AXCELIS TECHNOLOGIES INC
For the period ended Dec 31, 2024. Filed Feb 28, 2025.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Feb 28, 2025
ACLS$99.24+10.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-02-23.
0001558370-24-001628
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-02-28.
0001558370-25-001855
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 81 previous paragraphs and 80 current paragraphs.
51 unchanged; 26 reworded; 1 added; 3 removed; 1 previous and 2 current paragraphs rearranged.
Tables are not compared: 22 previous and 21 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (1)
Current report
General and administrative expense was $70.3 million in 2024, an increase of $4.5 million, or 6.9%, compared with $65.8 million in 2023. The increase was primarily due to higher bad debt expense and higher personnel expenses associated with an increase in wages and benefits partially offset by a decrease in variable compensation expense.
Removed paragraphs (3)
Previous report
Our consolidated financial statements contain certain deferred tax assets which have arisen primarily as a result of operating losses, as well as other temporary differences between financial and income tax accounting.
Previous report
General and administrative expense was $65.8 million in 2023, an increase of $8.3 million, or 14.5% compared with $57.5 million in 2022. The increase was primarily due to higher payroll related costs due to increased headcount and incentive based pay as well as increases in various other expenses to support growth.
Previous report
At December 31, 2023, we had $53.4 million of net deferred tax assets worldwide relating to capitalized research and development costs and other temporary differences, which are available to reduce income taxes in future years. We have recorded a $11.0 million valuation allowance against certain tax credits and state net operating losses due to the uncertainty of their realization. Realization of our net deferred tax assets is dependent on future taxable income. We believe it is more likely than not that such assets will be realized; however, ultimate realization could be impacted by market conditions and other variables not known or anticipated at this time.
Reworded paragraphs (26)
Previous wording
2023 was an exceptional year for Axcelis despite an industry downturn. As a result of the demand for the Company’s products and aftermarket support, we delivered record full year revenue and operating profit since our first full year as a public company in 2001. Revenue for 2023 was $1,130.6 million, an increase of 22.9% from 2022 revenue of $920.0 million. Systems revenue for 2023 was $883.6 million, compared to $692.1 million in 2022. Gross margin percent for the year was 43.5% compared to 43.7% in 2022. Operating profit was $265.8 million in 2023, compared to $212.4 million in 2022. Net income for the year was $246.3 million, an increase of 34.5% from 2022, following an 85.6% increase in net income from 2021.
Current wording
Revenue for 2024 was $1,017.9 million, compared to $1,130.6 million in 2023. Systems revenue for 2024 was $782.6 million, compared to $883.6 million in 2023. Gross margin percent for the year was 44.7% compared to 43.5% in 2023. Operating profit was $210.8 million in 2024, compared to $265.8 million in 2023. Net income for the year was $201.0 million, compared to $246.3 million in 2023.
Previous wording
The Company is in a strong competitive position as we participated in a period of extended industry growth in 2022 and 2023. A focused strategy on ion implant, combined with the hard work and dedication of our employees and the encouragement and support of our customers and suppliers, enabled us to achieve numerous critical milestones in our drive to market leadership. Axcelis had a number of important accomplishments in 2023:
Current wording
The Company is in a strong competitive position. A focused strategy on ion implant, combined with the hard work and dedication of our employees and the encouragement and support of our customers and suppliers, enabled us to achieve numerous critical milestones in our drive to market leadership. Important accomplishments in 2024 included:
Previous wording
The market for our systems and aftermarket products and services is represented by a relatively small number of companies. In 2023, the top 20 semiconductor chip manufacturers accounted for approximately 92.0% of total semiconductor capital equipment spending, up from 89.0% in 2022. Our net revenue from our ten largest customers accounted for 51.7% of total revenue for the year ended December 31, 2023 compared to 59.4% and 69.5% of revenue for the years ended December 31, 2022 and 2021, respectively. For the year ended December 31, 2023, no customers represented ten percent or more of total revenue.
