What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2026-02-26 compared with 2025-02-28 · 212 added, 123 removed, 964 unchanged (26% of the section changed)

1 unchanged sentence

Evaluation of Disclosure Controls and Procedures.

Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this Annual Report on Form 10-K (the “Evaluation Date”).

Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act as of the end of the period covered by this Annual Report on Form 10-K (the “Evaluation Date”).

Based on this evaluation, our principal executive officer and principal financial officer concluded that, as of the Evaluation Date, these disclosure controls and procedures are effective.

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and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect

misstatements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

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Other Information.

During the quarter ended December 31, 2024 , no director or officer adopted or terminated any contract, instrument or written plan for the purchase or sale of Axcelis securities intended to satisfy the affirmative defense conditions of Rule 10 b 5 -1(c) under the Exchange Act or any non-Rule 10b5-1 trading arrangement as defined in Item 408(c) of Regulation S-K.

During the quarter ended December 31, 2025 , Russell J.

Low adopted a 10b5-1 Preset Diversification Program.

No other director or officer adopted, modified or terminated any contract, instrument or written plan for the purchase or sale of Axcelis securities intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act or any non-Rule 10b5-1 trading arrangement as defined in Item 408(c) of Regulation S-K during the quarter ended December 31, 2025.

Disclosure regarding Foreign Jurisdictions that Prevent Inspections.

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We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 26, 2026 expressed an unqualified opinion thereon.

Adoption of ASU 2023-07 Segment Reporting (Topic 280)

As discussed in Note 2 to the consolidated financial statements, the Company changed its segment disclosures in 2024 and 2023 due to the adoption of ASU No.

2023-07, Segment Reporting.

Adoption of ASU 2023-09 Improvements to Income Tax Disclosures (Topic 740)

As discussed in Note 2 to the consolidated financial statements, the Company changed its income tax disclosures in 2024 and 2023 due to the adoption of ASU No.

2023-09, Improvements to Income Tax Disclosures.

Basis for Opinion

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The Company’s revenue contracts for systems have multiple performance obligations, including the systems themselves and obligations that are not delivered simultaneously with the systems.

Systems revenue accounted for $782.6 million of the Company’s total revenue of $1.0 billion in 2024.

Systems revenue accounted for $571 million of the Company’s total

revenue of $839 million in 2025.

Auditing management’s recognition of revenue was challenging because of the higher extent of audit effort and because the amounts are material to the consolidated financial statements and related disclosures.

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Management determines the provision using its assumptions of future materials usage, based on estimates of demand and market conditions.

Auditing the Company’s provision for excess inventory is complex due to the highly judgmental nature of the factors used to estimate demand and market conditions.

Specifically, the Company’s estimated materials usage may be significantly affected by management’s assumptions of forecasted system sales and the size and utilization of the installed base of systems.

Management’s identification and measurement of these factors are forward looking and could be affected by future economic and market conditions that could have a significant effect on the excess inventory reserve.

Auditing the Company’s provision for excess inventory is complex due to the judgmental nature of the factors used to estimate demand and market conditions.

Specifically, the Company’s estimated materials usage may be significantly affected by the expected utilization period by customers of installed systems.

Management’s estimate of the expected utilization period could be affected by future economic and market conditions that could have a significant effect on the excess inventory reserve.

How We Addressed the Matter in Our Audit

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This included management’s assessment of the assumptions and data underlying the excess inventory provision.

For example, we tested controls over management’s review of its systems sales forecasts, as well as management’s review of the assumptions relating to the market size and utilization of installed systems.

For example, we tested controls over management’s review of the assumption relating to the expected utilization period of installed systems.

We also tested management’s controls over the completeness and accuracy of the data used in the estimation model.

Our substantive audit procedures included, among others, evaluating the significant assumptions stated above and testing the accuracy and completeness of the underlying data used by management to compute the value of excess inventory.

Our substantive audit procedures included, among others, evaluating the expected utilization period of installed systems used by Management and testing the accuracy and completeness of the underlying data used by management to compute the value of excess inventory.

For example, we compared the quantities of on-hand inventories to historical and forecasted materials usage and evaluated adjustments to forecasts for specific product considerations, such as technological changes or alternative uses.

We also assessed the historical accuracy of management’s estimates and performed sensitivity analyses over the significant assumptions to evaluate the changes in the excess inventory estimates that would result from changes in the underlying assumptions.

We also assessed the historical accuracy of management’s estimates and performed sensitivity analyses over the significant assumptions used by Management to evaluate the changes in the excess inventory estimate that would result from changes in the underlying assumption.

