ACMR earnings call analysis

NASDAQ:ACMR Q4 2025 Earnings Call Transcript Generated on 6/8/2026 Operator: Good day, ladies and gentlemen. Thank you for standing by, and welcome to the ACM Research Fourth Quarter and Fiscal Year 2025 Earnings Conference Call. Currently, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. As a reminder, we are recording today's call. If you have any objections, you may disconnect at this time. Now I will turn the call over to Mr. Steven Palaio, Managing Director of Blue Shirt Group. Steven, please go ahead. Steven Palaio | Managing Director, Blue Shirt Group: Good day, everyone. Thank you for joining us to discuss fourth quarter and fiscal year 2025 results, which we released before the U.S. market opened today. The release is available on our website as well as from Newswire Services. There is also a supplemental slide deck posted to the investor relations section of our website that we will reference during our prepared remarks. On the call with me today are our CEO, Dr. David Wong, our CFO, Mark McKechnie, and Lisa Fang, our CFO of our operating subsidiary, ACM Shanghai. Before we continue, please turn to slide two. Let me remind you that remarks made during this call may include predictions, estimates, or other information that might be considered forward-looking. These forward-looking statements represent ACM's current judgment for the future. However, they are subject to risks and uncertainties that could cause actual results to differ materially. Those risks are described under the risk factors and elsewhere in ACM's filings with the Securities and Exchange Commission. Please do not place undue reliance on these forward-looking statements, which reflect ACM's opinions only as of the date of this call. ACM is not obliged to update you on any revisions to these forward-looking statements. Certain financial results that we provide on this call will be on a non-GAAP basis, which excludes stock-based compensation and unrealized gain or loss on short-term investments. For our GAAP results and reconciliations between GAAP and non-GAAP amounts, you should refer to our earnings release, which is posted on the IR section of our website, and to slides 14 and 15. Also, unless otherwise noted, the following figures refer to the fourth quarter and fiscal year 2025, and comparisons are going to be with the fourth quarter and fiscal year 2024. I will now turn the call over to David Wang. David? Dr. David Wong | CEO, ACM Research: Thanks, Stephen, and hello, everyone, and welcome to ACM's fourth quarter and the fiscal year 2025 earning conference call. I'm pleased with our first quarter results, which kept off a solid year of execution. Revenue grow 9% in the first quarter and 15% for the full year. We continue to execute well across our core business. We made a lot of progress with new product platforms, and we strengthen our position in China and globally. Investment in AI and data center infrastructure is reshaping the global semiconductor demand, shifting capital toward advanced logic, memory, and advanced packaging. The industry is looking to key supplier for new technology, many of which have not yet been invented. ACM differential technology portfolio has been aligned well with this high value process steps. and the market is how now the market is coming for us for solutions. A good demonstration is recent momentum with several key global customer outside the mainland China market that we announced in today's press release. First, we announced that we have delivered multiple single wafer cleaning tools to Singapore facility of our Asia-based foundries customer. This marks HCM's first tool in relation to Singapore, a key milestone for HCM. Second, we announced that we're receiving multiple orders for our advanced packaging tool from three global customers. This included orders for multiple wafer-level advanced packaging systems from our leading global OSEP customer base in Singapore. Deliver schedule for the first quarter of 2026. A panel-level advanced packaging vacuum cleaning tool from a leading global semiconductor packaging manufacturer based outside mainland China. Also scheduled for delivery in the first quarter of 2026. And multiple wafer-level packaging system from a leading North America-based technology customer with a delivery schedule later this year. Long on to our business result, please turn to slide three. For the fourth quarter of 2025, we delivered $244 million in revenue, upper 9%. For the year 2025, we delivered $901 million in revenue, upper 15%. Top line growth of 15% was a better than growth for the overall China WFC market, which Third party estimate as January flat for 2025. We consider this good result, especially since our 2025 revenue includes very little contribution from our new products. We expect a strong product cycle in 2026 from SPM cleaning and our furnace product as we made a very good technical progress for this new product across our customer base. We also made a good progress with our supercritical CO2 joint, track, panel level plating, and PCVD, which we expected to contribute some more in 2026, but more in 2027 and beyond. Shearman for 2025 were 854 million versus 973 million. Remember, 2024, Shearman increased 63% over the year So we had a tough compare. We also had some shipment for new product pushing to the 2026. Importantly, we expected 2026 shipment growth to be higher than our 2026 revenue growth. Growth margin was 41% for the fourth quarter and 44.5% for the full year. Q4 growth margin was slightly below our long-term target range of 42%. to 48 percent. We attribute the Q4 level to product mixing, including a few semi-critical product with a lower margin due to the competitive pressure, and also higher seasonal inventory provisions. We expect a lower gross margin to be temporary. We believe our new product ramp, combined with the product design and the supply chain will enable us to deliver the best product at a low cost. There's no changing to our long-term target model range of 42 to 48%. Moving on, we ended the year with a net cash of 845 million versus 259 million at the year end of 2024. This balance sheet provides the foundation to continue our effort to develop world-class tools for the leading global semiconductor manufacturers. Before I review our product, I will provide a view on competitive dynamics in China and how we will win in this environment. We have recently seen a flood of new local entrants to the China capital equipment industry. In many cases, there are five or more players going after a single point product, all with very similar design and performance. We believe we will compete and win in China market because number one, we have a differential technology with many product, almost the best in the world. Two, we have a deep portfolio of IP with strong protection in China. And three, our local customer demand the best technology in world to compete in a global market. Now I will provide detail on product. Please turn to slide four. Revenue from single wafer cleaning, Tahoe, and the semi-critical cleaning tool was $626 million, up 8% in 2025, and represented 69% of the total revenue. We now estimate our cleaning portfolio addresses 95% of the application and process step. And we are working on developing the remaining solution that will bring us to 100% in 2026. We believe ACM now has the widest coverage Canadian tool far more extensive as compared to all competitors their 8% year-over-year growth in 2025 include a very little contribution from our newer Canadian line we expected this new product including single waiver SPM power and into bubbling wet edge to contribute more meaningfully to our 2026 revenue as industry moves forward To more advanced nodes, we expect to increase demand for high-performance cleaning tools. The increased adoption of multiple patterning is driving higher layer counts, potentially impact use, and it demands more cleaning steps with a higher cleaning efficiency. We believe this plays right into ACM's strengths. For example, our proprietary end-tool bubbling etching technology is unique uniquely positioned in the market. We are seeing growth interest for advanced 3D NAT application where larger bubble size and the uniformity control would become more critical as industry moves to 300 layer and above. In SPM cleaning, customer recognize the advantage of our proprietary nozzle and the chamber design. We believe our platform outperforming leading competitors in small particle cleaning performance. We made a significant technical progress at the end of 2025 with our new SPM nozzle design. We achieved a 15 nanoparticle size count of under 20, which we believe is the best-in-class performance for the industry. Our unique nozzle design does not require any routine chambered-air water cleaning. This is a big deal for customer because you not only deliver the better cleaning environment for the chamber, but it also increase uptime of our equipment. As a result, I'm pleased to report today that we have received a strong repeat order for our SPM cleaning tools from major customer for delivering to Model 5 in 2026. We are also seeing very strong interest for our unique SPM technology for numerous global customer because they are not satisfied with the performance of their current plan of the record tool. Our super critical CO2 Joy tool integrate ACM proprietary cleaning IP while reducing CO2 consumption by approximately 40% as compared to their competitors. This result in process efficiency with low operation cost. We made a successful in-house demo for the multiple logic and memory customer at the end of 2025. We have already received a demo PO for evaluation tools from two customers for delivery in the middle of 2026. And we expect to deliver additional tools to multiple customers later this year. In mainland China alone, we estimate the incremental market opportunity for this next generation cleaning product is nearly $1 billion. We remain confident in our long-term objective to achieve approximately 60% of the market share in China cleaning market, and we expect cleaning to alter growth in China WFE this year and in the year ahead. We estimate our market share for ECP in China is now more than 40%. and we remain confident in our long-term goal to achieve 60% or more. Front-end tool represent about 70% of the mixing per year, including our MAP, MAP+, ECP3D, ECPG3 products. ECP back-end tool were about 30% of the mix, including our ECP8P product line. In Q4, we deliver our first ultra-ECP8PP horizontal panel-level electroplating tool to an industry-leading large panel fabrication customer. Our customer, ACM, prefers horizontal plating solution versus competitive vertical plating approach due to the much better plating film uniformity and much less cross-contamination between multiple plating chemicals. We expect a growing customer interest in our panel-level solution as industry looks for higher throughput and low cost to support advanced packaging solution for multiple large die size and HBM AI chips. As discussed earlier, we received order from three global customer for both wafer-level and panel-level packaging tools. Our first tool under various stage of evaluation of many customer. Revenue from furnace was relatively small in 2025, and we expect a more meaningful contribution in 2026. We made several technical breakthroughs for LPCVD and ALD and PALD in 2025. We see good demand across multiple applications, including high-temperature NEO, especially 1350-degree version LPCVD. ALD and PLD. We believe ACM differential design position us to capture meaningful market share. Revenue from advanced packaging, which is good ECP, but including service and the spell was up 45% in 2025 to 76 million and represent 8% of revenue. This includes coder, developer, etcher, stripper, scrubber, and vacuum cleaning tools. We believe ACM is the only company to offer a full portfolio of wet process tools and world-class plating products for the advanced packaging. We think the combination is very powerful. It provides ACM with valuable insight into the challenges of next-generation packaging as AI drives industry towards 2.5D and 3D integration. We are making solid progress with our new track and PCVD platforms. Last September, we delivered our high-throughput 300 WPH KIF track tool for evaluation at the key customer. We expect mass production qualification in 2026 for the tool. And we anticipate this will lead to demand from additional customers, including both standalone and full integrated systems in line with the ESR graphic tool. We believe our high throughput design positions this platform to compete effectively with the current supplier. In Q4, we delivered our first ultra lethal BK system. This milestone represents the first customer deploy of our tracker series following early demonstration and evaluation. It also marked our entry into the display panel market, a new segment that requires high-volume manufacturing and strong performance stability. We anticipate to develop our proprietary PECVD platform. Our design has three chucks per chamber, which we believe is the only one in the world. This provides flexibility for a wide range of our process with the same hardware. We feel good about our positioning as the team works through the technical detail with a field tool in our Lingang mini lab, running wafer tasks and a custom demo wafer. We expect to ship multiple EVA tools in the near term. In summary, we innovation, our innovation engine contribute to drive a differentiated solution across a broader growing portfolio. As AI drives a more complex semiconductor process, customers are turning into ACM as a trusted partner to help solving their increasing challenges. Next, let me provide update on our production facility. First, on Lingang, please turn to slide eight. Our Lingang production and R&D center is now our primary production center. The first building is in volume production, and the second provides capacity for the future expansion. Together, the two facilities can support up to $3 billion in annual output. During 2025, we made good progress on our mini-line and lingo. We have enhanced our process development capability and now support on-site customer evaluation in fab-like conditions. Our mini line including ACM tools and tools from other player and metrology tools. We believe the mini line will accelerate our internal product validation, shorten R&D and qualification cycle, and strengthen collaboration with the key customer as we introduce next generation platforms. Next, our Oregon facility, please turn to slide nine. We are accelerating investment in Oregon. with the operation expected beginning in the second half of 2026. This facility will allow customers to evaluate our technology and to test their wafer locally, and it will serve as our initial base for production in the United States. Our global customers are encouraging by our commitment, which we believe will help them to choose ACM as a key supplier to scare production. We remain very pleased by the success of ACM Shanghai team, which continues to be a key supplier to the semiconductor industry in Asia. ACM Shanghai has also proven to be a great source of capital and financial flexibility for ACM. In September 2025, ACM Shanghai completed a private offering of an ordinary share, generating approximately $623 million in net proceeds. In February 2026, we complete the sale of approximately 4.8 million ACM Shanghai shares at 160 RMB per share, generating approximately $111 million in gross proceeds. ACM Shanghai also has been a good source of dividends in 2023, 2024, and 2025. We received dividends, net of tax of $19.2 million, $28.5 million, and $29 million, respectively. Our major ownership in Shanghai remains a strategic asset. It enhanced our financial flexibility and supported disciplined execution as we continue expanding globally. Taken together, our expanding product