VEECO INSTRUMENTS INC
For the period ended Mar 31, 2026. Filed May 5, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 5, 2026
VECO$37.19+11.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-05.
0001104659-25-107052
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-05.
0001104659-26-055672
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 85 previous paragraphs and 71 current paragraphs.
30 unchanged; 23 reworded; 15 added; 27 removed; 5 previous and 3 current paragraphs rearranged.
Tables are not compared: 9 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (15)
Current report
Overview
Current report
Semiconductor Market
Current report
In the logic market, our annealing solutions continue to gain traction at advanced node customers. Our LSA platform is production tool of record at all three Tier 1 logic customers. Our next-generation Nanosecond Annealing (“NSA”) system is progressing through evaluations at Tier 1 logic customers. Our NSA tool addresses critical low-thermal budget applications such as contact annealing, 3D device integration and materials modification. These evaluations are advancing well, and we are anticipating an additional evaluation shipment to a third Tier 1 logic customer in the coming months.
Current report
In the memory market, we continue to expand our presence as current and future roadmap requirements for Dynamic-Random-Access Memory (“DRAM”) drive the need for low-thermal-budget anneals used in high-band-width memory and vertical DRAM devices. We are the production tool of record at a leading high-bandwidth memory customer, and we continue to make progress with another LSA evaluation system at a second Tier 1 DRAM customer, with potential for pilot line orders in the second half of 2026.
Current report
Compound Semiconductor Market
Current report
Compound Semiconductor revenue increased by 31% in the first quarter from the comparable prior year period, comprising 12% of total revenue. In the Compound Semiconductor market, we have a broad portfolio of products which are gaining momentum due to a significant inflection point within the industry with AI data center infrastructure build-out.
Current report
The AI build-out is impacting interconnects where there is a shift from copper wiring to pluggables and co-packaged optics as data centers demand higher-speed and lower-power communication. Within this space, Indium Phosphide (“InP”) lasers are a major component as the light-source for pluggables and co-packaged optics for next-generation AI infrastructure. As the industry transitions toward future capacity requirements, we believe this represents growth opportunity of approximately $2.0 billion dollars over the next several years. Our technology plays a critical role within the manufacturing of InP lasers and order demand is greatly accelerating across multiple of our products. These products include Lumina MOCVD Arsenide Phosphide batch platform, Wafer Etch and Wafer Storm for etching and metal lift-off, and importantly our Spector ion beam deposition for the laser diode facet coatings. Our Spector ion beam deposition system, designed for the critical laser facet coating step, is essential to the process. Veeco is the market leader in ion beam deposition and is highly differentiated from traditional approaches such as E-beam evaporation, ion assisted deposition or physical vapor deposition (“PVD”). Compared with other approaches, the Spector Ion Beam Deposition (“IBD”) tool delivers low-loss optical films with tight control of thickness, uniformity, and reflectivity – precision that is required for anti-reflective and high-reflective facet coatings on InP. We received orders over $250 million dollars from multiple customers for our MOCVD, wet processing and ion beam deposition tools to support the manufacturing of InP lasers with deliveries starting in 2026 and significantly accelerating in 2027. A large portion of these orders is from a leading supplier of next-generation 800-gig and 1.6-terabit optical transceivers for hyperscale customers, for our Spector IBD systems. This significant order activity underscores the long-term value of our ion beam deposition technology leadership and our expanding role in this rapidly growing market. We have long-standing partnerships with our customers, spanning more than two decades, and we are well positioned across our multiple differentiated products to meet their growing needs in silicon photonics.
Current report
Additionally, there are other photonics applications driving growth for our products in this space, including red MircoLEDs, low earth orbit solar cells and augmented / virtual reality applications.
Current report
Lastly, our Propel300mm GaN on Si product continues to be a strong long-term driver tied to AI data center power efficiency, electrification, and high-power density applications. At a leading power IDM customer, we have an evaluation for our Propel300 system in place, and we received a pilot-line order for a multi-chamber system at the end of 2025. As this leading customer ramps and finalizes long-term capacity plans, there is potential for additional system orders in the second half of 2026 for delivery in 2027.
Current report
We expect our compound semiconductor market to grow as AI, power efficiency and advanced connectivity continue to reshape the industry.
