Q1 2026 ACM Research Inc Earnings Call

May 7, 2026

Speaker #1: Later, we'll conduct a question-and-answer session, and instructions will follow at that time. As a reminder, we're recording today's call. If you have any objections, you may disconnect at this time.

Speaker #1: Now I'll turn the call over to Mr. Steven Pelayo, Managing Director of the Blue Shirt Group. Steven, please go ahead.

Speaker #2: Thank you. Good day, ladies and gentlemen. Thank you for standing by and welcome to ACM Research first quarter 2026 earnings conference call. Currently, all participants are in a listen-only mode.

Steven Pelayo: Thank you. Good day, ladies and gentlemen. Thank you for standing by, and welcome to ACM Research Q1 2026 earnings conference call. Currently, all participants are in a listen-only mode. Later, we will conduct a question and answer session, and instructions will follow at that time. As a reminder, we are recording today's call. If you have any objections, you may disconnect at this time. Sorry. I'm repeating there. We released Q1 2026 results before the US market opened today. The release is available on our website, as well as from Newswire Services. There's also a supplemental slide deck posted to the investor section of our website that we will reference during our prepared remarks. On the call with me today are our CEO, Dr. David Wang, our CFO, Mark McKechnie, and Lisa Feng, our CFO of our operating subsidiary, ACM Research (Shanghai), Inc.

Steven Pelayo: Thank you. Good day, Ladies and gentlemen. Thank you for standing by, and Welcome to ACM Research Q1 2026 Earnings Conference call. Currently, all participants are in a listen-only mode. Later, we will conduct a question and answer session, and instructions will follow at that time. As a reminder, we are recording today's call. If you have any objections, you may disconnect at this time. Sorry. I'm repeating there. We released Q1 2026 results before the US market opened today. The release is available on our website, as well as from Newswire Services. There's also a supplemental slide deck posted to the investor section of our website that we will reference during our prepared remarks. On the call with me today are our CEO, Dr. David Wang, our CFO, Mark McKechnie, and Lisa Feng, our CFO of our operating subsidiary, ACM Research (Shanghai), Inc.

Speaker #2: Later, we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, we are recording today's call. If you have any objections, you may disconnect at this time.

Speaker #2: Oh, sorry. I'm repeating there. We released first quarter 2026 results before the US market opened today. The release is available on our website, as well as from Newswire services.

Speaker #2: There's also a supplemental slide deck posted to the investor section of our website. We will reference during our prepared remarks. On the call with me today are our CEO, Dr. David Wong; our CFO, Mark McKechnie; and Lisa Fang, our CFO of our operating subsidiary, ACM Shanghai.

Speaker #2: Before we continue, please turn to slide two. Let me remind you that remarks made during this call may include predictions, estimates, or other information that might be considered forward-looking.

Steven Pelayo: Before we continue, please turn to Slide 2. Let me remind you that remarks made during this call may include predictions, estimates, or other information that might be considered forward-looking. These forward-looking statements represent ACM's current judgment for the future. However, they are subject to risks and uncertainties that could cause actual results to differ materially. Those risks are described under risk factors and elsewhere in ACM's filings with the Securities and Exchange Commission. Please do not place undue reliance on these forward-looking statements, which reflect ACM's opinions only as of the date of this call. ACM is not obliged to update you on any revisions to these forward-looking statements. Certain financial results that we provide on this call will be on a non-GAAP basis, which excludes stock-based compensation and an unrealized gain and loss on short-term investments.

Speaker #2: These forward-looking statements represent ACM's current judgment for the future. However, they are subject to risks and uncertainties that could cause actual results to differ materially.

Speaker #2: Those risks are described under risk factors and elsewhere in ACM's filings with the Securities and Exchange Commission. Please do not place undue reliance on these forward-looking statements, which reflect ACM's opinions only as of the date of this call.

Speaker #2: ACM is not obliged to update you on any revisions to these forward-looking statements. Certain financial results that we provide on this call will be on a non-gap basis, which excludes stock-based compensation and an unrealized gain and loss on short-term investments.

Speaker #2: For our gap results and reconciliation between gap and non-gap amounts, you should refer to our earnings release, which is posted on the IR section of our website, and on slide 13.

Steven Pelayo: For our GAAP results and reconciliation between GAAP and non-GAAP amounts, you should refer to our earnings release, which is posted on the IR section of our website and on Slide 13. Also, unless otherwise noted, the following figures refer to Q1 2026, and the comparisons are to Q1 2025. With that, I'm going to now turn the call over to David Wang. David?

Speaker #2: Also, unless otherwise noted, the following figures refer to the first quarter of 2026 and the comparisons are to the first quarter of 2025. So with that, I'm going to now turn the call over to David Wang.

Speaker #2: David?

David Wang: Thanks, Steven. Hello, everyone, and welcome to ACM's Q1 2026 earnings conference call. We started the year with a solid Q1 report, with revenue up 34% and a gross margin above the middle point of our long-term target range. Revenue growth for the quarter was driven by the continual strength in our ECP and advanced packaging business. With a global boom in AI, the market is demand solution for enabling high speed, high density, and low power consumption semiconductor devices manufacturing. Many of which have not yet been invented. It is clear that ACM's focus on world-class differentiated tool based on our own IP is right strategy to win in global market. We're happy to see 2026 as a big year for new product.

Speaker #3: Thanks, Steven. Hello everyone, and welcome to ACM's first quarter 2026 earnings conference call. We started the year with a solid Q1 report, with revenue up 34% and gross margin above the midpoint of our long-term target range.

