VEECO INSTRUMENTS INC
For the period ended Sep 30, 2026. Filed Nov 4, 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.
Sep 30, 2026 · Filed Nov 4, 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 2026-06-30; filed 2026-08-05.
0001104659-26-091158
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-04.
0001104659-26-122721
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 90 previous paragraphs and 94 current paragraphs.
46 unchanged; 35 reworded; 10 added; 8 removed; 1 previous and 3 current paragraphs rearranged.
Tables are not compared: 8 previous and 8 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 (10)
Current report
Compound Semiconductor revenue increased by 268% in the third quarter from the comparable prior year period, comprising 19% of total revenue. In the Compound Semiconductor market, our broad portfolio of ion beam deposition, wet processing, and MOCVD technologies are gaining momentum as investments in AI data center infrastructure drive demand for higher-speed optical connectivity and more power efficient semiconductor devices.
Current report
We continue to benefit from demand tied to AI infrastructure, particularly through our exposure to Silicon Photonics and the Indium Phosphide (“InP”) lasers used in optical connectivity applications. Increasing bandwidth requirements and larger AI computing architectures are driving greater use of optical connectivity as traditional copper interconnects become less effective at higher speeds and distances. Hyperscalers and their suppliers are advancing higher-speed pluggable transceivers and, over the longer term, near-package and co-packaged optics. These architectures increasingly rely on advanced InP laser technologies, supporting demand for InP epitaxy and related manufacturing equipment as the industry transitions to higher transmission speeds.
Current report
Our SAM is expanding through two primary technology trends. First, higher optical connectivity requirements are increasing demand for InP lasers and the epitaxial layers used to manufacture them. Second, the transition toward higher-power lasers is creating more demanding performance and reliability requirements for laser-facet coatings. We believe these trends expand the opportunity for our technologies across multiple stages of the laser manufacturing process.
Current report
We are a market leader with our ion beam deposition technology, and within the Silicon Photonics space our Spector systems address the critical laser-facet coating process. Based on ongoing customer engagements, we believe our ion beam deposition technology is differentiated from traditional approaches as the industry transitions toward higher-power lasers that require increasingly stringent film quality and reliability.
Current report
In wet processing, we maintain a strong position with our WaferEtch and WaferStorm technologies for critical etching, cleaning and surface-preparation applications.
Current report
For MOCVD, we are gaining momentum in the InP market as leading optical and photonics customers add capacity and evaluate our technology for next-generation applications. As of year to date, we have received multiple orders for our
Current report
Lumina and Lumina+ systems from leading photonics customers. We are installing systems at existing customers, pursuing additional expansion opportunities and engaging with prospective customers on epitaxy applications.
Current report
Additional Compound Semiconductor market opportunities include MOCVD systems used to manufacture specialized devices for space-based solar applications, microLED displays and other photonics applications. We are also engaged in emerging applications involving blue microLEDs for short-distance optical connectivity, although these applications remain at an early stage of development. The industry is evaluating microLED and micro-vertical-cavity surface-emitting laser technologies as potential alternatives for certain short-distance scale-up and scale-in interconnect applications. These emerging architectures could create additional opportunities for our GaN and arsenide phosphide MOCVD technologies.
Current report
In power electronics, our Propel 300-millimeter GaN-on-silicon platform represents a long-term opportunity associated with AI data center power efficiency, electrification and other high-power-density applications. Our evaluation system at a leading power semiconductor customer continues to support process development and pilot-line preparation. We continue to work with this leading customer to complete the remaining technical qualifications required to support potential future capacity expansion.
Current report
For the nine months ended September 30, 2026 and 2025
Removed paragraphs (8)
Previous report
the year, bringing increased visibility through 2027. The sustained interest from leading customers in our ability to enable their extreme ramp and AP roadmap supports our confidence in the outlook for the business.
Previous report
Compound Semiconductor revenue increased by 45% in the second quarter from the comparable prior year period, comprising 11% 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 due to the AI data center infrastructure build-out.