Current report
Data Storage Market
Current report
Scientific & Other Market
Current report
Not meaningful
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Merger Costs
Current report
During the three months ended March 31, 2026, we incurred an additional $2.0 million in legal, accounting, consulting fees and employee-related costs in connection with the proposed Merger.
Removed paragraphs (27)
Previous report
Our strategy of investing in advanced logic and memory has enabled our Semiconductor business to outperform WFE growth for four consecutive years. Veeco’s technologies are at the forefront of enabling new technical innovations in the
Previous report
While the long-term outlook of the Semiconductor industry remains favorable, recently enacted tariffs, foreign and domestic, have resulted in uncertainty across Veeco’s business. The tariffs have resulted in an increase in certain of our costs and those of our customers and could impact future end market demand. Given the dynamic nature of the situation, we continue to evaluate the potential impacts to our business, and our team is working diligently with our suppliers and customers to assess, manage and mitigate the related impacts.
Previous report
Our laser annealing solutions continue to gain traction at advanced logic nodes, highlighted by recent order activity and shipments to leading-edge logic customers Gate-All-Around nodes. In the memory market, we continue to ship LSA systems to a Tier 1 customer for high volume production of HBM and advanced DRAM devices.
Previous report
We have two next generation laser annealing systems under evaluation at Tier 1 foundry and logic customers. This next generation system, the NSA500, covers the nano-second annealing regime and complements our LSA product. This new system is part of our continued effort to enable our customers’ product roadmap by providing annealing solutions and driving higher device performance. Nanosecond annealing provides Veeco with an opportunity to expand our laser annealing SAM for new advanced node logic and memory applications, including low thermal budget anneals for Gate-All-Around transistors and advanced 3D devices.
Previous report
Our Advanced Packaging lithography systems are used for packaging applications such as 2.5D and 3D packaging, fan out wafer level packaging and other advanced packaging solutions. We are seeing an uptick in the order activity from several OSAT customers driven by AI and consumer markets recovery.
Previous report
Veeco also serves customers in the Compound Semiconductor, Data Storage, and Scientific & Other markets. We address the Compound Semiconductor market with a broad portfolio of technologies, including Wet Processing, MOCVD, MBE and Ion Beam, for Power Electronics, Photonics, and 5G RF applications. Sales in the Compound Semiconductor market declined in the third quarter from the comparable prior year period. In GaN Power, emerging use cases have driven some traditional silicon power electronics manufacturers to consider adoption of GaN at 300mm.
Previous report
Additionally, we received an order for a Propel 300mm GaN on Silicon Epitaxy system from a leading power device IDM customer. This order cements our position as a leader in 300mm MOCVD technology.
Previous report
We are also seeing photonics orders driven by demand for space-grade solar cells and panels, optical communication solutions for datacom industry, as well as opportunities in MicroLEDs for applications such as luxury TVs, AR/VR, and automotive.
Previous report
For the three months ended September 30, 2025, gross profit decreased against the comparable prior period primarily due to a decrease in sales volume, as well as a decrease in gross margins. Gross margins decreased principally due to lower volume and higher logistics costs partially offset by favorable product mix. Additionally other factors will cause our gross margins to fluctuate each period. We expect higher costs in future periods as we incur tariffs on imported materials from overseas suppliers, as well as higher costs from domestic suppliers incurring tariffs on their imports. Additionally, we anticipate a reduction in gross margin for the remainder of the year primarily driven by a shift in product mix.
Previous report
Amortization Expense
Previous report
Amortization expense decreased compared to the comparable prior year period primarily due to changes in amortization expense to reflect expected cash flows of certain intangible assets, and certain other intangible assets becoming fully amortized, as well as the full impairment of the Epiluvac related intangibles in 2024.
Previous report
Other Operating Expense (Income), Net
Previous report
Other operating income decreased compared to the comparable prior year period primarily due to reduction in the expected earn-out payment to the previous shareholders of Epiluvac during the three months ended September 30, 2024.
Previous report
For the nine months ended September 30, 2025 and 2024
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Net Sales
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Gross Profit
Previous report
Research and Development
Previous report
Selling, General, and Administrative
Previous report
Selling, general, and administrative expenses increased for the nine months ended September 30, 2025 against the comparable prior period due to expenses incurred associated with the Company entering into the Merger Agreement described above, partially offset by a reduction in personnel-related expenses as part of our efforts to manage costs.
