What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2025-02-14 compared with 2024-02-16 · 175 added, 227 removed, 1090 unchanged (27% of the section changed)

4 unchanged sentences

Our principal executive and financial officers are responsible for establishing and maintaining adequate internal control over financial reporting, which is a process designed and put into effect to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Using the criteria established in the Internal Control — Integrated Framework (2013) published by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), Management has evaluated, assessed, and concluded that internal control over financial reporting is effective as of December 31, 2023.

Using the criteria established in the Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, Management has evaluated, assessed, and concluded that internal control over financial reporting is effective as of December 31, 2024.

KPMG LLP, an independent registered public accounting firm, has audited the consolidated financial statements included in this Annual Report on Form 10-K and, as part of their audit, has issued their report, included herein, on the effectiveness of our internal control over financial reporting.

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Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

To the Stockholders and the Board of Directors

Veeco Instruments Inc.:

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None of the material on this website is part of this report.

We have a Securities Trading Policy governing the purchase, sale, and other dispositions of our securities that applies to all our directors, officers, employees, and other individuals associated with us.

We believe that our Securities Trading Policy is reasonably designed to promote compliance with insider trading laws, rules and regulations, as well as applicable listing standards.

A copy of our Securities Trading Policy is filed as Exhibit 19.1 to this Form 10-K.

Executive Compensation

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Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 .

Amendment No.

2 to the Veeco Instruments Inc.

2019 Stock Incentive Plan dated as of May 9, 2024.

Lease dated February 18, 2021 between Veeco Instruments Inc.

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First Amendment to Loan and Security Agreement, dated as of May 19, 2023, by and among Veeco Instruments Inc., as borrower, the guarantors party thereto, the lenders from time to time party thereto and HSBC Bank USA, National Association, as administrative agent, collateral agent, joint lead arranger, and joint bookrunner, Barclays Bank PLC, as joint lead arranger and joint bookrunner, and Santander Bank, N.A.

Form of Notice of Performance Restricted Stock Unit Award and related terms and conditions pursuant to the Veeco 2010 Stock Incentive Plan, effective March 2019 .

Form of Notice of Restricted Stock Award and related terms and conditions pursuant to the Veeco 2010 Stock Incentive Plan, effective March 2019 (time-based version A) .

Incorporated by Reference

Exhibit Description

Form of Notice of Restricted Stock Award and related terms and conditions pursuant to the Veeco 2010 Stock Incentive Plan, effective March 2019 (time-based version B) .

Third Amendment to Loan and Security Agreement, dated as of August 2, 2024, by and among Veeco Instruments Inc., as borrower, the guarantors party thereto, HSBC Bank USA, National Association, as administrative agent and collateral agent, Citizens Bank, N.A., and the lenders from time to time party thereto.

Form of Notice of Performance Restricted Stock Unit Award and related terms and conditions pursuant to the Veeco 2019 Stock Incentive Plan, effective March 2020.

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Form of Notice of Restricted Stock Award and related terms and conditions pursuant to the Veeco 2019 Stock Incentive Plan, effective March 2023.

Form of Notice of Performance Restricted Stock Unit Award and related terms and conditions pursuant to the Veeco 2019 Stock Incentive Plan, effective March 2024.

Form of Notice of Restricted Stock Unit Award and related terms and conditions pursuant to Veeco 2019 Stock Incentive Plan, effective March 2024.

Veeco 2013 Inducement Stock Incentive Plan, effective September 26, 2013 .

5 unchanged sentences

2016 Employee Stock Purchase Plan .

Incorporated by Reference

Exhibit Description

Form of Amended and Restated Indemnification Agreement entered into between Veeco and each of its directors and executive officers (August 2017).

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Letter Agreement dated August 29, 2018 between Veeco and Dr.

Incorporated by Reference

Exhibit Description

Amendment dated March 22, 2019 to the Letter Agreement between Veeco and William J.

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Letter Agreement dated March 9, 2020 between Veeco and Susan Wilkerson.

Veeco Instruments Inc.

Securities Trading Policy

Subsidiaries of the Registrant.

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XBRL Calculation.

Incorporated by Reference

Exhibit Description

XBRL Definition.

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Report of Independent Registered Public Accounting F irm

To the Stockholders and Board of Directors

To the Stockholders and the Board of Directors

Veeco Instruments Inc.:

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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, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 14, 2025 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Change in Accounting Principle

As discussed in Note 1 to the consolidated financial statements, the Company has changed its method of accounting for the convertible senior notes as of January 1, 2022 due to the adoption of Accounting Standards Update No.

Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, using the modified retrospective method.

Basis for Opinion

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Assessment of the value of excess and obsolete inventory

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For certain inventory items, we compared the prior year estimate of anticipated demand to actual results to assess the Company’s ability to accurately forecast.

Acquisition-date fair value of a developed technology intangible asset and contingent consideration in the acquisition of Epiluvac AB

As discussed in Note 5 to the consolidated financial statements, on January 31, 2023, the Company acquired Epiluvac AB (Epiluvac) in a business combination for total purchase consideration of $56.4 million, including contingent consideration.

In connection with the transaction, the purchase price was allocated to the assets and liabilities assumed by the Company based on their fair values as of the acquisition date, primarily comprised of developed technology with the estimated fair value of $28.0 million.

The acquisition date fair value of the contingent consideration was approximately $26.1 million, which includes payments up to $15.0 million based on the timely completion of certain defined milestones tied to strategic targets, and up to $20.0 million based on the percentage of orders received during the defined earn-out period.

The Company estimated the fair value of the developed technology based on a discounted cash flow model.

The Company estimated the fair value of the contingent consideration by assigning probabilities and discount factors to each of the various defined performance milestones, while using a Monte-Carlo simulation model to determine the most likely outcome for payments to be based on value of orders received.

We identified the evaluation of the acquisition-date fair value of developed technology and the acquisition-date fair value of the contingent consideration related to the orders received during the defined earn-out period as a critical audit matter.

A higher degree of auditor judgment was required to evaluate the Company’s determination of certain projected revenues used in the fair value of the developed technology and the fair value of the contingent consideration because there was limited observable market information.

Additionally, specialized skills and knowledge were required to evaluate the discount rates used to determine in the fair value of the developed technology and the fair value of the contingent consideration.

Changes in certain projected revenues and discount rates could have a significant impact on the fair value of the acquired developed technology and the contingent consideration liability.

The following are the primary procedures we performed to address the critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s acquisition-date valuation process, including controls over the determination of certain projected revenues and discount rates.

We evaluated the Company’s determination of certain projected revenues by (1) inquiring of individuals outside of the accounting function about the underlying assumptions used to determine certain projected revenues and the process used to develop them, (2) comparing the underlying assumptions to relevant industry reports, (3) and comparing the underlying assumptions to relevant competitor investor presentation materials.

