Nova Ltd.

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

Thank you, operator, and good day, everybody. I would like to welcome all of you to NOVA's fourth quarter and full year 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 welcome everyone to our quarterly financial results conference call. I will start the call today by speaking about our fourth quarter and full year performance highlights. Following my commentary, Dror will review the quarterly and annual financial results in detail. The agility we have developed during the COVID period drove NOVA to another robust quarter, concluding the best-performing year in our history. Our success in adapting to the dynamic environment and evolving demand resulted in record growth across product lines, financials, and business achievements in 2021. During the year, we successfully continued to modify our working models to navigate through unprecedented supply chain disruptions while we continued to rapidly expand our production capacity to fulfill record demand across all our technologies and markets. Company performance at the end of the year drove our fourth quarter revenues to a new record high with results at the high end of the guidance, making it the seventh consecutive growth quarter. As a result, our annual revenues grew at 54% year over year, reflecting our continuous innovation, our resiliency in the face of constant challenges, and the strength of our global teams. Our record annual performance is also plainly apparent in our financial results, pushing our non-GAAP earnings per share to a record high with 87% growth year over year. Combined with our positive guidance for the first quarter of 2022, it is evident that we are successfully realizing our NOVA 500 strategy and continue our trajectory to double the company revenue every five years. As we continue to grow and diversify our technologies and markets, we recently announced the acquisition of ANCOSYS, a leading provider of chemical analysis and metrology solutions for advanced semiconductor manufacturing, mainly utilized for deposition and CMP. The transaction is valued approximately at 90 million U.S. dollars, all cash, and includes and includes a performance-based earn-out of approximately 10 million. The deal was signed during the fourth quarter of 2021 and was closed in the first quarter of 2022, solidifying our strategy to keep investing in the growing materials engineering market, where new materials and compositions are introduced frequently to improve chip performance in all semiconductor segments. In today's complicated production environment, the number of interconnects requiring plating and different organic alloys and compounds has tripled over the last few years. This directly translates into growing demand for a tight in-line chemical process control with increasing intensity. ANCOSYS enables manufacturers to increase yield by controlling the organic and inorganic materials at the front-end process as well as in packaging and back-ends. NOVA's goal during 2022 is to expand ANCOSY's served markets by utilizing our position and growing leadership in the materials metrology segment. ANCOSY's progress was evident by our recent press release that detailed a new front-end customer that adopted ANCOSY's solution. To date, AncoSys Ancolizer has been selected by five leading front-end wafer manufacturers, including the world's leading foundry. Following the AncoSys acquisition, our product strategy for the next coming years will continue to be built around expanding our product offering in three main categories, materials methodology, dimensional methodology, and advanced process control software. One of the more notable achievements of this strategy is the record revenue contribution from our materials metrology portfolio in 2021. We are striving to lead this market segment with a highly differentiated and unique set of solutions. 2021 has been a record year for our VERIFLEX XPS platform, which provides ultra thin film thickness and composition capabilities. Veriflex has now been adopted by every leading manufacturer in the world, including a recently announced Global Logic customer. To that segment, we can add also the recent rollout of the Ellipson product that utilizes Raman spectroscopy to extract unique materials property information. The platform has already gained repeated orders, and it is evaluated by additional customers. On top of that, and in order to provide a wide range of inline materials capabilities, we have also launched the Matrion, our secondary ion mass spectrometry platform. Matrion has already been purchased by a couple of customers and is evaluated by others. To complete our holistic materials metrology portfolio, we now have the AncoSys Ancolizers products to provide better process insights to the materials flowing into the process. With this advanced offering, we now cover a wide range of materials production challenges, from ultra-thin film to composition to material stock profile, stress, strain, and chemical analytics. In 2022, our goal is that revenue contribution from this part alone will reach 40% of our product's revenue. The second element in our strategy is the dimensional portfolio. Along with the company record growth, the optical CD product line reached a new record high, outperforming the market and industry by growing at 63% year over year. This outstanding result is driven by a new generation optical offering which was introduced in both standalone and integrated OCD platforms, market share gains, and extensive growth in China and US. Our synergetic portfolio is currently adopted by all leading customers for the current technology nodes, as well as for the next generation device in both logic and memory. The third element in our strategy is the software offering. Our distinguished hardware portfolio is complemented by our market-leading machine learning, modeling, and fleet management solutions. During 2021, we were able to prove clear benefits of our software and algorithms advantages, enabling our customers to reduce time to solution and increase yields. The completely innovative software ecosystem for metrology, which includes an internal cloud-based environment to handle big data, and mass communication between hundreds of tools combined with advanced physical and mathematical models provides the customers with cutting-edge metrology performance for yield ramping efforts. As a result, this year we have hit our strategic goal of roughly 10% coming from software sales out of our overall product revenue. Another notable achievement this year is the company's diversification over different geographical regions. As part of our revenue growth, all three major territories grew significantly. Taiwan's revenue contribution grew due to elevated investment by the leading foundry, but also by the investment of other customers in training nodes for common applications. In Korea, our memory revenue grew significantly due to our increasing position in this segment across all our products. Our China revenue grew tremendously where local manufacturers have been working around the clock to meet the exploding demand for mid-range and legacy logic and memory devices. Our growing reputation and customer base drove our sales in China to a record high with more than 15 active customers. NOVA's strategic focus in China led us to establish a new Chinese branch and open a new facility in Shanghai to support our growing activity and further improve the service we provide directly to our customers. Finally, on this front, we are also excited by the growing revenues from North America this year, a trend we believe will continue also in 2022. Finally, to summarize the year, I would like also to refer to another strong milestone, the service sales growth. Revenues from the service business increased more than 30% this year to a record high, with contracts, upgrades, and evaluated services contributing to the continuous utilization of the growing install base. Let me turn now to our industry current fundamentals and their relevancy to NOVA. The demand environments continue to demonstrate accelerated adoption of a broad range of applications and devices. The ongoing digital transformation is propagating blistering demand drivers such as 5G communication, high-performance computing, artificial intelligence, gaming, data center, and other end-market applications. driving investment in both memory and logic semiconductors, as well as new complex advanced packaging technologies. Additionally, across the industry, we see multiple investments in building new FABs globally, which requires massive capex. And on top of that, we see additional investments as a result of the geographical environment, geopolitical situation, that drive for semiconductor independency. We believe that this trend will keep pushing the industry forward in 2022 as well. Before I hand over the call to draw, let me briefly summarize. We have had an incredible record year, and I'm immensely proud of our team for rising to the challenge and maximizing the business and technology potentials. Although we are not immune to the growing challenges in the supply chain and the chain reactions they have on the industry, Nova succeeded in outperforming the market, demonstrating the agility and efficiency of its operational model. Given our innovative portfolio, new product rollout, and growing exposure to a broader opportunity range, we believe that Nova is well-positioned to continue its solid growth in 2022 as well. Now, let me hand over the call to Dror to review our financial results in detail. Dror?