Veeco Instruments Inc. reported fourth‑quarter and full‑year 2025 results that ended December 31, 2025. Total revenue was $165 million, flat quarter‑over‑quarter and down 7% year‑over‑year to $664 million for the full year. Diluted earnings per share were $0.24, missing the consensus estimate of $0.2658 by 9.7% but matching the company’s own adjusted EPS estimate of $0.24.
The semiconductor business, which accounts for 72% of total revenue, grew 2% YoY to $477 million, while the compound‑semiconductor segment rose 12% to $20 million. Data‑storage revenue remained flat at $10 million, and scientific and other revenue held steady at $24 million. The mix shift toward higher‑margin semiconductor contracts helped offset the decline in legacy product sales, but the company still faced margin compression of 38% in Q4, driven by product‑mix changes and tariff impacts. Management targets a 45% gross margin by the second half of 2026 as it scales AI‑focused product lines.
For the first quarter of 2026, Veeco guided sales of $150 million to $170 million and an adjusted EPS of $0.14 to $0.24. Full‑year 2026 guidance calls for sales of $740 million to $800 million and an adjusted EPS of $1.50 to $1.85, reflecting confidence in continued demand from AI and high‑performance computing customers. The guidance represents a modest upside to prior expectations and signals that the company believes its strategic shift toward laser annealing, ion‑beam deposition, and advanced packaging will drive growth.
The company’s pending merger with Axcelis Technologies is on track for completion in the second half of 2026, pending regulatory approval. The transaction is expected to create a leading semiconductor equipment provider with a broader product portfolio and enhanced R&D capabilities, positioning Veeco to capture additional market share in high‑growth segments.
Investors reacted to the earnings miss, with the EPS falling short of the consensus estimate. The miss was attributed to weaker-than‑expected profitability in legacy segments, while revenue met guidance. Market participants noted the company’s margin compression and the need for continued cost discipline, but also recognized the upside in the AI‑driven semiconductor market and the strategic value of the Axcelis merger.
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