Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2025
or
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 000-30941
AXCELIS TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Delaware
34-1818596
(State or other jurisdiction ofincorporation or organization)
(IRS EmployerIdentification No.)
108 Cherry Hill Drive
Beverly, Massachusetts 01915
(Address of principal executive offices, including zip code)
(978) 787-4000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading symbol
Name of each exchange on which registered
Common Stock, $0.001 par value
ACLS
Nasdaq Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☒
Accelerated filer ☐
Non-accelerated filer ☐
Smaller reporting company ☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐ No ☒
As of August 1, 2025, there were 31,418,860 shares of the registrant’s common stock outstanding.
PART I - FINANCIAL INFORMATION
Item 1.
Financial Statements (Unaudited)
Consolidated Statements of Operations for the three and six months ended June 30, 2025 and 2024
3
Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2025 and 2024
4
Consolidated Balance Sheets as of June 30, 2025 and December 31, 2024
5
Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30, 2025 and 2024
6
Consolidated Statements of Cash Flows for the six months ended June 30, 2025 and 2024
7
Notes to Consolidated Financial Statements (Unaudited)
8
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
21
Overview
Critical Accounting Estimates
Results of Operations
22
Liquidity and Capital Resources
28
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
29
Item 4.
Controls and Procedures
PART II - OTHER INFORMATION
30
Legal Proceedings
Item 1A.
Risk Factors
Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities
Defaults Upon Senior Securities
Mine Safety Disclosures
Item 5.
Other Information
Item 6.
Exhibits
31
2
PART 1—FINANCIAL INFORMATION
Item 1. Financial Statements.
Axcelis Technologies, Inc.
Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Three months ended
Six months ended
June 30,
2025
2024
Revenue:
Product
$
183,402
245,380
366,226
488,798
Services
11,142
11,132
20,881
20,085
Total revenue
194,544
256,512
387,107
508,883
Cost of revenue:
95,462
134,759
189,962
262,670
11,739
9,344
21,034
17,753
Total cost of revenue
107,201
144,103
210,996
280,423
Gross profit
87,343
112,409
176,111
228,460
Operating expenses:
Research and development
27,064
25,786
54,192
51,448
Sales and marketing
15,003
17,230
30,127
34,675
General and administrative
16,311
16,583
33,668
32,988
Total operating expenses
58,378
59,599
117,987
119,111
Income from operations
28,965
52,810
58,124
109,349
Other income (expense):
Interest income
5,481
6,051
11,082
11,566
Interest expense
(1,355)
(1,339)
(2,722)
(2,684)
Other, net
1,906
(257)
1,597
(1,968)
Total other income
6,032
4,455
9,957
6,914
Income before income taxes
34,997
57,265
68,081
116,263
Income tax provision
3,621
6,399
8,126
13,803
Net income
31,376
50,866
59,955
102,460
Net income per share:
Basic
0.99
1.56
1.87
3.14
Diluted
0.98
1.55
3.12
Shares used in computing net income per share:
Basic weighted average shares of common stock
31,847
32,598
32,051
32,618
Diluted weighted average shares of common stock
31,882
32,771
32,103
32,848
See accompanying Notes to these Consolidated Financial Statements (Unaudited)
Consolidated Statements of Comprehensive Income
(In thousands)
Other comprehensive income (loss):
Foreign currency translation adjustments
5,066
(913)
5,712
(2,644)
Amortization of actuarial net gain and other adjustments from pension plan, net of tax
—
10
Unrealized (losses) gains on available-for-sale investments
(58)
23
Total other comprehensive income (loss)
5,008
(908)
5,735
(2,634)
Comprehensive income
36,384
49,958
65,690
99,826
Consolidated Balance Sheets
December 31,
ASSETS
Current assets:
Cash and cash equivalents
173,649
123,512
Short-term investments
376,193
447,831
Accounts receivable, net
138,841
203,149
Inventories, net
310,768
282,225
Prepaid income taxes
5,505
6,420
Prepaid expenses and other current assets
59,519
60,471
Total current assets
1,064,475
1,123,608
Property, plant and equipment, net
57,377
53,784
Operating lease assets
28,561
29,621
Finance lease assets, net
14,704
15,346
Long-term restricted cash
7,631
7,552
Deferred income taxes
72,432
68,277
Long-term investments
31,114
-
Other assets
47,192
50,593
Total assets
1,323,486
1,348,781
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable
37,111
46,928
Accrued compensation
16,631
25,536
Warranty
10,903
13,022
Deferred revenue
89,827
94,673
Current portion of finance lease obligation
1,437
1,345
Other current liabilities
21,198
26,018
Total current liabilities
177,107
207,522
Long-term finance lease obligation
41,567
42,329
Long-term deferred revenue
39,915
43,501
Other long-term liabilities
42,514
42,639
Total liabilities
301,103
335,991
Commitments and contingencies (Note 17)
Stockholders’ equity:
Common stock, $0.001 par value, 75,000 shares authorized; 31,418 shares issued and outstanding at June 30, 2025; 32,365 shares issued and outstanding at December 31, 2024
32
Additional paid-in capital
535,667
548,654
Retained earnings
487,164
470,318
Accumulated other comprehensive loss
(479)
(6,214)
Total stockholders’ equity
1,022,383
1,012,790
Total liabilities and stockholders’ equity
Consolidated Statements of Stockholders’ Equity
Accumulated
Additional
Other
Total
Common Stock
Paid-in
Retained
Comprehensive
Stockholders’
Shares
Amount
Capital
Earnings
(Loss)
Equity
Balance at December 31, 2023
32,685
33
547,189
319,506
(1,846)
864,882
51,595
(1,731)
Change in pension obligation
Issuance of common stock on restricted stock units, net of shares withheld
42
(2,699)
Stock-based compensation expense
4,690
Repurchase of common stock
(122)
(2,201)
(12,798)
(14,999)
Balance at March 31, 2024
32,605
546,979
358,303
(3,572)
901,743
Issuance of stock under Employee Stock Purchase Plan
1,242
143
(8,468)
5,469
(141)
(2,545)
(12,451)
(14,996)
Balance at June 30, 2024
32,617
542,677
396,718
(4,480)
934,948
Balance at December 31, 2024
32,365
28,579
646
Unrealized gains on available-for-sale investments
81
38
(1,583)
4,903
(274)
(4,954)
(13,224)
(18,178)
Balance at March 31, 2025
32,129
547,020
485,673
(5,487)
1,027,238
Unrealized losses on available-for-sale investments
1,246
94
(2,569)
5,421
(826)
(1)
(15,451)
(29,885)
(45,337)
Balance at June 30, 2025
31,418
Consolidated Statements of Cash Flows
Cash flows from operating activities
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
8,824
7,636
(4,155)
(2,013)
10,324
10,159
Provision for doubtful accounts
(459)
Provision for excess and obsolete inventory
1,742
2,846
Accretion of discounts and premiums on short-term and long-term investments
(2,254)
(6,623)
Unrealized currency (gain) loss on foreign denominated transactions
(6,807)
11,505
Mark-to-market adjustment on forward exchange contracts
457
Changes in operating assets and liabilities:
Accounts receivable
67,459
25,009
Inventories
(16,760)
12,951
1,175
(5,849)
Accounts payable and other current liabilities
(28,343)
(18,541)
(9,581)
(35,957)
Income taxes
1,966
(8,391)
Other assets and liabilities
(12,443)
Net cash provided by operating activities
79,522
82,290
Cash flows from investing activities
Expenditures for property, plant and equipment and capitalized software
(6,945)
(3,624)
Purchases of short-term and long-term investments
(345,174)
(249,015)
Maturities and sales of short-term investments
387,975
191,345
Net cash provided by (used in) investing activities
35,856
(61,294)
Cash flows from financing activities
Net settlement on restricted stock grants
(4,152)
(11,167)
(63,515)
(29,995)
Proceeds from Employee Stock Purchase Plan purchases
Principal payments on finance lease obligation
(676)
(736)
Net cash used in financing activities
(67,097)
(40,656)
Effect of exchange rate changes on cash and cash equivalents
1,935
(2,474)
Net increase (decrease) in cash, cash equivalents and restricted cash
50,216
(22,134)
Cash, cash equivalents and restricted cash at beginning of period
131,064
173,951
Cash, cash equivalents and restricted cash at end of period
181,280
151,817
Note 1. Nature of Business
Axcelis Technologies, Inc. (“Axcelis” or the “Company”) was incorporated in Delaware in 1995 and is a producer of ion implantation equipment used in the fabrication of semiconductor chips in the United States, Europe and Asia. In addition, we provide extensive worldwide aftermarket service and support, including spare parts, equipment upgrades, used equipment, and maintenance services to the semiconductor industry.
