Axcelis Technologies — Third Quarter 2026 Earnings Summary

Financial Performance:

• Revenue for the three months ended September 30, 2026, was $237.8 million, compared to $213.6 million in the same period of 2025.
• GAAP gross margin was 41.0% (vs. 41.6% in Q3 2025); Non-GAAP gross margin was 41.2% (vs. 41.8% in Q3 2025).
• GAAP operating margin was 11.5% (vs. 11.7% in Q3 2025); Non-GAAP operating margin was 16.6% (vs. 18.2% in Q3 2025).
• GAAP net income was $37.8 million, compared to $26.0 million in Q3 2025.
• GAAP diluted earnings per share (EPS) were $1.21, compared to $0.83 in Q3 2025.
• Non-GAAP diluted EPS were $1.26, compared to $1.21 in Q3 2025.
• Adjusted EBITDA was $44.0 million for the quarter, compared to $43.2 million in Q3 2025.
• Cash and cash equivalents increased to $190.8 million at September 30, 2026, from $145.5 million at December 31, 2025.
• Total assets were $1.48 billion at September 30, 2026, compared to $1.36 billion at December 31, 2025.
• Deferred revenue increased to $138.0 million (current $95.6 million + long-term $42.4 million) at September 30, 2026, from $108.9 million (current $65.5 million + long-term $43.4 million) at December 31, 2025.
• Net cash provided by operating activities was $40.2 million for the quarter.

Guidance and Future Outlook:

• For the fourth quarter ending December 31, 2026, the company expects revenue of approximately $275 million.
• Q4 2026 GAAP diluted EPS is expected to be approximately $1.15.
• Q4 2026 Non-GAAP diluted EPS is expected to be approximately $1.50.
• Management anticipates finishing 2026 with positive momentum and expects further growth in 2027.

Business Segments and Product Lines:

• Systems revenue showed sequential growth driven by improving demand.
• CS&I (Customer Solutions & Services) revenue reached a quarterly record.
• Bookings saw a strong increase, reflecting a broadening recovery across end markets.
• Continued momentum was observed in the Memory market.
• Increasing activity was noted in the Power and General Mature markets.
• The CS&I business continues to show sustained strength.
• Starting in Q3 2026, the company no longer separately presents revenue and cost of revenue attributable to Services.

Market and Competitive Landscape:

• Demand is improving across end markets, with a broadening recovery noted.
• Customer investment is recovering, positioning the company to capitalize on expanding market opportunities.
• The company's strategy of investing in next-generation technologies is yielding tangible results.

Risks and Challenges:

• Foreign exchange headwinds impacted gross margin in the third quarter.
• Forward-looking statements are subject to risks including customer order timing, conversion of orders to revenue, and demand continuity for semiconductor equipment.
• Risks include inability to meet changing market requirements, maintaining business relationships with major customers, and increased competitive pressure on sales and pricing.
• Potential increases in material and production costs that cannot be recouped in product pricing.
• Instability from global economic, political, or financial conditions, including tariffs on products or components.

Management Commentary and Tone:

• President and CEO Russell Low expressed pleasure with the third-quarter performance, citing improving demand and record CS&I revenue.
• Low highlighted a strong increase in bookings and a broadening recovery across end markets.
• Low noted that investments in next-generation technologies are beginning to yield results.
• Interim CFO David Ryzhik stated results exceeded expectations despite foreign exchange headwinds.
• Ryzhik emphasized healthy cash flow generation and a strong balance sheet providing ample financial flexibility.
• Management cited the combination of improving demand, a growing installed base, and CS&I strength as a solid foundation for 2027.

Other Key Points:

• A merger agreement with Veeco Instruments was announced on October 1, 2025, with associated transaction and integration costs included in non-GAAP adjustments.
• The company incurred transaction and integration costs of $4.97 million in Q3 2026 and $20.19 million for the nine months ended September 30, 2026.
• Stock-based compensation expense was $6.47 million for the quarter and $17.79 million for the nine months ended September 30, 2026.
• No common stock repurchases occurred in Q3 2026; $32.3 million was repurchased in Q3 2025, and $95.9 million was repurchased for the nine months ended September 30, 2025.
• The company will host a conference call on November 5, 2026, at 8:30 a.m. ET to discuss results.