Earnings call transcript: SUSS MicroTec Q2 2025 sees mixed results amid market challenges

SUSS MicroTec SE released its Q2 2025 earnings report, revealing a mixed performance characterized by robust sales growth but tempered by a decline in order intake and gross profit margins. Total sales for the first half of 2025 reached €266.4 million, marking a 38.2% year-over-year increase, continuing the company’s impressive 42.6% revenue growth over the last twelve months. The company’s stock price experienced a slight decline of 1.26%, closing at €31.78. With a market capitalization of €692.5 million, InvestingPro analysis suggests the stock is currently undervalued, despite the semiconductor equipment market’s uncertainty and reduced orders from Chinese customers presenting notable challenges.

Key Takeaways

• Total sales surged by 38.2% year-over-year to €266.4 million.
• Order intake decreased by 13.2%, reflecting market volatility.
• Gross profit margin fell to 37.2%, impacting profitability.
• Stock price declined by 1.26% post-earnings announcement.
• Continued focus on R&D and strategic investments in Taiwan.

Company Performance

SUSS MicroTec demonstrated solid sales growth in the first half of 2025, driven by strong demand in niche semiconductor equipment markets. Trading at a P/E ratio of 10.47 and maintaining a robust current ratio of 2.55, the company’s financial position remains strong despite facing headwinds with a 13.2% reduction in order intake and a decline in gross profit margin to 37.2%. The semiconductor equipment market remains uncertain, with saturation effects in the High Bandwidth Memory (HBM) sector and reduced orders from Chinese customers. Access the complete financial health analysis and detailed valuation metrics through InvestingPro’s comprehensive research report, one of 1,400+ available for top stocks.

Financial Highlights

• Revenue: €266.4 million, up 38.2% year-over-year.
• Order intake: €166.8 million, down 13.2%.
• Gross profit margin: 37.2%.
• EBIT margin: 15.7%.
• Cash and cash equivalents: €99.1 million.
• Free cash flow: -€27.6 million.

Market Reaction

Following the earnings announcement, SUSS MicroTec’s stock price fell by 1.26% to €31.78. This decline reflects investor concerns over the reduced order intake and declining gross profit margins, despite the company’s strong sales performance. The stock remains within its 52-week range of €27.04 to €47.16, indicating moderate volatility.

Outlook & Guidance

Looking ahead, SUSS MicroTec expects full-year sales to range between €470 million and €510 million. The company anticipates lower sales volume in the second half of 2025 but remains optimistic about positive order momentum and new product launches in 2026. Adjustments to gross margin and EBIT margin forecasts reflect ongoing market challenges.

Executive Commentary

CEO Burkhard Frick expressed confidence in the company’s strategic positioning, stating, "Zoos is positioned to profit strongly from the increasing demand for solutions in the back end and front end of the semiconductor industry in the years to come." CFO Cornelia Balwieser highlighted the company’s progress, noting, "We have already booked more than half of the sales we needed to meet the upper end of our sales guidance."

Risks and Challenges

• Market Uncertainty: The semiconductor equipment market remains volatile, impacting order intake.
• Gross Margin Pressure: Declining gross profit margins could affect profitability.
• Reduced Chinese Orders: A decrease in orders from Chinese customers poses a risk to sales growth.
• HBM Market Saturation: Saturation effects in the HBM sector could limit growth opportunities.
• Supply Chain Disruptions: Potential disruptions could affect production and delivery timelines.

Q&A

During the earnings call, analysts inquired about the impact of market saturation in the HBM sector and potential recovery timelines. Executives maintained that strategic R&D projects are ongoing and that flexible capacity management would help navigate current challenges.

Full transcript - SUSS MicroTec SE (SMHN) Q2 2025:

Moderator: to today’s earnings call of the Zoos Microtech SE on the occasion of the publication of the half year figures of 2025. I am delighted to welcome the CEO, Burkhard Frick CFO, Doctor. Cornelia Balwieser the COO, Doctor. Thomas Rohr as well as Manager, Investor Relations, Florian Mangold. The management board will speak in a moment and guide us through the presentation and the numbers.

After the presentation, we will move on to a Q and A session in which you will be allowed to place your questions directly to the management. We are looking forward to the results. And having said this, I hand over to mister Mangrud. Please, the stage is yours.

Florian Mangold, Investor Relations Manager, Zoos Microtech: Thank you, and welcome to the conference call on our results for the second quarter and the 2025, which we have published in our half yearly financial report this morning. As you probably know from earlier calls, this call is being recorded and considered as copyright material. It cannot be recorded or rebroadcasted without permission. Participating in this call implies your consent to this procedure. Please be aware that our safe harbor statement of page two on the slide deck.

It applies throughout the conference call. And now I hand over to our CEO, Burkhard. Please.

Burkhard Frick, CEO, Zoos Microtech: Thank you, Florian. Also from my side, dear investors, analysts and guests, warm welcome. After a moderate order intake in the first quarter, we now must realize that the order momentum is not as positive as expected. Order intake of €166,800,000 marks a 13.2% decrease year on year. On the other hand, sales peaked in the second quarter.

