Asked for more detail on general mature market weakness despite broader IDM pickup, and why the full-year guide wasn't raised given better memory sentiment.

David Ryzhik acknowledged end markets are picking up (auto stabilizing, industrial recovering, AI picking up for general mature), but Q1 bookings were softer. He noted rising utilization rates are a positive sign for 2027, but 2026 general mature is still expected to be down. The flat FY26 guidance is maintained due to digestion in power and general mature offsetting strong memory. “We still expect 2026 general mature to be down year-over-year. But as we think about the business trending into 2027, we feel a little bit better today than we did 3 months ago in general mature.”

Inquired about expectations for the book-to-bill ratio in the next quarter, given it was up to ~1.0 from 0.8%.

David Ryzhik stated the company does not guide bookings per quarter due to fluctuations but is encouraged by the consistency of Q1 bookings with Q4 2025, which was a significant improvement. “Yes, we're not going to guide bookings per quarter, it can fluctuate. But we are encouraged that Q1 was relatively consistent with Q4, which was a big step up from earlier in 2025.”

Asked for elaboration on silicon carbide adoption beyond EVs, specifically in data centers (voltage step-down, closer to rack) and other applications.

Russell Low highlighted the increasing silicon carbide content per EV (800V subsystems, traction inverter, DC-to-DC, onboard charging, AC system). For data centers, he explained that silicon carbide will handle power conversion from the grid (13kV) down to the rack, while gallium nitride might be used inside the rack (800V). He also mentioned white goods as an emerging application. “But if you drop down from the grid, which is 13 kilovolts or more, that's going to be a great application of silicon carbide.”

ACLS

Axcelis Technologies (ACLS) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Information Technology· May 7, 2026

Source: earnings call transcript

Executive summary

Axcelis Technologies Q1 FY26 — Strong Memory Demand and CS&I Growth

Axcelis Technologies delivered Q1 FY26 results slightly above expectations, driven by robust performance in its CS&I business and a significant uptick in memory market shipments. While general mature and power markets continue to experience digestion, the company sees encouraging demand signals in silicon carbide and memory, setting the stage for a return to growth in 2027. The pending merger with Veeco is progressing, with regulatory approval in China remaining.

Highlights

Revenue of $199 million, slightly above expectations.
CS&I revenue grew more than 30% year-over-year.
System shipments to the memory market saw a strong sequential increase, reaching the highest level since Q4 2023.
Bookings showed a second consecutive quarter of year-over-year growth on a trailing 12-month basis, driven by memory and silicon carbide demand.
Maintained a strong balance sheet with $570 million in cash, cash equivalents, and marketable securities.

Concerns

A one-time customer settlement resulted in a $5 million headwind to system revenue, 70 bps to gross margin, and $0.09 per share to EPS.
CS&I revenue moderated on a sequential basis.
Bookings in the general mature market were softer.
Continued digestion of capacity in general mature and power markets is expected to offset memory strength in FY26.
Other income was lower sequentially due to lower interest income and foreign exchange-related losses.

Guidance & targets

Category	Target	Timeline	Confidence
Q2 FY26 Revenue	approximately $205 million high materiality	Q2 · FY26	High
Q2 FY26 Gross Margin	approximately 43% medium materiality	Q2 · FY26	High
Q2 FY26 Operating Expenses	approximately $59 million medium materiality	Q2 · FY26	High
Q2 FY26 Adjusted EBITDA	approximately $34 million medium materiality	Q2 · FY26	High
Q2 FY26 Net Earnings Per Diluted Share	approximately $0.90 high materiality	Q2 · FY26	High
Full Year 2026 Revenue	approximately flat high materiality	FY26	Medium
Full Year 2026 Gross Margins	low- to mid-40% range medium materiality	FY26	Medium
Full Year 2026 Operating Expenses	approximately $60 million per quarter medium materiality	FY26	High
Full Year 2026 Tax Rate	approximately 15% low materiality	FY26	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Systems System revenue for Q1 FY26, impacted by a $5 million customer settlement.	$126 million	—	—	—
CS&I CS&I revenue exceeded expectations, driven by service, consumables, and system upgrades, despite sequential moderation.	$73 million	>30%	moderated sequentially	—
China Revenue share by geography, showing sequential increase.	40%	—	up from 32%	—
Korea Second largest revenue-generating region in Q1, driven by higher memory sales.	28%	—	—	—
Europe Revenue share by geography.	16%	—	—	—
United States Revenue share by geography.	12%	—	—	—
Taiwan Revenue share by geography.	1%	—	—	—
Japan Revenue share by geography.	1%	—	—	—
Rest of World Revenue share by geography.	2%	—	—	—
General Mature Customers continue to manage capacity, with stabilizing auto and recovering industrial volumes. Growing demand from AI data centers noted. Expected to be down in FY26 but with momentum into 2027. Spares and consumables: improvedTool utilization rates: higher	—	down year-over-year (expected FY26)	—	—
Memory Revenue and bookings increased meaningfully in Q1, driven by strong demand in DRAM and HBM. Expected strong growth for full year 2026 with momentum into 2027.	increased meaningfully	strong growth (expected FY26)	increased meaningfully	—

