Veeco Instruments (VECO) Q4 2024 earnings summary

Executive summary

• Achieved record revenue in the semiconductor segment, up 13% year-over-year to $467M, driven by laser annealing and advanced packaging growth, with significant milestones in next-gen system shipments and customer qualifications.

• FY 2024 revenue reached $717.3M, up 8% year-over-year, exceeding guidance; non-GAAP operating income was $116.1M and diluted non-GAAP EPS was $1.74.

• Q4 2024 revenue was $182.1M, up 5% year-over-year, with non-GAAP operating income of $27.4M and EPS of $0.41.

• Semiconductor business outperformed wafer fab equipment (WFE) growth for the fourth consecutive year.

Financial highlights

• FY 2024 gross margin was 43.3% non-GAAP and 42.4% GAAP; Q4 2024 gross margin was 41.5% non-GAAP and 40.6% GAAP.

• Compound Semiconductor revenue declined to $78M (11% of revenue), Data Storage rose 12% to $99M (14%), and Scientific/Other was $74M (10%).

• FY 2024 GAAP net income was $73.7M (GAAP EPS $1.23); non-GAAP net income was $104.3M (non-GAAP EPS $1.74).

• Ended 2024 with $345M in cash and short-term investments; operating cash flow for the year was $64M.

• Convertible notes outstanding at $282M with a weighted average coupon of 3.0%.

Outlook and guidance

• Q1 2025 revenue expected between $155M and $175M; non-GAAP gross margin around 42%; non-GAAP net income $16M–$22M; non-GAAP EPS $0.26–$0.36.

• Q2 2025 revenue expected to be similar to Q1.

• AI-related revenue projected to grow to over 20% of total revenue in 2025, up from 10% in 2024.

• Advanced Packaging revenue expected to double in 2025, driven by Wet Processing and Lithography, from ~$75M to ~$150M.

• Data Storage revenue expected to decline by $60M–$70M in 2025, with business limited to service and aftermarket.