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ACM Research, Inc. (ACMR)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 revenue of $215.4m rose 6.4% Y/Y but came in below consensus ($223.4m), while non-GAAP diluted EPS of $0.54 beat consensus ($0.5025); GAAP diluted EPS was $0.44 . Revenue Consensus Mean: $223.4m*; Primary EPS Consensus Mean: $0.5025*.
  • Gross margin remained strong at 48.5% (48.7% non-GAAP), above the long-term model range (42–48%), with mix and volume noted as drivers of variability .
  • FY25 revenue guidance was maintained at $850–$950m; CFO guided FY25 effective tax rate ~10% and raised planned FY25 R&D intensity to 14–16% (from 13–14% prior), signaling investment behind new platforms (Track, PECVD, PLP) .
  • Management raised long-term China revenue target and reiterated global expansion (several tools slated for U.S. delivery in Q3) and multi-sourcing to mitigate export control risk; shipments were $206.4m (+1.9% Y/Y) .

What Went Well and What Went Wrong

  • What Went Well

    • Non-GAAP EPS beat and margin resilience: non-GAAP diluted EPS $0.54 vs $0.5025 consensus*, gross margin 48.5% (48.7% non-GAAP) above model high end . Primary EPS Consensus Mean: $0.5025*.
    • Product momentum and innovation: repeat orders for upgraded Ultra C wb wet bench with patent-pending N₂ bubbling; momentum in SPM, Tahoe, plating and furnace; Track/PECVD and panel-level packaging progressing .
    • Long-term growth positioning: FY25 guide maintained; raised long-term China revenue target; deliveries to U.S. planned in Q3; CSRC approval to raise up to ~$620m for ACM Shanghai to accelerate growth .

  • What Went Wrong

    • Top-line miss and operating deleverage: revenue of $215.4m missed consensus ($223.4m*), operating income fell Y/Y ($31.7m vs $37.6m), and GAAP operating margin compressed to 14.7% (non-GAAP 19.3%) amid higher opex . Revenue Consensus Mean: $223.4m*.
    • Opex intensity rose: GAAP opex +22.9% Y/Y to $72.8m; non-GAAP opex +38.8% Y/Y to $63.4m; CFO also lifted FY25 R&D plan to 14–16% of sales vs 13–14% prior, reflecting heavier spend .
    • Macro/policy overhang persists: export restrictions require multi-sourcing and strategic component purchases; management noted further strategic buys potentially in Q3 to mitigate risks .

Financial Results

Headline metrics vs prior year, prior quarter, and consensus

MetricQ2 2024Q1 2025Q2 2025 ActualQ2 2025 Consensus*
Revenue ($m)202.5 172.3 215.4 223.4*
GAAP Diluted EPS ($)0.35 0.30 0.44 0.5025*
Non-GAAP Diluted EPS ($)0.55 0.46 0.54 —
Gross Margin (%)47.8 47.9 48.5 (48.7 non-GAAP) —
GAAP Operating Income ($m)37.6 25.8 31.7 —
GAAP Operating Margin (%)18.6 15.0 14.7 —
Non-GAAP Operating Income ($m)51.9 35.6 41.5 —
Non-GAAP Operating Margin (%)25.6 20.7 19.3 —

Values retrieved from S&P Global*

Segment revenue breakdown

Product Category ($m)Q2 2024Q2 2025
Single-wafer cleaning, Tahoe & semi-critical cleaning153.2 155.0
ECP (front-end & packaging), furnace & other technologies39.0 48.0
Advanced packaging (ex-ECP), services & spares10.3 12.4
Total202.5 215.4

KPIs and balance metrics

KPIQ1 2025Q2 2025
Shipments ($m)157.0 206.4
Cash & equivalents + restricted + time deposits ($m)498.4 (as of 3/31/25) 483.9 (as of 6/30/25)
Inventory, net ($m)609.6 (as of 3/31/25) 648.3 (as of 6/30/25)
Net cash ($m)271.0 (as of 3/31/25) 205.8 (as of 6/30/25)

Trajectory vs prior quarters (context)

MetricQ4 2024Q1 2025Q2 2025
Revenue ($m)223.5 172.3 215.4
GAAP Diluted EPS ($)0.46 0.30 0.44
Gross Margin (%)49.6 47.9 48.5

