Veeco(VECO) - 2021 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenue for Q1 2021 was $134 million, driven by semiconductor and data storage sales, with a gross margin above 41% and non-GAAP operating income of$ 16 million, leading to diluted non-GAAP EPS of $0.25 [9][28] - Cash flow from operations was$ 10 million, and cash and short-term investments increased by $8 million to$ 328 million [10][32] - The company increased its full-year revenue guidance to a range of $540 million to$ 560 million, reflecting a 21% year-on-year growth, up from a previous guidance of 17% [37] Business Line Data and Key Metrics Changes - Semiconductor revenue was $52 million, representing 39% of total revenue, driven by laser annealing and lithography products [29] - Compound semiconductor revenue was$ 25 million, making up 18% of total revenue, driven by wet processing systems for RF applications [29] - Data storage revenue was $41 million, accounting for 31% of total revenue, with expectations for continued growth [29] Market Data and Key Metrics Changes - The Asia Pacific region (excluding China) contributed 41% of total revenue, the United States accounted for 34%, China made up 15%, and EMEA contributed 10% [30] - Analysts forecasted a growth of more than 20% in wafer fab equipment for 2021 and another 10% in 2022, indicating a healthy macro environment in the semiconductor equipment space [11] Company Strategy and Development Direction - The company is focusing on maintaining resiliency across operations, profitability, and near-term growth with laser annealing, 5G RF, and data storage solutions [25][26] - Investments are being made in evaluation systems and service infrastructure to support growth and win additional application steps [26] - The company is engaging with customers and shipping evaluation systems to position itself for long-term growth [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's performance and the positive macro trends in the semiconductor space, noting increased demand for laser annealing and advanced packaging [41][44] - The company is cautiously optimistic about returning to normal operations as vaccination rates increase, while prioritizing employee health and safety [7][8] Other Important Information - The company reported a backlog of$ 366 million at the beginning of the year, with data storage being the largest contributor [102] - The company is experiencing strong demand in the compound semiconductor market, particularly for RF filters and power amplifiers driven by 5G adoption [22][78] Q&A Session Summary Question: Demand pull-ins in semiconductor supply chain - Management noted an uptick in demand aligned with macro trends, particularly in laser annealing opportunities, and increased engagement in the semiconductor space [41] Question: Number of evaluation tools delivered - Six evaluation systems are currently in the field, with plans to ship four more by the end of the year, focusing on laser annealing and advanced packaging [45] Question: Advanced packaging market demand - Demand is broadening to include foundries and IDMs, not just OSATs, indicating a positive trend in the advanced packaging market [50] Question: Supply chain tightness - The supply chain is currently stable, with no significant constraints reported, and the company is actively managing supply chain issues [59] Question: Data storage business visibility - Management indicated that Q1 revenue was within expectations, and they anticipate a strong data storage year based on backlog [67][68] Question: Transition to HAMR and EMR heads - The transition to more complex heads is expected to increase the number of passes through Veeco's equipment, positively impacting demand [91] Question: Backlog size and growth - The backlog was reported at $366 million, with a positive trend in backlog execution, particularly in data storage and semiconductor segments [102]