Speaker #3: Revenue growth for the quarter was driven by the continual strength in our ECP and advanced packaging business. With the global boom in AI, the market is demanding solutions for enabling high-speed, high-density, and low-power-consumption semiconductor device manufacturing, many of which have not yet been invented.

Speaker #3: It is clear that ACM focuses on world-class differentiated tools based on our own IP, with right strategy to win in global markets. We a big year for new products, our investment in our proprietary R&D over the past five years, together with our fully functioning midline at Lingong, is beginning to deliver significant benefits.

David Wang: Our investment in our proprietary R&D over the past five years, together with our fully functioning mini-line at Lingang, is beginning to deliver significant benefit. For instance, we now have industry-leading offering cross multiple product category that enable our global customer to effectively solving their evolving production challenges. As we progress through 2026, we expect to see an increased impact to our financials from new product. With regard to revenue, we anticipate incremental contribution from new product cycle from Tahoe, single wafer SPM, and our vertical furnace product. With regard to the shipment, we expect to increase shipment of our evaluation tool across a range of customer for our panel level horizontal plating, panel-level low-pressure flux cleaning, high throughput track, and PECVD tools. This quarter, at SEMICON China, we announced the ACM Planetary Family.

Speaker #3: For instance, we now have industry-leading offerings across multiple product categories that are enabling our global customers to effectively solve their evolving production challenges. As we progress through 2026, we expect to see an increased impact on our financials from new products.

Speaker #3: With regard to revenue, we anticipate incremental contributions from new products cycling from Tahoe, single-wafer SPM, and all vertical furnace products. With regard to the shipment, we expect an increased shipment of evaluation tools across a range of customers for our panel-level horizontal plating.

Speaker #3: Panel low-pressure flux cleaning, high-throughput track, and PECVD tools. This quarter, a semiconductor, we announced the ACM planetary family. This organized ACM tool portfolio into eight product families.

David Wang: This organized ACM tool portfolio into 8 product family, aligned with the key step in the semiconductor manufacture process. This represent ACM's comprehensive world-class multi-product offering and the global reach of our company. We encourage you to view the video on our IR website. Now, onto our business results. Please turn to slide 3. Q1 revenue was $231 million, up 34%. The ECP category was the primary growing driver, with revenue up more than 3 times year-over-year. Next, advanced packaging services spare parts category was grow 62%. This was partly offset by cleaning, which declined by 6%. We had a little contribution from new cleaning product in our Q1 2026 revenue. As I will discuss later in the call, we have a significant ramp ahead for our single-wafer SPM tools, which we will be delivering in Q1.

Speaker #3: Aligned with the key steps in the semiconductor manufacturing process, this represents ACM's comprehensive world-class multi-product offering. And the global reach of our company. We encourage you to view the video on our IR website.

Speaker #3: Now onto our business results. Please turn to slide three. First quarter revenue was $231 million, up 34%. The ECP category was the primary growing driver, with revenue up more than three times year over year.

Speaker #3: Next, advanced packaging, services, es, spare parts category was growing 62%. This was a positive offset by cleaning, which declined by 6%. We had a little contribution from new cleaning products in our Q1 2026 revenue, but as I will discuss later, in the call, we have a significant ramp ahead for our single-wafer SPM tools, which is delivering in Q1.

David Wang: Shipment for Q1 were $241 million, up 54%. The solid growth reflect strong customer demand and execution across our product portfolio. It also includes contribution from the initial ramp of single wafer SPM tools. For reference, shipment of the cleaning category grow by 32% for the quarter. I also know that about 15% of Q1 shipment were from catch-up of a product that had been rescheduled from Q4 of last year. For 2026, we continue to expect the shipment growing to outpace revenue growth. Gross margin was 46.5% for Q1, above the middle point of our long-term range, 42% to 48%. We ended Q1 with gross cash of $1.3 billion and net cash, $924 million.

Speaker #3: Shipment for the first quarter was $241 million, up 34%. The solid growth reflects strong customer demand and the execution across our product portfolio. And it also includes contributions from the initial ramp of single-wafer SPM tools for reference, shipment of the cleaning category growing by 32% for the quarter.

Speaker #3: I also note that about 15% of Q1 shipment were from catch-up of a product, that had been rescheduled from Q4 of last year. For 2026, we continue to expect the shipment growing to outpace revenue growth.

Speaker #3: Gross margin was 46.5% for the first quarter, above the middle point of our long-term range. 42% to 48%. We ended the first quarter with gross cash of $1.3 billion and net cash $924 million.

Speaker #3: This balance included $110 million of gross proceeds from February sale of ACM Shanghai shares. The capital providing a solid foundation for continual investment in our global operations.

David Wang: This balance including $110 million of gross proceeds from February sale of ACM Shanghai shares. The capital providing a solid foundation for continued investment in our global operations. I will provide detail on product. Please turn to slide 4. Revenue from single wafer cleaning, Tahoe semi-critical cleaning tool was down 6%. We continue to believe ACM's full product offering in cleaning is amongst the best in the world. As noted in a prior calls, we believe cleaning technology becomes even more important as the industry move into more advanced production technology. This trend play directly to ACM's strengths, particularly in differentiated technology such as N2 bubbling, wafer pressure, single wafer SPM cleaning, Tahoe, and others.

Speaker #3: Now I will provide a detail on product. Please turn to slide four. Revenue from single-wafer cleaning, Tahoe semicritical cleaning tool, was down 6%. We continue to believe ACM's full product offering in cleaning is amongst the best in the world.

