well. So I'm curious, why not raise that for your guide. Thank you.

Speaker #5: How should we think about the full-year trajectory when obviously, it tends to be a little bit lumpy on a quarterly basis, but we had a pretty strong start to the year?

Speaker #5: And I think also NAND, the NAND activities have begun to pick up. So any color on the full-year memory would be helpful. Thank you.

Speaker #1: Yeah. That's right. From quarter to quarter, it could be lumpy. It just depends on when customers are taking when we're shipping to customers. And fab availability space.

Speaker #1: So for example, in Q2, memory is going to be a little softer sequentially. But we think for the full year, it's we expect pretty strong growth in memory.

Duksan Jang: Got it. A follow-up more specifically on the memory side. I think at one point you said, memory is going to be up year over year, and clearly the trends are looking that way. How should we think about the full year trajectory when obviously it tends to be a little bit lumpy on a quarterly basis, but we had a pretty strong start to the year. I think also NAND activities have begun to pick up. Any color on the full year memory would be helpful. Thank you.

you're going to get, you know, we expect about flat but, you know, with the with the nice setup into 2027,

Speaker #1: And that's all DRAM. Our expectation embedded in our 2026 expectation is not much NAND. So that's something that we're paying attention to. As you know, Duksan, a lot of the NAND manufacturers are focused on vertical scaling.

Speaker #1: And so that doesn't require a lot of incremental implant. But once the industry starts to add wafers, that's when we would start to see a pickup.

Got it. Um, and then a follow-up more specifically on the memory side. So I think at one point you said, um, memory is going to be up year-over-year, and clearly the trends are looking that way. Um, how should we think about the four-year trajectory when obviously it tends to be a little bit lumpy on a quarterly basis, but we had a pretty strong start to the year. Um, and I think also non-

David Ryzhik: Yeah. It, that's right. From quarter-to-quarter it could be lumpy. It just depends on when customers are taking, when we're shipping to customers and, you know, fab availability space. For example, in Q2, memory is going to be a little softer sequentially. We think for the full year, it's, we expect pretty strong growth in memory, and that's all DRAM. Our expectation, embedded in our 2026 expectation, is not much NAND. That's something that we're paying attention to. As you know, Duksan, a lot of the NAND manufacturers are focused on vertical scaling. That doesn't require a lot of incremental implant. Once the industry starts to add wafers, that's when we would start to see a pickup.

The nand activities have begun to pick up so um any color on the 4 year memory would be helpful. Thank you.

Speaker #5: Got it. And then if I may, just one quick one. Within memory, and sorry for being too specific maybe, but I think the industry is trending and shifting away a little bit from HBM and diversifying more into other types of memory.

Speaker #5: And I assume the wafer consumption ratio is not as high on those. For example, like the LPDDRs. So obviously, I think that would be a positive trend for you.

Speaker #5: Have you seen any signs that the demand signals are stronger because of that?

Speaker #1: I don't think we've seen any meaningful change based on any mixed shift in memory. So customers are still really trying to build out HBM capacity and DRAM for AI.

Yeah, it it. Um, that's right from quarter to quarter. It could be a lumpy, uh, it just depends on when customers are taking when we're shipping to customers and, you know, grab availability space. So for example, in Q2 memory is going to be a little softer sequentially. Uh, but we think for the full year, um, it's, it's, uh, we expect pretty strong growth in memory and that's all D. Ram, uh, our expectation, uh, embedded in our 2026 expectation. Uh, is not much nand, uh, so that that's something that, uh, we're paying attention to. As, you know, ducks in a lot of the manufacturers are focused on vertical scaling, um, and so, uh, that doesn't require a lot of incremental implant. Uh, but once uh, the industry starts to add Wafers, that's

when we would start to see,

Speaker #4: Yeah. And when I think about HBM, it's essentially DRAM stacked. And so the implant intensity doesn't change much between DRAM and HBM. And NAND is not different.

A pickup.

Duksan Jang: Got it. If I may, just one quick one. Within memory, and sorry for being too specific maybe, but I think the industry is trending and shifting away a little bit from HBM and diversifying more into other types of memory. And I assume the wafer consumption ratio is not as high on those, for example, like the LPDDRs. Obviously, I think that would be a positive trend for you. Have you seen any signs that the demand signals are stronger because of that?

Speaker #4: It's a slightly different mix of high-energy, high-current, medium-current, but I'd say that NAND and even node-to-node-to-node as well, it's not changing significantly. I'd say the implant intensity is relatively stable.

Speaker #5: All right. Thank you so much.

Speaker #4: Thank you.

Speaker #2: I'm showing no further questions at this time. I would now like to turn it back to David Ryzhik for closing remarks.

Got it. Um and then if I may just 1 quick 1 um within memory and and sorry for being too specific maybe but um I think the industry is trending and shifting away a little bit from hbm and diversifying more into other types of memory. Uh, and I assume the the way for consumption ratio is not as high on those uh, for example like the lpddr. So, um, obviously I think that would be a positive trend for you. Um, have you seen any

Speaker #1: Thank you, Operator. Just wanted to thank everybody for joining the call and your interest in Accelis. You can close the call.

Um, signs that the demand signals are stronger because of that.

David Ryzhik: I don't think we've seen any meaningful change, based on any mix shift in memory. Customers are still really trying to build out HBM capacity and DRAM for AI.

Russell Low: Yeah. When I think about, you know, HBM, it's essentially DRAM stacked. The implant intensity doesn't change much between DRAM and HBM, and NAND's not different. It's a slightly different mix of high G, high current, and medium current. I'd say that NAND, and even node to node to node as well, it's not changing significantly. I'd say the implant intensity is relatively stable.

Duksan Jang: All right. Thank you so much.

I don't think we've seen any meaningful change uh based on any uh mixed shift in memory. So customers are still uh really trying to build out uh HPM capacity and dramm for for AI. Yeah. And when I think about, you know, HPM it's essentially dramm stacked and so so the implant intensity uh, doesn't change much between DM and HPM and Nan's not different. It's a slightly different. Mix of hannie high current medium current, but let's say that n and even not to not to note as well. It's not changing significantly. I say the implants are intensity. Is relatively stable.

Russell Low: Thank you.

All right, thank you so much.

Operator: I'm showing no further questions at this time. I would now like to turn it back to David Ryzhik for closing remarks.

Thank you.

David Ryzhik: Thank you, operator. Just wanted to thank everybody for joining the call and your interest in Axcelis. You can close the call.

I'm showing no further questions at this time. I would now like to turn it back to David rizik for closing remarks

Thank you, Operator. Just wanted to thank everybody for joining the call and you're interested in excellus.

Operator: Okay. This concludes the presentation. Thank you for your participation in today's conference. You may now disconnect. Have a good day.

You can close the call.

This concludes the presentation. Thank

you to patient in today's conference, you may now disconnect

have a good day.

Mhm.

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Q1 2026 Axcelis Technologies Inc Earnings Call

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Axcelis Technologies

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Q1 2026 Axcelis Technologies Inc Earnings Call

Thursday, May 7th, 2026 at 9:00 PM

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