Release Date: August 01, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Axcelis Technologies Inc (ACLS, Financial) delivered strong second quarter results with revenue of $257 million and earnings per diluted share of $1.55, exceeding expectations.
- The company experienced robust demand for its implantation systems in the silicon carbide market, driven by the expanding EV market.
- Axcelis Technologies Inc (ACLS) successfully closed a Purion Dragon evaluation unit for advanced R&D and received follow-on orders for volume manufacturing at three nanometers.
- The company has a healthy backlog of approximately $1 billion, indicating strong future demand.
- Axcelis Technologies Inc (ACLS) is making significant progress in geographic expansion, particularly in Japan, leveraging customer relationships and growing its presence in the country.
Negative Points
- Demand for silicon IGBT applications remained soft in the quarter, consistent with expectations.
- The memory market remains weak, with no systems revenue generated from this segment in the second quarter.
- General Mature demand may see some moderation in the second half, depending on the macroeconomic environment.
- The company incurred restructuring charges of approximately $1.4 million, impacting operating margins.
- Bookings are bouncing along the bottom, and while expected to improve, they remain a concern in the current market environment.
Q & A Highlights
Q: Has there been any changes since your Capital Markets Day that would change your opinion or give you more or less confidence in terms of near-term as well as going into next year?
A: Russell Low, President and CEO, stated that expectations for the full year have not materially changed since the Q1 call. The second half is expected to be slightly higher than the first half, with the fourth quarter being stronger. Power, led by silicon carbide, remains strong, while General Mature may see some moderation. Memory is soft, but some DRAM spending is expected as the year ends.
Q: At what point do you reassess the expectation of reaching $1.3 billion in 2025?
A: James Coogan, CFO, mentioned that achieving the $1.3 billion model in 2025 is possible but requires a step-up in demand across segments, particularly in Memory and General Mature. The timing and magnitude of recoveries are hard to predict, but the company remains focused on long-term opportunities, especially in Power and Advanced Logic.
Q: Are there any cancellations or push-outs in the backlog and bookings?
A: James Coogan, CFO, noted that while there are occasional purchase order movements, nothing overly material occurred. The differential in backlog was largely due to revenue load and bookings.
Q: Do you expect the breakdown of system revenue to remain consistent in the third quarter, and any shifts in revenue by segment going into the fourth quarter?
A: James Coogan, CFO, expects silicon carbide to remain strong, with General Mature being the largest revenue contributor. Memory is expected to pick up in the fourth quarter, while Advanced Logic may vary based on customer progress.
Q: What are your expectations for a NAND recovery, and when do you expect demand to drive growth?
A: Russell Low, President and CEO, indicated that NAND recovery is expected in 2025, with ASPs improving. NAND will trail DRAM recovery, and the company is seeing better pricing and demand fundamentals.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