Speaker #3: As noted in the prior course, we believe cleaning technology becomes even more important as industry moving to more advanced production technology. This trend plays directly to ACM's strengths, particularly in differentiated technologies such as N2 bubbling wet etcher, single-wafer SPM cleaning, Tahoe, and others.

Speaker #3: I'm pleased to announce today that we expect a significant production ramping of our single-wafer SPM production product line. With more than 15 to 20 units to be delivered by year-end across our customer base.

David Wang: I'm pleased to announce today that we expect a significant production ramping of our single wafer SPM product line, with more than 15 to 20 units to be delivered by year-end across our customer base. This is a result of many years of R&D by our team to develop a better solution than the current market leader. As I noted for the past several investor call, ACM proprietary approach deliver the excellent particle performance with fewer than 15 particle at a 15 nanometer. Much better than market leader. While other players need a periodical DI water cleaning of the process chamber and the surrounding environment to remove residue generated by their hot SPM films, our system does not. Instead, our unique nozzle design providing a maintenance-free solution as the chamber does not need to be taken offline for periodical DI water cleaning.

Speaker #3: This is a result of many years' R&D by our team to develop a better solution than the current market leader. As I noted for the past several investor calls, ACM proprietary approach delivered excellent particle performance.

Speaker #3: With fewer than 15 particles. At 15 nanometers. Much better than market leader. While other players needed periodical DI water cleaning of the process chamber and surrounding environment to remove residue generated by the hot SPM films, our system does not.

Speaker #3: Instead, our unique nozzle design providing a maintenance-free solution. As the chamber does not need to be taken offline for periodical DI water cleaning. This not only improved tool uptime, but also enhanced particle cleaning performance at 13 nanoparticles and beyond.

David Wang: This not only improve tool uptime, but also enhance particle cleaning performance at a 13 nanometer NDR. Such fine particle removal is very critical for manufacture advanced node, GAA logic devices, and memory devices such as HBM. It is no surprise that we're also seeing strong interest in our SPM tool from multiple global customers. SPM cleaning process tool has occupied 30% of the cleaning market. We believe our innovative hot SPM tool will take a significant market share in the next few year. The revenue for ECP, furnace, and other technology grow 205%. Growing was driven by strong momentum in electroplating, supported by our leading position and expanding engagement across both front-end and advanced packaging applications. In advanced packaging, our panel-level low-pressure flux cleaning is gaining additional traction in Asia and with the global customers.

Speaker #3: Such fine particle removal is very critical for manufacturing advanced node GAA logic devices and memory devices such as HBM. It is no surprise that we are also seeing strong interest in our SPM tool from multiple global customers.

Speaker #3: SPM cleaning process tool has occupied 30% of the cleaning market. We believe our innovative hot SPM tool will take a significant market share in the next few years.

Speaker #3: Revenue from ECP furnace and other technology grows 205%. Growing was driven by strong momentum in electroplating supported by our leading position in expanding engagement across both front-end and advanced packaging applications.

Speaker #3: In advanced packaging, our panel-level horizontal plating solution is gaining additional tractor traction in Asia and with global customers. We began development of a panel-level horizontal electroplating platform in 2022.

David Wang: We began development of our panel level horizontal electroplating platform in 2022. We're ahead of the industrial and delivered their world's first horizontal plating tool, 550 by 510 millimeter, to a customer in Q4 last year. Since then, we have continued to expand customer engagements and build a backlog, supporting both 515 by 510 millimeter and the 310 by 310 millimeter format panels. In April, we presented a keynote at the Taiwan Electronic Equipment Forum on 3D IC packaging technology, highlighting our role enabling next generation AI driving packaging solutions. We are confident that a successful customer evaluation will lead to volume production order for 550 by 510, and additional evaluation of 310 by 310 later this year.

Speaker #3: We're ahead of the industrial. And delivered a first horizontal plating tool 515 by 510 millimeters to a customer in the fourth quarter last year.

Speaker #3: Since then, we have continued to expand customer engagements and build a backlog. Supporting both 515 by 510 millimeters and 310 by 310 millimeters format panels.

Speaker #3: In April, we presented a keynote at the Taiwan Electronic Equipment Forum, on 3D IC packaging technology, highlighting our role in enabling next-generation AI-driven packaging solutions.

Speaker #3: We are confident that a successful customer evaluation will lead to value production order for 515 by 510 and additional evaluation of 310 by 310 later this year.

Speaker #3: For our vertical furnace business, tools are under evaluation at multiple customer sites. And we continue to expect more meaningful revenue contributions later this year.

David Wang: For our vertical furnace business, tools are under evaluation at multiple customer site, and we continue to expect a more meaningful revenue contribution later this year. We continue to see solid demand across key applications, including LPCVD, oxidation, thermal ALD, PLD, and ultra-high temperature anneal, supported by our ongoing technology development. Revenue from advanced packaging, which excludes ECP, but including service and spare, was up 62%. This category, including coater/developer, etcher, stripper, scrubber, and vacuum clean flux tools, supporting a broader range of advanced packaging application. We're also providing back-end plating tool, including in ECP category. Last quarter, we announced multiple advanced packaging equipment orders from leading global customers. In Q1, we ship our panel-level vacuum cleaning system to a leading global semiconductor packaging manufacturer outside mainland China.

Speaker #3: We continue to see solid demand across key applications, including LPCVD, oxidation, thermal ALD, PLD, and ultra-high temperature anneal supporting by our ongoing technology development.