After only six months, we are already at record high €266,400,000 which is a growth of 38.2% compared to the previous year. Growth is driven by both segments. While EBIT is still at a solid level of 15.7%, gross profit margin came in only at 37.2 after six months. Compared to the first quarter, we have not seen an improvement, but more details in a moment. Now let’s take a closer look at the main topics.

First, the order intake. We observe greater uncertainty in the market, probably also due to the far reaching tariff announcements, we are noticing greater reluctance to invest. Further, after huge AI related capacity expansions in recent quarters, we see certain saturation effects, especially in the HBM sector. To make this clearer, the growth that, for example, major memory manufacturers achieved this year is based on equipment installations in recent months and quarters. In terms of sales, we have also benefited massively from this development since the beginning of twenty twenty four.

This is obviously reflected in our sales performance. Zoos has never generated a higher first year sales result. After six months, we are at 266,400,000 Considering the upper end of the sales forecast of $470,000,000 to €510,000,000 we have already achieved more than 50% of our 2025 sales target. This is an outstanding performance of our operations team. In terms of gross profit margin achievements, however, we are unfortunately falling short of our own expectations.

After 37.9% in Q1, the gross profit margin in Q2 has not improved and was now at 36.5%. There are two main reasons. First, the preparation and training of our employees in Taiwan for the production of the Yigi projection scanner. These costs of our very big ramp in Q1 and partially Q2 were higher than anticipated. Secondly, major one offs, especially in the second quarter.

Here, we had to write off materials we had ordered for a project, which was terminated. This is not unusual for our sector and innovation projects in general, but it was not anticipated. Let us now look at developments in our two segments. First, Advanced Backend Solutions. Here, the order intake in this segment was down in the 2025.

Developments in the three product lines varied. Demand for our 300 millimeter coating solutions from packaging customers in Korea and Taiwan was very strong, particularly in the second quarter. However, the surge in demand could not compensate for the more restrained orders for our temporary bonder and debonders. Despite a few follow-up orders, we still do not see a big momentum in demand from our memory customers. Demand for Imaging Solutions was slightly up on the previous year, especially due to higher orders for our UV projection scanner.

Sales momentum continued to be strong at plus 25% year on year for the 2025. All three product lines contributed to the sales growth with double digit percentage growth rates. Coders recorded the strongest percentage growth, while the execution of AI related Bondar projects continued as planned. Meanwhile, the gross profit margin fell to 35.1% in the second quarter and the situation did not improve due to one off effects. Now to photomask solutions.

After the order intake in this segment in the first quarter was the same as in previous year, new business acquisition in the second quarter, however, amounted to just €12,900,000 There were no orders from Chinese customers for new tools in Q2, which once again shows the expected decline, particularly in the high end segment. This underlines the importance of launching a dedicated tool for the mid end sector in 2026. At the same time, the execution of customer projects gained momentum once again. Q2 twenty twenty five sales amounted to €56,000,000 Growth now stands at a strong almost 70% after the first half year. Looking at both order intake and sales, the low book to bill ratio of 0.48 naturally stands out.

The order book has fallen to €106,000,000 due to accelerated execution of the backlog. Visibility is still sufficiently high for 2025, but the outlook for 2026 is limited in light of recent demand situation. The higher sales volume and associated scaling effects as well as a better product and customer mix have led to a significant improvement in margins in the photomasker segment compared to first half twenty twenty four. With a gross profit margin of 40.2 and an EBIT margin of 28.8%, the segment achieved strong half year margins. Now let’s take another look at our new production site in Tubei, Taiwan.

As you probably can see, my board colleague, Thomas Roe, was recently on-site, and he’s on that picture in the middle, to monitor the project status. And he was very pleased because the installations for our production clean rooms and the warehouse were almost completed. The outfitting of the office space and the plaza is also progressing very well. Up to now, we have made investments totaling 9,400,000 We currently anticipate total CapEx of €14,500,000 in 2025. This means we are below the initial announced budget of 15,000,000 to €20,000,000 Here on the next picture, you see on the left side one of the clean rooms where we will build the new increased output for the UV projection scanner.

We are nearing the completion of our build out. With that, I’d like to hand over to Cornelia Baldwiese for a closer look at our financial key figures. Unile?

Cornelia Balwieser, CFO, Zoos Microtech: Yes. Thank you, Burpat. Hello. Also a warm welcome from my side. I will now provide an overview of the most important developments at the group level.

The muted order intake of €78,700,000 in the second quarter leads to an order intake of €166,800,000 for the first six months. This is a decline of 13.2% year on year. After the very strong year 2024, we expected a more muted order intake. Currently, our customers install the tools delivered to them and start production. Also, the current uncertainty does not help with the order situation.

Orders are being pushed out into late twenty twenty five and early twenty twenty six. So the order backlog is down year on year. But even at €325,000,000, we still have decent visibility for the full year, and we have even roughly €60,000,000 of tool orders for 2026 in the order backlog already. Sales revenue, on the other hand, developed very strongly. The first half twenty twenty five is the best first half year in history of ZUS with sales of €266,400,000 and outstanding growth rates in both segments.