In addition, we involved valuation professionals with specialized skills and knowledge who assisted in:

● evaluating the discount rate applied to the developed technology intangible asset by reconciling it to the weighted average cost of capital that was calculated using publicly available market data

● evaluating the discount rate applied to the contingent consideration by comparing it to a discount rate that was independently developed using publicly available market data

● developing a fair value estimate of the contingent consideration using a parallel Monte-Carlo simulation and comparing it to the Company’s estimate.

We have served as the Company’s auditor since 2015.

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Amortization of intangible assets

Asset impairment

Other operating expense (income), net

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Balance at December 31, 2021

Cumulative effect of change in accounting principle - adoption of ASU 2020-06

Net income (loss)

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Net issuance under employee stock plans

Extinguishment of equity component of repurchased/exchanged 2023 Notes

Balance at December 31, 2022

Cumulative effect of change in accounting principle - adoption of ASU 2020-06

Net income (loss)

2 unchanged sentences

Net issuance under employee stock plans

Partial extinguishment of 2025 and 2027 Notes

Balance at December 31, 2023

3 unchanged sentences

Net issuance under employee stock plans

Partial extinguishment of 2025 and 2027 Notes

Balance at December 31, 2024

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Net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Depreciation and amortization

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Loss on extinguishment of debt

Asset impairment

Impairment of equity investments

Provision for bad debts

Change in contingent consideration

Changes in contingent consideration

Changes in operating assets and liabilities:

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Payments for purchases of investments

Proceeds from held for sale assets, net of costs to sell

Proceeds from sale of productive assets

Net cash provided by (used in) investing activities

Cash Flows from Financing Activities

Restricted stock tax withholdings

Contingent consideration payments

Proceeds (net of tax withholdings) from option exercises and employee stock purchase plan

Proceeds from issuance of 2029 Notes, net of issuance costs

Extinguishment of convertible notes

Debt issuance costs

Contingent consideration payment

Proceeds (net of tax withholdings) from option exercises and employee stock purchase plan

Restricted stock tax withholdings

Net cash provided by (used in) financing activities

5 unchanged sentences

Interest paid

Income taxes paid (refunds received)

Income taxes paid, net of refunds received

Non-cash activities

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The Company’s fourth quarter always ends on the last day of the calendar year, December 31.

During 2023 the interim quarters ended on April 2, July 2, and October 1, and during 2022 the interim quarters ended on April 3, July 3, and October 2.

During 2024 the interim quarters ended on March 31, June 30, and September 29, and during 2023 the interim quarters ended on April 2, July 2, and October 1.

The Company reports these interim quarters as March 31, June 30, and September 30 in its interim consolidated financial statements.

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Consequently, the total compensation expense is recognized straight-line over the entire vesting period, so long as the compensation cost recognized at any date at least equals the portion of the grant date fair value of the award that is vested at that date.

Additionally, the Company will make adjustments to compensation expense for forfeitures as they occur.

In addition to stock options, restricted share awards (“RSAs”) and restricted stock units (“RSUs”) with time-based vesting, the Company grants performance share units and awards (“PSUs” and “PSAs”) that have either performance or market conditions.

Compensation cost for PSUs and PSAs with performance conditions is recognized over the requisite service period based on the timing and expected level of achievement of the performance targets.

A change in the assessment of performance attainment prior to the conclusion of the performance period is recognized in the period of the change in estimate.

Compensation cost for PSUs and PSAs with market conditions is recognized over the requisite service period regardless of the expected level of achievement.

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Historically, the Company has not experienced any material credit losses on its investments.

The Company maintains an allowance reserve for potentially uncollectible accounts for estimated losses resulting from the inability of its customers to make required payments.

The Company maintains an allowance reserve for potentially uncollectible accounts receivable for estimated losses resulting from the inability of its customers to make required payments.

The Company evaluates its allowance for doubtful accounts based on a combination of factors.

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Finally, the Company also considers its current expectations of future economic conditions, when estimating its allowance for doubtful accounts.

The allowance for doubtful accounts totaled $ 1.0 million and $ 0.7 million at December 31, 2023 and 2022 respectively.

To further mitigate the Company’s exposure to uncollectable accounts, the Company may request certain customers provide a negotiable irrevocable letter of credit drawn on a reputable financial institution.

The allowance for doubtful accounts totaled $ 1.0 million at both December 31, 2024 and 2023.

To further mitigate the Company’s exposure to uncollectible accounts receivable, the Company may request certain customers provide a negotiable irrevocable letter of credit drawn on a reputable financial institution.

These irrevocable letters of credit are typically issued to mature between zero and 90 days from the date the documentation requirements are met, typically when a system ships or upon receipt of final acceptance from the customer.

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(o) Inventories

Inventories are stated at the lower of cost or net realizable value, with cost determined on a first-in, first-out basis.

Inventories are stated at the lower of cost and net realizable value, with cost determined on a first-in, first-out basis.

Each quarter the Company assesses the valuation and recoverability of all inventories:

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The Company evaluates usage requirements by analyzing historical usage, anticipated demand, alternative uses of materials, and other qualitative factors.

Unanticipated changes in demand for the Company’s products may require a write down of inventory, which would be reflected in cost of sales in the period the revision is made.

Unanticipated changes in demand for the Company’s products may require a write down of inventory, which would be reflected in Cost of Sales in the Consolidated Statements of Operations in the period the revision is made.

Inventory acquired as part of a business combination is recorded at fair value on the date of acquisition.

(p) Business Combinations

The Company allocates the fair value of the purchase consideration of the Company’s acquisitions to the tangible assets, intangible assets, including in-process research and development (“IPR&D”), if any, and liabilities assumed, based on estimated fair values.

The Company allocates the fair value of the purchase consideration of the Company’s acquisitions to the tangible assets, intangible assets, and liabilities assumed, based on estimated fair values.

The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill.

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Notes to Consolidated Financial Statements (Continued)

(q) Goodwill and Indefinite-Lived Intangible Assets

Goodwill is an asset representing the future economic benefits arising from assets acquired in a business combination that are not individually identified and separately recognized.

Goodwill is measured as the excess of the consideration transferred over the net fair value of identifiable assets acquired and liabilities assumed.

Intangible assets with indefinite useful lives are measured at their respective fair values on the acquisition date.

Intangible assets related to IPR&D projects are considered to be indefinite-lived until the completion or abandonment of the associated research and development (“R&D”) efforts.

If and when development is complete, the associated assets would be deemed long-lived and would then be amortized based on their respective estimated useful lives at that point in time.

Goodwill and indefinite-lived intangibles are not amortized into results of operations but instead are evaluated for impairment.

The Company performs the evaluation in the beginning of the fourth quarter of each year or more frequently if impairment indicators arise.

Goodwill is evaluated for impairment in the beginning of the fourth quarter of each year or more frequently if impairment indicators arise.

In testing goodwill for impairment, the Company may first perform a qualitative assessment of whether it is more likely than not that the reporting unit’s fair value is less than its carrying amount, and, if so, the Company then quantitatively compares the fair value of the reporting unit to its carrying amount.

