ACLS 10-K & 10-Q changes, risk factors and insider trading
Axcelis Technologies Inc. · Nasdaq · Special Industry Machinery, Nec · CIK 1113232 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “The impact of tariffs on our business is difficult to predict, and may change substantially and without notice.”
New heading “Risks Related to the Merger”
New heading “The exchange ratio is fixed and will not be adjusted in the event of any change in either Axcelis’ or Veeco’s stock price.”
New heading “The Merger may be delayed or may not be completed and the Merger Agreement may be terminated in accordance with its terms, which could materially and adversely effect Axcelis and/or Veeco.”
New heading “The market price for shares of common stock of the combined company following the completion of the merger may be affected by factors different from, or in addition to, those that historically have affected or currently affect the market prices of shares of Axcelis common stock and Veeco common stock.”
New heading “Regulatory approvals may not be received, may take longer than expected or may impose conditions that are not presently anticipated or that cannot be met.”
New heading “Axcelis stockholders and Veeco stockholders will each have reduced ownership and voting interest in the combined company as compared to ownership and voting interest in each of Axcelis and Veeco on a standalone basis.”
New heading “The Merger Agreement may prevent Axcelis and Veeco from entering into certain transactions and taking certain actions that might otherwise be beneficial to Axcelis or Veeco and their respective stockholders”
New heading “Litigation against Axcelis and Veeco could prevent or delay the completion of the Merger or result in the payment of damages following completion of the Merger.”
New heading “Failure to attract, motivate and retain executives and other key employees could diminish the anticipated benefits of the Merger.”
New heading “Whether or not the Merger is completed, the announcement and pendency of the Merger will divert significant management resources to complete the Merger, which could have a material adverse effect on Axcelis’ and Veeco’s respective businesses, financial results, and/or market prices.”
New heading “The market price of the combined company’s common stock may be volatile, and holders of the combined company’s common stock could lose a significant portion of their investment due to decreases in the market price of the combined company’s common stock following completion of the Merger.”
New heading “Each of Axcelis and Veeco will incur significant transaction, merger-related and restructuring costs in connection with the Merger.”
New heading “Axcelis stockholders and Veeco stockholders will not be entitled to appraisal rights in the Merger.”
Largest changes
“Litigation against Axcelis and Veeco could prevent or delay the completion of the Merger or result in the payment of damages following completion of the Merger.”see in full comparison
“Each of Axcelis and Veeco will incur significant transaction, merger-related and restructuring costs in connection with the Merger.”see in full comparison
“The impact of tariffs on our business is difficult to predict, and may change substantially and without notice.”see in full comparison
“Axcelis stockholders and Veeco stockholders may file lawsuits challenging the Merger or the other transactions contemplated by the Merger Agreement, which may name Axcelis, Veeco and/or members of their respective boards of directors as defendants. The results of any such potential legal proceedings are difficult to predict, and could delay or prevent the Merger from becoming effective in a timely manner. The existence of litigation related to the Merger could affect the likelihood of obtaining the required approval from Axcelis stockholders or Veeco stockholders. …”see in full comparison
“Stock price changes may result from a variety of factors, including, among others, general market and economic conditions, changes in Axcelis’ or Veeco’s respective businesses, operations and prospects, short-selling activity, changes in and speculation regarding Axcelis’ and Veeco’s respective businesses, operations and prospects, reductions or changes in U.S. …”see in full comparison
“The market price for shares of common stock of the combined company following the completion of the merger may be affected by factors different from, or in addition to, those that historically have affected or currently affect the market prices of shares of Axcelis common stock and Veeco common stock.”see in full comparison
Full comparison: every changed paragraph (48)
U.S. export controls on shipments to Chinese customers have been notably increasing since 2020. Since the placement of SMIC on the U.S. Entity List in 2020, we are required to obtain export control licenses to ship to mature process SMIC fabs, which to date, we have been able to obtain. Other chipmakers have been placed on the Entity List, some with, and some without, a similar policy allowing licensed shipments on specified conditions. A newAn export controls regulatory framework issued by the U.S. in October 2022 and supplemented in 2023, prohibits all semiconductor equipment shipments to Chinese customers (other than certain multi-nationals) who are producing or developing logic, DRAM and NAND chips meeting specific advanced parameters. While these regulations have further excluded exports to certain Chinese customers, we currently are able to continue to ship to the majority of our Chinese customers. In general, however, continuing revenue from Chinese customers is at higher risk than continuing revenue formfrom customers in other international locations because of trade tensions between the United States government and the Chinese government, and other challenges reflecting China’s stage of development and rapid growth.
Increased U.S. export controls and other political and trade tensions exacerbate the risk that Chinese customers will change suppliers to non-U.S. vendors, such as Advanced Ion Beam Technology, Inc., Nissin Ion Equipment Co., Ltd. and Sumitomo Heavy Industries Ion Technology Co., Ltd. In addition, two Chinese entities, known as Kingstone Semiconductor and CETC Electronics Equipment Group Co., Ltd., arecontinue developingto develop ion implanters for the Chinese domestic market. The loss of a significant customer or any reduction or delays in our ability to ship to any significant customer will adversely affect us.
The impact of tariffs on our business is difficult to predict, and may change substantially and without notice.
The U.S. government has proposed or enacted tariffs and substantial changes to trade policies, which could adversely affect our business. In August 2025, the U.S. Court of Appeals for the Federal Circuit ruled that the tariffs imposed by the current Federal administration exceed presidential authority and therefore are invalid, and in February 2026, the U.S. Supreme Court affirmed such decision. Following the ruling, the current Federal administration signed an executive order imposing a 10% “global tariff” and later indicated an intention to increase such “global tariff” to 15%, effective immediately, using presidential powers under certain U.S. trade laws. If implemented, such tariffs can remain in effect for up to 150 days, which may be extended by the U.S. Congress. The current Federal administration may continue to impose additional tariffs under other U.S. trade laws. The Company cannot predict what additional changes to trade policy will be made by the current Federal administration or Congress, including whether existing tariff policies will be maintained or modified, what materials or products may be subject to such policies or whether the entry into new bilateral or multilateral trade agreements, or the amendment or termination of existing trade agreements, will occur, nor can we predict the effects that any such changes would have on our business.
The U.S. government has proposed or enacted tariffs and substantial changes to trade policies, which could adversely affect our business. For example, the U.S. government has imposed tariffs on certain foreign products, including most recently from Canada, Mexico and China, that in the past have resulted in and may result in future retaliatory tariffs on U.S. goods and products. We cannot predict whether these policies will continue, or if new policies will be enacted, or the impact, if any, that any policy changes could have on our business.
Substantially all of our system sales are billed in U.S. dollars. We also pay almost all non-U.S. vendors providing materials, components, and subassemblies to our U.S. factory in U.S. dollars. Aftermarket revenues of our non-U.S.
Substantially all of our system sales are billed in U.S. dollars. We also pay almost all non-U.S. vendors providing materials, components, and subassemblies to our U.S. factory in U.S. dollars. Aftermarket revenues of our non-U.S. subsidiaries are denominated in both local currency and U.S. dollars. The majority of operating expenses of these non-U.S. subsidiaries, are received and incurred in local currencies. The establishment of the Axcelis Asia Operations Center in South Korea has increased the volume of our transactions in non-U.S. dollar currencies and increased the impact of foreign exchange gain / loss on the Company’s financial results. The Company experiences translation adjustments when local currency accounts payable on non-U.S. subsidiary books are re-measured for consolidated financial reporting. Similarly, the translation of long-term asset and liability values to U.S. dollars are recorded in stockholders’ equity as an element of accumulated other comprehensive income (loss). The value of the asset or liability in U.S. dollars will increase or decrease relative to the local currency based on changes in the exchange rate between the two currencies over the period. As a result, any unplanned non-cash gains or losses are recorded in the Company’s consolidated financial statements. Accordingly, fluctuations in exchange rates can impact reported revenues, expense, and profitability and asset values in our Consolidated Financial Statements. During the year ended December 31, 2024,2025, approximately 6.2%11.4% of our revenue was derived in local currencies from foreign operations with this inherent risk. In addition, at December 31, 2024,2025, our operations outside of the United States accounted for approximately 9.2%11.9% of our total assets, the majority of which was denominated in currencies other than the U.S. dollar.