Previous report
Amortization Expense
Previous report
Amortization expense decreased compared to the comparable prior year period primarily due to changes in amortization expense to reflect expected cash flows of certain intangible assets, and certain other intangible assets becoming fully amortized, as well as the full impairment of the Epiluvac related intangibles in 2024.
Previous report
Other Operating Expense (Income), Net
Previous report
Other operating income decreased compared to the comparable prior year period primarily due to a reduction in the expected earn-out payment to the previous shareholders of Epiluvac, as well as proceeds from the sale of productive assets during the nine months ended September 30, 2024.
Previous report
Interest Income (Expense)
Previous report
Income Taxes
Previous report
Our tax expense for the nine months ended September 30, 2025, was $5.2 million, compared to $5.7 million of tax expense for the comparable prior period. For the nine months ended September 30, 2025, the effective tax rate was favorably impacted by tax benefits related to Foreign-Derived Intangible Income and research and development tax credits, partially offset by a discrete income tax expense resulting from the share-based compensation shortfall. For the
Previous report
nine months ended September 30, 2024, the effective tax rate was favorably impacted by tax benefits related to Foreign-Derived Intangible Income and research and development tax credits, as well as a discrete income tax benefit resulting from the share-based compensation windfall.
Reworded paragraphs (23)
Previous wording
On September 30, 2025, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Axcelis Technologies, Inc., a Delaware corporation (“Axcelis”), and Victory Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Axcelis (“Merger Sub”). Pursuant to the Merger Agreement, and subject to the satisfaction or waiver of the conditions specified therein, Merger Sub shall be merged with and into Veeco (the “Merger”), with Veeco surviving as a wholly-owned subsidiary of Axcelis. The Merger Agreement was unanimously approved by our board of directors (except for one (1) independent director who serves on the Axcelis board of directors as well and thus recused himself) and is subject to certain customary closing conditions, including the approval by the stockholders of each company and various regulatory approvals. For more information regarding the previously announced Merger, see Note 10Subsequent Events to the accompanying Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.
Current wording
On September 30, 2025, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Axcelis Technologies, Inc., a Delaware corporation (“Axcelis”), and Victory Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Axcelis (“Merger Sub”). Pursuant to the Merger Agreement, and subject to the satisfaction or waiver of the conditions specified therein, Merger Sub shall be merged with and into Veeco (the “Merger”), with Veeco surviving as a wholly-owned subsidiary of Axcelis. The Merger Agreement was approved by our board of directors (except for one (1) independent director who serves on the Axcelis’ board of directors as well who recused himself) and, on February 6, 2026, by the stockholders of each company. The completion of the Merger remains subject to the satisfaction or (to the extent permissible) waiver of customary closing conditions, including the final pending regulatory approval from the State Administration for Market Regulation of the People’s Republic of China.
Previous wording
Sales in the Semiconductor industry are estimated to have increased year-over-year in 2024 to around $650 billion. Looking ahead, industry analysts are forecasting long-term growth of the industry, driven by secular growth trends such as artificial intelligence, high-performance computing, mobile connectivity, and the electrification of the automotive industry. Additionally, government investments in the Semiconductor industry are projected to accelerate global spending in next-generation technologies.
Current wording
Sales in the Semiconductor industry are estimated to have increased year-over-year in 2025 to approximately $770 billion dollars, according to Gartner. Looking ahead, industry analysts are forecasting long-term growth of the industry, driven by secular growth trends such as artificial intelligence, high-performance computing, mobile connectivity, and the electrification of the automotive industry. Additionally, government investments in the Semiconductor industry are projected to accelerate global spending in next-generation technologies.
Previous wording
Growth in the Semiconductor industry, coupled with increasing technological complexity of Semiconductor chips, are expected to drive long-term growth in WFE spending. In an effort to improve chip performance, optimize power consumption, and reduce costs, today’s most advanced Semiconductor manufacturers are shrinking device geometries, investing in more complex transistor designs such as Gate-All-Around and exploring 3D architectures. As a result, growth of the WFE market is forecasted to keep pace with long-term growth of the Semiconductor industry, which we believe should benefit semiconductor capital equipment providers, including Veeco.
