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Axcelis Announces Financial Results for First Quarter 2025

1. Q1 revenue was $192.6 million, down from $252.4 million last year. 2. Gross margins remained strong at 46.1%, slightly up year-over-year. 3. Operating margins declined to 15.1%, reflecting decreased customer investments. 4. Projected Q2 revenue is $185 million, indicating further revenue decline. 5. Company maintains strong cash position with no debt and ongoing share repurchase.

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FAQ

Why Bearish?

The significant drop in revenue and earnings compared to the previous year indicates potential challenges ahead. Similar downturns in tech firms have often led to negative investor sentiment and stock price drops, particularly when guidance shows continued declines.

How important is it?

Given the substantial changes in revenue and earnings, investors will closely monitor ACLS for future growth prospects. The company's strong cash position and no debt somewhat mitigate concerns but don’t fully offset negative trends.

Why Short Term?

The immediate effects of Q1 results and guidance for Q2 will likely influence investor sentiment quickly. Investors often react sharply to quarterly results, especially if the outlook suggests ongoing struggles.

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Q1 Highlights: Revenue of $192.6 million GAAP Gross Margin of 46.1%, and Non-GAAP Gross Margin of 46.4% GAAP Operating Margin of 15.1% and Non-GAAP Operating Margin of 18.3% GAAP Diluted earnings per share of $0.88, and Non-GAAP Diluted earnings per share of $1.04 , /PRNewswire/ -- Axcelis Technologies, Inc. (Nasdaq: ACLS) today announced financial results for the first quarter ended March 31, 2025. President and CEO Russell Low commented, "We executed well in the first quarter, delivering strong profitability despite a moderation in customer investments and a more uncertain broader economic backdrop. Axcelis is well positioned to navigate a dynamic macroeconomic and global trade environment with an agile global manufacturing and supply chain footprint that we have optimized over the past few years. This provides a solid platform for us to meet our customers' needs while continuing to invest in innovation to capture the long-term growth opportunities that lie ahead." Executive Vice President and Chief Financial Officer Jamie Coogan said, "We delivered strong margins and cash flow in the first quarter, reflecting solid execution and the resilience of our operating model. We exited the quarter with a robust cash position and no debt, and are repurchasing shares in an opportunistic but disciplined manner, while continuing to invest in our business." Results Summary (In thousands, except per share amounts and percentages) Three months ended March 31, 2025 2024   Revenue $ 192,563 $ 252,372   Gross margin 46.1 % 46.0 %   Operating margin 15.1 % 22.4 %   Net income $ 28,579 $ 51,595   Diluted earnings per share $ 0.88 $ 1.57 Non-GAAP Results    Non-GAAP gross margin 46.4 % 46.1 %   Non-GAAP operating margin 18.3 % 24.1 %   Adjusted EBITDA $ 39,520 $ 64,545   Non-GAAP net income $ 33,784 $ 55,234   Non-GAAP diluted earnings per share $ 1.04 $ 1.68 Business OutlookFor the second quarter ending June 30, 2025, Axcelis expects revenues of approximately $185 million. GAAP earnings per diluted share of approximately $0.57, and non-GAAP earnings per share of approximately $0.73. Please refer to Second Quarter Outlook under the "Notes on our Non-GAAP Financial Information" section of this document for detail relating to the computation of non-GAAP earnings per diluted share as well as the Safe Harbor Statement section of this document. First Quarter 2025 Conference CallThe Company will host a call today to discuss the results at 8:30 a.m. ET. The call will be available via webcast that can be accessed through the Investors page of Axcelis' website at www.axcelis.com, or by registering as a participant here: https://register-conf.media-server.com/register/BI454c6816ae884406ade486cc1372dc9f Webcast replays will be available for 30 days following the call. Use of Non-GAAP Financial ResultsThis press release includes financial measures that are not presented in accordance with U.S. generally accepted accounting principles ("Non-GAAP financial measures"). These non-GAAP financial measures include non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income, non-GAAP operating margin, non-GAAP income tax provision, Adjusted EBITDA, non-GAAP net income, and non-GAAP diluted earnings per share, and reflect adjustments for the impact of share-based compensation expense and certain items related to restructuring and severance charges and any associated adjustments. Reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are provided in the financial tables included in this release. For further information regarding these non-GAAP financial measures, please refer to the tables presenting reconciliations of our non-GAAP results to our