Previous report
We continue to benefit from the growing demand tied to AI, particularly through our exposure to Silicon Photonics and the Indium Phosphide (“InP”) lasers used for optical connectivity applications. Industry investment remains focused on hyperscalers' need for higher bandwidth and optical connectivity across increasingly large AI data clusters. As bandwidth requirements continue to accelerate, the industry is increasingly focused on overcoming the "copper wall," where traditional electrical interconnects become less efficient at supporting higher-speed data transmission. At the same time, hyperscalers continue to advance optical networking architectures, including evolution of EML pluggables, Silicon Photonics pluggables, as well as the longer-term solutions of near-package and co-packaged optics. Collectively, these trends are driving broader adoption of optical connectivity throughout the AI infrastructure ecosystem. These architectures increasingly rely on InP laser technologies, which are critical to next-generation AI networking and optical interconnect solutions.
Previous report
Overall, our SAM expansion is driven by two key market inflections. First, the exponential growth of optical connectivity bandwidth requirement due to agentic AI, leading to a corresponding growth in high-power InP Continuous Wave laser demand and thus InP epitaxy. Second, the exponential growth in power demand is simultaneously driving the number of laser diodes, but more importantly power required per laser diode, leading to higher reliability requirements from laser facet coating solutions.
Previous report
First, the MOCVD epitaxy steps play a crucial role and we are continuing to penetrate the market with our Lumina MOCVD InP Platform as leading photonics customers expand capacity. In the second quarter, a global leader in optical and photonic technologies selected our Lumina+ MOCVD system to fabricate InP lasers for innovative communication solutions in the datacom industry. Second, we are a market leader with our WaferEtch and WaferStorm wet processing technologies for advanced etching and surface preparation. Third, we remain a market leader with our Spector IBD tool for the critical laser facet coating step. From ongoing customer engagements, we believe our IBD technology remains differentiated from traditional approaches, as the industry transitions to higher powered lasers which demand stricter film specifications.
Previous report
Additionally, in the Compound Semiconductor market there are Other Photonics applications driving growth for our products, including red MircoLEDs, low earth orbit solar cells and augmented/virtual reality applications.
Previous 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. We believe we are well positioned to participate in future capacity expansions.
Previous report
For the six months ended June 30, 2026 and 2025
Reworded paragraphs (35)
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 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, and is currently expected to close in the second half of 2026.
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, and is currently expected to close by the end of the first quarter of 2027.
Previous wording
The Semiconductor industry experienced robust growth in 2025 and, looking ahead, industry analysts are forecasting long-term growth of the industry, driven by secular growth trends such as artificial intelligence (“AI”), high-performance computing, advanced 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
The Semiconductor industry experienced robust growth in 2025 and continues to benefit from strong investment in artificial intelligence (“AI”) infrastructure in 2026. Looking ahead, industry analysts are forecasting long-term growth driven by secular trends including AI, high-performance computing, and advanced connectivity.
Previous wording
Growth in the Semiconductor industry driven by AI investments, 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 architectures. As a result, growth of the WFE market is forecasted to keep pace with long-term growth
Current wording
Growth in the Semiconductor industry driven by AI investments, 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, leading Semiconductor manufacturers are shrinking device geometries, transitioning to more complex transistor architectures such as Gate-All-Around, increasing memory bandwidth and adopting advanced packaging and 3D integration technologies. As a result, growth of the WFE
Previous wording
of the Semiconductor industry, which we believe should benefit semiconductor capital equipment providers, including Veeco.
Current wording
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.
Previous wording
Veeco’s technologies are at the forefront of enabling new technical innovations in the manufacturing of high-performance AI chips, advanced connectivity 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.
Current wording
Our technologies are at the forefront of enabling new technical innovations in the manufacturing of high-performance AI chips, advanced connectivity and High-Bandwidth Memory (“HBM”), as well as advanced logic and advanced packaging applications. We continue to invest in new technologies to expand our Serviceable Available Market (“SAM”) across a broad range of new applications.
Previous wording
Semiconductor revenue comprised 68% of second quarter total revenue primarily driven by system shipments of our Laser Spike Annealing (“LSA”) technology, and our Advanced Packaging technology, particularly for our wet processing products. Semiconductor revenue increased 5% from the comparable prior period due to increase in sales to our leading-edge foundry/logic and memory customers.
