Axcelis Technologies, Inc.

Good day, ladies and gentlemen, and welcome to the Excellus Technologies call to discuss the company's results for the third quarter. My name is Corey, and I'll be your coordinator today. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your phone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference call is being recorded. I would now like to hand the conference call over to your host for today's call, Doug Lawson, Executive Vice President of Corporate Marketing and Strategy.

Thank you, Operator. This is Doug Lawson, Executive Vice President of Corporate Marketing and Strategy. And with me today is Russell Lowe, President and CEO, and Jamie Coogan, Executive Vice President and CFO. If you have not seen a copy of our press release issued yesterday, it is available on our website. 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's 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 Form 10-K annual report and other SEC filings which we urge you to review. Our actual results may differ materially from our current expectations. We do not assume any obligation to update these forward-looking statements. Now I'll turn the call over to President and CEO, Russell Lowe.

Good morning. Thank you for joining us for our third quarter 2023 earnings call. Sales continued to execute at a high level in the third quarter driven by strength in the power market. Third quarter revenue and EPS exceeded guidance of $292.3 million with earnings per share of $1.99. We are guiding fourth quarter revenue at approximately $295 million with gross margin of approximately 45%, operating profit approximately $73 million, and earnings per share of approximately $2. 2023 annual revenue is expected to be greater than $1.1 billion, representing year-over-year revenue growth of around 20% in a year in which overall WFE is expected to decrease by 20% to 30%. Backlog remains strong at $1.2 billion, with quarterly systems bookings increasing slightly to $198 million. The book-to-bill ratio is 0.83%, primarily due to increased shipments in the quarter. The power market continues to be an area of strength for Excellus, representing more than 60% of our system shipments for the third consecutive quarter. The overall mature process technology market generated 99% of the quarter's system shipments, with just 1% going to memory customers composed entirely of DRAM. The geographic mix of our system shipments in the third quarter was much more balanced, with the combined US and Europe representing 38%, China at 35%, Korea 12%, Taiwan 4%, Japan 3%, and the rest of the world at 8%. The power device segment, and in particular silicon carbide, has driven our growth during this downturn. We continue to win business from new customers and expand our product footprint with existing customers. We expect greater than 60% of our ship's system revenue in 2023 to come from power, with around 35% of total system revenue coming from carbide applications. The full Purion Power series product portfolio is important to our customers, and we continue to see increased adoption of Purion H200 silicon carbide and Purin XE silicon carbide systems. In Q3, we shipped a 200 millimeter Purin EXE silicon carbide system to a leading Japanese power device manufacturer. We also have three Purin H200 silicon carbide system evaluations underway with customers in multiple geographies. Two of these systems are 150 millimeters and one is a 200 millimeter system. These evaluation units give our customers a head start qualifying productivity-limiting recipes as they ramp to higher volumes. It also enables the customer to conduct optimization work on their devices utilizing the high energy and dose capabilities of the Purin H200 silicon carbide system. The importance of the three implanter types in silicon carbide is highlighted by the relatively even revenue split across the full Purin Power Series product family in 2023. Excellus is the only iron implantation company that can deliver complete respiratory coverage for all power device applications. We are considered a technology leader and the supplier of choice, providing the best product family and manufacturing capabilities. This means that using Excellus tools provides the lowest risk path to high volume manufacturing required to support aggressive fab ramp plans. Xcelis places significant value on enabling our customers to succeed in this exciting market by providing differential product performance at a high level of customer satisfaction. Xcelis has a large number of customers in the power market, which is currently expected to remain healthy in 2024. This will provide good support for Xcelis even as the industry downturn continues and now includes increased softness in the general mature markets. While our customers are managing through this downturn, Excellus remains close to them, supporting their in-store base and working with them on the future technology and manufacturing needs. Recently, we shipped a Purian Dragon to a leading research institute focused on advanced logic process development. This tool and the associated collaboration will be critical to our advanced logic customers' development for next-generation technology. Additionally, we have multiple evaluation systems and many customer engagements. designed to increase our footprint across all segments. As the industry exits this downturn, Excellus will return to healthy growth in these markets. This combined with continued strength in the power segment will drive Excellus to our $1.3 billion model and beyond. Now I'd like to turn it over to Jamie.