GAAP results and the "Notes on Our Non-GAAP Financial Information" at the end of this press release. Safe Harbor Statement This press release contains, and the conference call will contain, forward-looking statements under the Private Securities Litigation Reform Act safe harbor provisions. These statements, which include our expectations for spending in our industry and guidance for future financial performance, are based on management's current expectations and should be viewed with caution. They are subject to various risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements, many of which are outside the control of the Company, including that customer decisions to place orders or our product shipments may not occur when we expect, that orders may not be converted to revenue in any particular quarter, or at all, whether demand will continue for the semiconductor equipment we produce or, if not, whether we can successfully meet changing market requirements, and whether we will be able to maintain continuity of business relationships with and purchases by major customers. Increased competitive pressure on sales and pricing, increases in material and other production costs that cannot be recouped in product pricing and instability caused by changing global economic, political or financial conditions, including with respect to the imposition of tariffs on our products or components of our products, could also cause actual results to differ materially from those in our forward-looking statements. These risks and other risk factors relating to Axcelis are described more fully in the most recent Form 10-K filed by Axcelis and in other documents filed from time to time with the Securities and Exchange Commission. About Axcelis:Axcelis (Nasdaq: ACLS), headquartered in Beverly, Mass., has been providing innovative, high-productivity solutions for the semiconductor industry for over 45 years. Axcelis is dedicated to developing enabling process applications through the design, manufacture and complete life cycle support of ion implantation systems, one of the most critical and enabling steps in the IC manufacturing process. Learn more about Axcelis at www.axcelis.com. CONTACTS: Investor Relations Contact:David RyzhikSenior Vice President, Investor Relations and Corporate StrategyTelephone: (978) 787-2352Email: [email protected] Press/Media Relations Contact: Maureen HartSenior Director, Corporate & Marketing CommunicationsTelephone: (978) 787-4266Email: [email protected] Axcelis Technologies, Inc. Consolidated Statements of Operations (In thousands, except per share amounts) (Unaudited) Three months ended March 31, 2025 2024 Revenue: Product $ 182,824 $ 243,418 Services 9,739 8,954 Total revenue 192,563 252,372 Cost of revenue: Product 94,500 127,912 Services 9,295 8,409 Total cost of revenue 103,795 136,321 Gross profit 88,768 116,051 Operating expenses: Research and development 27,128 25,662 Sales and marketing 15,124 17,445 General and administrative 17,357 16,405 Total operating expenses 59,609 59,512 Income from operations 29,159 56,539 Other income (expense): Interest income 5,601 5,516 Interest expense (1,367) (1,346) Other, net (309) (1,710) Total other income 3,925 2,460 Income before income taxes 33,084 58,999 Income tax provision 4,505 7,404 Net income $ 28,579 $ 51,595 Net income per share: Basic $ 0.89 $ 1.58 Diluted $ 0.88 $ 1.57 Shares used in computing net income per share: Basic weighted average shares of common stock 32,258 32,638 Diluted weighted average shares of common stock 32,335 32,926 Axcelis Technologies, Inc. Consolidated Balance Sheets (In thousands, except per share amounts) (Unaudited) March 31, December 31, 2025 2024 ASSETS Current assets: Cash and cash equivalents $ 183,957 $ 123,512 Short-term investments 403,102 447,831 Accounts receivable, net 164,949 203,149 Inventories, net 295,850 282,225 Prepaid income taxes 6,615 6,420 Prepaid expenses and other current assets 59,463 60,471 Total current assets 1,113,936 1,123,608 Property, plant and equipment, net 57,034 53,784 Operating lease assets 28,767 29,621 Finance lease assets, net 15,025 15,346 Long-term restricted cash 7,553 7,552 Deferred income taxes 69,334 68,277 Other assets 48,969 50,593 Total assets $ 1,340,618 $ 1,348,781 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 38,985 $ 46,928 Accrued compensation 14,796 25,536 Warranty 11,882 13,022 Deferred revenue 110,456 94,673 Current portion of finance lease obligation 1,370 1,345 Other current liabilities 22,881 26,018 Total current liabilities 200,370 207,522 Long-term finance lease obligation 41,958 42,329 Long-term deferred revenue 28,868 43,501 Other long-term liabilities 42,184 42,639 Total liabilities 313,380 335,991 Stockholders' equity: Common stock, $0.001 par value, 75,000 shares authorized; 32,129 shares issued and outstanding at March 31, 2025; 32,365 shares issued and outstanding at December 31, 2024 32 32 Additional paid-in capital 547,020 548,654 Retained earnings 485,673 470,318 Accumulated other comprehensive loss (5,487) (6,214) Total stockholders' equity 1,027,238 1,012,790 Total liabilities and stockholders' equity $ 1,340,618 $ 1,348,781 Axcelis Technologies, Inc. Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) Three months ended March 31, 2025 2024 Cash flows from operating activities Net income $ 28,579 $ 51,595 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 4,309 3,775 Stock-based compensation expense 4,903 4,690 Other (1,682) 3,143 Change in operating assets and liabilities, net 3,686 (20,980) Net cash provided by operating activities 39,795 42,223 Cash flows from investing activities Expenditures for property, plant and equipment and capitalized software (4,960) (1,620) Other changes in investing activities, net 45,429 (54,071) Net cash provided by (used in) investing activities 40,469 (55,691) Cash flows from financing activities Repurchase of common stock (18,178) (14,999) Other changes from financing activities, net (1,932) (3,056) Net cash used in financing activities (20,110) (18,055) Effect of exchange rate changes on cash and cash equivalents 292 (1,813) Net increase (decrease) in cash, cash equivalents and restricted cash 60,446 (33,336) Cash, cash equivalents and restricted cash at beginning of period 131,064 173,951 Cash, cash equivalents and restricted cash at end of period $ 191,510 $ 140,615 Notes on Our Non-GAAP Financial Information Management uses non-GAAP gross profit, gross margin, operating income, operating margin, income tax provision, net income, diluted earnings per share, and Adjusted EBITDA to evaluate the Company's operating and financial performance and for planning purposes. Axcelis believes these measures enhance an overall understanding of its performance and investors' ability to review the Company's business from the same perspective as the Company's management.  There are limitations in using non-GAAP financial measures because the non-GAAP financial measures are not prepared in accordance with GAAP, may be different from non-GAAP financial measures used by other companies, and may exclude certain items that may have a material impact upon our reported financial results. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP. Totals presented may not sum and percentages may not recalculate using figures presented due to rounding. Axcelis Technologies, Inc.  Schedule Reconciling Selected Non-GAAP Financial Measures (In thousands, except per share amounts and percentages) Three months ended March 31, 2025 2024 GAAP gross profit $ 88,768 $ 116,051 Restructuring1 226 — Stock-based compensation 353 290 Non-GAAP gross profit $ 89,347 $ 116,341 Non-GAAP gross margin 46.4 % 46.1 % Operating expenses $ 59,609 $ 59,512 Bad debt expense — 459 Restructuring (923) — Stock-based compensation (4,550) (4,400) Non-GAAP operating expenses $ 54,136 $ 55,571 GAAP operating income $ 29,159 $ 56,539 Bad debt expense — (459) Restructuring1 1,149 — Stock-based compensation 4,903 4,690 Non-GAAP operating income $ 35,211 $ 60,770 Non-GAAP operating margin 18.3 % 24.1 % GAAP income tax provision $ 4,505 $ 7,404 Income tax effect of non-GAAP adjustments2 847 592 Non-GAAP income tax provision $ 5,352 $ 7,996 GAAP net income $ 28,579 $ 51,595 Bad debt expense — (459) Restructuring1 1,149 — Stock-based compensation 4,903 4,690 Income tax effect of non-GAAP adjustments2 (847) (592) Non-GAAP net income $ 33,784 $ 55,234 GAAP diluted EPS $ 0.88 $ 1.57 Bad debt expense — (0.01) Restructuring1 0.04 — Stock-based compensation 0.15 0.14 Income tax effect of non-GAAP adjustments2 (0.03) (0.02) Non-GAAP diluted EPS $ 1.04 $ 1.68 Note 1: Restructuring and other costs primarily related to early retirement programs and severance costs, due to global cost-saving initiatives. Note 2: Impact of taxes from non-GAAP adjustments, uses adjusted tax rate of 14%. Axcelis Technologies, Inc.  Reconciliation of Net Income to Adjusted EBITDA (In thousands, except percentages) Three months ended March 31, 2025 2024 Net income $ 28,579 $ 51,595 Other (income)/expense (3,925) (2,460) Income tax provision 4,505 7,404 Depreciation & amortization 4,309 3,775 Subtotal 33,468 60,314 Bad debt expense — (459) Restructuring1 1,149 — Stock-based compensation 4,903 4,690 Adjusted EBITDA $ 39,520 $ 64,545 Adjusted EBITDA margin 20.5 % 25.6 % Note 1: Restructuring and other costs primarily related to early retirement programs and severance costs, due to global cost-saving initiatives. Axcelis Technologies, Inc.  Second Quarter Outlook GAAP to Non-GAAP Diluted Earnings Per Share Three months ended June 30, 2025 GAAP diluted EPS $ 0.57 Stock-based compensation 0.18 Income tax effect of non-GAAP adjustments1 (0.03) Non-GAAP diluted EPS $ 0.73 Note 1: Impact of taxes from non-GAAP adjustments, uses adjusted tax rate of 14%. Figures may not sum due to rounding. SOURCE Axcelis Technologies, Inc. WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM? 440k+ Newsrooms & Influencers 9k+ Digital Media Outlets 270k+ Journalists Opted In

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