Axcelis Announces Financial Results for Third Quarter 2025

Q3 Highlights: Revenue of $213.6 million GAAP Gross Margin of 41.6%, and Non-GAAP Gross Margin of 41.8% GAAP Operating Margin of 11.7% and Non-GAAP Operating Margin of 18.2% GAAP Diluted earnings per share of $0.83, and Non-GAAP Diluted earnings per share of $1.21 , /PRNewswire/ -- Axcelis Technologies, Inc. (Nasdaq: ACLS) today announced financial results for the third quarter ended September 30, 2025. President and CEO Russell Low commented, "We delivered another solid quarter, with sales and earnings both exceeding our expectations. We are also pleased to report record CS&I revenue in the quarter, reflecting the success of our aftermarket strategy and the continued expansion of our installed base. We are executing on our product development roadmap and customer engagement initiatives with focus and urgency, while maintaining disciplined cost controls. These actions have enabled us to successfully navigate the anticipated cyclical digestion period across our markets in 2025." Low added, "We entered the fourth quarter with a solid financial foundation and are well poised to execute on our strategy as we enter into our next chapter of growth and innovation. Our recently announced merger with Veeco Instruments marks a critical milestone that we believe will position the combined company to capitalize on powerful secular tailwinds including AI and electrification. By bringing our two companies together, we believe we are building a leading semiconductor equipment company with the capabilities, resources and financial foundation to drive sustainable growth and value creation for shareholders and deliver meaningful benefits to all stakeholders." Executive Vice President and Chief Financial Officer Jamie Coogan stated, "We generated robust operating leverage through higher volume and disciplined cost management, translating into strong free cash flow. With over $590 million in cash and investments on the balance sheet, Axcelis has ample flexibility to capitalize on our value-enhancing strategic initiatives and long-term growth priorities." Results Summary (In thousands, except per share amounts and percentages) Three months ended September 30, 2025 2024 Revenue $ 213,611 $ 256,564 Gross margin 41.6 % 42.9 % Operating margin 11.7 % 18.3 % Net income $ 25,986 $ 48,576 Diluted earnings per share $ 0.83 $ 1.49 Non-GAAP Results Non-GAAP gross margin 41.8 % 43.0 % Non-GAAP operating margin 18.2 % 21.7 % Adjusted EBITDA $ 43,202 $ 59,674 Non-GAAP net income $ 37,900 $ 56,191 Non-GAAP diluted earnings per share $ 1.21 $ 1.72 Business Outlook For the fourth quarter ending December 31, 2025, Axcelis expects revenues of approximately $215 million, GAAP earnings per diluted share of approximately $0.76, and non-GAAP earnings per share of approximately $1.12. Please refer to Fourth 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. Third 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/BI7b3b54c06ff14c8080f379ce76dc7cabWebcast 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, certain items related to restructuring and severance charges and any associated adjustments and transaction and integration costs associated with the merger agreement with Veeco Instruments announced on October 1, 2025. 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 StatementThis 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 and, with respect to the potential transaction with Veeco, failure to obtain applicable regulatory or stockholder approvals in a timely manner or otherwise; failure to satisfy other closing conditions to the proposed transaction or to complete the proposed transaction on anticipated terms and timing; negative effects of the announcement of the proposed transaction; risks that the businesses will not be integrated successfully or that the combined company will not realize expected benefits, cost savings, accretion, synergies and/or growth, or that such benefits may take longer to realize or may be more costly to achieve than expected; the risk that disruptions from the proposed transaction will harm business plans and operations; risks relating to unanticipated costs of integration; significant transaction and/or integration costs, or difficulties in connection with the proposed transaction and/or unknown or inestimable liabilities; restrictions during the pendency of the proposed transaction that may impact the ability to pursue certain business opportunities or strategic transactions; potential litigation associated with the proposed transaction; the potential impact of the announcement or consummation of the proposed transaction on the Company's, Veeco's or the combined company's relationships with suppliers, customers, employees and regulators; and demand for the combined company's products. Actual results may differ materially from