Axcelis Technologies Reports Strong Q1 Earnings Amid Challenges

Axcelis ((ACLS)) has held its Q1 earnings call. Read on for the main highlights of the call.

Axcelis Technologies recently held an earnings call that conveyed a generally positive sentiment, despite some challenges in specific segments. The company reported strong financial performance, with impressive revenue, earnings, and gross margins. Axcelis also demonstrated confidence in its future growth by maintaining a robust cash position and continuing to invest in share repurchases and research and development. However, concerns were raised about declining shipments in certain areas and a decrease in revenue from China.

Exceeding Revenue and Earnings Expectations

Axcelis Technologies exceeded its revenue and earnings expectations for the first quarter of 2025, reporting $193 million in revenue and earnings per diluted share of $0.88. On a non-GAAP basis, earnings per share were $1.04, showcasing the company’s strong financial performance.

Strong Bookings

The company generated $110 million in bookings, achieving a book-to-bill ratio of 0.8x, the highest since the fourth quarter of 2023. This indicates a healthy demand for Axcelis’ products and services.

Robust Gross Margins

Axcelis reported GAAP gross margins of 46.1%, surpassing the outlook of 40%. This was driven by lower warranty and installation costs and a favorable sales mix. Non-GAAP gross margins were slightly higher at 46.4%.

Resilient Cash Position

The company ended the quarter with $587 million in cash and no debt, generating $35 million in free cash flow. This strong cash position provides Axcelis with financial flexibility for future investments and operations.

Continued Investment and Share Repurchase

Axcelis’ Board approved a $100 million increase in share repurchase authorization. The company repurchased $18 million of shares in the first quarter and plans to continue repurchasing at an elevated level, demonstrating its commitment to returning value to shareholders.

Silicon Carbide Shipments Decline

Shipments of silicon carbide applications declined sequentially, aligning with expectations due to softer end demand. This reflects a broader trend in the industry and highlights the challenges in this specific segment.

Muted Silicon IGBTs Revenues

Revenues from silicon IGBTs were muted, affected by cyclical softness in the automotive end market and the impact of silicon carbide adoption. This indicates a shift in market dynamics that Axcelis is navigating.

NAND Market Weakness

Demand from NAND applications is expected to remain muted as customers focus on transitioning to higher layer accounts rather than expanding wafer capacity. This trend suggests a strategic shift in customer priorities.

Lower Revenue from China

Revenue from China accounted for 37% of total system sales in the first quarter, down from 49% in the previous quarter. The company anticipates a year-over-year decline in revenue from China, reflecting geopolitical and market challenges.

Forward-Looking Guidance

Looking ahead, Axcelis anticipates second-quarter revenue of approximately $185 million and gross margins around 42%. The company remains focused on mitigating tariff impacts and maintaining operational resilience, indicating a proactive approach to future challenges.

In summary, Axcelis Technologies’ earnings call highlighted a strong financial performance with impressive revenue and earnings figures. Despite challenges in certain segments and a decrease in revenue from China, the company remains confident in its growth prospects, supported by a robust cash position and continued investments. The forward-looking guidance suggests a cautious yet optimistic outlook, with a focus on maintaining resilience in the face of market dynamics.