Microvast Holdings announces departure of chief financial officer
Introduction & Market Context
Kulicke and Soffa Industries (NASDAQ:KLIC) reported a significant net loss for its fiscal second quarter ended March 29, 2025, primarily due to charges related to the company’s announced divestiture of its EA Equipment business. The semiconductor equipment maker’s shares fell 4.85% in premarket trading to $30.20, reflecting investor concern over the financial impact of the strategic shift.
The company’s Q2 results come amid mixed regional demand patterns in the semiconductor industry, with softening in U.S. and Southeast Asian markets contrasting with utilization improvements in China and Taiwan. Management characterized these regional shifts as short-term, expecting ongoing industry growth through calendar year 2025.
Quarterly Performance Highlights
Kulicke & Soffa reported Q2 fiscal 2025 revenue of $162.0 million, representing a 2.5% sequential decline from the previous quarter. The company posted a net loss of $84.5 million, or $(1.59) per diluted share. On a non-GAAP basis, which excludes certain one-time items, the net loss was $27.9 million, or $(0.52) per share.
The substantial loss was primarily attributed to $86.6 million in charges related to the EA Equipment business divestiture announced on March 31, 2025. This strategic decision significantly impacted the company’s gross margin, which fell to 24.9% from 52.4% in the previous quarter.
As shown in the following comprehensive overview of the quarter’s financial performance:
Breaking down revenue by end market reveals the continued importance of the General Semiconductor segment, which contributed $91 million in the quarter. The Automotive & Industrial and Advanced Packaging (NYSE:PKG) Solutions (APS) segments generated $31 million and $37 million, respectively. The company noted sequential improvements in its Ball (NYSE:BALL), Wedge, and Thermo-Compression bonding technologies.
Despite the quarterly loss, Kulicke & Soffa maintained its shareholder returns program, repurchasing $21.3 million in shares and paying $11.0 million in dividends during the quarter. The company’s net cash position improved to $398.5 million from $369.2 million in the previous quarter.
The detailed income statement summary illustrates the significant impact of the EA Equipment-related charges:
Strategic Initiatives
The most significant strategic development was Kulicke & Soffa’s announcement to divest its EA Equipment business, while retaining certain technology and aftermarket parts. Management emphasized that this decision is expected to improve through-cycle performance and allow the company to prioritize long-term technology transitions.
The company highlighted several technology advancements across its core product lines. In its Ball bonding segment, Vertical Wire momentum is accelerating in both memory and general semiconductor applications, with the recent launch of the AT Premier MEM Plus system. The Wedge bonding business is benefiting from increasing complexity in power semiconductor assembly, particularly for electric vehicle and sustainable energy applications.
The following slide details the company’s technology transitions across multiple product lines:
In the Thermo-Compression bonding (TCB) space, Kulicke & Soffa reported gaining market share in advanced logic applications, with 120 systems deployed across 10 customers. Management noted that TCB technology is embedded in many leading AI, high-performance computing, and mobile device roadmaps, positioning the company well for future growth in these segments.
Regional Market Dynamics
Kulicke & Soffa’s performance reflected divergent regional trends in the semiconductor industry. The company reported softening demand in U.S. and Southeast Asian markets, while China and Taiwan showed utilization improvements and demand uptake.
Management characterized these regional shifts as anticipated short-term fluctuations, noting that core field utilization improvements are still expected. The company also highlighted that High Bandwidth (NASDAQ:BAND) Memory (HBM) and LPDDR transitions are expected to expand its market reach in 2026.
The company’s financial position remains solid despite the challenging quarter, as evidenced by its balance sheet and cash flow metrics:
Forward-Looking Statements
For the fiscal third quarter of 2025, Kulicke & Soffa provided guidance that reflects continued near-term challenges. The company expects revenue of $145 million (plus or minus $10 million), representing a sequential decline from Q2. Gross margin is projected at 46.5% (plus or minus 100 basis points), with diluted earnings per share forecast at $0.05 (plus or minus 10%).
Management noted limited direct trade-related impact on its business but acknowledged that order intake had slowed in Southeast Asia while improving in China and Taiwan. The company expects residual EA Equipment-related expenses to be below $15 million going forward.
The Q3 fiscal 2025 outlook is detailed in the following slide:
Looking beyond the immediate quarter, Kulicke & Soffa remains optimistic about its long-term positioning. The company emphasized that near-term headwinds are not specific to its business and that long-term industry dynamics remain favorable. Management expects ongoing semiconductor industry growth through calendar year 2025 and believes the company is well-optimized for the future following its strategic realignment.
The company’s focus on technology transitions in Ball, Wedge, Advanced Dispense, and Thermo-Compression bonding, along with its expansion into adjacent markets like solid-state batteries, underscores its strategy to capitalize on long-term semiconductor industry trends despite current market challenges.
Full presentation:
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