portfolio increased manufacturing capacity and the strength in capital position give us confidence in our long-term strategy. Now turn to our outlook for the full year 2026. Please turn to slide 10. In middle January, we introduced our 2026 revenue outlook in a range of $1.08 to $1.175 billion. This implies 25% year-over-year growth at the middle point. iterate this outlook today since our from founding in california in 1998 and the establishment of acm shanghai in 2005 we're building a globally competitive semiconductor equipment company grounded in innovation and differential technology our leadership in cleaning and electroplating created a strong foundation and we are now expanding across furnace track and pcbd as we broaden our multiple product portfolio in asia we are recognized as a leader in waiver cleaning and plating and we are in engaging with a global customer across us and europe with continual progress across spm tahoe supercritical seal to dry furnace track pcbd and the panel level packaging we believe we are entering a new phase of a product cycle that we are driving for standard growth We have the customer, the product, the capacity, and the capital to execute our global business plan, and we remain committed to our long-term target of $4 billion in revenue. Now let me turn the call over to our CFO, Mark, who will reveal details of our first quarter and full year result. Mark, please. Mark McKechnie | CFO, ACM Research: Thank you, David. Good day, everyone. Please turn to slide 11 and 12. Unless I note otherwise, I'll refer to non-GAAP financial measures which exclude stock-based compensation, unrealized gain loss on short-term investments. Reconciliation of these non-GAAP measures to comparable GAAP measures is included in our earnings release. Also, unless otherwise noted, the following figures refer to the fourth quarter and full year of 2025, and comparisons are with the fourth quarter and full year of 2024. I will now provide financial highlights. Revenue was $244 million for the fourth quarter, up 9.4%. For the full year, revenue was $901.3 million, up 15.2%. Full year revenue was in line with our original guidance set a year ago and slightly above the updated range announced on January 22nd. Fourth quarter revenue for single wafer cleaning, Tahoe, and semi-critical cleaning was $159.9 million, up 3%. For the year, this category grew by 8.1%. Fourth quarter revenue for ECP, front-end packaging, furnace, and other technologies was $64.1 million, up 23.9%. For the year, this category grew by 32.1%. Fourth quarter revenue for advanced packaging, excluding ECP, services, and spares was $20.5 million, up 23.8%. For the year, this category grew by 45.3%. I will now provide revenue mixed by customer type for 2025. Starting this year, rather than disclosing specific customer names, we are now disclosing revenue by customer type once a year. For each customer type, this includes product, services, and spare parts. We've included the mix table on slide seven of our presentation. For 2025, our revenue mix by customer type was split among Foundry, Logic, and other, 59%. Memory, 27%. Packaging and wafer processing, 14%. 2025, we had four 10-plus percent customers, including our top customer was 16.9%, next was 13.5%, then 11.6%, and 10.2% for an aggregate total of four customers representing 52.2% of total sales. For 2024, we had four 10% customer, also for a total of 52.2%. Total shipments were $228 million for the fourth quarter, down 13.5%, and $854 million for the full year of 2025, down 12.2%. David noted we had a tough compare versus a strong 2024 when shipments increased 63% year-over-year. We also did have some shipments for new products pushed into 2026. We expect 2026 shipment growth rate to be higher than our 2026 revenue growth rate. Gross margin was 41.0% for the fourth quarter and 49.8%. For the full year, gross margin was 44.5% versus 54.4% in 2024. Q4 gross margin was slightly below our long-term target model. Adding to David's earlier remarks, gross margins were down 8.8 percentage points year-over-year on a quarterly basis. This was due to product mix and margin pressure concentrated in a few semi-critical products, which contributed about five points to the headwind, and a higher level of inventory provisions that contributed about four points negative impact. As David noted, we expect the lower gross margins to be temporary. We believe our new product ramp, combined with supply chain initiatives, will enable us to deliver the best products at a low cost. and there is no change to our long-term target model range of 42% to 48%. For modeling purposes, we expect gross margins to be at the lower end of this longer-term target range for the first half of 2026, with an anticipated lift in the second half due in part to contribution from newer products, which generally have higher gross margins. Operating expenses were $70.6 million for the fourth quarter of 21%. For the full year, operating expenses were $258.4 million, up 34%. For 2025, R&D was 15.1% of sales, sales and marketing was 7.8% of sales, and G&A was 5.8% of sales. For 2026, we planned for R&D in the 16% to 18% range, sales and marketing in the 7% to 8% range, and G&A in the 6% range. Operating income was $29.5 million for the fourth quarter versus $52.8 million. Operating margin for Q4-25 was 12.1% as compared to 23.6%. For the full year, operating margin was 15.9% as compared to 25.6%. Long-term, we look to grow our R&D spending in line with revenue, but we expect to show operating leverage in SG&A with spending growth below our revenue growth level. Income tax expense was $6.6 million for the fourth quarter versus $17.3 million. For the full year, income tax expense was $13.3 million versus $35 million in 2024. For 2026, we expect our effective tax rate in the 8% to 10% range. Net income attributable to ACM Research was $17.3 million for the fourth quarter versus $37.7 million. For the full year, net income attributable to ACM Research was $110.2 million versus $152.2 million. Net income for diluted share was $0.25 for the fourth quarter versus $0.56. For the full year, net income for diluted share was $1.61 versus $2.26. Our non-GAAP net income excluded $6.4 million of stock-based compensation expense for the fourth quarter and $33.6 million for the full year. I will now review selected balance sheet and cash flow items. Cash-to-cash equivalents restricted cash and time deposits were $1.13 billion versus $441 million at the year-end 2024. Net cash, which excludes short-term and long-term debt, was $845.5 million versus $259.1 million at year-end 2024. $585.4 million increase in net cash for 2025 included $623 million net raised in the private offering by ACM Shanghai in 2025. Total inventory at year-end was $702.6 million versus $676.4 million at the end of the third quarter. Raw materials were $349.7 million, up $23.5 million quarter-over-quarter. We made additional strategic purchases to support production plans and to mitigate any potential supply chain risk. Work in process was $61.4 million, up $1.9 million quarter over quarter. Finished goods inventory was $291.6 million, up $0.9 million quarter over quarter. Finished goods inventory primarily consists of first tools under evaluation at our customer sites along with finished goods located at ACM's facilities. Cash provided by operations was $33.9 million for the fourth quarter. For the full year cash 2025, cash used by operations was about $10 million. Capital expenditures were $58 million for the full year 2025. For the full year 2026, we expect to spend about $200 million in capital expenditures. This includes continued investments in Lingong, including the mini-line and the second production facility, fixed assets for the business, and investments in Oregon, along with other items. That concludes our prepared remarks. Now let's open the call for any questions that you may have. Operator, please go ahead. Operator: Thank you. To ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. One moment while we compile our Q&A roster. Our first question will come from the line of Charles Shive with Needham & Company. Your line is open. Please go ahead. Charles Shive | Analyst, Needham & Company: Hi, thanks for taking my question. I believe you gave a pretty good color shipment versus revenue growth this year. So I have a question since you mentioned about new products probably going to be a bigger driver this year for growth. And I wonder if you can give some color, let's say excluding the new products, what's the growth, either shipment or revenue is expected to be, excluding all the new products. Maybe I'm talking about the existing product lines in cleans, plating, et cetera. Thank you. Dr. David Wong | CEO, ACM Research: Okay. Thank you, Zhao. Actually, you know that, as we said, we made quite a big progress in the SPM process. General speaking, SPM, Carter SPM, represent 25, 30% of the Canadian market. And this market, you know, last couple of years, we're not in much touch so much. As I said, last 2025, we made a very good progress, both into their special nozzle design for the high temperature and also a powerful product. So we're getting to very aggressively into this market. And again, this is a very high margin product. and also a lot of our customers, both in mainland China, also outside China, they have suffered their particle issue with this high temperature SPM process. And we think with our proprietary design model, we can control a very good environment, so therefore can be, you know, really reduce particle size. So that can really enhance our market growth in Kunini. Secondly, I want to say that is our End-to-bubbling proprietary bubbling wet etching technology is really critical for the 3D net sitting nitrate etching process, which we believe our proprietary technology not only cover today's demand for 300 layer, we believe as people moving to 400 or even 500 layer will suffer this kind of an uniformity of the top or bottom. So we're using large bubble. and size, also with our proprietary technology, we can make a very uniform large bubble distribution in a tank. That will be really enhance the etching uniformity from the top to the bottom for the via. So we believe that's not only demand in the market in China, we also see that demand outside the global market too. And third one, I also mentioned that is our supercritical CO2 dry. we also made a lot of progress, right? And which is, you know, past customer demo. We have two tools, you know, scheduled to deliver, you know, in the first or second quarter of this year. We have additional interest in coming. Again, since the supercritical CO2 with our provider design, we got a capacity or cavity, our CO2 chamber is about 40% smaller. So we believe that we're really providing customer a 40% reduction of the consumer cost. And that really also, again, driving this product out in the local, I call it, China market, but also getting to the outside China market. So with all this cleaning, I call it, together, we believe also expansion in the future, this will probably represent, even in China, almost a billion-dollar market potential for us to get in. So we're very exciting about our continuing expanding our Canadian product in the China market, plus also give us a really strong differential technology exposure to the global market. So that's for Canadian. And again, for copper plating, as I mentioned, we have a full set of their Canadian product, front-end, TSV, back-end, advanced packaging. including also, you know, this I call the compound semiconductor. Plus, recently we just, you know, announced our panel horizontal plating, which we believe very, very key technology to driving for the panel size plating. This moment, everybody using vertical and cover plating for panel. We're the first one in the world so far doing horizontal plating, right? With our differential technology, we believe probably most likely only one in the market to drive another horizontal copper plating. So this also we see the bigger interest, not only in the China market, we see also a lot of interest coming in for us to deliver this tool. So with that, all new products in our existing Canadian copper plating can drive a lot of revenue this year, including next year. Right. And then plus, as I said, our other foreigners and the PCVD and also track business we're developing for last four or five year really made a lot of technology breakthrough too. So believe those technology getting this year started in market and were real sustaining our next three to five year growth. And which, you know, that last three, four year, our major growth comes from Canadian copper trading. And next few year, we see this new product coming, what that is strengthening our high growth profile in next few year. So we're very, you know, exciting, very, you know, try to, I was executing our strategy to continue to grow our revenue. Charles. Charles Shive | Analyst, Needham & Company: Thanks, David. Maybe a question on profitability. So you reported the last year. You gave some color about this year. But I believe if my math is right, your operating margin will compress the last year from maybe close to 26% in 24 to 16% in 25. But this year, based on what you guided about growth margin, what you guided about R&D, SG&A, doesn't look like operating margin can rebound, feels like operating margin probably more or less the same or even coming down a little bit depending on how the gross margin trends for the remainder of the year. So I want to get some sense, what's the reason for operating margin being under pressure for almost two years and And how do you plan to address this and maybe try to expand the operating margin from here? Thank you. Dr. David Wong | CEO, ACM Research: Yeah, actually, let's do it this way. You know, looking at growth margin, right, we're probably the top of the company in China, right, for growth margin, right, for the last few years. And as you said, Q4, our expected Q4 last year, we do see our, you know, first time growth margin is, you know, lower than our range, 40 to 48%, right? As we're explaining maybe three factors, one is the product mixing. We have, you know, one or two products, which is a semi-critical tool. Do have, you know, pressure from the competitor for pricing, you know, there. The next one is really our, you know, this inventory provision. But we think this year, as we are new product coming, as I mentioned, this, you know, three Canadian product coming, we're definitely encountering margin. And also our inventory provision, we believe will be also greatly reduced too. So with that, we still have a confidence we're in a 42, 48, you know, gross margin in this year or beyond. And more than that is, as you said, we put quite a bit R&D last year, right? It used to be R&D 13, 14%. Last year, we're getting to 16%. We'll probably keep that number in the wake. Why? You know, the next few years, AI is driving a lot of demand for the new technology, and everybody else, you know, first-tier company, you know, outside China, all people put a lot of R&D, and so we'll continue to invest that, which we know will impact a little bit, you know, our operation margin, but it's worth spending money now. Why? I said opportunity is there, right? And a lot of customers, real demand for the new technology, which I believe, A lot of AI technology today is not invented yet. So it really gives ACM a good opportunity with our innovation power, our technology development capability, we can use this AI as a trend. We'll catch a lot of new technology and also catch the customer. This is a good example. So again, it's worth to spend more R&D. and even get a few percent of the operation margin lower, which is real long-run, and we're working for the investor interest and also the growth ACM market into the next few years. Mark McKechnie | CFO, ACM Research: Yeah. Hey, David, I might add a few