Nova Ltd.

Good day and welcome to NOVA's first quarter 2021 results. Today's conference is being recorded. At this time, I would like to turn the conference over to Mary Segal of MSIOR. Please go ahead.

Thank you, Operator, and good day to everybody. I would like to welcome all of you to NOVA's first quarter 2021 financial results conference call. With us on the line today are Mr. Eitan Oppenheim, President and CEO, and Mr. Dror David, CFO. Before we begin, may I remind our listeners that certain information provided on this call may contain forward-looking statements, and the safe harbor statement outlined in today's earnings release also pertains to this call. If you have not received a copy of the release, please view it in the investor relations section of the company's website. Eitan will begin the call with a business update, followed by a drawer with an overview of the financials. We will then open the call for the question and answer session. I'll now hand over the call to Mr. Eitan Oppenheim, NOVA's president and CEO. Eitan, please go ahead.

Thank you, Miri, and thank you all for joining our first quarter financial results conference call. I will start the call today by speaking about our first quarter results and performance highlights. Following my commentary, Dror will review the quarter's financial results in detail and will conclude with the guidance for the second quarter of 2021. NOVA continues to perform well in the first quarter of the year, delivering outstanding results and exceeding both our revenue and profitability guidance. The growth in our business momentum, as reflected in our financial results, is driven by our entire product portfolio across markets, customers, and technology nodes. Our revenue grew 38% year-over-year to a record high, while our non-GAAP net profit grew at 52% year-over-year to a record level as well. During this remarkable quarter, we also achieved record bookings and operating cash flow. The solid growth momentum this quarter and the outstanding performance we demonstrated along the last year could be accomplished only by consistently executing our strategic roadmap while creating greater agility in our operational models. The flexibility we have built into our operating model combined with the investment we have made to secure our supply chain during COVID-19 enabled us to ramp up our production capacity by more than 30% to meet on-time delivery in this surging market. Our differentiated portfolio, honed by our commitment to innovation, continues to amplify our position with leading customers, as we address their challenging technical transitions to new generations of semiconductors, which combine innovative complex architectures with new novel materials. Our achievements this quarter mark another successful milestone in our healthy growth trajectory for this year, as we expand our market presence and deploy our new leading-edge technologies. NOVA's diverse revenue across multiple device segments is a result of the growing demand at the end markets for the electronics, which continues shaping the growing demand at the semiconductor fabrication supply chain. The main catalysts are driven by the growing digitization of multiple industries and include improvements in data management, network infrastructure, and broader usage of AI in different markets. In addition to pure demand for silicon, and in order to support these dynamic changes, the complexity embedded in building next-generation technology nodes requires a breed of innovative products, specifically in process control, to support the development and fabrication of new advanced memory and logic devices. Furthermore, in addition to these current demand factors, customers are more focused on growing their investment by optimizing productivity and diversifying their investment across multiple regions. When combined, these elements of accelerated technology transition, increasing complexity in new advanced nodes, and new investment in geographical distribution drive strong healthy WFC standing in 2021 and beyond. In this favorable environment, Nova is well positioned to capture more opportunities with its dimensional and materials unique process control solutions. Zooming into our quarterly achievements, I would like to highlight several business and technology milestones, which will also impact the rest of the year. This quarter's revenue was driven by record contribution from both our products and service sales, which included a mix of technology, functionality, and productivity enhancements to the install base. The growth in our traditional OCD and XPS business, along with several new technology and business wins, and the increasing volume in our service business reflects our progress and the momentum to meet our long-term organic targets. The broad diversity in our revenue stream across segments, territories, and customers was maintained in this first quarter, reflecting ongoing robust demands for both trailing edge and advanced 5, 3, and 2 nanometer logic devices across customers and territories. memory grew significantly compared to the previous quarter as we leveraged our strategic exposure and new technology wins in both DRAM and Vinant. The wide exposure we have built to both logic and memory is reflected also in our customer mix with four major customers that contributed more than 10% each to our revenue mix. This includes two of the