Nova (NVMI) 9 May 242024 Q1 Earnings call transcript

Good day and welcome to the Nova Limited Q1 '24 Earnings Conference Call. [Operator Instructions]. Please note this event is being recorded. I would now like to turn the conference over to Miri Segal, CEO of MS-IR. Please go ahead.

good and operator you, day, everybody. Thank like First Quarter would to Call. welcome Nova's to you of XXXX all I Financial Conference Results With and today CEO, line CFO. of us Waisman, incoming on and President Finance are and Dror Kizner, Guy Gaby CFO; Corporate VP David, the

on the release begin, we safe call. outlined today's earnings provided harbor pertains remind may to contain that certain our statement Before call listeners forward-looking also this I information may this statements and in

copy will of with the business a release, call you please of in received If by an have the it the Investor financials. the the view not Dror with of followed update, company's begin section overview Relations website. Gaby the

then open call will question-and-answer the session. the We for

President please ahead. I'll now turn the call Nova's CEO. go and over Waisman, to Gaby, Gaby

Miri by first summarizing will all us for Thank thank our you today joining start call you, today. and the highlights. quarter performance I

quarterly in Dror my results detail. review financial the Following will commentary,

guidance exceeding cash Nova revenue flow. delivered free quarter, with strong and and another end the in non-GAAP operating profit, both record EPS, of high

our performance our to continues portfolio, track we operational in favorable increased backed are for second exposure advanced a diverse execute we for and guidance technologies. to Nova's back our plan. a with market forward. ability drive quarter product us opportunities With confident remain on customers demand supported a across the Our by to The strategic for segments, our mix, model territories, by robust in combined was mind, growth and trajectory

leverage time, product nodes revenue to diverse with XX% markets our demand At memory memory portfolio same devices the have Korea DDRX for by million. playing Positive share HBM, our enabled increased as from quarter, exposure us and and China. a recovery the revenue the with $XXX reserves in and the cash totaling multiple mature sequential a solid of primarily major role. to such approximately of advanced this cycle, driven resulted year-over-year execution Our our to DRAM indicators growth

long-term the capacity and segments. ahead, rising indicators X for encouraging perpetuating rise need are secular growth we for semiconductors industry and across the on at Looking for the again need control year reasons. see Utilization rates in the process

inventory with positive end stabilizing, On note replacement while of for levels a enterprise are both cycles consumer demand recovers hand, anticipation market one the products. and in

for On to chip continuous chips and Xx those According ago. the chips drive chip a X other, volume Xx the power-efficient center data HBMXE processor in the today parties, and driven leading-edge third faster, customers our processing consume need a sizes sizes larger to of are by DRAM up more few wafer other increase and wafers of memory production. than years more than just produced some

of emergence technologies support such process bonding The for serve tolerance steps new a and need process address consistently the complexity computing all substantial errors, smaller of AI and our increase and control. in side. of by Beyond TSV, to server insatiable driver and running models and chips power drive the business, also design to material the on capacity as of new inferences for number growth the as client both hybrid

example positive Other for of layer bonding the drive positive devices, the healthy U.S., notes process a have of Naturally, all Europe across supply the we the for technology are Asia. footprint recognition the on need such control, our is demand a and that vast broad across good process Hybrid nodes and build-out as complex local the business. bonding rigorous manufacturing requires flatness. chain investments a impact see that highly resiliency mature these

with results. the I've are As a and quarter said, strong we we pleased had very

packaging portfolio continued to for advanced the memory. solutions, gate-all-around include and demand of Nova's transition the Our by performance rising customers advanced was for which leading advanced including adoption on high-bandwidth built applications,

the evaluations advanced technologies to selections in-line in such transition with see anticipated Raman as taking market multiple and existing nodes, and Towards new SIMS significant and technology customers. we traction the a place for increase most numerous at

I'd like examples. to share several

with new the At same multiple processes new logic leading and by and purchases, the secured leading selections Let's is starting start memory of platform X new foundry, memory a memory traction VeraFlex and ELIPSON repeat evaluations which single systems evaluation several at global was time, by our new record gaining fab. global is manufacturers. platform, landed customers. a X METRION And selected and IV in leading a customers reached

stand-alone for HPM dedicated process the benefits TSV PRISM of with There portfolio. which bonding, algorithmic have tools bonding able technology which creating our is solutions. at of use recognize. end and we by On a hybrid place brings spectral capability we evaluations of clear PRISM Nova its a our customers early and clear challenges, multiple X OCD back integrated to hybrid and advanced metrology platform interferometry address identify in production, and the off were fronts, control packaging case front-end and The strategic kicking unique orders nodes and to the X