/s/ Ernst & Young LLP

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Interest expense

Total other income (expense)

Total other income

Income before income taxes

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Twelve months ended

Other comprehensive (loss) income:

Other comprehensive income (loss):

Foreign currency translation adjustments

Amortization of actuarial net gain and other adjustments from pension plan, net of tax

Total other comprehensive (loss) income

Unrealized gains on available-for-sale investments

Total other comprehensive income (loss)

Comprehensive income

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Deferred income taxes

Long-term investments

LIABILITIES AND STOCKHOLDERS’ EQUITY

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Stockholders’

Income (Loss)

Balance at December 31, 2022

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Change in pension obligation, net of tax

Exercise of stock options

Issuance of stock under Employee Stock Purchase Plan

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Foreign currency translation adjustments

Unrealized gains on available-for-sale investments

Change in pension obligation, net of tax

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Provision for excess and obsolete inventory

Accretion of discounts and premiums on marketable securities

Unrealized currency loss on foreign denominated transactions

Accretion of discounts and premiums on short-term and long-term investments

Unrealized currency gain on foreign denominated transactions

Mark-to-market adjustment on forward exchange contracts

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Expenditures for property, plant and equipment and capitalized software

Purchase of short-term investments

Maturities of short-term investments

Net cash used in investing activities

Purchases of short-term and long-term investments

Maturities and sales of short-term investments

Net cash provided by (used in) investing activities

Cash flows from financing activities

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Effect of exchange rate changes on cash and cash equivalents

Net decrease in cash, cash equivalents and restricted cash

Net increase (decrease) in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of period

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Foreign currency transaction gains and losses are included in other income (expense) in the Consolidated Statements of Operations.

For the years ended December 31, 2024, 2023, and 2022 we had foreign exchange losses of $ 9.1 million, $ 0.5 million, and $ 6.6 million, respectively.

For the years ended December 31, 2025, 2024, and 2023 we had foreign exchange gains of $ 4.5 million and foreign exchange losses of $ 9.1 million, and $ 0.5 million, respectively.

(d) Derivative Instruments

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We have not designated these forward exchange contracts as hedging instruments and we record changes in the fair values at each measurement date in Other, net on the Consolidated Statements of Operations.

For the year ended December 31, 2024, we recorded $ 9.1 million of gain on forward currency exchange contracts.

For the years ended December 31, 2025 and 2024, we recorded $ 2.1 million of losses and $ 9.1 million of gains on forward currency exchange contracts, respectively.

We do not offset fair value amounts of derivative instruments.

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(e) Cash, Cash Equivalents and Short-term Investments

Cash and cash equivalents consist of cash on hand and highly liquid investments with original maturities of ninety days or less.

Cash and cash equivalents consist of cash on hand and highly liquid investments with original maturities of 90 days or less.

Cash equivalents consist primarily of money market funds, U.S.

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Cash equivalents are carried on the balance sheet at fair market value.

Short-term investments are h ighly liquid investments with original maturities of greater than 90 days but less than one year from date of purchase and are carried on the balance sheet at amortized cost.

Our short-term investments consist primarily of U.S.

Government and Agency securities and are classified as held-to-maturity based on our positive intent and ability to hold the securities to maturity.

Short-term investments are h ighly liquid investments with original maturities of greater than 90 days but less than one year from date of purchase.

Beginning as of March 31, 2025, our short-term investments are classified as available-for-sale as a result of the below noted sale of securities.

In prior periods, our short-term investments were classified as held-to-maturity.

We evaluate if a ny declines in fair value below amortized cost are caused by expected credit losses, as well as our ability and intent to hold the investment until a forecasted recovery occurs.

Any unrealized gains and losses are included in accumulated other comprehensive loss in the Consolidated Statement of Stockholders’ Equity.

Income related to these securities is recorded in interest income in the Consolidated Statements of Operations .

(f) Inventories

As of December 31, 2025, the amortized cost and fair value of the available-for-sale short-term investments was $ 228.7 million and $ 228.8 million, respectively.

As of December 31, 2025, we had no allowances for credit loss on our investments.

In February 2025, we sold securities classified as held-to-maturity with a total net carrying value of $ 199.5 million.

The majority of the proceeds were reinvested back into short-term investments during the three months ended March 31, 2025.

Due to this sale, the remaining held-to-maturity securities were reclassified as available-for-sale, resulting in a remeasurement increase in short-term investments for balance sheet presentation purposes with a corresponding adjustment to accumulated other comprehensive loss of $ 81.0 thousand as of March 31, 2025.

(f) Long-term Investments

Long-term investments consist of U.S.

government and agency securities with original maturities greater than one year from the date of purchase and are classified as available-for-sale.

We classify our long-term investments as non-current based on the security’s contractual maturity.

We evaluate if a ny declines in fair value below amortized cost are caused by expected credit losses, as well as our ability and intent to hold the investment until a forecasted recovery occurs.

Any unrealized gains and losses are included in accumulated other comprehensive loss in the Consolidated Statement of Stockholders’ Equity.

Income related to these securities is recorded in interest income in the Consolidated Statements of Operations .

As of December 31, 2025, the amortized cost and fair value of the long-term investments was $ 182.1 million and $ 182.4 million, respectively.

As of December 31, 2025, we had no allowances for credit loss on our investments.

(g) Inventories

Inventories are carried at the lower of cost or net realizable value, determined using the first-in, first-out (“FIFO”) method.

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If actual market conditions become less favorable than those projected by management, additional inventory write-downs may be required.

