Slide 1: Q4 & FY 2023 Financial Results Conference Call
Veeco Instruments Q4 & FY 2023 Financial Results Conference Call February 14th, 2024 1 Q4 & FY 2023 Financial Results Conference Call Copyright © 2024 Veeco Instruments Inc. All Rights Reserved.
Slide 2: Safe Harbor
Safe Harbor This presentation contains “forward-looking statements”, within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, as amended, that are based on management’s expectations, estimates, projections and assumptions. Words such as “expects,
Slide 3: CEO Overview and Business Update
CEO Overview and Business Update Bill Miller, Ph.D. 3 Q4 & FY 2023 Financial Results Conference Call Copyright © 2024 Veeco Instruments Inc. All Rights Reserved.
Slide 4: 2023 – Executing Our Strategy
2023 – Executing Our Strategy Several Key Milestones ✓ Launched NSA and IBD300 products Reached ✓ SiC CVD technology advances toward tool demonstration ✓ Record Semiconductor revenue Semiconductor Business ✓ Shipped LSA systems to 1st DRAM customer despite industry wide Outperforms WFE CAPEX reducti
Slide 5: FY 2023 Financial Highlights
FY 2023 Financial Highlights • Top and bottom-line growth with results near or Revenue $666M above high-end of guidance • Record Semiconductor Revenue • 12% YoY growth in Semiconductor market Non-GAAP Operating Income $110M • Margin improvement drives bottom line growth • Operating Income increases
Slide 6: Q4 Financial Highlights
Q4 Financial Highlights Revenue $174M • Strong top and bottom-line results • Sequential gross margin improvement Non-GAAP • Continued strength in Semiconductor market Operating Income $32M • 17% sequential growth, led by Laser Annealing systems Diluted Non-GAAP EPS 0.51¢ Strong results led by streng
Slide 7: Market Update
Market Update Core Technologies Laser Wet Semiconductor strength driven by LSA share gains. Annealing Ion Beam Processing Lithography Mask blank business aligned with EUV industry’s roadmap. Expect LSA, NSA, and IBD300 to enable SAM expansion. Wet Compound Semiconductor opportunity driven by Power E
Slide 8: Veeco Growth Technologies for Artificial Intelligence
Veeco Growth Technologies for Artificial Intelligence GPU Current PTOR High-Bandwidth Memory (HBM) DRAM • Laser-Spike Annealing (LSA) Current PTOR • IBD for EUV mask blanks • Laser-Spike Annealing (LSA) Additional Future Opportunities Additional Future Opportunities • Nanosecond Annealing (NSA) • Na
Slide 9: Nanosecond Annealing Opportunity
Nanosecond Annealing Opportunity 2000 NSA Future (nanosecond) Traditional • Solidifies Veeco’s laser annealing leadership & helps drive Temperature (°C) LSA Lamp Based the Semi industry roadmap 1000 (sub millisecond) (sub second) • Shipped two NSA500TM evaluations to two leading logic customers in Q
Slide 10: IBD300 – 300mm Front End Semi Opportunity
IBD300– 300mm Front End Semi Opportunity Illustration of grain size and distribution TODAY FUTURE Traditional PVD IBD • Industry leader in Ion Beam Technology • Lower resistance metals essential for improved device performance & customer scaling • IBD displays lower resistivity vs traditional PVD ba
Slide 11: CFO Financial Review
CFO Financial Review John Kiernan 11 Q4 & FY 2023 Financial Results Conference Call Copyright © 2024 Veeco Instruments Inc. All Rights Reserved.
Slide 12: FY 2023 Revenue by Market & Region
FY 2023 Revenue by Market & Region Revenue by Market Revenue by Region Compound Semiconductor 13% China Data Storage Rest of APAC 13% 33% 31% Semiconductor $666M 62% 12% Scientific & ROW is negligible United Other EMEA States 12% 24% Revenue Trend ($M) FY 21 FY 22 FY 23 Semiconductor 247 369 413 Com
Slide 13: FY Operating Results
FY Operating Results GAAP Non-GAAP In millions (except per share amounts) FY 22 FY 23 FY 22 FY 23 Revenue $646.1 $666.4 $646.1 $666.4 Gross Profit 263.1 285.1 271.0 290.2 Gross Margin 40.7% 42.8% 41.9% 43.5% Operating Expenses 202.9 215.1 171.2 180.6 Operating Income 60.3 69.9 99.8 109.6 Net Income
Slide 14: Q4 Revenue by Market & Region
Q4 Revenue by Market & Region Revenue by Market Revenue by Region Compound Semiconductor 10% Data Storage 11% China APAC 38% 34% Semiconductor 66% $174M 13% Scientific & Other ROW is negligible United States 6% 22% EMEA Revenue Trend ($M) Q4 22 Q3 23 Q4 23 Semiconductor 94 98 115 Compound Semi 25 26
Slide 15: Q4 Operating Results
Q4 Operating Results GAAP Non-GAAP In millions (except per share amounts) Q3 23 Q4 23 Q3 23 Q4 23 Revenue $177.4 $173.9 $177.4 $173.9 Gross Profit 76.9 78.7 78.4 79.0 Gross Margin 43.3% 45.2% 44.2% 45.4% Operating Expenses 54.6 54.5 45.7 46.9 Operating Income 22.3 24.2 32.7 32.1 Net Income $24.6 $21
Slide 16: Balance Sheet and Cash Flow Highlights
Balance Sheet and Cash Flow Highlights $ millions Q4 22 Q3 23 Q4 23 Cash & Short-Term Investments 303 287 306 Accounts Receivable 124 122 103 Inventories 207 252 238 Accounts Payable 52 63 42 Long-Term Debt Including Current Portion 275 275 275 Cash Flow from Operations 33 7 29 DSO (days) 73 62 53 D
Slide 17: 2024 Guidance
2024 Guidance Q1 2024 GAAP Non-GAAP Revenue $160M - $180M $160M - $180M Gross Margin 42% - 43% 43% - 44% Operating Expenses $53M - $56M $46M - $48M Net Income / (Loss) $13M - $20M $21M - $27M Diluted Earnings / (Loss) Per Share $0.22 - $0.33 $0.36 - $0.46 FY 2024 Non-GAAP Revenue $680M - $740M Non-G
Slide 18: Closing Remarks
Closing Remarks 18 Q4 & FY 2023 Financial Results Conference Call Copyright © 2024 Veeco Instruments Inc. All Rights Reserved.