The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments which are of a normal recurring nature and considered necessary for a fair presentation of these financial statements have been included. Operating results for the interim periods presented are not necessarily indicative of the results that may be expected for other interim periods or for the year as a whole.
The balance sheet at December 31, 2024 has been derived from the audited consolidated financial statements at that date but does not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. As of June 30, 2025, there have been no material changes in the Company’s significant accounting policies, other than as described in Note 2 below. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Form 10-K”).
Note 2. Significant Accounting Policies
Cash, Cash Equivalents, Short-term Investments, and Long-term Investments
Cash and cash equivalents consist of cash on hand and highly liquid investments with original maturities of 90 days or less. Cash equivalents consist primarily of money market funds, U.S. government and agency securities and deposit accounts. Cash equivalents are carried on the balance sheet at fair market value. Short-term investments are highly liquid investments, primarily consisting of U.S. government and agency securities, with original maturities of greater than 90 days but less than one year from date of purchase. Long-term investments consist of U.S. government and agency securities with original maturities greater than one year from the date of purchase. Beginning as of March 31, 2025, both our short-term and long-term investments are classified as available-for-sale as a result of the below noted sale of securities. In prior periods, our short-term investments were classified as held-to-maturity. We classify our long-term investments as non-current based on the security’s contractual maturity. We evaluate if any declines in fair value below amortized cost are caused by expected credit losses, as well as our ability and intent to hold the investment until a forecasted recovery occurs. Any unrealized gains and losses are included in accumulated other comprehensive loss in the Consolidated Statement of Stockholders’ Equity. Income related to these securities is recorded in interest income in the Consolidated Statements of Operations. As of June 30, 2025, the amortized cost and fair value of the available-for-sale short-term investments was $376.3 million and $376.2 million, respectively. As of June 30, 2025, the amortized cost and fair value of the long-term investments was $31.0 million and $31.1 million, respectively. As of June 30, 2025, we had no allowances for credit loss on our investments.
In February 2025, we sold securities classified as held-to-maturity with a total net carrying value of $199.5 million. The majority of the proceeds were reinvested back into short-term investments during the three months ended March 31, 2025. Due to this sale, the remaining held-to-maturity securities were reclassified as available-for-sale, resulting in a remeasurement increase in short-term investments for balance sheet presentation purposes with a corresponding adjustment to accumulated other comprehensive loss of $81.0 thousand as of March 31, 2025.
Note 3. Stock-Based Compensation
We maintain the Axcelis Technologies, Inc. 2012 Equity Incentive Plan, as amended (the “2012 Equity Plan”), which became effective on May 2, 2012, and permits the issuance of options, restricted stock, restricted stock units (“RSUs”) and performance awards to selected employees, directors, and consultants of the Company.
The 2012 Equity Plan is more fully described in Note 13 to the consolidated financial statements in our 2024 Form 10-K.
We recognized stock-based compensation expense of $5.4 million and $5.5 million for the three-month periods ended June 30, 2025 and 2024, respectively. We recognized stock-based compensation expense of $10.3 million and $10.2 million for the six-month periods ended June 30, 2025 and 2024, respectively. These amounts include compensation expense related to RSUs and stock issued to participants under the 2020 Employee Stock Purchase Plan (the “2020 ESPP”).
In the three-month periods ended June 30, 2025 and 2024, we issued 0.1 million and 0.2 million shares of common stock, respectively, upon vesting of RSUs granted under the 2012 Equity Plan and purchases under the 2020 ESPP. In both the three-month periods ended June 30, 2025 and 2024, we received proceeds of $1.2 million in connection with purchases under the 2020 ESPP.
In each of the six-month periods ended June 30, 2025 and 2024, we issued 0.2 million shares of common stock, upon vesting of RSUs granted under the 2012 Equity Plan and purchases under the 2020 ESPP. In both the six-month periods ended June 30, 2025 and 2024, we received proceeds of $1.2 million in connection with purchases under the 2020 ESPP.
Note 4. Leases
We have operating leases for manufacturing, office space, warehouse space, computer and office equipment and vehicles used in our business operations. We have a finance lease in relation to the 2015 sale-leaseback of our corporate headquarters in Beverly, Massachusetts. We review all agreements to determine if the agreement contains a lease component. An agreement contains a lease component if it provides for the use of a specific physical space or a specific physical item.
We recognize operating lease obligations under Accounting Standards Codification Topic 842, Leases (“Topic 842”). The guidance in Topic 842 requires recognition of lease assets and related liabilities on a discounted basis using the explicit or implicit discount rate stated within the agreement. We recognize a corresponding right-of-use asset, which is initially determined based upon the net present value of the associated liability and is adjusted for deferred costs and possible impairment, if any. For those lease agreements that do not indicate the applicable discount rate, we use our incremental borrowing rate. We have made the following policy elections: (i) operating leases with an initial term of 12 months or less are not recorded on the consolidated balance sheets; (ii) we recognize lease expense for operating leases on a straight-line basis over the lease term; and (iii) we account for lease components and non-lease components that are fixed payments as one component. Some of our operating leases include one or more options to renew, with renewal terms that can extend the respective lease term by one to three years. The exercise of lease renewal options is at our sole discretion. For lease extensions that are reasonably certain to occur, we have included the renewal periods in our calculation of the net present value of the lease obligation and related right-of-use asset. Certain leases also include options to purchase the leased property. The depreciable life of certain assets and leasehold improvements is limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. The amounts of operating and finance lease right-of-use assets and related lease obligations recorded within our consolidated balance sheets are as follows:
9
Leases
Classification
Assets
(in thousands)
Operating leases
Finance lease
Finance lease assets*
Total leased assets
43,265
44,967
Liabilities
Current
Operating
4,574
4,470
Finance
Non-current
24,363
25,321
Finance lease obligation
Total lease liabilities
71,941
73,465
*Finance lease assets are recorded net of accumulated depreciation of $47.9 million and include $0.5 million of prepaid financing costs as of June 30, 2025. Finance lease assets are recorded net of accumulated depreciation of $47.4 million and include $0.5 million of prepaid financing costs as of December 31, 2024.
