Veeco Q3 2025 presentation: Revenue beats estimates as merger with Axcelis advances

Introduction & Market Context

Veeco Instruments Inc. (NASDAQ:VECO) reported strong third-quarter 2025 results on November 5, exceeding analyst expectations with revenue of $166 million and non-GAAP earnings per share of $0.36. The semiconductor equipment manufacturer saw its stock rise 1.41% in after-hours trading, reflecting positive investor sentiment toward both the quarterly performance and the company’s strategic merger with Axcelis Technologies.

The company’s results were driven by sustained demand in artificial intelligence and high-performance computing applications, which continue to be key growth drivers in the semiconductor industry. Veeco’s specialized equipment plays a critical role in enabling advanced semiconductor manufacturing processes, particularly for leading-edge technologies.

Quarterly Performance Highlights

Veeco reported Q3 2025 revenue of $166 million, non-GAAP operating income of $23 million, and non-GAAP earnings per share of $0.36, all exceeding analyst expectations. The semiconductor segment remained the dominant revenue contributor at $118 million, representing 71% of total revenue.

As shown in the following quarterly highlights:

The company’s regional revenue distribution reveals strong performance in Asia-Pacific markets, with APAC (excluding China) accounting for 49% of revenue ($82 million) and China representing 28% ($46 million). The United States contributed 16% ($27 million) and EMEA 7% ($12 million).

This geographic breakdown illustrates Veeco’s global market presence:

A detailed comparison of GAAP and non-GAAP results shows improvement across key metrics. The company achieved a non-GAAP gross margin of 41.9% and operating income of $23.1 million for the quarter, demonstrating solid operational execution.

The following table provides a comprehensive view of Veeco’s Q3 financial performance:

Strategic Initiatives

The most significant strategic development highlighted in Veeco’s presentation is the proposed merger with Axcelis Technologies. This combination is positioned to create a leading semiconductor equipment company with expanded market reach and complementary product offerings.

The merger offers several key benefits as illustrated below:

The combined entity will have a served available market exceeding $5 billion on a pro-forma 2024 basis, with over $900 million in cash providing a strong financial foundation. The complementary product portfolio will enable the company to address adjacent technology steps in semiconductor manufacturing, while enhanced channel and regional reach will help penetrate Tier 1 customers more effectively.

Veeco’s presentation also highlighted its critical role in semiconductor manufacturing processes, showing how its systems support both front-end and back-end operations:

Detailed Financial Analysis

Veeco’s balance sheet showed continued strengthening, with cash and short-term investments increasing from $355 million in Q2 2025 to $369 million in Q3. Cash flow from operations improved from $9 million to $16 million quarter-over-quarter, though days sales outstanding (DSO) increased slightly from 58 to 63 days.

The company’s semiconductor served available market (SAM) is projected to grow significantly, expanding from approximately $1.3 billion in 2025 to $2.7 billion by 2029, representing an 18% compound annual growth rate. This growth is driven by Veeco’s technologies enabling advanced semiconductor architectures including Gate-All-Around transistors, High-Bandwidth Memory, EUV lithography, and advanced packaging.

The following chart illustrates this projected market expansion:

Forward-Looking Statements

For the fourth quarter of 2025, Veeco provided guidance of $155-$175 million in revenue and non-GAAP earnings per share of $0.16-$0.32. The company expects a non-GAAP gross margin of 37-39% and operating expenses of approximately $48 million.

The detailed Q4 guidance is presented in the following table:

CEO Bill Miller emphasized during the earnings call that "demand tied to AI and high-performance compute remains strong and is pulling innovation forward," highlighting the company’s optimistic outlook despite broader market uncertainties.

The merger with Axcelis is expected to close in the coming months, subject to regulatory approvals and shareholder votes. Management indicated that integration planning is already underway, with the combined company positioned to benefit from increased scale in research and development.

Veeco’s long-term strategy continues to focus on expanding its served available market through new product introductions and technology advancements. The company’s emphasis on enabling next-generation semiconductor technologies, particularly those supporting AI applications, aligns with industry growth trends and positions it well for continued expansion in 2026 and beyond.

Full presentation:

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.