Current wording
The market for our systems and aftermarket products and services is represented by a relatively small number of companies. In 2024, the top 20 semiconductor chip manufacturers accounted for approximately 87.6% of total semiconductor capital equipment spending, down from 92.0% in 2023. Our net revenue from our ten largest customers accounted for 45.9% of total revenue for the year ended December 31, 2024 compared to 51.7% and 59.4% of revenue for the years ended December 31, 2023 and 2022, respectively. For the year ended December 31, 2024, no customers represented ten percent or more of total revenue.
Previous wording
We generally offer a one-year warranty for all of our systems, the terms and conditions of which vary depending upon the product sold. For all systems sold, we accrue a liability for the estimated cost of standard warranty at the time of system shipment and defer the portion of systems revenue attributable to the relative fair value of non-standard warranty.
Current wording
We generally offer a one-year warranty for all of our systems, the terms and conditions of which vary depending upon the product sold. For all systems sold, we accrue a liability for the estimated cost of standard warranty at the time of system shipment and defer the portion of systems revenue attributable to the relative fair value of non-standard warranty. Costs for non-standard warranty are expensed as incurred. Factors that affect our warranty liability include the number of installed units, historical and anticipated product failure rates, material usage and service labor costs. We periodically assess the adequacy of our recorded liability and adjust the amount as necessary.
Previous wording
The following year-to-year comparative statements include the 2023 and 2022 year periods. For comparative statements for the 2022 and 2021 periods, please refer to our 2022 Annual Report on Form 10-K, filed with the Securities and Exchange Commission on February 24, 2023.
Current wording
The following year-to-year comparative statements include the 2024 and 2023 year periods. For comparative statements for the 2023 and 2022 periods, please refer to our 2023 Annual Report on Form 10-K, filed with the Securities
Previous wording
Product revenue, which includes new system sales, sales of spare parts, product upgrades and used system sales was $1,095.7 million or 96.9% of revenue in 2023, compared with $890.6 million or 96.8% of revenue in 2022. The increase in product revenue in 2023 was primarily driven by an increase in the number of Purion systems sold.
Current wording
Product revenue, which includes new system sales, sales of spare parts, product upgrades and used system sales was $976.9 million or 96.0% of revenue in 2024, compared with $1,095.7 million or 96.9% of revenue in 2023. The decrease in product revenue in 2024 was primarily driven by a decrease in the number of Purion systems sold.
Previous wording
A portion of our revenue from system sales is deferred until installation and other services related to future deliverables are performed. The total amount of deferred revenue at December 31, 2023 and 2022 was $210.9 million and $154.8 million, respectively. The increase was primarily due to an increase in system prepayments.
Current wording
A portion of our revenue from system sales is deferred until installation and other services related to future deliverables are performed. The total amount of deferred revenue at December 31, 2024 and 2023 was $138.2 million and $210.9 million, respectively. The decrease was primarily due to a decrease in system prepayments.
Previous wording
Services revenue, which includes the labor component of maintenance and service contracts and fees for service hours provided by on-site service personnel, was $35.0 million, or 3.1% of revenue for 2023, compared with $29.4 million, or 3.2% of revenue for 2022. Although services revenue should increase 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.
Current wording
Services revenue, which includes the labor component of maintenance and service contracts and fees for service hours provided by on-site service personnel, was $41.0 million, or 4.0% of revenue for 2024, compared with $35.0 million, or 3.1% of revenue for 2023. 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.
Previous wording
Revenue from our aftermarket business was $247.0 million in 2023, compared to $227.9 million for 2022. Aftermarket revenue generally increases with the expansion of the installed base of systems but can fluctuate from period to period based on capacity utilization at customers’ manufacturing facilities which affects the sale of spare parts and demand for equipment service.
Current wording
Revenue from our aftermarket business was $235.3 million in 2024, compared to $247.0 million for 2023. Aftermarket revenue generally increases with the expansion of the installed base of systems but can fluctuate from period to period based on capacity utilization at customers’ manufacturing facilities which affects the sale of spare parts and demand for equipment service.
Previous wording
Gross margin from product revenue was 44.5% for the twelve months ended December 31, 2023, compared to 44.7% for the twelve months ended December 31, 2022. The slight decrease in gross margin is primarily attributable to changes in the mix of products.