things. I think that was a good overview. But, Charlie, I think kind of summarizing it up, we're spending into the $4 billion market opportunity. There's a number of products that – areas that – We've been investing in that haven't scaled yet, but we expect them to scale over the next few years. It's the right thing to do to spend into that. You're right about the operating margin for 2026 kind of comes in at the mid-teen level, similar to what it was here in 2025. You move out a few years. Our target is to keep those gross margins at that target range and then move you know, grow our top line faster than our optics. I think you can see some leverage in the out years. Charles Shive | Analyst, Needham & Company: Okay, thank you. Mark McKechnie | CFO, ACM Research: Yeah, thanks, Charles. Dr. David Wong | CEO, ACM Research: Thank you, Charles. Operator: Thank you. One moment for our next question. Our next question will come from the line of Edison Lee with Jefferies. Your line is open. Please go ahead. Edison Lee | Analyst, Jefferies: Oh, hi, David and Mark. Congratulations on the results. I just have two quick questions. Number one is that For the fourth quarter, the margin is a little bit low and the revenue growth also is a little bit slow. And then your shipment, I think, declined on a year-on-year basis. So how much of that is just product mix and seasonality? And when do you think these numbers will actually start improving in 2026? And then the second question is about the $111 billion you raised about selling down ACMS. Can you shed some light as to how you would actually utilize that proceeds? Dr. David Wong | CEO, ACM Research: Okay. So let's answer your first question, right? I think that you look in there, I guess I mentioned last couple years, our major growth engine from cleaning and also cover plating, right? Even the cleaning, I said, there's one important product, which is SPM process. We're not touching too much. As I mentioned last year, you know, end of last year, you know, Q4 last year, we made a significant progress with this, you know, special nozzle design. We believe our performance is outperforming and, you know, top tier as a tool. So we see that a grow continuously, right? And so then I would say our cleaning, copper plating, you know, also horizontal panel can, you know, expand too. So that keeps momentum. Our cleaning market, you know, probably today in China, about 35 range, we're expanding to 50, 60%, you know, next few years. And the copper right now, the 40, I still say we're trying to catch 60 in the beyond mark in China. More than that is those are, product defensive product we see a very high interest from global you know top tier customer so that's what we also reinforce ourselves outside china so that's what i see that you know um impact our all boost our revenue you know uh for our existing product and but and also i want to see that in through the last five years we are really working the differential you know pcbd and track and also furnace technology which is we believe a lot of our new technology we are putting in and nobody had it before, right? So that's what really reinforced our, I call it the market position. And plus, those tools, it really, with our differential technology, we put a lot of time to develop IP, develop the roadmap. It cost a little bit of a long time than, you know, the other guys. So, and now it's come the moment for the market. And plus, I want to say another bigger impact is, I call it, improvement is the last Q3, we start using Ningang or MiniLine, which we did not have before. That was really helping our internal demonstration, internal R&D speed. We see the bigger impact already. So that will be helping our tool mature before shipping to the customer. So with all together, I want to say this is a new growth from the existing and also our new product coming in. We're driving ACM in real high growth profile in a year, this year, and in the next few years. So we're very confident. Plus, even I say, you know, WFE market in China is flat. We can get a high growth rate because of new product coming. And plus, also, as you say, we have made a lot of progress in a global customer, you know, this news announced, you know, today. We also see a lot of interesting coming into our differential technology from top-tier customers. Because we have a patent that has been locked with technology already. They almost have no choice. They have to come to us. Anyway, so that's really exciting for all technology. We're really trying to push all technology real benefit to the international global customer for their AI challenges. Mark, anything you want to add on that? Mark McKechnie | CFO, ACM Research: Yeah, let me add on to something before you answer his question about our Shanghai stock sales. So Edison, for Q4, you probably remember last call, we mentioned that Q4 in the year, the overall year came in at the midpoint of where we started the year, maybe a little bit better. And don't forget, we had two things. Our newer products didn't kick in very little in 2025. And then we did have a customer push out from Q4 into 2026. And so that was kind of those two things that hit 2024. I'm sorry, the Q4. When you look out to 2025, you know, we're expecting linearity pretty similar to, I'm sorry, 2026. We're expecting our linearity to be pretty similar. So the first half will be about 42%, 43% of revenue. Second half will be, you know, 57% to 58%. But, you know, I would kind of anticipate Q1 at about 18% to 20% of the full year mix. Maybe David, uh, if you wanted to take his question, what are we going to do with the cash that we raised in, um, or that we sold, you know, the cash that we sold. Edison Lee | Analyst, Jefferies: Sorry, sorry, Mark, Mark, Mark. Can you hear me? Mark McKechnie | CFO, ACM Research: Yes. Yeah. Edison Lee | Analyst, Jefferies: Hey, before, before we move on to the use of process, can you also comment a little bit on what you said about, I think some products have been some pricing pressure, uh, which I think partially account for lower margin in the fourth quarter. Mark McKechnie | CFO, ACM Research: Yeah, and there's not much to add to what I said there, you know, or what David and I both said. You know, there were a couple of semi-critical products that had particularly low margins that hit us in Q3 and Q4. And we, you know, David mentioned in the prepared remarks, he talked about the competitive situation in China. You know, we are very focused on developing world-class tools. We think that... There was also a bigger provision in the back half of the year, so we think that'll be the overall provision for 2026. Probably be smaller than it was in 2025, and it'll probably be more balanced throughout the year. Edison Lee | Analyst, Jefferies: Okay. Dr. David Wong | CEO, ACM Research: So you want me to talk to you there how we use and proceed, right? Edison Lee | Analyst, Jefferies: Yes. Dr. David Wong | CEO, ACM Research: Okay, well, obviously, we have a second offering in China, right? Those are Money will be real focusing on R&D again, our expansion for their manufacturing. We have a second building. We'll start the decoration this year. So with that add together, probably we can manufacture 3 billion annually, which will really give us a lot of room for manufacturing. And plus, we'll also put the money in the mini line, as I mentioned. This mini line really speed up our internal R&D and debugging tool, and also even can do the joint development with the customer process too. So it's really worth spending for those money. And the proceeds we got from there, so the 1.3% from Shanghai here, definitely the major purpose for that was spending global customer, global market itself. So we see that opportunity really big in a global market. As I mentioned, we do have some differential technology might be the only solution for their, you know, AI challenging. So those products, we think, will really gather attention from the global customer. So we have to spend money and, you know, building the international strongly self-channel. And also, you know, we already had a career manufacturer base already. And however, you know, with this geographic... tariff going on, we have to minimize the tariff impact, right? So that's why we started assembly tool in the USA. So that will be real, reduce our concern or any dynamic changing for those tariff will impact our revenue. So anyway, that's really what work on. And our goal is very simple. We try to work in with, you know, with satisfy all regulation and requirement and maximize the investor interest We're building a global sales, global company. That's our goal. Edison Lee | Analyst, Jefferies: Okay. Thank you. Mark McKechnie | CFO, ACM Research: Thanks, Edison. Yeah, I appreciate it. Next question, please, operator. Operator: One moment. Our next question comes from the line of Jimmy Hong with JP Morgan. Your line is open. Please go ahead. Jimmy Hong | Analyst, JPMorgan: Hi. Hi, Debbie. Can you hear me? Yes, please. Yeah. Yeah. Thank you. Congrats for the good results. I want to ask about, we deliver single-way for cleaning tools to a Singapore-based foundry. What would be the potential size of treatments in terms of units or dollars this year or next year? And next year, yeah. Dr. David Wong | CEO, ACM Research: This is my first question. Yeah. Very good question. Actually, you know, we're a field tool, or we're in an inspiration process right now, right? This tool, you know, this tool will be qualified and go in production, you know, this year. And with that, we definitely will introduce more of a community tool. And also, we do have a cover play team in the behind. So that's really what gives us exposure of product in the Asian market. And so this will be real making more of a confidence and also get a high interest from other players in Asia and the market too. So this is a really bigger milestone for us. And plus, you know, we're not only looking at a customer only in Singapore, and we do have a customer in Korea, and also we have a customer, you know, potentially in Taiwan. So we have really confidence, you know, we should have expanding quickly in the Asia market. And plus, again, you know, we're also very focusing on our U.S. market, too. We do have an advanced packaging tool, PO, and receiving, which will deliver by end of this year. And we saw a lot of potential going on in the U.S. market, too. Again, because today all the memory, all logic, they're AI-driven for their advanced technology. ACM, I won't say I feel good technology is really needed for their production line. We believe that's really beneficial for the customer and also can help expansion our market to global. So it's a great opportunity because, again, innovation is the key. And every customer and every key customer, they all demand for innovation technology, which will probably fit our, you know, strategy. Jimmy Hong | Analyst, JPMorgan: Yeah. Yeah, thank you. Dr. Wang, yeah. So for Singapore business, how's the chance that we penetrate to Singapore-based memory makers in the next few years? And my second question is for advanced packaging. We are making great process, but you know for Taiwan, Taiwan needs foundries and also leading the panel level packaging for AI GPUs. Can we talk about our POP problems with potential Taiwanese players? Do we have any, like, other forecasts or purchase orders from these Taiwanese potential customers? Dr. David Wong | CEO, ACM Research: Yeah. Yeah, actually, you know, we are talking to a few key customers, right? Even a panel, large size, 515 by 510. And also, we're talking about their 310 by 310, right? Which is a true vision right now people are trying to push in. So we have very good exposure to those customers. By the way, April 7, 8, we're attending the panel conference in Taiwan. And in that conference, we'll do the keynote speaker about the horizontal plating and also our vacuum cleaning technology. So it's really a lot of exciting, I want to say, interest coming in. And also, you know, I said, I heard everybody say panel product or equipment. they probably satisfy all other products except their plating. So plating becomes a bottleneck for their production expansion. So with that, you know, demand, I said we are the only one supplying horizontal plating. You probably heard that is the one key player in Taiwan. They said they only want horizontal plating. They don't want vertical. So our horizontal plating perfect fit their strategy or their demand. So, as I said, it's really a big opportunity with our panel product. Actually, we're not only trying to introduce the SuperFar 3 product, right? Panel plating, vacuum cleaning, and also the bevel. We're going to develop also additional, you know, and code the developer, wet etcher, and cleaning all kind of wet tools we're putting in, too. So that's really what we catch this wave of the panel I call it a shift, right, for the advanced packaging. So we're in a very good position for those coming panel advanced packaging expanding. We're very excited about this opportunity, right. Jimmy Hong | Analyst, JPMorgan: Yeah, but do you know like in which kind of periods, quarters, it will be more clear that whether we'll have any other forecasts or purchase orders for this POP equipment, yeah, Dr. David Wong | CEO, ACM Research: Well, you know, let's put it this way. We announced that we do have also a PO from outside mainland China, right? I mean, we said already. So you know what I mean here. And then we're continually expanding more, right? So, again, I want to say this year we have confidence to catch additional PO for our, you know, for our vacuum cleaning and also for the horizontal copper plating. Not only in Taiwan market, we also see the opportunity in Korea, also in Singapore, by the way. So it's very exciting. Jimmy Hong | Analyst, JPMorgan: Yeah, thank you. Maybe I can squeeze in my last question in that FAQ. Like ACM has disposed a small portion of that in ACM Shanghai. How do we think about more further stock disposal in the future? You mentioned that U.S. international capacity bills will require more funding. Will we dispose of more staff of ACM Shanghai in the future? Dr. David Wong | CEO, ACM Research: Yeah. Repeat the question again. I'm sorry. Can you repeat again? Mark McKechnie | CFO, ACM Research: He's asking, are we going to sell more of our ACM? Dr. David Wong | CEO, ACM Research: Ah, I see, I see. Okay. You know, we sold 1.3% already, right? And we're going to proceed, you know, about 111 million. And, you know, we do have both arms to, I could raise money. We can raise the U.S., we can raise the Shanghai. We're very flexible for what way we're choosing, number one. And this moment, I want to say, our Shanghai stock is still know we think it's still undervalued okay with all growth so we maybe consider what's the money demand and the timeline also what's the stock pricing in shanghai what decider you know where or when or we should sell additional or not and plus as it will have silver arm you know we can raise the money in usa so it's quite flexible for us to reach the phone and this moment you know i want to say well obviously we'll continue invest more in global market, and we have no concern for those, you know, money, where it comes from, right? We're very confident. We also have another knob, another tool. We can get the money anyway. Jimmy Hong | Analyst, JPMorgan: Yeah. Thank you for all my questions. Thank you, Dr. Wong. I'll be back to the queue. Thank you. Dr. David Wong | CEO, ACM Research: Great. Thank you. Thank you. Operator: Thank you. Seeing no more questions in the queue, let me turn the call back over to Steven Palau for closing remarks. Steven Palaio | Managing Director, Blue Shirt Group: Okay, great. Before we conclude, I just want to give everyone a quick reminder on our upcoming investor conferences. On March 9th, we will participate virtually in Loop Capital Markets' 7th Annual Investor Conference for one-on-one meetings. On March 23rd and 24th, we will present at the 38th Annual Roth Conference in Dana Point, California. Attendance at the conference is by invitation only. For interested investors, please contact your respective sales representative to register and schedule one-on-one meetings with the management team. This concludes the call, and you may now disconnect. Take care. Operator: This concludes today's conference call. Thank you for participating, and you may now disconnect. Everyone have a great day. jsPDF 3.0.3 D:20260608224548-00'00'