(g) Property, Plant and Equipment and Leased Assets

(h) Property, Plant and Equipment and Leased Assets

Property, plant and equipment are stated at cost, less accumulated depreciation and amortization.

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Expenditures greater than $ 2.5 thousand for renewals and betterments are capitalized and depreciated over their useful lives.

(h) Impairment of Long-Lived Assets

(i) Impairment of Long-Lived Assets

We record impairment losses on long-lived assets when events and circumstances indicate that these assets might not be recoverable.

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This could be caused by strategic decisions made in response to economic and competitive conditions, the impact of the economic environment on our customer base, or a material adverse change in our relationships with significant customers.

(i) Concentration of Risk and Off-Balance Sheet Risk

Financial instruments that potentially subject us to concentrations of credit risk are principally cash equivalents, short-term investments and accounts receivable.

Our cash equivalents and short-term investments are principally maintained in investment grade money-market funds, U.S.

(j) Concentration of Risk and Off-Balance Sheet Risk

Financial instruments that potentially subject us to concentrations of credit risk are principally cash equivalents, short-term investments, long-term investments and accounts receivable.

Our cash equivalents, short-term investments and long-term investments are principally maintained in investment grade money-market funds, U.S.

Government and Agency Securities and deposit accounts.

Other than our currency exchange contracts, we have no significant off-balance sheet risk relating to option contracts or other hedging arrangements.

Our exposure to market risk for changes in interest rates relates primarily to cash equivalents and short-term investments.

Our exposure to market risk for changes in interest rates relates primarily to cash equivalents, short-term and long-term investments.

The primary objective of our investment activities is to preserve principal without significantly increasing risk.

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We perform ongoing credit evaluations of our customers’ financial condition and generally require no collateral to secure accounts receivable.

For selected overseas sales, we require customers to obtain letters of credit before product is shipped.

For selected overseas sales, we require customers to obtain letters of credit before product is

We maintain an allowance for doubtful accounts based on our assessment of the collectability of accounts receivable.

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Our customers consist of semiconductor chip manufacturers located throughout the world and net sales to our ten largest customers accounted for 55.2 %, 45.9 % and 51.7 % of revenue in 2025, 2024 and 2023, respectively.

For the year ended December 31, 2025, we had one customer representing 11.0 % of total revenue.

For the years ended December 31, 2024 and December 31, 2023, we had no customers representing 10 % or greater of total revenue.

For the year ended December 31, 2022, we had two customers representing 13.1 % and 11.5 % of total revenue, respectively.

As of December 31, 2024, we had one customer account for 10.0 % of consolidated accounts receivable.

As of December 31, 2025, we had three customers account for 14.7 %, 13.5 % and 10.3 % of consolidated accounts receivable, respectively.

As of December 31, 2024, we had one customer account for 10.0 % of consolidated accounts receivable.

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Disruption to our supply source, resulting either from economic conditions or other factors, could affect our ability to deliver products to our customers.

(j) Revenue Recognition

(k) Revenue Recognition

We recognize revenue in accordance with Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers or (“ASC 606”).

Under ASC 606, revenue is recognized when a customer obtains control of

promised goods or services in an amount that reflects the consideration we expect to receive in exchange for those goods or services.

Under ASC 606, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration we expect to receive in exchange for those goods or services.

We measure revenue based on the consideration specified in the customer arrangement, and revenue is recognized when the performance obligations in the customer arrangement are satisfied.

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Variable consideration has not been identified as a significant component of the transaction price for any of our transactions.

For those transactions where all performance obligations will be satisfied within one year or less, we apply the

practical expedient outlined in ASC 606-10-32-18.

For those transactions where all performance obligations will be satisfied within one year or less, we apply the practical expedient outlined in ASC 606-10-32-18.

This practical expedient allows us not to adjust promised consideration for the effects of a significant financing component if we expect at contract inception that the period between when we transfer the promised good or service to a customer and when the customer pays for that good or service will be one year or less.

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Revenue is recognized over time if either 1) the customer simultaneously receives and consumes the benefits provided by the entity’s performance, 2) the entity’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced, or 3) the entity’s performance does not create an asset with an alternative use to the entity and the entity has an enforceable right to payment for performance completed to date.

If the entity does not satisfy a performance obligation over time, the related performance obligation is satisfied at a point in time by transferring the control of a promised good or service to a customer.

If the entity does not satisfy a performance obligation over time, the related

performance obligation is satisfied at a point in time by transferring the control of a promised good or service to a customer.

Examples of control are using the asset to produce goods or services, enhance the value of other assets or settle liabilities, and holding or selling the asset.

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Progress in the satisfaction of these performance obligations is measured using an input method of either time elapsed in the case of fixed period contracts, or labor hours expended, in the case of project-based contracts.

(k) Recognizing Assets related to Recoverable Customer Contract Costs

(l) Recognizing Assets related to Recoverable Customer Contract Costs

We recognize an asset related to incremental costs incurred by us to obtain a contract with a customer if we expect to recover those costs.

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Under ASC 606, an asset is amortized on a systematic basis that is consistent with the transfer to the customer of the goods or services to which the asset relates.

