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    ACLS
    Earnings call· Jun 2026(Q2 FY26)

    AXCELIS TECHNOLOGIES Q2 FY26 earnings call ACLS

    Aug 6, 2026 Source

    Executive summary

    Axcelis Technologies Q2 FY26 — Strong Execution and Upgraded Full-Year Outlook

    Axcelis Technologies reported a strong Q2 FY26, surpassing revenue and EPS expectations, driven by robust operational execution and favorable demand trends across key markets. The company upgraded its full-year 2026 revenue growth outlook to mid-single digits and anticipates continued growth into 2027, fueled by memory investments and power market recovery. Progress continues on the pending merger with Veeco, expected to close in the second half of 2026.

    Highlights

    5

    • Q2 FY26 revenue of $215 million exceeded expectations.

    • Q2 FY26 earnings per diluted share of $1.06 exceeded expectations.

    • CS&I business delivered a strong quarter, driving overall performance.

    • Bookings grew slightly, and book-to-bill neared 1 over the past 3 quarters, indicating market stability.

    • Full-year 2026 revenue growth now expected to be mid-single digits year-over-year, upgraded from prior flat outlook.

    Concerns

    2

    • Q2 FY26 gross margin of 42.7% was slightly below the outlook of 43% due to mix and higher service costs.

    • Q2 FY26 operating expenses of $60 million were slightly above the outlook of $59 million due to higher variable compensation and fringe costs.

    Guidance & targets

    12
    CategoryTargetConfidence
    Q3 FY26 Revenue
    ~$230 million
    high materiality
    High
    Q3 FY26 Gross Margin
    ~43%
    medium materiality
    High
    Q3 FY26 Operating Expenses
    ~$62 million
    medium materiality
    High
    Q3 FY26 Adjusted EBITDA
    ~$41 million
    high materiality
    High
    Q3 FY26 Tax Rate
    ~15%
    medium materiality
    High
    Q3 FY26 Net Earnings Per Diluted Share
    ~$1.11
    high materiality
    High
    Q4 FY26 Revenue
    increase sequentially
    high materiality
    High
    Q4 FY26 Gross Margin
    improve slightly
    medium materiality
    High
    Q4 FY26 Operating Expenses
    slightly higher
    medium materiality
    High
    FY26 Revenue Growth
    mid-single digits year-over-year
    high materiality
    High
    FY27 Revenue Growth
    another year of revenue growth
    high materiality
    High
    Veeco Merger Close
    H2 2026
    high materiality
    High

    Segment performance

    11
    SegmentRevenueYoYQoQMargin
    Systems Revenue
    Driven by improvement in power and general mature markets, partially offset by expected moderation in memory due to timing of available fab space.
    		$132 million—sequential growth—
    CS&I Revenue
    Supported by a growing installed base, increased customer utilization, and continued expansion of aftermarket products and service offerings.
    		$83 million—strong quarter—
    China
    Increased from 40% in the prior quarter, representing the largest revenue-generating region.
    		46%—increased sequentially—
    Korea
    Second largest revenue-generating region.
    		26%———
    Europe
    Revenue contribution from Europe.
    		11%———
    United States
    Revenue contribution from the United States.
    		6%———
    Taiwan
    Revenue contribution from Taiwan.
    		2%———
    Japan
    Revenue contribution from Japan.
    		1%———
    Rest of World
    Remaining revenue contribution from other regions.
    		8%———
    Mature Node Applications
    Accounted for approximately 84% of system shipments.
    		84%———
    Memory and Advanced Logic
    Made up the balance of system sales.
    		balance———

    Operational metrics

    9
    Non-GAAP EPS
    $1.06
    Q2 FY26

    Exceeded expectations.

    Non-GAAP operating margin
    14.7%
    Q2 FY26
    Non-GAAP gross margin
    42.7%slightly below 43% outlook
    Q2 FY26
    Cash and investments balance
    $577 million
    Q2 FY26 end

    Strong balance sheet.

    Adjusted EBITDA
    $36 million
    Q2 FY26
    Adjusted EBITDA margin
    16.7%
    Q2 FY26
    Operating expenses
    $60 millionslightly above $59 million outlook
    Q2 FY26
    Tax rate
    11%below 15% forecast
    Q2 FY26
    Other income
    $5 millionhigher on a sequential basis
    Q2 FY26

    Industry KPIs

    9
    MetricValueDetails
    Backlog order book$452 millionUSD
    Book to bill ratio~1x
    Ai data center revenue—
    Services installed basegrowing installed base
    Fab capacity utilizationincreased customer utilization; higher tool utilization rates; really high utilization rates
    Bookings net order intake$131 millionUSD
    Design wins socket pipeline2 new customers in China; multiple customers for high-energy channeling applications; additional orders from leading North American memory manufacturer
    Node platform ramp schedule2-nanometer production
    End market segment revenue mixMature node applications: ~84% of system shipments; Memory and advanced logic: balance of system shipments%

    Orderbook & backlog

    2
    Bookings$131 millionQ2 FY26

    slightly higher sequentially

    Driven by general mature and power.

