Veeco Instruments Inc.

Greetings and welcome to the week of fourth quarter and full year 2024 earnings conference call. At this time, all participant lines are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star and zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Anthony Papon, Head of Investor Relations. Please go ahead.

Thank you, and good afternoon, everyone. Joining me on the call today are Bill Miller, FICO's Chief Executive Officer, and John Kiernan, our Chief Financial Officer. Today's earnings release and slide presentation to accompany today's webcast is available on the FICO website. To the extent that this call discusses expectations for future revenues, future earnings, market conditions, or otherwise make statements about the future, these forward-looking statements are based on management's current expectations and are subject to the risks and uncertainties that could cause actual results to differ materially from the statements made. These risks are discussed in detail in our Form 10-K Annual Report and other SEC filings. VECO does not undertake any obligation to update any forward-looking statements, including those made on this call, to reflect future events or circumstances after the date of such statements. Unless otherwise noted, management will discuss non-GAAP financial results. We encourage you to refer to our reconciliation between GAAP and non-GAAP results, which you can find in our press release and at the end of the earnings presentation. With that, I will turn the call over to our CEO, Bill Miller.

Thank you, Anthony. 2024 was another successful year for Vico. We reached several important milestones, grew the business, delivered solid profitability, and strategically invested in several exciting long-term growth opportunities. Beginning with strategic milestones, as announced in a press release earlier today, we shipped an NSA system to a leading-edge semiconductor company for high-volume production of a two-nanometer gate-all-around logic chips. We also reached an agreement to ship an LSA evaluation to a second leading memory customer in 2025, and we shipped a 300 millimeter gallon silicon evaluation system to a tier one power device customer, with this customer having since provided positive feedback. Revenue from our semiconductor business reached another record in 2024, outperforming WFE growth for the fourth consecutive year. Our robust performance was primarily driven by record laser annealing revenue, including growth in LSA shipments to mature node customers, as well as leading edge shipments for high bandwidth memory and gate all around. Another key driver of growth came from wet processing, where our system is production tool of record and 3D packaging for AI. While investing for growth is core to our long-term strategy, expanding profitability is also important. In 2024, we successfully grew non-GAAP operating income and VPS, while continuing to invest in our largest SAM expansion opportunities. Switching gears to our full-year financial highlights, VECO delivered top and bottom line growth, with results coming in above the midpoint of our updated 2024 guidance. Revenue totaled $717 million, growing 8% from the prior year, led by a 13% year-over-year growth in our semiconductor business. Non-GAAP operating income grew 6% to $116 million and diluted non-GAAP EPS grew to $1.74. Now for a look at our Q4 highlights. Revenue in the fourth quarter totaled $182 million, increasing 5% year-over-year. Non-GAAP operating income $27 million and non-GAAP EPS 41 cents. Our semiconductor business delivered another solid quarter of revenue highlighted by record laser annealing revenue, including shipments to two leading edge customers gate all around nodes. I'll now provide an overview of VECO's role in the semiconductor manufacturing process, as well as an update on key technologies driving business today. VECO technologies are critical for several leading edge semi manufacturing process steps. Leading-edge customer roadmaps require the most advanced annealing solutions to address scaling challenges associated with shrinking geometries and new architectures. Device scaling with incumbent technologies is becoming more challenging, and as a result, the number of steps available to laser annealing in both logic and memory is increasing. VECO is the market leader in laser annealing, with our laser spike annealing system qualified as production tool of record for leading logic customers and one tier one memory customer. Our recently launched next generation NSA system expands laser annealing capabilities to enable precise anneals at a nanosecond dwell time and is under evaluation at two advanced logic customers for several new applications. Beko is also the industry leader in ion beam deposition for EUV mask blanks, with our IBD EUV system enabling deposition of defect-free films for EUV mass blank production. Our ion beam deposition technology is critical to the industry's roadmap and is expanding to adjacent mass blank steps as customers continue to explore new use cases. The growing need for energy efficient compute is driving the SEMI roadmap to consider new materials and technologies to scale optimize performance, and reduce power consumption. As device geometries continue to shrink, incumbent technologies are struggling to lower resistivity, driving tier one logic and memory customers to consider new solutions. VECO's recently launched IBD300 system differentiates itself from incumbent technologies through its ability to preferentially deposit low resistance metals. This can result in improved thin film properties and lower resistivity for critical metals in logic and memory, which directly impact device performance, speed, and battery life. Looking ahead, we're highly focused on working with Tier 1 customers to integrate our technology into their manufacturing processes and evaluate new applications. In advanced packaging, our wet processing system is production tool of record at a leading foundry, HBM manufacturer, and OSATS. Our system's ability to support challenging process capabilities has enabled our strong position in 3D packaging for AI, which drove strong growth in 2024 and expectations for growth to accelerate in 2025. And in advanced packaging lithography, capacity expansions in the AI and mobile markets have led to expectations of a recovery in 2025 driven by a broad range of customers. Our strategy in the semiconductor market has been focused on expanding our served available market by investing in core technologies to enable industry inflections. VECO technologies have exposure to leading edge inflections in logic, memory, and advanced packaging, enabling technology transitions such as gate all around, high bandwidth memory, EUV lithography, and 3D packaging for AI. In annealing, We forecast our SAM to grow from approximately $800 million to around $1.3 billion. We expect this to be driven by an increase in laser annealing intensity as logic and memory customers adopt laser annealing to address new challenges. In ion beam deposition, we project our SAM to grow to approximately $350 million for high value front end semi applications requiring critical film performance. Growth in AI is accelerating adoption of new technologies and materials that enable device scaling and address the growing need for energy efficient compute performance. We believe our IBD 300 system has unique capabilities that can address each of these high value challenges. In ion beam deposition for EUV mass blanks, we project our SAM to increase to over $120 million as ASML expands EUV and high NA capacity, and customers adopt our systems for new applications. And in advanced packaging, we see SAM expansion opportunities for our enabling wet processing technology for an increasing number of applications supporting AI and high-performance computing. As we look ahead, we believe our portfolio of enabling technologies For key inflections, positions are semi-business to outperform WFE over the long term. I'd now like to provide additional detail on our evaluation program. Our evaluation program is essential to expanding our position in logic and memory, and we're investing in several evaluation systems to capture our largest SAM growth opportunities. Many evaluations are targeting several applications, which can result in follow-on business between $30 to $60 million per application win, assuming 100,000 wafer starts per month. While the timing of adoption by system, customer, and market will vary, customers are excited about the value proposition our technologies offer, and we're highly focused on executing. With that, I'll turn it over to John for a financial update.