However, ASC 606 provides a practical expedient to allow for the recognition of commission expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less.

However, ASC 606 provides

a practical expedient to allow for the recognition of commission expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less.

Based on the nature of our commission agreements, all commissions are expensed as incurred based upon the expectation that the amortization period would be one year or less.

(l) Shipping and Handling Costs

(m) Shipping and Handling Costs

Shipping and handling costs are included in cost of revenue.

(m) Stock-Based Compensation

(n) Stock-Based Compensation

We generally recognize compensation expense for all stock-based payments to employees and directors, including grants of stock options and restricted stock units, based on the grant-date fair value of those stock-based payments.

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See Note 13 for additional information relating to stock-based compensation.

(n) Income Taxes

(o) Income Taxes

We record income taxes using the asset and liability method.

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See Note 18 for additional information relating to income taxes.

(o) Computation of Net Income per Share

(p) Computation of Net Income per Share

Basic earnings per share is computed by dividing income available to common stockholders (the numerator) by the weighted-average number of shares of common stock outstanding (the denominator) for the period.

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Weighted average shares of common stock outstanding used in computing basic income per share

Incremental options and RSUs

Incremental RSUs

Weighted average shares of common stock used in computing diluted net income per share

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Diluted weighted average shares of common stock outstanding does not include restricted stock units outstanding to purchase 221,204 , 122,294 and 6,025 common equivalent shares for the periods ended December 31, 2025, 2024 and 2023, respectively, as their effect would have been anti-dilutive.

(p) Accumulated Other Comprehensive Loss

The following table presents the changes in accumulated other comprehensive loss, net of tax, by component, for the year ended December 31, 2024:

(q) Accumulated Other Comprehensive Loss

The following table presents the changes in accumulated other comprehensive loss, by component, for the year ended December 31, 2025:

Unrealized gains on

Defined benefit

available-for-sale

(in thousands)

Balance at December 31, 2024

Other comprehensive loss and pension reclassification

Other comprehensive income and reclassifications

Balance at December 31, 2025

(q) Recent Accounting Guidance

In November 2023 the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures ("ASU 2023-07").

ASU 2023-07 is intended to enhance disclosures for significant segment expenses for all public entities required to report segment information in accordance with ASC Topic 280, Segment Reporting ("ASC 280").

ASC 280 requires a public entity to report for each reportable segment a measure of segment profit or loss that its chief operating decision maker (“CODM”) uses to assess segment performance and to make decisions about resource allocations.

ASU 2023-07 is intended to improve financial reporting by requiring disclosure of incremental segment information on an annual and interim basis for all public entities to enable investors to develop more useful financial analyses.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

(r) Recent Accounting Guidance

In December 2023 the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures ("ASU 2023-09") .

We adopted ASU 2023-09 within this Annual Report on Form 10-K and we applied the update retrospectively for all prior periods presented in the consolidated financial statements.

See Note 18 for related disclosures.

In December 2023 the FASB issued Accounting Standards Update 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures ("ASU 2023-09") .

ASU 2023-09 is intended to enhance the transparency and decision usefulness of income tax disclosures.

ASU 2023-09 addresses investor requests for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information.

Early adoption is permitted.

A public entity should apply ASU 2023-09 prospectively to all annual periods beginning after December 15, 2024.

The Company is currently evaluating the impact of ASU 2023-09 on its future consolidated financial statements and related disclosures.

In November 2024 the FASB issued Accounting Standards Update 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

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Early adoption is permitted.

A public entity should apply ASU 2024-03 either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to all prior periods presented in the financial statements.

A public entity should apply ASU 2024-03 either prospectively to

financial statements issued for reporting periods after the effective date of this ASU or retrospectively to all prior periods presented in the financial statements.

The Company is currently evaluating the impact of ASU 2024-03 on its future consolidated financial statements and related disclosures.

In September 2025, the FASB issued Accounting Standards Update 2025-06 ASU No.

2025-06, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”).

ASU 2025-06 requires companies to start capitalizing eligible software costs when management has authorized and committed to funding the software project, and it is probable that the project will be completed and the software will be used to perform the function intended.

The guidance is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods.

Early adoption is permitted and may be applied using a prospective, retrospective or modified transition approach.

The Company is currently evaluating the impact of ASU 2025-06 on its future consolidated financial statements and related disclosures.

In September 2025, the FASB issued ASU No.

2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606) – Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract (“ASU 2025-07”).

ASU 2025-07 applies to all entities that enter into non-exchange-traded contracts with underlying content based on operations or activities specific to one of the parties to the contract.

The new guidance excludes from derivative accounting non-exchange-traded contracts with underlying content based on operations or activities specific to one of the parties to the contract.

ASU 2025-07 is effective for annual reporting periods beginning after December 15, 2026, and interim periods within those annual reporting periods.

Early adoption is permitted.

The Company is currently evaluating the impact of ASU 2025-07 on its future consolidated financial statements and related disclosures.

In December 2025, the FASB issued ASU No.

