Axcelis Technologies’ Earnings Call: Mixed Sentiments and Strategic Moves

Axcelis ((ACLS)) has held its Q3 earnings call. Read on for the main highlights of the call.

Axcelis Technologies’ recent earnings call revealed a mixed sentiment, highlighting both achievements and challenges. The company celebrated surpassing revenue expectations and achieving record Customer Support and Innovation (CS&I) revenue. However, these positive notes were counterbalanced by a decline in bookings, lower gross margins, and reduced revenue from China.

Exceeded Revenue and Earnings Expectations

Axcelis Technologies reported impressive financial results for Q3 2025, with revenue reaching $214 million and non-GAAP earnings per share of $1.21. Both figures surpassed the company’s outlook, showcasing strong financial performance despite market challenges.

Record CS&I Revenue

The company achieved a milestone with record CS&I revenue of $70 million. This success was driven by robust demand for spares, consumables, and service revenues, underscoring the strength of Axcelis’ customer support and innovation efforts.

Merger with Veeco Announced

In a strategic move, Axcelis announced a merger with Veeco. This merger is expected to create a leading semiconductor equipment company, leveraging cross-sell synergies, enhancing market presence in semiconductor materials, and expanding capabilities.

Silicon Carbide Market Growth

Axcelis reported sequential growth in shipments to Silicon Carbide applications, with multiple tools delivered to customers. This development validates the long-term growth opportunities in the Silicon Carbide market, positioning the company for future success.

Positive Outlook for Memory Segment

Despite recent declines, Axcelis remains optimistic about the memory segment’s growth prospects in 2026. The anticipated increase in demand for DRAM and HBM is expected to drive this growth, offering a positive outlook for the segment.

Decline in Bookings and China Revenue

The earnings call highlighted a decline in bookings to $52 million and a decrease in revenue from China, which fell to 46% of total sales from 55% in the previous quarter. This decline presents a challenge for the company moving forward.

Lower Gross Margin

Axcelis reported a non-GAAP gross margin of 41.8%, falling short of the expected 43%. This was attributed to product mix and the recognition of low-margin system installations, impacting overall profitability.

Challenges in Power and General Mature Segments

The power and general mature segments faced softer bookings, affecting overall performance and visibility. These challenges highlight areas where the company needs to focus on improving performance.

Forward-Looking Guidance

Looking ahead, Axcelis provided guidance for the fourth quarter of 2025, anticipating revenue of approximately $215 million and non-GAAP gross margins of about 43%. The company is optimistic about sequential booking improvements, driven by increased activity in various segments, despite a moderation in demand throughout 2025.

In summary, Axcelis Technologies’ earnings call presented a mixed outlook, with notable achievements in revenue and CS&I growth tempered by challenges in bookings and margins. The company’s strategic moves, such as the merger with Veeco and focus on emerging markets like Silicon Carbide, position it for future growth, despite current hurdles.