Speaker #3: Revenue from advanced packaging, which excludes ECP but including service and spell, was up 62%. This category including coaters, ers, developer, etcher, stripper, scrubber, and vacuum cleaning flux tools.

Speaker #3: Supporting a brand range a broad range of advanced packaging applications. We also providing backend plating tool, including in the ECP category. Last quarter, we announced multiple advanced packaging equipment orders from leader leading global customers.

Speaker #3: In Q1, we shipped our panel-level vacuum cleaning system to a leading global semiconductor packaging manufacturer outside mainland China. We also completed shipment of multiple wafer-level advanced packaging systems to a leading offset customer in Singapore.

David Wang: We also complete shipment of multiple wafer-level advanced packaging system to a leading OSAT customer in Singapore. ACM is uniquely positioned with a comprehensive set of wet process solution and plating technology to address key process steps in advanced packaging. Our integrated process capability provide a valuable insight into next-generation packaging challenges. As industry evolve towards 2.5D and 3D integration, including TSV-based architecture and heterogeneous integration, we believe our capability position us to supporting this increasingly complex requirements. We are making good progress with our new track on the PECVD platforms. In April, we ship our first PECVD silicon carbon nitride system to a leading semiconductor manufacturer, now in customer evaluation process. This is a big deal. We achieved a great results in our mini-line, and the tool is now being evaluated at the customer site.

Speaker #3: ACM is unique positioned with a comprehensive set of wet process solutions and plating technology to address key process steps in advanced packaging. Our integrated process capability provides valuable insight into next-generation packaging challenges.

Speaker #3: As industry evolves towards 2.5D and 3D integration, including TSV-based architecture and heterogeneous integration, we believe our capability positioned us to support this increasingly complex requirements.

Speaker #3: We are making good progress with our new track and PCVD platforms. In April, we shipped our first PCVD silicon carbon nitride system to a leading semiconductor manufacturer.

Speaker #3: Now in customer evaluation process. This is a big deal. We achieved a greater result in our media line and the tool is now being evaluated at the customer site.

Speaker #3: The system incorporates ACM proprietary three-station rotating architecture and one-station, one RF technology enabling strong film uniformity interface control process stability and small footprint. We believe this positioned us for growth in backend of the line and advanced packaging.

David Wang: The system incorporates ACM proprietary three-station rotating architecture and one station one RF technology, enabling strong film uniformity, interface control, process stability, and small footprint. We believe this positions us for growth in back-end of line and advanced packaging. For high throughput, 300 WPH KrF track tool, we delivered our first tool evaluation last September and are progressing towards mass production qualification this year. We continue to see growing interest from multiple customers for both standalone and their configuration integrated with the scanner. ACM culture is deeply rooted in differentiated R&D. We bring innovative solutions to the ever-evolving challenges faced by major global semiconductor manufacturers. Our current success is driven by good decision-making 5 years ago, and the future success depends on today's innovation. We are committed to our strategy to providing a long-term roadmap of world-class tools across our growing product portfolio.

Speaker #3: For our high throughput 300 WPH cap track tool, we delivered our first tool evaluation last September and our progressing towards mass production qualification this year.

Speaker #3: And we continue to see growing interest from multiple customers for both standalone and configuration integrated with the scanner. ACM culture is deeply rooted in differentiated R&D.

Speaker #3: We bring innovative solutions to the ever-evolving challenges faced by major global semiconductor good decision-making facilities and the future success depends on today's innovation. We are committed to our strategy to providing a long-term roadmap of world-class tools across our growing product portfolio.

Speaker #3: We remain confident in our $4 4 billion revenue target and our longer-term goal of becoming a top-tier supplier of capital equipment to the global semiconductor industry.

David Wang: We remain confident in our $4 billion revenue target and our longer-term goal of becoming a top-tier supplier of capital equipment to the global semiconductor industry. Next, let me provide an update on our production facility. First, on Lingang. Please turn to slide 8. The first building is in volume production, and we plan to open the second building later this year. Together two facility, we can support up to $3 billion in annual output. On strategic note, I will now discuss our Lingang mini-line, which went into full operation in H2 of last year. We now have a fully experiment R&D line in a class 100 environment, running our own tool and those of other vendors. This is a big deal. It will also speed up our joint R&D collaboration with our customer in Asia.

Speaker #3: Next, let me provide an update on our production facility. First, I'm Ling Gang. Please tend to slide 8. The first building is in volume production and we plan to open the second building later this year.

Speaker #3: Together, two facilities we can support up to $3 billion in annual output. On strategic note, I will now discuss our Ling Gang media line, which went into full operation in the second half of last year.

Speaker #3: We now have a fully experimented R&D line in a class 100 environment. Running our own tool and those of other vendors this is a big deal.

Speaker #3: It is an exciting our own R&D effort and it will also speed up our joint R&D collaboration with our customer in Asia. We expect this to have a meaningful impact on our operating model.

David Wang: We expect this to have a meaningful impact on our operating model. For new product, rather than delivering multiple tool for expanded, extended customer evaluation, we now process custom wafer on our new product in the Lingang mini-line to validate the tool to meet the customer's specific requirement before shipment. We expect this approach to shorten qualification cycle of a new product at a customer site, shorten the time of conversion to revenue, and enhance overall capital efficiency. We are now already see early benefit across multiple product. I will give a few example. Our first shipment of the PECVD silicon carbon nitride system complete the customer-specific validation at Lingang to shipment. We expect this to reduce on-site qualification time and enable faster ramps to pre-production.