It took at our forecast a look at our forecast, it implies that sales in the second half of the year will not be on the same high level as in the first half. And gross profit margin, however, was down year on year due to several reasons. As Burkhard already said, product customer mix, cost to ramp the UV scanner production in Taiwan as well as inventory write offs. EBIT margin, however, is with 15.7% in line with our expectation for the first half year. Net cash development is driven by the increase in leasing liability.

Please keep in mind here that all financial liabilities, including the short and long term lease liabilities, are netted with our cash position. Cash and cash equivalents were at €99,100,000 Short and long term leasing liabilities added up to €51,100,000 which was substantially higher than the sum of €8,000,000 at the 2024. So this has even been driven mostly by the expansion in Taiwan. Free cash flow was at minus 27,600,000 after the first six months. Main driver here are less advanced payments, in particular of our Chinese customers.

Since the orders from China are down significantly in the first half year, there are also less prepayments. You can see this effect in the balance sheet. The current contract liabilities are EUR €28,300,000 lower compared to December 24. However, we expect free cash flow to turn positive for the full year, ending up in a dimension of 20 plus million euros for the full year. A major driver here will be the reduction of inventories, which is linked to the expected lower business volume in the second half of the year as well as to improving working capital management.

Capital expenditure is also up. Most of it also related to the Taiwan expansion, especially for technical building installations, installations and equipment and, yeah, equipment for the offices in the new factory. And as already said, we are in budget and on time. This page shows the development of our four performance indicators over the last six quarters. Overall, the second quarter was a strong quarter, the second best in company’s history in terms of sales after the best ever in Q4 twenty twenty four.

This really shows that we can handle a large number of customer projects simultaneously. We have already booked more than a half of the sales we needed to meet the upper end of our sales guidance. Gross profit margin was outside the corridor that we have achieved in the recent quarters. We have already discussed the reasons for this. EBIT margin in the quarter was also lower.

In the segments, we see that the one offs are attributable to the advanced back end solutions segment. This is why the profitability in the segment has suffered particularly. In photomask solutions, we had another great quarter. The first half year compared to the first half sales are up 69.5%. Gross profit margin again came in strong at 40.2%.

EBIT margin was lower. In the segment, profit profitability depends on relatively few tools and the customer mix. If we ship to one of our major customers, margins are not as high as if our customers from China, for example. But overall, the segment performed strongly in the first half year. EBIT margin for the segment was 26.1%.

We already talked a lot about the order intake today, so I want to keep it brief here. The book to bill ratio for the first six months was 0.63. This is a result of strong sales and a muted demand. When

Burkhard Frick, CEO, Zoos Microtech: we

Cornelia Balwieser, CFO, Zoos Microtech: look at the regions, we see some movement, but the overall picture remains the same. Demand from China in the second quarter was weak, down to 20% of the order intake in the first quarter twenty five. Finally, let’s go over the main developments of the balance sheet. Total assets increased by €32,000,000 The increase of the non current assets was driven by the Taiwan expansion with the right of use asset for the site in the amount of €42,800,000 and further installation at the site as well as CapEx in Germany. In current assets, we have a strong increase of contract assets by €20,400,000 linked to the overall increase in business volume.

Inventory trend: Inventories are down by €7,000,000 or 3.3% since the beginning of the year. We expect also positive effects for the remainder of the year. Inventories will be lower due to the increase in business, to to the decrease in business volume. At the December, inventories could be up to, let’s say, 30 plus million lower. Five sorry.

It’s the cash position, our cash and cash equivalents are lower because of less advanced payments, as I already mentioned. However, our cash position of around €100,000,000 remains strong, and we are still in a comfortable financial position to shape our future and withstand headwinds. The liability side, we also have an effect from the new time on-site. The noncurrent liabilities increased due to the lease liabilities, as I already mentioned. For the current liabilities, we see the effect of the change in the volume of the advanced payments.

This effect is due to lower business in China. The advanced payments were mostly from our customers in China, but there are also some customers who made some advanced payments in the last year, more or less is an exception. We finished the 2025 with an equity ratio of 55.8%. So basically, still very solid and where we started at the year. And with that, I hand over back to Burkhard.

Burkhard Frick, CEO, Zoos Microtech: Thanks a lot, Cornelia. Now let’s take a look at the full year of 2025, starting with an update on our sales guidance. As you know, our forecast here is to achieve sales of between EUR $470,000,000 to EUR $510,000,000. After six months at EUR 266,400,000.0, we have already reached 56% of the midpoint of the forecast and 52% of the upper end of the range. This means that this year will not be as back end loaded as previous years when we still needed to have a record Q4.

Therefore, we anticipate in the second half lower sales volume compared to the first half. In the first half of the year, we demonstrated that this operating performance has improved steadily in recent years. In view of the latest order intake, you can also see that production capacity utilization is slowly declining in some products as early as the fourth quarter. We have already started initiatives to improve the profitability in H2. We will pause headcount additions and focus on internal cost savings.

However, we are sticking to our plans, advancing research and development as well as our strategic structural projects, since this is the foundation for our future and further growth. Now to my final slide. We have adjusted the forecast of our gross profit margin and EBIT margin downwards for the financial year 2025, to which our stock has responded quite sharply. Whether or not a two percentage points cut to the midpoint of the forecast justified a response like this, I don’t know. What I do know, these were mainly one off effects, which say very little about the development of the overall profitability going forward.

