Veeco Instruments Inc. · NASDAQ:VECO
Veeco Instruments — Q1 2024 Earnings Presentation
34 slides from Veeco Instruments's earnings presentation, May 2024
Slide 1: Investor Presentation May 2024
Investor Presentation May 2024 1 Investor Presentation 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: Contents
Contents Overview Veeco at a Glance Who is Veeco? Strategy & SAM Opportunities Investment Strategy SAM Opportunities Financials Historical Revenue 2024 Outlook Customers, Resource Alignment, Veeco Team & ESG Backup & Financial Tables 3 Investor Presentation Copyright © 2024 Veeco Instruments Inc. Al
Slide 4: Veeco at a Glance
Veeco at a Glance Patents >350 Global provider of Solving customers high value semiconductor capital materials challenges equipment Employees ~1,200 Differentiated technologies with 2023 Revenue opportunities to expand served Financial strength and flexibility available markets $666M 4 Investor Pres
Slide 5: Who is Veeco?
Who is Veeco? Strong History Semiconductor Solving materials challenges Compound Semiconductor 2019- Today Data Storage 2010 - Today Differentiated Laser 1990’s - Today MOCVD Technology Fabricated Annealing & Ion Beam Growth Focus Deposition technologies Ion Beam Technologies for 70%+ of LED’s globa
Slide 6: Strategy & SAM
Strategy & SAM 6 Investor Presentation Copyright © 2024 Veeco Instruments Inc. All Rights Reserved.
Slide 7: Investment Strategy Enabling SAM Expansion
Investment Strategy Enabling SAM Expansion Future Technologies ➢ LSA gaining share in advanced logic due to performance benefits Driving Growth ➢ EUV Mask Blank Business well-positioned for High NA adoption ➢ Strength in Wet processing driven by High-Bandwidth Memory TODAY ➢ Laser Annealing SAM to g
Slide 8: Available Market
Available Market Total Veeco SAM Veeco’s Served Available Market to grow to ~$4.3B ~4.3B Projected CAGR ~15% Semiconductor opportunity expected to ~$2.4B grow to ~$2.0B driven by Laser Annealing, Nanosecond Annealing and Ion Beam Deposition equipment Compound Semiconductor opportunity expected to gr
Slide 9: Semiconductor SAM Growth
Semiconductor SAM Growth Total SAM Key Drivers of SAM Growth (Systems Only) 2024 2028 ~$2.0B Laser Spike Projected ~20% CAGR • PTOR at three Tier 1 logic and one Tier 1 memory Annealing ~$600M ~$750M customers’ advanced nodes IBD300 Ion Beam (LSA) Deposition IBD EUV ~$1.0B Nanosecond • Under evaluat
Slide 10: Nanosecond Annealing Opportunity
Nanosecond Annealing Opportunity 2000 NSA Future (nanosecond) Traditional Temperature (°C) • Device scaling challenges driving the need for new annealing LSA Lamp Based capabilities 1000 (sub millisecond) (sub second) • NSA broadening Laser Annealing adoption to new Logic and Memory applications • S
Slide 11: IBD300 – 300mm Front End Semi Opportunity
IBD300– 300mm Front End Semi Opportunity Illustration of grain size and distribution TODAY FUTURE Incumbent Technology IBD • Industry leader in Ion Beam Technology • Lower resistance metals essential for improved device performance & customer scaling • IBD achieving superior thin film properties vs
Slide 12: Veeco Growth Technologies for Artificial Intelligence
Veeco Growth Technologies for Artificial Intelligence CPU/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)
Slide 13: Compound Semiconductor SAM Growth
Compound Semiconductor SAM Growth Total SAM Key Drivers of SAM Growth (Systems Only) 2024 2028 ~$1.8B SiC Power • Single wafer SiC CVD for 8 inch addresses high Projected ~16% CAGR ~$350M ~$650M Electronics voltage and power applications such as EVs ~$1.0B MicroLED GaN Power • Single wafer MOCVD pla
Slide 14: Financials
Financials 14 Investor Presentation Copyright © 2024 Veeco Instruments Inc. All Rights Reserved.
Slide 15: Revenue by End-Market
Revenue by End-Market $680M-$740M $646M $666M $583M $454M 2020 2021 2022 2023 2024 Semiconductor Compound Semiconductor Data Storage Scientific & Other Semiconductor CAGR of ~30% drives increase from 37% of total 2020 revenue to >60% in 2024 15 Investor Presentation Amounts may not calculate precise
Slide 16: Historical Financials & 2024 Outlook (Non-GAAP)
Historical Financials & 2024 Outlook (Non-GAAP) Revenue ($m) Gross Margin (%) ~800 680-740 ~45% 646 666 43% 44% 43-44% 583 42% 42% 454 2020 2021 2022 2023 2024 Target 2020 2021 2022 2023 2024 Target Model Model Operating Income (%) Diluted EPS ($) ~20% 16% 16-18% 1.69 1.60-1.90 15% 15% 1.57 1.43 12%
Slide 17: Customers, Resource Alignment, Veeco Team & ESG
Customers, Resource Alignment, Veeco Team & ESG 17 Investor Presentation Copyright © 2024 Veeco Instruments Inc. All Rights Reserved.