Slide 19: Backup and Financial Tables
Backup and Financial Tables 19 Q4 & FY 2023 Financial Results Conference Call Copyright © 2024 Veeco Instruments Inc. All Rights Reserved.
Slide 20: Historical Revenue by End-Market
Historical Revenue by End-Market $M 2020 2021 2022 2023 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Semiconductor 165.9 51.6 53.7 76.3 65.4 247.1 77.6 97.5 100.4 93.8 369.4 93.1 106.3 98.2 115.2 412.7 Compound 107.9 24.8 24.2 23.3 34.7 107.0 37.1 31.1 28.1 24.9 121.2 21.2 24.1 25.7 16.3 87.3 Sem
Slide 21: Convertible Notes – Outstanding
Convertible Notes – Outstanding As of December 31, 2023 Annual Cash Annual Non-Cash Initial Conversion Convertible Notes Principal Amount Carrying Value Coupon Interest Interest Price Convertible Notes Due Jan 2025 $27M $26M 3.5% $0.9M $0.1M $24.00 Convertible Notes Due June 2027 25M 25M 3.75% 0.9M
Slide 22: Effect of Convertible Notes on Diluted EPS
Effect of Convertible Notes on Diluted EPS (Effective Q4 2023) 2029 Convertible Notes (GAAP and 2025 and 2027 Convertible Notes Non-GAAP)** Quarterly Incremental Dilutive Average Stock Price per Shares (in GAAP Non-GAAP* Common Share thousands) EPS threshold Reduction to Interest EPS threshold Reduc
Slide 23: Note on Reconciliation Tables
Note on Reconciliation Tables These tables include financial measures adjusted for the impact of certain items; these financial measures are therefore not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). These Non-GAAP financial measures exclude items such as: sh
Slide 24: Supplemental Information—GAAP to Non-GAAP Reconciliation
Supplemental Information—GAAP to Non-GAAP Reconciliation $ millions Q3 23 Q4 23 2023 2022 $ millions, except per share amounts Q3 23 Q4 23 2023 2022 Net sales $177.4 $173.9 $666.4 $646.1 GAAP Basic weighted average shares 55.4 55.5 53.8 49.9 GAAP gross profit 76.9 78.7 285.1 263.1 GAAP Diluted weigh
Slide 25: Q4 2023 Actual: GAAP to Non-GAAP Reconciliation
Q4 2023 Actual: GAAP to Non-GAAP Reconciliation $ millions Non-GAAP Adjustments Share-Based GAAP Compensation Amortization Other Non-GAAP Net Sales $173.9 $173.9 Gross Profit 78.7 0.3 — — 79.0 Gross Margin 45.2% 45.4% Operating Expenses $54.5 (5.9) (2.1) 0.4 $46.9 Operating Income $24.2 6.2 2.1 (0.4
Slide 26: FY 2023 Actual: GAAP to Non-GAAP Reconciliation
FY 2023 Actual: GAAP to Non-GAAP Reconciliation Non-GAAP Adjustments Share-Based GAAP Compensation Amortization Other Non-GAAP Net Sales $666.4 $666.4 Gross Profit 285.1 4.9 — 0.2 290.2 Gross Margin 42.8% 43.5% Operating Expenses $215.1 (23.6) (8.5) (2.4) $180.6 Operating Income $69.9 28.6 8.5 2.6 $
Slide 27: 2024 Guidance
2024 Guidance ($ millions, except per share amounts) Q1 Reconciliation of GAAP to non-GAAP Financial Data Non-GAAP Adjustments Share-Based GAAP Compensation Amortization Other Non-GAAP Net Sales $160–$180 $160–$180 Gross Profit 68–78 1 — — 69–79 Gross Margin 42%–43% 43%–44% Operating Expenses $53–$5