Speaker #3: For new products, rather than delivering multiple tools for expanded for extended customer evaluation, we now process customer wafer on our new product in the Ling Gang media line.

Speaker #3: To validate the tool to meet the customer's specific requirement before shipment. We expect this approach to shorten qualification cycle of a new product at the customer site, shorten the time of conversion to revenue, and enhance overall capital efficiency.

Speaker #3: We are now already see early benefit across multiple products. I will give a few examples. Our first shipment of the PCVD silicon carbon nitride system completed the customer-specific validation at Ling Gang to shipment.

Speaker #3: We expect this to reduce on-site qualification time and enable faster ramp to production. We tested and improved our single wafer SPM tool for several months hand in hand with our leading customer and confirmed 50 nanoparticle performance.

David Wang: We tested and improved our single wafer SPM tool for several months, hand in hand with our leading customer, and confirmed 50 nanoparticle performance. This led to volume orders from numerous different customers. We are confident that we can reproduce each customer's specific production environment in our lab, resulting in shorter qualification on the order of few quarter rather than more than a year. Next, our Oregon facility. Please turn to slide 9. We continue to advance investment in Oregon. We remain on track for in-house demo lab with multiple tools and the capability to produce US-made tool in Oregon by year-end of 2026. This is important for our global customer, and we believe it will strengthen our position as a key local partner at this scale of production. Our global initiatives are beginning to pay off.

Speaker #3: This lead to volume orders from numerous different customers. We are confident that we can produce each customer-specific production environment in our lab, resulting in shorter qualification on order a few quarter rather than more than a year.

Speaker #3: Next, our Oregon facility pretend to slide 9. We continue to advance investment in Oregon. We remain on track for in-house demo lab with multiple tools and the capability to produce US-made tools in Oregon by year-end 2026.

Speaker #3: This is important for our global customer, and we believe it will strengthen our position as a key local partner as they scale production. Our global initiatives are beginning to pay off.

Speaker #3: By the end of 2026, we expect to have more than 20 tools installed outside of our mainland China market. This is including about 10 customers in 5 countries or no still early day for our global deployment.

David Wang: By the end of 2026, we expect to have more than 20 tools installed outside of our Mainland China market. This includes about 10 customers in 5 countries. Although still early days for our global deployment, our engagement teams are growing, and we remain confident that our investment in global sales and service team will deliver good results. ACM Shanghai continues to play a critical role in our overall strategy, serving as a leading supplier to the semiconductor industry in Asia and as a key source of capital to support our global expansion. We completed a minority share sale last February, generating approximately $110 million in gross proceeds, and enabled a strong financial footprint on our US account. We intend to deploy this capital to supporting our US expansion and broader global growth initiatives.

Speaker #3: Our engagement are growing and we remain confident that our investment in global sales and service team will deliver good results. ACM Shanghai continue to play a critical role in our overall strategy serving as a leading supplier to the semiconductor industry in Asia.

Speaker #3: And as a key source of capital to support our global expansion. We completed a minority share sale last February generating approximately $110 million in gross proceeds.

Speaker #3: And enable this fund through our US account. We intend to deploy this capital to supporting our US expansion and broader global growth initiatives. In April, ACM Shanghai announced a proposed eight-year secondary listing in Hong Kong.

David Wang: In April, ACM Shanghai announced a proposed H-share secondary listing in Hong Kong. Turning to our outlook for the full year 2026. Please turn to slide 10. In mid-January, we introduced our 2026 revenue outlook in the range of 1.08 to 1.075 billion. This implying 25% year-over-year growth at the midpoint. We iterate this outlook today. We are expecting our annual shipment growth will outpace our revenue growth in 2026. Let me turn the call over to our CFO, Mark, who will review details of our first quarter results. Mark, please.

Speaker #3: Now turning to our outlook for the full year 2026, please tend to slide 10. In the middle of January, we introduced our 2026 revenue outlook in the range of $1.08 to $1.175 billion.

Speaker #3: This implies 25% year-over-year growth and middle point. We iterate this outlook today. We are expecting our annual shipment growth will outpace our revenue growth in 2026.

Speaker #3: Now let me turn the call over to our CFO, Mark, who will review details of our first quarter results. Mark, please.

Speaker #2: Thank you, David. Good day, everyone. Please turn to slide 11. That slide note otherwise I'll refer to non-GAAP financial measures, which exclude stock-based compensation, and unrealized gain loss on short-term investments.

Mark McKechnie: Thank you, David, and good day, everyone. Please turn to slide 11. Unless I note otherwise, I will refer to non-GAAP financial measures, which exclude stock-based compensation and unrealized gain loss on short-term investments. Reconciliation of these non-GAAP measures to comparable GAAP measures is included in our earnings release. Also, unless otherwise noted, the following figures refer to Q1 2026, and comparisons are with Q1 2025. I will now provide the financial highlights. Revenue was $231.3 million, up 34.2%. Revenue for single wafer cleaning, Tahoe and semi-critical cleaning was $122.5 million, down 5.5%, and it represented about 53% of sales for the quarter. As David noted, this included very little contribution from new products.

Speaker #2: Reconciliation of these non-GAAP measures to comparable GAAP measures is included in our earnings release. Also, unless otherwise noted, the following figures refer to the first quarter of 2026 and comparisons are with the first quarter of 2025.