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The control premium is estimated using historical transactions in similar industries.

In testing indefinite-lived intangible assets for impairment, the Company may first perform a qualitative assessment of whether it is more likely than not that the fair value of the indefinite-lived intangible asset is less than its carrying amount, and, if so, the Company then quantitatively compares the fair value of the indefinite-lived intangible asset to its carrying amount.

The Company determines the fair value of its indefinite-lived intangible assets using a discounted cash flow method.

(r) Long-lived Assets

Long-lived intangible assets consist of purchased technology, customer relationships, patents, trademarks and tradenames, and backlog and are initially recorded at fair value.

Long-lived intangible assets are amortized over their estimated useful lives in a method reflecting the pattern in which the economic benefits are consumed or straight-lined if such pattern cannot be reliably determined.

Long-lived intangible assets consist of purchased technology, customer relationships, patents, trademarks and tradenames, software licenses, and backlog and are initially recorded at fair value.

Long-lived intangible assets are amortized over their estimated useful lives utilizing a method reflecting the pattern in which the economic benefits are consumed or straight-lined if such pattern cannot be reliably determined.

Property, plant, and equipment are recorded at cost.

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Fair value is determined through various valuation techniques including discounted cash flow models or, when available, quoted market values and third-party appraisals.

Veeco Instruments Inc.

and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

The Company determines at contract inception if an arrangement is a lease, or contains a lease, of an identified asset for which the Company has the right to obtain substantially all of the economic benefits from its use and the right to direct its use.

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These options are included in the determination of lease term when it is reasonably certain that the Company will exercise such options.

The Company does not separate lease and non-lease components in determining ROU assets or lease liabilities for real estate leases.

The Company does not separate lease and non-lease components in determining ROU assets or lease liabilities

Veeco Instruments Inc.

and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

for real estate leases.

Additionally, the Company does not recognize ROU assets or lease liabilities for leases with original terms or renewals of one year or less.

1 unchanged sentence

The Company adopted ASU 2023-07:

Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity on January 1, 2022, using the modified retrospective method for all financial instruments that were outstanding as of the adoption date.

This standard simplifies the accounting for convertible debt instruments by removing the separation models for convertible debt with a cash conversion feature, as well as convertible instruments with a beneficial conversion feature.

As a result, entities will account for a convertible debt instrument wholly as debt, unless certain other conditions are met.

The elimination of these models reduces non-cash interest expense for entities that have issued a convertible instrument that was within the scope of those models before the adoption of ASU 2020-06, such as the Company’s 2023 Notes, 2025 Notes, and 2027 Notes.

Additionally, ASU 2020-06 requires the application of the if-converted method for calculating diluted earnings per share, and precludes the use of the treasury stock method for certain debt instruments, such as the Company’s 2023 Notes, 2025 Notes, and 2027 Notes.

The adoption of ASU 2020-06 resulted in the following adjustments to the Consolidated Balance Sheets:

December 31, 2021

January 1, 2022

(in thousands)

Balance Sheet line item:

Long-term debt

Additional paid-in capital

Accumulated deficit

Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures on December 31, 2024.

This standard primarily enhances disclosures about significant segment expenses.

The standard requires interim and annual disclosure of significant segment expenses that are regularly provided to the chief operating decision-maker (“CODM”) and included within the reported measure of a segment’s profit or loss, requires interim disclosures about a reportable segment’s profit and loss and assets that are currently required annually, requires disclosure of the position and title of the CODM, clarifies circumstances in which an entity can disclose multiple segment measures of profit or loss and contains other disclosure requirements.

Refer to Note 16 for further details.

(u) Recent Accounting Pronouncements Not Yet Adopted

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The Company is currently in the process of evaluating the impact of adoption on its consolidated financial statements .

In November 2024, the FASB issued ASU 2024-03, “Disaggregation of Income Statements Expenses (Subtopic 220-40),” to improve income statement expenses disclosure.

The standard requires more detailed information related to the types of expenses, including (among other items) the amounts of purchases of inventory, employee compensation, depreciation and intangible asset amortization included within each interim and annual income statement’s expense caption, as applicable.

This authoritative guidance can be applied prospectively or retrospectively and will be effective for financial statements issued for annual periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted.

The Company is currently in the process of evaluating the impact of adoption on its consolidated financial statements.

The Company is evaluating other pronouncements recently issued but not yet adopted.

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Basic income (loss) per share is calculated by dividing net income (loss) by the weighted average number of shares outstanding during the period.

Diluted income per share is calculated by dividing net income by the weighted average number of shares used to calculate basic income per share plus the weighted average number of common share equivalents outstanding during the period.

The dilutive effect of outstanding options to purchase common stock and non-participating share-based awards is considered in diluted income per share by application of the treasury stock method.

The dilutive effect of performance share units is included in diluted income per common share in the periods the performance targets have been achieved, or would have been achieved if the reporting date was the end of the contingency period.

Upon the adoption of ASU 2020-06 on January 1, 2022, the Company includes the dilutive effect of shares issuable upon conversion of its Notes in the calculation of diluted income per share using the if-converted method.

Diluted income per share is calculated by dividing net income (loss) available to common shareholders by the weighted average number of shares used to calculate basic income per share plus the weighted average number of common share equivalents outstanding during the period.

The dilutive effect of outstanding options to purchase common stock and share-based awards is considered in diluted income per share by application of the treasury stock method.

Finally, the Company includes the dilutive effect of shares issuable upon conversion of its Notes in the calculation of diluted income per share using the if-converted method.

The Company has the option for the 2025 and 2027 Notes to settle the conversion value in any combination of cash or shares, and as such, the maximum number of shares issuable are included in the dilutive share count if the effect would be dilutive.

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As such, the Company only includes the excess shares that may be issuable above the principal amount of the 2029 Notes in the dilutive share count, if the effect would be dilutive.

Prior to the adoption of ASU 2020-06, based on the Company’s ability and intent to settle the principal amount of its convertible senior notes in cash, and the excess of the principal portion in shares of its common stock, the Company accounted for the conversion spread using the treasury stock method, and the shares issuable upon conversion of the Notes were not included in the calculation of diluted earnings per share except to the extent that the conversion value of the Notes exceeds their principal amount and if the effect would be dilutive.

The computations of basic and diluted income (loss) per share for the years ended December 31, 2024, 2023, and 2022 are as follows:

Veeco Instruments Inc.

and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

For the year ended December 31,

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Diluted weighted average shares outstanding

Net income per common share:

Unvested participating shares excluded from basic weighted average shares outstanding since the securityholders are not obligated to fund losses

Net income (loss) per common share:

Common share equivalents excluded from the diluted weighted average shares outstanding since the Company incurred a net loss and their effect would be antidilutive

1 unchanged sentence

Potential shares to be issued for settlement of the convertible notes excluded from the diluted calculation as their effect would be antidilutive

Veeco Instruments Inc.

and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Note 3 — Fair Value Measurements

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The use of different market assumptions or estimation methodologies could have a significant effect on the estimated fair value amounts.