ACLS operating KPIs by quarter

ACLS operating KPIs stated on its earnings calls, by fiscal quarter
KPI	This call Mar 2026 Q1 FY26	Jun 2026 Q2 FY26	Change vs prior quarter
Bookings	$128M Bookings were roughly flat on a sequential basis at $128 million but marked our second consecutive quarter of firming order rates. Source: earnings call transcript	$131M Bookings were $131 million, slightly higher sequentially, continuing the trend of improving order activity with a book-to-bill ratio of approximately 1x. Source: earnings call transcript	+2.3%
Backlog	$453M We exited the first quarter with a backlog of $453 million. Source: earnings call transcript	$452M We exited the quarter with total backlog of $452 million. Source: earnings call transcript	-0.2%

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Orderbook & backlog

Backlog $453 million end of Q1 FY26

Product announcements

Product	Type	Timeline	Details
Purion H6	launch	Q1 FY26

Deals & partnerships

Veeco Pending merger to combine the two companies.

The only remaining approval is from the State Administration for Market Regulation in China.

Risks & headwinds

Customer settlement impact Q1 FY26

$5 million headwind to system revenue, 70 bps to gross margin, $0.09 per share to EPS in Q1 FY26

Mitigation:Described as a one-time impact.

Digestion in general mature and power markets FY26

Expected to offset memory strength, leading to approximately flat FY26 revenue year-over-year.

Mitigation:Improving trends across multiple markets are setting the stage for a return to growth in 2027; encouraging demand signals in silicon carbide and rising utilization rates in general mature.

Lower other income Q1 FY26

$2.7 million in Q1 FY26, lower sequentially

Mitigation:Primarily due to lower interest income and foreign exchange-related losses, implying market-driven factors.

Regulatory approval for Veeco merger Expected to close in H2 2026

Awaiting approval from China's State Administration for Market Regulation.

Mitigation:Working closely with the state administration to obtain regulatory approval.

What to watch in Q2 FY26

Silicon carbide demand recovery

H2 FY26

Current Moderated sequentially in Q1, but encouraging demand signals emerging.

Target Improvement in silicon carbide revenue in H2 FY26.

Why it matters

Recovery in silicon carbide is a key driver for full-year revenue and momentum into 2027.

From a market segment perspective, our memory market is on track for strong growth in 2026, offset by a continued digestion of capacity in general mature and power, albeit with some encouraging signs in silicon carbide.

Find out whether ACLS delivers this. Inve re-checks your case every morning.

Q&A highlights

Inquiring about implant opportunities in GaN and InP, especially for data center silicon photonics, and if these are primarily Veeco's product lines post-merger.

Russell Low explained that while there are minor GaN implants, the main opportunity in silicon photonics for data centers is in modulation units for optical transmission, which require isolation implants. He confirmed that the MOCVD and thin film capabilities for optical components are primarily within Veeco's product line.

“But to put the data to encode the laser with the data, that requires a modulation unit. And that modulation unit is a silicon unit, and that does require implantation.”

asked by Jonathan Dorsheimer · answered by Russell Low

2 min read 6 chapters

Detailed narrative

Q1 Performance Overview

Axcelis reported Q1 FY26 revenue of $199 million and earnings per diluted share of $0.72, slightly exceeding expectations. These results include a one-time $5 million customer settlement impact. CS&I revenue demonstrated strong year-over-year growth of over 30%, while system shipments to the memory market saw a significant sequential increase, reaching the highest level since Q4 2023.

Market Segment Trends and Demand Signals

The company observed encouraging demand signals in silicon carbide, with increased customer engagement on capacity plans and technology roadmaps, particularly for 200mm wafers and AI data center applications. Memory market revenue and bookings increased meaningfully, driven by strong demand in DRAM and high-bandwidth memory. General mature and other power markets remained muted, though rising tool utilization rates were noted in general mature.

Product Innovation and Advanced Logic Progress

Axcelis introduced its next-generation high current product, Purion H6, in Q1 and secured a high current win with a new customer in China. While no system revenue was generated in advanced logic in Q1, a system was shipped early in Q2 for a 2-nanometer production material modification application, indicating active engagement on next-generation technology roadmaps.

Financial Highlights and Balance Sheet Strength

Gross margin for Q1 was 40.7%, impacted by the customer settlement. Operating expenses were $57.7 million, leading to an operating margin of 11.7% and adjusted EBITDA of $27.7 million (13.9% margin). The company maintains a strong balance sheet with $570 million in cash, cash equivalents, and marketable securities, including $203 million in long-term securities.

Veeco Merger Update

The pending merger with Veeco is anticipated to close in the second half of 2026. The only remaining regulatory approval required is from China's State Administration for Market Regulation, with Axcelis working closely with the agency. Management expressed continued excitement about the opportunity to combine the two companies and drive long-term value creation.

Outlook for 2026 and 2027 Growth

Axcelis expects full-year 2026 revenue to be approximately flat year-over-year, with improving trends across multiple markets, particularly memory and silicon carbide, setting the stage for a return to growth in 2027. Q2 revenue is guided to $205 million with an anticipated gross margin of 43%, reflecting a more favorable mix and the absence of Q1's nonrecurring items.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.