The semiconductor equipment industry is cyclicalcyclical, and we expect that demand for our products will increase and decrease, making it difficult to manage the business and potentially causing harm to our sales and profitability.
In the conduct of our business, Axcelis collects, uses, transmits, and stores data on information technology systems. This data includes confidential information belonging to Axcelis, our employees or our customers or other business partners, some of which is personally-identifiable information of individuals. As reported in the 20242025 Verizon Data Breach Investigation Report, cyber-attacks in the manufacturing industries are almost entirelymostly financially motivated.motivated with another major motive being espionage. Axcelis has been and expects to continue to be subject to cybersecurity threats and incidents, including through employee error or misuse; individual attempts to gain unauthorized access to information systems; and sophisticated and targeted measures known as advanced persistent threats, none of which have had a material impact on the Company to date.
Axcelis implements a “Layered Security Strategy” that aligns with National Institute of Standards and Technology Cybersecurity Framework. To do so, we devote resources to network security, data encryption, employee training and other measures to protect our systems and data from unauthorized access or misuse. This includes continuously monitoring and reacting to the cybersecurity environment, by implementing best-in-class solutions from several vendors. On an on-going basis, we engage a cybersecurity consultant to validate and advise on the Company’s cyber landscape and to drive employee vigilance through employee cyber training and messaging. We continually replace less secure legacy systems to improve internal and external cyber defenses and maintain a cyber incident response plan including reporting and recovery processes. See Item IC1C “Cybersecurity” below. In addition, as discussed in our proxy statement, the Audit Committee and the full Board of Directors receive quarterly reports on cybersecurity risks and annual reports on management initiatives to promote cybersecurity.
We are also subject to laws and regulations in various jurisdictions that determine how much profit has been earned and when it is subject to taxation in that jurisdiction. In the United States, for example, the InflationOne ReductionBig Beautiful Bill Act (IRA“OB3”) imposeswas enacted in the third quarter of 2025. For the year ended December 31, 2025, the OB3 did not have a 15%material book minimum taximpact on corporations with three-year average annual adjusted financial statement income exceeding $1 billion. To date, the IRA has not materially impacted our effective tax rate.rate or tax expense.
Corporate tax reform, anti-base-erosion rules and tax transparency continue to be high legislative orand regulatory priorities in many jurisdictions. Changes in laws and regulations regarding these matters could impact us in the jurisdictions where we are deemed to earn income, which could in turn adversely affect our tax liability and results of operations. As of December 31, 2024, 54 countries have enacted various aspects of the Organization for Economic Co-operation and Development’s Base Erosion and Profit Shifting 2.0 Pillar Two global minimum tax (GMT). In 35 of those countries, the GMT is effective beginning in 2024. Based on currently enacted law and countries we operate in, the impact of GMT on our 2024 results did not have an impact on our business.
Risks Related to the Merger
The exchange ratio is fixed and will not be adjusted in the event of any change in either Axcelis’ or Veeco’s stock price.
Upon completion of the merger, each share of Veeco common stock issued and outstanding immediately prior to the Merger will be converted into and become exchangeable for 0.3575 shares of Axcelis common stock. This exchange ratio is fixed in the Merger Agreement and will not be adjusted for changes in the market price of either Axcelis common stock or Veeco common stock. The market prices of Axcelis common stock and Veeco common stock have fluctuated prior to and after the date of the announcement of the Merger Agreement and may continue to fluctuate from the date hereof to the date the Merger is consummated.
Stock price changes may result from a variety of factors, including, among others, general market and economic conditions, changes in Axcelis’ or Veeco’s respective businesses, operations and prospects, short-selling activity, changes in and speculation regarding Axcelis’ and Veeco’s respective businesses, operations and prospects, reductions or changes in U.S. government spending or budgetary policies, market assessments of the likelihood that the merger will be completed and/or expectations regarding the timing thereof, interest rates, general market, industry and economic conditions, including the impact of continued inflation and associated changes in monetary policy, and other factors generally affecting the respective prices of Axcelis’ or Veeco’s common stock, federal, state and local legislation, governmental regulation and legal developments in the industry segments in which Axcelis or Veeco operate, and the timing of the Merger.
Many of these factors are beyond Axcelis’ and Veeco’s control, and neither Axcelis nor Veeco are permitted to terminate the Merger Agreement solely due to a decline in the market price of the common stock of the other party.
The Merger may be delayed or may not be completed and the Merger Agreement may be terminated in accordance with its terms, which could materially and adversely effect Axcelis and/or Veeco.
The Merger is subject to a number of conditions that must be satisfied, some of which are beyond the control of Axcelis and Veeco, may not be satisfied or waived in a timely manner or at all, and, accordingly, the merger may be delayed or not completed. These conditions include: approval for listing on Nasdaq of the shares of Axcelis common stock to be issued in connection with the merger (subject to official notice of issuance), the absence of governmental restraints or prohibitions preventing the consummation of the Merger and the approval of the Merger by the State Administration for Market Regulation in the People’s Republic of China. The obligation of each of Axcelis and Veeco to consummate the merger is also conditioned on, among other things, the absence of a material adverse effect on the other party, the truth and correctness of the representations and warranties made by the other party on the date of the merger agreement and on the closing date (subject to certain materiality qualifiers), and the performance by the other party in all material respects of its obligations under the merger agreement. No assurance can be given that the required consents and approvals will be obtained or that the required conditions to closing will be satisfied, and, if all required consents and approvals are obtained and the conditions are satisfied, no assurance can be given as to the terms, conditions and timing of such consents and approvals. Any delay in completing the Merger could cause the combined company not to realize, or to be delayed in realizing, some or all of the benefits that Axcelis and Veeco expect to achieve if the Merger is successfully completed within its expected time frame. Additionally, Axcelis and Veeco may incur significant additional costs in connection with any delay in completing the merger or termination of the Merger Agreement, in addition to significant transaction costs, including legal, financial advisory, accounting and other costs Axcelis and Veeco have already incurred.
If the Merger is not completed for any reason, the ongoing businesses of Axcelis and Veeco may be adversely affected and, without realizing any of the benefits of having completed the Merger, Axcelis and Veeco would be subject to a number of risks, including the following:
Uncertainty regarding completion of the Merger may also cause customers, suppliers, vendors, strategic partners or others that deal with Axcelis or Veeco to delay or defer entering into contracts with Axcelis or Veeco or making other decisions concerning Axcelis or Veeco or could cause such customers, suppliers, vendors, strategic partners or others to seek to change or cancel existing business relationships with Axcelis or Veeco, which could negatively affect their respective businesses. Any delay or deferral of those decisions or changes in existing agreements could have a material adverse impact on the respective businesses of Axcelis and Veeco, regardless of whether the Merger is ultimately completed.
The market price for shares of common stock of the combined company following the completion of the merger may be affected by factors different from, or in addition to, those that historically have affected or currently affect the market prices of shares of Axcelis common stock and Veeco common stock.
Upon consummation of the Merger, Axcelis stockholders and Veeco stockholders will both hold shares of common stock in the combined company. The businesses of Axcelis and Veeco differ from each other, and, accordingly, the results of operations of the combined company will be affected by some factors that are different from those currently or historically affecting the separate results of operations, as well as the market price of the common stock, of Axcelis and Veeco. Additionally, the market price of the combined company’s common stock may fluctuate significantly following completion of the Merger.
Regulatory approvals may not be received, may take longer than expected or may impose conditions that are not presently anticipated or that cannot be met.