Current wording
Semiconductor revenue comprised 65% of third quarter total revenue primarily driven by system shipments of our Laser Spike Annealing (“LSA”) technology, and our Advanced Packaging technology, particularly for our wet processing products. Semiconductor revenue increased by 14% from the comparable prior year period due to increase in sales to our leading-edge foundry/logic and memory customers. This increase does not include a laser annealing system that we shipped to a customer in China in the third quarter of 2026, which was detained and is pending review by U.S. Customs and Border Protection and the Bureau of Industry and Security. Title, risk of loss, and control had transferred to the customer. Despite satisfying the conditions to seek payment for this product under the applicable letter of credit, as a customer accommodation, Veeco has not sought payment for this shipment while the product is held by CBP and may not seek collection if the product is ultimately not cleared for export. As a result, given the uncertainty, Veeco has not recognized this related approximately $8 million in revenue in the third quarter of 2026 because Veeco cannot make the determination that it is probable that no significant reversal of revenue will occur when the uncertainty is subsequently resolved, which adversely affected our operating results for the third quarter.
Previous wording
In logic and foundry, we have long-standing and trusted customer relations and 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, driving repeat business. Additionally, our next-generation Nanosecond Annealing (“NSA”) system tool addresses critical low-thermal budget applications such as contact annealing, 3D device integration and materials modification. In the second quarter, for our NSA system we announced that a Tier 1 customer successfully completed their evaluation and placed a follow-on order for a second system to ship in the second half of 2026. We also announced in the second quarter, that the third Tier 1 logic customer received an NSA evaluation tool. We have now successfully engaged all three Tier 1 logic and foundry customers with our NSA technology, and we continue working closely with them to support high-volume manufacturing.
Current wording
In logic and foundry, we have long-standing and trusted customer relations, and 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, driving repeat business. Additionally, our next-generation Nanosecond Annealing (“NSA”) system addresses critical low-thermal budget applications such as contact annealing, 3D device integration and materials modification. We have successfully engaged all three Tier 1 logic customers and made significant progress advancing NSA over the past several months. One customer has completed its evaluation and placed a revenue order, a second continues to make progress toward completing its evaluation, and we recently shipped an evaluation system to the third customer. Customers are seeing great results and are accelerating their adoption of our NSA system. We see potential for additional orders in the coming months supporting their pilot-lines and high-volume manufacturing needs.
Previous wording
In the memory market, we continue to expand our presence as there is significant long-term opportunity as AI-driven computing architecture accelerates demand for Dynamic Random Access Memory (“DRAM”) and NAND technologies. These technology transitions are creating new thermal processing and material requirements that align well with our differentiated annealing capabilities. The memory industry is at the early stages of adopting laser-based technologies for annealing applications. We continue to make solid progress with leading memory customers, including serving as the production tool of record at a Tier 1 HBM customer, that is accelerating their investments in 2026. We are also advancing an LSA evaluation system at a second Tier 1 DRAM customer, with potential for follow-on orders in 2027 and 2028. Customer engagement continues to expand with a third DRAM customer, with potential to enter an evaluation agreement over the coming quarters. Furthermore, we are encouraged by several NAND customers who are exploring applications for our LSA and NSA platforms, which are continuing to advance well.
Current wording
In the memory market, we continue to expand our presence as there is significant long-term opportunity as AI-driven computing architecture accelerates demand for Dynamic Random Access Memory (“DRAM”) and NAND technologies. These technology transitions are creating new thermal processing and material requirements that align well with our differentiated annealing capabilities. The memory industry is at the early stages of adopting laser-based technologies for annealing applications. We continue to make solid progress with leading memory customers, including serving as the production tool of record at a Tier 1 HBM customer, which is accelerating their investments in 2026. We are also advancing an LSA evaluation system at a second Tier 1 DRAM customer, with potential for follow-on orders in 2027 and 2028. Customer engagement continues to expand with a third DRAM customer, with potential to enter an evaluation agreement in 2027. Furthermore, we are encouraged by several NAND customers who are exploring applications for our LSA and NSA platforms, which are continuing to advance well.
Previous wording
We also have two Ion Beam Deposition 300 (“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.
Current wording
We also have two Ion Beam Deposition 300 (“IBD300”) systems under evaluation at leading DRAM memory customers. Our IBD300 system provides our company 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 (“IBD”) EUV system for mask blanks. Leading logic and memory manufacturers expect EUV and High Numerical Aperture (“High-NA”) lithography to be integral to their future roadmaps. Our IBD 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 protect defect-free masks and improve productivity as EUV utilization scales. We continue to win production business at a Tier 1 foundry and engage new customers for EUV pellicles.
