ACM Research, Inc.

Good day, ladies and gentlemen. Thank you for standing by, and welcome to the ACM Research Third Quarter 2025 Earnings Conference Call. Currently, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. As a reminder, we are recording today's call. If you have any objections, you may disconnect at this time. Now, I'd like to turn the call over to Stephen Paleo, Managing Director of the Blue Shirt Group. Stephen, please go ahead.

Good day, everyone. Thank you for joining us to discuss third quarter 2025 results, which we released before the U.S. market opened today. The release is available on our website as well as from Newswire Services. There is also a supplemental slide deck posted to the investor section of our website that we will reference during our prepared remarks. On the call with me today are CEO Dr. David Wong, our CFO Mark McKechnie, and Lisa Fang, our CFO of our operating subsidiary, ACM Shanghai. Before we continue, please turn to slide two. Let me remind you that the remarks made during this call may include predictions, estimates, or other information that might be considered forward-looking. These forward-looking statements represent ACM's current judgment for the future. However, they are subject to risks and uncertainties that could cause actual results to differ materially. Those risks are described under risk factors and elsewhere in ACM's filings with the Securities and Exchange Commission. Please do not place undue reliance on these forward-looking statements, which reflect ACM's opinions only as of the date of this call. ACM is not obliged to update you on any revisions to these forward-looking statements. Certain financial results that we provide on this call will be on a non-GAAP basis, which excludes stock-based compensation and unrealized gains and losses on short-term investments. For our GAAP results and reconciliation between GAAP and non-GAAP amounts, you should refer to our earnings releases which is posted on the IR section of our website and on slide 13. Also, unless otherwise noted, the following figures refer to the third quarter of 2025, and comparisons are with the third quarter of 2024. With that, I will now turn the call over to David Wang. David?

