Veeco Instruments (VECO) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue was $158.3 million, with non-GAAP net income of $8.9 million ($0.14 per diluted share) and GAAP net loss of $0.3 million, reflecting strong order momentum in AI, silicon photonics, and InP lasers.

• Major $250M+ orders for indium phosphide laser manufacturing tools, with shipments starting Q3 2026 and ramping in Q1 2027.

• Manufacturing capacity expansion underway to meet demand, especially for Spector IBD and wet processing systems.

• Pending merger with Axcelis progressing, with $2.0 million in related costs and awaiting China antitrust approval, expected to close H2 2026.

• Compound semiconductor and data storage markets grew 31% and 52% year-over-year, respectively.

Financial highlights

• Q1 2026 revenue was $158.3M, down 5% year-over-year; non-GAAP gross margin was 36.2%, GAAP gross margin 35.3%.

• Non-GAAP operating income was $8.6M; GAAP operating loss was $2.7M.

• Non-GAAP net income was $8.9M ($0.14 per share); GAAP net loss was $0.3M ($(0.01) per share).

• Cash and short-term investments ended at $383.3M; cash flow from operations was $8M; CapEx was $5M.

• Customer deposits increased by $19M to $69M.

Outlook and guidance

• Q2 2026 revenue expected between $170M–$190M; non-GAAP gross margin 38%–40%; non-GAAP EPS $0.20–$0.32.

• FY 2026 revenue guidance reiterated at $740M–$800M; non-GAAP EPS $1.50–$1.85; GAAP EPS $0.83–$1.17.

• Growth expected to accelerate in H2 2026, driven by AI, advanced packaging, and silicon photonics.

• Compound semiconductor business expected to grow ~50% in 2026, driven by silicon photonics and AI data center demand.

• Data storage market fully booked for 2026, with strong engagement into 2027.