Our operating lease office locations support local selling and servicing functions. Our Axcelis Asia Operations Center facility in South Korea is used to manufacture our products for Asia-based customers. We lease a logistics and flex manufacturing center in Beverly, Massachusetts to support our principal product manufacturing operations at our corporate headquarters. Operating lease expense and depreciation and interest expense relating to our finance lease obligation are recognized within our Consolidated Statement of Operations for the three and six months ended June 30, 2025 and 2024 as follows:
Lease cost
Operating lease cost
Product / services*
Cost of revenue
1,606
1,694
3,280
3,522
Operating expenses
149
203
368
326
Sales and marketing*
450
451
894
902
General and administrative*
212
337
538
532
Total operating lease cost
2,417
2,685
5,080
5,282
Finance lease cost
Depreciation of leased assets
Cost of revenue, Research and development, Sales and marketing and General and administrative
321
643
Interest on lease liabilities
1,148
1,187
2,304
2,384
Total finance lease cost
1,469
1,508
2,947
3,027
Total lease cost
3,886
4,193
8,027
8,309
* Product / services, sales and marketing and general and administrative expense also includes short-term lease and variable lease costs of approximately $0.4 million and $1.0 million for the three and six months ended June 30, 2025, respectively, and includes short-term lease and variable lease costs of approximately $0.7 million and $1.3 million for the three and six months ended June 30, 2024, respectively.
The lease of our corporate headquarters, shown below under finance leases, had an original lease term of 22 years, beginning in January 2015 and expiring in January 2037, with renewal options. All other locations are treated as operating leases, with lease terms ranging from one to 16 years. The tables below reflect the minimum cash outflow regarding our current lease obligations as well as the weighted-average remaining lease term and weighted-average discount rates used in our calculation of our lease obligations and right-of-use assets as of June 30, 2025:
Maturity of Lease Liabilities
2,950
3,243
6,193
2026
6,008
5,405
11,413
2027
6,128
3,597
9,725
2028
6,251
2,478
8,729
2029
6,376
2,278
8,654
Thereafter
48,960
22,384
71,344
Total lease payments
76,673
39,385
116,058
Less interest portion*
(33,669)
(10,448)
(44,117)
Finance lease and operating lease obligations
43,004
28,937
* Finance lease interest calculated using the implied interest rate; operating lease interest calculated using estimated corporate borrowing rate.
The table above does not include options to renew lease terms that are not reasonably certain of being exercised.
11
Lease term and discount rate
Weighted-average remaining lease term (years):
10.8
Finance leases
11.6
Weighted-average discount rate:
5.5%
10.5%
Our cash outflows from our operating leases include rent expense and other charges associated with these leases. These cash flows are included within the operating activities section of our statement of cash flows. Our cash flows from our finance lease include both an interest component and a principal component. The table below shows our cash outflows by lease type and related section of our statement of cash flows, as well as the non-cash amount capitalized on our balance sheet in relation to our operating lease right-of-use assets for the six months ended June 30, 2025 and 2024, respectively:
Six months ended June 30,
Cash paid for amounts included in the measurement of lease liabilities
Operating cash outflows from operating leases
Operating cash outflows from finance leases
Financing cash outflows from finance leases
676
736
Operating lease assets obtained in exchange for operating lease liabilities
1,411
825
Finance lease assets obtained in exchange for new finance lease liabilities
Note 5. Revenue
To reflect the organization of our business operations, we divide revenue into two categories: revenue from sales of new systems and revenue arising from the sale of used systems, parts, and labor to customers who own systems, which we refer to as “Aftermarket.”
Revenue by categories used by management are as follows:
Systems
133,288
198,645
270,897
394,076
Aftermarket
61,256
57,867
116,210
114,807
Total Revenue
12
We also consider revenue by geography. Revenue is allocated to geographic markets based upon the location to which our products are shipped and in which our services are performed. Revenue in our principal geographic markets is as follows:
North America
34,223
34,373
74,748
79,876
Asia Pacific
145,628
196,159
280,053
384,376
Europe
14,693
25,980
32,306
44,631
Our system sales revenue transactions give rise to contract liabilities (in the case of pre-payments and the fair value of goods and services to be delivered after the system delivery, such as installation and certain warranty obligations).
Contract liabilities are as follows:
Contract liabilities
129,742
138,174
Contract liabilities are reflected as deferred revenue on the consolidated balance sheets and include payments received in advance of system sales as well as deferral of revenue from systems sales for installation and other future performance obligations. Contract liabilities are recognized as revenue upon the fulfillment of performance obligations.
Balance, beginning of the period
139,324
208,418
210,885
Deferral of revenue
29,047
24,341
42,207
59,943
Other adjustments *
(2,273)
(4,716)
(2,272)
Recognition of deferred revenue
(36,356)
(54,032)
(48,367)
(92,101)
Balance, end of the period
174,011
* Adjustment to contracts with customers are assessed to determine if amounts paid by customers represent deferred revenue or liabilities payable to customers and will reclassify such amounts pursuant to our revenue recognition policy and ASC 606.
The majority of our system transactions have either (1) payment terms of 90% due upon shipment of the system and 10% due upon acceptance or (2) a pre-shipment deposit ranging from 20% to 60%, with the remainder due upon shipment, less 10% due at acceptance. Aftermarket transaction payment terms typically provide that payment is due either within 30 or 60 days after the service is provided or parts delivered.
Note 6. Receivables and Allowances for Credit Losses
All trade receivables are reported on the consolidated balance sheets at their amortized cost adjusted for any write-offs and net of allowances for credit losses.
We maintain an allowance for credit losses, which represents an estimate of expected losses over the remaining contractual life of our receivables, considering current market conditions and estimates for supportable forecasts when appropriate. The estimate is a result of our ongoing assessments and evaluations of collectability, historical loss experience, and future expectations in estimating credit losses in our receivable portfolio. We use historical loss experience rates and apply them to a related aging analysis while also considering customer and/or economic risk where appropriate.