Current wording
The ongoing adoption of EUV lithography for advanced logic and memory semiconductor manufacturing continues to drive demand for our Ion Beam Deposition (“IBD”) systems used in the production of EUV mask blanks. Demand is being supported by AI-driven scaling, increasing EUV layer counts at leading-edge logic nodes, and the expanding use of EUV in advanced DRAM and HBM applications. Leading logic and memory manufacturers expect High Numerical Aperture (“High-NA”) EUV lithography to be integral to their future roadmaps. Our IBD technology is a key enabler of
Previous wording
In Advanced Packaging (“AP”), which includes our wet processing and lithography systems, we continue to experience increased demand as AI-related investments accelerate adoption of heterogenous integration of advanced 2.5D and 3D architectures. In the second quarter, we had an increase in orders for our wet processing and lithography systems from leading OSAT customers. We are also working with a Tier 1 foundry on a panel wet processing tool opportunity, and we are encouraged by our engagement. AP continues to provide meaningful momentum to Veeco, as we progress through
Current wording
In Advanced Packaging (“AP”), which includes our wet processing and lithography systems, we continue to experience increased demand as AI-related investments accelerate adoption of heterogenous integration of advanced 2.5D and 3D architectures. Throughout the year, we received significant orders for our wet processing and lithography systems from leading Outsourced Semiconductor Assembly and Test, foundry and memory customers. We are also engaged with a Tier 1 foundry on the qualification of a next-generation wet processing panel tool. AP continues to provide meaningful momentum with customer demand and our order pipeline providing increased visibility into 2027. To support anticipated customer requirements, we are expanding our manufacturing capacity, including through contract manufacturing partners. Continued customer engagement and demand for solutions that enable increasingly complex advanced packaging architectures support our confidence in the long-term outlook for the business.
Previous wording
Looking ahead, we anticipate growth in the semiconductor market in leading-edge investment driven by AI investments.
Current wording
We anticipate growth in the semiconductor market in leading-edge driven by AI investments.
Previous wording
Our portfolio spans multiple steps of the laser manufacturing process, including Lumina MOCVD Arsenide Phosphide batch platform for the epitaxy steps, Wafer Etch and Wafer Storm for etching and metal lift-off, and our Spector IBD for the laser diode facet coatings.
Current wording
Our portfolio includes our Spector IBD for the laser diode facet coatings, WaferEtch and WaferStorm systems for etching, cleaning, surface preparation and metal lift-off; and our Lumina and Lumina+ MOCVD arsenide phosphide batch platform for the epitaxy.
Previous wording
Data Storage market revenue increased by 80% in the second quarter from the comparable prior year period, comprising 11% 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 expect full year 2026 to more than double and continue to be booked well into 2027. We are engaged with our customers on their roadmaps, including for Heat Assisted-Magnetic-Recording (“HAMR”) technology, giving us strong momentum in this market.
Current wording
Data Storage market revenue increased by 101% in the third quarter from the comparable prior year period, comprising 10% 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 expect full-year 2026 revenue in this market to approximately double compared to 2025 and have order visibility extending into 2027. We remain engaged with customers on their technology roadmaps, including the adoption of heat-assisted magnetic recording, which is contributing to renewed investment and demand for our technologies.
Previous wording
Scientific & Other market revenue increased by 28% in the second quarter from the comparable prior year period, comprising 10% 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.
Current wording
Scientific & Other market revenue decreased by 48% in the third quarter from the comparable prior year period, comprising 6% of total revenue. Demand in this market is primarily project-driven and includes sales to government-funded laboratories, universities, research institutions and customers developing emerging technologies. We address the Scientific & Other market with several technologies, including Molecular Beam Epitaxy (“MBE”), Atomic Layer Deposition (“ALD”), MOCVD, Wet Processing, and ion beam deposition and etch systems. These technologies support research, development and specialized production applications across areas such as quantum computing and other advanced materials.
Previous wording
Sales increased for the three months ended June 30, 2026 against the comparable prior year period across all markets. By geography, sales increased in the United States, and China regions, partially offset by decreased sales in the Rest of APAC, and EMEA regions. Sales in the Rest of APAC region for the three months ended June 30, 2026 included sales in Taiwan, Singapore, and Japan of $43.4 million, $10.5 million, and $9.8 million, respectively. Sales in the Rest of APAC region for the three months ended June 30, 2025 included sales in Taiwan, Singapore, and Japan of $45.5 million, $23.4 million, and $14.8 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.