XX% We by more grow to in expect than from our portfolios. packaging-related optical driven revenues and XXXX, by processes chemical metrology

our rapid is another addressable the Speaking back year performance new Chemical front with it the Metrology penetrations its customer XXXX. Chemical hit in Metrology record capitalize and Overall, market growth business of end, HBM. multiple of on peak in we end at to our division, and expect

deliver this business to service quarter, our growing Finally, year-over-year. by XX% continues

customers are While lifespan, rates the a to utilization during to demand more approach, extend year, our rising performance. investments XXXX, many maximize and of this to driving prudent preferred our

across We business XXXX the maintain customer service in path expect our its to growth and board. capture spending

West over formidable Dror thank down over Guy I has been SEMICON person. and to XX handover since Dror for forward I'm decided the seamless. will successor, step in Nova. and confident like his at year, years look be CFO, past meeting San the friend you we my I'm and plan of have and be his who colleague I Guy grateful joined the in and I'd contribution support Francisco Nova to for conclude, to David, been years Kizner, after has to indispensable. that our his I and Before advice to many

a our every customers to opportunity to who to to worldwide Israel tight-knit continue circumstances. I express deliver and our as maximize in work employees who gratitude of regardless our support and employees to also my unit want

to incredible truly the a of who Nova fortunate wealth have people group our of on of work and and gifted We build the breadth at chose we team. talent are and to resilience

had tools value services quarter and healthy a customers. and trends our by quarter prepared territories additional portfolio and second our To forecast multiple the across a summarize to positive for robust demand my driven remarks, market We bring indicates growth. see segments nodes, Nova and our the clear for

shaping on Looking growth is our to a to long-term plan. an out executing and forward, be year XXXX encouraging strategic path milestone our

the on hand Dror. me call Now financials, for let over some to details the more

distribution $XXX day, quarter XX%. basis company non-GAAP Thanks, from with margin in and target reached in of XX% the revenues logic model XX% Product XXXX and you foundry GAAP company's to the and demonstrating year-over-year to on Total exceeding Good Gaby. increase basis, memory. guidance for thank joining quarter XX% X% on everyone call. quarter-over-quarter and a first XX% revenue XXXX was the remaining conference our quarter a a topping the million, XX% growth. increased and the first approximately from first X% of Blended gross

adoption newer advanced was margins. coupled value by present to The a favorable embed gross and newer attributed higher product higher customer improved These in nodes. of mix, quarter with high gradual configurations gross margin product for performance products the

target on We with higher line expect model end gross the of in the margins an quarters the company in gradually basis coming normalize to XXXX. and in annual

the per on high GAAP basis Financial As first quarter quarterly of expected, basis, basis. million in company increased quarter, in cash reflecting on on basis in XX% the reaching Earnings remained in Operating first quarter tax exceeding a GAAP company the $X GAAP The XX%. guidance reaching a our quarter and end share, end million, per the per record Earnings were for high basis on on XX% on margins the rate $XX million to diluted $X.XX the the expenses a was quarter in excellent share a effective quarter. high of per $X.XX margins and non-GAAP share. operating the elevated, model a were a yields reaching XX%. $XX high by first result consecutive were on share XX% reserves. non-GAAP first and quarter robust second a operational model. first gross healthy was of basis income non-GAAP This driven approximately target diluted and the the the surpassing

and a to expenses from XXXX second to details our a earnings remain $X.XX GAAP second to million, gross the tax $XX margins expenses anticipate to of model, earnings basis million; million the following; would for basis first expect the the per the guidance, non-GAAP range share GAAP range increase per at quarter. At million; approximately of we our operating a we a $X.XX share financial income of operating guidance the from quarter XX% Finally, revenues $XX midpoint to on XX% to approximately XXXX. like to of non-GAAP GAAP non-GAAP to and $XXX target for $X.XX, quarter $XXX basis be on to Currently, end to quarter between the on approximately company rate to high share similar the of increase and basis $X.XX. on diluted approximately I to

and strategies $XX company million, the investments. generated enables robust a of first increased first the to which reserves want cash execute approximately company's position and the of us record infrastructure I free the to continue at XXXX. growth to $XXX mention flow during of cash cash quarter the and end that million This pursue quarter,

to that, questions. With pleased Operator? we be will your take

Bank first We'll Vivek Instructions]. of America with line the Securities. from our of [Operator question take Arya

advanced could Good split your both contributing about of this hoping for is across growth us year year. is of I how Gaby, and memory XX% last this what year? you give for foundry, you versus I mentioned it proportion for was luck you said Guy. believe And sales, logic? and kind Dror a to sense packaging, it