13
Determination of the proper amount of allowances requires management to exercise judgment about the timing, frequency and severity of credit losses that could materially affect the provision for credit losses and, as a result, net earnings. The allowance takes into consideration numerous quantitative and qualitative factors that include receivable type, historical loss experience, loss migration, delinquency trends, collection experience, current economic conditions, trade restrictions, estimates for supportable forecasts, when appropriate, and credit risk characteristics.
We evaluate the credit risk of the customer when extending credit based on a combination of financial and qualitative factors that may affect our customers’ ability to pay. These factors may include the customer’s financial condition, past payment experience, and credit bureau report, as well as the value of the underlying collateral.
Management performs detailed reviews of our receivables on a quarterly basis to assess the adequacy of the allowances and to determine if any impairment has occurred. Amounts determined to be uncollectable are charged directly against the allowances, while amounts recovered on previously written-off accounts increase the allowances. Changes to the allowances for credit losses are maintained through adjustments to the provision for credit losses, which are charged to current period earnings. We did not have any allowance or incur any credit losses or recoveries for the three and six month periods ended June 30, 2025. We did not have any allowance or incur any credit losses or recoveries for the three month period ended June 30, 2024. We recorded $0.5 million of recovery of bad debt expense for the six month period ended June 30, 2024. As of both June 30, 2025 and June 30, 2024, we had no provision for credit losses.
Note 7. Computation of Net Earnings per Share
Basic earnings per share is computed by dividing income available to common stockholders (the numerator) by the weighted-average number of shares of common stock outstanding (the denominator) for the period. The computation of diluted earnings per share is similar to basic earnings per share, except that the denominator is increased by the number of additional shares of common stock that would have been outstanding if the potentially dilutive shares of common stock issuable on vesting of RSUs had been issued, calculated using the treasury stock method.
The components of net earnings per share are as follows:
(in thousands, except per share amounts)
Net income available to common stockholders
Weighted average shares of common stock outstanding used in computing basic income per share
Incremental RSUs
35
173
52
230
Weighted average shares of common stock used in computing diluted net income per share
Net income per share
Diluted weighted average shares of common stock outstanding does not include 509,998 and 22,983 common equivalent shares issuable with respect to outstanding equity awards for the three-month periods ended June 30, 2025 and 2024, respectively, or 411,238 and 20,639 common equivalent shares issuable with respect to outstanding equity awards for the six-month periods ended June 30, 2025 and 2024, respectively, as their effect would have been anti-dilutive.
14
Note 8. Accumulated Other Comprehensive Loss
The following table presents the changes in accumulated other comprehensive loss, net of tax, by component, for the six months ended June 30, 2025:
Unrealized gains on
Foreign
Defined benefit
available-for-sale
currency
pension plan
investments
(6,253)
39
Other comprehensive income and reclassifications
(541)
Note 9. Cash, cash equivalents and restricted cash
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets to the total of the amounts shown in the statement of cash flows:
Total cash, cash equivalents and restricted cash
As of June 30, 2025, we had $7.6 million in restricted cash representing the total of (i) a $5.9 million cash collateralized letter of credit serving as a security deposit for our headquarters lease in Beverly, Massachusetts, (ii) a $0.9 million letter of credit for customs purposes, (iii) a $0.7 million cash collateralized letter of credit relating to workers’ compensation insurance and (iv) a $0.1 million deposit relating to customs activity. See Note 13 for further discussion on the $5.9 million cash collateralized letter of credit.
Note 10. Inventories, net
The components of inventories are as follows:
Raw materials
243,484
227,141
Work in process
38,421
34,490
Finished goods (completed systems)
28,863
20,594
When recorded, inventory reserves reduce the carrying value of inventories to their net realizable value. We establish inventory reserves when conditions exist that indicate inventory may be in excess of anticipated demand or is obsolete based upon assumptions about future demand for our products or market conditions. We regularly evaluate the ability to realize the value of inventories based on a combination of factors including the following: forecasted sales or usage, estimated product end of life dates, estimated current and future market value and new product introductions. Purchasing and usage alternatives are also explored to mitigate inventory exposure.
Note 11. Product Warranty
We generally offer a one-year warranty for all of our systems, the terms and conditions of which vary depending upon the product sold. For all systems sold, we accrue a liability for the estimated cost of standard warranty at the time of system shipment and, if applicable, defer the portion of systems revenue attributable to non-standard warranty. Costs for
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non-standard warranty are expensed as incurred. Factors that affect our warranty liability include the number of installed units, historical and anticipated product failure rates, material usage and service labor costs. We periodically assess the adequacy of our recorded liability and adjust the amount as necessary.
The changes in our standard product warranty liability are as follows:
Balance at January 1 (beginning of year)
15,183
16,757
Warranties issued during the period
4,334
5,755
Settlements made during the period
(6,865)
(5,653)
Changes in estimate of liability for pre-existing warranties during the period
(61)
(444)
Balance at June 30 (end of period)
12,591
16,415
Amount classified as current
14,502
Amount classified as long-term (within other long-term liabilities)
1,688
1,913
Total warranty liability
Note 12. Fair Value Measurements
Fair value is defined as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.
(a) Fair Value Hierarchy
The accounting guidance for fair value measurement requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is as follows:
Level 1 - applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
Level 2 - applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability, such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.
Level 3 - applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.
(b) Fair Value Measurements
Our money market funds and short-term investments with initial maturities of three months or less are included in cash and cash equivalents in the consolidated balance sheets. Other investments that have a maturity of greater than three months but less than one year are included within short-term investments in the consolidated balance sheets. Investments that have a maturity of greater than one year are included within long-term investments in the consolidated balance sheets.
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The following tables set forth our assets which are measured at fair value by level within the fair value hierarchy:
June 30, 2025
Fair Value Measurements
Level 1
Level 2
Level 3
Cash equivalents and other short-term investments:
Cash equivalents (money market funds, U.S. Government Securities and Agency Investments)
141,363
Short-term investments (U.S. Government Securities and Agency Investments)
(457)
Long-term investments (U.S. Government Securities and Agency Investments)
548,670
548,213
December 31, 2024
81,320
448,296
267
529,616
529,883
The following table summarizes the contractual maturities of our cash equivalents and investments as of June 30, 2025:
Amortized Cost
Fair Value
Due within one year
517,629
517,556
Due after one year through two years
31,018
548,647
(c) Other Financial Instruments
The carrying amounts reflected in the consolidated balance sheets for accounts receivable, prepaid expenses, forward currency exchange contracts and other current assets and non-current assets, restricted cash, accounts payable and accrued expenses approximate fair value due to their short-term maturities.
