Veeco Instruments (VECO) Q4 2025 earnings summary

Executive summary

• Achieved record semiconductor revenue in 2025, driven by laser annealing, wet processing, and ion beam EUV technology, with advanced packaging business doubling year-over-year.

• Announced all-stock merger agreement with Axcelis Technologies, approved by shareholders and pending final regulatory clearance, expected to close in the second half of 2026.

• Strong order momentum, especially from AI and high-performance computing, led to a significant year-end backlog increase and bookings acceleration in H2 2025.

• Strategic investments in next-generation technologies and expansion into memory, advanced packaging, and compound semiconductor markets.

• Ongoing evaluations and shipments of LSA, IBD300, and NSA systems at major DRAM and logic customers.

Financial highlights

• FY 2025 revenue was $664 million, down from $717.3 million year-over-year; Q4 revenue was $165 million, both at the mid-point of guidance.

• Semiconductor business delivered $477 million, up 2% year-over-year, accounting for 72% of total revenue.

• FY 2025 non-GAAP operating income was $84 million; net income $80 million; diluted non-GAAP EPS $1.33.

• FY 2025 gross margin was 41% non-GAAP, down from 43.3% in FY 2024; Q4 gross margin was 37.7% non-GAAP.

• Order backlog ended at $555 million, up $145 million (35%) from prior year.

Outlook and guidance

• FY 2026 revenue guidance: $740 million–$800 million; non-GAAP EPS: $1.50–$1.85.

• Gross margin expected at 41%–43% non-GAAP; OpEx $205 million–$220 million; net income $94 million–$115 million.

• Q1 2026 revenue forecasted at $150 million–$170 million; non-GAAP EPS $0.14–$0.24.

• Growth expected in semiconductor (~15% to $550 million), compound semiconductor (~33% to $80 million), and data storage (doubling to $80 million); scientific and other segment expected to decline.

• Gross margin improvement anticipated in the second half of 2026, targeting 45% as new products and higher volumes ramp.