Zoos is positioned to profit strongly from the increasing demand for solutions in the back end and front end of the semiconductor industry in the years to come. We are working on and introducing the relevant solutions for the next big steps. Even if you expect 2026 to be a transition year, we have successfully laid the foundation for future success in the coming years. And with that, we’re looking forward to the discussion. Let’s open the floor for the Q and A session, please.

Moderator: Yes. Thank you very much for the presentation, and we will now move on to the Q session. A dynamic conversation, we kindly ask you to ask questions in person via audio line. To do so, please click on the raise your hand button. If you have dialed in by phone, please use the key combination star nine followed by star six.

If you do not have the opportunity to speak freely, you can also place your question in the chat box. And we have already some participants raising their hands. Missus Winkler, you should be able to speak now and place your question.

Winkler, Analyst: Yes. Thank you for taking my questions. I have four, if I may. So starting with the first, which is, like, more of a general question. Do you face an increase in postponements or even cancellations from your customers?

And what is your current view on this?

Burkhard Frick, CEO, Zoos Microtech: Currently, don’t see any postponements or major postponements. Can always be shifts, but we don’t see any general pushouts or even cancellations.

Winkler, Analyst: Okay. And that’s good news. And the second one would be related to the write downs in connection with the discontinued project you had. Can you give us some more color on, yeah, on the discontinued project, but also on your current project pipeline when I’m thinking about hybrid bonding wafer level cleaning and whether there’s a shift in risk profile of these projects?

Burkhard Frick, CEO, Zoos Microtech: Well, I can start, and I think Thomas can continue. I think we made clear that this discontinued project is none of our strategic projects like hybrid bonding or wafer cleaning and so on and so forth. And this is just part of life in the high-tech industry that some projects fly and others have to be stopped, And then you have to face the consequences, like in this case, and have to do some write downs. So this does not, by any means, impact our future pipeline of innovation projects. It was one project which was discontinued, and therefore, we had to take measures in hand.

Thomas, back probably to add something.

Thomas Rohr, COO, Zoos Microtech: Yes. There’s not much there. Confirmation that the other projects and especially the strategic projects are still in our first focus for sure in in the r and d department, also from business units. So from that that point of view, the the other projects are continuing and making progress as planned more or less because, you know, as always, you have some deviations in r and d because you cannot really 100% predict it, but but no major deviations.

Winkler, Analyst: Okay. Understood. And my last question, I guess, Thomas, it would I would think it’s rather for you. It’s geared towards the photomask solution segment. In your opinion, what was the main contributor to the strong top line performance in this segment?

The increase in personnel capacity or the actual reduction in production throughput time?

Thomas Rohr, COO, Zoos Microtech: I think the major improvement came really from increasing the headcount and training people from outside. This was a major contributor to this really big success there. It took some time to get the people on board and to train them, but this really realized right now in the first half of this year. But for sure, we also work on the the lead time in in the manufacturing, but this was only a minor contribution. So major contribution is really headcount.

Winkler, Analyst: And maybe a a small follow-up question here. The people you were referring to, the trained people from outside, are these more temporary or, like, kind of normal personal?

Thomas Rohr, COO, Zoos Microtech: The the majority is flexible workforce in terms of really contractors and and temporary workers.

Winkler, Analyst: Okay. Understood. Thank you. I would

Cornelia Balwieser, CFO, Zoos Microtech: step back into the line.

Moderator: Yes. Thank you very much. And we now move on to the next participant. That’s a participant from Apus Capital. Please be so kind and state your name while answering and pulling your question.

Johannes Thies, Analyst, Apus Capital: Yes. Johannes Thies from Apus Capital. Good afternoon. Also, some follow on question to missus Winkler’s questions. First, maybe on order development in HPM.

You said as a customer’s first maybe to to grow in in the new capacity. But any signs or hopes from from the forecast of your customers that there could be a recovery of this business sometimes later in the year or beginning of next year?

Burkhard Frick, CEO, Zoos Microtech: Johannes, thanks for that question. I mean, this is, of course, a situation we are monitoring very carefully. We still installing and delivering bonders in the HBM space, which were ordered last year or even early this year. As I said in the last call, we also did receive in the meantime follow-up orders, but not at this big scale we were facing in 2024. So and yes, of course, there’s always hope, but we see there’s a saturation effect.

We see that the capacity at some of the customers are not is not fully utilized. Therefore, I think there’s some headroom left. But the moment that headroom is consumed, we do anticipate follow-up orders, and, this is also what, we plan for.

Johannes Thies, Analyst, Apus Capital: Okay. Thanks a lot. And for 02/1926, you mentioned you have 60,000,000 of equipment orders. How how high is maybe maintenance and aftermarket revenue you normally have per year, therefore, which comes on top for next year already?

Burkhard Frick, CEO, Zoos Microtech: Yeah. That’s yeah. That’s a good question. These were equipment orders only and to large extent, of course, photomask business because of the long lead times. The the maintenance and service portion historically has been around 15%, but that’s a portion we, want to structurally grow.

So don’t mark my words on that, that next year, will be as low as 15%.