(d) Forward Currency Exchange Contracts
We enter into forward currency exchange contracts to minimize the impact of foreign currency fluctuations on our earnings and cash flows. These contracts have month-to-month settlement dates. Any gains or losses on these contracts are reported within Other, net in our Consolidated Statement of Operations. Any open contracts at period end that have settlement dates within one month after the reported period end are marked-to-market and the valuation adjustments related to these open contracts are recorded in the current asset or current liability account. Any unrealized gain or loss on the open contracts is recognized and recorded within Other, net in our Consolidated Statement of Operations. These contracts are measured at fair value using observable market inputs such as forward currency exchange rates and our counterparties’ credit risks. Based on these inputs, the derivative instruments are classified within Level 2 of the valuation hierarchy. At June 30, 2025, the recognized unrealized loss on these forward exchange contracts was approximately $0.5 million. Based
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on our continued ability to trade and enter into forward contracts, we consider the markets for our fair value instruments to be active. We evaluated the credit risk associated with the counterparties to these derivative instruments and determined that as of June 30, 2025, such credit risks have not had an adverse impact on the fair value of these instruments.
Note 13. Financing Arrangements
On January 30, 2015, we sold our corporate headquarters facility in Beverly, Massachusetts for $48.9 million. As part of the sale, we also entered into a 22-year lease agreement of our headquarters facility. This sale-leaseback is accounted for as a finance lease under generally accepted accounting principles and, as such, we have recorded a finance lease obligation of $43.0 million as of June 30, 2025. The associated lease payments include both an interest component and payment of principal, with the remaining liability being extinguished at the end of the original lease term. As of June 30, 2025, we had a security deposit of $5.9 million related to this lease in the form of a cash collateralized letter of credit, which is classified as long-term restricted cash on our balance sheet at June 30, 2025.
Note 14. Income Taxes
Income tax expense was $3.6 million for the three months ended June 30, 2025, compared to $6.4 million for the three months ended June 30, 2024. The $2.8 million decrease was primarily due to the decrease in pre-tax book income and an increased Foreign Derived Intangible Income deduction. The effective tax rate (“ETR”) for the six months ended June 30, 2025 was less than the U.S. statutory rate of 21% primarily attributable to Foreign Derived Intangible Income deduction and Federal research and development tax credits. The reported ETR for the three months ended June 30, 2025 was 10.3% compared to 11.2% for the three months ended June 30, 2024.
On July 4, 2025, U.S tax legislation known as the One Big Beautiful Bill Act (the “OBBBA”) was signed into law. The OBBBA makes permanent many of the tax provisions enacted as part of the Tax Cuts and Jobs Act of 2017 that were originally set to expire at the end of 2025. In addition, the OBBBA makes changes to certain U.S. corporate tax provisions, many of which are not in effect until 2026. The Company is currently evaluating the impact of this new legislation.
Note 15. Concentration of Risk
For the three months ended June 30, 2025, no individual customer accounted for greater than ten percent of total revenue. For the three months ended June 30, 2024, one customer accounted for 11.5% of total revenue.
For the six months ended June 30, 2025, two customers accounted for 11.6% and 11.2% of total revenue, respectively. For the six months ended June 30, 2024, no individual customer accounted for greater than ten percent of total revenue.
At June 30, 2025, no individual customer accounted for greater than ten precent of accounts receivable. At December 31, 2024, one customer accounted for 10.0% of accounts receivable.
Note 16. Share Repurchase
In March 2025, our Board of Directors approved an additional funding of $100 million for our stock repurchase program. This approval brings the current outstanding repurchase authorization to $215 million. During the six months ended June 30, 2025, we repurchased 1.1 million shares of common stock at an average cost of $57.20 per share. The timing and actual number of any additional shares to be repurchased under this program will depend on various factors including price, corporate and regulatory requirements, alternative investment opportunities and other market conditions.
Repurchased shares are accounted for when the transaction is settled and returned to the status of authorized but unissued shares. Accordingly, on our balance sheet, the repurchase price is deducted from common stock par value and from additional paid-in capital for the excess over par value. If additional paid-in capital has been exhausted, the excess over par value is deducted from retained earnings. Direct costs incurred to acquire the shares are included in the total cost of the shares.
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Note 17. Contingencies
(a) Litigation
We are from time to time a party to litigation that arises in the normal course of our business operations. We are not presently a party to any litigation that we believe might have a material adverse effect on our business operations.
(b) Indemnifications
Our system sales agreements typically include provisions under which we agree to take certain actions, provide certain remedies and defend our customers against third-party claims of intellectual property infringement under specified conditions and indemnify customers against any damage and costs awarded in connection with such claims. We have not incurred any material costs as a result of such indemnifications and have not accrued any liabilities related to such obligations in the accompanying consolidated financial statements.
Note 18. Business Segment
The Company operates as one operating segment. The Company’s chief operating decision maker (“CODM”) is our chief executive officer, who assesses financial performance for the Company and decides how to allocate resources based on consolidated net income. Segment asset information is provided to the CODM but it is not used to allocate resources.
The following table presents selected financial information with respect to the Company’s single operating segment for the three and six months ended June 30, 2025 and 2024:
Three months ended June 30,
Less:
Segment Net Income
Reconciliation of profit or loss Adjustments and reconciling items
The above table includes depreciation expense and amortization expense of $4.5 million and $8.8 million for the three and six month periods ended June 30, 2025, respectively, and $3.9 million and $7.6 million for the three and six month periods ended June 30, 2024, respectively.
Note 19. Recent Accounting Guidance
In December 2023 the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 is intended to enhance the transparency and decision usefulness of income tax disclosures. ASU 2023-09 addresses investor requests for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information. Early adoption is permitted. A public entity should apply ASU 2023-09 prospectively to all annual periods beginning after December 15, 2024. We are currently evaluating the impact of ASU 2023-09 on our future consolidated financial statements and related disclosures.
In November 2024, the FASB issued Accounting Standards Update 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement
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Expenses (“ASU 2024-03”). ASU 2024-03 is intended to enhance the disclosures for expenses for all public entities in accordance with ASC Topic 220, Income Statement-Reporting Comprehensive Income. ASU 2024-03 addresses investor requests for more detailed information about expenses, specifically cost of sales and selling, general, and administrative expenses. ASU 2024-03 requires a public entity to disclose the amounts of (a) purchases of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and (e) depreciation, depletion, and amortization recognized as part of oil- and gas-producing activities (or other amounts of depletion expense) included in each relevant expense caption presented on the face of the income statement as well as a qualitative description of the amounts remaining in the relevant expense captions that are not separately disaggregated quantitatively. ASU 2024-03 also requires a public entity to disclose the total amount of selling expenses and the entity’s definition of selling expenses. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. A public entity should apply ASU 2024-03 either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact of ASU 2024-03 on its future consolidated financial statements and related disclosures.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Certain statements within "Management's Discussion and Analysis of Financial Condition and Results of Operations" are forward-looking statements that involve risks and uncertainties. Words such as may, will, should, would, anticipates, expects, intends, plans, believes, seeks, estimates and similar expressions identify such forward-looking statements. The forward-looking statements contained herein are based on current expectations and entail various risks and uncertainties that could cause actual results to differ materially from those expressed in such forward-looking statements. Factors that might cause such a difference include, among other things, those set forth under "Liquidity and Capital Resources" below and under “Risk Factors” in Part I, Item 1A to our 2024 Form 10-K, which discussion is incorporated herein by reference. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis only as of the date hereof. We assume no obligation to update these forward-looking statements to reflect actual results or changes in factors or assumptions affecting forward-looking statements, except as may be required by law.