Veeco Instruments Inc.

and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

The following table presents the Company’s assets that were measured at fair value on a recurring basis at December 31, 2024 and 2023:

3 unchanged sentences

Certificate of deposits and time deposits

Corporate debt

Money market cash

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Certificate of deposits and time deposits

Corporate debt

Money market cash

3 unchanged sentences

Commercial paper

The Company’s investments classified as Level 1 are based on quoted prices that are available in active markets, as well as certificates of deposits and time deposits that are classified as Level 1 due to their short-term nature.

The Company’s investments classified as Level 2 are valued using observable inputs to quoted market prices, benchmark yields, reported trades, broker/dealer quotes, or alternative pricing sources with reasonable levels of price transparency.

Veeco Instruments Inc.

1 unchanged sentence

Notes to Consolidated Financial Statements (Continued)

Note 4 — Investments

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The realized gains or losses for the years ended December 31, 2024, 2023, and 2022 were immaterial.

Other Investments

Veeco has an ownership interest of less than 20 % in a non-marketable investment in a separate entity, with a carrying value of $ 2.0 million at December 31, 2023 and 2022.

The Company does not exert significant influence over this entity.

This equity investment does not have a readily observable market price, and therefore the Company has elected to measure this investment at cost, adjusted for changes in observable market prices minus impairment.

The investment is included in “Other assets” on the Consolidated Balance Sheets.

The investment is subject to periodic impairment reviews which require judgment.

The analyses include assessments of the companies’ financial condition, the business outlooks for their products and technologies, their projected results and cash flows, business valuation indications from recent rounds of financing, the likelihood of obtaining subsequent rounds of financing, and the impact of equity preferences held by Veeco relative to other investors.

During the year ended December 31, 2021, the Company identified impairment indicators on the Company’s investment, and recorded a non-cash impairment charge of $ 1.0 million.

This impairment charge was included in “Other income (expense), net” in the Consolidated Statement of Operations.

Note 5 — Business Combination

On January 31, 2023, the Company acquired Epiluvac AB, a privately held manufacturer of chemical vapor deposition (CVD) epitaxy systems that enable silicon carbide (SiC) applications in the electric vehicle market.

This acquisition is expected to accelerate penetration into the emerging, high-growth SiC equipment market.

The results of Epiluvac’s operations have been included in the consolidated financial statements since the date of acquisition.

6 unchanged sentences

Acquisition date fair value

Veeco Instruments Inc.

and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

The purchase agreement included performance milestones that, if achieved, could trigger additional payments to the original selling shareholders.

1 unchanged sentence

The earn-out period is four years after the closing date of the acquisition, or earlier if certain conditions are met.

These fair value measurements are based on significant inputs not observable in the market and thus represent a Level 3 measurement as defined in ASC 820.

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The aggregate fair value of the contingent consideration arrangement at the acquisition date was $ 26.1 million.

While the use of SiC is expected to grow in the near future, it is difficult to predict the rate at which SiC will be adopted by the market and thus would impact the sales of our equipment.

The Company updates its estimate of fair value of the contingent consideration each reporting period, utilizing the same methodologies described above.

During the year ended December 31, 2023, the Company recognized approximately $ 0.7 million of additional contingent consideration, included within “Other operating expense (income) net” in the Consolidated Statement of Operations.

Additionally, during the year ended December 31, 2023, the Company paid $ 2.5 million to the selling shareholders in recognition of a performance milestone having been successfully completed.

Total contingent consideration liability as of December 31, 2023 was $ 24.2 million, of which $ 1.8 million was included in “Accrued expenses and other current liabilities” and $ 22.4 million was included within “Other liabilities” on the Consolidated Balance Sheet.

Veeco Instruments Inc.

and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date:

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Net assets acquired

Veeco Instruments Inc.

and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

The gross contractual value of the acquired accounts receivable is the amount expected to be collected by the Company, and therefore is also considered its fair value.

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For the year ended December 31, 2023, the Company incurred approximately $ 1.1 million of acquisition related costs, included within “Selling, general, and administrative” in the Consolidated Statement of Operations.

Epiluvac’s results of operations were immaterial to the Company’s Consolidated Statement of Operations for the year ended December 31, 2023.

Additionally, the pro forma Consolidated Statement of Operations as if Epiluvac had been acquired as of January 1, 2022 would not be materially different from the Company’s actual Consolidated Statement of Operations for the year ended December 31, 2023 or 2022.

During the fourth quarter of 2024, the Company lowered its projected cash flows for the Epiluvac asset group as a result of the Company’s market penetration not meeting expectations associated with the SiC technology, and determined that the revised projections were significantly lower than projected cash flows at the time of the acquisition and that these

Veeco Instruments Inc.

and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

revised projections required the Company to assess the Epiluvac asset group for impairment.

See Note 8, “Goodwill and Intangible Assets,” for additional information.

Additionally, the Company updates its estimate of fair value of the contingent consideration each reporting period, utilizing the same methodologies described above.

The discount rate used was 5.4 % at December 31, 2024 for the strategic target and order value related contingent payments.

During the year ended December 31, 2024, the Company reduced the contingent consideration by approximately $ 21.2 million as a result of the lowered projected bookings, the benefit for which was included within “Other operating expense (income) net” in the Consolidated Statement of Operations.

Additionally, during the year ended December 31, 2024, the Company paid $ 1.8 million to the original selling shareholders associated with the settlement of a strategic target milestone.

The total contingent consideration liability as of December 31, 2024 was $ 1.2 million, of which $ 0.7 million was included in “Accrued expenses and other current liabilities” and $ 0.5 million was included within “Other liabilities” on the Consolidated Balance Sheet.

Note 6 — Inventories

Inventories are stated at the lower of cost or net realizable value, with cost determined on a first-in, first-out basis.

Inventories are stated at the lower of cost and net realizable value, with cost determined on a first-in, first-out basis.

Inventories consist of the following:

3 unchanged sentences

Evaluation inventory

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Notes to Consolidated Financial Statements (Continued)

Note 7 — Property, Plant, and Equipment

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accumulated depreciation and amortization

Net property, plant, and equipment

(1) Machinery and equipment also includes software, furniture, and fixtures

Property, plant, and equipment, net

(1) Machinery and equipment includes software, furniture, and fixtures

Depreciation expense was $ 18.2 million, $ 16.5 million, and $ 15.6 million for the years ended December 31, 2024, 2023, and 2022, respectively.

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Notes to Consolidated Financial Statements (Continued)

Note 8 — Goodwill and Intangible Assets

Goodwill represents the future economic benefits arising from assets acquired in a business combination that are not individually identified and separately recognized.

The following table presents the changes in goodwill balances for the year ending December 31, 2023:

Gross carrying

(in thousands)

Balance at December 31, 2022

Balance at December 31, 2023

There were no changes in goodwill balances during the year ended December 31, 2024.