Current wording
Growth in the Semiconductor industry, coupled with increasing technological complexity of Semiconductor chips, are expected to drive long-term growth in Wafer Fab Equipment (“WFE”) spending. In an effort to improve chip performance, optimize power consumption, and reduce costs, today’s most advanced Semiconductor manufacturers are shrinking device geometries, investing in more complex transistor designs such as Gate-All-Around and exploring 3D
Previous wording
manufacture of high-performance AI chips and High-Bandwidth Memory (“HBM”). We continue to invest in new technologies to expand our SAM to a broad range of new applications.
Current wording
Veeco’s technologies are at the forefront of enabling new technical innovations in the manufacturing of high-performance AI chips and High-Bandwidth Memory (“HBM”). We continue to invest in new technologies to expand our Serviceable Available Market (“SAM”) to a broad range of new applications.
Previous wording
Semiconductor revenue decreased by 5% in the third quarter from the comparable prior year period, comprising 71% of total revenue. Revenue was primarily driven by system shipments of our Laser Spike Annealing (“LSA”), Ion Beam Deposition EUV for mask blanks and our Advanced Packaging wet processing.
Current wording
Semiconductor revenue comprised 69% of first quarter total revenue primarily driven by system shipments of our Laser Spike Annealing (“LSA”), and our Advanced Packaging, wet processing and lithography products. Semiconductor revenue decreased 12% from the comparable prior period due to a reduction in China revenue of 74% partially offset by increases in Rest of APAC revenue of 38% and United States revenue of 69%.
Previous wording
We also have two Ion Beam Deposition “IBD300” systems under evaluation at leading DRAM memory customers. Our IBD300 system provides Veeco with another opportunity to expand our SAM to advanced node applications where low resistance films are critical. These initial systems are being evaluated for advanced memory applications, such as DRAM bitline.
Current wording
We also have two Ion Beam Deposition “IBD300” systems under evaluation at leading DRAM memory customers. Our IBD300 system provides Veeco with another opportunity to expand our SAM to advanced node applications where low resistance films are critical. These initial systems are being evaluated for advanced memory applications, such as DRAM bitline metallization.
Previous wording
The ongoing adoption of EUV Lithography for advanced node semiconductor manufacturing continues to drive demand for our Ion Beam Deposition EUV system for mask blanks. Leading logic and memory customers expect EUV and High Numerical Aperture (“High-NA”) lithography to be integral to their future roadmaps, which our Ion Beam Deposition technology is a key enabler of the EUV mask blank Multiple Layer Mirror. Our product roadmap is well positioned as the industry adopts next-generation High-NA EUV lithography, and we are expanding our EUV related business to EUV pellicles which are increasingly being used to improve the productivity of EUV steps. Our IBD-EUV system is used to form the high-transparency membrane used in pellicles.
Current wording
The ongoing adoption of EUV Lithography for advanced node semiconductor manufacturing continues to drive demand for our Ion Beam Deposition EUV system for mask blanks. Leading logic and memory customers expect EUV and High Numerical Aperture (“High-NA”) lithography to be integral to their future roadmaps. Our Ion Beam Deposition technology is a key enabler of the EUV mask blank Multiple Layer Mirror deposition. Our product roadmap is well positioned as the industry adopts next-generation High-NA EUV lithography, and we are expanding our EUV related business to EUV pellicles which are increasingly being used to improve the productivity of EUV steps. Our IBD-EUV system is also used to form the high-transparency membrane used in pellicles.
Previous wording
In Advanced Packaging, our Wet Processing systems are used for several applications, and we continue to see strong demand driven by Heterogenous Integration and 3D Packaging for AI and high-performance computing. In the third quarter of 2025, we had increased order activity supporting these end markets.
Current wording
In Advanced Packaging (“AP”), our wet processing systems are used for several applications, and we continue to see strong demand driven by Heterogenous Integration and 2.5D and 3D Packaging for AI and high-performance computing. In the first quarter, we had an increase in orders for our wet processing systems from leading OSAT customers, supporting high-volume manufacturing of next-generation AI accelerators using 2.5D AP architectures.
Previous wording
Looking ahead, we anticipate seeing growth in the semiconductor market in leading-edge investment driven by new nodes and AI-related demand, including investment in Gate-All-Around nodes, High-Bandwidth Memory, and 3D packaging for AI.
Current wording
Looking ahead, we anticipate growth in the semiconductor market in leading-edge investment driven by AI and high-performance computing.