NASDAQ:ACMR Q3 2025 Earnings Call Transcript Generated on 6/8/2026 Operator | Conference Operator: Good day, ladies and gentlemen. Thank you for standing by, and welcome to the ACM Research Third Quarter 2025 Earnings Conference Call. Currently, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. As a reminder, we are recording today's call. If you have any objections, you may disconnect at this time. Now, I'd like to turn the call over to Stephen Paleo, Managing Director of the Blue Shirt Group. Stephen, please go ahead. Stephen Paleo | Managing Director, Blue Shirt Group: Good day, everyone. Thank you for joining us to discuss third quarter 2025 results, which we released before the U.S. market opened today. The release is available on our website as well as from Newswire Services. There is also a supplemental slide deck posted to the investor section of our website that we will reference during our prepared remarks. On the call with me today are CEO Dr. David Wong, our CFO Mark McKechnie, and Lisa Fang, our CFO of our operating subsidiary, ACM Shanghai. Before we continue, please turn to slide two. Let me remind you that the remarks made during this call may include predictions, estimates, or other information that might be considered forward-looking. These forward-looking statements represent ACM's current judgment for the future. However, they are subject to risks and uncertainties that could cause actual results to differ materially. Those risks are described under risk factors and elsewhere in ACM's filings with the Securities and Exchange Commission. Please do not place undue reliance on these forward-looking statements, which reflect ACM's opinions only as of the date of this call. ACM is not obliged to update you on any revisions to these forward-looking statements. Certain financial results that we provide on this call will be on a non-GAAP basis, which excludes stock-based compensation and unrealized gains and losses on short-term investments. For our GAAP results and reconciliation between GAAP and non-GAAP amounts, you should refer to our earnings releases which is posted on the IR section of our website and on slide 13. Also, unless otherwise noted, the following figures refer to the third quarter of 2025, and comparisons are with the third quarter of 2024. With that, I will now turn the call over to David Wang. David? Dr. David Wong | Chief Executive Officer: Thanks, Stephen. Hello, everyone, and welcome to ACM's third quarter early conference call. I'm very pleased to report another strong quarter for ACM. Revenue grew 32% year-over-year to a new quarterly record, reflecting broader demand across our innovation product portfolio. Across industry, AI and data center investment are accelerating semiconductor and wafer fab equipment spending. AI is also demanding new innovations, many of which have yet to be developed. We believe these trends are driving the market toward us. ACM's strategy remains focused on building a multi-product portfolio of world-class tools that expand our service market and play a critical role in enabling the next generation of chipmaking. Our differential technology continues to raise the performance bar across both front-end and advanced packaging applications. For example, In advanced packaging, we are seeing strong global customer engagement in our proprietary horizontal plating technology for panel-level packaging. And we plan to ship our first system in the fourth quarter. In cleaning, our high-temperature SPM platform is reaching industrial leading performance as our proprietary nozzle design achieving performance at a 19 nanoparticle size. down to single-digit particle counts. We believe this will lead to higher product yield for our customers. Further, with no need to clean the outer chamber, the tool requires significant lower maintenance. This is a truly world-class tool, and our team has a roadmap to even lower particle size down to 70 nano, 50 nano, and 30 nano to support the next few generation technology nodes. In Trac, we shipped our first KIF high-throughput Trac platform this quarter, further broadening our reach into lithography adjacent applications, which demonstrate ACM's ability to grow into new product categories. Together with innovations such as nitrogen bubbling cleaning and etchers and a high-temperature furnace discussed last quarter, this advancement reflect ACM commitment to continuous innovation and the tangible performance improvement we are delivering to customers. In September, our ACM Shanghai subsidiary completed its second capital raising on Star Market. Raising net proceeds approximately 623 million. ACM has the technology the customers, the capacity, and the global reach, and now additional capital to pursue our mission to become a key supplier to major global semiconductor producers. This fund strengthens our balance sheet and will be used for additional investment in our Lingam Media Line and to expand our global production capacity. We also plan to accelerate our R&D investment This will advance our existing cleaning and electroplating tool for next generation process. It will also speed up the development for our new product categories, including furnace, PCVD, track, and panel-level packaging tools. And we're also investing in new product that we have not announced yet. ACM is committed to world-class product. for both China and global customers. Our tools enable next-generation devices, architecture, and help solve our customer complex process, challenging across front and back-end applications. We have a world-class technology and a strong IT position. Customers around the world come to us for our technology rather for a low price. We believe this is the right combination to grow our business and maintain our gross margin targets. We feel that ACM is now an infraction point in which innovation will win the game and drive significant shifts in the market share. Now onto our business results. Please turn to slide three. For the third quarter of 2025, we delivered a revenue of $269 million, upwards 32% year over year. Sheetments were $263 million, up 1% year over year. Gross margin was 42.1%. This was at the low end of our target due in part to product mixing, inventory provision, and other adjustment. There is no change to our target model range of 42% to 48%. We ended the quarter with a net cash, $811 million versus $206 million last quarter and $259 million at the year end of 2024. Now I will provide detail on product. Please turn to slide four. Revenue from single wafer cleaning, Tahoe, and semi-critical cleaning tool grew 13% and represent 68% of total revenue. We believe our top bottom cleaning portfolio is world class. and put us in a strong position to gain additional share, both in China to expand it to a global market. The 13% year-over-year growth was mainly from our traditional cleaning product. Their contribution from our newer cleaning line, including single-wafer STM, pothole, and supercritical CO2 is still fairly small. We expect this new platform, especially STM, to contribute more revenue in 2026 and beyond. we estimate an incremental opportunity of more than $1 billion for those new cleaning products from the mainland China market alone. We remain confident in our target for 60% market share in China market, and we expect higher growth rates for cleaning next year and beyond. Revenue for ECP, furnace, and other technology grow 73% and represent 22% of total revenue. We had a record revenue quarter for ECP front-end tool, which represent about 60% of the mix for this group. This group, including our MAP, MAP+, ECP 3D, and ECP G3 product, all of which grow from last year, ECP back-end tools were about 40% of the mix for their quarter. Revenue from furnace was small for their quarter, and year-to-date. That said, we are making good technical progress across a range of customers and multiple product offerings. This includes our ultra-high-temperature new furnace, which operates at more than 1,250 degrees C, our LPCVD oxidation, and ALD for both thermal and plasma. We continue to focus on qualification of the key customers, and we anticipate incremental revenue contribution from foreigners in 2026. And as I noted earlier, we are seeing very strong interest in our panel-level plating tool for advanced packaging from both China and the global customers. We will ship our first panel-level packaging tool in Q4. Revenue for advanced packaging, which exclude ECP, but including service and spell, was upper 231%. and represent 10% of revenue. About two-thirds of this group for this quarter is small tools for advanced packaging. This includes coder, developer, etcher, stripper, and wafer-level packaging tools that run around $500K to $1 million each. We had a good contribution this quarter from a handful of different customers. Although we include plating products, for advanced packaging in the ECP group, and the combination is very powerful. It provides ACM a valuable insight into the challenges of next-generation packaging as AI drives industry towards 2.5D and 3D integration, stacking data through silicon via PSV and integrated memory and logic in a single packaging. We also shipped advanced packaging tool in Q3 to two new customers in the U.S. And we expect installation and then tool acceptance in next couple of quarter. We are making good progress with our new track and PCVD platforms. I already mentioned the shipment of our first KF track tool. We believe our high throughput design position this platform to complete effectively with incubator suppliers. Our proprietary PCVD platform with three trucks per chamber gives the flexibility to support a wide range of processes with the same hardware. We feel good about our positioning as the team continues to work through the technical detail with a few tools in our Lingang mini lab running wafer test and the EVA tools planned to ship in the near term. To close on product, ACM's culture of innovation continues to deliver industrial leading performance across the broader portfolio. Customer engagement is deepening as the chain makers look for partners that can enable their next generation processes. Please turn to slide six. Global WFE depends, continues to be fueled by investment in AI and data center infrastructure, particularly in advanced logic and memory, while China market, in our view, remains stable. Last quarter, we increased our long-term revenue target to $4 billion, supported by an estimated $2.5 billion US dollar contributed from China and $1.5 billion from global markets. Next, let me provide an update on our production facility. First is Lingam. Please turn to slide eight. Our new Lingam production and R&D center is now fully up and running. The site's first building is already in volume production, while the second is providing additional room for future expansion. Together, the two buildings can support up to $3 billion in annual output. position ACM to meet growing customer demand and support our long-term growth plans. We plan to allocate part of the proceeds from ACM Shanghai's secondary capital raising to expand our mini-line at Lingang to strengthen our process development capability and enable on-site customer evaluation under FAB-like conditions. This will accelerate product validation, shorten development cycle, and enhance collaboration with our key customer as we expanding our portfolio of next generation tools. Turn to our Oregon site. Please turn to slide nine. This facility will allow customers to test wafer locally on ACM tool and will serve as our initial base for production and technology development in the United States. Our global customers are encouraging by our commitment which we believe will help them to choose ACM as a key supplier to scale production. Now, I will provide our outlook for the full year 2025. Please turn to slide 10. We have narrowed our 2025 revenue outlook to a range of $875 million to $925 million versus prior range of $850 million to $950 million. This implies 15% year-over-year growth at the middle point. We made greater progress with several major product lines this year, including single-wafer SPM, townhome, panel-level plating, furnace, track, PCVD. We believe this new product providing a solid foundation for multiple major new product cycles for the continued growth in the coming years. Now let me turn the call over to our CFO, Mark. who will review detail of our third quarter results. Mark, please. Mark McKechnie | Chief Financial Officer: Thank you, David. Good day, everyone. Please turn to slide 11. Unless I note otherwise, I will refer to non-GAAP financial measures which exclude stock-based compensation, unrealized gain loss on short-term investments. The reconciliation of these non-GAAP measures to comparable GAAP measures is included in our earnings release. Unless otherwise noted, the following figures refer to the third quarter of 2025 and comparisons are with the third quarter of 2024. I'll now provide financial highlights. Revenue was $269.2 million, up 32%. Total shipments were $263.1 million, up 28% sequentially and up 0.7% year-over-year. Gross margin was 42.1% versus 51.6%. This is the low end of our target model. Adding color to David's earlier remarks, we attribute this to two key factors. First, product mix. Our Q3 sales included a high number of smaller front-end tools, which had forced margins, and that contributed about 200 basis points of the headwind to the gross margin. Second, we had a higher level of inventory provisions and other adjustments, which hit our COGS for the quarter, contributed about 300 basis points negative impact. I want to reiterate, there's no change to our target model of 42% to 48%. ACM is fully committed to developing world-class tools that enable our customers to scale production of leading-edge semiconductor devices. We believe this creates a healthy pricing environment for our tools, which, combined with an efficient cost structure, results in good profitability. Operating expenses were $76.9 million, up 56.3%. R&D was 14% of sales. Sales and marketing was 7.7% of sales, and G&A was 6.9% of sales. For 2025, we continue to plan for R&D in the 14% to 16% range, sales and marketing in the 8% range, and G&A in the 6% range. Operating income was $36.5 million, down 34.9%. Operating margin was 13.6% versus 27.5%. Income tax expense was $2.9 million versus $4 million. For 2025, we now expect our effective tax range in the 7% to 8% range. Net income attributable to ACM research was $24.8 million versus $42.4 million. Net income for diluted share was $0.36 versus $0.63. Our non-GAAP net income excluded $7.6 million in stock-based compensation expense for the third quarter and $18.7 million in unrealized gain on short-term investments. I remind the analysts that as a result of the second capital raise of $632 million, net by our subsidiary ACM. ACM's ownership in ACM Shanghai is now 74.6% versus 81.1% at the end of last quarter. I will now review selected balance sheet and cash flow items. Cash and cash equivalents, restricted cash, and time deposits were $1.1 billion at the end of third quarter versus $483.9 million at the end of the second quarter. Net cash, which excludes the short-term and long-term debt, was $811 million, or about $12 per share, versus $205.8 million at the end of the second quarter. Total inventory