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2025$850–$950m (Q1’25) $850–$950m (Q2’25) Maintained
Effective Tax RateFY 202510–15% (Q1 call) ~10% (Q2 call) Tightened lower
R&D as % of SalesFY 202513–14% (Q1 call) 14–16% (Q2 call) Raised
Sales & Marketing %FY 2025~7% (Q1 call) ~8% (Q2 call) Raised
G&A %FY 20255–6% (Q1 call) 5–6% (Q2 call) Maintained
Gross Margin ModelLong-term40–45% (pre-2024)42–48% (updated in Q4’24) Raised (structural)
CapexFY 2025~$70m (Q1 call) ~$70m (Q2 call) Maintained
ACM Shanghai Dividend PolicyNext 3 yrs25–30% payout intent (Q4’24) No update in Q2’25Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’24, Q1’25)Current Period (Q2’25)Trend
AI/Tech initiatives & productsQualified ALD furnace tools; PLP horizontal plating approach; strong cleaning/SPM/Tahoe cycles Upgraded Ultra C wb (N₂ bubbling) with repeat orders; ongoing SPM/Tahoe/plating/furnace momentum Strengthening
Supply chain/export controlsEntity List additions; localization to reduce U.S.-sourced components, impact “manageable” Multi-sourcing outside U.S.; strategic component purchases to mitigate risk Mitigation progressing
Global expansion/U.S.Purchased Oregon facility; building demo/production footprint Several tool deliveries planned to U.S. in Q3; Oregon demo lab progress Accelerating
China WFE & long-term targetsChina WFE +12% in 2024; strong share gains Long-term China WFE assumption at ~$40B; raised long-term China revenue target; total long-term co. target to $4B More confident
R&D execution & OpExFY25 plan R&D 12–13% (Q4 call) / 13–14% (Q1 call) R&D plan raised to 14–16%; S&M ~8%, G&A 5–6% Investment up
Financing (ACM Shanghai)Dividends and potential follow-on discussed in context CSRC approval to raise up to ~$620m, <10% shares Funding secured
Segment/product performanceCleaning/plating leading; furnace customer count up Cleaning 72% of rev; ECP/furnace 22%; AP 6%; continued tool evals (Track, PECVD, PLP) Broadening

Management Commentary

  • “We see continued momentum from our SPM, Tahoe, plating and furnace tools… we have raised our long-term revenue target for the mainland China market… several tool deliveries planned to the U.S. during the third quarter.” — Dr. David Wang, CEO .
  • “Gross margin was 48.7%, exceeding our long-term business model target range… For 2025, we now plan for R&D in the 14% to 16% range… we expect our effective tax rate in the 10% range.” — Mark McKechnie, CFO .
  • “We have received repeat orders [for Ultra C wb with N₂ bubbling]… adaptable to our Ultra C Tahoe platform… significant application potential for manufacturing advanced 3D NAND, 3D DRAM, and 3D logic devices.” — Dr. David Wang .

Q&A Highlights

  • Shipments and outlook: Management expects a strong Q3 and regular Q4; 2025 shipments still seen growing vs 2024 despite tough comps; noted sequential rebound in Q2 shipments (to $206.4m) .
  • Supply chain/export controls: Company is multi-sourcing outside the U.S., increasing strategic inventory of key components to mitigate risk from export controls .
  • Global expansion traction: Active U.S. customer evaluations; additional tools shipping to U.S. in Q3; Oregon demo lab and initial production on track .
  • China WFE and long-term targets: Long-term China WFE assumed ~$40B; ACM raised long-term China revenue target to $2.5B and total company target to $4B, driven by share gains and new platforms .
  • Financials/borrowing: Long-term borrowings increased amid capital planning; China interest rate dynamics create positive carry; net cash declined to $205.8m on higher borrowings and strategic purchases .

Estimates Context

  • Q2 2025: Revenue $215.4m vs consensus $223.4m (miss); non-GAAP diluted EPS $0.54 vs $0.5025 (beat). GAAP diluted EPS $0.44 . Revenue Consensus Mean: $223.4m*; Primary EPS Consensus Mean: $0.5025*.
  • FY 2025: Consensus revenue $906.6m*, EPS $1.87* vs company guidance $850–$950m; with Q2 opex intensity and investment plans, Street may reassess margins near term even as growth drivers build for 2026+ .

Values retrieved from S&P Global*

Key Takeaways for Investors

  • Mixed print: revenue miss but EPS beat on strong gross margins; operating leverage constrained by stepped-up R&D and go-to-market investments .
  • Guide intact; spending up: FY25 revenue range maintained; R&D plan raised to 14–16% to support Track/PECVD/PLP ramps—near-term opex pressure in service of medium-term growth .
  • Product-cycle breadth: Visible momentum in SPM/Tahoe, plating, furnace; repeat orders for upgraded Ultra C wb bolster cleaning leadership entering AI-driven 3D architectures .
  • China strength, global optionality: Long-term China targets increased; deliveries to U.S. in Q3 and Oregon facility progress support de-risking and international expansion .
  • Supply-chain risk managed: Multi-sourcing and strategic component buys to mitigate export controls; watch working capital and borrowings as inventory builds to support growth .
  • Estimate implications: Expect modest revenue estimate trims for Q3/Q4 given Q2 shortfall, partly offset by higher confidence in margin quality and non-GAAP EPS trajectory; FY25 consensus ($906.6m, $1.87*) sits within company revenue guide .
  • Trading setup: Catalysts include Q3 tool deliveries to U.S., further Track/PECVD milestones, and updates on ACM Shanghai capital raise progress; narrative skewed to long-cycle share gains despite policy overhangs .