We are primarily a producer of ion implantation equipment used in the fabrication of semiconductor chips in the United States, Europe, and Asia. In addition, we provide extensive worldwide aftermarket service and support, including spare parts, equipment upgrades and maintenance services to the semiconductor industry. Our product development and manufacturing activities currently occur primarily in the United States and South Korea. Our equipment and service products are highly technical and are sold through a direct sales force in the United States, Europe, and Asia. Consolidation and partnering within the semiconductor manufacturing industry has resulted in a small number of customers representing a substantial portion of our business. Our ten largest customers accounted for 55.5% of total revenue for the six months ended June 30, 2025.
Sales of our systems in the first six months of 2025 were down compared to the same period in the prior year, as customers have moderated the pace of investments into mature process node technologies. The overall mature process segment represented 92% of our shipped systems revenue, with 8% of shipments to dynamic random-access memory (“DRAM”) applications. Of the mature process segment, power device shipments comprised 47% of total systems revenue with the general mature segment representing 45%, which includes image sensor applications starting with first quarter 2025 results.
For the six months ending June 30, 2025, the geopolitical environment surrounding trade and tariffs did not have a meaningful impact on our financial results. It is difficult to predict the exact timing and magnitude of the tariffs, the duration for which the tariffs will be in place, and the impact the tariffs will have on our customers and suppliers. We continue to develop plans to reduce the potential impact of these tariffs by leveraging our global supply chain and manufacturing footprint.
Management’s discussion and analysis of our financial condition and results of operations included herein and in our 2024 Form 10-K are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates and assumptions. Management’s estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Management has not identified any need to make any material change in, and has not changed, any of our critical accounting estimates and judgments as described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2024 Form 10-K.
The following table sets forth our results of operations as a percentage of total revenue:
94.3
%
95.7
94.6
96.1
5.7
4.3
5.4
3.9
100.0
49.1
52.5
51.6
6.0
3.6
3.5
55.1
56.1
54.5
44.9
43.9
45.5
13.9
10.1
14.0
7.7
6.7
7.8
6.8
8.4
6.5
8.7
30.0
23.3
30.5
23.4
14.9
20.6
15.0
21.5
2.8
2.4
2.9
2.3
(0.7)
(0.5)
1.0
(0.1)
0.4
(0.4)
3.1
1.8
2.6
1.4
18.0
22.4
17.6
22.9
1.9
2.5
2.1
2.7
16.1
19.9
15.5
20.2
Revenue
The following table sets forth our product and services revenue:
Period-to-Period
Change
(dollars in thousands)
(61,978)
(25.3)
(122,572)
(25.1)
Percentage of revenue
0.1
796
4.0
(61,968)
(24.2)
(121,776)
(23.9)
Three months ended June 30, 2025 Compared with Three months ended June 30, 2024
Product revenue, which includes systems sales, sales of spare parts, product upgrades and used systems, was $183.4 million, or 94.3% of revenue, during the three months ended June 30, 2025, compared with $245.4 million, or 95.7% of revenue, for the three months ended June 30, 2024. The $62.0 million decrease in product revenue for the three-
month period ended June 30, 2025, in comparison to the same period in 2024, was primarily driven by a decrease in system sales.
Deferred revenue includes payments received in advance of system sales as well as deferral of revenue from systems sales for installation and other future performance obligations. The total amount of deferred revenue at June 30, 2025 and December 31, 2024 was $129.7 million and $138.2 million, respectively.
Services revenue, which includes the labor component of maintenance and service contracts and fees for service hours provided by on-site service personnel, was $11.1 million, or 5.7% of revenue, for the three months ended June 30, 2025, relatively flat compared with $11.1 million, or 4.3% of revenue, for the three months ended June 30, 2024. Although services revenue typically increases with the expansion of the installed base of systems, it can fluctuate from period to period based on capacity utilization at customers’ manufacturing facilities, which affects the need for equipment service.
Six months ended June 30, 2025 Compared with Six months ended June 30, 2024
Product revenue was $366.2 million, or 94.6% of revenue, during the six months ended June 30, 2025, compared with $488.8 million, or 96.1% of revenue, for the six months ended June 30, 2024. The $122.6 million decrease in product revenue for the six-month period ended June 30, 2025, in comparison to the same period in 2024, was primarily driven by a decrease in system sales.
Services revenue was $20.9 million, or 5.4% of revenue, for the six months ended June 30, 2025, compared with $20.1 million, or 3.9% of revenue, for the six months ended June 30, 2024.
Revenue Categories used by Management
In addition to the line item revenue categories discussed above, management also regularly disaggregates revenue in the following categories, which it finds relevant and useful:
(Aftermarket purchases reflect current fab utilization as opposed to Systems purchases which reflect capital investment decisions by our customers, which have differing economic drivers);
Aftermarket and Systems Revenue
Included in total revenue of $194.5 million during the three months ended June 30, 2025 is revenue from our Aftermarket business of $61.3 million, compared with $57.9 million of Aftermarket revenue for the three months ended June 30, 2024. Aftermarket revenue fluctuates from period to period based on capacity utilization at customers’ manufacturing facilities, which affects the sale of spare parts and demand for equipment service. Aftermarket revenue can also fluctuate from period to period based on the demand for system upgrades or used equipment. The remaining $133.2 million of revenue for the three months ended June 30, 2025 was systems revenue, compared with $198.6 million of systems revenue for the three months ended June 30, 2024. Systems revenue fluctuates from period to period based on our customers’ capital spending.
Included in total revenue of $387.1 million during the six months ended June 30, 2025 is revenue from our Aftermarket business of $116.2 million, compared with $114.8 million of Aftermarket revenue for the six months ended June 30, 2024. The remaining $270.9 million of revenue for the six months ended June 30, 2025 was systems revenue, compared with $394.1 million of systems revenue for the six months ended June 30, 2024.
Gross Profit / Gross Margin
The following table sets forth our gross profit / gross margin:
Gross Profit:
87,940
110,621
(22,681)
(20.5)
176,264
226,128
(49,864)
(22.1)
Product gross margin
47.9
45.1
48.1
46.3
(597)
1,788
(2,385)
(133.4)
(153)
2,332
(2,485)
(106.6)
Services gross margin
(5.4)
Total gross profit
(25,066)
(22.3)
(52,349)
(22.9)
Gross margin
Gross margin from product revenue was 47.9% for the three months ended June 30, 2025, compared to 45.1% for the three months ended June 30, 2024. The increase in gross margin primarily resulted from improved margins on Purion systems and a favorable mix of parts and upgrades.
Gross margin from services revenue was (5.3)% for the three months ended June 30, 2025, compared to 16.1% for the three months ended June 30, 2024. The decrease in gross margin is attributable to changes in the mix of service contracts.
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Gross margin from product revenue was 48.1% for the six months ended June 30, 2025, compared to 46.3% for the six months ended June 30, 2024. The increase in gross margin primarily resulted from improved margins on Purion systems and a favorable mix of parts and upgrades.