Thank question. you for the

that more we we overall. of overall year, revenue year So our and than growth XX% this, last fact was packaging-related about this business XX% the indicated expect

at memory a looking forward essentially such bonding focused ones, are dimensional at looking growth on lines the in technologies the is with as chemical the dimensional whereas hybrid high-bandwidth We and potential chemical from division well HBMX. the and coming TSV as as product making strong and is portfolio headways the the

algorithmic dimensional into specific additional and CD capabilities parameters bonding and etching fill. we look after [indiscernible] for -- TSV, -- And the metrology integration that the as to of metrology For spectral for for of related which at interferometry PRISM, and at with and applications the as both part both have, after as the addressing look serve. [indiscernible] together tools TSV the portfolio, overall which those capable hybrid which the the Via we integrated and dedicated platforms is well Through-Silicon suite for we'll the

So growth it definitely a strong for the outlook this gives year us onwards. and position a strong and

definitely a in still HPM. to or As versus benefit yet? started strong opportunity Gate-All-Around, so does Is about And come? increase in conceptually, much you growth content What have you of how outline follow-up, it that see the your the FinFET? to gate-all-around

announced rate the strong And of this is release year, the whereas we both the already and do into we've a place position initial the characterization. coming and see this precision and that next the all lines. have recently product in a we players. as earlier beyond. basically time and we increased gate gate-all-around ramp us for high-k/metal offering higher And and press business during involving see position gate happen that the material all is sampling onwards we gate-all-around unique expect year as very -- in have. So And strong this in and our from a of encouraging, software and hardware that with of we've the orders size, our to months We most see perspective control, announced, XX gives currently

last for the one gross And on margins.

in continue your it they to guide at upside surprise, happens mix kind And coincide them of quarter of long-term just increasing the So with you end conservatively every your then lower, on and memory. the outlook. still high always to although

a is or mix mix expecting? in a helping mix your what to you product do what Is consistently product them expectations? half? think you're margin down that whether about or back you in then the So the it think will gross change customer And do outperform you it's tone customer

Yes.

margins So mix. obviously, gross impact is on main has the the which product aspect,

model, in the products, exactly for also you intaking also was the than the Therefore, are adopted QX bit last was this specifically where, look, If by high. XX% in prepared my of first the in Nova is year, year, in were the gross product more favorable happened quarter, were XXXX, content at of example, which I we the end equipment a mentioned in newer in and remarks, was currently little what as mix QX. that. customers, and high that were And several version margin which and higher

Our quarter is it within year XX%. higher the expectation of XX%. on around obviously, expect model. maybe basis, for to the around the rest portion annual of the next be the do -- And for But we and an

next from take with question [indiscernible] We'll Evercore. our

I Yes. on the double down wanted gate-all-around to opportunity.

You several semi have companies about lines. talked about talking started cap pilot

of a you dimensional had provide orders out played the metrology? year? orders to for expect those us starting on what orders color in. release you press how You size with trajectory the through the any remainder you're between of And of Can the do come versus seeing,

Sure.

some our product and but I'd give as orders, to across lines I few a the are examples. like mentioned color before, So

that tools. stand-alone We've We of with OCD as METRION. well that at for the focusing the for PRISM. METRION and general, looking strong in-line see we're as for the technologies course, adopted the the and see the at the -- So both ELIPSON mentioned being see one. looking IV we in ELIPSON fact also integrated gate-all-around the Gate-All-Around. materials, the of have, on VeraFlex we We're the And new introduction essentially for the we traction on tool, both Raman, metrology SIMS,

by customers traction high-volume And So already of the METRION. additional the by we've top be ELIPSON we production potential, this applications X for fab. And evaluation -- mentioned course, reaches the gate-all-around expect and in manufacturing. by it the year, in of proliferation end X will once advanced for

coming ramp time to -- for this the during in So strong already I beyond. We expected for do potential. the see is the and orders the deliveries next next XX see the initial and happen months

packaging then side. helpful. That's gears right. And the switching All on

does these solutions? year-on-year. are XX% between versus chemical growing You mentioned split How metrology dimensional this your

on gaining both advanced well say packaging to but strong is demand HBM. want and optical focused if specifically, We dive of as HBM portfolios the dimensional hybrid and again, dimensional more from packaging. for bonding adoption a coming Via the applications wafer the the chemical both suite see size the very definitely for Through-Silicon as the part as advanced as include we chemical measuring the dimensions we technologies. strong the So that that that the than the traction see as in flatness. becoming We segment. applications the TSV, important, the and requirements of has more And I'd is and with of flatness. on optical of see that well the criticality And more tool drives edge of on that all other chemical

that back front mean, for of you're happen being what And in? competitors is into been look the competitive seeing used converted If bigger that, they end. Is KLA, like applications you your ask, -- if positioning? some about at have talking their may I we are competitive tools I your being end the