Johannes Thies, Analyst, Apus Capital: Okay. So for around $7,075,000,000 for 2025 and so forth. And also base it for next year. Okay. Maybe a a question on the the mask cleaners and the scanners where there come new product versions, and you mentioned also an entry product for for the mask for the mask cleaners.

How much maybe there is also an impact that the customers knows their new products are coming that they’re holding back a little bit new orders?

Burkhard Frick, CEO, Zoos Microtech: Well, that’s yeah. That could could be a reason. But, of course, we we have solutions to address the market right now. But, of course, if if if people familiar with the with the subject know that there is a next generation tool. They might hold up orders for for the current tool.

However, we already see interest and we already see preorders, you know, for for the non launched products. So this is currently not holding customers back. So the interest for to be precise for Maastricht Smart, which is our next generation high end tool, and also for the mid end cleaning solution, where we have quite some chances also to recover some of the decline we see in China because that tool really addresses the needs in China because, as you know, there are less and less high end tools allowed in China. So therefore, a mid end cleaner is more a perfect fit for Chinese requirements. That is a tool which where we have high expectations to recover the current declining Chinese order intake for photomask.

For the scanner, there was, I think, the third product you mentioned. I mean, we use the scanner primarily right now in the cobas process. So of course and those customers are pulling, and and they they are pulling on on the existing scanner as as high as as on the new scanner. I think the moment the new scanner is available, they will immediately switch to that one. New customers, however, of course, they are also we are holding back engagements because we we want to to expand the sale for our UV scanner business with the new platform.

Johannes Thies, Analyst, Apus Capital: Okay. Super. But, there was some maybe discussion in the market after TGtime news two days ago. But there is no slowdown in the demand for scanners from your major customer, which itself in its conference call set, you don’t see maybe a balancing of demand and supply for cohorts even in ’26. Therefore, it was a little bit surprising to read that there should be a slowdown there.

Burkhard Frick, CEO, Zoos Microtech: Yeah. We currently don’t see this. We are still ramping up. We more than tripled by now the capacity, and we are not not not there yet. We will make one more step, and this is pulled by hard orders we we we have, you know, from from a Taiwanese customer.

Johannes Thies, Analyst, Apus Capital: Great. Finally, one question to Cornelia. The impact of the US dollar weakness, how how much did it influence your figures and maybe, also maybe an influence of your your exchange guidance?

Cornelia Balwieser, CFO, Zoos Microtech: In the first quarter, the impact, in terms of our operational result from the US dollar was roughly $506,100,000 euro.

Johannes Thies, Analyst, Apus Capital: Okay. Not a lot.

Cornelia Balwieser, CFO, Zoos Microtech: We assumed in our guidance, FX rate of 1.19.

Johannes Thies, Analyst, Apus Capital: Mhmm. Okay.

Cornelia Balwieser, CFO, Zoos Microtech: Yeah. And, hopefully hopefully, it it it it is in the range of the 1.19, 1.18.

Johannes Thies, Analyst, Apus Capital: So for you are more on the on the cautious side, in other words, expecting the dollar Yeah.

Cornelia Balwieser, CFO, Zoos Microtech: Hopefully. Hopefully. Yeah. Yeah. Thanks a lot.

Thomas Rohr, COO, Zoos Microtech: A lot.

Johannes Thies, Analyst, Apus Capital: That’s all my questions.

Cornelia Balwieser, CFO, Zoos Microtech: You. Mhmm.

Moderator: Well, thank you very much. And we quickly get back to miss Winkler, but maybe there’s a follow-up question from her.

Winkler, Analyst: Yes. Indeed. Also a question to Corbalvisa. Can you give us more information about the shift within the upfront payments that led to the reduction in operating cash flow?

Cornelia Balwieser, CFO, Zoos Microtech: The upfront payments are 28 around 28,000,000 less than, at end of last fiscal year, and mainly because, of the lower business in China because the most, advanced payments are from Chinese customers. And in in in ’24, there were some few prepayments from other customers that we consider as an exemption.

Winkler, Analyst: Understood. Thank you so much.

Moderator: Well, thank you. And we move on to the next participant, mister Davos. You should be able to speak now and place your question.

Davos, Analyst: Yes. Good afternoon. Thanks for letting me on. I I just had one, related to photomask, demand. Just wanted to think about a bit the risk for this activity with the order intake dropping, but, obviously, the margins were the highest in the group.

So how do you think about the high margin photomask business becoming maybe further underutilized if China demand does rebound? What’s your what are your thoughts around that?

Burkhard Frick, CEO, Zoos Microtech: Yes. No, that’s a good question, of course. I mean we are still as we, I think, hopefully explained well enough, we are peaking in the output for photomask business because we, for the first time, really have the ability to work on the backlog and get these orders executed. At the same time, we see a lower intake. And of course, if it stays like that, you have to contract somewhat.

Thomas, I think, mentioned clearly, we have a flexibility in our workforce that we can breathe in that sense and deal with those fluctuations. The margin improvements, yes, is driven, of course, also by volume, but also by many means in improving the margins internally. So even with the decline in sales level for photomask, we expect we know we can do well. But we also expect a higher order activity in the second half of the year. And therefore, that’s a question I think I’d like to postpone until we can look at the total picture.

