AXCELIS TECHNOLOGIES INC

At March 31, 2024, we had $134.0 million in unrestricted cash and cash equivalents and $396.2 million in short-term investments, in addition to $6.7 million in restricted cash. Management believes that maintaining a strong cash balance is necessary to fund a continuing ramp in our business which can require significant cash investment to meet sudden demand. Additionally, we are using cash to repurchase shares as part of our stock repurchase program and are considering both organic and inorganic opportunities to drive future growth, for which cash resources will be necessary.

Our liquidity is affected by many factors. Some of these relate specifically to the operations of our business, for example, the rate of sales of our products, and others relate to the uncertainties of global economic conditions, including the availability of credit and the condition of the overall semiconductor equipment industry. Our industry requires ongoing investments in operations and research and development that are not easily adjusted to reflect changes in revenue. As a result, profitability and cash flows can fluctuate more widely than revenue. Stock repurchases, as discussed below, also reduce our cash balances.

During the three months ended March 31, 2024 and 2023, we generated $42.2 million and $34.6 million, respectively, of cash related to operating activities.

Investing activities for the three months ended March 31, 2024 resulted in cash outflows of $55.7 million, $1.6 million of which was used for capital expenditures and $145.1 million of which was used to purchase short-term investments, offset by $91.1 million related to maturities of short-term investments. Investing activities for the three months ended March 31, 2023 resulted in cash outflows of $33.0 million, $2.2 million of which was used for capital expenditures and $61.8 million of which was used to purchase short-term investments, offset by $31.0 million related to maturities of short-term investments.

Financing activities for the three months ended March 31, 2024 resulted in a cash usage of $18.1 million. During the first three months of 2024, $15.0 million in cash was used to repurchase our common stock and $2.7 million was used for payments to government tax authorities for income tax withholding on employee compensation arising from the vesting of RSUs, where units are withheld by us to cover taxes, as well as $0.4 million relating to the reduction of the liability under the finance lease of our corporate headquarters. In comparison, financing activities for the three months ended March 31, 2023 resulted in cash usage of $16.7 million, $12.5 million of which related to the repurchase of our common stock and $3.9 million of which related to payments made to government tax authorities for income tax withholding on employee compensation arising from the vesting of RSUs, as well as $0.3 million relating to the reduction of our financing lease liability.

As of March 31, 2024, we had a security deposit of $5.9 million related to this lease in the form of a cash collateralized letter of credit issued with UBS Bank USA, which is classified as long-term restricted cash on our balance sheet.

We believe that based on our current market, revenue, expense and cash flow forecasts, our existing cash and cash equivalents will be sufficient to satisfy our anticipated cash requirements for the short- and long-term.

Commitments and Contingencies

Significant commitments and contingencies at March 31, 2024 are consistent with those discussed in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and Note 16 to the consolidated financial statements included in our 2023 Form 10-K.