Veeco Instruments (VECO) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue was $167.3M, above guidance midpoint but down 4% year-over-year, with non-GAAP EPS of $0.37 and GAAP EPS of $0.20; semiconductor revenue grew 3% and comprised 74% of total revenue, offsetting declines in other segments.

• Advanced packaging and lithography, especially for AI and high-bandwidth memory, drove growth, with advanced packaging revenue expected to double in 2025.

• Strategic wins included Intel's 2025 Supplier/EPIC Award and multiple production tool of record designations for laser annealing and wet processing platforms.

• Tariffs and global trade policy changes created uncertainty, shipment delays in China, and increased costs.

• Net income for Q1 2025 was $22.2M non-GAAP and $11.9M GAAP, down year-over-year due to lower sales and margin contraction.

Financial highlights

• Gross margin for Q1 2025 was 41%–42% (GAAP: 40.9%, non-GAAP: 41.7%), down from 43%–44% last year.

• Operating income was $24.3M non-GAAP and $14.1M GAAP, both down year-over-year.

• Diluted EPS was $0.37 non-GAAP and $0.20 GAAP; net cash from operations was $20M.

• Cash and short-term investments totaled $353M at March 31, 2025.

• Total assets rose to $1.28B from $1.25B at December 31, 2024.

Outlook and guidance

• Q2 2025 revenue expected between $135M and $165M, with non-GAAP EPS guidance of $0.12–$0.32 and GAAP EPS of ($0.05)–$0.17.

• Non-GAAP operating income for Q2 2025 projected at $8M–$22M.

• Advanced packaging and gate-all-around revenue projected to double in 2025, offsetting China headwinds.

• Data Storage revenue projected to decline by $60M–$70M in 2025 as customers utilize existing capacity.

• Long-term outlook for the semiconductor industry remains favorable, with growth driven by AI and new nodes.