Veeco Instruments Inc. reported third‑quarter 2025 results that surpassed analyst expectations, with revenue of $165.9 million—well above the consensus range of $160.41 million to $160.49 million—and a non‑GAAP earnings per share of $0.36, beating the estimate of $0.28 by $0.08, or 28.6%. The company guided for Q4 revenue between $155 million and $175 million and non‑GAAP EPS between $0.16 and $0.32, indicating a modest sequential decline in earnings but a continued confidence in revenue growth driven by AI and high‑performance computing (HPC) demand.
The quarter’s revenue was driven largely by the semiconductor segment, which generated $118 million—71% of total sales—up from $184.8 million in Q3 2024. While overall revenue fell 10% year‑over‑year, the semiconductor business grew 5% sequentially, reflecting sustained demand for advanced process equipment in AI and HPC data‑center deployments. The company’s MOCVD and other specialty equipment lines also contributed to a 3% increase in sales, offsetting a 12% decline in legacy lithography equipment sales.
Veeco’s non‑GAAP gross margin reached 42%, the top end of its guidance range, as higher‑margin semiconductor sales offset lower‑margin legacy equipment. Operating income remained strong, supported by disciplined cost management and a favorable mix shift toward high‑margin products. The company’s ability to maintain margin in the face of rising raw‑material costs underscores its pricing power in the AI/HPC market.
Management highlighted the strategic importance of the pending merger with Axcelis Technologies, which is expected to create a leading semiconductor equipment company with an expanded addressable market. CEO Bill Miller noted that “demand tied to AI and high‑performance compute remains strong and is pulling innovation forward,” while CFO John P. Kiernan emphasized continued focus on cost discipline and investment in high‑return verticals. The company’s Q4 guidance reflects a cautious outlook amid potential macro‑headwinds but signals confidence in sustaining profitability through operational leverage.
After the earnings release, Veeco’s shares rose 1.41% in after‑hours trading, reflecting investor approval of the earnings beat, margin strength, and the merger announcement. Analysts praised the company’s ability to capture growth in AI and HPC while maintaining healthy margins, and the market reaction underscores the importance of the company’s strategic positioning in a rapidly expanding semiconductor equipment market.
The results suggest that Veeco’s focus on AI and HPC demand is paying off, with the semiconductor segment continuing to outperform legacy equipment. The merger with Axcelis is poised to broaden the company’s technology portfolio and market reach, potentially creating new revenue streams and cost synergies. While the company faces headwinds such as potential margin compression from raw‑material cost increases, its disciplined cost structure and strong product mix position it well to navigate short‑term challenges and capitalize on long‑term growth opportunities.
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