Davos, Analyst: Alright. Alright. Thanks. And then just a bit a bit higher level. Like, I think you probably touched upon it already, but you highlighted different solutions being ordered now versus the you know, during the AI peak.

Just thinking about the implications for your entire product portfolio, what that means in practical terms, you know, fewer temporary bonders possibly, and then more, I’d say, semiautomated products like spray coaters, etcetera. Like, how would you expect that type of business to, you know, to evolve, I guess, in the next twelve months? Because there’s still massive spend in the downstream markets for for any for anything AI. So just curious for your thoughts here.

Burkhard Frick, CEO, Zoos Microtech: Yes. Of course, are multiple effects here. Of course, those huge waves of initial capacity spend, we kind of chewed those big orders. We see now follow-up orders, and they come more sporadically one by one and not in this bulk as we have seen it before. The different solution comment is more towards the COWOS process where less temporary bonders are being used due to different COWOS flavors, which are being implemented moving forward.

However, that is kind of exchanged also by the overall demand growth where the UV scanner comes in, which goes also in that process. So it’s really a mix of the products. And luckily, we have those products in our portfolio. But of course, all these products have different margin spectrums or different maturity levels. That’s why you also see fluctuations in the margin performance based on the product mix.

Davos, Analyst: Okay. Okay. And then just a brief question on the Coating Solutions. I think you called it out as sort of a demand driver in Q2. I was curious, is that tied to like new customer wins or shifts in packaging architectures or just like replenishment, I guess, from existing accounts?

Burkhard Frick, CEO, Zoos Microtech: Yes. It’s more than later. It’s replenishment of existing accounts mainly in the OSAT space where we see that our tool is the process of record. And we received quite some big orders for 300 millimeter spin coders. And that’s we are quite happy about that.

But as I before, that only partially offsets, you know, what what what we are missing in the temporarily bonding space.

Davos, Analyst: Okay. Alright. That’s all for me. Thank you.

Moderator: Thanks very much. And we move on to one participant dialed in by phone, so we try to give him the opportunity to speak. You should be able to speak now. And please state your name. So that is not possible at the moment.

We move on to next participant, Avasel Teys. You should be able to oh, now we have the opportunity to hear the participant on the phone.

Madeline Jenkins, Analyst, UBS: That’s great. Sorry, it’s Madam Jenkins from UBS. I had just two quick questions. The first is on the CHF 60,000,000 backlog you talk about for 2026. Roughly, how does this number compare to kind of where you were at a similar time last year?

And also you mentioned it was largely for your photomask solutions business. Is this more for Chinese customers that want deliveries in 2026 or the rest of the world? Thank you.

Burkhard Frick, CEO, Zoos Microtech: Yes. Madeline, I hope I understood you right. You’re referring to the €60,000,000 order intake, which are for 2026 delivery, right?

Madeline Jenkins, Analyst, UBS: Yes, exactly.

Burkhard Frick, CEO, Zoos Microtech: Okay. That’s indeed, to a large extent, as I said before, for photomask solutions. And it’s not for Chinese customers because that’s where we see the decline. But luckily, we have many non Chinese customers in Asia, but also in The U. S.

Who are placing orders for high end tools. And that’s a process we expect to be ongoing. That’s also why we are slightly positive about an increased order momentum for the second half of the year.

Madeline Jenkins, Analyst, UBS: Okay. And then in ’24, sorry, what was your backlog for 2025? Like what was the kind of comparable number versus the 60,000,000

Burkhard Frick, CEO, Zoos Microtech: Yes. That number, I don’t have on hand right now. But you mean at the same point in time, last year, what We our year’s backlog have to look that up. Don’t have it on hand here, and I don’t want to point you in the wrong direction, Madeline. So I will get back to you answering that question.

Madeline Jenkins, Analyst, UBS: Of course, no worries. And then my follow-up is just on HBM. Do you see kind of any reuse within generations of your tools? Or would it be kind of typical for kind of a next generation HBM to see a sort of big order for your temporary bonders? Thank you.

Burkhard Frick, CEO, Zoos Microtech: Yes, that’s a good question. I think the basic process, we don’t see changes. What we do see, however, is after we installed dozens of systems at our key customers, we see kind of improvement areas. So we are working on those to refine the process to make those machines run faster or improve the throughput or availability and whatnot. So we have kind of ongoing improvements on the current generation of the platform.

But you also rightfully point to a direction we also work on next generation bonding platforms also for temporary bonders, and that’s also one thing. But this will not show any traction on short notice.

Madeline Jenkins, Analyst, UBS: And

Moderator: we move on to the next participant on your audio line. Wezel Teys, you should be able to speak now and place your question. Yeah. Your microphone is on, but we can’t hear you. Okay.

So we first move to another participant placing a question in our chat box. I’ll read this out for you. How should we think about the potential carryover impact of late twenty twenty five underutilization on gross margins in 2026 compared to 2025?

Burkhard Frick, CEO, Zoos Microtech: Well, I mean, is the call for the first half twenty twenty five results. So we kind of stay away from making indications for 2026. Now with early signs of underutilization, we are taking measures to counter that. As I think we said before, we have a flexible workforce and we also reduced spend. And we took various saving measures in place to counter that and to balance this if it really materializes.