world's leading memory customers, the world's largest foundry, and a leading Chinese customer. This mix of different customers in different geographies is reflective of our wins in different markets and will accompany the company throughout the year. During the current investment cycle, the leading customers are going through fundamental technology changes in the way they process new devices. In the 3d non roadmap, we have started to see involvement to multi stack scaling to contain more memory layers. The new design creates new challenges in both high aspect ratio applications, tilting and ultra thin layers with new materials. The prism with its unique channels and advanced data interpretation was created in order to provide the right sensitivity to these dimensional challenges. Following the introduction of the platform, we are expanding our penetration to more memory customers globally, which benefits from faster time to solution and advanced process control that can't be achieved with any of the traditional optic methods. In the first quarter, we continued our penetration efforts and established multiple new evaluations with leading memory customers that will decide on their capacity expansion later this year. On the material side, these new devices require a better approach to the way composition and ultra-thinsence are controlled. And following our introduction of the VeriFlex 4 XPS platform, we see more traction with memory customers as demand for high throughput and high precision inline methodology grows. I would like to mention again and refer to some competitive comments that this is non-destructive inline high productivity tool which measures tens of wafers every hour. As a result of this growing demand, XPSL's contribution maintain its record sales level in this quarter as well. In the logic foundry, new device architectures are introduced as well to meet the required performance of the high end market. Beyond continuous scaling to three and two nanometer, the leading manufacturers are adopting 3D structures like gate all around and nano sheets. The combination of scaling and new dimensional structures creates new process challenges which drive higher metrology intensity and new measurement schemes around in-die, in-line capabilities. The surge in demand for logic chips along with the technology transition to enhanced architecture drove high demand for all our platforms with integrated metrology reaching another sharp increase to a record high. In this manner, we are very encouraged with the market adoption of our newly introduced i570 integrated methodology platform that was designed to measure complex 3D structures, improving precision, productivity, and sensitivity. Multiple tools have already been installed in the field and are forecast to grow during the year. Another highlight I would like to mention in the progress we are making in introducing new products, which is the software solutions. Handling high-end applications in advanced nodes calls for more innovative solutions as tighter process specifications require more complicated methodology measurements while maintaining fast times of solution. Our product strategy is built on combining advanced hardware platforms and state-of-the-art machine learning, and AI software engines. Our software strategy brings a holistic approach that is built on four elements. Physical modeling, enhanced with mathematical modeling for accurate and fast measurements, and fleet management with automatic preventive maintenance, which focuses on tool performance control and enhancements. By adopting more software elements, we opened the metrology ecosystem to other references of other process control technologies, and by that, improves Nova's capabilities to provide better results to its customers. Our long-term software revenue goal, beyond the system traditional sequencing software, remains intact with the efforts to reach at least 10% of our product's revenues. Finally, all these successful businesses and technology milestones are reflected in our growing bookings which reached new quarterly records and drove a strong book-to-bill ratio. The fundamentals in the current market along with our achievements in the first quarter support our ambition to outperform this year as well. Before I hand over the call to draw to explain our financial highlights in more detail, I would like to recap our position post Q1 results. We are in an environment where industry fundamentals are strong, demand is healthy, and complex technical transitions are taking place. Moreover, semiconductor manufacturers are standing in large breeds of technology nodes, geographical presence, and new process methods, combining new materials with dimensional scaling. Based on our newly introduced products and technologies, NOVA is well positioned at the forefront of technology innovations to meet customer requirements and roadmap. Based on our diversified portfolio and exposure, solid operational leverage that has proven itself during COVID-19 pandemic, and our strong local teams, we expect to continue our organic growth in the current cycle to meet our long-term strategic goals. Alongside with the guidance we provided for the second quarter of 2021, we expect roughly 40% growth in revenue in the first half of 2021 versus the first half of 2020. Now, let me hand over the call to Dror to review our financial results in detail. Dror?