Veeco(VECO) - 2021 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenue for Q2 2021 was $146 million, representing a 9% sequential increase and a 48% year-over-year increase [24] - Non-GAAP gross margin was 41.6%, flat compared to the previous quarter [27] - Non-GAAP operating income increased by 32% sequentially to$ 21.3 million, more than doubling from the same quarter last year [27] - Diluted non-GAAP EPS was $0.35, based on a diluted share count of 51.8 million shares [27] - Cash and short-term investments at the end of the quarter were$ 330 million, a sequential increase of $2 million [28] Business Line Data and Key Metrics Changes - Semiconductor revenue increased by 43% to$ 54 million, accounting for 37% of total revenue, driven by Laser Annealing and Lithography products [25] - Data Storage revenue increased by 84% to $52 million, making up 35% of total revenue, driven by capacity and technology additions [25] - Compound Semiconductor revenue increased by 37% to$ 24 million, representing 17% of total revenue, driven by wet processing systems for RF applications [25] Market Data and Key Metrics Changes - The U.S. region accounted for 46% of total revenue, driven by Ion Beam systems shipped to Data Storage customers [26] - The Asia-Pacific region (excluding China) made up 34% of revenue, while China accounted for 14% [26] - Wafer fab equipment spending is forecasted to be approximately $18 billion for 2021, with long-term forecasts predicting spending up to$ 100 billion annually [13] Company Strategy and Development Direction - The company is focused on four priorities: improving culture, enhancing profitability, achieving revenue growth, and investing in evaluation systems and service infrastructure [21][22] - The strategic rationale for the Ultratech acquisition is now serving as a cornerstone for the overall growth strategy [10] - The company is expanding its manufacturing footprint for Laser Annealing and Lithography products to meet increasing demand [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the remainder of 2021, with near-term growth plans unfolding as expected [8] - The company anticipates a digestion period in Data Storage equipment in 2022 but expects to offset this with growth in Semiconductor and Compound Semiconductor markets [43] - Management highlighted strong momentum in the semiconductor market, particularly in Laser Annealing and Advanced Packaging [10][16] Other Important Information - The company plans to host a Virtual Analyst Day in September to share more details about its strategy, markets, and technologies [33] - The company expects Q3 revenue to be between $135 million and$ 155 million, with non-GAAP gross margin between 41% and 43% [30] Q&A Session Summary Question: Update on equipment wins and evaluation tools - The company has shipped eight out of ten planned evaluation tools, with strong performance in Laser Annealing and Compound Semiconductor applications [36][37] Question: Data Storage market outlook - The company has a significant backlog in Data Storage and expects continued growth despite a potential slowdown in the market [40][42] Question: Sources of second-half upside - The company is seeing strength in its Semiconductor business and higher service revenue, which may provide upside in the second half of the year [50] Question: Supply chain constraints - The company is experiencing supply chain constraints but has successfully mitigated risks through proactive measures [59][60] Question: Advanced Packaging business demand - The Advanced Packaging business is seeing broad-based demand, particularly in heterogeneous integration applications [74][76]