Speaker #2: I will now provide the financial highlights. Revenue was $231.3 million up 34.2%. Revenue for single wafer cleaning Tahoe and semi-critical cleaning was $122.5 million down 5.5% and it represented about 53% of sales for the quarter.

Speaker #2: As David noted, this included very little contribution from new products. We expect significant shipments of SPM to ramp through the year followed by revenue contribution in later quarters.

Mark McKechnie: We expect significant shipments of SPM to ramp through the year, followed by revenue contribution in later quarters. For the full year 2026, we do anticipate the mix in cleaning will normalize towards the 65% level, 6, similar to the mix in 2025. Revenue for ECP front-end packaging, furnace and other technologies was $84.2 million, up 204.9%, and represented 36.4% of sales for the quarter. The majority was ECP front end, and we had very little contribution from furnace. Revenue from advanced packaging, excluding ECP, services and spares, was $24.5 million, up 62%, and represented 10.6% of sales for the quarter. Total shipments were $240.7 million, up 53.6%.

Speaker #2: For the full year 2026, we do anticipate the mixing cleaning will normalize towards the $65% level. Similar to the mix in 2025. Revenue for ECP front-end packaging furnace and other technologies was $84.2 million up 204.9% and represented 36.4% of sales for the quarter.

Speaker #2: The majority was ECP front-end and we had very little contribution from furnace. Revenue from advanced packaging excluding ECP services and spares was $24.5 million up 62% and represented 10.6% of sales for the quarter.

Speaker #2: Total shipments were $240.7 million up 53.6%. As David noted, this was driven by solid demand and good execution and also cleaning shipments grew by 32%.

Mark McKechnie: As David noted, this was driven by solid demand and good execution, also cleaning shipments grew by 32%. Approximately 15% of the shipments were catch-up from tools that were originally scheduled for Q4 delivery. For 2026, we continue to expect shipment growth to outpace revenue growth. Gross margin was 46.5% versus 48.2%. Q1 gross margin was above the midpoint of our long-term target model of 42% to 48%, a good recovery from the low 40% range in Q3 and Q4 of 2025. Favorable product mix, a slightly lower impact from the inventory provision led to the recovery. We maintain our 42% to 48% target range, note that product mix can cause fluctuations on a quarterly basis. Operating expenses were $65.8 million, up 38.5%.

Speaker #2: Approximately 15% of the shipments were catch-up from tools that were originally scheduled for Q4 delivery. For 2026, we continue to expect shipment growth to outpace revenue growth.

Speaker #2: Gross margin was 46.5% versus 48.2%. Q1 gross margin was above the midpoint of our long-term target model of 42 to 48% and a good recovery from the low 40% range in Q3 and Q4 of 2025.

Speaker #2: Favorable product mix and a slightly lower impact from the inventory provision led to the recovery. We maintain our 42 to 48% target range and note that product mix can cause fluctuations on a quarterly basis.

Speaker #2: Operating expenses were $65.8 million up 38.5%. R&D was 15% of sales. Sales and marketing was $8.3% of sales and GNA was $5.1% of sales.

Mark McKechnie: R&D was 15% of sales and marketing was 8.3% of sales, and G&A was 5.1% of sales. For 2026, we plan for R&D in the 16% to 18%, sales and marketing in the 8% to 9% range, and G&A in the 5% to 6% range. Operating income was $41.8 million versus $35.6 million. Operating margin was 18.1% as compared to 20.7%. Long term, we look to grow our R&D spending in line with revenue, but to show operating leverage in SG&A. Income tax expense was $3.8 million versus $2.2 million. For 2026, we expect our effective tax rate in the 8% to 10% range. Net income attributable to ACM Research was $24.3 million versus $31.3 million.

Speaker #2: For 2026, we plan for R&D in the $16 to $18%. Sales and marketing in the $8 to $9% range and GNA in the $5 to $6% range.

Speaker #2: Operating income was $41.8 million versus 35.6 million. Operating margin was 18.1% as compared to 20.7%. Long-term, we look to grow our R&D spending in line with revenue but to show operating leverage in SGNA.

Speaker #2: Income tax expense was $3.8 million versus $2.2 million. For 2026, we expect our expected tax rate in the $8 to $10% range. Net income attributable to ACM research was $24.3 million versus $31.3 million.

Speaker #2: Net income was $24.3 million versus $31.3 million. I just said that. Okay. Our non-GAAP net income excluded $5.6 million in stock-based compensation expense for the first quarter.

Mark McKechnie: Net income was $24.3 million versus $31.3 million. I just said that. Our non-GAAP net income excluded $5.6 million in stock-based compensation expense for Q1. We anticipate SBC will increase in Q2 due to option grants related to ACM Shanghai stock that were granted in Q1. Net income per diluted share was $0.34 versus $0.46. On to the balance sheet and cash flow items. Cash and cash equivalents, restricted cash, and time deposits were $1.25 billion at the end of Q1 2026 versus $1.13 billion at the end of 2025. Net cash, which excludes short-term and long-term debt, was $924.2 million at quarter end versus $844.5 million at year-end 2025.

Speaker #2: We anticipate SPC will increase in Q2 due to option grants related to ACM Shanghai stock that were granted in Q1. Net income for diluted share was $34 versus $46.

Speaker #2: Now onto the balance sheet and cash flow items. Cash and cash equivalents restricted cash and time deposits were $1.25 billion at the end of the first quarter 2026 versus $1.13 billion at the end of 2025.