2025-11, Interim Reporting (Topic 270) – Narrow-Scope Improvements (“ASU 2025-11”).

ASU 2025-11 applies to all entities that provide interim financial statements and notes in accordance with generally accepted accounting principles.

The new guidance improves the navigability of the required interim disclosures, clarifies when that guidance is applicable and provides additional guidance on what disclosures should be provided in interim reporting periods.

ASU 2025-11 also adds a principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity.

ASU 2025-11 is effective for interim and annual reporting periods beginning after December 15, 2027.

Early adoption is permitted.

The Company is currently evaluating the impact of ASU 2025-11 on its future consolidated financial statements and related disclosures.

We design, manufacture and service ion implantation and other processing equipment used in the fabrication of semiconductor chips and sell our products to leading semiconductor chip manufacturers worldwide.

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In addition, we provide extensive aftermarket lifecycle products and services, including used tools, spare parts, equipment upgrades, maintenance service and customer training.

Our revenue recognition policies are set forth in Section (j) of Note 2, Summary of Significant Accounting Policies.

Our revenue recognition policies are set forth in Section (k) of Note 2, Summary of Significant Accounting Policies.

(a) Alternative Operational Revenue Categories used by Management

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Below are the revenues by categories used by management for the periods covered in this report:

(in thousands)

Total Revenue

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We are substantially dependent on sales of our products and services to customers outside of the United States.

Adverse economic conditions, political instability, potential adverse tax consequences, regulatory changes and volatility in exchange rates pose a risk that our clients may reduce, postpone or cancel spending for our products and services, which would impact our revenue.

Adverse economic conditions, political instability, potential adverse tax consequences, regulatory changes and volatility in currency exchange rates pose a risk that our customers may reduce, postpone or cancel spending for our products and services, which would impact our revenue.

Revenue by geographic markets is determined based upon the location to which our products are shipped and where our services are performed.

Revenue in our principal geographic markets is as follows:

(in thousands)

North America

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Contract liabilities are as follows:

(in thousands)

Balance, beginning of the period

Deferral of revenue

Other adjustments *

Recognition of deferred revenue

Balance, end of the period

* Amount is net of a reclassification of $ 12.7 million from deferred revenue to refund liability for the year ended December 31, 2024.

* Adjustment to contracts with customers are assessed to determine if amounts paid by customers represent deferred revenue or liabilities payable to customers and such amounts are accordingly reclassified pursuant to our revenue recognition policy and ASC 606.

Contract liabilities are reflected as deferred revenue on the consolidated balance sheet.

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Short-term deferred revenue of $ 65.5 million as of December 31, 2025 represents performance obligations that are expected to be satisfied within the next 12 months.

This amount relates primarily to prepayments made prior to system delivery as well as to installation and non-standard warranty performance obligations for system sales.

This amount relates primarily to prepayments made prior to system

delivery as well as to installation and non-standard warranty performance obligations for system sales.

Long-term deferred revenue of $ 43.4 million as of December 31, 2025 relates to prepayments made prior to system delivery as well as to extended warranty performance obligations that we expect to be completed in excess of the next 12 months but within the next 24 months .

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All trade receivables are reported on the Consolidated Balance Sheets at their amortized cost adjusted for any write-offs and net of allowances for credit losses.

Axcelis maintains an allowance for credit losses, which represents an estimate of expected losses over the remaining contractual life of its receivables considering current market conditions and estimates for supportable forecasts when

The estimate is a result of the Company’s ongoing assessments and evaluations of collectability, historical loss experience, and future expectations in estimating credit losses in its receivable portfolio.

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(in thousands)

Balance, beginning of period

Balance, beginning of year

Provision for credit losses

Balance, end of period

Balance, end of year

The components of accounts receivable are as follows:

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When recorded, inventory reserves are intended to reduce the carrying value of inventories to their net realizable value.

We establish inventory reserves when conditions exist that indicate inventory may be in excess of anticipated

demand or is obsolete based upon assumptions about future demand for our products or market conditions.

We establish inventory reserves when conditions exist that indicate inventory may be in excess of anticipated demand or is obsolete based upon assumptions about future demand for our products or market conditions.

We regularly evaluate our ability to realize the value of inventories based on a combination of factors including the following:

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The exercise of lease renewal options is at our sole discretion.

For lease extensions that are reasonably certain to occur, we have included the renewal periods in our calculation of the net present value of the lease obligation and related right-of-use asset.

For lease extensions that are reasonably certain to occur, we have included

the renewal periods in our calculation of the net present value of the lease obligation and related right-of-use asset.

Certain leases also include options to purchase the leased property.

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Operating lease cost

(in thousands)

Product / services*

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Changes in estimate of liability for pre-existing warranties during the period

Balance at December 31 (end of period)

Balance at December 31 (end of year)

Amount classified as current

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Total liabilities

The expense recorded in connection with these plans was $ 1.7 million, $ 1.7 million and $ 1.5 million during the years ended December 31, 2024, 2023 and 2022, respectively.

The expense recorded in connection with these plans was $ 1.7 million for each of the years ended December 31, 2025, 2024 and 2023.