The Company performs its annual goodwill impairment test at the beginning of the fourth quarter each year.

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This analysis is sensitive to changes in the Company’s stock price and absent other qualitative factors, the Company may be required to record goodwill impairment charges in future periods if the stock price declines and remains depressed for an extended period of time.

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Notes to Consolidated Financial Statements (Continued)

The components of purchased intangible assets were as follows:

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Other intangible assets primarily consist of patents, licenses, and backlog.

During the fourth quarter of 2024, the Company lowered its projected cash flows for the Epiluvac asset group, which were significantly below the projected cash flows at the time of the acquisition.

The reduced projections were based on the Company’s market penetration not meeting expectations associated with the SiC technology.

This required the Company to assess the Epiluvac asset group for impairment.

As a result of the analysis, which included projected sales and other cash flows that required the use of unobservable inputs, the Company recorded a non-cash impairment charge of $ 28.1 million related to definite-lived intangible assets during the fourth quarter of 2024.

The impairment charge is included in “ Asset impairment ” in the Consolidated Statement of Operations.

Based on the intangible assets recorded at December 31, 2024, and assuming no subsequent additions to or impairment of the underlying assets, the remaining estimated annual amortization expense, is expected to be as follows:

(in thousands)

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Notes to Consolidated Financial Statements (Continued)

Note 9 — Accrued Expenses and Other Liabilities

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The contract liability balance as of December 31, 2023 was approximately $ 118.0 million, of which the Company recognized approximately $ 97.0 million into revenue during the year ended December 31, 2024.

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Notes to Consolidated Financial Statements (Continued)

This reduction in contract liabilities was offset by new billings for products and services which were unsatisfied performance obligations to customers and revenue had not yet been recognized as of December 31, 2024.

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Other liabilities

Other Liabilities at December 31, 2023 was approximately $ 25.5 million, which included contingent consideration of $ 22.4 million.

Additionally, at December 31, 2023 and 2022, other liabilities included medical and dental benefits for former executives of $ 1.9 million and $ 2.0 million, respectively;

and asset retirement obligations of $ 0.9 million and $ 0.7 million, respectively.

Other Liabilities at December 31, 2024 was approximately $ 3.8 million, which included medical and dental benefits for former executives, asset retirement obligations, contingent consideration, and tax liabilities.

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Notes to Consolidated Financial Statements (Continued)

Note 10 — Commitments and Contingencies

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The weighted average remaining lease term of the Company’s operating leases as of December 31, 2024 was 11 years , and the weighted average discount rate used in determining the present value of future lease payments was 5.7 % .

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Notes to Consolidated Financial Statements (Continued)

The following table provides the maturities of lease liabilities at December 31, 2024:

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Lease expense, which includes operating lease costs and variable lease costs, was $ 6.1 million, $ 6.1 million, and $ 9.4 million for the years ended December 31, 2024, 2023, and 2022, respectively.

In addition, the Company is obligated under such leases for certain other expenses, including real estate taxes and insurance.

Operating cash outflows from operating leases for the year ended December 31, 2023, 2022, and 2021 were $ 5.8 million, $ 7.5 million, and $ 6.6 million (excluding landlord reimbursements for leasehold improvements of $ 6.1 million in 2021 included within “Other, net” in the Consolidated Statements of Cash Flows), respectively.

In addition, the Company is obligated under such leases for certain other expenses, including real

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Notes to Consolidated Financial Statements (Continued)

estate taxes and insurance.

Operating cash outflows from operating leases for the year ended December 31, 2024, 2023, and 2022 were $ 6.8 million, $ 5.8 million, and $ 7.5 million, respectively.

Legal Proceedings

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The Company depends on purchases from its ten largest customers, which accounted for 63 % and 65 % of net accounts receivable at December 31, 2024 and 2023, respectively.

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Notes to Consolidated Financial Statements (Continued)

Customers who accounted for more than 10% of net accounts receivable or net sales are as follows:

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The Company entered into a receivable purchase agreement with a financial institution to sell certain of its trade receivables from customers without recourse, up to $ 30.0 million at any point in time.

Pursuant to this agreement, the Company sold $ 32.7 million of receivables during the year ended December 31, 2023, of which $ 19.9 million remained outstanding as of December 31, 2023 as defined in the receivable purchase agreement, and $ 10.1 million was available under the agreement for additional sales of receivables.

Pursuant to this agreement, the Company sold $ 8.0 million of receivables during the year ended December 31, 2024, of which no amounts remained outstanding as of December 31, 2024 as defined in the receivable purchase agreement, and $ 30.0 million was available under the agreement for additional sales of receivables.

The Company sold $ 32.7 million of receivables during the year ended December 31, 2023.

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In addition, certain of the components and sub-assemblies included in the Company’s products are obtained from a single source or a limited group of suppliers.

The failure of the Company’s present outsourcing partners and suppliers to meet their contractual obligations and the Company’s inability to make alternative arrangements or resume the manufacture of these systems could have a material adverse effect on the Company’s revenues, profitability, cash flows, and relationships with its customers.

The failure of the

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Notes to Consolidated Financial Statements (Continued)

Company’s present outsourcing partners and suppliers to meet their contractual obligations and the Company’s inability to make alternative arrangements or resume the manufacture of these systems could have a material adverse effect on the Company’s revenues, profitability, cash flows, and relationships with its customers.

The Company had deposits with its suppliers of $ 18.7 million and $ 19.4 million at December 31, 2024 and 2023, respectively, that were included in “Prepaid expenses and other current assets” on the Consolidated Balance Sheets.

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Purchase commitments are primarily for inventory used in manufacturing products, as well as equipment and project materials used to support research and development activities, and are partially offset by existing deposits with suppliers.

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Notes to Consolidated Financial Statements (Continued)

Bank Guarantees

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On January 10, 2017, the Company issued $ 345.0 million of 2.70 % convertible senior unsecured notes due 2023 (the “2023 Notes”).

The Company received net proceeds, after deducting underwriting discounts and fees and expenses payable by the Company, of approximately $ 335.8 million.

The 2023 Notes bear interest at a rate of 2.70 % per year, payable semiannually in arrears on January 15 and July 15 of each year, commencing on July 15, 2017.

The 2023 Notes had a maturity date of January 15, 2023, unless earlier purchased by the Company, redeemed, or converted.

On May 18, 2020, in connection with the completion of a private offering of $ 125.0 million aggregate principal amount of 3.75 % convertible senior notes due 2027 described below, the Company repurchased and retired approximately $ 88.3 million in aggregate principal amount of its outstanding 2023 Notes, with a carrying amount of $ 78.1 million, for approximately $ 81.2 million of cash.

Additionally, on November 11, 2020, the Company entered into a privately negotiated exchange agreement with a holder of its outstanding 2023 Notes, under which the Company agreed to retire $ 125.0 million in aggregate original principal amount of the 2023 Notes, with a carrying amount of $ 113.1 million, in exchange for the issuance of $ 132.5 million in aggregate principal amount of new 3.50 % convertible senior notes due 2025 described below, which had a fair value that approximated the principal amount of notes issued.

