ACM Research (ACMR) Q4 FY25 earnings call: guidance and Q&A

Analyst asked for color on growth excluding new products and how existing product lines (cleans, plating) will contribute to growth, given the new products are expected to be bigger drivers.

David Wang highlighted the significant progress in SPM cleaning (25-30% of cleaning market, high-margin, outperforming competitors), N2 bubbling wet etch for 3D NAND (critical for 300+ layers), and supercritical CO2 Dry (40% CO2 reduction, demo POs from 2 customers). He also emphasized the horizontal panel plating as a unique technology. These existing and new products are expected to drive substantial revenue growth in China and globally, with cleaning market share targeting 50-60% and copper plating 60%+.

“So with all this cleaning I call it add together, we believe also expansion in the future. This will probably represent even China, over $1 billion market potential for us to get in.”

asked by Charles Shi · answered by David Wang

Analyst noted operating margin compression from 26% in FY24 to 16% in FY25 and questioned the plan to address this, as current guidance suggests no rebound in FY26.

David Wang acknowledged the Q4 gross margin dip due to product mix and inventory provisions but expects new products to enhance margins and provisions to reduce, maintaining the 42-48% target. He justified continued high R&D investment (16% of sales) as necessary for capturing AI-driven opportunities, even if it temporarily impacts operating margin, stating it's a long-term investment for growth. Mark McKechnie added that operating margins are expected to remain in the mid-teens for FY26, with leverage expected in out-years as top-line grows faster than OpEx.

“It's the right thing to do to spend into that. You're right about the operating margin for 2026 kind of comes in at the mid-teen level, similar to what it was here in 2025. You move out a few years, our target is to keep those gross margins at that target range and then grow our top line faster than our OpEx. I think you can see some leverage in the out years.”

asked by Charles Shi · answered by David Wang

Analyst asked about the reasons for lower Q4 margin, slower revenue growth, and declining shipments, and when these numbers are expected to improve in 2026.

David Wang reiterated that existing cleaning and copper plating products, along with new differentiated PECVD, Track, and Furnace technologies, will drive growth. He highlighted the Lingang mini-line's positive impact on R&D speed and tool maturity. Mark McKechnie clarified that Q4 was impacted by new products not kicking in and a customer push-out. He expects Q1 FY26 revenue to be 18-20% of the full year, with H1 at 42-43% and H2 at 57-58%.

“When you look out to 2025, we're expecting linearity pretty similar to -- I'm sorry, 2026, we're expecting our linearity to be pretty similar. So the first half will be about 42%, 43% of revenue. Second half will be 57% to 58%. But I would kind of anticipate Q1 at about 18% to 20% of the full year mix.”

asked by Edison Lee · answered by David Wang

Analyst asked how the $111 million raised from selling ACM Shanghai shares would be utilized.

David Wang stated that the proceeds from the Shanghai private offering (earlier $623M) are for R&D and manufacturing expansion (second building, mini-line). The $111 million from the recent share sale is primarily for global customer and marketing/sales expansion, building international sales channels, and establishing assembly in the USA (Oregon facility) to minimize tariff impact.

“The proceeds we got from the -- so the 1.3% from Shanghai here, definitely the major purpose for that was spending global customer, global marketing sales.”

asked by Edison Lee · answered by David Wang

Analyst inquired about the potential unit/dollar size of shipments to the Singapore foundry customer and the chances of penetrating Singapore memory makers.

David Wang confirmed that tools are being installed and will go into production this year, expecting more cleaning tools and copper plating to follow. He sees this as a significant milestone for expansion in the Asian market (Korea, Taiwan) and globally. He believes ACM's technology is needed for AI-driven advanced technology in memory and logic.

“This tool will be qualified and go in production this year. And with that, we definitely will induce more of a cleaning tool. And also, we do have a copper plating and in -- behind.”

asked by Jimmy Huang · answered by David Wang

Analyst asked about ACM's progress with Taiwanese foundries and OSATs for panel-level packaging, specifically regarding order forecasts or purchase orders.

David Wang stated they are in discussions with key customers regarding large panel sizes (515x510, 310x310) and will be keynote speakers at a Taiwan panel conference in April to discuss horizontal plating and vacuum cleaning. He highlighted that ACM's horizontal plating is unique and a perfect fit for a key Taiwanese player's strategy, as plating is a bottleneck. He expects additional POs for bevel, vacuum cleaning, and horizontal copper plating from Taiwan, Korea, and Singapore this year.

“Our horizontal plating perfect fit their strategy or their demand. So as I said, really, we see a big opportunity and with our panel product.”

asked by Jimmy Huang · answered by David Wang

Analyst asked if ACM plans further disposal of its ACM Shanghai stake to fund international capacity builds.

David Wang stated they sold 1.3% for $111 million. He noted that ACM Shanghai stock is currently undervalued. The company has flexibility to raise funds in both the U.S. and Shanghai, and will decide on future sales based on money demand, timeline, and Shanghai stock pricing. He emphasized they have other tools to get money and are confident in funding global market investments.

“At this moment, I want to say our Shanghai stock is still -- we think it's still undervalued, okay, with our growth. So we maybe consider what the money demand and the time line, also what's the stock pricing in Shanghai. We decide where or when we should sell additional or not.”

asked by Jimmy Huang · answered by David Wang