net was $676.4 million versus $648.3 million at the end of the second quarter. Raw materials were $326.2 million, up $40.6 million quarter over quarter. We made additional strategic purchases to support production plans and to mitigate any potential supply chain risk. Work in progress was $59.5 million, down $1.2 million quarter on quarter. Finished goods inventory was $290.7 million, down $11.3 million quarter over quarter. Finished goods inventory primarily consists of first tools under evaluation at our customer sites, along with finished goods located at ACM's facilities. Cash flow used by operations was $4.6 million for the third quarter and $44.4 million year-to-date. Capital expenditures were $43.2 million. For the full year, we expect to spend about $60 to $70 million in capital expenditures. That concludes our prepared remarks. Let's open the call for any questions that you may have. Operator, please open up the call for questions. Operator | Conference Operator: Certainly. Ladies and gentlemen, if you have a question at this time, please press star 1-1 on your telephone. If your question has been answered and would like to remove yourself from the queue, simply press star 1-1 again. Our first question comes from the line of Suji De Silva from Roth Capital. Your question, please. Suji De Silva | Analyst, Roth Capital: Good morning, David Mark. Congrats on the progress here. Can you talk about the shipments and the growth there? Are there any factors, puts and takes in terms of what we should expect from in terms of your visibility in the next four quarters? Dr. David Wong | Chief Executive Officer: Yeah. As a shipment, we see there are some customers asking for delay for maybe the Q1 next year. And also, there are certain parts with shortage, right? We cannot fully complete the order as a manufacturer final testing. But those products probably will still get into the Q1 shipment. We're still expecting next year's shipments to continue to grow. Suji De Silva | Analyst, Roth Capital: These part shortages, David, how long do you expect that to persist? Is that a multi-quarter effect, or is that short-term? Dr. David Wong | Chief Executive Officer: It's not really. I think there's certain parts we're using right now, and we're kind of replacing some parts. We're kind of looking for new suppliers. And those things have been qualified, you know, in their customer process. And so those parts qualify finished. They can use more of their, I want to say, domestic-made in China parts. So that's probably a portion of the fact there. I see. Mark McKechnie | Chief Financial Officer: Yeah. Hey, Suji, one other thing. Yeah. One other thing I'd add to the shipments for the quarter and even for the year. We talked about this before, but... Some of the newer products that we would be shipping, you know, that David talked about in his prepared remarks, some of those, you know, probably a little more fell into, it's going to fall into next year versus this year. Okay. Helps, Mark. Suji De Silva | Analyst, Roth Capital: Thanks. And then my final question is on the panel tools. Can you talk about the opportunity as you ramp maybe into the HBM memory or AI memory opportunity, how much that can grow as a percent of revenues and you know, how quickly that can ramp. Thanks. Dr. David Wong | Chief Executive Officer: Wow. Okay. So you've got panel packaging, right? Yes. Charles | Analyst, Needham & Company: Okay. Dr. David Wong | Chief Executive Officer: Well, and the panel has been real hot, right? In there, you know, you know, this year, especially major customer in Taiwan, real promoting the panel business. We believe panel is a way to solving as large area AI chip, right? Packaging with the HBM together. So all the way for a level, cut a lot of, you know, I call it the area. So it wastes the efficiency of using the area. So panel packaging, one key is plating technology, right? I should say a lot of people in the copper plating for panel is a vertical style. And we are probably the first one to propose the horizontal and the copper plating for the panel, which is also we got the 3D inside the Award, Innovation Technology Award from USA. We are really have a good solution and they can play their panel uniformly and there will be a few requirements of all this either 310 by 310 or 515 by 510. By the way, we're going to ship one of the panel plating tool in the fourth quarter and also we're engaging with multiple customer for the panel packaging business in Taiwan, in the U.S., and also, you know, in China, in China. Suji De Silva | Analyst, Roth Capital: Okay. Sounds very exciting. Thanks, guys. I'll pass it on. Operator | Conference Operator: Yeah, thanks, Suji. Thank you. And our next question comes from the line of Charles from Needham & Company. Your question, please. Charles | Analyst, Needham & Company: Hey, good evening, David, Mark. couple questions here. The first one, a follow-up to Suji's question on shipment. So sounds like it's more of a customer push-out and partly due to parts shortage. And sounds like the implied message seems like it's not a reflection of the ad market demand. But wonder, can you kind of Quantify a little bit. What's the expectation for Q4 shipment? And maybe on a four-year basis as well. Looks like a shipment probably is going to be down this year. This is probably the first time in many years your shipment is down on a four-year basis. Thank you. Mark McKechnie | Chief Financial Officer: David, do you want to take that or do you want me to start on that? Dr. David Wong | Chief Executive Officer: Go ahead, Mark. You go ahead and do it. Mark McKechnie | Chief Financial Officer: Yeah. Hey, Charles. So I think your read's good. We're not really making a call on the end markets here. You know, it's hard to say a company specific versus end market. But yeah, in terms of our shipments, the Q4 will probably be down from Q3. So, you know, you could have the full year would be down year on year. And that is different than what we had expected. I think I would point out that Shipments were pretty heavy last year, as we know, and some of the reasons that we talked about for the deferments and shipments, we should start seeing those pick back up in the first half of next year. I think David, in his prepared remarks, talked about an inflection point. where, you know, we're still shipping a lot of our current products and a lot of newer products we expect to really start kicking in and contributing more next year. You know, the SPM, the furnace, and this panel-level packaging product line. Dr. David Wong | Chief Executive Officer: Yeah, actually, including we're probably shipping a few PCV tools, and we see that will be, you know, definitely contributing revenue in the next year. So, I think it's kind of a we're in the time of infection point right and their new product come out and also we're expecting some new convenient tool come out too to contributing on their um our shipment and revenue especially to mention this uh proprietary design and spm special nozzle and reach a very excellent result and which is a you know we think we're going to gain a lot of market share for spm process um Charles | Analyst, Needham & Company: Got it. I do have a question a little bit later around innovation, some of the comments you made, David, around, I mean, also proprietary design, et cetera. Before that, maybe a question on the 300 bps impact from inventory write-down. Mark, it wasn't clear to me what's the reason for writing down, if my math is right, around $8 million-ish of the inventory. And may I ask if the write-down is related to inventory you have at your own facility, or this is about some of the write-down of the evaluation tools at your customer sites, and if the latter, what's the reason for that? Thank you. Mark McKechnie | Chief Financial Officer: Yeah, no, thanks for the question, Charles, on that. So, you know, inventory, you always have a pretty thorough process internally to kind of value the inventory on your books. And so, A big piece of it is related to the aging of some of our raw materials. And it's interesting. We think that, and so it's just kind of a formula you apply to the age profile of your raw materials. And on the other side, you know, there were some finished goods that we took a write-down on. And these were, I think these were mostly at our own internal. See, these were tools that I'm pretty sure were used Charles | Analyst, Needham & Company: we had internally uh and so we're not really disclosing it internal versus um uh end customers yeah uh great thanks um um so david my last question um i think you you spoke you we probably have uh discussed about this along the same line before but uh but you you talk a lot about innovation but uh that develop better products than your global competitors' wing market share. But I think what I am hearing is that domestic customers are probably more looking for simply matching the global baseline, like matching what the global tools they already have given restrictions, given self-sufficiency, all kinds of reasons. At this point of time, like trying to do a lot of product innovation, do you think you may be missing out some near-term opportunities? I understand you said that you're going to win in the long term, but do you think that you're going to, I mean, because your tool, even though it's performing better, maybe it will perform differently from their global baseline, your customer's global baseline. Could that cost you some business in the near term? Thank you. Dr. David Wong | Chief Executive Officer: Yeah, actually, we are waiting a short time. In other words, I gave this example, this high-temperature SPM process, right? And with our special proprietary design, we can really control all the high-temperature SPM splash out of the chamber and also the vapor into that environment. So therefore, we control the environment very well. That's why I said there are 90 nanoparticles down to a single digit number, you know, basically less than, you know, five. So it's way better than even top tier player, you know, today in SPM process. Also, because we control the environment, we think about even 70 nano, 50 nano, even 30 nano, we can control better. So answer your question is, yeah, there's a certain domestic player going there, or there's other first-tier tool vendor still sell in China, but as I said, we're in the best performance. And also, we think they're either custom in China or outside China, they still desire best performance. As go to small geometry, those are 99 or 70 nanoparticles, real matter their yield loss. So that's why we think that we really gain our market share. both in China or outside China. We still strongly believe our innovation product has been heavily bad patented in inner China, also in global semiconductor country and area. We have our confidence. Nobody will copy our proprietary technology or patent the technology. So that's why we have the confidence to maintain, continue to increase our market share, maintain our gross margin. And I still think AI driving a lot of innovation and the customer desire new technology. Those customer maybe prefer more technology other than low price, right? So that's really, I think, a strong point. And also I want to say a lot of our existing product cannot meet customer future requirement. And so that's another reason we have companies on our tool. Suji De Silva | Analyst, Roth Capital: Thank you. Operator | Conference Operator: Once again, ladies and gentlemen, if you have a question at this time, please press star 11 on your telephone. Our next question comes from the line of Mark Miller from the benchmark company. Your question, please. Mark Miller | Analyst, Benchmark Company: Thank you for the question. I just wonder if you give us some color on what you expect for mo CVD next year and also give us an update on what's going on with SK hynix. Dr. David Wong | Chief Executive Officer: Okay, well, actually, maybe, Peter, Mark, I want to make sure this is not, we're not going to make a MOCVD, we'll make a PCVD. Okay. So, anyway, you know, PCVD has been, you know, big in the market, a lot of, you know, market size. We developed, you know, the PCVD almost from five years ago, right? And we're choosing, again, innovation approach. And we're differential from major player in the PCVD to big player now. And for example, like our chamber has three chucks. Other people has four or even two. So we believe three chucks in one chamber can do almost all the process. And therefore, customer buy one platform, we can do almost every PCVD process. And for other reasons, we also have a lot of control a chamber power supply or other differentiation come here. So we believe our PCVD will be, uh, we're shipping, you know, you know, probably to this quarter or continue shipping more next quarter. And we'll see that the PCVDs are getting into their, uh, market. And also expecting those PCVD will be, you know, generate revenue next year. And also we have a really high expectation. And those PCVD are not only services in China, you know, we're expecting to go Korea and also, you know, go to global market. Mark Miller | Analyst, Benchmark Company: If you can comment, please, on Hynix and any developments there. Dr. David Wong | Chief Executive Officer: Hynix is our customer, right, is a long-run customer, and we're engaged with the multi-tool, you know, cleaning, obviously. and also other products. We're still thinking Hynix is a real innovator, leading customer, and we're continuing to engage with them on multi-product right now. And as I said, again, a lot of our new stuff were developed right now, and they are very interested, right? And because they're also leading all the HPM, leading everything, right? Even the DRAM and the field. So they're desire more of advanced technology. Also, we have a Korean team and Shanghai team together. So it's working very well. And a lot of technology actually was invented and developed in Korea, too. So that's really fitting, you know, the requirement locally, you know, manufactured locally R&D. So we still see a lot of potential. We can provide good technology to our customers in Korea. Mark Miller | Analyst, Benchmark Company: So is your panel... Packaging tool is that of interest to Hynix? Dr. David Wong | Chief Executive Officer: Yeah, not only packaging, right? Also, talk about front-end too, right? Okay. And, you know, in all level of the engagement and including, you know, we talk about our foreigners, PCVD, track, and all other even, you know, product unit developers. Mark Miller | Analyst, Benchmark Company: What about your cleaning tools? Have you been able to penetrate Hynex with the cleaning tools, Tahoe and SAPS? Dr. David Wong | Chief Executive Officer: Well, we're, you know, we have a SAPS tool has been sold, the main tool, right, in Hynex already. And now, obviously, we have a new cleaning tool engaging with them. And one is probably, you know, end-to-bubbling tool, and which really take care, you know, probably more than a final layer of 3D net. And all this is one of the major applications, you know, we think will be contributing to their customers in the future 3D nano technology. Thank you. Thank you. Operator | Conference Operator: Thanks, Mark. Thank you. This does conclude the question and answer session of today's program. I'd like to hand the program back to Stephen Paleo for any further remarks. Stephen Paleo | Managing Director, Blue Shirt Group: Great, thank you. Before we conclude, I just want to give everyone a quick reminder on our upcoming investor conferences. On November 19th, we'll present at the 14th Annual Roth Technology Conference in New York City. On December 3rd, we will present at the UBS Global Technology and AI Conference in Scottsdale, Arizona. On December 16th, we will present at the 14th Annual New York City Summit in New York City. And then on January 15th, we will join... the 28th Annual Needham Growth Conference, virtually for our presentation and one-on-one meetings. Attendance at the conferences are by invitation only. For interested investors, please contact your respective sales representative to register and schedule one-on-one meetings with management. This concludes the call. You may now disconnect. Take care. Operator | Conference Operator: Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day. jsPDF 3.0.3 D:20260608224805-00'00'

