AXCELIS TECHNOLOGIES INC 10-Q

Item 1. Financial Statements. ​ Axcelis Technologies, Inc. Consolidated Statements of Operations (In thousands, except per share amounts) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ ​ ​ March 31, ​ ​ 2025 2024 Revenue: ​ ​ ​ ​ ​ ​ ​ Product ​ $ 182,824 ​ $ 243,418 ​ Services ​ 9,739 ​ 8,954 ​ Total revenue ​ 192,563 ​ 252,372 ​ Cost of revenue: ​ ​ ​ ​ ​ ​ ​ Product ​ 94,500 ​ 127,912 ​ Services ​ 9,295 ​ 8,409 ​ Total cost of revenue ​ 103,795 ​ 136,321 ​ Gross profit ​ 88,768 ​ 116,051 ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ Research and development ​ 27,128 ​ 25,662 ​ Sales and marketing ​ 15,124 ​ 17,445 ​ General and administrative ​ 17,357 ​ 16,405 ​ Total operating expenses ​ 59,609 ​ 59,512 ​ Income from operations ​ 29,159 ​ 56,539 ​ Other income (expense): ​ ​ ​ ​ ​ ​ ​ Interest income ​ 5,601 ​ 5,516 ​ Interest expense ​ ( 1,367 ) ​ ( 1,346 ) ​ Other, net ​ ( 309 ) ​ ( 1,710 ) ​ Total other income ​ 3,925 ​ 2,460 ​ Income before income taxes ​ 33,084 ​ 58,999 ​ Income tax provision ​ 4,505 ​ 7,404 ​ Net income ​ $ 28,579 ​ $ 51,595 ​ Net income per share: ​ ​ ​ ​ ​ ​ ​ Basic ​ $ 0.89 ​ $ 1.58 ​ Diluted ​ $ 0.88 ​ $ 1.57 ​ Shares used in computing net income per share: ​ ​ ​ ​ ​ ​ ​ Basic weighted average shares of common stock ​ 32,258 ​ 32,638 ​ Diluted weighted average shares of common stock ​ 32,335 ​ 32,926 ​ ​ See accompanying Notes to these Consolidated Financial Statements (Unaudited) ​ ​ 3 Table of Contents ​ Axcelis Technologies, Inc. Consolidated Statements of Comprehensive Income (In thousands) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ ​ ​ March 31, ​ ​ 2025 2024 Net income ​ $ 28,579 ​ $ 51,595 ​ Other comprehensive income (loss): ​ ​ ​ ​ ​ ​ ​ Foreign currency translation adjustments ​ 646 ​ ( 1,731 ) ​ Amortization of actuarial net gain and other adjustments from pension plan, net of tax ​ — ​ 5 ​ Unrealized gains on available-for-sale investments ​ ​ 81 ​ ​ — ​ Total other comprehensive income (loss) ​ ​ 727 ​ ​ ( 1,726 ) ​ Comprehensive income ​ $ 29,306 ​ $ 49,869 ​ ​ See accompanying Notes to these Consolidated Financial Statements (Unaudited) ​ ​ 4 Table of Contents ​ Axcelis Technologies, Inc. Consolidated Balance Sheets (In thousands, except per share amounts) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, December 31, ​ ​ 2025 ​ 2024 ASSETS ​ Current assets: ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 183,957 ​ $ 123,512 ​ Short-term investments ​ 403,102 ​ 447,831 ​ Accounts receivable, net ​ 164,949 ​ 203,149 ​ Inventories, net ​ 295,850 ​ 282,225 ​ Prepaid income taxes ​ ​ 6,615 ​ ​ 6,420 ​ Prepaid expenses and other current assets ​ 59,463 ​ 60,471 ​ Total current assets ​ 1,113,936 ​ 1,123,608 ​ Property, plant and equipment, net ​ 57,034 ​ 53,784 ​ Operating lease assets ​ ​ 28,767 ​ ​ 29,621 ​ Finance lease assets, net ​ ​ 15,025 ​ ​ 15,346 ​ Long-term restricted cash ​ 7,553 ​ 7,552 ​ Deferred income taxes ​ ​ 69,334 ​ ​ 68,277 ​ Other assets ​ 48,969 ​ 50,593 ​ Total assets ​ $ 1,340,618 ​ $ 1,348,781 ​ LIABILITIES AND STOCKHOLDERS’ EQUITY ​ Current liabilities: ​ ​ ​ ​ ​ ​ ​ Accounts payable ​ $ 38,985 ​ $ 46,928 ​ Accrued compensation ​ 14,796 ​ 25,536 ​ Warranty ​ 11,882 ​ 13,022 ​ Deferred revenue ​ 110,456 ​ 94,673 ​ Current portion of finance lease obligation ​ 1,370 ​ 1,345 ​ Other current liabilities ​ 22,881 ​ 26,018 ​ Total current liabilities ​ 200,370 ​ 207,522 ​ Long-term finance lease obligation ​ 41,958 ​ 42,329 ​ Long-term deferred revenue ​ 28,868 ​ 43,501 ​ Other long-term liabilities ​ 42,184 ​ 42,639 ​ Total liabilities ​ 313,380 ​ 335,991 ​ Commitments and contingencies (Note 17) ​ ​ ​ ​ ​ ​ ​ Stockholders’ equity: ​ ​ ​ ​ ​ ​ ​ Common stock, $ 0.001 par value, 75,000 shares authorized; 32,129 shares issued and outstanding at March 31, 2025; 32,365 shares issued and outstanding at December 31, 2024 ​ 32 ​ 32 ​ Additional paid-in capital ​ 547,020 ​ 548,654 ​ Retained earnings ​ 485,673 ​ 470,318 ​ Accumulated other comprehensive loss ​ ( 5,487 ) ​ ( 6,214 ) ​ Total stockholders’ equity ​ 1,027,238 ​ 1,012,790 ​ Total liabilities and stockholders’ equity ​ $ 1,340,618 ​ $ 1,348,781 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ See accompanying Notes to these Consolidated Financial Statements (Unaudited) ​ 5 Table of Contents Axcelis Technologies, Inc. Consolidated Statements of Stockholders’ Equity (In thousands) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ Other ​ Total ​ ​ ​ Common Stock ​ Paid-in ​ Retained ​ Comprehensive ​ Stockholders’ ​ ​ Shares Amount Capital Earnings (Loss) Equity Balance at December 31, 2023 ​ ​ 32,685 ​ $ 33 ​ $ 547,189 ​ $ 319,506 ​ $ ( 1,846 ) ​ $ 864,882 ​ Net income ​ — ​ — ​ — ​ 51,595 ​ — ​ 51,595 ​ Foreign currency translation adjustments ​ — ​ — ​ — ​ — ​ ( 1,731 ) ​ ( 1,731 ) ​ Change in pension obligation ​ — ​ — ​ — ​ — ​ 5 ​ 5 ​ Issuance of common stock on restricted stock units, net of shares withheld ​ 42 ​ — ​ ( 2,699 ) ​ — ​ — ​ ( 2,699 ) ​ Stock-based compensation expense ​ ​ — ​ — ​ 4,690 ​ — ​ — ​ 4,690 ​ Repurchase of common stock ​ ( 122 ) ​ — ​ ( 2,201 ) ​ ( 12,798 ) ​ — ​ ( 14,999 ) ​ Balance at March 31, 2024 ​ 32,605 ​ $ 33 ​ $ 546,979 ​ $ 358,303 ​ $ ( 3,572 ) ​ $ 901,743 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ Other ​ Total ​ ​ ​ Common Stock ​ Paid-in ​ Retained ​ Comprehensive ​ Stockholders’ ​ ​ Shares Amount Capital Earnings (Loss) Equity Balance at December 31, 2024 ​ ​ 32,365 ​ $ 32 ​ $ 548,654 ​ $ 470,318 ​ $ ( 6,214 ) ​ $ 1,012,790 Net income ​ — ​ — ​ — ​ 28,579 ​ — ​ 28,579 Foreign currency translation adjustments ​ — ​ — ​ — ​ — ​ 646 ​ 646 Unrealized gains on available-for-sale investments ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 81 ​ ​ 81 Issuance of common stock on restricted stock units, net of shares withheld ​ 38 ​ — ​ ( 1,583 ) ​ — ​ — ​ ( 1,583 ) Stock-based compensation expense ​ ​ — ​ — ​ 4,903 ​ — ​ — ​ 4,903 Repurchase of common stock ​ ( 274 ) ​ — ​ ( 4,954 ) ​ ( 13,224 ) ​ — ​ ( 18,178 ) Balance at March 31, 2025 ​ 32,129 ​ $ 32 ​ $ 547,020 ​ $ 485,673 ​ $ ( 5,487 ) ​ $ 1,027,238 ​ ​ See accompanying Notes to these Consolidated Financial Statements (Unaudited) 6 Table of Contents Axcelis Technologies, Inc. Consolidated Statements of Cash Flows (In thousands) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ ​ ​ March 31, ​ ​ 2025 2024 Cash flows from operating activities ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 28,579 ​ $ 51,595 ​ Adjustments to reconcile net income to net cash provided by operating activities: ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization ​ 4,309 ​ 3,775 ​ Deferred income taxes ​ ( 1,057 ) ​ ( 1,097 ) ​ Stock-based compensation expense ​ 4,903 ​ 4,690 ​ Provision for doubtful accounts ​ ​ — ​ ​ ( 459 ) ​ Provision for excess and obsolete inventory ​ 875 ​ 1,445 ​ Accretion of discounts and premiums on marketable securities ​ ​ ( 618 ) ​ ​ ( 3,306 ) ​ Unrealized currency (gain) loss on foreign denominated transactions ​ ​ ( 752 ) ​ ​ 6,560 ​ Mark-to-market adjustment on forward exchange contracts ​ ​ ( 130 ) ​ ​ — ​ Changes in operating assets and liabilities: ​ ​ ​ ​ ​ ​ ​ Accounts receivable ​ 38,586 ​ 7,042 ​ Inventories ​ ( 12,386 ) ​ ( 11,427 ) ​ Prepaid expenses and other current assets ​ 1,311 ​ ( 5,489 ) ​ Accounts payable and other current liabilities ​ ( 25,844 ) ​ ( 29,118 ) ​ Deferred revenue ​ 1,106 ​ ( 1,963 ) ​ Income taxes ​ 2,194 ​ 21,374 ​ Other assets and liabilities ​ ( 1,281 ) ​ ( 1,399 ) ​ Net cash provided by operating activities ​ 39,795 ​ 42,223 ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from investing activities ​ ​ ​ ​ ​ ​ ​ Expenditures for property, plant and equipment and capitalized software ​ ( 4,960 ) ​ ( 1,620 ) ​ Purchase of short-term investments ​ ( 252,495 ) ​ ( 145,121 ) ​ Maturities and sales of short-term investments ​ 297,924 ​ 91,050 ​ Net cash provided by (used in) investing activities ​ 40,469 ​ ( 55,691 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from financing activities ​ ​ ​ ​ ​ ​ ​ Net settlement on restricted stock grants ​ ( 1,583 ) ​ ( 2,699 ) ​ Repurchase of common stock ​ ( 18,178 ) ​ ( 14,999 ) ​ Principal payments on finance lease obligation ​ ​ ( 349 ) ​ ​ ( 357 ) ​ Net cash used in financing activities ​ ( 20,110 ) ​ ( 18,055 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Effect of exchange rate changes on cash and cash equivalents ​ 292 ​ ( 1,813 ) ​ Net increase (decrease) in cash, cash equivalents and restricted cash ​ 60,446 ​ ( 33,336 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash, cash equivalents and restricted cash at beginning of period ​ 131,064 ​ 173,951 ​ Cash, cash equivalents and restricted cash at end of period ​ $ 191,510 ​ $ 140,615 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ See accompanying Notes to these Consolidated Financial Statements (Unaudited) ​ 7 Table of Contents Axcelis Technologies, Inc. Notes to Consolidated Financial Statements (Unaudited) ​ Note 1. Nature of Business ​ Axcelis Technologies, Inc. (“Axcelis” or the “Company”) was incorporated in Delaware in 1995 and is a producer of ion implantation equipment used in the fabrication of semiconductor chips in the United States, Europe and Asia. In addition, we provide extensive worldwide aftermarket service and support, including spare parts, equipment upgrades, used equipment, and maintenance services to the semiconductor industry. ​ The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments which are of a normal recurring nature and considered necessary for a fair presentation of these financial statements have been included. Operating results for the interim periods presented are not necessarily indicative of the results that may be expected for other interim periods or for the year as a whole. ​ The balance sheet at December 31, 2024 has been derived from the audited consolidated financial statements at that date but does not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. As of March 31, 2025, there have been no material changes in the Company’s significant accounting policies, other than as described in Note 2 below. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Form 10-K”). ​ ​ Note 2. Significant Accounting Policies ​ Cash, Cash Equivalents and Short-term Investments ​ 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. government and agency securities and deposit accounts. 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 fair value. 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. Our short-term investments consist primarily of U.S. government and agency securities. 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. Any unrealized gains and losses are included in accumulated other comprehensive loss in the Consolidated Statement of Stockholder’s Equity. Income related to these securities is recorded in interest income in the Consolidated Statements of Operations . As of March 31, 2025, the amortized cost and fair value of the available-for-sale investments was $ 403.0 million and $ 403.1 million, respectively. As of March 31, 2025, we had no allowances for credit loss. ​ 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 as of 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. ​ Note 3. Stock-Based Compensation ​ We maintain the Axcelis Technologies, Inc. 2012 Equity Incentive Plan, as amended (the “2012 Equity Plan”), which became effective on May 2, 2012, and permits the issuance of options, restricted stock, restricted stock units (“RSUs”) and performance awards to selected employees, directors, and consultants of the Company. ​ 8 Table of Contents The 2012 Equity Plan is more fully described in Note 13 to the consolidated financial statements in our 2024 Form 10-K. ​ We recognized stock-based compensation expense of $ 4.9 million and $ 4.7 million for the three-month periods ended March 31, 2025 and 2024, respectively. These amounts include compensation expense related to RSUs and stock issued to participants under the 2020 Employee Stock Purchase Plan (the “2020 ESPP”). ​ In the three-month periods ended March 31, 2025 and 2024, we issued 38,459 and 41,941 shares of common stock, respectively, upon vesting of RSUs granted under the 2012 Equity Plan and purchases under the 2020 ESPP. In the three-month periods ended March 31, 2025 and 2024, we received no proceeds from purchases under the 2020 ESPP. ​ Note 4. Leases ​ We have operating leases for manufacturing, office space, warehouse space, computer and office equipment and vehicles used in our business operations. We have a finance lease in relation to the 2015 sale-leaseback of our corporate headquarters in Beverly, Massachusetts. We review all agreements to determine if the agreement contains a lease component. An agreement contains a lease component if it provides for the use of a specific physical space or a specific physical item. ​ We recognize operating lease obligations under Accounting Standards Codification Topic 842, Leases (“Topic 842”). The guidance in Topic 842 requires recognition of lease assets and related liabilities on a discounted basis using the explicit or implicit discount rate stated within the agreement. We recognize a corresponding right-of-use asset, which is initially determined based upon the net present value of the associated liability and is adjusted for deferred costs and possible impairment, if any. For those lease agreements that do not indicate the applicable discount rate, we use our incremental borrowing rate. We have made the following policy elections: (i) operating leases with an initial term of 12 months or less are not recorded on the consolidated balance sheets; (ii) we recognize lease expense for operating leases on a straight-line basis over the lease term; and (iii) we account for lease components and non-lease components that are fixed payments as one component. Some of our operating leases include one or more options to renew , with renewal terms that can extend the respective lease term by one to three years . 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. Certain leases also include options to purchase the leased property. The depreciable life of certain assets and leasehold improvements is limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. The amounts of operating and finance lease right-of-use assets and related lease obligations recorded within our consolidated balance sheets are as follows: ​ 9 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ ​ Leases Classification ​ 2025 2024 ​ Assets ​ ​ (in thousands) ​ ​ Operating leases Operating lease assets ​ $ 28,767 ​ $ 29,621 ​ ​ ​ Finance lease Finance lease assets* ​ 15,025 ​ 15,346 ​ ​ ​ Total leased assets ​ ​ $ 43,792 ​ $ 44,967 ​ ​ ​ Liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating Other current liabilities ​ $ 4,353 ​ $ 4,470 ​ ​ ​ Finance Current portion of finance lease obligation ​ ​ 1,370 ​ ​ 1,345 ​ ​ ​ Non-current ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating Other long-term liabilities ​ ​ 24,698 ​ ​ 25,321 ​ ​ ​ Finance Finance lease obligation ​ 41,958 ​ 42,329 ​ ​ ​ Total lease liabilities ​ ​ $ 72,379 ​ $ 73,465 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ *Finance lease assets are recorded net of accumulated depreciation of $ 47.7 million and include $ 0.5 million of prepaid financing costs as of March 31, 2025. Finance lease assets are recorded net of accumulated depreciation of $ 47.4 million and include $ 0.5 million of prepaid financing costs as of December 31, 2024. ​ ​ ​ ​ 10 Table of Contents Our operating lease office locations support local selling and servicing functions. Our Axcelis Asia Operations Center facility in South Korea is used to manufacture our products for Asia-based customers. We lease a logistics and flex manufacturing center in Beverly, Massachusetts to support our principal product manufacturing operations at our corporate headquarters. Operating lease expense and depreciation and interest expense relating to our finance lease obligation are recognized within our Consolidated Statement of Operations for the three months ended March 31, 2025 and 2024 as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ ​ ​ ​ March 31, ​ ​ Lease cost Classification ​ 2025 2024 ​ Operating lease cost ​ ​ (in thousands) ​ Product / services* Cost of revenue ​ $ 1,674 ​ $ 1,828 ​ ​ Research and development Operating expenses ​ 219 ​ 123 ​ ​ Sales and marketing* Operating expenses ​ 444 ​ 451 ​ ​ General and administrative* Operating expenses ​ 326 ​ 194 ​ ​ Total operating lease cost ​ ​ $ 2,663 ​ $ 2,596 ​ ​ Finance lease cost ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation of leased assets Cost of revenue, Research and development, Sales and marketing and General and administrative ​ $ 321 ​ $ 319 ​ ​ Interest on lease liabilities Interest expense ​ 1,156 ​ 1,197 ​ ​ Total finance lease cost ​ ​ $ 1,477 ​ $ 1,516 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total lease cost ​ ​ $ 4,140 ​ $ 4,112 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ * Product / services, sales and marketing and general and administrative expense also includes short-term lease and variable lease costs of approximately $ 0.6 million for both the three months ended March 31, 2025 and 2024. ​ ​ ​ ​ The lease of our corporate headquarters, shown below under finance leases, had an original lease term of 22 years , beginning in January 2015 and expiring in January 2037, with renewal options. All other locations are treated as operating leases, with lease terms ranging from one to 16 years . The tables below reflect the minimum cash outflow regarding our current lease obligations as well as the weighted-average remaining lease term and weighted-average discount rates used in our calculation of our lease obligations and right-of-use assets as of March 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Finance ​ Operating Total Maturity of Lease Liabilities ​ Leases ​ Leases ​ Leases ​ ​ ​ (in thousands) ​ 2025 ​ $ 4,425 ​ $ 4,641 ​ $ 9,066 ​ 2026 ​ 6,008 ​ 5,032 ​ 11,040 ​ 2027 ​ 6,128 ​ 3,344 ​ 9,472 ​ 2028 ​ 6,251 ​ 2,417 ​ 8,668 ​ 2029 ​ ​ 6,376 ​ ​ 2,271 ​ ​ 8,647 ​ Thereafter ​ ​ 48,960 ​ ​ 22,384 ​ ​ 71,344 ​ Total lease payments ​ $ 78,148 ​ $ 40,089 ​ $ 118,237 ​ Less interest portion* ​ ​ ( 34,820 ) ​ ​ ( 11,038 ) ​ ​ ( 45,858 ) ​ Finance lease and operating lease obligations ​ $ 43,328 ​ $ 29,051 ​ $ 72,379 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ * Finance lease interest calculated using the implied interest rate; operating lease interest calculated using estimated corporate borrowing rate. ​ ​ The table above does not include options to renew lease terms that are not reasonably certain of being exercised. ​ 11 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ Lease term and discount rate 2025 ​ Weighted-average remaining lease term (years): ​ ​ ​ ​ Operating leases ​ ​ 11.0 ​ Finance leases ​ 11.8 ​ Weighted-average discount rate: ​ ​ ​ ​ Operating leases ​ 5.5 % ​ Finance leases ​ 10.5 % ​ ​ ​ ​ ​ ​ ​ Our cash outflows from our operating leases include rent expense and other charges associated with these leases. These cash flows are included within the operating activities section of our statement of cash flows. Our cash flows from our finance lease include both an interest component and a principal component. The table below shows our cash outflows by lease type and related section of our statement of cash flows, as well as the non-cash amount capitalized on our balance sheet in relation to our operating lease right-of-use assets for the three months ended March 31, 2025 and 2024, respectively: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended March 31, Cash paid for amounts included in the measurement of lease liabilities 2025 2024 ​ ​ (in thousands) Operating cash outflows from operating leases ​ $ 2,663 ​ $ 2,596 Operating cash outflows from finance leases ​ 1,156 ​ 1,197 Financing cash outflows from finance leases ​ 349 ​ 357 Operating lease assets obtained in exchange for operating lease liabilities ​ 500 ​ 632 Finance lease assets obtained in exchange for new finance lease liabilities ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ Note 5. Revenue ​ To reflect the organization of our