Axcelis Technologies (NASDAQ:ACLS) reported third-quarter 2026 revenue of $238 million and earnings per diluted share of $1.26, exceeding its expectations as demand improved across several semiconductor equipment markets.
The company forecast fourth-quarter revenue of approximately $275 million and earnings per diluted share of about $1.50. It also expects first-quarter 2027 revenue to be relatively consistent with fourth-quarter levels, despite a seasonal decline in its CS&I business.
President and CEO Russell Low said system bookings rose significantly from the prior quarter, resulting in a system book-to-bill ratio of 1.5. “We are increasingly encouraged by the broadening recovery across our end markets,” he said, adding that Axcelis expects growth in memory, power and general mature applications in 2027.
Bookings and CS&I support results
Third-quarter revenue included $145 million from systems and a record $93 million from CS&I. Low attributed the latter’s growth to a larger installed base, higher customer utilization and expansion of service contracts and upgrades.
Total bookings were $222 million, their highest quarterly level since the fourth quarter of 2023, while backlog rose to $531 million. Low said the largest increase in bookings came from general mature applications, with activity improving in China, Europe and the United States.
Gross margin was 41.2%, below the company’s 43% outlook, primarily because of a sharp strengthening of the Korean won against the U.S. dollar, Senior Vice President and Interim CFO David Ryzhik said. A related foreign exchange gain partly offset the impact through other income.
Operating expenses were $58.5 million, below the $62 million forecast, while adjusted EBITDA was $44 million. Earnings per diluted share exceeded the company’s $1.11 outlook. Except for revenue, the income statement figures discussed on the call were non-GAAP unless otherwise noted.
Axcelis generated $38 million in free cash flow and ended the quarter with $615 million in cash, equivalents and marketable securities, including $143 million in long-term securities. China accounted for 46% of revenue, followed by Korea at 18% and the United States at 13%.
Memory and power demand improve
Low said silicon carbide sales increased notably from the prior quarter, helped by customer orders pulled forward in Europe and Asia. He pointed to potential demand from data centers and AI-related power needs, in addition to established automotive, industrial and solar applications.
Power bookings have risen for four consecutive quarters, although Low said the business remained slightly below its 2025 level year over year. He also cited multiple orders for the Purion VXE LT+, a proton implantation system used in silicon IGBT applications.
Memory represented about 20% of system sales in the third quarter, Ryzhik said. Low said the company shipped one NAND system, but the majority of its memory revenue was tied to DRAM. He expects 2026 to be Axcelis’ best year for DRAM revenue, surpassing the $90 million achieved in 2023, with further growth expected in 2027.
Axcelis recently broke ground on a $35 million manufacturing facility in Pyeongtaek, Korea. The approximately 200,000-square-foot site will consolidate and expand Korean manufacturing operations, with production expected to begin in the second half of 2028.
Outlook, merger and leadership
For the fourth quarter, Axcelis expects gross margin of approximately 42.5%, operating expenses of about $65 million and adjusted EBITDA of approximately $56 million. Ryzhik said the company is seeing supply-chain tightness but is not constrained for the fourth quarter after investing in inventory ahead of time.
Ryzhik said systems revenue could grow faster than CS&I in 2027, though the company expects both businesses to expand. He also said Axcelis expects gross margin to improve year over year in 2027, while noting that the eventual mix of products and services remains uncertain.
Axcelis now expects its pending merger with Veeco Instruments to close by the end of the first quarter of 2027. Low said the companies continue to work toward regulatory clearance in China and plan to promptly make a new HSR submission because their current clearance is nearing expiration.
Jeroen Delsman is scheduled to join Axcelis as executive vice president and CFO on November 12. Ryzhik will then become senior vice president of corporate development and investor relations, reporting to Low.
About Axcelis Technologies (NASDAQ:ACLS)
Axcelis Technologies, Inc develops and manufactures equipment used in the fabrication of semiconductor devices. The company is best known for its ion implantation systems, which precisely introduce dopant atoms into silicon wafers to control the electrical properties of semiconductor components.
Its product portfolio includes the Purion family of ion implantation systems, designed for applications such as high-current, medium-current and high-energy implantation. Axcelis also provides related aftermarket products and services, including spare parts, equipment upgrades, process support and customer training.
Headquartered in Beverly, Massachusetts, Axcelis serves semiconductor manufacturers and other customers in major chip-production regions worldwide.