NASDAQ:ACMR Q2 2025 Earnings Call Transcript Generated on 6/9/2026 Operator | Operator: Good day, ladies and gentlemen. Thank you for standing by, and welcome to the ACM Research Second Quarter 2025 earnings conference call. Currently, all participants are in listen-only mode. Later, we will conduct a question and answer session, and instructions will follow at that time. As a reminder, we're recording today's call. If you have any objections, you may disconnect at this time. Now I will turn the call over to Mr. Stephen Palao, Managing Director of the Blue Shirt Group. Stephen, please go ahead. Stephen Palao | Managing Director, Blue Shirt Group: Thank you. Good day, everyone. Thank you for joining us to discuss Second Quarter 2025 results, which we released before the US market opened today. The release is available on our website, as well as from our Newswire services. There is also a supplemental slide deck posted in the Investors section of our website that we will reference during our prepared remarks today. On the call with me today are our CEO, David Wang, our CFO, Mark McKechnie, and Lisa Feng, our CFO of our operating subsidiary, ACM Shanghai. Before we continue, please turn to slide two. Let me remind you that the remarks made during this call may include predictions, estimates, or other information that might be considered forward-looking. These forward-looking statements represent ACM's current judgment for the future. However, they are subject to risks and uncertainties that could cause actual results to differ materially. Those risks are described under risk factors and elsewhere in ACM's filings with the Securities and Exchange Commission. Please do not place undue reliance on these forward-looking statements, which reflect ACM's opinions only as of the date of this call. ACM is not obliged to update you on any revisions to these forward-looking statements. Certain other financial results that we provide on this call will be on a non-GAAP basis, which excludes stock-based compensation and unrealized gain and loss on short-term investments. For our GAAP results and reconciliation between GAAP and non-GAAP amounts, you should refer to our earnings release, which is posted on the IR section of our website, and to slide 13. Also, unless otherwise noted, the following figures refer to the second quarter of 2025, and comparisons are with the second quarter of 2024. I will now turn the call over to David Wang. David Wang | CEO: David? Thanks, Stephen. Hello, everyone, and welcome to ACM Research, second quarter, early conference call. We deliver another quarter of good results with strong sequential growth in both revenue and achievement, reflecting continued progress across our expanding product portfolio. We saw momentum from our SBN, PAHO, Plating, and the Furnace tool, which are helping expand our accessible market and gain market share. We also continue to make progress with new platform, including track, PCVD, and panel-level packaging tools, which represent important long-term growth drivers. We recently announced major upgrade to our Ultra-C WB wet bench cleaning tool. The technology integrate ACM pattern-pending nitrogen bubbling technology to generate a large-size bubble with good bubble density uniformity and enhance the etching rate uniformity in a 3D structure across the wafer. I'm happy to announce that we have received repeat orders for the new Ultra-C WB wet bench tool with our proprietary end to bubbling technology. We expect a good achievement for this tool this year and next. The technology is also adaptable to our Ultra-C PAHO platform with a significant application potential for manufacturing advanced 3D net, 3D DRAM, 3D logic devices. We believe this new technology is another example of ACM leadership in cleaning tools that will be good for our customers and support our growth initiatives. Our nitrogen bubbling technology tool adds to early breakthrough for PAHO and other recent product launching, such as our high-temperature SBN tool and the panel-level packaging tool for flux cleaning and the bubble etcher. Taker, together, this development reinforce ACM differentiated leadership in wafer cleaning and give us confidence that we will continue to gain share in a critical segment. We remain committed to deliver innovative new products, such as this, to enable our customer to meet next generation of semiconductor manufacturing challenges as demanded by the artificial intelligence transformation. Now, onto our business results. Please turn to slide three. For the second quarter of 2025, we believe revenue of $215 million, upper 25% sequential, and 6% -over-year. Shilin were $206 million, upper 32% sequential, up 2% -over-year. Growth margin was at 48.7%, exceeding our target range of 42 to 48. We ended the quarter with a net cash $206 million. Now I will provide a detail on product. Please turn to slide four. Revenue from single-wafer cleaning, PAHO, and semi-critical cleaning tools grow 1% and represent 72% of total revenue. We believe a -to-bottom cleaning portfolio put us in a strong position. We continue to make a technical improvement and the customer progress with our SPM tool. Our high-temperature SPM system features ACM proprietary nozzle design, which prevents both liquid SPM and acid mist spat out of the chamber during the SPM process. This improving particle performance reduce chamber preventative maintenance cleaning frequency and enhances system uptime. We have achieved better particle control over average particle count, less than 10 at this 26-nanoparticle size. We also believe it will be show better performance than competitors offering at a particle size more than 17 and 15 nanometers. In Q2, we gave SPM and PAHO tools to several more customers as we continue to gain market share in SPM space. Revenue from ECP, furnace, and other technologies grow 23% and represent 22% of total revenue. ECM recently delivered an ECP tool to a customer, which included the company's 1500th electroplating chamber shift. We are seeing a strong momentum for ECP tool in advanced packaging, driving by demand for both front and back end plating system. We also see growth interest in our new ultra-ECP APP panel-level horizontal plating system. As the industry shifts from wafer to panel-level packaging to support the next generation AI chips, our unique horizontal plating approach, which delivers superior uniformity than vertical panel plating solution, has attracted attention from the major players. Our furnace product are building momentum supported by strong customer interest and expanded pipeline of evaluation and engagement. We see good demand across multiple applications, including high-temperature NEO, especially our 1200 50 degree C degree version, high-temperature NEO furnace, and also LPCVD, oxidation, and ALD. We believe ECM differentiated the design position us to capture meaningful market share. Revenue from advanced packaging, which is exclude ECP, but including service and the spell, was up 20% and represent 6% of revenue. We are making good progress with a new track and a PCVD platform. Our proprietary PCVD platform with three tracks for chamber give us the flexibility to support a wide range of process with the same hardware. We feel good about our positioning with a plan to deliver more better tool to our friendful of the customer this year and look for revenue contribution in 2026 and beyond. For track, we're in the final development phase of our 300 wafer per hour inline KF tool. And we expect to deliver the better tool to a key customer in the current quarter. To close on product, our roadmap including incremental contribution from Tahoe SPM and the furnace tool in 2025 with the panel level packaging, track and PCVD tool expected to drive growth in 2026 and beyond. Please turn to slide six. Our first half result reflects solid execution across our product portfolio. We remain confident in the year and our long term opportunity in China. As a result, we have increased our long term revenue target for mainland China to 2.5 billion versus our previous target of 1.5 billion. The increase is based on two main factors. First, we now assuming a long term China WFE market size of a 40 billion US dollar versus our prior assumption of a 30 billion US dollar. This is based on updated by third party global market forecast and also our view of the China semiconductor industry. Second, we have adjust our market share targets for product group as follows. We have raised our market share target for both cleaning and plating to 60% versus the 55% prior. This is the result of our current assessment of a customer traction and increased confidence for share gain for new product. For furnace, PCVD and track, however, we're keeping our target at the 15% and 10% level. Of course, we aspire to achieve better result, but need more time in the market before we will formally adjust the target. Moving to the bottom of the chart, we maintain our revenue target for the rest of the world at 1.5 billion. We believe ACM focus on differentiated water cost product combined our global sales and the service team will deliver results with our global customer. As an example, we have a plan to deliver a server tool to the US in the third quarter. We remain engaged with our major US customer with active validation across a range of the cleaning process step as we continue to work towards our global, our goal for production orders. Bottom line, we have raised our long-term revenue target to 4 billion versus our prior target of 3 billion. Now I will provide update on ACM Shanghai's proposed the capital race in China. ACM Shanghai recently received approved from the CSRC to proceed with its proposed the follow on offering on the stock market to raise up to 620 million US dollar by selling less than 10% of your total share. The capital racing is a leadership is intended to help accelerator our updated revenue target and added to the long-term foundation to support our effort to scale up product to major global customer. As the majority shareholder, we view their proposed transaction as an important step in strengthening our position in the China market and it demonstrates the long-term value of our ownership stakes. Next, let me provide the update of our production facility. First is Lingang, please turn to slide eight. As I discussed last quarter, our state of art, Lingang production and only center is nearly completed. The site including two production building with a first now in production and a second available for future expansion. Each of the two production building can supporting up to 1.5 billion of annual production capacity combined. We believe we can eventually support three billion of a production at Lingang for the from the two manufacturer building. Next, our Oregon facility, please turn to slide nine. Recall we purchased a 40,000 square feet facility last year. We made a good progress during the second quarter and we have began upgrade on our customer demo R&D lab. We believe this will help our effort with the customer in the region as it will later then test wafer locally on ACM tool. We also are moving forward with a plan to add production capacity to Oregon facility. We target the middle 2026 for the demo lab and production to commerce operations. Our investment Lingang and Oregon are key enable of our growth strategy, expanding our capacity, strengthening customer support and prepare us to scale globally. Now I will provide our outlook for the full year 2025, please turn to slide 10. We're maintaining our 2025 revenue outlook in the range of 815 million to 950 million. This is implying 15% year over year growth at a middle point. In close, our focusing remains on delivering differentiated enabling technology that solve our global customer most critical process challenges. Now let me turn the call over to our CFO Mark who will reveal the details of our second quarter results. Mark, please. Mark McKechnie | CFO: Yeah, thanks David, good day everybody. Please turn to slide 11. Unless I note otherwise I'll refer to non-GAAP financial measures which exclude stock based compensation unrealized gain loss on short term investments. Reconciliation of these non-GAAP measures to comparable gap measures is included in our earnings release. Also unless otherwise noted the following figures refer to the second quarter of 2025, comparisons are with the second quarter of 2024. I'll now provide the financial highlights. Revenue was 215.4 million up 6.4%. Total shipments were 206 million versus 202 million in Q2 24 and 157 million in Q1 of 2025. Strong sequential rebound in Q2 shipments led to return a positive year over year shipment growth for the quarter. Gross margin was .7% versus 48.2%. This exceeded our long term business model target range of 42 to 48%. We expect gross margin to vary from period to period due to a variety of factors including sales volume, product mix and currency impacts. Operating expenses were 63.4 million up 38.8%. R&D was .5% of sales, sales and marketing was .3% of sales and G&A was .6% of sales. For 2025 we now plan for R&D in the 14 to 16% range. This is an increase versus last quarters plan due to ACM's continued focus on proprietary R&D programs. We plan for sales and marketing in the 8% range and G&A in the 5 to 6% range. Operating income was 41.5 million down 20.2%. Operating margin was .3% versus 25.6%. Income tax expense was 1.9 million versus 9.3 million. For 2025 we expect our effective tax rate in the 10% range. Net income attributable to ACM research was 36.8 million versus 37.5 million. Net income for diluted share was 54 cents versus 55 cents. Our non-GAAP net income excluded 9.8 million in stock-based compensation expense for the second quarter. I will now review selected balance sheet and cash flow items. Cash, cash equivalents, restricted cash and time deposits were 483.9 million at quarter end versus 498.4 million at the end of the first quarter. Net cash which excludes short-term and long-term debt was 205.8 million versus 271.0 million at the end of the first quarter. Total inventory net was 648.3 million versus 60, 609.6 million at the end of the first quarter. Raw materials was 285.6 million up 45.7 million quarter on quarter. We made strategic purchases to support production plans and to mitigate any potential supply chain risk. Work in progress was 60.7 million down 10.2 million quarter on quarter. Finished goods inventory was 302 million up 2.2 million quarter on quarter. Finished goods inventory primarily consists of first tools under evaluation at our customer sites along with finished goods located at ACM facilities. Cash flow used by operations for the first half of 2025 was 39.6 million versus 51.9 million cash flow provided by operations in the year ago period. Capital expenditures were 32.2 million for the first half of 2025 versus 39.7 million in the year ago period. For the full year 2025, we expect to spend about 70 million in capital expenditures. That includes our prepared remarks. Now let's open the call for any questions that you may have. Operator, please go ahead. Operator | Operator: Thank you. To ask a question, you'll need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile our Q&A roster. Your first question comes from the line of Charles Shee with Needham and Company. Your line is now open. Charles Shee | Analyst, Needham & Company: Evening, David Mark. First question on shipment. I noticed that the