Executive Summary

Q1 2025 revenue and non-GAAP EPS both beat S&P Global consensus: revenue $192.6M vs $184.9M*, and non-GAAP EPS $1.04 vs $0.38*; strong gross margin execution (GAAP 46.1%, non-GAAP 46.4%) drove the upside .
Bookings improved to $110M (book-to-bill 0.8x), the highest since Q4’23, while backlog ended at $618M; mix shifted regionally with China 37% of Shift system sales, U.S. 23%, Korea 20% .
Q2 outlook: revenue ≈$185M, GAAP EPS ≈$0.57, non-GAAP EPS ≈$0.73; management expects H2 revenue to be “relatively consistent” with H1 and non-GAAP gross margins in H2 similar to Q2 (~42%) despite tariff noise .
Stock narrative catalysts: margin/earnings beat, sequential bookings improvement, and clear mitigation plans for tariffs (impact “relatively small”), offset by muted NAND and moderated SiC investments near term .

What Went Well and What Went Wrong

What Went Well
- Margin execution: GAAP gross margin 46.1% (non-GAAP 46.4%) vs outlook of ~40%, helped by lower warranty/installation costs and favorable deferred revenue/CS&I mix; non-GAAP operating margin 18.3% .
- Bookings/backlog improvement: Bookings $110M, book-to-bill 0.8x, backlog $618M; both systems and CS&I slightly above internal expectations .
- Strategic positioning: “We executed well… strong profitability despite a moderation in customer investments… agile global manufacturing and supply chain footprint,” CEO said; tariff impact expected to be small with mitigation plans in place .
What Went Wrong
- Topline compression: Revenue fell to $192.6M from $252.4M YoY (Q1’24) and from $252.4M QoQ (Q4’24) as mature-node digestion and SiC moderation persisted .
- Operating leverage: GAAP operating margin fell to 15.1% from 22.4% YoY; non-GAAP operating margin to 18.3% from 24.1% YoY .
- End-market softness: NAND demand remains muted (no new wafer starts), SiC investments moderated; China mix expected to fluctuate while trending lower vs 2024 over the year .

Financial Results

Headline results vs prior quarters

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($M)	$256.6	$252.4	$192.6
GAAP Gross Margin (%)	42.9%	46.0%	46.1%
Non-GAAP Gross Margin (%)	—	—	46.4%
GAAP Operating Margin (%)	18.3%	21.6%	15.1%
Non-GAAP Operating Margin (%)	—	—	18.3%
GAAP Diluted EPS ($)	$1.49	$1.54	$0.88
Non-GAAP Diluted EPS ($)	—	—	$1.04
Adjusted EBITDA ($M)	—	—	$39.5

Q1’25 actuals vs S&P Global consensus

Metric	Actual	Consensus	Beat/(Miss)
Revenue ($M)	$192.6	$184.9*	+$7.7
Primary EPS (non-GAAP) ($)	$1.04	$0.38*	+$0.66

Values marked with * were retrieved from S&P Global.

Revenue mix and segments

Breakdown	Q1 2025
Product Revenue	$182.8M
Services Revenue	$9.7M
Systems Revenue	$138M
CS&I Revenue	$55M

Key KPIs

KPI	Q1 2025
Bookings	$110M
Book-to-Bill	0.8x
Backlog	$618M
China Mix (Shift systems)	37%
U.S. Mix (Shift systems)	23%
Korea Mix (Shift systems)	20%
Share Repurchases (Q1)	$18.2M
Share Repurchases (Q2 to 5/5)	$23M
Cash & ST Investments (end Q1)	$587M; no debt

Context

YoY: Revenue down from $252.4M (Q1’24) to $192.6M; GAAP op margin down from 22.4% to 15.1% .
Seq: Revenue down from $252.4M (Q4’24), though gross margin mix helped sustain 46.1% GAAP in Q1 .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	Q1 2025	≈$185M (from Q4 PR)	Actual $192.6M	Beat vs prior guide
GAAP Diluted EPS	Q1 2025	≈$0.38 (from Q4 PR)	Actual $0.88	Beat vs prior guide
Revenue	Q2 2025	N/A	≈$185M	New
GAAP Diluted EPS	Q2 2025	N/A	≈$0.57	New
Non-GAAP Diluted EPS	Q2 2025	N/A	≈$0.73	New
Non-GAAP Gross Margin	Q2 2025	N/A	≈42%	New
Non-GAAP OpEx	Q2 2025	N/A	≈$54M; FY flat YoY	New
Adjusted EBITDA	Q2 2025	N/A	≈$29M	New
Tax Rate	Rest of 2025	N/A	≈15%	New
China Mix (Shift systems)	Q2 2025	N/A	Sequential increase expected	New
Revenue cadence	H2 2025	N/A	H2 ≈ H1 levels	New

