Veeco Instruments Inc.

Greetings and welcome to the VECO Q2 2025 earnings call. At this time, all participants 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 then zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Anthony Popone, Head of Invest Relations. Thank you, you may begin.

Thank you and good afternoon everyone. Joining me on the call today are Bill Miller, VECO's Chief Executive Officer and John Curnan, our Chief Financial Officer. Today's earnings release and slide presentation to accompany today's webcast is available on the VECO 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 10K 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 address 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. VECO delivered strong financial performance, exceeding the high end of our guidance, revenue totaled $166 million, non-GAAP operating income of $23 million, and non-GAAP EPS of $0.36. Our semiconductor business posted another robust quarter highlighted by record revenue for our advanced packaging systems. This revenue was driven by growing demand from AI by a broad base of customers, including leading foundries and OSATs. Additionally, we had increased revenue for our ion beam deposition systems for EUV mask blanks and continued demand for our laser spike annealing systems with shipments to leading customers supporting GAAP all around and high bandwidth memory applications. I'll now provide an overview of our role in the semiconductor manufacturing process and an update on key technologies. VECO technologies remain critical for several leading edge semi-manufacturing process steps. VECO is a 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 DRAM customer. Our next generation nanosecond annealing system expands our capabilities to enable new applications and we're pleased to report our evaluations that advanced logic customers are progressing well. Equally as important, interest from additional logic and memory customers to evaluate our NSA system remains high. VECO is also the market leader for deposition of defect free films for EUV mask blank production with our IBDEUV system. Our ion beam deposition technology is critical to the industry's roadmap and we're in a strong position to support demand for EUV lithography. We also see opportunities to expand our business into adjacent mask blank steps. Growth in AI is accelerating the adoption of new technologies and materials that enable continued device scanning and address the increasing demand for energy efficient compute performance. As device geometry shrink, traditional approaches are falling short of meeting resistivity requirements, prompting customers to evaluate new solutions to tackle these high value challenges. VECO's IBDE300 system, which is currently being evaluated by two DRAM customers, differentiates itself from traditional technologies through its ability to achieve improved thin film properties with critical metals in memory and logic, which can directly impact device performance, speed and battery life. Looking ahead, we remain highly focused on working with our customers to integrate our technology into their manufacturing processes and evaluate new applications. In advanced packaging, our wet processing systems, our production tool of record, had a number of leading customers and we continue to expand with new application lens. Our system's unique capabilities have enabled our strong position in 3D packaging for AI, providing continued growth. And in advanced packaging lithography, we're experiencing recovery fueled by IDM and OSAT customers for several applications. This is expected to drive meaningful revenue growth in 2025. Demand for VECO technologies is being accelerated by leading edge inflections, such as gate all around, high bandwidth memory, EUV lithography and 3D packaging. Our exposure to each of these high growth areas offers opportunity to expand our served available market. In annealing, we project our SAM to grow to approximately 1.3 billion in 2029 as device geometries continue to shrink and new architectures emerge, customer roadmaps increasingly require precise annealing solutions with tighter thermal budgets. This is expanding the number of process steps where laser annealing is being adopted. In logic, gate all around architectures and innovations like backside power delivery are driving higher laser annealing intensity. In memory, the shift toward high bandwidth memory and 3D devices is prompting customers to adopt laser annealing to address new performance and integration challenges. In ion beam deposition for front end semi applications, we forecast growth in our SAM to approximately $350 million for high value steps requiring critical film performance. In ion beam deposition for EUV mass blanks, we see our SAM growing to over $120 million as the market expands adoption of EUV and high NA lithography. And customers continue evaluating our technologies for adjacent mass blank steps. And in advanced packaging, we see potential SAM growth for our enabling wet processing solutions for a growing number of applications supporting AI in high performance computing. As we look ahead, we believe our portfolio of enabling technologies for key inflections positions our semi business to outperform WFE growth over the long term. I'll now provide additional details on our evaluation program, which is core to our investment strategy and essential to capturing our largest opportunities. We're seeing strong customer engagement across multiple evaluations, which are targeting a range of high value applications. Each application win has the potential to generate 30 to $60 million in follow on business, assuming 100,000 wafer starts per month. While adoption timing will vary by system, customer and market, customers are clearly excited about the value our technologies bring, and we remain sharply focused on execution. Our evaluations in the field are progressing well, and we're continuing to invest in additional systems to drive new business in both logic and memory. We expect to ship an LSA evaluation system to a second tier one DRAM customer later this year, along with an NSA evaluation system to a third logic customer. We also see potential for additional NSA and IBD 300 evaluation systems in 2026. Given our continued momentum in the semiconductor business, we remain confident in our ability to capitalize on our long-term growth trajectory. With that, I'll turn it over to John for a financial update.