Previous wording
We address the Data Storage market with sales of our Ion Beam technology. Demand for our Ion Beam products is driven by demand for cloud and AI Data Centers. Revenue in our Data Storage market declined in the third quarter from the comparable prior year period. While customers are not adding new system capacity in 2025, we have started seeing new order activity in the third quarter, driven by increased customer utilization rates and adoption of new technologies like Heat Assisted-Magnetic-Recording (“HAMR”).
Current wording
Data Storage market revenue increased by 52% in the first quarter from the comparable prior year period, comprising 6% of total revenue. We address the Data Storage market with sales of our Ion Beam technology and wet process systems driven by demand for cloud and AI data centers. We have seen increase in order activity in the back-half of 2025 and increased customer utilization rates as customers gain traction in new technologies like Heat Assisted-Magnetic-Recording (“HAMR”). Orders received in the third and fourth quarter of 2025 for our ion beam and wet processing equipment from demand for cloud and AI data centers, will drive revenue growth in 2026, principally in the second half. Customer engagement remains strong with our business fully booked in 2026 and extending into 2027.
Previous wording
Sales in the Scientific & Other market are largely driven by sales to government-funded laboratories, universities, and research institutions. We address the Scientific & Other market with several technologies, including MBE, ALD, MOCVD, Wet Processing, and IBD/IBE, which support diverse R&D and niche low-volume production applications. Sales in this market increased in the third quarter from the comparable prior year period driven by optical deposition systems.
Current wording
Scientific & Other market revenue decreased by 9% in the first quarter from the comparable prior year period, comprising 13% of total revenue. Sales in the Scientific & Other market are largely driven by sales to government-funded laboratories, universities, and research institutions. We address the Scientific & Other market with several technologies, including MBE, ALD, MOCVD, Wet Processing, and IBD/IBE, which support diverse R&D and niche low-volume production applications.
Previous wording
Sales decreased for the nine months ended September 30, 2025 against the comparable prior year period driven by a decrease in sales in the Data Storage and Compound Semiconductor markets, partially offset by an increase in sales in the Semiconductor and Scientific & Other markets. By geography, sales decreased in the United States, China, and the Rest of the World partially offset by increased sales in the Rest of APAC and EMEA regions. Sales in the Rest of APAC
Current wording
Sales decreased for the three months ended March 31, 2026 against the comparable prior year period driven by a decrease in sales in the Semiconductor, and Scientific & Other markets, partially offset by an increase in sales in the
Previous wording
Sales decreased for the three months ended September 30, 2025 against the comparable prior year period driven by a decrease in sales in the Data Storage, Semiconductor, and Compound Semiconductor markets, partially offset by an increase in sales in the Scientific & Other market. By geography, sales decreased in the United States and China, partially offset by increased sales in the Rest of APAC and EMEA regions. Sales in the Rest of APAC region for the three months ended September 30, 2025 included sales in Taiwan and Japan of $54.9 million and $10.3 million, respectively. Sales in the Rest of APAC region for the three months ended September 30, 2024 included sales in Taiwan and Japan of $49.9 million, and $4.0 million respectively. In light of the global nature of our business, we are impacted by conditions in the various countries in which we and our customers operate, including the recent tariff and trade dynamics. We expect there will continue to be year-to-year variations in our future sales distribution across markets and geographies.
Current wording
Compound Semiconductor and Data Storage markets. By geography, sales decreased in the China region, partially offset by increased sales in the Rest of APAC, United States, and EMEA regions. Sales in the Rest of APAC region for the three months ended March 31, 2026 included sales in Taiwan and Japan of $65.6 million and $9.2 million, respectively. Sales in the Rest of APAC region for the three months ended March 31, 2025 included sales in Japan and Taiwan of $32.5 million, and $14.0 million respectively. In light of the global nature of our business, we are impacted by conditions in the various countries in which we and our customers operate, including the recent tariff and trade dynamics. We expect there will continue to be year-to-year variations in our future sales distribution across markets and geographies.
Previous wording
For the nine months ended September 30, 2025, gross profit decreased against the comparable prior period primarily due to a decrease in sales volume, as well as a decrease in gross margins. Gross margins decreased principally due to lower volume and higher logistics costs. Additionally other factors will cause our gross margins to fluctuate each period. We expect higher costs in future periods as we incur tariffs on imported materials from overseas suppliers, as well as higher costs from domestic suppliers incurring tariffs on their imports.