Consummation of the Merger is conditioned upon, among other things, the approval of the Merger by the State Administration for Market Regulation in the People’s Republic of China. Any such requirements or restrictions may prevent or delay completion of the Merger or may reduce the anticipated benefits of the Merger, which could also have a material adverse effect on the combined company’s business and cash flows, financial condition and results of operations.
Axcelis stockholders and Veeco stockholders will each have reduced ownership and voting interest in the combined company as compared to ownership and voting interest in each of Axcelis and Veeco on a standalone basis.
Upon consummation of the Merger, each Axcelis stockholder and each Veeco stockholder will become a stockholder of the combined company with a percentage ownership of the combined company that is smaller than such stockholder’s percentage ownership of Axcelis or Veeco, as applicable, immediately prior to the effective time of the Merger.
Because of this, each share of Axcelis common stock and each share of Veeco common stock will represent a smaller percentage ownership of the combined company than it represented in Axcelis or Veeco, respectively. Accordingly, Axcelis stockholders and Veeco stockholders will have less voting power in the combined company than they now have in Axcelis or Veeco and will be able to exercise less influence over the management and policies of the combined company following the consummation of the Merger than they are able to exercise over Axcelis or Veeco, as applicable, immediately prior to the consummation of the Merger.
The Merger Agreement may prevent Axcelis and Veeco from entering into certain transactions and taking certain actions that might otherwise be beneficial to Axcelis or Veeco and their respective stockholders
Until the completion of the Merger or the termination of the Merger Agreement in accordance with its terms, Axcelis and Veeco are each prohibited from entering into certain transactions and taking certain actions that might otherwise be beneficial to Axcelis or Veeco and their respective stockholders.
From and after the date of the Merger Agreement and prior to completion of the Merger, the Merger Agreement restricts Axcelis and Veeco from taking specified actions without the consent of the other party and requires that the business of each company and its respective subsidiaries be conducted in all material respects in the ordinary course of business consistent with past practice. These restrictions, which could be in place for an extended period of time if the completion of the Merger is delayed, may prevent Axcelis or Veeco from making appropriate changes to their respective businesses or organizational structures or from pursuing attractive business opportunities that may arise prior to the completion of the Merger, and could have the effect of delaying or preventing other strategic transactions. Adverse effects arising from the pendency of the Merger could be exacerbated by any delays in consummation of the Merger or termination of the Merger Agreement.
Litigation against Axcelis and Veeco could prevent or delay the completion of the Merger or result in the payment of damages following completion of the Merger.
Axcelis stockholders and Veeco stockholders may file lawsuits challenging the Merger or the other transactions contemplated by the Merger Agreement, which may name Axcelis, Veeco and/or members of their respective boards of directors as defendants. The results of any such potential legal proceedings are difficult to predict, and could delay or prevent the Merger from becoming effective in a timely manner. The existence of litigation related to the Merger could affect the likelihood of obtaining the required approval from Axcelis stockholders or Veeco stockholders. Further, one of the conditions to the completion of the Merger is that no law or order by any governmental entity of competent jurisdiction, such as a court, is in effect that prohibits, restrains or makes illegal the consummation of the Merger. As such, if any future legal actions result in a law or order prohibiting the consummation of the Merger, then such law or order may prevent the consummation of the Merger on the agreed terms, within the expected timeframe or at all, any of which could substantially harm Axcelis’ and Veeco’s respective businesses. Moreover, any litigation could be time consuming and expensive, could divert Axcelis and Veeco’s management’s attention away from their regular business and, if any lawsuit is adversely resolved against either Axcelis, Veeco, or members of their respective boards of directors (each of whom Axcelis and Veeco is required to indemnify pursuant to indemnification agreements), could have a material adverse effect on Axcelis or Veeco’s financial condition.
Failure to attract, motivate and retain executives and other key employees could diminish the anticipated benefits of the Merger.
The success of the Merger will depend in part on the retention of personnel critical to the business and operations of the combined company due to, for example, their technical skills or management expertise. Current and prospective employees of Axcelis and Veeco may experience uncertainty about their future role with Axcelis and Veeco until strategies with regard to these employees’ roles in the combined company are announced or executed, which may impair Axcelis’ and Veeco’s ability to attract, retain and motivate key management, sales, marketing, technical and other personnel prior to and following the Merger. If Axcelis and Veeco are unable to retain personnel, including Axcelis’ and Veeco’s key management, who are critical to the successful integration and future operations of the companies, Axcelis and Veeco could face disruptions in their respective operations, loss of existing customers or loss of sales to existing customers, loss of key information, expertise or know-how, and unanticipated additional recruitment and training costs. In addition, the loss of key personnel could diminish the anticipated benefits of the Merger.
If key employees of Axcelis or Veeco depart, the integration of the companies may be more difficult and the combined company’s business following the Merger may be harmed. Furthermore, the combined company may have to incur significant costs in identifying, hiring and retaining replacements for departing employees and may lose significant expertise and talent relating to the business of each of Axcelis or Veeco, and the combined company’s ability to realize the anticipated benefits of the Merger may be adversely affected. In addition, there could be disruptions to or distractions for the workforce and management associated with activities of labor unions or integrating employees into the combined company. No assurance can be given that the combined company will be able to attract or retain key employees of Axcelis and Veeco to the same extent that those companies have been able to attract or retain their own employees in the past.
Whether or not the Merger is completed, the announcement and pendency of the Merger will divert significant management resources to complete the Merger, which could have a material adverse effect on Axcelis’ and Veeco’s respective businesses, financial results, and/or market prices.
Whether or not the Merger is completed, the announcement and pendency of the Merger could cause disruptions in the businesses of Axcelis and Veeco by directing the attention of management of each of Axcelis and Veeco toward the completion of the Merger. Axcelis and Veeco have each diverted significant management resources in an effort to complete the Merger and are each subject to restrictions contained in the Merger Agreement on the conduct of their respective businesses in the period prior to the completion of the Merger. If the Merger is not completed, Axcelis and Veeco will have incurred significant costs, including the diversion of management resources, for which they will have received little or no benefit.
The market price of the combined company’s common stock may be volatile, and holders of the combined company’s common stock could lose a significant portion of their investment due to decreases in the market price of the combined company’s common stock following completion of the Merger.
The market price of the combined company’s common stock may be volatile, and following completion of the Merger, stockholders may not be able to resell their Axcelis common stock at or above the price at which they acquired the common stock pursuant to the merger agreement or otherwise due to fluctuations in its market price, including changes in price caused by factors unrelated to the combined company’s operating performance or prospects.
Specific factors that may have a significant effect on the market price for the combined company’s common stock include, among others, the following:
Each of Axcelis and Veeco will incur significant transaction, merger-related and restructuring costs in connection with the Merger.
Axcelis and Veeco have each incurred and expect to incur a number of non-recurring costs associated with combining the operations of the two companies, as well as transaction fees and other costs related to the Merger. These costs and expenses include fees paid to financial, legal and accounting advisors, facilities and systems consolidation costs, severance and other potential employment-related costs, including retention and severance payments that may be made to certain Axcelis employees and Veeco employees, filing fees, printing expenses and other related charges. Some of these costs are payable by Axcelis or Veeco regardless of whether the Merger is completed.
The combined company will also incur restructuring and integration costs in connection with the Merger. The costs related to restructuring will be expensed as a cost of the ongoing results of operations of either Axcelis or Veeco or the combined company. There are a large number of processes, policies, procedures, operations, technologies and systems that must be integrated in connection with the Merger and the integration of the two companies’ businesses. Although Axcelis and Veeco expect that the elimination of duplicative costs, strategic benefits, additional income and the realization of other efficiencies related to the integration of the businesses may offset incremental transaction, merger-related and restructuring costs over time, any net benefit may not be achieved in the near term or at all. While both Axcelis and Veeco have assumed that certain expenses would be incurred in connection with the Merger and the other transactions contemplated by the Merger Agreement, there are many factors beyond their control that could affect the total amount or the timing of the integration and implementation expenses.
Axcelis stockholders and Veeco stockholders will not be entitled to appraisal rights in the Merger.
