Veeco(VECO) - 2021 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenue for the full year 2021 was $583 million, representing a 28% increase over 2020, driven by semiconductor and data storage performance [14][20] - Non-GAAP operating income for 2021 was$ 87 million, a 65% increase from $52 million in 2020, with diluted non-GAAP EPS increasing 66% to$ 1.43 [32][14] - Cash flow from operations was $68 million, a 58% increase over 2020 [15] - Q4 2021 revenue was$ 153 million, exceeding guidance, with diluted non-GAAP EPS at $0.43 [16][17] Business Line Data and Key Metrics Changes - Semiconductor revenue for 2021 was$ 247 million, a 49% increase year-over-year, accounting for 43% of total revenue [20] - Data Storage revenue was $169 million, a 37% increase over the prior year, making up 29% of total revenue [23] - Compound semiconductor revenue was$ 107 million, flat from 2020, but underlying growth was noted after normalizing for one-time sales [21] - In Q4, semiconductor market contributed 43% of revenue, compound semiconductor market contributed 23%, and data storage market contributed 24% [25] Market Data and Key Metrics Changes - The United States accounted for 38% of total revenue in 2021, driven by data storage customers, while Asia Pacific (excluding China) made up 35% [24] - In Q4, the United States represented 37% of total revenue, Asia Pacific (excluding China) contributed 26%, and China accounted for 25% [27] Company Strategy and Development Direction - The company views 2021 as an inflection point, completing its transformation and focusing on growth strategies, including R&D projects in laser annealing and MOCVD for power electronics [10][12] - The company aims to expand its served available market through the adoption of laser annealing technology and is engaged with leading customers for advanced applications [49][51] - The company is committed to improving governance and corporate responsibility while enhancing service capabilities to support customer needs [13][60] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2022, expecting significant growth in semiconductor and compound semiconductor markets, with a revenue outlook between $640 million and$ 680 million [45][41] - The company anticipates challenges from supply chain issues and inflation but expects to maintain gross margins around 42% to 44% [29][34] - Management noted that the data storage market is expected to decline in 2022 but anticipates recovery in 2023 as demand from cloud and data center applications increases [58][96] Other Important Information - The company ended 2021 with a backlog of $440 million, a 20% increase from 2020, with semiconductor backlog more than doubling [33] - The company has entered into a$ 150 million revolving credit facility to enhance financial flexibility [41] Q&A Session Summary Question: Can you expand on the repeat multi-systems orders? - Management indicated that laser annealing is expected to be the largest business in 2022, with nearly 50% growth anticipated [66] Question: What specific applications are driving MOCVD adoption? - Management noted traction in power electronics and multiple applications for the Lumina platform, including micro LED and edge-emitting lasers [70] Question: What is the outlook for gross margins? - Management expects gross margins to improve to 43% in 2022, despite ongoing supply chain challenges [76] Question: Are you seeing traction in advanced packaging processes? - Management confirmed opportunities in heterogeneous integration while also maintaining business in traditional packaging processes [80] Question: What is the expected revenue progression throughout 2022? - Management anticipates higher revenue in the second half of 2022 compared to the first half, with a year-on-year growth of 13% to 14% [91]