business operations, we divide revenue into two categories: revenue from sales of new systems and revenue arising from the sale of used systems, parts, and labor to customers who own systems, which we refer to as “Aftermarket.” ​ Revenue by categories used by management are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ ​ ​ March 31, ​ ​ ​ 2025 ​ 2024 ​ ​ ​ (in thousands) ​ Systems ​ $ 137,609 ​ $ 195,432 ​ Aftermarket ​ ​ 54,954 ​ ​ 56,940 ​ Total Revenue ​ $ 192,563 ​ $ 252,372 ​ ​ 12 Table of Contents We also consider revenue by geography. Revenue is allocated to geographic markets based upon the location to which our products are shipped and in which our services are performed. Revenue in our principal geographic markets is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ ​ ​ March 31, ​ ​ ​ 2025 ​ 2024 ​ ​ ​ (in thousands) ​ North America ​ $ 40,525 ​ $ 45,503 ​ Asia Pacific ​ ​ 134,426 ​ ​ 188,217 ​ Europe ​ ​ 17,612 ​ ​ 18,652 ​ Total Revenue ​ $ 192,563 ​ $ 252,372 ​ ​ Our system sales revenue transactions give rise to contract liabilities (in the case of pre-payments and the fair value of goods and services to be delivered after the system delivery, such as installation and certain warranty obligations). ​ Contract liabilities are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ 2025 ​ 2024 ​ ​ (in thousands) Contract liabilities ​ $ 139,324 ​ $ 138,174 ​ ​ ​ ​ ​ ​ ​ Contract liabilities are reflected as deferred revenue on the consolidated balance sheets and include payments received in advance of system sales as well as deferral of revenue from systems sales for installation and other future performance obligations. Contract liabilities are recognized as revenue upon the fulfillment of performance obligations. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ ​ ​ March 31, ​ ​ 2025 ​ 2024 ​ ​ ​ (in thousands) ​ Balance, beginning of the period ​ $ 138,174 ​ $ 210,885 ​ Deferral of revenue* ​ ​ 26,359 ​ ​ 42,974 ​ Recognition of deferred revenue ​ ​ ( 25,209 ) ​ ​ ( 45,441 ) ​ Balance, end of the period ​ $ 139,324 ​ $ 208,418 ​ ​ * Amount includes a reclassification of $ 8.0 million of a refund liability included within other current liabilities as of December 31, 2024 to deferred revenue for the three months ended March 31, 2025. ​ The majority of our system transactions have either (1) payment terms of 90 % due upon shipment of the system and 10 % due upon acceptance or (2) a pre-shipment deposit ranging from 20 % to 60 %, with the remainder due upon shipment, less 10 % due at acceptance. Aftermarket transaction payment terms typically provide that payment is due either within 30 or 60 days after the service is provided or parts delivered. ​ Note 6. Receivables and Allowances for Credit Losses ​ 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. ​ We maintain an allowance for credit losses, which represents an estimate of expected losses over the remaining contractual life of our receivables, considering current market conditions and estimates for supportable forecasts when appropriate. The estimate is a result of our ongoing assessments and evaluations of collectability, historical loss experience, and future expectations in estimating credit losses in our receivable portfolio. We use historical loss experience rates and apply them to a related aging analysis while also considering customer and/or economic risk where appropriate. Determination of the proper amount of allowances requires management to exercise judgment about the timing, frequency 13 Table of Contents and severity of credit losses that could materially affect the provision for credit losses and, as a result, net earnings. The allowance takes into consideration numerous quantitative and qualitative factors that include receivable type, historical loss experience, loss migration, delinquency trends, collection experience, current economic conditions, trade restrictions, estimates for supportable forecasts, when appropriate, and credit risk characteristics. ​ We evaluate the credit risk of the customer when extending credit based on a combination of financial and qualitative factors that may affect our customers’ ability to pay. These factors may include the customer’s financial condition, past payment experience, and credit bureau report, as well as the value of the underlying collateral. ​ Management performs detailed reviews of our receivables on a quarterly basis to assess the adequacy of the allowances and to determine if any impairment has occurred. Amounts determined to be uncollectable are charged directly against the allowances, while amounts recovered on previously written-off accounts increase the allowances. Changes to the allowances for credit losses are maintained through adjustments to the provision for credit losses, which are charged to current period earnings. We did not have any allowance or incur any credit losses or recoveries for the three-month period ended March 31, 2025. We recorded $ 0.5 million of recovery of bad debt expense for the three month period ended March 31, 2024. As of both