Finally, on November 5, 2021, the Company entered into a privately negotiated note purchase agreement with a holder of its outstanding 2023 Notes, under which the Company agreed to repurchase and retire approximately $ 111.5 million in aggregate original principal amount of the 2023 Notes, with a carrying amount of $ 105.5 million, for cash consideration of approximately $ 115.6 million, and approximately $ 1.0 million of accrued and unpaid interest.

The Company accounted for the partial settlement of the 2023 Notes as an extinguishment, and as such, recorded a loss on extinguishment of approximately $ 4.0 million for the year ended December 31, 2021, which is included in “Other income (expense), net” in the Consolidated Statements of Operations, as well as a reduction of additional paid-in capital of $ 6.1 million for the repurchase of the conversion feature.

The Company repurchased and retired approximately $ 111.5 million and $ 213.3 million of aggregate principal amount of its outstanding 2023 Notes during the years ended December 31, 2021 and December 31, 2020, respectively.

The 2023 Notes that remained outstanding matured on January 15, 2023 and were paid in cash and settled by the Company at that time.

On November 17, 2020, as part of the privately negotiated exchange agreement described above, the Company issued $ 132.5 million of 3.50 % convertible senior notes due 2025 (the “2025 Notes”).

On November 17, 2020, as part of a privately negotiated exchange agreement, the Company issued $ 132.5 million of 3.50 % convertible senior notes due 2025 (the “2025 Notes”).

The 2025 Notes bear interest at a rate of 3.50 % per year, payable semiannually in arrears on January 15 and July 15 of each year, commencing on July 15, 2021.

The 2025 Notes mature on January 15, 2025, unless earlier purchased by the Company, redeemed, or converted.

On May 19, 2023, in connection with the completion of a private offering of $ 230.0 million aggregate principal amount of 2.875 % convertible senior notes due 2029 described below, the Company repurchased and retired approximately $ 106.0 million in aggregate principal amount of its outstanding 2025 Notes, with a carrying amount of $ 105.4 million, for approximately $ 106.0 million of cash and 0.7 million shares of the Company’s common stock.

The Company accounted for the partial settlement of the 2025 Notes as an extinguishment, and as such, recorded a loss on extinguishment of approximately $ 16.5 million for the year ended December 31, 2023, which is included in “Other income (expense), net” in the Consolidated Statements of Operations.

Veeco Instruments Inc.

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Notes to Consolidated Financial Statements (Continued)

The 2025 Notes that remained outstanding matured on January 15, 2025 and were settled through the issuance of 1.1 million shares of the Company’s common stock to the noteholders.

On May 18, 2020, the Company completed a private offering of $ 125.0 million of 3.75 % convertible senior notes due 2027 (the “2027 Notes”).

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and structurally subordinated to all indebtedness and other liabilities (including trade payables) of Veeco’s subsidiaries.

The Notes are convertible at the option of the holders upon the satisfaction of specified conditions and during certain periods as described below.

The initial conversion rates are 41.6667 , 71.5372 , and 34.21852 shares of the Company’s common stock per $ 1,000 principal amount of the 2025 Notes, 2027 Notes, and 2029 Notes, respectively, representing initial effective conversion prices of $ 24.00 , $ 13.98 , and $ 29.22 per share of common stock, respectively.

The conversion rates may be subject to adjustment upon the occurrence of certain specified events.

The Notes are recorded as a single unit within liabilities in the consolidated balance sheets as the conversion features within the Notes are not derivatives that require bifurcation and the Notes do not involve a substantial premium.

Transaction costs of $ 9.2 million, $ 1.9 million, $ 3.1 million, and $ 6.8 million incurred in connection with the issuance of the 2023 Notes, 2025 Notes, 2027 Notes, and 2029 Notes, respectively, were recorded as direct deductions from the related debt liabilities and recognized as non-cash interest expense using the effective interest method over the expected terms of the Notes.

The Company may redeem for cash, at its option, all or any portion of (i) the outstanding 2025 Notes at any time on or after January 15, 2023, (ii) the outstanding 2027 Notes at any time on or after June 6, 2024 and/or (iii) the outstanding 2029 Notes at any time on or after June 8, 2026, in each case, at a redemption price equal to 100 % of the principal amount of such Notes to be redeemed plus accrued and unpaid interest to, but excluding, the redemption date, if the last reported sale price of the common stock has been at least 130 % of the conversion price for the applicable series of Notes then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period

Veeco Instruments Inc.

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Notes to Consolidated Financial Statements (Continued)

(including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides the redemption notice.

Upon the Company’s notice of redemption, holders may elect to convert their Notes based on the conversion rates and criteria outlined below.

The Notes are convertible at the option of the holders upon the satisfaction of specified conditions and during certain periods as described below.

The conversion rates may be subject to adjustment upon the occurrence of certain specified events.

Holders may convert all or any portion of their notes, in multiples of one thousand dollar principal amount, at their option at any time prior to the close of business on the business day immediately preceding October 15, 2024 with respect to the 2025 Notes, October 1, 2026 with respect to the 2027 Notes, and February 1, 2029, with respect to the 2029 Notes, only under the following circumstances:

3 unchanged sentences

(iv) Upon the occurrence of specified corporate events.

For the calendar quarter ended December 31, 2023, the last reported sales price of common stock during the 30 consecutive trading days, based on the criteria outlined in (i) above, was greater than 130 % of the conversion price of the 2027 Notes, and as such the 2027 Notes are convertible by the holders until March 31, 2024.

For the calendar quarter ended December 31, 2024, the last reported sales price of common stock during the 30 consecutive trading days, based on the criteria outlined in (i) above, was greater than 130 % of the conversion price of the 2027 Notes, and as such the 2027 Notes are convertible by the holders and callable by the Company until March 31, 2025.

Holders may convert their notes at any time, regardless of the foregoing circumstances, on or after October 15, 2024 with respect to the 2025 Notes, October 1, 2026 with respect to the 2027 Notes, and February 1, 2029 with respect to the 2029 Notes, until the close of business on the business day immediately preceding the respective maturity date.

Accounting for the Notes after the adoption of ASU 2020-06

The Company adopted ASU 2020-06 on January 1, 2022 as further described in Note 1, “Basis of Presentation”.

Following the adoption of ASU 2020-06, the Notes are recorded as a single unit within liabilities in the consolidated balance sheets as the conversion features within the Notes are not derivatives that require bifurcation and the Notes do not involve a substantial premium.

Accounting for the Notes prior to the adoption of ASU 2020-06

With respect to the 2023 Notes, 2025 Notes, and 2027 Notes, upon conversion by the holders, the Company may elect to settle such conversion in shares of its common stock, cash, or a combination thereof.

As a result of its cash conversion options, prior to the adoption of ASU 2020-06, the Company segregated the liability component of the instruments from the equity components.

