Veeco Instruments (VECO) Q2 2026 earnings summary

Executive summary

• Q2 2026 revenue reached $193.5 million, up 16%-17% year-over-year, with strong order momentum and robust demand across all major end markets, especially in Data Storage and Compound Semiconductor segments, and $200 million in Advanced Packaging orders secured.

• Non-GAAP net income was $21.8 million ($0.33/share), GAAP net income was $11.9 million ($0.18/share), and non-GAAP operating income was $23.1 million, all exceeding guidance.

• Major milestones achieved in the next-generation NSA program and commercial validation for new systems.

• Strategic investments and manufacturing expansion are underway to support anticipated growth in 2027, particularly in Advanced Packaging and Silicon Photonics.

• Progress continues on the pending merger with Axcelis, with most regulatory approvals obtained and closing targeted for the second half of 2026.

Financial highlights

• Q2 2026 revenue was $193.5 million, with semiconductor revenue at $131 million (68% of total), compound semiconductor at $21 million, and data storage at $22 million, all showing sequential and year-over-year growth.

• Non-GAAP operating income was $23.1 million; GAAP operating income was $11.9 million.

• Gross margin for Q2 was 39.5% non-GAAP (up from 36.2% sequentially), and 39% GAAP.

• Cash and short-term investments totaled $429 million, with $51 million in cash flow from operations and $4 million in CapEx.

• Days sales outstanding improved to 69 days, and long-term debt remained at $227 million.

Outlook and guidance

• Q3 2026 revenue expected between $200 million and $220 million, gross margin 41%-42%, OpEx $57-$58 million, net income $23-$33 million, and diluted EPS $0.35-$0.49 (non-GAAP).

• Full year 2026 revenue guidance raised to $780-$810 million, gross margin 40%-42%, OpEx $215-$225 million, and non-GAAP diluted EPS $1.36-$1.61.

• Semiconductor revenue expected to grow over 10% year-over-year in 2026; compound semiconductor and data storage revenues both expected to double year-over-year.

• Significant portion of anticipated 2027 revenue already in backlog, with customer forecasts extending beyond 2027.

• The merger with Axcelis is expected to enhance scale and market reach, with closing targeted for the second half of 2026.