Aixtron SE (AIXXF) Q3 2024 Earnings Call: Strong Order Backlog and Strategic Technological Advancements
Friday, Nov 1, 2024 9:07 pm ET
2min read Aixtron SE (AIXXF), a leading provider of deposition equipment for the semiconductor industry, reported robust Q3 2024 earnings with a strong order backlog and strategic technological advancements. Despite revenue challenges and market uncertainties, the company demonstrated solid performance, indicating a positive outlook for the future.
Positive Points:
Aixtron SE reported a robust Q3 2024 with solid orders amounting to EUR144 million and revenues of EUR156 million. The company achieved a gross margin of 43%, showing strong improvement due to a better product mix. Aixtron SE has a high equipment order backlog of EUR384 million, indicating strong future demand. The company has made significant technical progress in silicon carbide and gallium nitride technologies, strengthening its market position. Aixtron SE is well-prepared for the transition to 300-millimeter wafer technology, which is expected to drive future growth in AI and other large volume applications.
Negative Points:
Aixtron SE ended Q3 2024 in the lower half of its guided revenue range due to a customer pushing a large project delivery to Q4. The company anticipates flat or slightly lower revenue for fiscal 2025 compared to 2024, indicating potential market challenges. Gross margin for the first nine months of 2024 was down 4 percentage points year-over-year, primarily due to a less favorable product mix. Operating expenses increased to EUR30 million in Q3, driven by higher R&D spending. The global silicon carbide market has built more capacity than demand, posing a challenge for future growth.
Q & A Highlights:
Q: How is the transition from batch to single-wafer GaN tools progressing, and what feedback have you received from customers?
A: The transition is going very well, with the tool providing positive surprises. We've integrated elements from our 200-millimeter technology into the 300-millimeter tool, achieving excellent results in film uniformity and crystalline quality. Customer feedback has been positive, with some results surpassing those of our 200-millimeter tools.
Q: Are you considering developing a single-wafer silicon carbide epi tool for the future?
A: We are satisfied with our current batch tool for silicon carbide, which has shown superior productivity and performance compared to single-wafer tools in the market. There is no current rationale to develop a new tool.
Q: What is the outlook for 2025 sales, and what factors could influence whether they are flat or slightly lower?
A: Sales could be flat or slightly down by 5% to 10%. The outcome depends on market dynamics and the duration of the current downturn. If the downturn persists through 2025, orders may only increase in 2026.
In conclusion, Aixtron SE's Q3 2024 earnings call highlights the company's strong order backlog and strategic technological advancements. Despite facing revenue challenges and market uncertainties, the company's solid performance and future growth prospects make it an attractive investment opportunity. As an investor focused on stable profits and cash flows, considering Aixtron SE as part of a diversified portfolio can provide exposure to the semiconductor industry while maintaining a long-term, income-focused strategy.
Positive Points:
Aixtron SE reported a robust Q3 2024 with solid orders amounting to EUR144 million and revenues of EUR156 million. The company achieved a gross margin of 43%, showing strong improvement due to a better product mix. Aixtron SE has a high equipment order backlog of EUR384 million, indicating strong future demand. The company has made significant technical progress in silicon carbide and gallium nitride technologies, strengthening its market position. Aixtron SE is well-prepared for the transition to 300-millimeter wafer technology, which is expected to drive future growth in AI and other large volume applications.
Negative Points:
Aixtron SE ended Q3 2024 in the lower half of its guided revenue range due to a customer pushing a large project delivery to Q4. The company anticipates flat or slightly lower revenue for fiscal 2025 compared to 2024, indicating potential market challenges. Gross margin for the first nine months of 2024 was down 4 percentage points year-over-year, primarily due to a less favorable product mix. Operating expenses increased to EUR30 million in Q3, driven by higher R&D spending. The global silicon carbide market has built more capacity than demand, posing a challenge for future growth.
Q & A Highlights:
Q: How is the transition from batch to single-wafer GaN tools progressing, and what feedback have you received from customers?
A: The transition is going very well, with the tool providing positive surprises. We've integrated elements from our 200-millimeter technology into the 300-millimeter tool, achieving excellent results in film uniformity and crystalline quality. Customer feedback has been positive, with some results surpassing those of our 200-millimeter tools.
Q: Are you considering developing a single-wafer silicon carbide epi tool for the future?
A: We are satisfied with our current batch tool for silicon carbide, which has shown superior productivity and performance compared to single-wafer tools in the market. There is no current rationale to develop a new tool.
Q: What is the outlook for 2025 sales, and what factors could influence whether they are flat or slightly lower?
A: Sales could be flat or slightly down by 5% to 10%. The outcome depends on market dynamics and the duration of the current downturn. If the downturn persists through 2025, orders may only increase in 2026.
In conclusion, Aixtron SE's Q3 2024 earnings call highlights the company's strong order backlog and strategic technological advancements. Despite facing revenue challenges and market uncertainties, the company's solid performance and future growth prospects make it an attractive investment opportunity. As an investor focused on stable profits and cash flows, considering Aixtron SE as part of a diversified portfolio can provide exposure to the semiconductor industry while maintaining a long-term, income-focused strategy.