    Total backlog$452 millionQ2 FY26 end

    Product announcements

    2
    ProductTypeDetails
    Purion XEmaxmilestone
    Purion H6 High Current platformupdate

    Deals & partnerships

    1
    VeecoPending merger to create a stronger company with enhanced capabilities, broader growth opportunities and meaningful long-term value creation potential.

    Progress continues on remaining requirements, including with the State Administration for Market Regulation in China.

    Risks & headwinds

    4
    Memory sales lumpinessQ2 FY26, potentially throughout FY26

    sequential decline in Q2 FY26

    Mitigation: Customers focused on solving bottleneck issues in existing fabs until new cleanroom space comes online; strong year-over-year growth still expected for FY26 and FY27.

    Gross margin slightly below outlookQ2 FY26

    42.7% vs. 43% outlook

    Mitigation: Attributed to mix within CS&I and higher-than-anticipated services costs, which can fluctuate. Q4 FY26 gross margin expected to improve slightly.

    Operating expenses slightly above outlookQ2 FY26

    $60 million vs. $59 million outlook

    Mitigation: Primarily due to higher variable compensation associated with stronger performance and higher fringe costs. Q4 FY26 operating expenses expected to be slightly higher due to continued investment.

    China regulatory approval for Veeco mergerH2 2026

    Remaining requirement for merger close

    Mitigation: Company continues to make progress on remaining requirements for the merger.

    What to watch in Q3 FY26

    5

    Memory system sales growth

    Q3 FY26
    Currentlumpy in Q2 FY26, sequential decline from Q1
    Targetsequential growth

    Why it matters

    Memory is a key growth driver, and its trajectory indicates broader market recovery and customer investment in AI-driven DRAM/HBM.

    Craig, I wanted to start off with a question on memory, understanding how the tenor of interaction with your more established customers and your newer customers has changed over the last 3 months. And as we look at near-term dynamics, which I think were indicated with memory up in the third quarter, are we at a point where we should expect memory system sales to grow sequentially? Or are we still in a period where there can be 2 steps forward and 1 step back?

    Q&A highlights

    6

    Is the memory market now in a phase of sequential growth, or will it remain lumpy, and how does the tenor of customer interaction compare between established and newer customers?

    Memory sales will likely remain lumpy in 2026 due to fab space availability, but 2026 is a significant improvement over 2025 for DRAM revenue, with momentum expected to continue into 2027 as new cleanrooms come online. The second half for memory will probably look similar to the first half.

    “So I think we're going to see memory being slightly lumpy this year. Again, until the new cleanroom space comes online, I think the customers are mostly focused on solving bottleneck issues in their existing fabs.”

    asked by Craig Ellis · answered by Russell Low

    2 min read6 chapters

    Detailed Narrative

    01

    Q2 Performance and Operational Execution

    Axcelis delivered Q2 FY26 revenue of $215 million and earnings per diluted share of $1.06, both exceeding expectations. This performance reflects strong operational execution, capitalizing on favorable demand trends. Sequential growth in systems revenue was driven by improvements in the power and general mature markets, partially offset by expected moderation in memory due to fab space timing.

    02

    CS&I Business as a Key Driver

    The Customer Support and Services (CS&I) business delivered a strong quarter, continuing to be an important driver of overall performance. Revenue growth in CS&I was supported by a growing installed base, increased customer utilization, and an expansion of aftermarket products and service offerings. This segment has been a deliberate multi-year strategic focus to drive growth and stability through market cycles.

    03

    Power Market Recovery and Drivers

    The power market is showing signs of recovery, with bookings improving sequentially and exceeding average levels over the past two years. Key drivers for silicon carbide include increasing penetration in electric vehicles (especially 800-volt systems), broader adoption in AI data center power infrastructure, and expanding use in commercial industrial applications. The company also secured orders from two new customers in China for this market.

    04

    General Mature and Advanced Logic Trends

    General mature sales improved sequentially, with signs of improving activity outside of China, supporting higher tool utilization rates. Customers in this segment are benefiting from demand for AI-related data center applications manufactured on 28nm and above process technologies. In advanced logic, Axcelis shipped a system early in Q2 and a follow-on system in Q3 for materials-modification applications supporting 2-nanometer production.

    05

    Memory Market Outlook and Expansion

    Despite a sequential decline in Q2, memory customer engagement remains robust. Axcelis anticipates strong year-over-year growth in memory for 2026, with momentum extending into 2027 as customers accelerate cleanroom investments for DRAM and high-bandwidth memory (HBM) applications driven by AI. The company is also expanding its memory customer portfolio, including additional orders from a leading North American memory manufacturer.

    06

    Veeco Merger Update

    Axcelis continues to make progress on the remaining requirements for the pending merger with Veeco, including regulatory approvals with the State Administration for Market Regulation in China. The transaction is still expected to close in the second half of 2026, with management expressing excitement about the potential for a stronger combined company.

    AI-generated summary of the company’s earnings call. Not investment advice.