Key Highlights

  • ACLS shares traded up 3.29% at $116.64, with the 50-day moving average moving below the 200-day average.
  • Second-quarter revenue was $215.2 million, up from $194.5 million a year earlier, with non-GAAP gross margin of 42.7%.
  • GAAP net income was $23.3 million, or $0.75 per diluted share, and non-GAAP earnings were $1.06 per share.
  • Third-quarter revenue is guided to about $230 million, with non-GAAP earnings per share of about $1.11.
  • Cash and investments totaled $577.0 million, while second-quarter share repurchases fell sharply to $0.2 million from $45.3 million.

Axcelis Technologies (NASDAQ:ACLS) shares are trading up 3.29% at $116.64, and the stock's 50-day simple moving average has moved below its 200-day, a pattern technical analysts call a death cross. The company has a market capitalization of $3.60 billion.

The signal is derived from past prices and does not reflect operating results. Axcelis makes ion implantation equipment used in semiconductor manufacturing, and it reported second-quarter results on August 6.

Revenue Rises 11% With Gross Margin Near 43%

Revenue for the quarter was $215.2 million, up from $194.5 million a year earlier, an increase of $20.7 million. GAAP gross margin was 42.4% and non-GAAP gross margin was 42.7%.

GAAP income from operations was $20.3 million, a margin of 9.4%, while non-GAAP operating income was $31.5 million, or 14.7%. The gap between the two measures reflects the adjustments the company excludes from its non-GAAP results.

Earnings Diverge by Measure and Third-Quarter Guidance Points Higher

GAAP net income was $23.3 million, or $0.75 per diluted share, and non-GAAP net income was $33.0 million, or $1.06 per share.

The chief executive said memory demand remains strong and the company is benefiting from positive momentum in its power market. The release also describes improving engagement and utilization in the general mature market as customers respond to end demand in data center, industrial and automotive applications.

The company guided third-quarter revenue to about $230 million, about 7% above the second quarter. It expects GAAP diluted earnings per share of about $0.76 and non-GAAP earnings per share of about $1.11.

The release does not provide a third-quarter gross margin outlook. Memory, power and general mature customers are the three demand areas the company names.

Cash Position and a Sharp Drop in Buybacks

Cash and investments were $577.0 million at June 30, made up of $155.0 million in cash and equivalents, $247.2 million in short-term investments and $174.8 million in long-term investments. Second-quarter repurchases were $0.2 million, against $45.3 million in the year-earlier quarter.

For the first six months, repurchases were $0.2 million, against $63.5 million a year earlier. The release does not explain the change in buyback activity.

Signal Versus Demand Commentary

The death cross reflects past price action, while the reported figures show higher revenue, solid non-GAAP margins and guidance for further sequential growth. The next report will show whether third-quarter revenue reaches about $230 million and whether the demand areas management cited continue to improve. This review is limited to reported results and company guidance and does not assess valuation.