Speaker #2: Net cash, which excludes short-term and long-term debt, was $924.2 million at quarter end versus $844.5 million at year-end 2025. Total inventory was $738 million versus $702.6 million at year-end 2025.

Mark McKechnie: Total inventory was $738 million versus $702.6 million at year-end 2025. Raw materials were $377.9 million, up $28.3 million quarter over quarter. We made additional strategic purchases to support production plans and to mitigate potential supply chain risk. Work in process was $81.6 million, up $22.2 million quarter over quarter. Finished goods inventory was $278.4 million, down $13.1 million quarter over quarter. Finished goods inventory primarily consists of first tools under evaluation at our customer sites, along with finished goods located at ACM's facilities. Cash used by operations was $29.5 million. Capital expenditures were $22 million. For the full year 2026, we now expect to spend about $175 million in capital expenditures. That concludes our prepared remarks.

Speaker #2: Raw materials were $377.9 million up 28.3 million quarter over quarter. We made additional strategic purchases to support production plans and to mitigate potential supply chain risk.

Speaker #2: Work in process was $81.6 million, up $22.2 million quarter over quarter. Finished goods inventory was $278.4 million, down $13.1 million quarter over quarter. Finished goods inventory primarily consists of first tools under evaluation at our customer sites, along with finished goods located at ACM's facilities.

Speaker #2: Cash used by operations was $29.5 million. Capital expenditures were $22 million. For the full year 2026, we now expect to spend about $175 million in capital expenditures.

Speaker #2: That includes our prepared remarks let's open the call for any questions that you may have. Operator, please go ahead.

Mark McKechnie: Let's open it to call for any questions that you may have. Operator, please go ahead.

Speaker #1: Thank you. At this time, we'll conduct the question-and-answer session as mentioned. As a reminder, you'll need to press star 11 on your telephone and wait for your name to be announced.

Operator: Thank you. Your first question comes on the line from Suji Desilva with Roth Capital.

Speaker #1: To withdraw your question, please press star 11 again. Please stand by while we compile our question. Your first question comes online with Roth Capital, your line is now open.

Speaker #2: Hi, David. Hi, Mark. Can you talk about the cleaning segment and what drove the decline year over year in 1Q and then how it's going to ramp up?

Suji Desilva: Hi, David. Hi, Mark. Can you talk about the cleaning segment and what drove the decline year over year in 1Q? How it is gonna ramp up? What caused that pause? It would be helpful to understand that.

Speaker #2: What caused that pause? It'd be helpful to understand that.

Speaker #3: Okay. Thanks, Suji. Actually, let's put it this way. And the 2025, we started to see our cleaning product has been going through the many applications, including those material notes and all the advanced notes.

David Wang: Okay. Thanks, Suji. Actually, let's put it this way. You know, the 2025, we start to see our cleaning product, you know, has been go through the many application, including those mature nodes and all the advanced nodes. The 2025, we're too facing some, you know, difficulty and also problem for those new applications. With the 12 months, you know, our problem-solving with the customer, especially most important in our Lingang production has started using. Those kind of problem actually we're mostly solving already. That really show that is, you know, I want to say last whole year progress also are difficult. That's why you can see impact our Q1 revenue.

Speaker #3: So the 2025, we do face some difficulty and also problem, right, for those new applications. And with the 12 months, our problem-solving with the customer especially most important in the Lingang production that started using.

Speaker #3: So those kind of problems actually were mostly solving already. And that really showed that I want to say last whole year progress and also are difficult.

Speaker #3: That's why you can see impact our Q1 revenue. However, as I said, since we're solving most of the issue, even today, our performance some two performance even outpace our leading supplier from global.

David Wang: However, as I said, since we are solving most of the issue, even today, our performance, you know, some tool performance even outpace of leading supplier, you know, from global. We see that they're really growing for our revenue. You can see that Q1, our revenue grow, I must say our shipment from the cleaning product is a 32% increase year over year, right? I can give another picture of probably backlog increase from this H1 versus, you know, last 1 year, H1 were almost like a 50% increase too for the PO receiving. That really show the momentum continuing. In my script, I specifically mentioned about this SPM process.

Speaker #3: So we see that really growing for our revenue. And you can see that the first quarter, our revenue I'm going to say our shipment from the cleaning product is at 32% increase year over year, right?

Speaker #3: Let me give you another picture. Probably backlog increase from the this first six months versus last one year, first six months were almost like 50% increase too for the PO receiving.

Speaker #3: So that's really show the momentum continuing and also in my script, I specifically mentioned about this SPM process. It's really our proprietary technology really gaining customer interest especially reach excellent result at the 50 nanoparticle.

David Wang: It's really our proprietary technology really gaining customer interest, especially reach excellent result at a 50 nanoparticle size. That really show our technology is better than the, you know, leading supplier. We're have a confidence you can take your significant market share in the SPM business, right? We're expecting 15 to 20 tool will deliver to the customer, you know, in the, in Asia or in China too. Anyway, that's I think you know the answer for you.

Speaker #3: Size. That's really show our technology is better than the leading supplier. So we have confidence you can take care significant market share in the SPM business, right?

Speaker #3: We're expecting 15 to 20 tools will deliver to the customer in the Asia or in China too. So anyway, that's, I think, the answer for you.

Speaker #2: Very helpful, Color. And then, David, just kind of following through on that, with shipments expected to outpace revenue in '26, would we think that '27 should be an above-trend year?

Suji Desilva: Very helpful color. Then David, just kind of following through on that. With shipments expected to outpace revenue in 2026, would we think that 2027 should be an above trend year? I mean, obviously you're not guiding, but just trying to understand if the implications of that.