The liability components were measured by estimating the fair value of a non-convertible debt instrument that is similar in its terms to the Notes.

The calculation of the fair value of the debt components required the use of Level 3 inputs, including utilization of convertible investors’ credit assumptions and high yield bond indices.

Fair value was estimated through discounting future interest and principal payments, an income approach, due under the Notes at a discount rate equal to the estimated borrowing rate for similar non-convertible debt, or 7.0 % , 8.0 % , and 9.1 % with respect to the 2023 Notes, 2025 Notes, and 2027 Notes, respectively.

The excess of the aggregate face values of the Notes over the estimated fair values of the liability components of $ 72.5 million, $ 21.0 million, and $ 34.2 million with respect to the 2023 Notes, 2025 Notes, and 2027 Notes, respectively, were recognized as debt discounts and recorded as

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Notes to Consolidated Financial Statements (Continued)

an increase to additional paid-in capital and were to be amortized over the expected lives of the Notes using the effective interest rate method.

Amortization of the debt discounts were recognized as non-cash interest expense.

The transaction costs of $ 9.2 million, $ 1.9 million, and $ 3.1 million incurred in connection with the issuance of the 2023 Notes, 2025 Notes, and 2027 Notes, respectively, were allocated to the liability and equity components based on their relative values.

Transaction costs allocated to the liability component were being amortized using the effective interest rate method and recognized as non-cash interest expense over the expected terms of the Notes.

Transaction costs allocated to the equity component of $ 1.9 million, $ 0.3 million, and $ 0.8 million, for the 2023 Notes, 2025 Notes, and 2027 Notes, respectively, reduced the value of the equity components recognized in stockholders' equity.

The carrying values of the Notes are as follows:

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Principal Amount

debt discount/

transaction costs

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Net carrying value

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Notes to Consolidated Financial Statements (Continued)

Total interest expense related to the Notes is as follows:

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In connection with the offering of the 2027 Notes, on May 13, 2020, the Company entered into privately negotiated capped call transactions (the “Capped Call Transactions”), pursuant to capped call confirmations, covering the total principal amount of the 2027 Notes for an aggregate premium of $ 10.3 million.

The Capped Call Transactions are expected generally to reduce the potential dilution to the Company’s common stock upon any conversion of the 2027 Notes and/or offset any cash payments the Company is required to make in excess of the aggregate principal amount of converted 2027 Notes, as the case may be, with such reduction and/or offset subject to a cap based on the capped price

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Notes to Consolidated Financial Statements (Continued)

of the Capped Call Transactions.

The Capped Call Transactions exercise price is equal to the initial conversion price of the 2027 Notes, and the capped price of the Capped Call Transactions is approximately $ 18.46 per share and is subject to certain adjustments under the terms of the capped call confirmations.

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The Company used a portion of the net proceeds from the offering of the 2027 Notes to pay for the Capped Call Transactions, and the cost of the Capped Call Transactions was recorded as a reduction of the Company’s additional paid-in capital in the accompanying consolidated financial statements.

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Notes to Consolidated Financial Statements (Continued)

Revolving Credit Facility

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Borrowings under the Credit Facility are secured by a first-priority lien on substantially all of the assets of the Company, subject to customary exceptions.

The Credit Facility has a term of five years , maturing on December 16, 2026, or earlier if certain liquidity measures are not met prior to the 2025 Notes maturing.

The Credit Facility has a term of five years maturing on December 16, 2026.

Subject to certain conditions and the receipt of commitments from the lenders, the Loan and Security Agreement allows for revolving commitments under the Credit Facility to be increased by up to $ 75 million.

The existing lenders under the Credit Facility are entitled, but not obligated, to provide such incremental commitments.

On August 2, 2024, lenders increased the Credit Facility by $ 75 million, and as such the total available under the revised Credit Facility is $ 225 million.

Borrowings will bear interest at a floating rate which can be, at the Company’s option, either (a) an alternate base rate plus an applicable rate ranging from 0.50 % to 1.25 % or (b) a SOFR rate (with a floor of 0.00 %) for the specified interest period plus an applicable rate ranging from 1.50 % to 2.25 %, in each case, depending on the Company’s Secured Net Leverage Ratio (as defined in the Loan and Security Agreement).

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The Loan and Security Agreement contains customary negative covenants, including, among others, restrictions on the ability to merge and consolidate with other companies, incur indebtedness, refinance our existing convertible notes, grant liens or security interests on assets, make investments, acquisitions, loans, or advances, pay dividends, and sell or otherwise transfer assets.

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Notes to Consolidated Financial Statements (Continued)

The Loan and Security Agreement contains financial maintenance covenants that require the Borrower to maintain an Interest Coverage Ratio (as defined in the Loan and Security Agreement) of not less than 3.00 to 1.00, a Total Net Leverage Ratio (as defined in the Loan and Security Agreement) of not more than 4.50 to 1.00, and a Secured Net Leverage Ratio (as defined in the Loan and Security Agreement) of not more than 2.50 to 1.00, in each case, tested at the end of each fiscal quarter commencing with the fiscal quarter ending March 31, 2024.

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No amounts were outstanding under the Credit Facility as of December 31, 2024 or December 31, 2023.

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Notes to Consolidated Financial Statements (Continued)

Note 12 — Stockholders’ Equity

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Gains (Losses)

on Available-

(in thousands)

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Balance - December 31, 2024

The Company did not allocate additional tax expense (benefit) to other comprehensive income (loss) for the years ended December 31, 2021, as the Company was in a full valuation allowance position such that a deferred tax asset related to amounts recognized in other comprehensive income was not regarded as realizable on a more-likely-than-not basis.

The Company allocated an immaterial amount of additional tax benefit to other comprehensive income (loss) for the year ended December 31, 2022, as the Company is no longer in a full valuation allowance position.

The Company allocated an immaterial amount of additional tax expense to other comprehensive income (loss) for the year ended December 31, 2023.

The Company allocated an immaterial amount of additional tax benefit or expense to other comprehensive income (loss) for the years ended December 31, 2024, 2023, and 2022.

Preferred Stock

The Board of Directors has authority under the Company’s Certificate of Incorporation to issue shares of preferred stock, par value $ 0.01 , with voting and economic rights to be determined by the Board of Directors.

The Board of Directors has authority under the Company’s Certificate of Incorporation to issue up to 0.5 million shares of preferred stock, par value $ 0.01 , with voting and economic rights to be determined by the Board of Directors.

As of December 31, 2024, no preferred shares have been issued.

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Notes to Consolidated Financial Statements (Continued)

Note 13 — Stock Plans

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Certain option and share awards provide for accelerated vesting if there is a change in control, as defined in the 2019 Plan.

At December 31, 2023, there is an immaterial amount of option shares and 1.7 million RSUs and PSUs outstanding under the 2019 Plan.

At December 31, 2024, there are no option shares outstanding and 2.4 million RSUs and PSUs outstanding under the 2019 Plan.

