Veeco Instruments Inc. · NASDAQ:VECO
Veeco Instruments — Q4 2023 Earnings Presentation
38 slides from Veeco Instruments's earnings presentation, February 2024
Slide 1: Investor Presentation February 2024
Investor Presentation February 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? Markets Market Update Growth Opportunities Financials Historical Revenue 2024 Outlook Customers, Resource Alignment, Veeco Team & ESG Backup & Financial Tables 3 Investor Presentation Copyright © 2024 Veeco Instruments Inc. All Rights Reserved.
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: Markets
Markets 6 Investor Presentation Copyright © 2024 Veeco Instruments Inc. All Rights Reserved.
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: Available Market
Available Market Total Veeco SAM Veeco’s Served Available Market to grow to ~$4.4B ~4.4B Projected CAGR ~14% ~$2.6B Semiconductor opportunity expected to grow to ~$2.0B driven by Laser Annealing, Nanosecond Annealing and Ion Beam Deposition equipment Compound Semiconductor opportunity 2024 2028 expe
Slide 9: Semiconductor SAM Growth
Semiconductor SAM Growth Total SAM Key Drivers of SAM Growth (Systems Only) 2024 2028 ~$2.0B Laser Spike Projected ~19% 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 • 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 11: 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 12: 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 13: Compound Semiconductor SAM Growth
Compound Semiconductor SAM Growth Total SAM Key Drivers of SAM Growth (Systems Only) 2024 2028 ~$1.9B SiC Power • Single wafer SiC CVD for 8 inch addresses high Projected ~15% CAGR ~$350M ~$650M Electronics voltage and power applications such as EVs ~$1.1B MicroLED GaN Power • Single wafer MOCVD pla
Slide 14: Executing Today & Well-Positioned for Long Term Growth
Executing Today & Well-Positioned for Long Term Growth Today Future ➢ Semiconductor business grew~12% in 2023 despite a ➢ Semiconductor growth well positioned to continue decline in WFE spending outperforming WFE growth, driven by new and existing products ➢ Laser Annealing expanding to new markets
Slide 15: Financials
Financials 15 Investor Presentation Copyright © 2024 Veeco Instruments Inc. All Rights Reserved.
Slide 16: Revenue by End-Market
Revenue by End-Market $680M-$740M $646M $666M $583M $454M 2020 2021 2022 2023 2024 Semiconductor Compound Semiconductor Data Storage Scientific & Other Semiconductor CAGR of ~35% drives increase from 37% of total 2020 revenue to >60% in 2023 16 Investor Presentation Amounts may not calculate precise
Slide 17: Historical Financials & 2024 Outlook (Non-GAAP)
Historical Financials & 2024 Outlook (Non-GAAP) Revenue ($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 18: Customers, Resource Alignment, Veeco Team & ESG
Customers, Resource Alignment, Veeco Team & ESG 18 Investor Presentation Copyright © 2024 Veeco Instruments Inc. All Rights Reserved.
Slide 19: 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 19 Investor Presentation RF – Radio Frequency OSAT – Outsourced Semiconductor Assem
Slide 20: 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 21: 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 22: 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 23: Backup and Financial Tables
Backup and Financial Tables 23 Investor Presentation Copyright © 2024 Veeco Instruments Inc. All Rights Reserved.
Slide 24: 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 25: 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 26: 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 27: 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 28: 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 29: 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 30: 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 31: 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 32: Effect of Convertible Notes on Diluted EPS (Effective Q4 2023)
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 33: 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 34: Supplemental Information—GAAP to Non-GAAP Reconciliation
Supplemental Information—GAAP to Non-GAAP Reconciliation In millions, except per share amounts Q4 23 Q3 23 2023 2022 2021 2020 $ millions Q4 23 Q3 23 2023 2022 2021 2020 GAAP Basic weighted average shares 55.5 55.4 53.8 49.9 49.1 48.4 Net sales $173.9 $177.4 $666.4 $646.1 $583.3 $454.2 GAAP Diluted
Slide 35: 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 36: 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 37: 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
Slide 38: Thank You
Thank You 38 Investor Presentation Copyright © 2024 Veeco Instruments Inc. All Rights Reserved.