Appraisal rights are statutory rights that, if applicable under law, enable stockholders of a corporation to dissent from an extraordinary transaction, such as a merger, and to demand that such corporation pay the fair value for their shares as determined by a court in a judicial proceeding instead of receiving the consideration offered to such stockholders in connection with the transaction. Under the DGCL, stockholders do not have appraisal rights if the shares of stock they hold are either listed on a national securities exchange or held of record by more than 2,000 holders. Notwithstanding the foregoing, appraisal rights are available if stockholders are required by the terms of the Merger Agreement to accept for their shares anything other than (i) shares of stock of the surviving corporation, (ii) shares of stock of another corporation that will either be listed on a national securities exchange or held of record by more than 2,000 holders, (iii) cash in lieu of fractional shares or (iv) any combination of the foregoing.
Because the Merger is of Merger Sub with and into Veeco and holders of Axcelis common stock may continue to hold their shares following completion of the Merger, holders of Axcelis common stock are not entitled to appraisal rights in the Merger.
Because shares of Axcelis common stock are listed on Nasdaq, a national securities exchange, and because Veeco stockholders are not required by the terms of the Merger Agreement to accept for their shares anything other than shares of Axcelis common stock and cash in lieu of fractional shares, holders of Veeco common stock will not be entitled to appraisal rights in the Merger.
Management's Discussion & Analysis (MD&A)
Largest changes
The following year-to-year comparative statements include thesee in full comparison20242025 and20232024 year periods. For comparative statements for the20232024 and20222023 periods, please refer to our20232024 Annual Report on Form 10-K, filed with theSecurities and Exchange Commission on February 23, 2024, as amended by Amendment No. 1 thereto, filed with the Securities and Exchange CommissionSEC on February 28,2024.2025.
“Sales and marketing expense was $65.4 million in 2025, a decrease of $2.7 million, or 3.9%, compared with $68.0 million in 2024. The decrease was primarily due to a decrease in the labor expenses related to evaluation systems.”see in full comparison
In 2025, $29.9 million of cash was used in investing activities, $11.3 million of which was used for capital expenditures. We used $646.0 million of cash for purchases of short-term and long-term investments, offset by maturities of short-term investment of $687.2 million. We held $228.8 million of short-term investments and $182.4 million of long-term investments at December 31, 2025. These short-term and long-term investments consist of U.S. Government securities and agency investments. In 2024, $108.7 million of cash was used in investing activities, $12.2 million of which was used for capital expenditures. We used $539.1 million of cash for purchases of short-termsee in full comparisoninvestments in 2024, partially offset by maturities of short-term investment of $442.6 million. We held $447.8 million of short-term investments at December 31, 2024. These short-term investments consist of U.S. Government securities and agency investments. In 2023, $100.9 million of cash was used in investing activities, $20.7 million of which was used for capital expenditures. We used $388.8 million of cash for purchases of short-term investments in 2023,investments, partially offset by maturities of short-term investments of$308.6$442.6 million. Total capital expenditures for20252026 are projected to be approximately$20$18 million. Future capital expenditures beyond20252026 will depend on a number of factors, including the timing and rate of expansion of our business and our ability to generate cash to fund them.
“Cash used in financing activities for the year ended December 31, 2025 was $124.5 million, which consisted of $121.1 million related to our stock repurchase program, $4.5 million related to net settlement of restricted stock issuances and $1.4 million related to principal reduction on our finance lease. These amounts were partially offset by $2.5 million in proceeds from our employee stock purchase plan. …”see in full comparison
“Cash used in financing activities for the year ended December 31, 2024 was $71.2 million, which consisted of $60.5 million related to our stock repurchase program, $11.6 million related to net settlement of restricted stock issuances and $1.5 million related to principal reduction on our finance lease. These amounts were partially offset by $2.4 million in proceeds from our employee stock purchase plan. …”see in full comparison
Other income for the year ended December 31, 2025 was $18.9 million, which includes $21.5 million of interest income on our investments, partially offset by $5.4 million of interest expense related to our sale leaseback obligation and $4.5 million of foreign exchange gains, partially offset by $2.1 million of foreign exchange losses from forward exchange contracts. Other expense for the year ended December 31, 2024 was $19.5 million, which includes $24.4 million of interest income on our investments, partially offset by $5.5 million of interest expense related to our sale leaseback obligation and $9.1 million of foreign exchange losses, offset by $9.1 million of foreign exchange gains from forward exchange contracts.see in full comparisonOther expense for the year ended December 31, 2023 was $12.8 million, which includes $18.2 million of interest income on our investments, partially offset by $5.3 million of interest expense related to our sale leaseback obligation.
Full comparison: every changed paragraph (18)
The market for our systems and aftermarket products and services is represented by a relatively small number of companies. In 2024,2025, the top 20 semiconductor chip manufacturers accounted for approximately 87.6%86.4% of total semiconductor capital equipment spending, down from 92.0%87.6% in 2023.2024. Our net revenue from our ten largest customers accounted for 45.9%55.2% of total revenue for the year ended December 31, 20242025 compared to 51.7%45.9% and 59.4%51.7% of revenue for the years ended December 31, 20232024 and 2022,2023, respectively. For the year ended December 31, 2024,2025, noone customerscustomer represented ten11.0% percent or more of total revenue.
Our accounting policies relating to the recognition of revenue require management to make estimates, determinations and judgments based on historical experience and on various other assumptions, which include (i) the existence of a contract with the customer, (ii) the identification of the performance obligations in the contract, (iii) the value of any variable consideration in the contract, (iv) the standalone selling price of multiple obligations in the contract, for the purpose of allocating the consideration in the contract, and (v) determining when a performance obligation has been met. Our revenue recognition policies are set forth in section (jk) of Note 2, Summary of Significant Accounting Policies, to the consolidated financial statements for the year ended December 31, 20242025 included in this Annual Report on Form 10-K. Recognition of revenue based on incorrect judgments, including an erroneous allocation of the estimated sales price between the units of accounting, could result in inappropriate recognition of revenue, or incorrect timing of revenue recognition, which could have a material effect on our financial condition and results of operations.
The following year-to-year comparative statements include the 20242025 and 20232024 year periods. For comparative statements for the 20232024 and 20222023 periods, please refer to our 20232024 Annual Report on Form 10-K, filed with the Securities and Exchange Commission on February 23, 2024, as amended by Amendment No. 1 thereto, filed with the Securities and Exchange CommissionSEC on February 28, 2024.2025.
Gross margin from product revenue was 47.9% for the twelve months ended December 31, 2025, compared to 46.3% for the twelve months ended December 31, 2024, compared to 44.5% for the twelve months ended December 31, 2023.2024. The increase in gross margin resulted from aan favorableincreased mix of systemhigher shipmentsmargin parts and improved margins on Purion systems.upgrades.
Gross margin from services revenue was (5.1)% for the twelve months ended December 31, 2025, compared to 5.4% for the twelve months ended December 31, 2024, compared to 10.7% for the twelve months ended December 31, 2023.2024. The decrease in gross margin is attributable to changes in the mix of service contracts.contracts and fluctuations of service expenses. Occasionally, we experience negative gross margin on service revenue as contract costs can vary significantly from one period to another based on customer demand.
Research and development (“R&D”) expense was $109.0 million in 2025, an increase of $3.5 million, or 3.3%, compared with $105.5 million in 2024. The increase was primarily due to higher variable compensation, stock compensation and expense related to early retirement programs and severance costs associated with global cost-saving initiatives.
Research and development (“R&D”) expense was $105.5 million in 2024, an increase of $8.6 million, or 8.9%, compared with $96.9 million in 2023. The increase was primarily due to increased outside services, materials and supplies expense to support ongoing R&D projects as well as higher personnel expenses associated with an increase in wages and benefits partially offset by a decrease in variable compensation expense and temporary employee expenses.