March 31, 2025 and March 31, 2024, we had no provision for credit losses. ​ ​ Note 7. Computation of Net Earnings 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. The computation of diluted earnings per share is similar to basic earnings per share, except that the denominator is increased by the number of additional shares of common stock that would have been outstanding if the potentially dilutive shares of common stock issuable on vesting of RSUs had been issued, calculated using the treasury stock method. ​ The components of net earnings per share are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ ​ ​ March 31, ​ ​ 2025 2024 ​ ​ (in thousands, except per share amounts) ​ Net income available to common stockholders ​ $ 28,579 ​ $ 51,595 ​ Weighted average shares of common stock outstanding used in computing basic income per share ​ 32,258 ​ 32,638 ​ Incremental RSUs ​ 77 ​ 288 ​ Weighted average shares of common stock used in computing diluted net income per share ​ 32,335 ​ 32,926 ​ Net income per share ​ ​ ​ ​ ​ ​ ​ Basic ​ $ 0.89 ​ $ 1.58 ​ Diluted ​ $ 0.88 ​ $ 1.57 ​ ​ ​ Diluted weighted average shares of common stock outstanding does not include 325,364 and 19,548 common equivalent shares issuable with respect to outstanding equity awards for the three-month periods ended March 31, 2025 and 2024, respectively, as their effect would have been anti-dilutive. ​ ​ 14 Table of Contents Note 8. Accumulated Other Comprehensive Loss ​ The following table presents the changes in accumulated other comprehensive loss, net of tax, by component, for the three months ended March 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrealized gains on ​ ​ ​ ​ Foreign Defined benefit ​ available-for-sale ​ ​ ​ ​ ​ ​ currency ​ pension plan ​ investments ​ Total ​ ​ (in thousands) Balance at December 31, 2024 ​ $ ( 6,253 ) ​ $ 39 ​ $ — ​ $ ( 6,214 ) ​ Other comprehensive income and reclassifications ​ 646 ​ — ​ 81 ​ 727 ​ Balance at March 31, 2025 ​ $ ( 5,607 ) ​ $ 39 ​ $ 81 ​ $ ( 5,487 ) ​ ​ ​ ​ Note 9. Cash, cash equivalents and restricted cash ​ The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets to the total of the amounts shown in the statement of cash flows: ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ 2025 ​ ​ 2024 ​ ​ (in thousands) ​ Cash and cash equivalents $ 183,957 ​ $ 123,512 ​ Long-term restricted cash ​ 7,553 ​ ​ 7,552 ​ Total cash, cash equivalents and restricted cash $ 191,510 ​ $ 131,064 ​ ​ As of March 31, 2025, we had $ 7.6 million in restricted cash representing the total of (i) a $ 5.9 million cash collateralized letter of credit serving as a security deposit for our headquarters lease in Beverly, Massachusetts, (ii) a $ 0.9 million letter of credit for custom purposes, (iii) a $ 0.7 million cash collateralized letter of credit relating to workers’ compensation insurance and (iv) a $ 0.1 million deposit relating to customs activity. See Note 13 for further discussion on the $ 5.9 million cash collateralized letter of credit. ​ Note 10. Inventories, net ​ The components of inventories are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ 2025 2024 ​ ​ (in thousands) ​ Raw materials ​ $ 224,943 ​ $ 227,141 ​ Work in process ​ 45,692 ​ 34,490 ​ Finished goods (completed systems) ​ 25,215 ​ 20,594 ​ Inventories, net ​ $ 295,850 ​ $ 282,225 ​ ​ When recorded, inventory reserves 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 regularly evaluate the ability to realize the value of inventories based on a combination of factors including the following: forecasted sales or usage, estimated product end of life dates, estimated current and future market value and new product introductions. Purchasing and usage alternatives are also explored to mitigate inventory exposure. ​ Note 11. Product Warranty ​ We generally offer a one-year warranty for all of our systems, the terms and conditions of which vary depending upon the product sold. For all systems sold, we accrue a liability for the estimated cost of standard warranty at the time of system shipment and, if applicable, defer the portion of systems revenue attributable to non-standard warranty. Costs for 15 Table of Contents non-standard warranty are expensed as incurred. Factors that affect our warranty liability include the number of installed units, historical and anticipated product failure rates, material usage and service labor costs. We periodically assess the adequacy of our recorded liability and adjust the amount as necessary. ​ The changes in our standard product warranty liability are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ ​ ​ March 31, ​ ​ 2025 2024 ​ ​ (in thousands) ​ Balance at January 1 (beginning of year) ​ $ 15,183 ​ $ 16,757 ​ Warranties issued during the period ​ 2,165 ​ 2,809 ​ Settlements made during the period ​ ( 3,298 ) ​ ( 3,022 ) ​ Changes in estimate of liability for pre-existing warranties during the period ​ ( 396 ) ​ 88 ​ Balance at March 31 (end of period) ​ $ 13,654 ​ $ 16,632 ​ ​ ​ ​ ​ ​ ​ ​ ​ Amount classified as current ​ $ 11,882 ​ $ 14,355 ​ Amount classified as long-term (within other long-term liabilities) ​ 1,772 ​ 2,277 ​ Total warranty liability ​ $ 13,654 ​ $ 16,632 ​ ​ ​ Note 12. Fair Value Measurements ​ Fair value is defined as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ​ (a) Fair Value Hierarchy ​ The accounting guidance for fair value measurement requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is as follows: ​ Level 1 - applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. ​ Level 2 - applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability, such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. ​ Level 3 - applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. ​ (b) Fair Value Measurements ​ Our money market funds and short-term investments with initial maturities of three months or less are included in cash and cash equivalents in the consolidated balance sheets. Other investments that have a maturity of greater than three months but less than one year are included within short-term investments in the consolidated balance sheets. ​ 16 Table of Contents The following tables set forth our assets which are measured at fair value by level within the fair value hierarchy: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2025 ​ ​ Fair Value Measurements ​ Level 1 Level 2 Level 3 Total ​ ​ (in thousands) Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash equivalents and other short-term investments: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash equivalents (money market funds, U.S. Government Securities and Agency Investments) ​ $ 141,225 ​ $ — ​ $ — ​ $ 141,225 ​ Short-term investments (U.S. Government Securities and Agency Investments) ​ ​ 403,102 ​ ​ — ​ ​ — ​ ​ 403,102 ​ Mark-to-market adjustment on forward exchange contracts ​ ​ — ​ ​ 130 ​ ​ — ​ ​ 130 ​ Total ​ $ 544,327 ​ $ 130 ​ $ — ​ $ 544,457 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ ​ Fair Value Measurements ​ Level 1 Level 2 Level 3 Total ​ ​ (in thousands) Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash equivalents and other short-term investments: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash equivalents (money market funds, U.S. Government Securities and Agency Investments) ​ $ 81,320 ​ $ — ​ $ — ​ $ 81,320 ​ Short-term investments (U.S. Government Securities and Agency Investments) ​ ​ 448,296 ​ ​ — ​ ​ — ​ ​ 448,296 ​ Mark-to-market adjustment on forward exchange contracts ​ ​ — ​ ​ 267 ​ ​ — ​ ​ 267 ​ Total ​ $ 529,616 ​ $ 267 ​ $ — ​ $ 529,883 ​ ​ (c) Other Financial Instruments ​ The carrying amounts reflected in the consolidated balance sheets for accounts receivable, prepaid expenses, forward currency exchange contracts and other current assets 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 and any mark-to-market valuation adjustments related to these open contracts are recorded in the current asset or current liability account and any unrealized gain or loss recognized is 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 March 31, 2025, the recognized unrealized loss on these forward exchange contracts was approximately $ 0.1 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 March 31, 2025, such credit risks have not had an adverse impact on the fair value of these instruments. ​ Note 13. Financing Arrangements ​ On January 30, 2015, we sold our corporate headquarters facility in Beverly, Massachusetts for $ 48.9 million. As part of the sale, we also entered into a 22-year lease agreement of our headquarters facility. This sale-leaseback is accounted for as a finance lease under generally accepted accounting principles and, as such, we have recorded a finance lease obligation of $ 43.3 million as of March 31, 2025. The associated lease payments include both an interest component and payment of principal, with the remaining liability being extinguished at the end of the original lease term. As of March 17 Table of Contents 31, 2025, we had a security deposit of $ 5.9 million related to this lease in the form of a cash collateralized letter of credit issued with UBS Bank USA, which is classified as long-term restricted cash on our balance sheet at March 31, 2025. ​ Note 14. Income Taxes ​ Income tax expense was $ 4.5 million for the three months ended March 31, 2025, compared to $ 7.4 million for the three months ended March 31, 2024. The $ 2.9 million decrease was primarily due to a decrease in pre-tax book income. ​ The effective tax rate (“ETR”) for the three months ended March 31, 2025 was less than the U.S. statutory rate of 21 % primarily attributable to Foreign Derived Intangible Income deduction and Federal research and development tax credits. The reported ETR for the three months ended March 31, 2025 was 13.6 % compared to 12.5 % for the respective 2024 period. The increase in the reported ETR is primarily related to a decrease in pre-tax book income and stock-based compensation. ​ Note 15. Concentration of Risk ​ For the three months ended March 31, 2025, two customers accounted for 15.3 % and 15.2 % of total revenue, respectively. For the three months ended March 31, 2024, no