Thanks, Stephen. Hello, everyone, and welcome to ACM's third quarter early conference call. I'm very pleased to report another strong quarter for ACM. Revenue grew 32% year-over-year to a new quarterly record, reflecting broader demand across our innovation product portfolio. Across industry, AI and data center investment are accelerating semiconductor and wafer fab equipment spending. AI is also demanding new innovations, many of which have yet to be developed. We believe these trends are driving the market toward us. ACM's strategy remains focused on building a multi-product portfolio of world-class tools that expand our service market and play a critical role in enabling the next generation of chipmaking. Our differential technology continues to raise the performance bar across both front-end and advanced packaging applications. For example, In advanced packaging, we are seeing strong global customer engagement in our proprietary horizontal plating technology for panel-level packaging. And we plan to ship our first system in the fourth quarter. In cleaning, our high-temperature SPM platform is reaching industrial leading performance as our proprietary nozzle design achieving performance at a 19 nanoparticle size. down to single-digit particle counts. We believe this will lead to higher product yield for our customers. Further, with no need to clean the outer chamber, the tool requires significant lower maintenance. This is a truly world-class tool, and our team has a roadmap to even lower particle size down to 70 nano, 50 nano, and 30 nano to support the next few generation technology nodes. In Trac, we shipped our first KIF high-throughput Trac platform this quarter, further broadening our reach into lithography adjacent applications, which demonstrate ACM's ability to grow into new product categories. Together with innovations such as nitrogen bubbling cleaning and etchers and a high-temperature furnace discussed last quarter, this advancement reflect ACM commitment to continuous innovation and the tangible performance improvement we are delivering to customers. In September, our ACM Shanghai subsidiary completed its second capital raising on Star Market. Raising net proceeds approximately 623 million. ACM has the technology the customers, the capacity, and the global reach, and now additional capital to pursue our mission to become a key supplier to major global semiconductor producers. This fund strengthens our balance sheet and will be used for additional investment in our Lingam Media Line and to expand our global production capacity. We also plan to accelerate our R&D investment This will advance our existing cleaning and electroplating tool for next generation process. It will also speed up the development for our new product categories, including furnace, PCVD, track, and panel-level packaging tools. And we're also investing in new product that we have not announced yet. ACM is committed to world-class product. for both China and global customers. Our tools enable next-generation devices, architecture, and help solve our customer complex process, challenging across front and back-end applications. We have a world-class technology and a strong IT position. Customers around the world come to us for our technology rather for a low price. We believe this is the right combination to grow our business and maintain our gross margin targets. We feel that ACM is now an infraction point in which innovation will win the game and drive significant shifts in the market share. Now onto our business results. Please turn to slide three. For the third quarter of 2025, we delivered a revenue of $269 million, upwards 32% year over year. Sheetments were $263 million, up 1% year over year. Gross margin was 42.1%. This was at the low end of our target due in part to product mixing, inventory provision, and other adjustment. There is no change to our target model range of 42% to 48%. We ended the quarter with a net cash, $811 million versus $206 million last quarter and $259 million at the year end of 2024. Now I will provide detail on product. Please turn to slide four. Revenue from single wafer cleaning, Tahoe, and semi-critical cleaning tool grew 13% and represent 68% of total revenue. We believe our top bottom cleaning portfolio is world class. and put us in a strong position to gain additional share, both in China to expand it to a global market. The 13% year-over-year growth was mainly from our traditional cleaning product. Their contribution from our newer cleaning line, including single-wafer STM, pothole, and supercritical CO2 is still fairly small. We expect this new platform, especially STM, to contribute more revenue in 2026 and beyond. we estimate an incremental opportunity of more than $1 billion for those new cleaning products from the mainland China market alone. We remain confident in our target for 60% market share in China market, and we expect higher growth rates for cleaning next year and beyond. Revenue for ECP, furnace, and other technology grow 73% and represent 22% of total revenue. We had a record revenue quarter for ECP front-end tool, which represent about 60% of the mix for this group. This group, including our MAP, MAP+, ECP 3D, and ECP G3 product, all of which grow from last year, ECP back-end tools were about 40% of the mix for their quarter. Revenue from furnace was small for their quarter, and year-to-date. That said, we are making good technical progress across a range of customers and multiple product offerings. This includes our ultra-high-temperature new furnace, which operates at more than 1,250 degrees C, our LPCVD oxidation, and ALD for both thermal and plasma. We continue to focus on qualification of the key customers, and we anticipate incremental revenue contribution from foreigners in 2026. And as I noted earlier, we are seeing very strong interest in our panel-level plating tool for advanced packaging from both China and the global customers. We will ship our first panel-level packaging tool in Q4. Revenue for advanced packaging, which exclude ECP, but including service and spell, was upper 231%. and represent 10% of revenue. About two-thirds of this group for this quarter is small tools for advanced packaging. This includes coder, developer, etcher, stripper, and wafer-level packaging tools that run around $500K to $1 million each. We had a good contribution this quarter from a handful of different customers. Although we include plating products, for advanced packaging in the ECP group, and the combination is very powerful. It provides ACM a valuable insight into the challenges of next-generation packaging as AI drives industry towards 2.5D and 3D integration, stacking data through silicon via PSV and integrated memory and logic in a single packaging. We also shipped advanced packaging tool in Q3 to two new customers in the U.S. And we expect installation and then tool acceptance in next couple of quarter. We are making good progress with our new track and PCVD platforms. I already mentioned the shipment of our first KF track tool. We believe our high throughput design position this platform to complete effectively with incubator suppliers. Our proprietary PCVD platform with three trucks per chamber gives the flexibility to support a wide range of processes with the same hardware. We feel good about our positioning as the team continues to work through the technical detail with a few tools in our Lingang mini lab running wafer test and the EVA tools planned to ship in the near term. To close on product, ACM's culture of innovation continues to deliver industrial leading performance across the broader portfolio. Customer engagement is deepening as the chain makers look for partners that can enable their next generation processes. Please turn to slide six. Global WFE depends, continues to be fueled by investment in AI and data center infrastructure, particularly in advanced logic and memory, while China market, in our view, remains stable. Last quarter, we increased our long-term revenue target to $4 billion, supported by an estimated $2.5 billion US dollar contributed from China and $1.5 billion from global markets. Next, let me provide an update on our production facility. First is Lingam. Please turn to slide eight. Our new Lingam production and R&D center is now fully up and running. The site's first building is already in volume production, while the second is providing additional room for future expansion. Together, the two buildings can support up to $3 billion in annual output. position ACM to meet growing customer demand and support our long-term growth plans. We plan to allocate part of the proceeds from ACM Shanghai's secondary capital raising to expand our mini-line at Lingang to strengthen our process development capability and enable on-site customer evaluation under FAB-like conditions. This will accelerate product validation, shorten development cycle, and enhance collaboration with our key customer as we expanding our portfolio of next generation tools. Turn to our Oregon site. Please turn to slide nine. This facility will allow customers to test wafer locally on ACM tool and will serve as our initial base for production and technology development in the United States. Our global customers are encouraging by our commitment which we believe will help them to choose ACM as a key supplier to scale production. Now, I will provide our outlook for the full year 2025. Please turn to slide 10. We have narrowed our 2025 revenue outlook to a range of $875 million to $925 million versus prior range of $850 million to $950 million. This implies 15% year-over-year growth at the middle point. We made greater progress with several major product lines this year, including single-wafer SPM, townhome, panel-level plating, furnace, track, PCVD. We believe this new product providing a solid foundation for multiple major new product cycles for the continued growth in the coming years. Now let me turn the call over to our CFO, Mark. who will review detail of our third quarter results. Mark, please.