Current wording
Sales increased for the three months ended September 30, 2026 against the comparable prior year period in the Compound Semiconductor, Semiconductor, and Data Storage markets, partially offset by a decrease in sales in the Scientific & Other market. By geography, sales increased in the United States, EMEA, and Rest of APAC regions, partially offset by decreased sales in the China region. Sales in the Rest of APAC region for the three months ended September 30, 2026 included sales in Taiwan and Singapore of $53.0 million and $17.2 million, respectively. 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. 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 three months ended June 30, 2026, gross profit increased against the comparable prior period primarily due to an increase in sales volume, partially offset by a decrease in gross margins. Gross margins decreased principally due to unfavorable product mix and higher spending, including logistics costs. Additionally other factors will cause our gross margins to fluctuate each period, including the impact of the evolving tariffs landscape, which includes refunds on previously paid tariffs, newly implemented tariffs, or changes to existing tariffs.
Current wording
For the three months ended September 30, 2026, gross profit increased against the comparable prior period primarily due to an increase in sales volume, partially offset by a decrease in gross margins. Gross margins decreased principally due to unfavorable product mix and higher spending, including logistics costs and spending to increase capacity and supply chain to ensure we are well positioned to meet customers increasing demand for our products. Additionally other factors will cause our gross margins to fluctuate each period, including the impact of the evolving tariffs landscape, which includes refunds on previously paid tariffs, newly implemented tariffs, or changes to existing tariffs. The Company has recognized approximately $2.8 million of tariff refunds for the three months ended September 30, 2026 as a reduction to Cost of Sales.
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 increased for the six months ended June 30, 2026 against the comparable prior period due to an increase in personnel-related expenses.
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 September 30, 2026 against the comparable prior period due to an increase in personnel-related and operating-related expenses.
Previous wording
During the three months ended June 30, 2026, we incurred an additional $1.5 million in legal, accounting, consulting fees and employee-related costs in connection with the proposed Merger.
Current wording
During the three months ended September 30, 2026 and 2025, we incurred $2.3 million and $2.6 million, respectively, in legal, accounting, and consulting fees, as well as employee-related costs in connection with the proposed Merger.
Previous wording
We recorded net interest income of $2.3 million for the six months ended June 30, 2026, compared to net interest income of $1.7 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 $1.8 million for the three months ended September 30, 2026, 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 higher interest bearing balances compared to the prior year period.
Previous wording
Our tax expense for the three months ended June 30, 2026, was $1.2 million, compared to $0.9 million of tax expense for the comparable prior period. For the three months ended June 30, 2026, the effective tax rate was favorably impacted by the tax benefits related to Foreign-Derived Deduction Eligible Income and research and development tax credits. Additionally, the effective tax rate was also impacted by a discrete income tax benefit resulting from share-based compensation windfall. For the three months ended June 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.
Current wording
Our tax expense for the three months ended September 30, 2026, was $2.2 million, compared to $1.3 million of tax expense for the comparable prior period. For the three months ended September 30, 2026, the effective tax rate was lower than the U.S. statutory tax rate primarily relating to tax benefits related to Foreign-Derived Deduction Eligible Income and research and development tax credits. 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.
Previous wording
Sales increased for the six months ended June 30, 2026 against the comparable prior year period driven by an increase in sales in the Data Storage, Compound Semiconductor, and Scientific & Other markets, partially offset by a decrease in sales in the Semiconductor market. By geography, sales increased in the United States, Rest of APAC, and EMEA, regions, partially offset by decreased sales in the China region. Sales in the Rest of APAC region for the six months ended June 30, 2026 included sales in Taiwan, Japan, and Singapore of $109.0 million, $19.1 million, and $14.0 million, respectively. Sales in the Rest of APAC region for the six months ended June 30, 2025 included sales in Taiwan, Singapore, and Japan of $78.0 million, $29.4 million, and $28.7 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
Sales increased for the nine months ended September 30, 2026 against the comparable prior year period driven by an increase in sales in the Compound Semiconductor, Data Storage and Semiconductor markets, partially offset by a decrease in sales in the Scientific & Other market. By geography, sales increased in the United States, Rest of APAC, and EMEA regions, partially offset by decreased sales in the China region. Sales in the Rest of APAC region for the nine months ended September 30, 2026 included sales in Taiwan, Singapore, and Japan of $162.0 million, $31.2 million, and $23.0 million, respectively. Sales in the Rest of APAC 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. 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 six months ended June 30, 2026, gross profit decreased against the comparable prior period due to a decrease in gross margins, partially offset by an increase in sales volume. Gross margins decreased principally due to unfavorable product mix and higher spending, including logistics costs. Additionally other factors will cause our gross margins to fluctuate each period, including the impact of the evolving tariffs landscape, which includes refunds on previously paid tariffs, newly implemented tariffs, or changes to existing tariffs.