Sales and marketing expense was $65.4 million in 2025, a decrease of $2.7 million, or 3.9%, compared with $68.0 million in 2024. The decrease was primarily due to a decrease in the labor expenses related to evaluation systems.
Sales and marketing expense was $68.0 million in 2024, an increase of $5.2 million, or 8.3%, compared with $62.8 million in 2023. The increase was primarily due to higher personnel expenses associated with an increase in wages and stock compensation partially offset by a decrease in variable compensation expense.
General and administrative expense was $70.3$83.2 million in 2024,2025, an increase of $4.5$12.9 million, or 6.9%,18.3%, compared with $65.8$70.3 million in 2023.2024. The increase was primarily due to higher bad debt expense and higher personnel expenses associated with an increase in wagesmerger-related professional and benefitsfiling fees of $16.3, partially offset by a decrease in variablebad compensationdebt expense.expense $3.0.
Other income for the year ended December 31, 2025 was $18.9 million, which includes $21.5 million of interest income on our investments, partially offset by $5.4 million of interest expense related to our sale leaseback obligation and $4.5 million of foreign exchange gains, partially offset by $2.1 million of foreign exchange losses from forward exchange contracts. Other expense for the year ended December 31, 2024 was $19.5 million, which includes $24.4 million of interest income on our investments, partially offset by $5.5 million of interest expense related to our sale leaseback obligation and $9.1 million of foreign exchange losses, offset by $9.1 million of foreign exchange gains from forward exchange contracts. Other expense for the year ended December 31, 2023 was $12.8 million, which includes $18.2 million of interest income on our investments, partially offset by $5.3 million of interest expense related to our sale leaseback obligation.
Income tax expense was $29.3$18.0 million for the year ended December 31, 2024,2025, compared to $32.3$29.3 million in 2023.2024. The effective tax rate for the year ended December 31, 20242025 was 12.7%13.0% compared to 11.6%12.7% for year the ended December 31, 2023.2024. The increase in the effective tax rate in 20242025 is primarily due to a decrease in the benefitdeduction associatedrelated withto stock-based compensation.
In 2025, $29.9 million of cash was used in investing activities, $11.3 million of which was used for capital expenditures. We used $646.0 million of cash for purchases of short-term and long-term investments, offset by maturities of short-term investment of $687.2 million. We held $228.8 million of short-term investments and $182.4 million of long-term investments at December 31, 2025. These short-term and long-term investments consist of U.S. Government securities and agency investments. In 2024, $108.7 million of cash was used in investing activities, $12.2 million of which was used for capital expenditures. We used $539.1 million of cash for purchases of short-term investments in 2024, partially offset by maturities of short-term investment of $442.6 million. We held $447.8 million of short-term investments at December 31, 2024. These short-term investments consist of U.S. Government securities and agency investments. In 2023, $100.9 million of cash was used in investing activities, $20.7 million of which was used for capital expenditures. We used $388.8 million of cash for purchases of short-term investments in 2023,investments, partially offset by maturities of short-term investments of $308.6$442.6 million. Total capital expenditures for 20252026 are projected to be approximately $20$18 million. Future capital expenditures beyond 20252026 will depend on a number of factors, including the timing and rate of expansion of our business and our ability to generate cash to fund them.
Cash used in financing activities for the year ended December 31, 2025 was $124.5 million, which consisted of $121.1 million related to our stock repurchase program, $4.5 million related to net settlement of restricted stock issuances and $1.4 million related to principal reduction on our finance lease. These amounts were partially offset by $2.5 million in proceeds from our employee stock purchase plan. Cash used in financing activities was $71.2 million for the year ended December 31, 2024, which consisted of $60.5 million related to our stock repurchase program, $11.6 million related to net settlement of restricted stock issuances, and $1.5 million of principal reduction on our finance lease. These amounts were partially offset by $2.4 million in proceeds from our employee stock purchase plan.
Cash used in financing activities for the year ended December 31, 2024 was $71.2 million, which consisted of $60.5 million related to our stock repurchase program, $11.6 million related to net settlement of restricted stock issuances and $1.5 million related to principal reduction on our finance lease. These amounts were partially offset by $2.4 million in proceeds from our employee stock purchase plan. Cash used in financing activities was $68.3 million for the year ended December 31, 2023, which consisted of $52.5 million related to our stock repurchase program, $16.6 million related to net settlement of restricted stock issuances, and $1.2 million of principal reduction on our finance lease. These amounts were partially offset by $2.1 million in proceeds from our employee stock purchase plan.
We have no off-balance sheet arrangements as of December 31, 2024.2025. See Note 18 – Income Taxes in the Notes to the Consolidated Financial Statements for information related to our unrecognized tax benefits.benefits and Note 19 – Merger for contractual termination fees associated with our pending acquisition.
Under the rules of the U.S. Securities and Exchange Commission (the “SEC”),SEC, we qualify as a “well-known seasoned issuer,” which allows us to file shelf registration statements to register an unspecified amount of securities that are effective upon filing. On August 3, 2023, we filed such a shelf registration statement with the SEC for the issuance of an unspecified amount of common stock, preferred stock, various series of debt securities and/or warrants to purchase any of such securities, either individually or in units, from time to time at prices and on terms to be determined at the time of any such offering. This registration statement was effective upon filing and will expire in August 2026. We may file another shelf registration statement to maintain the availability of this financing option.
We believe that based on our current market, revenue, expense and cash flow forecasts, our existing cash, cash equivalentsequivalents, short-term and short-termlong-term investments will be sufficient to satisfy our anticipated cash requirements for the short and long-term.
What changed in the latest 10-Q
Risk Factors
As of June 30, 2026, there have been no material changes to the risk factors described in Item 1A, “Risk Factors” included in our 2025 Form 10-K.
Full comparison: every changed paragraph (1)
As of MarchJune 31,30, 2026, there have been no material changes to the risk factors described in Item 1A, “Risk Factors” included in our 2025 Form 10-K.
Management's Discussion & Analysis (MD&A)
Largest changes
“Other income was $7.7 million for the six months ended June 30, 2026, compared with other income of $10.0 million for the six months ended June 30, 2025. The $2.2 million decrease in other income (expense) compared to the same prior year period was primarily due to a decrease in interest income of $2.0 million, partially offset by a slight increase in net foreign exchange gains of $0.1 million. …”see in full comparison
Financing activities for thesee in full comparisonthreesix months endedMarchJune31,30, 2026 resulted in a cash usage of$1.4$9.2 million. During the firstthreesix months of 2026, (i)$1.0$9.5 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,and(ii)$0.4$0.2 million related to the excise taxes paid for the repurchase of our common stock, and (iii) $0.8 million was used to reduce the liability under the finance lease of our corporate headquarters. These amounts were partially offset by $1.3 million of proceeds related to the purchase of shares under our 2020 ESPP during the first six months of 2026. In comparison, financing activities for thethreesix months endedMarchJune31,30, 2025 resulted in cash usage of$20.1$67.1 million, of which (i)$18.2$63.5 million related to the repurchase of our common stock (ii)$1.6$4.2 million related to payments made to government tax authorities for income tax withholding on employee compensation arising from the vesting of RSUs, and (iii)$0.3$0.7 million relating to the reduction of our finance lease liability. These amounts were partially offset by $1.2 million of proceeds related to the purchase of shares under our 2020 ESPP during the first six months of 2025.
Other income wassee in full comparison$2.7$5.1 million for the three months endedMarchJune31,30, 2026, compared with other income of$3.9$6.0 million for the three months endedMarchJune31,30, 2025. The$1.3$1.0 million decrease in other income (expense) compared to the same prior year period was primarily due to a decrease in interest income of$1.1$0.9millionmillion,andpartiallyanoffset by a slight increase in net foreign exchangelossesgains of$0.1$0.2 million. Net foreign exchangelossesgains for the three months endedMarchJune31,30, 2026 includes$1.7$1.5 million of gains related to forward currency exchangecontracts,contracts and foreign exchange gains of $0.2 million. Net foreign exchange gains for the three months ended June 30, 2025 includes foreign exchange gains of $7.3 million, partially offset by foreign exchange lossesof $2.2 million. Net foreign exchange losses for the three months ended March 31, 2025 includes foreign exchange losses of $1.2 millionfrom forward currency exchangecontracts, partially offset by foreign exchange gainscontracts of$0.8$5.8 million.