exactly of identify use need. back we early into Definitely. front-end end converting the we I is And tools seeing. are did what case that believe the

of And specific so support the end, we back hybrid back back tools to customized and the the end, order in far bonding. both end requirements

it boils that all the customers to So adoption down the respect. from in

the Needham take of from line Charles Company. question We'll Shi & next the from

ramp, nanometer the the a back to the bit. ramp little want shape come the about X to question I of

least here looks on of big initial X customers, into across node? Or the some you the a think wonder year. But leading-edge So will kind customers more be next X-nanometer are maybe ramp XXXX all you X more orders whether expecting like of and that, ramp to year? I why be a that ask XXXX announced they event maybe reason was be The will TSMC Day, than will at a revenue rather XXXX. this the nanometer expect should -- the bigger we XXXX like

Of seen adopted for of a amount leading we a revenue want trying 'XX, the bit or Do the tools on the but technologies they good shape course, that it you maybe your just bit in 'XX ramp X-nanometer. going they're of I will new think happen understand, customer, but a little to 'XX? that bit later little maybe IDM earlier contribution haven't several pull what's of your And, to logic to overall add still course, little visibility, current in the the in a like sounds of yet. earlier based

Thank you.

gate-all-around we did I in So for X gate-all-around fact, are to on received customers. are mention that orders we months. XX already in expected And delivered which coming the be talking,

customers the our and going 'XX, traction. 'XX I'll year, address In of it's but -- we of that specific definitely terms shape, are towards gain all to as very gain customer this into as we I ramp them. and onwards cannot with a definitely grow enter closely working say finish to momentum

strong memory the wonder that I the And a memory on It sounds the quarters even memory numbers record, to the or a looks grow expect little want are results. from quarter? maintain QX, the numbers is you ask for of last the is from for But more do Korea much rest probably that like revenue memory the the driver revenue in year? I memory bit run the accurate. like It past for of how to here your in China side. probably, main if my is rate it's

had XX-XX, split for logic our in So logic and higher in of foundry. of past between for even XX-XX the the metrology for XX% is that long-term already because memory. memory logic, XX% calls model an and foundry intensity simply We and

other territories a definitely compare you've but different quite if few and is split to improvement the mentioned customers. we obviously that memory The the quarter. territories, ones are the not it's is an XX% it previous to So between there record

first on focused we it DRAM much that definitely half second is the and opportunity, onwards. gets very -- segment grows probably foremost when sure towards this as and definitely most capture NAND, can on making are year but this we any XD once that So the traction

I one question. may, last If

One of the for memory XPS applications, X fab. tools examples you X tools gave memory about for the

I've more driving I'm a whether X I intensity in like because or the think correct of tools memory the fabs? talk what's DRAM NAND? I details, probably the number what there. highest bit is little more you fab Or heard increased probably if remember is Can wrong in the that's this per but XPS me

VeraFlex to X or And applications of reached that is I as the very record of And the span both tools that growth. tools attributed as IV mentioned well see that this we we memory. in per a by fab encouraged we're VeraFlex capacity. fact

of also it of the focus criteria, number the and provides. execute with in fab. on And that rate increasing sampling terms and effort able discussed additional that We applications, past that, the performance definitely the are we the the the number of in VeraFlex value tools the throughput appeal, IV, per our and increase on platform with to

next Company. We'll take line question a Benchmark from from Miller of the Mark the

Congratulations on record your results.

previously, in sales, -- high of to can we was bandwidth attribute terms just memory As memory as XX%. to what percentage that memory? wondering, you discussed up a you -- I'm

counted is part as memory memory of high-bandwidth Well, packaging. as as well advanced

HBM the -- quarter memory are high So we and consists that. bandwidth seeing are the that in growth respect, XX%. first in that on both the of focus that that a DRAM And of part making of total is the the

Okay.

any tools for margins? typically are bandwidth of memory, higher terms there have In that high tools

optical for both tools are bandwidth So high our as well as memory chemical.

customized use the that On in bandwidth memory. were side, the high front-end tools it's for optical the

such being or For copper tool front-end the we packaging that fabs. customers, for is say, the both the the back-end front-end side, dual tools have those ancolyzer. used for -- would are the chemical, it's serving And that those damascene as I

ancolyzer the HBM for specifically, it's the mostly tool. So

to President back I would to like This Waisman, conference the remarks. concludes session. question-and-answer CEO, closing turn and Mr. our Gaby for any over

our Thank joining you, and thank operator you call all for today.

The conference today's has Thank you. now presentation. concluded. for Thank you attending

disconnect. now may You