Current wording
For the nine months ended September 30, 2026, gross profit increased against the comparable prior period primarily due to an increase in sales volume, partially offset by a decrease in gross margins. Gross margins decreased principally due to unfavorable product mix and higher spending, including logistics costs and spending to increase capacity and supply chain to ensure we are well positioned to meet customers increasing demand for our products. Additionally other factors will cause our gross margins to fluctuate each period, including the impact of the evolving tariffs landscape, which includes refunds on previously paid tariffs, newly implemented tariffs, or changes to existing tariffs. The Company has recognized approximately $3.3 million of tariff refunds for the nine months ended September 30, 2026 as a reduction to Cost of Sales.
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 increased for the three months ended June 30, 2026 against the comparable prior period due to an increase in personnel-related expenses.
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 nine months ended September 30, 2026 against the comparable prior period due to an increase in personnel-related expenses.
Previous wording
Selling, general, and administrative expenses increased for the six months ended June 30, 2026 against the comparable prior period due variable incentive related compensation and commission expenses based on increased order volume.
Current wording
Selling, general, and administrative expenses increased for the nine months ended September 30, 2026 against the comparable prior period due variable incentive related compensation and commission expenses based on increased order volume.
Previous wording
During the six months ended June 30, 2026, we incurred an additional $3.5 million in legal, accounting, consulting fees and employee-related costs in connection with the proposed Merger.
Current wording
During the nine months ended September 30, 2026 and 2025, we incurred $5.7 million and $2.6 million, respectively, in legal, accounting, and consulting fees, as well as employee-related costs in connection with the proposed Merger.
Previous wording
We recorded net interest income of $1.2 million for the three months ended June 30, 2026, compared to net interest income of $0.9 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 $4.1 million for the nine months ended September 30, 2026, compared to net interest income of $3.1 million for the comparable prior year period. The increase in net interest income was primarily due to higher balances in interest bearing accounts and a reduction of 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 six months ended June 30, 2026 was immaterial, compared to $3.9 million of tax expense for the comparable prior period. For the six months ended June 30, 2026, the effective tax rate was favorably impacted by the tax benefits related to Foreign-Derived Deduction Eligible Income and research and development tax credits. Additionally, the effective tax rate was also impacted by a discrete income tax benefit resulting from share-based compensation windfall. For the six months ended June 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.
Current wording
Our tax expense for the nine months ended September 30, 2026 was $2.3 million, compared to $5.2 million of tax expense for the comparable prior period. For the nine months ended September 30, 2026, the effective tax rate was favorably impacted by the tax benefits related to Foreign-Derived Deduction Eligible Income and research and development tax credits. Additionally, the effective tax rate was also impacted by a discrete income tax benefit resulting
Previous wording
At June 30, 2026 and December 31, 2025, cash and cash equivalents of $46.6 million and $23.6 million, respectively, were held outside the United States. As of June 30, 2026, we had $29.2 million of accumulated undistributed earnings generated by our non-U.S. subsidiaries for which the U.S. tax has previously been provided. Approximately $14.2 million of undistributed earnings will be subject to foreign withholding taxes if distributed back to the United States and we have accrued $1.4 million for foreign withholding taxes for the undistributed earnings.
Current wording
At September 30, 2026 and December 31, 2025, cash and cash equivalents of $59.4 million and $23.6 million, respectively, were held outside the United States. As of September 30, 2026, we had $31.2 million of accumulated undistributed earnings generated by our non-U.S. subsidiaries for which the U.S. tax has previously been provided. Approximately $15.0 million of undistributed earnings will be subject to foreign withholding taxes if distributed back to the United States and we have accrued $1.5 million for foreign withholding taxes for the undistributed earnings.
