Axcelis ((ACLS)) has held its Q4 earnings call. Read on for the main highlights of the call.
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Axcelis Technologies recently concluded 2024 on a high note, reporting revenues and earnings per share that surpassed expectations. Despite this success, the company is poised to face challenges in 2025, with anticipated revenue declines, particularly in China and the Silicon IGBT market. Additionally, potential impacts from export control restrictions may affect future performance.
Better Than Expected Q4 Performance
Axcelis Technologies reported impressive Q4 2024 results, with revenue reaching $252 million and earnings per share of $1.54, exceeding market expectations. This strong performance was driven by robust demand for Customer Support and Improvements (CS&I) sales, which helped offset a decrease in system sales.
Growth in Silicon Carbide Sales
The company saw a 6% year-over-year growth in Silicon Carbide system sales for 2024. This growth is attributed to the increased adoption of Silicon Carbide in the electric vehicle industry and other applications, indicating a positive long-term growth trajectory.
Strong Recognition from Customers
Axcelis received 22 customer awards in 2024 for supplier excellence and other categories, marking a significant increase compared to the previous year. This recognition underscores the company’s commitment to quality and customer satisfaction.
Solid Financial Position
Exiting 2024, Axcelis held $571 million in cash, cash equivalents, and short-term investments, with no debt. This strong financial footing provides a solid foundation for future investments and growth opportunities.
Decline in Q1 2025 Revenue
The company anticipates a decline in Q1 2025 revenue to approximately $185 million, mainly due to reduced systems revenue from China and seasonal declines in CS&I revenue.
Challenges in Silicon IGBT Market
Silicon IGBT system sales declined in late 2024, and the market is expected to soften further in 2025 as customers manage capacity and the industrial auto sector recovers slowly.
General Mature Revenue Decline Anticipated
Axcelis forecasts a sequential decline in General Mature revenue for Q1 2025, driven by the digestion of mature node capacity in China and sluggish recovery in the auto and industrial markets.
Impact of New Export Control Restrictions
New U.S. export restrictions may impact Axcelis’ revenue from China in 2025, with potential revenue impacts estimated at the lower end of the $20 million to $50 million range.
Guidance for 2025
Looking ahead, Axcelis provided detailed guidance for 2025. The company projects a year-over-year revenue decline with Q1 revenue expected at $185 million and gross margins around 40%. However, the second half of 2025 is anticipated to improve, supported by growth in memory, particularly DRAM, and continued strength in Silicon Carbide shipments. Axcelis also emphasized its strategic focus on long-term growth through R&D investments and geographic expansion into Japan.
In conclusion, while Axcelis Technologies wrapped up 2024 with commendable financial results, the company is preparing for a challenging 2025. Key takeaways from the earnings call include the anticipation of revenue declines due to various market dynamics and potential impacts from export restrictions. Nevertheless, Axcelis remains committed to long-term growth and strategic investments, providing a cautiously optimistic outlook for the future.