Stock Award Plans and Stock-Based Compensation

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We settle restricted stock units upon vesting with newly issued shares of common stock.

No restricted stock was granted during the three year period ended December 31, 2024.

As of December 31, 2025, there were 2.7 million shares available for grant under the 2012 Equity Plan.

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The 2020 ESPP is considered compensatory and as such, compensation expense has been recognized based on the benefit of the discounted stock price, amortized to compensation expense over each offering period of six months .

Compensation expense relating to the 2020 ESPP was approximately $ 0.4 million, $ 0.4 million, and $ 0.3 million for the years ended December 31, 2024, 2023 and 2022, respectively.

As of December 31, 2024, there were approximately 0.9 million shares reserved for issuance and available for purchase under the 2020 ESPP, with 19,268 shares purchased on that date to be issued pending settlement.

0.1 million shares were purchased under the 2020 ESPP for the year ended December 31, 2024.

Less than 0.1 million shares were purchased under the 2020 ESPP for both of the years ended December 31, 2023 and 2022.

Compensation expense relating to the 2020 ESPP was approximately $ 0.4 million for each of the years ended December 31, 2025, 2024 and 2023.

As of December 31, 2025, there were approximately 0.8 million shares reserved for issuance and available for purchase under the 2020 ESPP, with 18 thousand shares purchased on that date to be issued pending settlement.

38 thousand shares, 30 thousand shares, and 16 thousand shares were purchased under the 2020 ESPP for the year ended December 31, 2025, 2024 and 2023, respectively.

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For the years ended December 31, 2025, 2024 and 2023, we used restricted stock units in our annual equity compensation program.

The benefit of tax deductions in excess of recognized compensation cost is reported in the consolidated statements of cash flows as part of cash flows from operating activities.

For the year ended December 31, 2024, the tax deductions in excess of recognized compensation cost had no material impact.

With regard to stock-based compensation, the statement of cash flows will report a net benefit related to tax deductions in excess of recognized compensation cost or a net charge related to non-deductible compensation cost.

For the year ended December 31, 2025, the net charge related to non-deductible stock compensation was $ 1.2 million.

(e) Restricted Stock Units and Restricted Stock

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Short-term investments with maturities greater than 90 days but not greater than 365 days are included in short-term investments in the consolidated balance sheets.

The following table sets forth Company’s assets which are measured at fair value by level within the fair value hierarchy.

Investments that have a maturity of greater than one year are included within long-term investments in the consolidated balance sheets.

The following table sets forth the Company’s assets which are measured at fair value by level within the fair value hierarchy.

December 31, 2025

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Mark-to-market adjustment on forward exchange contracts

Long-term investments (U.S.

Government Securities and Agency Investments)

December 31, 2024

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Government Securities and Agency Investments)

Mark-to-market adjustment on forward exchange contracts

The following table summarizes the contractual maturities of our cash equivalents and investments as of December 31, 2025:

Amortized Cost

(in thousands)

Due within one year

Due after one year through two years

The carrying amounts reflected in the consolidated balance sheets for accounts receivable, prepaid expenses and other current and non-current assets, restricted cash, accounts payable and accrued expenses approximate fair value due to their short-term maturities.

(d) Forward Currency Exchange Contracts

We enter into forward currency exchange contracts to minimize the impact of foreign currency fluctuations on our earnings and cash flows.

These contracts have month-to-month settlement dates.

Any gains or losses on these contracts are reported within Other, net in our Consolidated Statement of Operations.

Any open contracts at period end that have settlement dates within one month after the reported period end are marked-to-market and the valuation adjustments related to these open contracts are recorded in the current asset or current liability account.

Any unrealized gain or loss on the open contracts is recognized and recorded within Other, net in our Consolidated Statement of Operations.

These contracts are measured at fair value using observable market inputs such as forward currency exchange rates and our counterparties’ credit risks.

Based on these inputs, the derivative instruments are classified within Level 2 of the valuation hierarchy.

At December 31, 2025, the recognized unrealized gain on these forward exchange contracts was approximately $ 0.4 million.

Based on our continued ability to trade and enter into forward contracts, we consider the markets for our fair value instruments to be active.

We evaluated the credit risk associated with the counterparties to these derivative instruments and

determined that as of December 31, 2025, such credit risks have not had an adverse impact on the fair value of these instruments.

Commitments and Contingencies

In addition to the finance and operating leases discussed in Note 9, we have purchase commitments and other contingency considerations.

See Footnote 19 for contingency considerations related to the proposed merger with Veeco Instruments Inc.