The Company is authorized to issue up to 2.25 million shares under the approved 2016 employee stock purchase plan (“ESPP”), including additional shares authorized under plan amendments approved by shareholders in 2019 and 2021.

Under the ESPP, substantially all employees in the U.S.

may purchase the Company’s common stock through payroll deductions at a price equal to 85 percent of the lower of the fair market value of the Company’s common stock at the beginning or end of each six-month offer period, as defined in the ESPP, and subject to certain limits.

may purchase the Company’s common stock through payroll deductions at a price equal to 85 percent of the lower of the fair market value of the Company’s common stock at the

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Notes to Consolidated Financial Statements (Continued)

beginning or end of each six-month offer period, as defined in the ESPP, and subject to certain limits.

The ESPP was approved by the Company’s shareholders.

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Selling, general, and administrative

The Company did not realize any tax benefits associated with share-based compensation for the year ended December 31, 2021 due to the full valuation allowance on its U.S.

deferred tax assets.

See Note 15, “Income Taxes” for additional information.

The Company recognized a tax benefit of approximately $ 3.9 million and $ 4.5 million associated with share-based compensation for the years ended December 31, 2023 and 2022, respectively.

The Company recognized a tax benefit of approximately $ 7.9 million, $ 3.9 million, and $ 4.5 million associated with share-based compensation for the years ended December 31, 2024, 2023, and 2022, respectively.

The Company capitalized an immaterial amount of share-based compensation into inventory for the years ended December 31, 2024, 2023, and 2022.

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Notes to Consolidated Financial Statements (Continued)

Unrecognized share-based compensation costs at December 31, 2024 are summarized below:

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Total unrecognized share-based compensation cost

Veeco Instruments Inc.

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Notes to Consolidated Financial Statements (Continued)

Stock Option Awards

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Balance - December 31, 2024

At December 31, 2023, stock option shares outstanding had a weighted average remaining contractual life of 0.5 years.

At December 31, 2024, there were no stock option shares outstanding.

The following table summarizes information on options exercised for the periods indicated:

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(3) The expected life is the number of years the Company estimates that the awards will be outstanding prior to exercise.

Employee Stock Purchase Plan

For the years ended December 31, 2024, 2023, and 2022 the Company received cash proceeds of $ 5.3 million, $ 4.6 million, and $ 3.7 million, and issued shares of 182,809 , 258,153 , and 208,140 , respectively, under the ESPP Plan.

Veeco Instruments Inc.

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Notes to Consolidated Financial Statements (Continued)

Employee Stock Purchase Plan

For the years ended December 31, 2023, 2022, and 2021 the Company received cash proceeds of $ 4.6 million, $ 3.7 million, and $ 3.4 million, and issued shares of 258,153 , 208,140 , and 196,024 , respectively, under the ESPP Plan.

The weighted average estimated values of employee purchase rights as well as the weighted average assumptions that were used in calculating such values during fiscal years 2023, 2022, and 2021 were based on estimates at the date of grant as follows:

weighted average estimated values of employee purchase rights as well as the weighted average assumptions that were used in calculating such values during fiscal years 2024, 2023, and 2022 were based on estimates at the date of grant as follows:

Year ended December 31,

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Share-based compensation

Tax benefits associated with asset impairments

Extinguishment of debt

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Operating leases

Research and experimental ("R&E") capitalization

Research and experimental capitalization

Total deferred tax assets

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Purchased intangible assets

Convertible Senior Notes

Operating leases

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The Company does not permanently reinvest its earnings from certain foreign jurisdictions and has accrued for foreign tax withholdings of $ 1.2 million on its unremitted earnings as of December 31, 2024.

During the year ended December 31, 2023, income tax expense of $ 2.0 million was primarily comprised of 1) a $ 16.2 million income tax expense on pre-tax income from operations;

2) a $ 2.0 million income tax expense for share based compensation, partially offset by 3) a $ 7.5 million tax benefit related to Foreign-Derived Intangible Income;

4) a $ 7.7 million tax benefit associated with research and development tax credits;

and 5) a $ 1.0 million tax benefit associated with the loss on extinguishment of convertible notes under Section 249 of the Internal Revenue Code of 1986, as amended (Section 249).

During the year ended December 31, 2024, the Company’s income tax benefit of $ 4.9 million was primarily attributed to 1) a $ 12.2 million income tax benefit associated with asset impairments, 2) a $ 7.9 million income tax benefit related to research and development tax credits, and 3) a $ 5.1 million income tax benefit related to Foreign-Derived Intangible Income, partially offset by 4) a $ 20.3 million income tax expense related to pre-tax income from operations.

At December 31, 2024, the Company had U.S.

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The majority of the Company’s foreign jurisdictions have been reviewed through 2015.

The Company’s major foreign jurisdictions’ statutes of limitation remain open with respect to the tax years 2016 through 2022 for Germany, 2017 through 2022 for China, 2022 for Taiwan, and 2020 through 2022 for Singapore.

The Company’s major foreign jurisdictions’ statutes of limitation remain open with respect to the tax years 2016 through 2023 for Germany, 2017 through 2023 for China, 2022 through 2023 for Taiwan, and 2021 through 2023 for Singapore.

The Company does not anticipate that its uncertain tax position will change significantly within the next twelve months subject to the completion of the ongoing tax audits and any resultant settlement.

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the development, manufacture, sales, and support of semiconductor and thin film process equipment primarily sold to make electronic devices.

The Company’s Chief Operating Decision Maker, the Chief Executive Officer, evaluates performance of the Company and makes decisions regarding the allocation of resources based on total Company results.

The accounting policies of this one operating segment are the same as those described in the summary of significant accounting policies.

The Chief Operating Decision Maker (“CODM”), the Chief Executive Officer, assesses segment performance and decides how to allocate resources based on net income that is reported on the Consolidated Statements of Operations.

The measure of segment assets is reported on the Consolidated Balance Sheet as total assets.

The Company does not have intra-entity sales or transfers.

The CODM uses net income to evaluate income generated from segment assets (return on assets) in deciding whether to reinvest profits into the segment or into other parts of the Company, such as for acquisitions.

Net income is used to monitor forecast versus actual results.

The CODM also uses net income in competitive analysis by benchmarking the Company’s competitors.

The competitive analysis along with the monitoring of forecasted versus actual results are used in assessing performance of the segment.

The Company regularly provides management reports to the CODM on a consolidated expense basis which includes actuals, forecasted, and budgeted information.

These reports are similar to the Company’s consolidated financial statements.

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Notes to Consolidated Financial Statements (Continued)

There are no additional expenses categories and amounts that meet the definition of significant expense items that are regularly provided to the CODM and included in the reported measure of net income.

Sales by end-market is as follows:

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For geographic reporting, sales are attributed to the location in which the customer facility is located.

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Notes to Consolidated Financial Statements (Continued)

Sales and long-lived tangible assets by geographic region are as follows:

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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