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2: Q3’24; Q-1: Q4’24)	Current Period (Q1’25)	Trend
Macro/tariffs	Near-term digestion flagged; focus on cost discipline and roadmap investment	Tariff impact “relatively small”; mitigation via global supply/manufacturing; margins to moderate on mix	Better clarity; manageable headwind
Bookings/backlog	Backlog recalibration disclosure (methodology correction)	Bookings $110M; B:B 0.8x; backlog $618M	Improving bookings; healthy backlog
SiC power	Key secular driver cited	Investments moderated near term; strong pull for 150→200mm, planar→trench, superjunction; Axcelis leads in high energy	Near-term digestion; LT intensity rising
Memory	Limited detail previously	DRAM improving; NAND muted (no wafer start adds)	DRAM up; NAND soft
Regional mix	China exposure noted in 2025 digestion context	China 37% in Q1; expected higher in Q2, but lower mix vs 2024 for FY; U.S. 23%, Korea 20%	Mix volatile; China down YoY
CS&I	Ongoing strength	Sticky CS&I; Q1 mix driven by higher-margin spares; upgrades opportunity ahead	Resilient; favorable mix
R&D/OpEx	Investing through cycle	OpEx to remain flat YoY to sustain roadmap and readiness for recovery	Continued investment
Inorganic M&A	—	“Aperture wide” beyond implant; returns-driven	Optionality added

Management Commentary

Strategic posture: “We executed well… delivering strong profitability despite a moderation in customer investments… agile global manufacturing and supply chain footprint… invest in innovation to capture the long-term growth opportunities” — CEO Russell Low .
Margins: “GAAP gross margins of 46.1%… exceeded our outlook of 40%… primarily due to lower-than-expected warranty and installation costs, favorable mix for deferred revenue recognized as well as more favorable mix within our CS&I business” — CFO Jamie Coogan .
Bookings/backlog: “We generated $110 million in bookings… book-to-bill of 0.8x…the highest… since Q4 of 2023” — CEO .
Tariffs: “We have plans in place to lessen the impact… leveraging our global supply base… Asian operations center… impact… relatively small” — CFO and CEO .
End markets: “DRAM improving… NAND… muted… need new wafer starts” — CEO .
SiC transitions: “Move from 150→200mm and planar→trench (and superjunction) increases implant intensity, especially high energy, playing to our strengths” — CEO .

Q&A Highlights

Margin sustainability and drivers: Q1 margin beat tied to higher-margin spares in CS&I, favorable deferred revenue recognition, and reduced installation/warranty costs; Q2 margin moderation on mix; H2 gross margins similar to Q2 including tariffs .
Tariffs: Impact expected to be relatively small with mitigation via global manufacturing and drawback processes where applicable; upside from tariff relief would be small .
Mix/backlog visibility: China was 37% of Shift system sales in Q1; expected to rise in Q2 but trend down vs 2024 for FY; backlog composition mirrors current revenue mix; company won’t disclose China backlog share .
Demand pockets: DRAM strength persisted; NAND muted due to layer-count transitions without wafer-start increases; Japan building seeds across Si power/SiC/general mature with potential back-half repeat orders .
Investment through cycle: OpEx guided flat YoY to protect R&D and talent; inorganic opportunities considered with wide aperture and returns discipline .

Estimates Context

Q1 beat vs S&P Global: Revenue $192.6M vs $184.9M*; Primary EPS (non-GAAP) $1.04 vs $0.38* — a significant outperformance on both top line and EPS .
Q2 context vs S&P Global: Company guided non-GAAP EPS ≈$0.73 and revenue ≈$185M; S&P Global consensus stood at $0.71* EPS and ~$185.1M* revenue, suggesting slightly above-consensus EPS guide and in-line revenue guide .
Implications: Street likely needs to raise near-term margin/EPS assumptions given demonstrated cost discipline, CS&I mix, and deferred revenue tailwinds; however, model mix normalization and tariff costs into Q2+.
Values marked with * were retrieved from S&P Global.

Key Takeaways for Investors

Mix-driven, execution-led beat: Strong gross margin and non-GAAP EPS outperformance driven by CS&I spares mix, deferred revenue recognition, and improved installation/warranty costs .
Demand bottoming signs: Bookings ticked up (0.8x B:B) and DRAM improved; however, mature-node and SiC digestion persists, and NAND remains a headwind absent new wafer starts .
Q2 guide prudent but confident: EPS guide modestly above consensus; management sees H2 revenue roughly level with H1 and H2 gross margins similar to Q2, implying stable profitability in a muted demand environment .
Tariff risk manageable: Clear mitigation pathways and “relatively small” expected impact reduce downside tail risk to margins .
Regional mix volatile: China mix to fluctuate (up in Q2) but trend lower vs 2024 for the year; U.S./Korea pockets provide balance .
Investment and optionality: Flat YoY OpEx supports roadmap/engineering capacity into the recovery; inorganic opportunities add strategic flexibility .
Trading setup: Positive near-term narrative from beat/raise on margins and bookings improvement, tempered by mix normalization in Q2 and ongoing end-market digestion — watch CS&I mix, regional shipments, DRAM orders, and tariff headlines for catalysts .

Additional Relevant Press Releases in Q1 Context

Share repurchase authorization increased by $100M (to $215M outstanding) on Mar 12; Q1 buybacks were $18.2M, and Q2-to-date as of May 5 were $23M .

Notes on non-GAAP measures: Company introduced non-GAAP reporting in 2025 and provides reconciliations; adjustments include stock-based compensation and restructuring/severance items .

AXCELIS TECHNOLOGIES INC (ACLS)·Q1 2025 Earnings Summary