(a) Purchase Commitments

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General and administrative

Total other income (expense)

Total other income

Income tax provision

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Year ended December 31,

(in thousands)

Income taxes at the United States statutory rate

State income taxes

(dollars in thousands)

Adjusted Pre-Tax Book Income

Federal Statutory Tax Rate

State Income Taxes, net of federal income tax benefit*

Foreign Tax Effects

Withholding Taxes

Other Jurisdictions

Research and Development Credit

Effect of Cross-Border Tax Laws

Foreign-derived intangible income

Research and other tax credits

Stock-based compensation

Foreign Tax Credit

Valuation Allowances

Nontaxable or Nondeductible Items

Nondeductible Compensation

Effect of change in valuation allowance

Unrecognized tax benefits

Income tax provision

Share-based Compensation

Other nontaxable or nondeductible Items

Changes in Unrecognized Tax Benefits

Other Adjustments

Income Tax Expense

* The states that contribute to the majority (greater than 50%) of the tax effect in this category include California, Texas, and Utah in 2025, Oregon, New York, and Maine for 2024, and Oregon, Minnesota, and Vermont for 2023.

The amounts of cash paid for income taxes (net of refunds) during the years ended December 31, 2025, 2024 and 2023 are as follows:

Year ended December 31,

(in thousands)

Withholding Tax

Other Jurisdictions

Total Income Taxes Paid (net of refunds)

*The amount of income taxes paid during the years ended December 31, 2024 and 2023 does not meet the 5% disaggregation threshold and is included in ‘Other’.

Deferred income taxes reflect the effect of temporary differences between the carrying amounts of assets and liabilities recognized for financial reporting purposes and the amounts recognized for tax purposes.

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Deferred revenue

Transaction Costs

Capitalized research and development costs

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Deferred tax liabilities:

Intangible assets

Right-of-use asset

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Deferred taxes, net

At December 31, 2025, we had a balance of $ 1.5 million related to deferred tax liabilities recorded within other long-term liabilities on the Consolidated Balance Sheets.

Changes in tax rates and tax laws are accounted for in the period of enactment.

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At December 31, 2025, we maintained a $ 16.0 million valuation allowance in the U.S.

against certain tax credits and state net operating losses due to the uncertainty of their realization based on long-term Company forecasts and the expiration dates on these attributes.

against federal and state tax credit carryforwards of the same amount.

The valuation allowance was recorded due to the uncertainty of their realization based on long-term Company forecasts and the expiration dates on these attributes.

This represents an increase of $ 1.3 million from the prior year.

At December 31, 2025, we had research and development and other tax credit carryforwards of $ 19.3 million.

These carry forwards are subject to an uncertain tax position reserve of $ 6.0 million.

These carry forwards are fully valued and are also subject to an uncertain tax position reserve of $ 3.4 million.

These credits can be used to reduce future federal and state income tax liabilities and expire principally between 2026 and 2040.

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income taxes have been provided thereon.

As of December 31, 2024, there is no cash associated with indefinitely reinvested foreign earnings.

As of December 31, 2025, there is no excess cash associated with indefinitely reinvested foreign earnings.

We did not, nor do we anticipate the need to, repatriate funds to the United States to satisfy domestic liquidity needs arising in the ordinary course of business.

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We and most foreign subsidiaries are subject to income tax examinations by tax authorities for all years dating back to 2022.

We are under an IRS income tax audit for the year ended December 31, 2023.

Such jurisdictions may assess

additional income tax against us.

The final determination of tax audits or any administrative appeals relating thereto could be materially different from our income tax provisions and accruals.

The ultimate result of any current or future audit could have a material adverse effect on our results of operations and cash flows in the period or periods for which that determination is made.

Our policy is to recognize interest related to unrecognized tax benefits as interest expense and penalties as operating expenses.

We believe that we have appropriate support for the income tax positions taken and to be taken on our tax returns and that our accruals for tax liabilities are adequate for all open years based on an assessment of many factors including past experience and interpretations of tax law applied to the facts of each matter.

At December 31, 2024, we had unrecognized tax benefits related to uncertain tax positions of $ 12.5 million, $ 9.0 million of which is recorded as a long-term liability, and the remainder of which reduced the Company’s state deferred tax

assets and the offsetting valuation allowance.

At December 31, 2025, we had unrecognized tax benefits related to uncertain tax positions of $ 12.7 million, $ 9.3 million of which is recorded as a long-term liability, and the remainder of which reduced the Company’s state deferred tax assets and the offsetting valuation allowance.

We recognized $ 0.7 million in interest and penalty expenses for the year ended December 31, 2025 relating to these uncertain tax positions.

These unrecognized tax benefits, if recognized, would reduce the effective tax rate and also reverse associated accrued interest and penalty expenses.

These unrecognized tax benefits, if recognized, would reduce the effective tax rate and also reverse associated accrued interest and penalty expenses included in profit before tax.

A reconciliation of the beginning and ending balance of unrecognized tax benefits are as follows:

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Balance at end of year

On September 30, 2025, the Company, Victory Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company (“Merger Sub”), and Veeco Instruments Inc., a Delaware corporation (“Veeco”), entered into an Agreement and Plan of Merger (the “Merger Agreement”).

Pursuant to the Merger Agreement, and subject to the satisfaction or waiver of the conditions specified therein, Merger Sub shall be merged with and into Veeco (the “Merger”), with Veeco surviving as a wholly-owned subsidiary of the Company.