Current wording
For the three months ended March 31, 2026, gross profit decreased against the comparable prior period primarily due to a decrease in sales volume, as well as a decrease in gross margins. Gross margins decreased principally due to unfavorable product mix and higher logistics costs. Additionally other factors will cause our gross margins to fluctuate each period, including the impact of the evolving tariffs landscape, which may include potential refunds on previously paid tariffs, newly implemented tariffs, or changes to existing tariffs.
Previous wording
The markets we serve are characterized by continuous technological development and product innovation, and we invest in various research and development initiatives to maintain our competitive advantage and achieve our growth objectives. Research and development expenses decreased for the three months ended September 30, 2025 against the comparable prior period due to a decrease in personnel-related and operating-related expenses as part of our efforts to manage costs.
Current wording
The markets we serve are characterized by continuous technological development and product innovation, and we invest in various research and development initiatives to maintain our competitive advantage and achieve our growth objectives. Research and development expenses increased for the three months ended March 31, 2026 against the comparable prior period due to an increase in personnel-related expenses.
Previous wording
Selling, general, and administrative expenses increased for the three months ended September 30, 2025 against the comparable prior period due to expenses incurred associated with the Company entering into the Merger Agreement described above, partially offset by a reduction in personnel-related expenses as part of our efforts to manage costs.
Current wording
Selling, general, and administrative expenses increased for the three months ended March 31, 2026 against the comparable prior period due to personnel-related expenses.
Previous wording
We recorded net interest income of $1.3 million for the three months ended September 30, 2025, compared to net interest income of $0.3 million for the comparable prior year period. The increase in net interest income was primarily due to reduced interest expense on the 2025 Notes as they matured on January 15, 2025 and the 2027 Notes that were settled on May 15, 2025.
Current wording
We recorded net interest income of $1.2 million for the three months ended March 31, 2026, compared to net interest income of $0.8 million for the comparable prior year period. The increase in net interest income was primarily due to reduced interest expense on the 2025 Notes as they matured on January 15, 2025 and the 2027 Notes that were settled on May 15, 2025.
Previous wording
Our tax expense for the three months ended September 30, 2025, was $1.3 million, compared to $2.7 million of tax expense for the comparable prior period. For the three months ended September 30, 2025, the effective tax rate was lower than the U.S. statutory tax rate primarily relating to tax benefits related to Foreign-Derived Intangible Income and research and development tax credits. For the three months ended September 30, 2024, the effective tax rate was lower than the U.S. statutory tax rate primarily relating to tax benefits related to Foreign-Derived Intangible Income and research and development tax credits.
Current wording
Our tax benefit for the three months ended March 31, 2026, was $1.2 million, compared to $3.0 million of tax expense for the comparable prior period. For the three months ended March 31, 2026, the effective tax rate was higher than the U.S. statutory tax rate primarily related to a discrete income tax benefit for share-based compensation windfall. For the three months ended March 31, 2025, the effective tax rate was in line with the U.S. statutory tax rate, which included a $1.5 million tax expense related to share-based compensation shortfalls, partially offset by tax benefits related to Foreign-Derived Intangible Income and research and development tax credits.
Previous wording
At September 30, 2025 and December 31, 2024, cash and cash equivalents of $36.4 million and $45.1 million, respectively, were held outside the United States. As of September 30, 2025, we had $23.8 million of accumulated undistributed earnings generated by our non-U.S. subsidiaries for which the U.S. tax has previously been provided. Approximately $9.8 million of undistributed earnings will be subject to foreign withholding taxes if distributed back to the United States and we accrued $1.0 million for foreign withholding taxes for the undistributed earnings.
Current wording
At March 31, 2026 and December 31, 2025, cash and cash equivalents of $34.0 million and $23.6 million, respectively, were held outside the United States. As of March 31, 2026, we had $27.5 million of accumulated undistributed earnings generated by our non-U.S. subsidiaries for which the U.S. tax has previously been provided. Approximately $13.4 million of undistributed earnings will be subject to foreign withholding taxes if distributed back to the United States and we accrued $1.4 million for foreign withholding taxes for the undistributed earnings.