“Investing activities for the six months ended June 30, 2026 resulted in a cash usage of $16.7 million, $5.4 million of which was used for capital expenditures and $223.2 million of which was used to purchase short-term and long-term investments, partially offset by $211.9 million related to maturities of short-term investments. …”see in full comparison
“Investing activities for the three months ended March 31, 2026 resulted in a cash usage of $10.6 million, $1.8 million of which was used for capital expenditures and $160.7 million of which was used to purchase short-term and long-term investments, partially offset by $151.9 million related to maturities and sales of short-term investments. …”see in full comparison
Personnel costs are our largest expense, representingsee in full comparison$35.7$39.2 million, or49.2%,55.3%, of our total operating expenses for the three months endedMarchJune31,30, 2026, compared to$35.4$35.9 million, or59.4%,61.5%, of our total operating expenses for the three months endedMarchJune31,30, 2025. Personnel costs were $74.9 million, or 52.2%, of our total operating expenses for the six months ended June 30, 2026, compared to $71.3 million, or 60.4%, of our total operating expenses for the six months ended June 30, 2025. Theslightlyhigher personnel costs for the three months endedMarchJune31,30, 2026 are primarily due to increases insalarysalary, benefits, commissions, andbenefitsstock-based compensation expenses. The higher personnel costs for the six months ended June 30, 2026 are primarily due to increases in salary, benefits, commissions, and stock-based compensation expenses,partiallyslightly offset by a decrease in separation program expenses.
Full comparison: every changed paragraph (32)
We are primarily a producer of ion implantation equipment used in the fabrication of semiconductor chips in the United States, Europe, and Asia. In addition, we provide extensive worldwide aftermarket service and support, including spare parts, equipment upgrades and maintenance services to the semiconductor industry. Our product development and manufacturing activities currently occur primarily in the United States and South Korea. Our equipment and service products are highly technical and are sold through a direct sales force in the United States, Europe, and Asia. Consolidation and partnering within the semiconductor manufacturing industry has resulted in a small number of customers representing a substantial portion of our business. Our ten largest customers accounted for 72.9%68.5% of total revenue for the threesix months ended MarchJune 31,30, 2026.
Sales of our systems in the first three monthshalf of 2026 were down slightly compared to the same period in the prior year, as customers have moderated the pace of investments into mature process node technologies.year. During the threesix months ended MarchJune 31,30, 2026, the overall mature process segment represented 68%77% of our shipped systems revenue, with the remainder represented by 32%22% of shipments to dynamic random-access memory (“DRAM”) applications.applications and 1% of shipments to advanced logic. Of the mature process segment, power device shipments comprised 35%38% of total systems revenue with the general mature segment representing 33%,39%, which includes image sensor applications.
On September 30, 2025, the Company, Victory Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company (“Merger Sub”), and Veeco Instruments Inc., a Delaware corporation (“Veeco”), entered into an Agreement and Plan of Merger (the “Merger Agreement”). Pursuant to the Merger Agreement, and subject to the satisfaction or waiver of the conditions specified therein, Merger Sub shall be merged with and into Veeco (the “Merger”), with Veeco surviving as a wholly-owned subsidiary of the Company. For further information regarding the Merger, see Note 19 to the consolidated financial statements included in this report. On February 6, 2026, Axcelis held a special meeting of stockholders at which the issuance of Company Stockcommon Issuancestock to the Veeco stockholders in the Merger was approved. The completion of the Merger remains subject to other customary closing conditions, including the final pending regulatory approval from the State Administration for Market Regulation of the People’s Republic of China. Axcelis and Veeco continue to expect that the Merger will be completed in the second half of 2026.
Product revenue, which includes systems sales, sales of spare parts, product upgrades and used systems, was $188.0$200.5 million, or 94.5%93.2% of revenue, during the three months ended MarchJune 31,30, 2026, compared with $182.8$183.4 million, or 94.9%94.3% of revenue, for the three months ended MarchJune 31,30, 2025. The $5.2$17.1 million increase in product revenue for the three-month period ended MarchJune 31,30, 2026, in comparison to the same period in 2025, was primarily driven by an increase in Aftermarket sales, offset partially by a customer settlement of $4.9 million.sales.
Deferred revenue includes payments received in advance of system sales as well as deferral of revenue from systems sales for installation and other future performance obligations. The total amount of deferred revenue at MarchJune 31,30, 2026 and December 31, 2025 was $109.6$118.5 million and $109.0$108.9 million, respectively.
Services revenue, which includes the labor component of maintenance and service contracts and fees for service hours provided by on-site service personnel, was $10.9$14.7 million, or 5.5%6.8% of revenue, for the three months ended MarchJune 31,30, 2026, compared with $9.7$11.1 million, or 5.1%5.7% of revenue, for the three months ended MarchJune 31,30, 2025. Although services revenue typically increases with the expansion of the installed base of systems, it can fluctuate from period to period based on capacity utilization at customers’ manufacturing facilities, which affects the need for equipment service.
Product revenue was $388.5 million, or 93.8% of revenue, during the six months ended June 30, 2026, compared with $366.2 million, or 94.6% of revenue, for the six months ended June 30, 2025. The $22.3 million increase in product revenue for the six-month period ended June 30, 2026, in comparison to the same period in 2025, was primarily driven by an increase in Aftermarket sales, partially offset by a customer settlement of $4.9 million.
Services revenue was $25.6 million, or 6.2% of revenue, for the six months ended June 30, 2026, compared with $20.9 million, or 5.4% of revenue, for the six months ended June 30, 2025.
Included in total revenue of $199.0$215.2 million during the three months ended MarchJune 31,30, 2026 is revenue from our Aftermarket business of $72.6$82.8 million, compared with $55.0$61.3 million of Aftermarket revenue for the three months ended MarchJune 31,30, 2025. Aftermarket revenue fluctuates from period to period primarily based on capacity utilization at customers’ manufacturing facilities, which affects the sale of spare parts and demand for equipment service. Aftermarket revenue can also fluctuate from period to period based on the demand for system upgrades or used equipment. The remaining $126.4$132.4 million of revenue for the three months ended MarchJune 31,30, 2026 was systems revenue, compared with $137.6$133.2 million of systems revenue for the three months ended MarchJune 31,30, 2025. Systems revenue fluctuates from period to period based on our customers’ capital spending.
Included in total revenue of $414.1 million during the six months ended June 30, 2026 is revenue from our Aftermarket business of $155.4 million, compared with $116.2 million of Aftermarket revenue for the six months ended June 30, 2025. The remaining $258.7 million of revenue for the six months ended June 30, 2026 was systems revenue, compared with $270.9 million of systems revenue for the six months ended June 30, 2025.
Gross margin from product revenue was 43.8%46.6% for the three months ended MarchJune 31,30, 2026, compared to 48.3%47.9% for the three months ended MarchJune 31,30, 2025. The decrease in gross margin resulted from a less favorable mix of system shipments.
Gross margin from services revenue was (15.515.7)% for the three months ended MarchJune 31,30, 2026, compared to 4.6%(5.4)% for the three months ended MarchJune 31,30, 2025. The decrease in gross margin is primarily attributable to changes in the mix of service contracts.contracts and fluctuations of service expenses. Occasionally, we experience negative gross margin on service revenue as contract costs can vary significantly from one period to another based on customer demand.
Gross margin from product revenue was 45.2% for the six months ended June 30, 2026, compared to 48.1% for the six months ended June 30, 2025. The decrease in gross margin primarily resulted from a less favorable mix of system shipments.