Current wording
Gross margin from product revenue was 46.3% for the twelve months ended December 31, 2024, compared to 44.5% for the twelve months ended December 31, 2023. The increase in gross margin resulted from a favorable mix of system shipments and improved margins on Purion systems.
Previous wording
Gross margin from services revenue was 10.7% for the twelve months ended December 31, 2023, compared to 11.3% for the twelve months ended December 31, 2022. The decrease in gross margin is attributable to changes in the mix of service contracts.
Current wording
Gross margin from services revenue was 5.4% for the twelve months ended December 31, 2024, compared to 10.7% for the twelve months ended December 31, 2023. The decrease in gross margin is attributable to changes in the mix of service contracts.
Previous wording
Our operating expenses consist primarily of personnel costs, including salaries, commissions, bonuses, stock-based compensation and related benefits and taxes; project material costs related to the design and development of new products and enhancement of existing products; and professional fees, facilities and amortization and depreciation expenses. Personnel costs are our largest expense, representing $135.1 million, or 59.9% of our total operating expenses, for the year ended December 31, 2023; and $114.8 million, or 60.6% of our total operating expenses for the year ended December 31, 2022.
Current wording
Our operating expenses consist primarily of personnel costs, including salaries, commissions, bonuses, stock-based compensation and related benefits and taxes; project material costs related to the design and development of new products and enhancement of existing products; and professional fees, facilities and amortization and depreciation expenses. Personnel costs are our largest expense, representing $144.2 million, or 59.1% of our total operating expenses, for the year ended December 31, 2024; and $135.1 million, or 59.9% of our total operating expenses for the year ended December 31, 2023.
Previous wording
Research and development (“R&D”) expense was $96.9 million in 2023, an increase of $18.6 million, or 23.7%, compared with $78.4 million in 2022. The increase was primarily due to higher payroll related costs due to increased headcount as well as increased outside services, materials and supplies expense to support ongoing R&D projects.
Current wording
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.
Previous wording
Sales and marketing expense was $62.8 million in 2023, an increase of $9.2 million, or 17.2%, compared with $53.6 million in 2022. The increase was primarily due to higher payroll related costs due to increased headcount and travel expense.
Current wording
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.
Previous wording
Other income (expense) consists of interest earned on our invested cash balances as well as interest expense relating to the lease obligation we incurred in connection with the 2015 sale of our headquarters facility (“sale leaseback”), foreign exchange gains and losses attributable to fluctuations of the U.S. dollar against the local currencies of certain of the countries in which we operate.
Current wording
Other income (expense) consists of interest earned and accretion on our invested cash balances, interest expense relating to the finance lease obligation we incurred in connection with the 2015 sale of our headquarters facility (“sale
Previous wording
Other income 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. Other expense for the year ended December 31, 2022 was $7.5 million, which includes $5.0 million of interest expense related to our sale leaseback obligation and $6.4 million of foreign currency translation loss, partially offset by interest income of $4.6 million.
Current wording
Other income 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.
Previous wording
Income tax expense was $32.3 million for the year ended December 31, 2023, compared to $21.8 million in 2022. The effective tax rate for the year ended December 31, 2023 was 11.6% compared to 10.6% for year the ended December 31, 2022. The increase in the effective tax rate in 2023 is due to an increase in the amount of limitation on executive compensation as well as an increase in foreign tax.
Current wording
Income tax expense was $29.3 million for the year ended December 31, 2024, compared to $32.3 million in 2023. The effective tax rate for the year ended December 31, 2024 was 12.7% compared to 11.6% for year the ended December 31, 2023. The increase in the effective tax rate in 2024 is primarily due to a decrease in the benefit associated with stock-based compensation.