individual customer accounted for greater than ten percent of total revenue. ​ ​ At March 31, 2025, three customers accounted for 10.7 %, 10.5 % and 10.4 % of accounts receivable, respectively. At December 31, 2024, one customer accounted for 10.0 % of accounts receivable. ​ Note 16. Share Repurchase ​ In March 2025, our Board of Directors approved an additional funding of $ 100 million for our stock repurchase program. This approval brings the current outstanding repurchase authorization to $ 215 million. During the three months ended March 31, 2025, we repurchased 0.3 million shares of common stock at an average cost of $ 66.22 per share. The timing and actual number of any additional shares to be repurchased under this program will depend on various factors including price, corporate and regulatory requirements, alternative investment opportunities and other market conditions. ​ Repurchased shares are accounted for when the transaction is settled and returned to the status of authorized but unissued shares. Accordingly, on our balance sheet, the repurchase price is deducted from common stock par value and from additional paid-in capital for the excess over par value. If additional paid-in capital has been exhausted, the excess over par value is deducted from retained earnings. Direct costs incurred to acquire the shares are included in the total cost of the shares. ​ Note 17. Contingencies ​ (a) Litigation ​ We are from time to time a party to litigation that arises in the normal course of our business operations. We are not presently a party to any litigation that we believe might have a material adverse effect on our business operations. ​ (b) Indemnifications ​ Our system sales agreements typically include provisions under which we agree to take certain actions, provide certain remedies and defend our customers against third-party claims of intellectual property infringement under specified conditions and indemnify customers against any damage and costs awarded in connection with such claims. We have not incurred any material costs as a result of such indemnifications and have not accrued any liabilities related to such obligations in the accompanying consolidated financial statements. ​ 18 Table of Contents Note 18. Business Segment ​ The Company operates as one operating segment. The Company’s chief operating decision maker (“CODM”) is our chief executive officer, who assesses financial performance for the Company and decides how to allocate resources based on consolidated net income. Segment asset information is provided to the CODM but it is not used to allocate resources. ​ The following table presents selected financial information with respect to the Company’s single operating segment for the three months ended March 31, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended March 31, ​ ​ ​ 2025 2024 ​ ​ ​ (in thousands) ​ Revenue: ​ $ 192,563 ​ $ 252,372 ​ Less: ​ ​ ​ ​ ​ ​ ​ Cost of revenue ​ ​ 103,795 ​ ​ 136,321 ​ Research and development ​ ​ 27,128 ​ ​ 25,662 ​ Sales and marketing ​ ​ 15,124 ​ ​ 17,445 ​ General and administrative ​ ​ 17,357 ​ ​ 16,405 ​ Total other income ​ ​ 3,925 ​ ​ 2,460 ​ Income tax provision ​ ​ 4,505 ​ ​ 7,404 ​ Segment Net Income ​ ​ 28,579 ​ ​ 51,595 ​ Reconciliation of profit or loss Adjustments and reconciling items ​ ​ - ​ ​ - ​ Net income ​ $ 28,579 ​ $ 51,595 ​ ​ The above table includes depreciation expense and amortization expense of $ 4.3 million and $ 3.8 million for the three months ended March 31, 2025 and 2024, respectively. ​ Note 19. 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”). 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. We are currently evaluating the impact of ASU 2023-09 on our 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): Disaggregation of Income Statement Expenses (“ASU 2024-03”). ASU 2024-03 is intended to enhance the disclosures for expenses for all public entities in accordance with ASC Topic 220, Income Statement-Reporting Comprehensive Income. ASU 2024-03 addresses investor requests for more detailed information about expenses, specifically cost of sales and selling, general, and administrative expenses. ASU 2024-03 requires a public entity to disclose the amounts of (a) purchases of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and (e) depreciation, depletion, and amortization recognized as part of oil- and gas-producing activities (or other amounts of depletion expense) included in each relevant expense caption presented on the face of the income statement as well as a qualitative description of the amounts remaining in the relevant expense captions that are not separately disaggregated quantitatively. ASU 2024-03 also requires a public entity to disclose the total amount of selling expenses and the entity’s definition of selling expenses. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. 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. The Company is currently evaluating the impact of ASU 2024-03 on its future consolidated financial statements and related disclosures. 19 Table of Contents