Previous wording
A summary of the cash flow activity for the six months ended June 30, 2026 and 2025 is as follows:
Current wording
A summary of the cash flow activity for the nine months ended September 30, 2026 and 2025 is as follows:
Previous wording
Net cash provided by operating activities was $59.4 million for the six months ended June 30, 2026 and was due to net income of $11.5 million, adjustments for non-cash items of $27.2 million, and an increase in cash flow from changes in operating assets and liabilities of $20.6 million. The changes in operating assets and liabilities were largely attributable to an increase in contract liabilities, accrued expenses, and accounts payable, partially offset by an increase in accounts receivables, and inventories. Net cash provided by operating activities was $29.0 million for the six months ended June 30, 2025 and was due to net income of $23.7 million and adjustments for non-cash items of $30.2 million, partially offset by a decrease in cash flow from changes in operating assets and liabilities of $24.9 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 accrued expenses.
Current wording
Net cash provided by operating activities was $117.3 million for the nine months ended September 30, 2026 and was due to net income of $25.2 million, adjustments for non-cash items of $41.5 million, and an increase in cash flow from changes in operating assets and liabilities of $50.6 million. The changes in operating assets and liabilities were largely attributable to an increase in contract liabilities, accrued expenses, and accounts payable, partially offset by an increase in accounts receivables, and inventories. 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.
Previous wording
The cash provided by investing activities during the six months ended June 30, 2026 was primarily attributable to net cash provided for investment activity, partially offset by capital expenditures. The cash provided by investing activities during the six months ended June 30, 2025 was primarily attributable to net cash provided for investment activity, partially offset by capital expenditures.
Current wording
The cash used by investing activities during the nine months ended September 30, 2026 was primarily attributable to net cash used for investment activity and capital expenditures. 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.
Previous wording
The cash used in financing activities for the six months ended June 30, 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 six months ended June 30, 2025 was related to cash used to settle taxes related to employee
Current wording
The cash used in financing activities for the nine months ended September 30, 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 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.
Previous wording
We believe that we have sufficient capital resources and cash flows from operations to support scheduled interest payments on this debt. In addition, in June 2025, we increased the total funds available to us through our revolving credit facility from $225 million to $250 million and extended the maturity until June 16, 2030, subject to a springing maturity date of March 2, 2029. The Company has no immediate plans to draw down on the facility. Interest under the facility is variable based on the Company’s secured net leverage ratio and is expected to bear interest based on SOFR plus a range of 125 to 200 basis points, if drawn. There is a yearly commitment fee of 20 to 30 basis points, based on the Company’s secured net leverage ratio, charged on the unused portion of the Facility.
Current wording
We believe that we have sufficient capital resources and cash flows from operations to support scheduled interest payments on this debt. In addition, in June 2025, we increased the total funds available to us through our revolving credit facility from $225 million to $250 million and extended the maturity until June 16, 2030, subject to a springing maturity date of March 2, 2029. This provides the Company with ability to meet any cash requirements that may arise as a result of potential conversions of the 2029 Notes, which are convertible by noteholders until December 31, 2026, the principal of which is required to be settled in cash. The Company has no immediate plans to draw down on the facility. Interest under the facility is variable based on the Company’s secured net leverage ratio and is expected to bear interest based on SOFR plus a range of 125 to 200 basis points, if drawn. There is a yearly commitment fee of 20 to 30 basis points, based on the Company’s secured net leverage ratio, charged on the unused portion of the Facility.
Previous wording
We have commitments under certain contractual arrangements to make future payments for goods and services. These contractual arrangements secure the rights to various assets and services to be used in the future in the normal course of business. We expect to fund these contractual arrangements with cash generated from operations in the normal course of business.
Current wording
We have commitments under certain contractual arrangements to make future payments for goods and services. These contractual arrangements secure the rights to various assets and services to be used in the future in the normal course of
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
the multilayer mirrors used in EUV mask blanks, and our product roadmap is well positioned to support evolving High-NA requirements and the industry’s development of larger-format masks. We are also expanding our EUV related business into pellicle applications, which are increasingly being used to protect defect-free masks and improve productivity as EUV utilization scales. We continue to win production business at a Tier 1 foundry and engage new customers for EUV pellicles.
Current report — wording carried from elsewhere
from share-based compensation windfall. 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.
Current report — wording carried from elsewhere
business. We expect to fund these contractual arrangements with cash generated from operations in the normal course of business.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
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.