Gross margin from services revenue was (15.6)% for the six months ended June 30, 2026, compared to (0.7)% for the six months ended June 30, 2025. The decrease in gross margin is primarily attributable to changes in the mix of service contracts and fluctuations of service expenses.
Personnel costs are our largest expense, representing $35.7$39.2 million, or 49.2%,55.3%, of our total operating expenses for the three months ended MarchJune 31,30, 2026, compared to $35.4$35.9 million, or 59.4%,61.5%, of our total operating expenses for the three months ended MarchJune 31,30, 2025. Personnel costs were $74.9 million, or 52.2%, of our total operating expenses for the six months ended June 30, 2026, compared to $71.3 million, or 60.4%, of our total operating expenses for the six months ended June 30, 2025. The slightly higher personnel costs for the three months ended MarchJune 31,30, 2026 are primarily due to increases in salarysalary, benefits, commissions, and benefitsstock-based compensation expenses. The higher personnel costs for the six months ended June 30, 2026 are primarily due to increases in salary, benefits, commissions, and stock-based compensation expenses, partiallyslightly offset by a decrease in separation program expenses.
Research and development expense was $28.5$29.0 million during the three months ended MarchJune 31,30, 2026, an increase of $1.4$1.9 million, or 5.1%,7.1%, compared with $27.1 million during the three months ended MarchJune 31,30, 2025. The increase is primarily due to higher personnel costs and an increase in consulting expenses.
Research and development expense was $57.5 million during the six months ended June 30, 2026, an increase of $3.3 million, or 6.1%, compared with $54.2 million during the six months ended June 30, 2025. The increase is primarily due to higher personnel costs and an increase in consulting expenses.
Sales and marketing expense was $17.4$19.6 million during the three months ended MarchJune 31,30, 2026, an increase of $2.2$4.6 million, or 14.7%,30.3%, compared with $15.1$15.0 million during the three months ended MarchJune 31,30, 2025. The increase is primarily due to higher personnel expenses and an increaseincreases in freight expenses.expenses and evaluation tool costs.
Sales and marketing expense was $36.9 million during the six months ended June 30, 2026, an increase of $6.8 million, or 22.5%, compared with $30.1 million during the six months ended June 30, 2025. The increase is primarily due to higher personnel expenses and increases in freight expenses and evaluation tool costs.
General and administrative expense was $26.8$22.4 million during the three months ended MarchJune 31,30, 2026, an increase of $9.4$6.1 million, or 54.2%,37.2%, compared with $17.4$16.3 million during the three months ended MarchJune 31,30, 2025. The increase is primarily due to an increase in Mergerprofessional fees related professionalto fees.the Merger.
General and administrative expense was $49.1 million during the six months ended June 30, 2026, an increase of $15.5 million, or 45.9%, compared with $33.7 million during the six months ended June 30, 2025. The increase is due to an increase in professional fees related to the Merger.
Other income was $2.7$5.1 million for the three months ended MarchJune 31,30, 2026, compared with other income of $3.9$6.0 million for the three months ended MarchJune 31,30, 2025. The $1.3$1.0 million decrease in other income (expense) compared to the same prior year period was primarily due to a decrease in interest income of $1.1$0.9 millionmillion, andpartially anoffset by a slight increase in net foreign exchange lossesgains of $0.1$0.2 million. Net foreign exchange lossesgains for the three months ended MarchJune 31,30, 2026 includes $1.7$1.5 million of gains related to forward currency exchange contracts,contracts and foreign exchange gains of $0.2 million. Net foreign exchange gains for the three months ended June 30, 2025 includes foreign exchange gains of $7.3 million, partially offset by foreign exchange losses of $2.2 million. Net foreign exchange losses for the three months ended March 31, 2025 includes foreign exchange losses of $1.2 million from forward currency exchange contracts, partially offset by foreign exchange gainscontracts of $0.8$5.8 million.
Other income was $7.7 million for the six months ended June 30, 2026, compared with other income of $10.0 million for the six months ended June 30, 2025. The $2.2 million decrease in other income (expense) compared to the same prior year period was primarily due to a decrease in interest income of $2.0 million, partially offset by a slight increase in net foreign exchange gains of $0.1 million. Net foreign exchange gains for the six months ended June 30, 2026 includes $3.2 million of gains related to forward currency exchange contracts, partially offset by foreign exchange losses of $2.0 million. Net foreign exchange gains for the six months ended June 30, 2025 includes foreign exchange gains of $8.1 million, partially offset by foreign exchange losses related to forward currency exchange contracts of $7.0 million.
Income tax expense was $1.4$2.1 million for the three months ended MarchJune 31,30, 2026, compared to $4.5$3.6 million for the three months ended MarchJune 31,30, 2025. The $3.1$1.6 million decrease was primarily due to the decrease in pre-tax book income.income and an increase in stock-based compensation deduction. The reported effective tax rate for the three months ended MarchJune 31,30, 2026 was 13.3%8.1% compared to 13.6%10.3% for the three months ended MarchJune 31,30, 2025. The effective tax rate for the threesix months ended MarchJune 31,30, 2026 was less than the U.S. statutory rate of 21%21%, primarily attributable to the Foreign Derived Intangible Income deduction and Federal research and development tax credits.
At MarchJune 31,30, 2026, we had $150.8$155.0 million in unrestricted cash and cash equivalents, $215.8$247.2 million in short-term investments and $203.3$174.8 million in long-term investments, in addition to $10.6 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, including for example, the rate of sales of our products, and others relate to the uncertainties of global economic conditions, including tariff programs implemented in countries in which we operate as well as 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 threesix months ended MarchJune 31,30, 2026 and 2025, we generated $18.1$36.5 million and $39.8$79.5 million, respectively, of cash related to operating activities.
Investing activities for the six months ended June 30, 2026 resulted in a cash usage of $16.7 million, $5.4 million of which was used for capital expenditures and $223.2 million of which was used to purchase short-term and long-term investments, partially offset by $211.9 million related to maturities of short-term investments. Investing activities for the six months ended June 30, 2025 resulted in cash generated of $35.9 million, $6.9 million of which was used for capital expenditures and $345.2 million of which was used to purchase short-term and long-term investments, offset by $388.0 million related to maturities and sales of short-term investments.
Investing activities for the three months ended March 31, 2026 resulted in a cash usage of $10.6 million, $1.8 million of which was used for capital expenditures and $160.7 million of which was used to purchase short-term and long-term investments, partially offset by $151.9 million related to maturities and sales of short-term investments. Investing activities for the three months ended March 31, 2025 resulted in cash generated of $40.5 million, $5.0 million of which was used for capital expenditures and $252.5 million of which was used to purchase short-term investments, offset by $297.9 million related to maturities and sales of short-term investments.
Financing activities for the threesix months ended MarchJune 31,30, 2026 resulted in a cash usage of $1.4$9.2 million. During the first threesix months of 2026, (i) $1.0$9.5 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, and (ii) $0.4$0.2 million related to the excise taxes paid for the repurchase of our common stock, and (iii) $0.8 million was used to reduce the liability under the finance lease of our corporate headquarters. These amounts were partially offset by $1.3 million of proceeds related to the purchase of shares under our 2020 ESPP during the first six months of 2026. In comparison, financing activities for the threesix months ended MarchJune 31,30, 2025 resulted in cash usage of $20.1$67.1 million, of which (i) $18.2$63.5 million related to the repurchase of our common stock (ii) $1.6$4.2 million related to payments made to government tax authorities for income tax withholding on employee compensation arising from the vesting of RSUs, and (iii) $0.3$0.7 million relating to the reduction of our finance lease liability. These amounts were partially offset by $1.2 million of proceeds related to the purchase of shares under our 2020 ESPP during the first six months of 2025.
As of MarchJune 31,30, 2026, we had a security deposit of $5.9 million related to the lease of our corporate headquarters in the form of a cash collateralized letter of credit, which is classified as long-term restricted cash on our balance sheet.
Significant commitments and contingencies at MarchJune 31,30, 2026 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 2025 Form 10-K.