shipment was up, but only up slightly on a -on-year basis. I recall you guys previously said that the shipment was not going to be able to be sent the full year 25 shipment should grow. Maybe not necessarily growing faster than revenue this year, but that should grow. But it looks to me that in second half of the year, you have a good amount of catch up to do for shipment to be flatish versus slushiest level. Is that still the right target to think about shipment? Or maybe the full year number may actually come down a little bit on -to-year basis. Thank you. David Wang | CEO: Hey, Charles. And our 2024 shipment was very strong, right? You recall about the, you know, over 2023 is 63% of their increase rate. So then we also have a lot of new product. And this year we're contributing to the shipment this year. So I want to say the first second half year, obviously much stronger than their first half of the year. We're expecting still growing for 2025, I mean 2025 and growing spk11: is still achievable. Got it. So relative to Charles Shee | Analyst, Needham & Company: let's say 90 days ago, the expectation for shipment for this year, do you see actually it's shipment growth may be stronger than you thought 90 days ago or slush or weaker at any direction or color you can provide. But the reason why I asked this, maybe it's good to get your thoughts as well. The, your US peers who have reported so far ahead of you have been seeing China WFE upside, especially for the second half of the year. Wonder if you're seeing the same thing or not. Thank you. David Wang | CEO: Yeah, I should say our Q3 is a very strong, right? We see the Q4 and there's still some slot we're gonna fill in. And so I still see the regular and outlook for Q4. So I want to compare like you said, 90 days ago, we see that the market situation spk11: got to improve. Got it. Lastly, I think Charles Shee | Analyst, Needham & Company: Mark, you mentioned some strategic purchase you made over the last quarter. I think the news flow did suggest that the US may be working on something in terms of actual control at the subsystem level. Wonder what was the ACM assessment, let's say supply chain risks, maybe for the reasons of potential new export controls and how the company has prepared to mitigate that risk. And any thoughts on that front would be great. Thank you. Mark McKechnie | CFO: Yeah, David, do you want to take that first and I can add or do you want me to go ahead? Yeah, go ahead. David Wang | CEO: And obviously, now we're doing the multi-source of the components, right? And we're definitely looking for the new components and supplier in other country and then the US. And also we have also looking for the local supplier in mainland China. And I want to say there's a certain challenging, however, and I think we can overcome that with the multi-source, alternative source supplier for our key components in the tour. So Mark, you want to add on that? Mark McKechnie | CFO: Yeah, Charlie, the only thing I'd add, I think it's a good question. It's something that we look at a lot. I mean, we have a pretty good solid balance sheet. We have a good forecast for our shipments. So we thought it was the right thing to do to kind of increase some of our strategic supplies of some key components. So we might even do a little bit more here in the second quarter. I'm sorry, in the third quarter. Charles Shee | Analyst, Needham & Company: Yeah, maybe just a quick follow-up because the strategic purchase, it could be for preparing for a higher demand in coming quarters, or it can be more for mitigating supply chain risks, especially that, let's say, maybe some of the components you are sourcing currently from the US. Which one is it more for you to do that? Mark McKechnie | CFO: Yeah, I mean, as of December, sorry, January 1st, you can't get parts from the US, right? So yeah, these are strategic purchases probably from other regions. And I won't really break out how much of it is to mitigate the risk or just kind of based on our forecast, but it's a combination of those, Charlie. Yeah. Charles Shee | Analyst, Needham & Company: Yeah, Mark McKechnie | CFO: thank Charles Shee | Analyst, Needham & Company: you, Mark. I really appreciate that, that's the insights, thanks. Yeah, you bet, you bet. David Wang | CEO: Thank you, Charles. Charles. Operator | Operator: Thank you. Your next question comes to the line of Mark Miller with the Benchmark Company. Your line is now open. Mark Miller | Analyst, Benchmark Company: I had a question about long-term borrowings. They're up significantly over the last six months. I'm just wondering what's going on there. Mark McKechnie | CFO: Yeah, I can hit on that a bit. And then we got Lisa here in the background. But long-term borrowing, we did step things up a bit. You know, there's controls over how we can use some of our capital from the China capital raise and what have you. Of course, we have that coming along. So we did step up our long-term borrowing a bit here in the first half of the year. Lisa, did you want to add something? Lisa Feng | CFO, ACM Shanghai: Yeah, in addition to that, the interest rate for deposit is much higher than borrowing in China. So we're trying to use that kind of leverage to maximize the return. Mark McKechnie | CFO: Good opportunity to kind of take the lower interest rate down. Thanks, Mark. Mark Miller | Analyst, Benchmark Company: Okay, thank you. spk11: Next question, please, operator. Yes, thank you. Operator | Operator: The next question comes from Suji De Silva with Roth Capital. Your line is now open. Suji De Silva | Analyst, Roth Capital: Hi, David, Mark, Lisa. Congrats on the progress here. So milestone-wise, can you talk about the customer traction outside China and what some of the milestones we would look for here, update on the customer base across different parts of the world? David Wang | CEO: Yes, hi, Suji. And I think we're continuing to work with a key customer in Korea and also in the US. And this moment, I want to say, it's taking a little more time. However, we're really working closely with a key customer, evaluate our differential, the Canadian technology and our Microsoft Canadian. And we are reaching a very encouraging result. Also, we're working with a Korean customer for their copper plating product. And that also made the progress, right? And continuing, we're also exploring new customer in both the US and Taiwan. And I think especially all, I want to say, our panel-level packaging tool made a very strong attraction from Taiwan customer, too. So I want to say, with our continued innovation and technology we're providing in the market, and we're going to have our, expand our sales revenue outside China. Especially, we're now building our army center in Oregon and also their manufacturing. And those army center will really make it easier and for our cleaning, copper plating demo and for the customer outside China. And also manufacturing, we're doing right now, prepare for the Oregon. And that's really give us a strong position and to really minimize impact of any tariff situation. So we believe our strategy, building our R&D manufacturing center in China, in Korea and in US, will further strengthen our position in the global market. And we're fully confident with our new differential product. And also, I want to say, a lot of new future AI chip request, a lot of new technology, which is even today nobody offer in the market. And those new demand for the technology driving will really put ACM's product in the differential or the position. So we believe with our innovation continues going on, and we'll continue again, attraction from the key customer in cleaning, in copper plating and panel, and also other new product we're planning too. So we still have very strong confidence, right? We're getting to the global market. I want to say, every customer in the world, they demand for the best technology. As we just meeting announced, we have a end to bubbling technology, we're generating large size end to bubble with uniformity across entire wafer in the bath. So we believe that's what really driving their innovation requirement and for their both 3D net and 3D DRAM in the future, probably also the 3D logic of that role. So that's another word I look at in our innovation technology or brings to the market. Okay, Mark, you want anything to add on that? Mark McKechnie | CFO: Yeah, no, David, that was a good answer. I mean, we're working really hard with our big US customers. We got some additional tools that are going to different organizations here in Q3 to the US. So, our team is pretty active in Oregon. We're pretty focused on getting our demo room up and running and being ready to produce tools in the spk11: US. Hi, Edison Li. Operator | Operator: Yes, thank you. The next question comes from Edison Li with Jeffreys. Your line is now open. Edison Li | Analyst, Jefferies: Hey, David and Mark, how are you? Can I maybe ask you two questions? Number one is for the 2Q growth at the revenue level is 6%, which is actually below the growth rate you are guiding for the full year. So what was actually driving that slower growth in the second quarter? And then for 3Q, you said that the outlook is very strong. Can you share the growth drivers coming from logic, memory, power and advanced packaging? So which areas actually you are seeing the strongest growth and which area you are seeing the slowest growth? Thank you. David Wang | CEO: Yeah, I mean, revenue can be lumpy, right? We're still expecting 15% of middle point growth for the year. And also, you're asking Q3 driving force, I wanna say still our cleaning and the cover plating is still the major driving there. And also certain product, customer requests where shipping turn to Q2 or Q3, right? I wanna say over the year, we still have a whole year of expecting growth. Better than the Q2. Edison Li | Analyst, Jefferies: Right, so in China, can you talk about the growth that you're seeing from memory versus logic? David Wang | CEO: I would say we both are true or self of the memory and the logic of customer, right? But you would say, which is the growth faster? I don't have a real number right now, put in my hand. But I wanna say both, even looking at long run, I wanna say memory is still very strong, both the 3D NAND and also this DRAM business. And of course, there's the logic and the people still building FAPs and both for mature nodes and other advanced nodes. And so I wanna say that, I look in the next really a few year, those the market is spk11: very solid, it's still there. Okay, great, thanks David. Thank you. Thanks Edison, yeah. Operator | Operator: Thank you. As a reminder to ask a question, you'll need to press star one one on your telephone and wait for your name to be announced. Your spk11: next question Operator | Operator: comes to the line of Matt Cook with Pretento, your line is now open. Matt Cook | Analyst, Pretento: Hey David, hey Mark, how's it going? Can you hear me okay? I'm adding. Charles Shee | Analyst, Needham & Company: Yes. Matt Cook | Analyst, Pretento: Good, great. So I just wanted to ask, ACM Shanghai reported its results about 60 minutes ago. Now I know that there are different accounts and standards, but their numbers look a lot better than yours, like the differences is bigger than we're kind of used to. So revenue was $270 million compared to 215 million for ACM, adjusted income was $62 million compared to about 37 that you just reported. So Mark, could you just help understand like what's caused the difference? I know there are different recognitions on revenue and timing. That's the first question, why the results are so much better there and if there could be some kind of like, you know, if that could have swung the other way in Q3. And then the second question is, are shipment numbers different for ACM Shanghai? And if so, what are they in dollars? That would be great, thank you. Mark McKechnie | CFO: Yeah, David, I can go ahead and hit that and you can add if you want. So in reverse order, yeah, I mean, simply the shipments are the same for both. They're measured the same. The difference is Revrec. And so under China Gap, the China organization recognizes revenue upon installation and of course, US Gap is 606, right? Where we take revenue on repeat shipments or upon acceptance when it's a first tool shipments. So just a timing difference in the Revrec standards and this quarter was a little bigger than it had been in the past. I think it could be kind of a result of some of the bigger shipments that we had last year that it took a little long, you know, the timing of the installations here in Shanghai. And we won't literally guide how that's gonna change for the back half of the year. Q3 and Q4, I don't think we're gonna give any specific details on that. David Wang | CEO: Yeah. I will add on that. You're looking at long run, this two numbers should be matching, right? But looking at quarterly, quarterly base, do you get a sometime US is higher, sometime, you know, Shanghai is higher. So that's, as Mark mentioned, different recognition of the revenue. So I wanna say overall, like you said, Shanghai number looks good, but that's only quarterly, quarterly base, right? And I wanna say a whole year, I mean, or long run, this number is very matching. Mark McKechnie | CFO: Hey, Matt, one other thing I could bring out that I think will be important is that the US gap and the R&D side, we don't capitalize anything, right? So it's all expense. And so there is some capitalization of R&D. I don't know if they give out the exact mix, but the big differences on the operating expenses, that's one. And then of course, ACMR, the global operation, we've got our cost of being a public company, and then we also have our sales and marketing effort that are incremental expenses, yeah. spk11: Helpful, thanks very much. You bet, thanks Matt. Thank you. Next question, operator, please, yep. Operator, next question, please. I think we lost the operator here. So I'm gonna go back to the question Charles, Mark McKechnie | CFO: are you able, do you have a live line, Charles? I think Charles sure is live. Yes, Operator | Operator: excuse me. Mark McKechnie | CFO: Your next question Operator | Operator: comes to the line of Charles Shee with Needham and Company. Your line is now open. Charles Shee | Analyst, Needham & Company: Yeah. Hey, can you hear me? David Wang | CEO: Yes, Charles, I can hear you. Yeah, Charles Shee | Analyst, Needham & Company: I feel obligated to ask a question about long-term targets. I think it's important update, but I have a really question on the mainland China portion of the long-term projection there. I think one key change versus your prior target was the mainland China WFE market size. You kind of raised it from 30 billion to 40 billion. It does match with where China WFE numbers were trending over the last couple of years. Last year, I believe it's slightly above 40 billion. This year, maybe around 40 billion. But I think my question is, would there be any concern? I mean, by the team, maybe you are a little bit extrapolating the peak China WFE number there from the last year's peak run rate level into the future or with the confidence, China WFE maintaining at this 40 billion level over the long-term. Thank you. David Wang | CEO: Okay, Charles, obviously, year over year can be kind of a change, right? Maybe five, 10% up and down. And I wanna say our long-term revenue is not for next year. It's like a five-year timeline we talk about or beyond. So we believe that the year China WFE market will be 40 billion. That's what we talk about a long run of the goal. And you look in the expanding China of the either memory or the logic or including IGBT, it's a lot of demand here. So that's our confidence. We believe that the market 40 billion, you look in the five-year down the road should be a number. Of course, there are global market growth too. So