Acm Research ((ACMR)) has held its Q1 earnings call. Read on for the main highlights of the call.
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Acm Research’s latest earnings call struck an overall optimistic tone, as strong top-line growth and surging electrochemical plating demand overshadowed near-term profit pressure. Management emphasized robust revenue and shipment gains, exceptional performance in newer product lines and a fortified balance sheet, while acknowledging weaker cleaning sales, thinner margins and negative operating cash flow in the quarter.
Revenue and Shipment Momentum
Acm Research reported Q1 2026 revenue of $231.3 million, an increase of 34.2% year over year, powered largely by its electrochemical plating and advanced packaging businesses. Shipments grew even faster to $240.7 million, up 53.6%, and the company expects shipments to continue outpacing reported revenue for the full year as tools move through customer acceptance.
ECP and Furnace Technologies Surge
Revenue from ECP, furnace and other technologies soared to $84.2 million, a 204.9% jump and 36.4% of quarterly sales, underscoring rapid adoption of Acm’s newer platforms. Management highlighted strong electroplating momentum, particularly in panel plating, positioning these tools as a key growth engine as customers push advanced node and high-density packaging.
Advanced Packaging Expansion
Advanced packaging, excluding ECP, along with services and spares, generated $24.5 million in revenue, up 62% year over year and signaling a broader footprint in packaging wet-process tools. The company noted that higher services and spares sales reflect a growing installed base, providing recurring revenue and deeper customer engagement in back-end and heterogeneous integration markets.
Margins Hold Within Target Band
Gross margin came in at 46.5%, above the midpoint of Acm’s long-term 42%–48% target range, supported by a favorable product mix and lower impact from inventory provisions. Even as the mix shifts toward newer platforms and advanced packaging, management suggested that current margins demonstrate pricing power and operational discipline in a competitive capital equipment landscape.
Cash Strength and Capital Raise
The balance sheet remains a major pillar of the story, with $1.25 billion in cash, equivalents, restricted cash and time deposits and net cash of $924.2 million at quarter-end. Acm also raised $110 million in gross proceeds via a February minority share sale in ACM Shanghai, bolstering funds for its global expansion and manufacturing build-out.
New Products Gain Traction
New tools are moving steadily through development and evaluation, including single-wafer SPM cleaning systems, where management expects over 15–20 units delivered by year-end. Panel-level horizontal plating tools, in both 515×510 mm and 310×310 mm sizes, are already in backlog, while the first PECVD silicon carbon nitride system and vertical furnace tools are undergoing customer evaluations.
Manufacturing and Global Footprint
The Lingang mini line is now fully operational, helping shorten qualification cycles, and a second Lingang building is planned to further expand capacity. In the U.S., Acm’s Oregon facility remains on track to support U.S.-made tool production and a demonstration lab by year-end 2026, with a goal of installing more than 20 tools outside Mainland China by that time.
Cleaning Revenue Soft Patch
Despite growth in other areas, cleaning revenue, including single-wafer, Tahoe and semi-critical tools, slipped 5.5% year over year to $122.5 million and about 53% of sales. Management attributed the decline to limited contribution from new cleaning products in the quarter, indicating room for recovery as additional platforms ramp and the mix normalizes.
Profitability Under Pressure
Net income attributable to Acm Research declined to $24.3 million from $31.3 million a year earlier, with diluted EPS falling to $0.34 from $0.46. Operating margin also narrowed to 18.1% from 20.7%, reflecting the drag from higher operating expenses and the early-stage nature of several growth initiatives.
Rising Operating Expenses
Operating expenses climbed 38.5% to $65.8 million as the company invested heavily in innovation and commercial expansion. Research and development spending reached 15% of sales, and management plans to lift R&D intensity to 16%–18% as it pushes a broad product roadmap, accepting near-term margin pressure to secure longer-term competitive advantages.
Negative Operating Cash Flow
Operating activities consumed $29.5 million of cash in the quarter, underscoring the near-term working capital demands of rapid growth and inventory build. However, management pointed to the substantial net cash position and ongoing access to capital as buffers that provide flexibility to invest through short-term cash volatility.
Inventory Build and Strategic Buys
Total inventory rose to $738.0 million from $702.6 million at year-end 2025, with raw materials up to $377.9 million and work-in-process to $81.6 million. The company described the higher levels as strategic, supporting increased production and mitigating supply risks as it prepares for stronger demand and more complex tool configurations.
Timing Dynamics in Deliveries
Roughly 15% of Q1 shipments represented catch-up deliveries of products rescheduled from the fourth quarter of 2025, highlighting some timing and scheduling shifts with customers. Management suggested such dynamics can create quarter-to-quarter noise but emphasized that the underlying demand trend for its tools remains intact.
Delayed Contribution from New Platforms
Some newer platforms, notably the vertical furnace line, contributed very little revenue in the quarter as tools remain in evaluation phases. Acm expects these products to add more meaningfully in later quarters once qualifications are completed, reinforcing the view that current earnings understate the potential of the expanding portfolio.
Stock-Based Compensation Uptick
Non-GAAP adjustments included $5.6 million in stock-based compensation during Q1, and management signaled that SBC will increase in Q2. The rise is tied to option grants associated with ACM Shanghai shares, which could modestly weigh on reported earnings metrics even as they align employee incentives with long-term growth.
Guidance and Long-Term Outlook
Acm reaffirmed its 2026 revenue outlook of $1.08–$1.175 billion, implying about 25% growth at the midpoint, and reiterated that shipments should again outpace revenue. The company maintained its long-term 42%–48% gross margin target and a $4 billion long-range revenue goal, backed by plans for $175 million in 2026 capex, elevated R&D, expanded Lingang capacity up to roughly $3 billion in annual output and continued global diversification.
Acm Research’s earnings call painted a picture of a company in investment mode, trading some near-term profitability and cash flow for accelerated growth and product diversification. For investors, the key takeaway is that strong revenue momentum, expanding ECP and packaging exposure and a sizable cash cushion are being leveraged to build a broader, more global franchise, even as margins and cleaning revenues face short-term headwinds.