those projected in such statements due to various factors, including but not limited to: economic, political and social conditions in the countries in which the Company and Veeco, their respective customers and suppliers operate; disruption to the Company's and Veeco's respective manufacturing facilities or other operations, or the operations of Company's and Veeco's respective customers and suppliers, due to natural catastrophic events, health epidemics or terrorism; ongoing changes in the technology industry, and the semiconductor industry in particular, including future growth rates, pricing trends in end-markets, or changes in customer capital spending patterns; the Company's, Veeco's and the combined company's ability to timely develop new technologies and products that successfully anticipate or address changes in the semiconductor industry; the Company's, Veeco's and the combined company's ability to maintain their respective technology advantage and protect their respective proprietary rights; the Company's, Veeco's and the combined company's ability to compete with new products introduced by their respective competitors; the Company's, Veeco's and the combined company's ability or the ability of their respective customers to obtain U.S. export control licenses for the sale of certain products or provision of certain services to customers in China. 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 Nine months ended September 30, September 30, 2025 2024 2025 2024 Revenue: Product $ 201,218 $ 246,826 $ 567,444 $ 735,626 Services 12,393 9,738 33,274 29,822 Total revenue 213,611 256,564 600,718 765,448 Cost of revenue: Product 112,078 136,379 302,041 399,049 Services 12,727 10,215 33,761 27,968 Total cost of revenue 124,805 146,594 335,802 427,017 Gross profit 88,806 109,970 264,916 338,431 Operating expenses: Research and development 24,640 26,395 78,832 77,843 Sales and marketing 15,838 16,808 45,965 51,483 General and administrative 23,308 19,854 56,976 52,842 Total operating expenses 63,786 63,057 181,773 182,168 Income from operations 25,020 46,913 83,143 156,263 Other income (expense): Interest income 5,465 6,560 16,547 18,126 Interest expense (1,305) (1,333) (4,028) (4,017) Other, net 970 3,225 2,569 1,257 Total other income 5,130 8,452 15,088 15,366 Income before income taxes 30,150 55,365 98,231 171,629 Income tax provision 4,164 6,789 12,290 20,593 Net income $ 25,986 $ 48,576 $ 85,941 $ 151,036 Net income per share: Basic $ 0.83 $ 1.49 $ 2.70 $ 4.63 Diluted $ 0.83 $ 1.49 $ 2.70 $ 4.61 Shares used in computing net income per share: Basic weighted average shares of common stock 31,287 32,550 31,796 32,595 Diluted weighted average shares of common stock 31,450 32,675 31,863 32,780 Axcelis Technologies, Inc. Consolidated Balance Sheets (In thousands, except per share amounts) (Unaudited) September 30, December 31, 2025 2024 ASSETS Current assets: Cash and cash equivalents $ 187,501 $ 123,512 Short-term investments 262,059 447,831 Accounts receivable, net 147,636 203,149 Inventories, net 324,342 282,225 Prepaid income taxes 4,687 6,420 Prepaid expenses and other current assets 57,804 60,471 Total current assets 984,029 1,123,608 Property, plant and equipment, net 57,979 53,784 Operating lease assets 29,499 29,621 Finance lease assets, net 14,440 15,346 Long-term restricted cash 7,626 7,552 Deferred income taxes 70,033 68,277 Long-term investments 143,214 - Other assets 45,120 50,593 Total assets $ 1,351,940 $ 1,348,781 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 52,466 $ 46,928 Accrued compensation 24,357 25,536 Warranty 9,258 13,022 Deferred revenue 81,486 94,673 Current portion of finance lease obligation 1,505 1,345 Other current liabilities 29,917 26,018 Total current liabilities 198,989 207,522 Long-term finance lease obligation 41,166 42,329 Long-term deferred revenue 47,434 43,501 Other long-term liabilities 44,207 42,639 Total liabilities 331,796 335,991 Stockholders' equity: Common stock, $0.001 par value, 75,000 shares authorized; 30,998 shares issued and outstanding at September 30, 2025; 32,365 shares issued and outstanding at December 31, 2024 31 32 Additional paid-in capital 532,951 548,654 Retained earnings 488,771 470,318 Accumulated other comprehensive loss (1,609) (6,214) Total stockholders' equity 1,020,144 1,012,790 Total liabilities and stockholders' equity $ 1,351,940 $ 1,348,781 Axcelis Technologies, Inc. Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) Three months ended Nine months ended September 30, September 30, 2025 2024 2025 2024 Cash flows from operating activities Net income $ 25,986 $ 48,576 $ 85,941 $ 151,036 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 4,328 3,906 13,152 11,542 Stock-based compensation expense 5,344 5,412 15,668 15,571 Other 6,907 (16,346) (4,110) (11,090) Change in other assets and liabilities, net 2,785 4,200 14,221 (39,021) Net cash provided by operating activities 45,350 45,748 124,872 128,038 Cash flows from investing activities Expenditures for property, plant and equipment and capitalized software (2,015) (3,899) (8,960) (7,523) Other changes in investing activities, net 3,393 (52,654) 46,194 (110,324) Net cash provided by (used in) investing activities 1,378 (56,553) 37,234 (117,847) Cash flows from financing activities Repurchase of common stock (32,335) (15,363) (95,850) (45,358) Other changes from financing activities, net (440) (630) (4,022) (11,291) Net cash used in financing activities (32,775) (15,993) (99,872) (56,649) Effect of exchange rate changes on cash and cash equivalents (106) 1,700 1,829 (774) Net increase (decrease) in cash, cash equivalents and restricted cash 13,847 (25,098) 64,063 (47,232) Cash, cash equivalents and restricted cash at beginning of period 181,280 151,817 131,064 173,951 Cash, cash equivalents and restricted cash at end of period $ 195,127 $ 126,719 $ 195,127 $ 126,719 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) Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 GAAP gross Profit $ 88,806 $ 109,970 $ 264,916 $ 338,431 Restructuring1 - - 226 876 Stock-based compensation 499 354 1,421 1,106 Non-GAAP gross profit $ 89,305 $ 110,324 $ 266,563 $ 340,413 Non-GAAP gross margin 41.8 % 43.0 % 44.4 % 44.5 % GAAP operating expense $ 63,786 $ 63,057 $ 181,773 $ 182,168 Transaction and integration3 (8,274) - (8,274) - Bad debt expense - (3,443) - (2,984) Restructuring1 (236) - (1,130) (553) Stock-based compensation (4,845) (5,058) (14,247) (14,465) Non-GAAP operating expense $ 50,431 $ 54,556 $ 158,122 $ 164,166 GAAP operating income $ 25,020 $ 46,913 $ 83,143 $ 156,263 Transaction and integration3 8,274 - 8,274 - Bad debt expense - 3,443 - 2,984 Restructuring1 236 - 1,356 1,429 Stock-based compensation 5,344 5,412 15,668 15,571 Non-GAAP operating income $ 38,874 $ 55,768 $ 108,441 $ 176,247 Non-GAAP operating margin 18.2 % 21.7 % 18.1 % 23.0 % GAAP income tax provision $ 4,164 $ 6,789 $ 12,290 $ 20,593 Income tax effect of Non-GAAPadjustments2 1,940 1,240 3,542 2,798 Non-GAAP income tax provision $ 6,104 $ 8,029 $ 15,832 $ 23,391 GAAP net income $ 25,986 $ 48,576 $ 85,941 $ 151,036 Transaction and integration3 8,274 - 8,274 - Bad debt expense - 3,443 - 2,984 Restructuring1 236 - 1,356 1,429 Stock-based compensation 5,344 5,412 15,668 15,571 Income tax effect of Non-GAAP adjustments2 (1,940) (1,240) (3,542) (2,798) Non-GAAP net income $ 37,900 $ 56,191 $ 107,697 $ 168,222 GAAP diluted EPS $ 0.83 $ 1.49 $ 2.70 $ 4.61 Transaction and integration3 0.26 - 0.26 - Bad debt expense - 0.11 - 0.09 Restructuring1 0.01 - 0.04 0.04 Stock-based compensation 0.17 0.16 0.49 0.48 Income tax effect of Non-GAAPadjustments2 (0.06) (0.04) (0.11) (0.09) Non-GAAP diluted EPS $ 1.21 $ 1.72 $ 3.38 $ 5.13 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%. Note 3: Transaction and integration costs include expenses associated with the merger agreement with Veeco Instruments, announced on October 1, 2025. Axcelis Technologies, Inc Reconciliation of Net Income to Adjusted EBITDA (In thousands, except percentages) Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 Net Income $ 25,986 $ 48,576 $ 85,941 $ 151,036 Other (income)/expense (5,130) (8,452) (15,088) (15,366) Income tax provision 4,164 6,789 12,290 20,593 Depreciation & amortization 4,328 3,906 13,152 11,542 Subtotal 29,348 50,819 96,295 167,805 Transaction and integration2 8,274 - 8,274 - Bad debt expense - 3,443 - 2,984 Restructuring1 236 - 1,356 1,429 Stock-based compensation 5,344 5,412 15,668 15,571 Adjusted EBITDA $ 43,202 $ 59,674 $ 121,593 $ 187,789 Adjusted EBITDA margin 20.2 % 23.3 % 20.2 % 24.5 % Note 1: Restructuring and other costs primarily related to early retirement programs and severance costs, due to global cost-saving initiatives. Note 2: Transaction and integration costs include expenses associated with the merger agreement with Veeco Instruments, announced on October 1, 2025. Axcelis Technologies, Inc Fourth Quarter Outlook GAAP to Non-GAAP Diluted Earnings Per Share Three months ended December 31, 2025 GAAP diluted EPS $ 0.76 Transaction and Integration2 0.19 Restructuring3 0.05 Stock-based compensation 0.18 Income tax effect of non-GAAP adjustments1 (0.06) Non-GAAP diluted EPS $ 1.12 Note 1: Impact of taxes from non-GAAP adjustments, uses adjusted tax rate of 14%. Note 2: Transaction and Integration costs include expenses associated with the merger agreement with Veeco Instruments, announced on October 1, 2025. Note 3: Restructuring and other costs primarily related to early retirement programs and severance costs, due to global cost-saving initiatives. SOURCE Axcelis Technologies, Inc.

Axcelis Announces Financial Results for Third Quarter 2025

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