Veeco Instruments Inc ((VECO)) has held its Q1 earnings call. Read on for the main highlights of the call.
Veeco Instruments Inc. recently held its earnings call, revealing a mixed sentiment. The company showcased strong performance in its semiconductor segment and celebrated strategic wins, yet faced notable challenges due to tariffs and declining revenues in other areas. Growth in advanced packaging and semiconductor sectors provided some relief against these hurdles.
Solid Financial Performance
Veeco reported a robust financial performance with revenues reaching $167 million, surpassing the midpoint of their guidance. The company achieved a non-GAAP operating income of $24 million and a non-GAAP EPS of $0.37, both exceeding the high-end of their guidance, indicating strong operational efficiency.
Strategic Wins and Customer Recognition
The company celebrated significant strategic achievements, including receiving Intel’s 2025 EPIC supplier award for excellence in anneal technology. Veeco also secured substantial orders for laser annealing systems from leading-edge logic customers, reinforcing its position as a key player in the industry.
Growth in Semiconductor Segment
Veeco’s semiconductor segment displayed impressive growth, with a 10% sequential increase and a 3% year-over-year rise. This growth was primarily driven by advanced packaging and lithography systems, highlighting the segment’s resilience and potential.
Strong Demand in Advanced Packaging
The advanced packaging segment showed promising prospects, with Veeco announcing $35 million in lithography orders. The company anticipates this business to double by 2025, fueled by demand in AI and high-performance computing.
Revenue Decline in Certain Segments
Despite overall strong performance, Veeco experienced a revenue decline of 4% year-over-year and 8% sequentially. The compound semiconductor market and data storage revenue decreased to $14 million and $7 million, respectively, indicating areas needing attention.
Impact of Tariffs and Trade Uncertainty
The introduction of new tariffs has led to shipment delays to China, affecting future demand and increasing costs. This has created an uncertain business environment, posing challenges for Veeco’s operations in the region.
Challenges in China Market
Veeco’s revenue from China is under pressure due to tariffs, with a projected $15 million impact on Q2 shipments. This highlights the geopolitical risks the company faces in maintaining its market presence in China.
Uncertain Data Storage Outlook
The outlook for the data storage segment remains uncertain, with no system shipments expected for 2025. Revenue in this area will rely solely on service and aftermarket support, indicating a need for strategic adjustments.
Forward-Looking Guidance
Looking ahead, Veeco remains optimistic about its long-term growth prospects. The company projects potential expansions in its served available market (SAM), including a $1.3 billion growth in annealing and significant opportunities in ion beam deposition and advanced packaging. Despite current challenges, Veeco is positioning itself for future success.
In summary, Veeco Instruments Inc.’s earnings call presented a picture of strong performance in its core semiconductor segment and strategic achievements, tempered by challenges from tariffs and declining revenues in certain areas. The company’s forward-looking guidance suggests optimism for long-term growth, driven by advancements in technology and strategic market positioning.