Q2 2026 Veeco Instruments Inc Earnings Call Transcript
Key Points
- Veeco Instruments Inc (VECO) delivered strong Q2 2026 results, with revenue of $193 million, non-GAAP operating income of $23 million, and non-GAAP diluted EPS of $0.33, all exceeding guidance and Street expectations.
- Order momentum accelerated across all major end markets, including securing $200 million in advanced packaging orders for wet processing and lithography systems, strengthening visibility into 2027.
- The next-generation nanosecond annealing (NSA) system achieved major milestones, with a Tier 1 customer completing evaluation and placing a follow-on order, and all three Tier 1 logic customers now engaged with the technology.
- The company is well-positioned in high-growth markets tied to AI infrastructure, including advanced packaging, silicon photonics, and memory, with a projected served available market (SAM) of approximately $1.3 billion for annealing and $700 million for silicon photonics by 2030.
- Full-year 2026 revenue guidance was raised to $780-$810 million, reflecting strong demand and improved customer visibility, with expectations for meaningful acceleration in 2027.
- The company is investing ahead of revenue, with approximately $10 million in incremental operating expenses and a 75 basis point gross margin impact in 2026, which will pressure near-term profitability.
- Full-year 2026 non-GAAP EPS guidance was lowered to $1.36-$1.61, reflecting the impact of higher operating expenses and gross margin dilution from growth initiatives.
- The pending merger with Axcelis remains subject to China antitrust approval, creating uncertainty around the closing timeline and potential integration risks.
- Gross margin in Q2 2026 was 39.5%, below the company's long-term target, and is expected to remain in the 40%-42% range for the full year, indicating ongoing margin pressure.
- The company faces execution risks in ramping manufacturing capacity, including expanding internal production and outsourcing partnerships in Southeast Asia, which could lead to operational challenges or delays.
Greetings and welcome to the Veeco second-quarter 2026 earnings call. (Operator Instructions)
It is now my pleasure to introduce your host, Alex Delacroix, Head of Investors Relations.
Thank you. You may begin.
Thank you, and good afternoon, everyone. Joining me on the call today are Bill Miller, Veeco's Chief Executive Officer; and John Kiernan, our Chief Financial Officer.
The earnings release and slide presentation to accompany today's webcast is available on the Veeco website. To the extent that this call discusses expectations for future revenues, future earnings, the timing and expected benefits of the proposed transaction with Axcelis, market conditions, or otherwise make statements about the future. These forward-looking statements are based on management's current expectations and are subject to their risks and uncertainties that could cause actual results to differ materially from the statements made.
These risks are discussed in detail in our
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