Axcelis' 2025 Outlook: Mixed Signals on Margins, Tariffs, and China Revenue

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Strong Financial Performance:
- Axcelis reported revenue of $193 million for Q1 2025, exceeding expectations, with earnings per diluted share of $0.88, up from a previous outlook of $0.38.
- The growth was driven by better-than-expected gross margins and disciplined cost control, particularly in the power and general mature market segments.

Improved Bookings and Backlog:
- The company generated $110 million in bookings in Q1 2025, reflecting a high book-to-bill ratio of 0.8x, the highest level since Q4 2023.
- This improvement is attributed to increased customer engagement and investments in technology roadmaps across power, mature nodes, and memory sectors.

Tariff Impact and Resilience:
- Axcelis has maintained strong operations despite potential tariff impacts, with no significant changes in customer demand due to announced tariffs.
- The company's resilience is due to its diversified global supply chain and manufacturing footprint, allowing it to mitigate direct tariff impacts.

Silicon Carbide Market Dynamics:
- Sales of silicon carbide applications saw a decline in the quarter, consistent with expectations, as customers moderate investments due to softer demand.
- However, engagement with technology transitions and long-term growth drivers, such as adoption in EVs and data centers, remain robust, benefiting Axcelis' market leadership in ion implantation.