there's a 40 billion we think is a reasonable target we put there. And second, I wanna see that is we do have also a new product and it coming in and we're through the last three, four year R&D, our furnace, PCVD and the track or including our latest panel level packaging tool getting into the market and all started, gendered revenue either this year and also next year. Second, I wanna mention that is we just get approved from CSRC and we're kind of second fund raising more than $600 million. Those fund raisings that will help ACM to X rating are the target R&D. And so that will be another big factor. And third, I wanna mention that is ACM has been really in China market insist order differentiation, innovative technology and to the market. And so I believe Chinese the customer still like the best technology with IP protection. So that really put ACM very unique position. And this moment we have not found any local Chinese company and copy our IP, infringe our IP. So we have a very confidence ACM can maintain our differential product margin and also I said, customer locally is really designed the best technology, which is we are providing our differential solution. So we're much better than those people provide their similar product. As since I said, we're providing differentiation. That's what solving the future needs for the customer. So with all three automation, so we're very confidence. That's why we're raising this China market from 1.5 billion to 2.5 billion. Thanks. spk11: Yeah, thank you. Appreciate Charles Shee | Analyst, Needham & Company: the wonderful spk11: color that I asked. Operator | Operator: Thank spk11: you. Operator | Operator: Next question comes to the line of Jimmy Hang with JP Morgan, your line is now open. Jimmy Hang | Analyst, JPMorgan: Yeah, hi David, can you hear me? David Wang | CEO: Yes, please. Jimmy Hang | Analyst, JPMorgan: Yeah, thank you. So I want to ask about whether you have any source of the BID into 2026. And actually, can you also share about your estimate on the China WSE for 25, 26, either absolute numbers or 101 comparison? Thank you. David Wang | CEO: Yeah, well, I mean, looking at 25 and obviously, different the report ratio, different results and looking at Gardner, they're pretty like her in lower but you have another IC semi there try also, show they're very, I won't say, different results. In other words, it's better than the Gardner. I mean, you're looking at 25, 26, I'm still hard to predict maybe, I mean, 10% up end or down, right? But therefore, our feeling is it doesn't matter. As I said, China market still exists. They already reach about either 30, 35% of a global number already. So with our differential technology, with a new product come out, and even the flat of the revenue or the WFE spending China, we're still expecting our growth and also high growth. And that said, our new product, PCVD, and we'll have a few customer, hands of customer coming to their evaluation this year. We'll also put the 300 WFE wafer per hour, care of line and which is in line with the scanner will ship out very soon in probably Q3. And also added a new technology as I mentioned, our panel level packaging, the traction. And plus, we have this high temperature anneal, 1,250 degrees C. That's really can real shorten the anneal time for the IGBT, also other critical application. So as I said, all this new product we put in the market and really give us a strong confidence where we have a growing fast, even with the flat or Chinese WFE market. As I mentioned, just in I tell, I answer Charlie is we offer China market with real differential product. And we feel confidence we can protect our IP. And therefore, and we can have our, I wanna say margin maintain and give the customer best of the choice. And so we're not getting into that kind of similar product in price competition. As I said, the Chinese customers still demand for the best performance. If they're choosing performance with the price, of course they're choosing performance. And so that's why we're our kind of differential product can offer such a superior better results and then those people provide a similar product. So we think that will be the our strong point. Jimmy Hang | Analyst, JPMorgan: Yeah. Thank you Dr. Wang. Mark McKechnie | CFO: Yeah, if you don't mind, I might just add a few things on that. Just, obviously we're not gonna, we don't give our guidance for 2026 until early in the year, but you probably noticed our OpEx was pretty strong this year relative to our revenue. Even if we do the midpoint, it's still kind of a, we're growing our OpEx this year. And a big reason is we're spending into the market opportunity, right? I mean, David mentioned a lot of the new R&D projects, we're also spending more on sales and marketing, but clearly that spending is kind of anticipating good growth ahead. David Wang | CEO: Yeah, and add on that, compared to the first tier guy, their R&D probably 10 to 12%, right? And we'll spend 14 to 16%. And that's really show our having invest R&D, also with our new product come out in a speed, and we have more, I call the product, a new product-common ratio compared to first tier global guy. And that's why you show that our spending is higher. So that's why we're spending investing R&D and also sales and marketing, and that's we are supporting our next five-year growth. And we believe we spend this, I mean, we spend this operation spending, it's very important, and also supporting our long-run growth. Jimmy Hang | Analyst, JPMorgan: Yeah, thank you, Dr. Wang and Mark. Also want to ask about the cleaning equipment market share target, you went to 50% in the long run in China. Do you think in that case, what will be the split of the remaining 40% share between other Chinese peers and international suppliers? You get 60% market share in China, yeah. David Wang | CEO: How to divide who is the second, who is the third, right? I mean, again, we're trying to be number one in China, of course, right? Why I see that is our now product portfolio, it really almost can match 95% of our cleaning process staff. So where are they probably the widest product in the world compared even the three big guy in global international, and also, as I said, our product has a lot of differentiation and the power tool and SAP's, Maxonic, Tebow, and non-violation or non-damaging Maxonic technology, and also continue adding this recently announced into Bobbany with a special proprietary design, generate a large bubble size with uniformity. So we're continuing really, not just our product widespread, also have a lot of innovative approach in the better than those top tier in the world. Especially on major SPM, our SPM, as I mentioned, we have new proprietary nozzle design, can real limit all the liquid splash or acid mist out of the chamber. And that really can improving in the small particle performance. And today, as I said, 26 nano, we're reaching average almost a five in the particle. And we believe with improving the chamber environment, and we should get a better result in the 15 nano, 17 nano, which is real advanced next step. So particle. Anyway, I wanna say, we're do our, again, differential approach with IP protection. And that's the strong point. And we are say we're expanding China market. And also we're not facing any, as I said, again, we've got a very strong IP portfolio in China, and globally. Also, we do not expect any local Chinese people can copy our tool. So that's a real strong confidence. And we see there expanding the China market. Of course, with those differential product test in the China market, will push to the global. As you know, the cleaning has been more and more important and for their future AI chip manufacturing, because of a yield suffer. So this cleaning become more and more challenging for 3D land, 3D, I mean, theorem down the road. And also 3D logic, eventually people will see that. So all the 3D cleaning, we do have a product, technology ready for that. So we're very, we're very exciting. We're very, and kind of see our technology going to spread out in other global market. Jimmy Hang | Analyst, JPMorgan: Yeah, I see. Thank you, Dr. Wang. Maybe I have my next question. Can you talk more about your progress in Taiwan and Southeast Asia region? And also for the PLP testing, because I think the industry now thinks that mass production of Taiwan foundries, FOPOP, or we call co-op, will wait until 2029 or even 30. I think the development time for tech and manufacturing will be longer than expected. So how do you think about the mass production time of the FOPOP or co-op with the fine light space? Not the large light space for the, done by the panel makers, I mean, for the element process. David Wang | CEO: Sure. Actually PLP, this panel level packaging, we believe is ready to go for the large size of the AI chip packaging, right? As the people lay down in the panels, 210 by 310 square versus the circle, their effective area increase more than 60, 60%. It's a bigger gain for the customer. It's for, especially for large chip. Obviously, other people, I mean, get a no to 310 by 310, we're probably very soon moving to large size panel. So we believe that's really a strategic step and the Taiwan customer taking that direction. As to the ACM, I feel we have very good product, ready for that product. And we're already putting in the market for their low pressure cleaning, bevel cleaning. Also, I wanna mention that is our horizontal and rotational electroplating. It's really a solution for this panel level, right? And why is, looking at the 20 millimeter packaging, used to be vertical and you go 300 millimeter wafer, everybody turn to horizontal. And now you can see it's working. Our panel level, we are probably the only guy providing this horizontal solution because of our ProPILORiT design. And this year, March, we got a reward. I got a technical award from the 3D IC inside USA. So we believe our strong position in this horizontal plating, we're position ACM, very strong position for this future AI PLP market. So we see that as recently, we reach our horizontal plating, uniformity less than 5%. And I wanna say we're trying next goal is less than 3%. So we'll maintain equal performance panel, square plating versus a circle, same level. That's really driving to the panel. As you mentioned about 2029 or timing, I think that that's really dependent on technology driving, right? And if a customer can solving the whole issue, they can speed up. If they cannot solving, maybe delay. So really this is a market is driven by two manufactured technology combined together. So, I mean, with our cover plating, we definitely believe that's what we speed up, right? In the cover plating process, which is one of the major block and for the people moving from 300 millimeter wafer to the panel level. And we're glad, you know, the technology offer to the customer enabling their production line. And hopefully speed up their production. That's our confidence. I also very engaging with the customer in Taiwan. Jimmy Hang | Analyst, JPMorgan: Yeah, I know that you have technology leadership, you have real products and IP. I feel like the issues now, the ecosystem is already, so the customer might need to delay the co-op mass production timeline. And meanwhile, do you think that the plating tool supplier from co-op to co-op, will they still stick to the original Japanese and American supplier or they could adopt new supplier for co-op? David Wang | CEO: Well, I wanna see. I wanna say, I mean, wafer level we're engaging, right? I mean, then you're looking at this panel level, I think we're a much better superior product, right? Wafer level probably will offer equal in this moment. I wanna see that. But for the real panel level, as I mentioned, you know, I mean, looks in the last 10 years, nobody can do horizontal plating, right? We're the first guy announced the product. We can do horizontal, as I said, even today, we're about 5% uniformity. Our next goal is go 3%. I believe with a strong IP position, we should offer the best panel plating tool in the world. And again, right? That's really exciting, you know, for our, I call their penetrating the global market and is one of the key product we offer to enabling the technology for the customer. So we're very, you know, I call it put effort on those product development. Plus, we also prepare additional other differential product and also enabling the panel level. And we're gonna announce probably, you know, in the end of this year, we'll come out a new product too, and to further get into this market. So we're very exciting about this panel level, right? It's a way to go because all AI chips got a size bigger and bigger. I mean, we're gonna invest a lot in this product. Jimmy Hang | Analyst, JPMorgan: I see, thank you so much. Sorry, I may have occupied too much time, but thank you so much for the details. David Wang | CEO: Thank you. Operator | Operator: Thank you. Your next question come to the line of Yanghui Lei with UBS, your line is now open. Yanghui Lei | Analyst, UBS: Hi David, can you hear us? Okay, can you hear me? David Wang | CEO: Yes, please. Yanghui Lei | Analyst, UBS: Thanks for taking my question. Just one quick one. Seems like your Q2 year over year growth in Asia is due to underperforming other China peers. Any reason to hide? And probably due to different customer exposure? Thanks. spk11: David, Mark McKechnie | CFO: I think the question was, the growth maybe of ACM Shanghai's revenue or even ours versus some of the China peers. Maybe it was, what's the reason for the difference? spk08: Between China, between US, or between all of us, with other peer? Yanghui Lei | Analyst, UBS: Maybe between ACM both US and China, and Shanghai versus other like China WSB peers, thanks. Stephen Palao | Managing Director, Blue Shirt Group: Quickly versus China peers. David Wang | CEO: Oh, okay. I didn't see the other result come out, China peer. Obviously, looking at Shanghai, our revenue growth, it still looks good, right? And so I wanna say we're confident, and also this year, as I said, we're coming to the moment of the multi-product. And revenue will not much contribute this year, but with the next year, we see our furnace PCVD track, that contribution. And also we have a new product with the cleaning, and continue expanding copper painting. So I wanna say we still have a very good confidence, and also our look for 2026. And this year, and well, Q3 very busy, and Q4, we have our copper slot open, but we think it will be also filled out soon. So in general, we still have a good confidence, we have a good spk11: growth, still this year. Thanks, pretty clear. Thank you. Operator | Operator: Thank you. Seeing no more questions in the queue, let me turn the call back to David Wang for closing remarks. David Wang | CEO: Okay, thanks operator, and thank you for all the participating on today's call, and for your support. Before we close, Stephen is going to mention our upcoming investor edition event. Stephen, please. Stephen Palao | Managing Director, Blue Shirt Group: Thanks, thanks David. Before we conclude, I just wanna give everyone a quick reminder, our upcoming investor conferences. On October 21st, we're gonna present at the Sixth Annual Needham Virtual Semiconductor and SemiCap -on-One Conference. On August 25th, we will present at the Jeffrey Semiconductor IT Hardware and Communications Technology Summit at the Four Seasons Hotel in Chicago. On September 3rd, we'll present at the Benchmark 2025 TMT Conference in New York City. On October 7th, we'll present at the 17th Annual CEO Summit in Phoenix, Arizona. Attendance at the conferences are by invitation only. For interested investors, please contact your respective sales representatives to register and schedule -on-one meetings with the management team. This concludes the call, and you may now disconnect. Take care. jsPDF 3.0.3 D:20260609232251-00'00'