However, we still have hopes that the second half of the year will be better. And in terms of order intake, that we can compensate this with a stronger order book. But maybe Thomas want to comment on the flex capability we have. Yes.

Thomas Rohr, COO, Zoos Microtech: Concerning underutilization, I think we have the measures in place to avoid underutilization but really adapt our workforce to the demand which we have coming from our order book. So I see not a really big risk that we have underutilization, but really adapt our capacity to the needed capacity also even if the order intake slows down a little bit or stagnates. Think there’s not a big issue. This is why we will increase also in the last year. The headcount will mainly with with temporary workers and also contractors so that we have a pretty high flexibility to adapt to changing circumstances.

Moderator: Okay. And the second question in the chat box. As you begin ramping next gen tools in 2026, do you anticipate a margin uplift from the new platform architecture, architecture? Or should we expect early stage launch dynamics to continue weighing on profitability?

Burkhard Frick, CEO, Zoos Microtech: Yes. Also good question. The next to introducing new features and next generation tools, which are demanded by our lead customers, we also, with those tools, want to address the profitability. So we improved the cost structure of those tools by design. So the right answer is we expect margin actually to improve with the launch of those tools and not to deteriorate.

But of course, this has to be proven in the field and in real life. But they were designed with improved cost structure, while we offer higher performance. And that’s why we usually are able to maintain our price levels or even increase price levels because of the additional values we provide to customers.

Moderator: Well, thank you very much. And we try to get back to Wessel Teys on the audio line to place the question. You should be able to speak now.

Wessel Teys, Analyst: Can you hear me?

Moderator: Yes. We can hear you.

Wessel Teys, Analyst: Great. Great. Yeah. A few questions. The first one would be a little bit around your guidance.

If I go through the guidance second half versus first half comparison, We expect in second half a a better gross margin versus first half. And then but the EBIT margin will decline versus first half. So it implies a little bit if you do the math that your OpEx will increase versus first half. So quarterly run rate around 30,000,000 plus, in second half. Why, why exactly?

And, if I remember correctly, you had in first half few one offs. Right? So is there further one offs or what what cost items are expected to go up in the second half?

Cornelia Balwieser, CFO, Zoos Microtech: Yes. Thank you for your question. First, OpEx will, I would say, slightly increase, but our operational result in absolute numbers are not able to cover all the general costs and fixed costs. So this goes or burdens the EBIT percentage or it’s just mathematics, let’s say this way. And the second was with the one offs.

Yeah. We will have some one offs we expected already in our guidance. For example, our double counting for the leasing contract in Taiwan this year for the new site and some of the old sites. So we have here a double leasing expenses. And, yeah, then that’s I would say, really a one off, and we will have maybe some more impact of the tariffs.

But I don’t know if this is a one off, maybe it is the future. And we will have also some expenses on our digitalization projects in the second half, that is more than in the first half of this year. But the major project will also go on in 2026. That’s more or less, let’s say, what we expect as a one off, in the second half of the year.

Wessel Teys, Analyst: And how much was the amount in the first half? Can you can you give a little bit, if I remember correctly, mid single digit, but, maybe I’m confusing the number. But what was really, those kind of one offs you had in the first half?

Cornelia Balwieser, CFO, Zoos Microtech: As as we already mentioned, the one offs are the inventory write offs, then the expenses for the ramp up of the UV scanner production, and also some customer product mix effects, and are also a little bit more training costs even in the r and d. And, yeah, that that’s that’s the main topics.

Wessel Teys, Analyst: But the amount was roughly roughly?

Cornelia Balwieser, CFO, Zoos Microtech: The amount was roughly all over this, a mid single digit million amount.

Wessel Teys, Analyst: Okay. Got it. And it it implies, like, in second half, it it will be a similar amount again?

Cornelia Balwieser, CFO, Zoos Microtech: No. No. It will not be a similar amount. Because the write offs of our inventories hopefully will not occur again. And, yeah, that’s a big amount, and we expect that we improve with our ramp up costs and also we’ll have less training costs.

And we also have some cost cutting measures in place for the second half of the year.

Wessel Teys, Analyst: Got it. Yeah. Maybe I follow-up on

Burkhard Frick, CEO, Zoos Microtech: the

Wessel Teys, Analyst: OpEx topic for the second half quarterly run rate. On the order entry, I mean, if I look now, your scanner business was down, so the China risk, then temporary bonder, debonders. So the AI related business, particularly the HBM part was in first half not really strong. Some cyclical recovery in the little business. And now the question is, if you look now into the second half of the year, what is your feeling?

Are we now at the bottom of the order activity? What we have seen in the first half as a quarterly run rate as some of the things are down and the cyclical component is a little bit up. So is that the kind of the bottom you what is your impression there?

Burkhard Frick, CEO, Zoos Microtech: I don’t know. I really have to polish the crystal ball here. But it’s I think it’s really difficult to predict. The outside circumstances are very unsecured with one day you have an agreement on tariffs and still people are discussing how it’s being implemented. So there are many factors you cannot influence.