ACLS insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 17 filings (13 insiders, 12 trade dates, 36,850 shares, about $5.7M; 2 of these filings say the sales were made under a Rule 10b5-1 trading plan). Net open-market shares: -36,850 (purchases minus sales); net value about -$5.7M.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-15 | Redinbo Greg |
Shares withheld for tax | 208 | $105.04 | $21.8K |
| 2026-09-15 | Tatnall Christopher |
Shares withheld for tax | 136 | $105.04 | $14.3K |
| 2026-07-15 | Ryzhik David |
Shares withheld for tax | 127 | $145.01 | $18.4K |
| 2026-07-15 | Ryzhik David |
Shares withheld for tax | 94 | $145.01 | $13.6K |
| 2026-06-16 | Ryzhik David |
Shares withheld for tax | 76 | $176.85 | $13.4K |
| 2026-06-15 | Blumenstock Gerald M |
Shares withheld for tax | 506 | $191.60 | $96.9K |
| 2026-06-03 | Sayiner Necip |
Open-market sale | 1,586 | $157.44 | $249.7K |
| 2026-06-02 | Mahoney Robert John |
Open-market sale | 1,155 | $155.24 | $179.3K |
| 2026-05-27 | Sutton Todd |
Open-market sale | 2,000 | $159.99 | $320.0K |
| 2026-05-22 | St Dennis Thomas |
Open-market sale | 900 | $155.37 | $139.8K |
| 2026-05-22 | Evans Eileen |
Open-market sale | 926 | $155.51 | $144.0K |
| 2026-05-21 | Blumenstock Gerald M |
Open-market sale | 1,161 | $152.70 | $177.3K |
| 2026-05-20 | Tatnall Christopher |
Open-market sale | 1,166 | $149.75 | $174.6K |
| 2026-05-19 | Graves Gregory B |
Open-market sale | 2,625 | $141.41 | $371.2K |
| 2026-05-19 | Graves Gregory B |
Open-market sale | 600 | $142.51 | $85.5K |
| 2026-05-19 | Kurtzweil John T |
Open-market sale | 3,500 | $138.79 | $485.8K |
| 2026-05-19 | Quirk Jeanne |
Open-market sale | 1,789 | $140.22 | $250.9K |
| 2026-05-18 | Sutton Todd |
Shares withheld for tax | 184 | $146.24 | $26.9K |
| 2026-05-18 | Mahoney Robert John |
Shares withheld for tax | 130 | $146.24 | $19.0K |
| 2026-05-18 | Mahoney Robert John |
Shares withheld for tax | 182 | $146.24 | $26.6K |
| 2026-05-18 | Redinbo Greg |
Shares withheld for tax | 79 | $146.24 | $11.6K |
| 2026-05-18 | Redinbo Greg |
Shares withheld for tax | 111 | $146.24 | $16.2K |
| 2026-05-18 | Low Russell |
Shares withheld for tax | 711 | $146.24 | $104.0K |
| 2026-05-15 | Sutton Todd |
Shares withheld for tax | 226 | $155.18 | $35.1K |
| 2026-05-15 | Sutton Todd |
Shares withheld for tax | 112 | $155.18 | $17.4K |
| 2026-05-15 | Sutton Todd |
Shares withheld for tax | 103 | $155.18 | $16.0K |
| 2026-05-15 | Sutton Todd |
Grant/award | 1,168 | — | — |
| 2026-05-15 | Ryzhik David |
Grant/award | 3,115 | — | — |
| 2026-05-15 | Ryzhik David |
Shares withheld for tax | 226 | $155.18 | $35.1K |
| 2026-05-15 | Mahoney Robert John |
Grant/award | 1,947 | — | — |
| 2026-05-15 | Mahoney Robert John |
Shares withheld for tax | 173 | $155.18 | $26.8K |
| 2026-05-15 | Mahoney Robert John |
Shares withheld for tax | 170 | $155.18 | $26.4K |
| 2026-05-15 | Mahoney Robert John |
Shares withheld for tax | 61 | $155.18 | $9.5K |
| 2026-05-15 | Mahoney Robert John |
Grant/award | 1,947 | — | — |
| 2026-05-15 | Mahoney Robert John |
Shares withheld for tax | 372 | $155.18 | $57.7K |
| 2026-05-15 | Blumenstock Gerald M |
Shares withheld for tax | 744 | $155.18 | $115.5K |
| 2026-05-15 | Blumenstock Gerald M |
Shares withheld for tax | 345 | $155.18 | $53.5K |
| 2026-05-15 | Blumenstock Gerald M |
Grant/award | 2,725 | — | — |
| 2026-05-15 | Blumenstock Gerald M |
Grant/award | 2,725 | — | — |
| 2026-05-15 | Tatnall Christopher |
Grant/award | 3,504 | — | — |
| 2026-05-15 | Tatnall Christopher |
Shares withheld for tax | 744 | $155.18 | $115.5K |
| 2026-05-15 | Tatnall Christopher |
Shares withheld for tax | 170 | $155.18 | $26.4K |
| 2026-05-15 | Tatnall Christopher |
Shares withheld for tax | 345 | $155.18 | $53.5K |
| 2026-05-15 | Tatnall Christopher |
Grant/award | 3,504 | — | — |
| 2026-05-15 | Redinbo Greg |
Grant/award | 3,115 | — | — |
| 2026-05-15 | Redinbo Greg |
Shares withheld for tax | 177 | $155.18 | $27.5K |
| 2026-05-15 | Redinbo Greg |
Shares withheld for tax | 452 | $155.18 | $70.1K |
| 2026-05-15 | Redinbo Greg |
Grant/award | 3,115 | — | — |
| 2026-05-15 | Redinbo Greg |
Shares withheld for tax | 210 | $155.18 | $32.6K |
| 2026-05-15 | Evans Eileen |
Grant/award | 3,893 | — | — |
| 2026-05-15 | Evans Eileen |
Shares withheld for tax | 867 | $155.18 | $134.5K |
| 2026-05-15 | Evans Eileen |
Grant/award | 3,893 | — | — |
| 2026-05-15 | Low Russell |
Shares withheld for tax | 1,453 | $155.18 | $225.5K |
| 2026-05-15 | Low Russell |
Shares withheld for tax | 1,722 | $155.18 | $267.2K |
| 2026-05-15 | Low Russell |
Shares withheld for tax | 3,716 | $155.18 | $576.6K |
| 2026-05-15 | Low Russell |
Grant/award | 19,466 | — | — |
| 2026-05-15 | Low Russell |
Grant/award | 19,466 | — | — |
| 2026-05-15 | Titinger Jorge |
Grant/award | 1,440 | — | — |
| 2026-05-15 | St Dennis Thomas |
Grant/award | 1,440 | — | — |
| 2026-05-15 | Sayiner Necip |
Grant/award | 1,440 | — | — |
Well-known investors holding ACLS (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| PRIMECAP Management | 2026-06-30 | 610,451 | $115.6M | 0.07% | Reduced 7% |
| Millennium Management (Israel Englander) | 2026-06-30 | 139,242 | $26.4M | 0.02% | Added 1011% |
| D. E. Shaw & Co. | 2026-06-30 | 133,044 | $25.2M | 0.02% | Reduced 76% |
| First Eagle Investment Management | 2026-06-30 | 71,925 | $13.6M | 0.02% | Reduced 28% |
| Two Sigma Investments | 2026-06-30 | 48,437 | $9.2M | 0.01% | Reduced 75% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 46,239 | $8.8M | 0.01% | Added 926% |
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 35,538 | $6.7M | 0.0% | Reduced 11% |
| Gotham Asset Management (Joel Greenblatt) | 2026-06-30 | 10,795 | $2.0M | 0.0% | Reduced 10% |
| Bridgewater Associates | 2026-06-30 | 8,301 | $772.7K | — | Sold out |
| Point72 Asset Management (Steve Cohen) | 2026-06-30 | 3,000 | $568.4K | 0.0% | Added 33% |