Gross margin from services revenue was (0.7)% for the six months ended June 30, 2025, compared to 11.6% for the six months ended June 30, 2024. The decrease in gross margin is attributable to changes in the mix of service contracts.
Operating Expenses
The following table sets forth our operating expenses:
1,278
5.0
2,744
5.3
(2,227)
(12.9)
(4,548)
(13.1)
(272)
(1.6)
680
(1,221)
(2.0)
(1,124)
(0.9)
Our operating expenses consist primarily of personnel costs, including wages, commissions, incentive-based compensation, stock-based compensation and related benefits and taxes; project material costs related to the design and development of new products and enhancement of existing products; and professional fees, travel and depreciation expenses.
Personnel costs are our largest expense, representing $35.9 million, or 61.5%, of our total operating expenses for the three months ended June 30, 2025, compared to $35.3 million, or 59.2%, of our total operating expenses for the three months ended June 30, 2024. Personnel costs were $71.3 million, or 60.4%, of our total operating expenses for the six months ended June 30, 2025, compared to $71.7 million, or 60.2%, of our total operating expenses for the six months ended June 30, 2024. The higher personnel costs for the three months ended June 30, 2025 are primarily due to an increase in variable compensation expense, partially offset by decreases in expatriate expenses, stock-based compensation, and separation program expenses. The lower personnel costs for the six months ended June 30, 2025 are primarily due to a decrease in variable compensation expense and expatriate expenses, partially offset by increases in wages and separation program expenses.
Research and Development
Our ability to remain competitive depends largely on continuously developing innovative technology, with new and enhanced features and systems and introducing them at competitive prices on a timely basis. Accordingly, based on our
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strategic plan, we establish annual research and development budgets to fund programs that we expect will solve customers’ high value, high impact, ion implantation challenges.
Research and development expense was $27.1 million during the three months ended June 30, 2025, an increase of $1.3 million, or 5.0%, compared with $25.8 million during the three months ended June 30, 2024. The increase is primarily due to higher personnel expenses, driven by increases in variable compensation and stock-based compensation, and increases in depreciation and amortization expense.
Research and development expense was $54.2 million during the six months ended June 30, 2025, an increase of $2.7 million, or 5.3%, compared with $51.4 million during the six months ended June 30, 2024. The increase is primarily due to higher personnel payroll expense, stock-based compensation, separation program expense, and an increase in depreciation and amortization expense.
Sales and Marketing
Our sales and marketing expenses result primarily from the sale of our equipment and services through our direct sales force.
Sales and marketing expense was $15.0 million during the three months ended June 30, 2025, a decrease of $2.2 million, or 12.9%, compared with $17.2 million during the three months ended June 30, 2024. The decrease is primarily due to a decrease in expatriate expenses and tool evaluation costs.
Sales and marketing expense was $30.1 million during the six months ended June 30, 2025, a decrease of $4.5 million, or 13.1%, compared with $34.7 million during the six months ended June 30, 2024. The decrease is primarily due to a decrease in expatriate expenses and tool evaluation costs.
General and Administrative
Our general and administrative expenses result primarily from the costs associated with our executive, finance, information technology, legal and human resource functions.
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General and administrative expense was $16.3 million during the three months ended June 30, 2025, a decrease of $0.3 million, or 1.6%, compared with $16.6 million during the three months ended June 30, 2024. The decrease is primarily due to a decrease in project and consulting expenses and travel expenses.
General and administrative expense was $33.7 million during the six months ended June 30, 2025, an increase of $0.7 million, or 2.1%, compared with $33.0 million during the six months ended June 30, 2024. The increase is primarily due to professional fees and the recovery of a previously written-off receivable in the prior year period.
Other Income (Expense)
Period-to-period
change
1,577
35.4
3,043
44.0
Other income (expense) consists of interest earned and accretion on our invested cash balances, interest expense relating to the finance lease obligation we incurred in connection with the 2015 sale of our headquarters facility and other financing obligations as well as foreign exchange gains and losses attributable to both fluctuations of the U.S. dollar against local currencies of the countries in which we operate and forward currency exchange contracts.
Other income was $6.0 million for the three months ended June 30, 2025, compared with other income of $4.5 million for the three months ended June 30, 2024. The $1.6 million increase in other income (expense) compared to the same prior year period was primarily due to a decrease in net foreign exchange losses of $1.8 million. Net foreign exchange losses for the three months ended June 30, 2025 includes $5.8 million of losses related to forward currency exchange contracts, partially offset by foreign exchange gains of $7.3 million. Net foreign exchange losses for the three months ended June 30, 2024 includes foreign exchange losses of $2.5 million, partially offset by foreign exchange gains of $2.3 million from forward currency exchange contracts.
Other income was $10.0 million for the six months ended June 30, 2025, compared with other income of $6.9 million for the six months ended June 30, 2024. The $3.0 million increase in other income (expense) compared to the same prior year period was primarily due to a decrease in net foreign exchange losses of $3.2 million. Net foreign exchange losses for the six months ended June 30, 2025 includes $7.0 million of losses related to forward currency exchange contracts, partially offset by foreign exchange gains of $8.1 million. Net foreign exchange losses for the six months ended June 30, 2024 includes foreign exchange losses of $5.9 million, partially offset by foreign exchange gains of $3.8 million from forward currency exchange contracts.
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Income Tax Provision
(2,778)
(43.4)
(5,677)
(41.1)
Income tax expense was $3.6 million for the three months ended June 30, 2025, compared to $6.4 million for the three months ended June 30, 2024. The $2.8 million decrease was primarily due to the decrease in pre-tax book income and an increased Foreign Derived Intangible Income deduction. The ETR for the six months ended June 30, 2025 was less than the U.S. statutory rate of 21% primarily attributable to Foreign Derived Intangible Income deduction and Federal research and development tax credits. The reported ETR for the three months ended June 30, 2025 was 10.3% compared to 11.2% for the three months ended June 30, 2024.
On July 4, 2025, U.S tax legislation known as the One Big Beautiful Bill Act (the “OBBBA”) was signed into law. The OBBBA makes permanent many of the tax provisions enacted as part of the Tax Cuts and Jobs Act of 2017 that were originally set to expire at the end of 2025. In addition, the OBBBA makes changes to certain U.S. corporate tax provisions, many of which are not effective until 2026. The Company is currently evaluating the impact of this new legislation.
At June 30, 2025, we had $173.6 million in unrestricted cash and cash equivalents, $376.2 million in short-term investments and $31.1 million in long-term investments, in addition to $7.6 million in restricted cash. Management believes that maintaining a strong cash balance is necessary to fund a continuing ramp in our business which can require significant cash investment to meet sudden demand. Additionally, we are using cash to repurchase shares as part of our stock repurchase program and are considering both organic and inorganic opportunities to drive future growth, for which cash resources will be necessary.