At the effective time of the Merger (the “Effective Time”), each share of common stock, par value $ 0.01 per share, of Veeco (“Veeco Common Stock”), issued and outstanding immediately prior to the Effective Time (other than shares that are owned by the Company, Veeco or Merger Sub or any wholly owned subsidiary of the Company, Veeco or Merger Sub) will be converted into the right to receive 0.3575 (the “Exchange Ratio”) newly issued shares of Company common stock (the “Company Common Stock”) (the “Common Stock Merger Consideration”).

No fractional shares of the Company will be issued in the Merger, and Veeco stockholders will receive cash in lieu of fractional shares as part of the merger consideration (the “Fractional Shares Cash Amount”, and the Fractional Shares Cash Amount together with the Common Stock Merger Consideration will be referred to as the “Merger Consideration”), as specified in the Merger Agreement.

The Merger Agreement may be terminated upon the mutual written consent of Axcelis and Veeco.

In addition, either Axcelis or Veeco may terminate the Merger Agreement in certain circumstances, including if (a) certain governmental entities have issued a final and non-appealable governmental order or enacted a law prohibiting the Merger or making the closing of the Merger illegal, (b) the Merger is not consummated by September 30, 2026, subject to successive automatic extensions until as late as June 30, 2027 if the only remaining conditions to be satisfied are regulatory approvals,

(c) the Axcelis stockholders fail to approve the Company Stock Issuance, (d) the Veeco stockholders fail to adopt the Merger Agreement, (e) the other party is in breach of the Merger Agreement in a manner that would result in a failure of an applicable closing condition (subject to the applicable cure period set forth in the Merger Agreement) or (f) the other party’s board of directors has changed its recommendation with respect to the Merger.

If the Merger Agreement is terminated by a party following a recommendation change of the board of directors of the other party, the non-terminating party will be required to pay the other party the following termination fee:

(i) if the non-terminating party is Axcelis, a termination fee of $ 108.7 million;

and (ii) if the non-terminating party is Veeco, a termination fee of $ 77.5 million.

Each party may also be required to pay such termination fee if such party enters into a competing proposal within twelve months of termination of the Merger Agreement under certain circumstances.

In addition, if the Merger Agreement is terminated by a party as a result of the other party’s failure to obtain stockholder approval, or is terminated by a party due to the other party’s breach of the Merger Agreement that would result in a failure of an applicable closing condition (subject to the applicable cure period set forth in the Merger Agreement), then the non-terminating party will be required to pay a fixed expense reimbursement amount of $ 15.0 million.

On February 6, 2026, Axcelis held a special meeting of stockholders (the “Special Meeting”) at which the Company Stock Issuance was approved.

The completion of the Merger remains subject to other customary closing conditions, including the final pending regulatory approval from the State Administration for Market Regulation of the People’s Republic of China.

Axcelis and Veeco continue to expect that the Merger will be completed in the second half of 2026.

Schedule II—Valuation and Qualifying Accounts

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Exhibit Index

Agreement and Plan of Merger, dated as September 30, 2025, by and among Axcelis Technologies, Inc., Veeco Instruments Inc.

and Victory Merger Sub, Inc.

Incorporated by reference to Exhibit 2.1 of the Company’s Form 8-K filed with the Commission on October 1, 2025 .

Restated Certificate of Incorporation of the Company, filed November 2, 2017.

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Filed herewith .

Axcelis Management Incentive Plan, as amended and restated by the Compensation Committee of the Board of Directors on February 11, 2010.

Incorporated by reference to Exhibit 10.2 of the Company’s report on Form 10-K for the year ended December 31, 2009 filed with the Commission on March 15, 2010.

Form of Indemnification Agreement approved by the Board of Directors of the Company on February 9, 2012 for use with each of its directors and officers.

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Form of Executive Separation Pay Agreement between the Company and each of its executive officers other than Russell J.

Low, including Gregory F.

Redinbo, Gerald M.

Blumenstock, Christopher J.

Tatnall, James G.

Coogan and Eileen J.

Evans, having dates from September 6, 2022 to December 12, 2024.

Low, including Gerald M.

Blumenstock, James G.

Coogan, Eileen J.

Evans, Gregory F Redinbo and Christopher J.

Tatnall, having dates from September 6, 2022 to December 12, 2024.

Incorporated by reference to Exhibit 10.2 of the Company’s Form 10-Q for the quarter ended June 30, 2019 filed with the Commission on August 7, 2019 .

1 unchanged sentence

Incorporated by reference to Exhibit 10.24 of the Company’s Form 10-K for the year ended December 31, 2014 filed with the Commission on March 11, 2015.

Ethical Business Conduct at Axcelis, revised through January 2003.

Incorporated by reference to Exhibit 14.1 of the Company’s report on Form 10-K filed with the Commission on March 28, 2003.

Ethical Business Conduct at Axcelis, revised through June, 2015.

Filed herewith .

Insider Trading Policy, as adopted by the Board of Directors on August 10, 2023.

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February 26, 2026

/s/ T zu-Yin Chiu

February 26, 2026

12 unchanged sentences

Jorge Titinger

/s/ Dipti Vachani

February 27, 2025

Dipti Vachani

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures