Axcelis Technologies, Inc.

Good day, ladies and gentlemen, and welcome to the Excellus Technologies call to discuss the company's result for the third quarter 2025. My name is Brittany Morgan, and I will be your coordinator for today. I would now like to turn the presentation over to your host for today's call, David Rizek, Senior Vice President of Investor Relations and Corporate Strategy. Please proceed.

Thank you, Operator. This is David Rizek, Senior Vice President of Investor Relations and Corporate 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 earlier today, it is available on our website. In addition, we have prepared slides accompanying today's call, and you can find those on our website as well. 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 annual report on Form 10-K 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. Given the pending merger with VECO, we will not be addressing questions related to the transaction. Please note that today's call is neither an offering of securities nor solicitation of a proxy vote in connection with our previously announced transaction with VECO. We urge you to read the joint proxy statement relating to the transaction with VECO once it becomes available. During this call, we will be discussing various non-GAAP financial measures. Please refer to our press release and accompanying materials for information regarding our non-GAAP financial results and a reconciliation to our GAAP measures. Now, I'll turn the call over to President and CEO Russell Lowe.

Good morning and thank you for joining us for our third quarter 2025 earnings call. Beginning on slide four, we generated solid results in the third quarter with revenue of $214 million and non-GAAP earnings per diluted share of $1.21, both exceeding our outlook. We delivered record CS&I revenue as well as slightly better than expected system revenue, which drove the better than expected profitability. Bookings in the third quarter declined on a sequential basis, primarily led by a softer power and general mature bookings, which were partially offset by an improvement in memory. While bookings fluctuate from quarter to quarter, based on recent encouraging quoting activity and a conversation with customers on their bill plans, we anticipate bookings to improve sequentially in the fourth quarter. Before I provide more detail on the trends we're seeing by market segment, I'd like to touch on our recent transaction announcement. On October 1, we announced that Excellus and Veco had agreed to merge to create what we believe will be a leading semiconductor equipment company. We have long admired Veco's history of innovation and its track record of delivering breakthrough products. And this merger is expected to position the combined company as a key beneficiary and critical enabler of secular tailwinds, including AI and electrification. I want to take this opportunity to recap a few points that we made when we announced this deal and what is a highly compelling opportunity for both companies. Starting the cross-seller synergy, we believe each company can open doors for the other. One such example is with Excellasys Implant and Veco's laser annealing solutions, which are adjacent steps and reside in the same diffusion module in the FAD. In addition, our combined technical debt is expected to enable us to optimize technology advancements. An example of this is our plan to leverage our deep ion source and component expertise to enhance Zico's ion beam deposition capabilities and vice versa. Second, from a market perspective, we are strong in silicon carbide, while Veek has an exciting opportunity in MOCVD for GaN on silicon. We believe this combined presence will allow us to be a comprehensive solution provider to the compound semiconductor market, which is becoming increasingly relevant due to electrification, including the growing need for greater power efficiency, driven in part by the rise in AI. In addition, We believe Veco's MOCV business has an opportunity in micro-LED, as well as an indium phosphide opportunity for optical communication products, which is an emerging data center application. Moreover, we see opportunities stemming from our strengths in memory and mature foundry logic, which we believe are complemented very well by Veco's strengths in advanced foundry logic and advanced packaging. Stretching across annealing, ion beam deposition, web processing, and lithography solutions. It is also worth noting that the combined company is expected to be better equipped to better serve our customers through access to an expanded install base supported by stronger aftermarket services. Finally, the all-stock nature of this transaction is expected to position the combined company to have a resilient operating profile and balance sheet post-closing which we believe allows us to invest in our business to drive organic growth as well as return capital to shareholders. In short, 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 drive meaningful benefits for all our stakeholders. With that, let me now turn back to our Q3 results and the trends we're seeing by market category. Turning to slide six, in the quarter, sales to mature node applications comprised almost the entirety of our system shipments, in particular, power and general mature. Now on slide seven, let me review our trends by end market. Within our power business, shipments to silicon carbide applications grew nicely on a sequential basis. Consistent with our commentary heading into 2025, customers continue to digest the capacity that has been put in place over the past few years. However, in China, multiple customers continue to build out capacity as they strive to address growing demand in the local market, while customers outside of China are making selective investments into next-generation technology, such as trench and super junction. Moreover, in the quarter, we shipped several tools to multiple customers that have only just begun to develop their silicon carbide capability. We believe this is yet another validation of the long-term secular growth opportunity in silicon carbide, and customers recognize the world's need for more efficient power delivery will continue to accelerate. As the cost of silicon carbide continues to decline, we anticipate its adoption and an expanding array of applications will continue to grow, ultimately requiring more investments in technology and capacity. As we've noticed in the past, Excellus is the market and technology leader in high-energy ion implantation, which is becoming increasingly critical for next-generation silicon carbide devices. In August, we announced a joint development program with GE Aerospace to pursue production-worthy high-voltage silicon carbide devices utilizing our Purin Xe Max system, which is our highest-energy implanter delivering up to 15 million electron volts in an ion beam. We are proud to partner GE Aerospace on this exciting initiative. In September, we made multiple new product announcements, including a new Purion Power Plus series at the annual Ice Cream Conference, which was held in Korea. The platform is designed to enable improved device performance and increased productivity for next generation power devices. While the majority of the platform is targeted to the silicon carbide market, there are also applications for silicon and gallium nitride. Xcel has a proven track record of collaborating with customers to develop innovative solutions, and this product announcement is no different. We also have received positive customer feedback about our new high energy channeling capability and music and multi-step implant chain capability which reduces the overhead of wafer transfer time during the implant process, enabling our customers to have increased output with less downtime between recipes. This capability is on tools we've already placed in the field with our leading customers. And as I said, we're receiving positive feedback. Additionally, Xcelis announced the launch of the GSD Ovation ES, a high-current multi-way for iron implanter targeted specifically for engineered substrates. Turning back to the near-term demand environment in silicon carbide, we continue to see select areas of capacity and technology investment, and we expect revenue from silicon carbide to fluctuate from quarter to quarter, with fourth quarter expected to be down slightly on a sequential basis. In our other power market segment, ship system revenue also grew on a sequential basis, primarily due to shipments to customers in Japan and Europe. In general mature, revenue declined on a sequential basis as customers continued to manage their capacity investments given the current demand environment in auto, industrial, and consumer electronics. Broadly speaking, we are seeing an improvement in utilization rates However, this varies by customer and can even vary by fab location within each customer. In fact, we're seeing some signs of improvement in utilization rates with our image sensor customers as camera content on autos continues to rise and smartphones continue to be a strong long-term demand driver. Image sensors require high energy on implantation. We are well-positioned to address this market as our customers assume capacity build-out investments. In the third quarter, we also shipped an Xe Max evaluation unit for a 300-millimeter power management IC application. This is noteworthy because our Xe Max was developed for the image sensor market, and yet we're seeing interest in additional applications where this technology can be deployed, namely power. Turning to slide eight, in advanced logic, we continue to actively target next generation ion implantation applications across multiple customers. In the quarter, we generated revenue from a previously booked system with an existing customer. Moving to memory, Revenue remained muted in the third quarter. However, we expect a sequential increase in the revenue in the fourth quarter as customers expand capacity to address growing demand for AI-related applications. While it is too early for us to predict 2026, given our conversations with customers on the capacity plans, we anticipate our sales to the memory market to grow next year, led by increased DRAM and HBM investments. In NAND, Customers remain focused on scaling to higher layered counts, which requires deposition and edge chamber-based upgrades, but not incremental ion implant capacity. As a result, we continue to expect demand for NAND applications to remain muted in the near term. However, we are encouraged with some initial signs of improvement in the NAND bit demand and pricing, and we are ready to serve this market once customers resume capacity additions. On slide nine, let me wrap up my thoughts prior to handing the call over to Jamie. We are navigating the current cyclical digestion period across our markets exceptionally well, remaining aggressive in our product development and customer engagement, while staying disciplined on cost control. As referenced earlier, we are seeing interest in new applications for our high-end solutions, but also executing on our strategy to drive greater adoption of our high-current portfolio. Meanwhile, our CS&I business continues to benefit from our focused aftermarket strategy and growing in-store base. It remains a foundational part of our company's profitability and cash flow profile and integral to the value proposition we offer our customers. Adding all this up, despite a moderation of demand in our markets in 2025, We have a strong base of profitability and cash flow, which we believe provides a solid platform for Excellus to execute on our long-term growth opportunities. With that, let me turn the call over to Jamie for a closer look at our results and outlook. Jamie?