Our liquidity is affected by many factors. Some of these relate specifically to the operations of our business, for example, the rate of sales of our products, and others relate to the uncertainties of global economic conditions, including tariff programs implemented in countries in which we operate as well as the availability of credit and the condition of the overall semiconductor equipment industry. Our industry requires ongoing investments in operations and research and development that are not easily adjusted to reflect changes in revenue. As a result, profitability and cash flows can fluctuate more widely than revenue. Stock repurchases, as discussed below, also reduce our cash balances.
During the six months ended June 30, 2025 and 2024, we generated $79.5 million and $82.3 million, respectively, of cash related to operating activities.
Investing activities for the six months ended June 30, 2025 resulted in cash generated of $35.9 million, $6.9 million of which was used for capital expenditures and $345.2 million of which was used to purchase short-term and long-term investments, offset by $388.0 million related to maturities and sales of short-term investments. Investing activities for the six months ended June 30, 2024 resulted in cash outflows of $61.3 million, $3.6 million of which was used for capital expenditures and $249.0 million of which was used to purchase short-term investments, offset by $191.3 million related to maturities of short-term investments.
Financing activities for the six months ended June 30, 2025 resulted in a cash usage of $67.1 million. During the first six months of 2025, (i) $63.5 million in cash was used to repurchase our common stock, (ii) $4.2 million was used for payments to government tax authorities for income tax withholding on employee compensation arising from the vesting of RSUs, where units are withheld by us to cover taxes, and (iii) $0.7 million was used to reduce the liability under the finance lease of our corporate headquarters. These amounts were partially offset by $1.2 million of proceeds related to the purchase of shares under our 2020 ESPP during the first six months of 2025. In comparison, financing activities for the six months ended June 30, 2024 resulted in cash usage of $40.7 million, of which (i) $30.0 million related to the repurchase of our common stock (ii) $11.2 million related to payments made to government tax authorities for income tax withholding on employee compensation arising from the vesting of RSUs, and (iii) $0.7 million relating to the reduction of our finance
lease liability. These amounts were partially offset by $1.2 million of proceeds related to the purchase of shares under our 2020 ESPP during the first six months of 2024.
As of June 30, 2025, we had a security deposit of $5.9 million related to the lease of our corporate headquarters in the form of a cash collateralized letter of credit, which is classified as long-term restricted cash on our balance sheet.
We believe that based on our current market, revenue, expense and cash flow forecasts, our existing cash and cash equivalents will be sufficient to satisfy our anticipated cash requirements for the short- and long-term.
Commitments and Contingencies
Significant commitments and contingencies at June 30, 2025 are consistent with those discussed in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and Note 16 to the consolidated financial statements included in our 2024 Form 10-K.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
As of June 30, 2025, there have been no material changes to the quantitative information about market risk disclosed in Item 7A, “Quantitative and Qualitative Disclosures about Market Risk” included in our 2024 Form 10-K.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report (the “Evaluation Date”). Based on this evaluation, our principal executive officer and principal financial officer concluded that, as of the Evaluation Date, these disclosure controls and procedures are effective.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) identified in connection with the evaluation of our internal control that occurred during the three months ended June 30, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
We are, from time to time, a party to litigation that arises in the normal course of our business operations. We are not presently a party to any litigation that we believe might have a material adverse effect on our business operations.
Item 1A. Risk Factors.
As of June 30, 2025, there have been no material changes to the risk factors described in Item 1A, “Risk Factors” included in our 2024 Form 10-K.
Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities.
In February 2022, our Board of Directors authorized a share repurchase program for up to $100 million of the Company’s common stock. This program was announced on March 1, 2022. In August 2023, our Board of Directors approved additional funding of $200 million for our stock repurchase program, to be available upon the full utilization of the $100 million repurchase funding approved in February 2022. In March 2025, we announced that the Board of Directors approved an additional funding of $100 million for share repurchases. The Company’s share repurchase program does not have an expiration date.
The following table summarizes the stock repurchase activity, based upon settlement date, for the three months ended June 30, 2025 as well as the approximate dollar value of shares that may yet be purchased pursuant to our stock repurchase program:
Total Number of Shares Purchased
Average Price Paid per Share
Total Number of Shares Purchased as Part of Publicly Announced Program
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program
(in thousands except per share amounts)
April 1 through April 30
360
$46.42
195,124
May 1 through May 31
297
$57.87
177,921
June 1 through June 30
169
$64.34
167,031
826
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not Applicable.
Item 5. Other Information.
During the quarter ended June 30, 2025, no director or officer adopted or terminated any contract, instrument or written plan for the purchase or sale of Axcelis securities intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act or any non-Rule 10b5-1 trading arrangement as defined in Item 408(c) of Regulation S-K.
Item 6. Exhibits.
The following exhibits are filed herewith:
ExhibitNo
Description
Restated Certificate of Incorporation of the Company filed November 2, 2017. Incorporated by reference to Exhibit 3.1 of the Company’s Form 10-Q filed with the Commission on November 3, 2017.
3.2
Certificate of Amendment to the Restated Certificate of Incorporation of the Company filed May 9, 2024. Incorporated by reference to Exhibit 3.1 of the Company’s Form 8-K filed with the Commission on May 9, 2024.
3.3
Bylaws of the Company, as amended as of May 11, 2022. Incorporated by reference to Exhibit 3.2 of the Company’s Form 8-K filed with the Commision on May 11, 2022.
31.1*
Certification of the Principal Executive Officer under Exchange Act Rule 13a-14(a)/15d-14(a) (Section 302 of the Sarbanes-Oxley Act), dated August 5, 2025.
31.2*
Certification of the Principal Financial Officer under Exchange Act Rule 13a-14(a)/15d-14(a) (Section 302 of the Sarbanes-Oxley Act), dated August 5, 2025.
32.1**
Certification of the Principal Executive Officer pursuant to Section 1350 of Chapter 63 of title 18 of the United States Code (Section 906 of the Sarbanes-Oxley Act), dated August 5, 2025.
32.2**
Certification of the Principal Financial Officer pursuant to Section 1350 of Chapter 63 of title 18 of the United States Code (Section 906 of the Sarbanes-Oxley Act), dated August 5, 2025.
101*
The following materials from the Company’s Form 10-Q for the quarter ended June 30, 2025, formatted in inline eXtensible Business Reporting Language (iXBRL): (i) Consolidated Statements of Operations, (ii) Consolidated Statements of Comprehensive Income, (iii) Consolidated Balance Sheets, (iv) Consolidated Statements of Cash Flows and (v) Notes to Consolidated Financial Statements (Unaudited). Filed herewith.
104*
Cover Page Interactive Data File (formatted as iXBRL and contained in Exhibit 101).
* Filed herewith
** This exhibit is being furnished rather than filed, and shall not be deemed incorporated by reference into any filing, in accordance with Item 601 of Regulation S-K.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
DATED: August 5, 2025
By:
/s/ JAMES G. COOGAN
James G. Coogan
Executive Vice President and Chief Financial Officer
Duly Authorized Officer and Principal Financial Officer