Previous wording
A summary of the cash flow activity for the nine months ended September 30, 2025 and 2024 is as follows:
Current wording
A summary of the cash flow activity for the three months ended March 31, 2026 and 2025 is as follows:
Previous wording
Net cash provided by operating activities was $44.6 million for the nine months ended September 30, 2025 and was due to net income of $34.3 million and adjustments for non-cash items of $44.3 million, partially offset by a decrease in cash flow from changes in operating assets and liabilities of $34.0 million. The changes in operating assets and liabilities were largely attributable to a decrease in contract liabilities and increases in accounts receivables, and inventories, partially offset by a decrease in prepaid expenses and other current assets.
Current wording
Net cash provided by operating activities was $7.9 million for the three months ended March 31, 2026 and was due to net loss of $0.3 million and adjustments for non-cash items of $12.7 million, partially offset by a decrease in cash flow from changes in operating assets and liabilities of $4.4 million. The changes in operating assets and liabilities were largely attributable to an increase in accounts receivables, and inventories, partially offset by an increase in contract liabilities, accrued expenses, and accounts payable.
Previous wording
The cash provided by investing activities during the nine months ended September 30, 2025 was primarily attributable to net cash provided for investment activity, partially offset by capital expenditures. The cash provided by investing activities during the nine months ended September 30, 2024 was primarily attributable to net cash used for capital expenditures, and net investment activity, partially offset by proceeds from the sale of productive assets.
Current wording
The cash provided by investing activities during the three months ended March 31, 2026 was primarily attributable to net cash provided for investment activity, partially offset by capital expenditures. The cash provided by investing activities
Previous wording
The cash used in financing activities for the nine months ended September 30, 2025 was related to cash used to settle taxes related to employee equity programs, settlement of the 2027 Notes, and debt issuance costs associated with the execution of the Fourth Amendment of the Loan and Security Agreement, partially offset by cash received under the Employee Stock Purchase Plan. The cash used in financing activities for the nine months ended September 30, 2024 was related to cash used to settle taxes related to employee equity programs and contingent consideration payment related to Epiluvac acquisition, partially offset by cash received under the Employee Stock Purchase Plan.
Current wording
The cash used in financing activities for the three months ended March 31, 2026 was related to cash used to settle taxes related to employee equity programs, offset by cash received under the Employee Stock Purchase Plan. The cash used in financing activities for the three months ended March 31, 2025 was related to cash used to settle taxes related to employee equity programs, partially offset by cash received under the Employee Stock Purchase Plan.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
For more information regarding the Merger, see Note 10 “Merger” to the accompanying Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.
Current report — wording carried from elsewhere
architectures. As a result, growth of the WFE market is forecasted to keep pace with long-term growth of the Semiconductor industry, which we believe should benefit semiconductor capital equipment providers, including Veeco.
Current report — wording carried from elsewhere
during the three months ended March 31, 2025 was primarily attributable to net cash used for investment activity, partially offset by capital expenditures.
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
The following table presents revenue and expense line items reported in our Consolidated Statements of Operations for the indicated periods in 2025 and 2024 and the period-over-period dollar and percentage changes for those line items. Our results of operations are reported as one business segment, represented by our single operating segment.
Previous report — wording carried elsewhere
The following is an analysis of sales by market and by region:
Previous report — wording carried elsewhere
region for the nine months ended September 30, 2025 included sales in Taiwan, Japan, and Singapore of $132.9 million, $39.0 million, and $33.1 million, respectively. Sales in the Rest of APAC region for the nine months ended September 30, 2024 included sales in Taiwan and Japan of $90.2 million, and $45.8 million respectively. In light of the global nature of our business, we are impacted by conditions in the various countries in which we and our customers operate, including the recent tariff and trade dynamics. We expect there will continue to be year-to-year variations in our future sales distribution across markets and geographies.
Previous report — wording carried elsewhere
The markets we serve are characterized by continuous technological development and product innovation, and we invest in various research and development initiatives to maintain our competitive advantage and achieve our growth objectives. Research and development expenses decreased for the nine months ended September 30, 2025 against the comparable prior period due to a decrease in personnel-related and operating-related expenses as part of our efforts to manage costs.
Previous report — wording carried elsewhere
We recorded net interest income of $3.1 million for the nine months ended September 30, 2025, compared to net interest income of $1.3 million for the comparable prior year period. The increase in net interest income was primarily due to reduced interest expense on the 2025 Notes as they matured on January 15, 2025 and the 2027 Notes that were settled on May 15, 2025.