And we cannot influence the order behavior of our customers either because they have their own risk assessment. They are very cautiously spending their CapEx. But there are, of course, some big projects we are involved in, and that’s also what makes us look a bit more positive in the second half because we are anticipating some orders. But if and when they come, it’s very hard to predict. So we currently see some of them to come in the second half, but then more in 2026, together with all those new orders for the new products we are launching.

And that, I think, has to be seen in context. So whether we have reached the bottom or not, I think this is very hard to predict. But I think we also stated in our half year report that we expect a more positive momentum in the second half. So yes, we think it will improve not by major steps, but it will improve somewhat. And therefore, we are still looking at this from a positive angle.

Wessel Teys, Analyst: Maybe ask related to this, ask a little bit differently. You mentioned in your, in your presentation the OSAT part, basically, the the traditional back end little business with quota, etcetera, doing better. Do you think this cyclical part has still legs to go, or, what is your your your, you’re feeling from the discussion with the customers? Is the all set are the all set customers are really investing more after years of, lower investments, Or are they now at a level where you say, yes, they are now okay with their investments? What is your impression there?

Burkhard Frick, CEO, Zoos Microtech: Yes. I mean, again, I think we were often even moving So the whole AI boom was somewhat triggering a big wave. And there was just to remind everyone, there was in a down cycle where we had a record order intake. So the cycle, of course, does affect kind of the big players in the global industry.

With certain products we, as a niche player, are offering, we are sometimes decoupled. So therefore, we are I think, yes, in general, we are following the cycle, but it depends how and when our big customers are placing orders. And some of our orders, for example, our high end photomask tool, which can easily reach EUR 8,000,000 apiece, if they order one or two order pieces of that, you have a higher order entry than we achieved, for example, in photomask business in the entire Q2. So this has big spikes and can move greatly. Now on OSATs, OSATs order when they scored business, when they have to expand, and they are following big chip act developments and the big scaling efforts of big fabs.

So they kind of they follow. And they follow and then we follow them. So it’s this is how it works. So therefore, predictions are difficult. We are very closely working with them.

Some had plans to invest earlier, and they kind of they’re a bit hesitant. But then when they invest, they usually invest very solidly and then they immediately ask us to confirm delivery times because they know that they can expect faster deliveries from us now where we have the capacity. So it’s so we get less warning because of our improved operational performance. But therefore, we can then also realize much faster. And that’s very different than two years ago when we had a massive backlog, which we could not execute.

And it’s almost a miracle that this backlog remained for such a long time that customers did wait so long. Nowadays, this has changed. So we have short term forecast and pretty short term orders from customers, and then we have to still run like hell to to execute them.

Wessel Teys, Analyst: Can I squeeze in two quick ones? The one is, can you confirm again that your lead times have have improved? So, basically, if you get in twenty twenty six orders within the first eight, nine months, you can still ship them in the same fiscal year. Can you confirm that?

Thomas Rohr, COO, Zoos Microtech: Let me answer this question. For sure, we’ve improved our lead times. I wouldn’t say that that if you order really complicated big tool after nine months in in 2026, we can still deliver it in 2026. It would be a little bit too fast. But I think in general, we adapted our lead times to the expectation of customers, which is around six to nine months, depending on the complexity and the volume of the tool.

So this is really, I would say, well accepted and and well known lead time also in the industry, in our business. So from that point of view, we adapted to the really good lead times also competition has. And even sometimes even better.

Wessel Teys, Analyst: Got it. And then final one on hybrid bonding. Can you give a brief update on your side? I mean, my impression is a little bit. It looks like hybrid bonding is going to be adopted in the NVIDIA Rubin Ultra.

So, basically, HPM four e. And it looks like 2027 time frame. So any and some of your competitors seem to be more optimistic now that we are going to finally see h hybrid bonding in in HPM memory. What is your I know your road map, but any updates there if you have something?

Burkhard Frick, CEO, Zoos Microtech: Yes. I think the situation hasn’t changed compared to when we talked last time. The our anticipation is earliest HBM4E, if not HBM5, for broader introduction. And also bear in mind that the current hybrid bonding solutions are often stand alone flip chip solutions and not integrated solutions, which are being deployed. So and that’s a tool which we are not offering.

So we had we, for the time being, completed our lineup for hybrid bonders. We have now a Diode wafer, a very compact tool, which is also very accurate. And that one is good for the time being. We don’t see yet a huge launch window coming up for any of the players, at least not short term. So therefore, the overall sentiment hasn’t changed.

Wessel Teys, Analyst: Thank you.

Moderator: Well, thank you very much, and that is on point for this scheduled call. We do not receive any other questions or raised hands, And we therefore come to the end of today’s earnings call. Thank you very much to all the participants for showing interest in Zoos Microtech. And should further questions arise at a later time, please feel free to contact investor relations. Thank you very much to mister Frick, doctor Balvisa, doctor Rohrer, and mister Mangold.

I wish you all the best and a lovely remaining day. And with this, I hand over to mister Mangold for some final remarks.

Florian Mangold, Investor Relations Manager, Zoos Microtech: Yes. Those final remarks are also very short. Thank you much for your participation in our call and your interest in Zoos. Don’t hesitate to get in touch if you have any further questions. Take care, and goodbye.

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