Slide 18: Serving a Diverse Customer Base
Serving a Diverse Customer Base Semiconductor Compound Semiconductor Data Storage RF Logic Memory Power Photonics Power Device MicroLED RF Filter & HDD Foundries OSATs IDMs Producers Fabs Amplifier Fabs Manufacturers 18 Investor Presentation RF – Radio Frequency OSAT – Outsourced Semiconductor Assem
Slide 19: Resources Aligned for Growth
Resources Aligned for Growth Strategic Optimization of our R&D In 2022 we completed our capacity build-out of a new Spending Portfolio leased facility in San Jose to support manufacturing our Semiconductor products. R&D Applied to Semiconductor ~100% Increase 2020 2023 R&D Manufacturing • Increasing
Slide 20: Leadership Team and Core Values
Leadership Team and Core Values ▪ We will always put our CUSTOMERS first Bill Miller CEO ▪ We will never compromise on SAFETY ▪ We will always demonstrate RESPECT ▪ We will never stop IMPROVING ▪ We will always be ACCOUNTABLE John Kiernan Susan Wilkerson Adrian Devasahayam Peter Porshnev ▪ We will n
Slide 21: ESG Goals: Commitment to Corporate Responsibility
ESG Goals: Commitment to Corporate Responsibility Environment “Making a material difference as a • Renewable Energy sustainable and transparent company is • Emissions Reduction at the core of the Veeco United team” • Hazardous Chemical Management –Bill Miller, CEO Social • Representation of women an
Slide 22: Backup and Financial Tables
Backup and Financial Tables 22 Investor Presentation Copyright © 2024 Veeco Instruments Inc. All Rights Reserved.
Slide 23: Q1 Revenue by Market & Region
Q1 Revenue by Market & Region Revenue by Market Revenue by Region Compound Semiconductor 12% Data Storage 10% APAC China 42% Semiconductor 69% $174M 9% Scientific & 37% Other ROW is negligible United States 5% 16% EMEA Revenue Trend ($M) Q1 23 Q4 23 Q1 24 Semiconductor 93 115 120 Compound Semi 21 16
Slide 24: Q1 Operating Results
Q1 Operating Results GAAP Non-GAAP In millions (except per share amounts) Q4 23 Q1 24 Q4 23 Q1 24 Revenue $173.9 $174.5 $173.9 $174.5 Gross Profit 78.7 75.4 79.0 77.1 Gross Margin 45.2% 43.2% 45.4% 44.2% Operating Expenses 54.5 53.4 46.9 47.8 Operating Income 24.2 22.0 32.1 29.4 Net Income $21.6 $21
Slide 25: Balance Sheet and Cash Flow Highlights
Balance Sheet and Cash Flow Highlights $ millions Q4 23 Q1 24 Cash & Short-Term Investments 306 297 Accounts Receivable 103 107 Inventories 238 243 Accounts Payable 42 54 Cash Flow from Operations 29 9 Capital Expenditures 11 6 25 Q1 2024 Financial Results Conference Call Copyright © 2024 Veeco Inst
Slide 26: Historical Revenue by End-Market
Historical Revenue by End-Market $M 2021 2022 2023 2024 Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Semiconductor 51.6 53.7 76.3 65.4 247.1 77.6 97.5 100.4 93.8 369.4 93.1 106.3 98.2 115.2 412.7 120.4 Compound 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 21.0 Semi
Slide 27: 2024 Guidance
2024 Guidance Q2 2024 GAAP Non-GAAP Revenue $165M - $185M $165M - $185M Gross Margin 42% - 43% 43% - 44% Operating Expenses $55M - $57M $46M - $48M Net Income / (Loss) $13M - $20M $22M - $29M Diluted Earnings / (Loss) Per Share $0.22 - $0.33 $0.38 - $0.48 FY 2024 Non-GAAP Revenue $680M - $740M Non-G
Slide 28: Convertible Notes – Outstanding
Convertible Notes – Outstanding As of March 31, 2024 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 0.1
Slide 29: Effect of Convertible Notes on Diluted EPS
Effect of Convertible Notes on Diluted EPS (Effective Q1 2024) 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 30: 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 31: Supplemental Information—GAAP to Non-GAAP Reconciliation
Supplemental Information—GAAP to Non-GAAP Reconciliation $ millions Q4 23 Q1 24 $ millions, except per share amounts Q4 23 Q1 24 GAAP Basic weighted average shares 55.5 56.0 Net sales $173.9 $174.5 GAAP Diluted weighted average shares 59.8 60.8 GAAP gross profit 78.7 75.4 GAAP Basic EPS $0.39 $0.39
Slide 32: Q1 2024 Actual: GAAP to Non-GAAP Reconciliation
Q1 2024 Actual: GAAP to Non-GAAP Reconciliation $ millions Non-GAAP Adjustments Share-Based GAAP Compensation Amortization Other Non-GAAP Net Sales $174.5 $174.5 Gross Profit 75.4 1.7 — — 77.1 Gross Margin 43.2% 44.2% Operating Expenses $53.4 (6.4) (1.9) 2.7 $47.8 Operating Income $22.0 8.1 1.9 (2.7
Slide 33: Q2 2024 Guidance
Q2 2024 Guidance ($ millions, except per share amounts) Reconciliation of GAAP to non-GAAP Financial Data Non-GAAP Adjustments Share-Based GAAP Compensation Amortization Other Non-GAAP Net Sales $165–$185 $165–$185 Gross Profit 69–80 2 — — 71–82 Gross Margin 42%–43% 43%–44% Operating Expenses $55–$5
Slide 34: Thank You
Thank You 34 Investor Presentation Copyright © 2024 Veeco Instruments Inc. All Rights Reserved.