Axcelis Q3 Bookings Jump as Q4 Revenue Outlook Reaches $275 Million

Axcelis (ACLS) reported stronger third-quarter revenue and sharply higher systems bookings, signaling broader demand across power, mature-process and memory applications as the semiconductor equipment maker prepares for further growth entering 2027. The company generated a systems book-to-bill ratio of approximately 1.5 and projected fourth-quarter revenue of $275 million.

Third-quarter revenue rose to $237.8 million from $213.6 million a year earlier and $215.2 million in the second quarter. Systems revenue was $145.1 million, compared with $143.7 million a year ago, while customer service and installed base, or CS&I, revenue reached a quarterly record of $92.6 million, up from $69.9 million.

Systems bookings climbed to $222.2 million from $130.9 million in the prior quarter and $52.2 million a year earlier. Systems backlog ended the quarter at $530.7 million, compared with $451.6 million in the second quarter and $484.5 million a year ago.

GAAP operating income increased to $27.3 million from $20.3 million in the second quarter, while operating margin expanded sequentially to 11.5% from 9.4%. GAAP net income was $37.8 million, or $1.21 per diluted share, compared with $23.3 million, or $0.75 per share, in the prior quarter.

On a non-GAAP basis, operating income was $39.6 million and operating margin was 16.6%, up sequentially from $31.5 million and 14.7%. Non-GAAP net income totaled $39.2 million, or $1.26 per diluted share. Adjusted EBITDA rose to $44.0 million from $36.0 million, with the adjusted EBITDA margin increasing to 18.5% from 16.7%.

Gross profitability was mixed. GAAP gross margin declined sequentially to 41.0% from 42.4%, while non-GAAP gross margin fell to 41.2% from 42.7%. Non-GAAP results exclude items including share-based compensation, transaction and integration costs associated with the pending Veeco Instruments merger, and certain other adjustments.

Power, mature-process and memory demand

Power applications represented 45% of shipped systems revenue, including 27% from silicon carbide and 18% from other power technologies. Axcelis said silicon carbide revenue improved notably from the second quarter, with artificial intelligence and data-center power requirements emerging as additional demand drivers. The company also reported customer interest in proton implant and power-management integrated circuit solutions, along with selections of its advanced channeling technology for next-generation superjunction applications.

General mature-process applications accounted for 33% of shipped systems revenue. Bookings in this category increased strongly on a sequential basis as utilization and customer investment improved. The company highlighted stronger North American activity, including AI-related capacity expansion, and growing interest in its recently introduced Purion H6 high-current platform.

Memory contributed 20% of shipped systems revenue. Management said demand remained robust as customers invested in DRAM and high-bandwidth memory capacity for AI-related requirements. Customer engagement was also gaining momentum in Korea and other markets. Advanced logic represented 1% of shipped systems revenue, with Axcelis continuing work on 2-nanometer and future-node technology roadmaps.

China remained the largest geographic market at 46% of total revenue, unchanged from both the prior quarter and the year-earlier period. South Korea accounted for 18%, the United States 13% and Europe 12%.

Fourth-quarter outlook and capacity investment

For the fourth quarter, Axcelis expects revenue of $275 million, a non-GAAP gross margin of 42.5%, non-GAAP operating expenses of $65 million and adjusted EBITDA of $56 million. Non-GAAP diluted earnings are projected at $1.50 per share. The company expects first-quarter 2027 revenue to be relatively similar to the anticipated fourth-quarter level.

Axcelis said a broader recovery across power, memory and general mature markets, together with continued CS&I strength, is expected to support growth in 2027. It specifically expects ongoing DRAM and HBM investment to contribute to memory growth next year.

The company is also investing $35 million in a roughly 200,000-square-foot factory in Pyeongtaek, South Korea. The facility will consolidate and expand its Korean manufacturing operations and is expected to begin production in the second half of 2028.

Cash, cash equivalents and marketable securities totaled $615.3 million at quarter-end, up from $577.0 million in the second quarter. Operating cash flow was $40.2 million, capital expenditures were $2.5 million and free cash flow was $37.7 million. Free cash flow included approximately $2 million of cash transaction expenses related to the pending Veeco merger.

Axcelis cautioned that its outlook remains subject to order timing, shipment schedules, customers’ investment decisions and the conversion of orders into revenue. Other identified uncertainties include semiconductor equipment demand, dependence on major customer relationships, competitive pricing pressure, production-cost increases, tariffs and changing global economic, political and financial conditions.