Speaker #2: I mean, obviously, you're not guiding, but just trying to understand if the implications of that.

Speaker #3: Well, I mean, '27 is still a little bit far away, right? But I want to see that our let me put it this way.

David Wang: Well, I mean, 2027 is a little bit far away, right? I want to say that, let me put it this way. 2026, we gain a lot of share, I mean, PO or the custom interest for our cleaning tool, obviously copper plating tool, right? Copper plating, you can see the growth a lot. We see the interest, you know, people were interest our furnace and the PECVD and the track system. I want to see that at 2027, we see our new product, including horizontal, you know, copper plating for panel tool will get into the revenue and shipment, you know, picture in 2027.

Speaker #3: 2026, we're getting a lot of share. I mean, PO or the customer interest for our cleaning tool obviously cover plating tool, right? Cover plating, you can see the growth a lot.

Speaker #3: And also, we see the interest people were interested in our furnace and the PCVD and the track system. So I want to see that 2027, we see our new product, including horizontal cover plating for panel too, we're getting into the revenue and the shipment picture in the 2027.

Speaker #3: So as I mentioned in a couple of earnings call, with our new product started playing into our product line, we see a lot of bigger growth.

David Wang: As I mentioned in a couple of earnings call, with our new product sort of playing into our, you know, the product line, we see a lot of bigger, you know, growth in next few years. Really supporting ACM's multi-product, you know, strategy and continue to grow our long-term revenue.

Speaker #3: And in the next few years, and really supporting ACM's multi-product strategy and continue to grow our long-term revenue.

Suji Desilva: Thanks, David. That helps paint a picture. I'll pass it on.

Speaker #2: Thanks, David. That helps paint a picture. I'll pass it along.

Speaker #4: Thanks, Suji. Yeah. Oh, next question, operator, please.

Steven Pelayo: Thanks, Suji. Yeah.

Suji Desilva: Thank you.

Steven Pelayo: Oh, next question, operator, please. Yeah.

Speaker #2: Yeah.

Speaker #1: Yes. Thank you. Your next question comes online of Dennis Petachin with Needham and Company. Your line is now open.

Operator: Yes. Thank you. Your next question comes the line of Charles Shi with Needham & Company. Your line is now open.

Speaker #5: I much appreciate it. Just one question from us today. So it looks like the ECP, the front-end packaging or some other technology segment has been seeing pretty sustained strength up very significantly both year over year and quarter over quarter.

Charles Shi: Much appreciated. Just 1 question from us today. It looks like ECP, the front-end packaging furnace and other technology segment, has been seeing pretty sustained strength, you know, up very significantly both year-over-year and quarter-over-quarter. Can you tell us more about, you know, what's doing well in that segment? What kind of customers are adopting which tools? Just some more color would be great. Thank you.

Denis Pyatchanin: Much appreciated. Just 1 question from us today. It looks like ECP, the front-end packaging furnace and other technology segment, has been seeing pretty sustained strength, you know, up very significantly both year-over-year and quarter-over-quarter. Can you tell us more about, you know, what's doing well in that segment? What kind of customers are adopting which tools? Just some more color would be great. Thank you.

Speaker #5: Can you tell us more about what's doing well in that segment? What kind of customers are adopting? Which tools? Just some more color would be great.

Speaker #5: Thank you.

Speaker #3: Yeah. I want to see that. This plating business has been growing a lot, right? Obviously, front-end growing, and also you can see HBM is also driving.

David Wang: Yeah. I want to say that this, you know, plating business has been grow a lot, right. Obviously, front-end growing, also can see HBM is also driving. Obviously, advanced packaging, you know, for all the 2.5D and application also growing and driving too. That's really driving factor for the copper plating and also the, you know, our advanced packaging wet process tool, including coater/developer, wet etcher, PR stripper, and cleaning.

Speaker #3: And obviously, advanced packaging for all the 2.5D and application also growing. And the driving too. So that's really driving factor for the cover plating and also the our advanced packaging wet process tool, including coated developer, wet etcher, PR stripper, and cleaning.

Speaker #5: I much appreciate it. Thank you.

Charles Shi: Much appreciated. Thank you.

Denis Pyatchanin: Much appreciated. Thank you.

Speaker #3: Thank you.

David Wang: Thank you.

Speaker #2: Great. Thanks, Dennis. Yeah.

Steven Pelayo: Great. Thanks, Charles Shi. Yeah.

Speaker #1: Okay, thank you. Seeing no more questions in the queue, let me turn the call back to Steven Pelayo for closing remarks.

Operator: Okay. Thank you. Seeing no more questions in the queue, let me turn the call back to Steven Pelayo for closing remarks.

Speaker #4: Great. Thank you. Before we conclude, I just want to give everyone a quick reminder on our upcoming investor conferences. On June 17th, we will present at the 16th Annual Roth London Conference at the Four Seasons Park Lane in London.

Steven Pelayo: Great. Thank you. Before we conclude, I just want to give everyone a quick reminder on our upcoming investor conferences. On June 17, we will present at the 16th Annual ROTH London Conference at the Four Seasons Park Lane in London. Attendance at the conference is by invitation only. For interested investors, please contact your respective sales representative to register and schedule one-on-one meetings with the management team. This concludes the call, and you may now disconnect. Take care.

Speaker #4: Attendance at the conference is by invitation only. For interested investors, please contact your respective sales representative to register and schedule one-on-one meetings with the management team.