Previous wording
In 2023, $156.9 million of cash was provided by operating activities. This compares to $215.6 million of cash provided by operations in 2022. Cash and cash equivalents at December 31, 2023 was $167.3 million, compared to $185.6 million at December 31, 2022. Approximately $48.3 million of cash was located in foreign jurisdictions as of December 31, 2023. In addition to the cash and cash equivalent balance at December 31, 2023, we had $6.7 million in restricted cash which relates to a $5.9 million cash collateral relating to our lease for our headquarters in Beverly, Massachusetts, a $0.7 million letter of credit relating to workers’ compensation insurance and a $0.1 million deposit relating to customs activity. Working capital at December 31, 2023 was $794.9 million. At December 31, 2023, we had no bank debt.
Current wording
In 2024, $140.8 million of cash was provided by operating activities. This compares to $156.9 million of cash provided by operations in 2023. Cash and cash equivalents at December 31, 2024 was $123.5 million, compared to $167.3 million at December 31, 2023. Approximately $41.8 million of cash was located in foreign jurisdictions as of December 31, 2024. In addition to the cash and cash equivalent balance at December 31, 2024, we had $7.6 million in restricted cash which relates to a $5.9 million cash collateral relating to our lease for our headquarters in Beverly, Massachusetts, a $0.9 million letter of credit for customs purposes, a $0.7 million letter of credit relating to workers’ compensation insurance and a $0.1 million deposit relating to customs activity. Working capital at December 31, 2024 was $916.1 million. At December 31, 2024, we had no bank debt.
Previous wording
In 2023, $100.9 million of cash was used in investing activities. Capital expenditures were $20.7 million for the year ended December 31, 2023. We held $338.9 million of short-term investments at December 31, 2023. These short-term investments consist of U.S. Government securities and agency investments. In 2022, $10.7 million was used in investing activities for capital expenditures. Total capital expenditures for 2024 are projected to be approximately $20 million. Future
Current wording
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, partially offset by maturities of short-term investments of $308.6 million. Total capital expenditures for 2025 are projected to be approximately $20 million. Future capital expenditures beyond 2025
Previous wording
capital expenditures beyond 2024 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.
Current wording
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.
Previous wording
Cash used in financing activities for the year ended December 31, 2023 was $68.3 million, 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 related to principal reduction on our financing lease. These amounts were partially offset by $2.1 million in proceeds from our employee stock purchase plan. Cash used in financing activities was $65.5 million for the year ended December 31, 2022, which consisted of $57.5 million related to our stock repurchase program, $9.9 million related to net settlement of restricted stock issuances, and $1.0 million of principal reduction on our finance lease. These uses of cash were partially offset by $1.2 million in proceeds of stock option exercises and $1.7 million in proceeds from our employee stock purchase plan.
Current wording
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.
Previous wording
We have outstanding letters of credit, surety bonds and deposits in the amount of $16.8 million to cover the security deposit under the lease of our headquarters, our workers’ compensation insurance program, customs and bank deposits and certain value added tax claims in Europe.
Current wording
We have outstanding letters of credit, surety bonds and deposits in the amount of $17.5 million to cover the security deposit under the lease of our headquarters, our workers’ compensation insurance program, customs and bank deposits and certain value added tax claims in Europe.
Previous wording
We have no off-balance sheet arrangements as of December 31, 2023, other than leases signed but not commenced. See Note 18 – Income Taxes in the Notes to the Consolidated Financial Statements for information related to our unrecognized tax benefits.
Current wording
We have no off-balance sheet arrangements as of December 31, 2024. See Note 18 – Income Taxes in the Notes to the Consolidated Financial Statements for information related to our unrecognized tax benefits.
Previous wording
We consider the undistributed earnings of our foreign subsidiaries as of December 31, 2023, to be indefinitely reinvested and, accordingly, no U.S. income taxes have been provided thereon. As of December 31, 2023, the amount of cash associated with indefinitely reinvested foreign earnings was approximately $11.8 million. We have not, nor do we anticipate the need to, repatriate funds to the United States to satisfy domestic liquidity needs arising in the ordinary course of business, including liquidity needs associated with any domestic debt service requirements. Upon repatriation of those earnings, in the form of dividends or otherwise, we could be subject to withholding taxes payable to the various foreign tax jurisdictions.
Current wording
We consider the undistributed earnings of our foreign subsidiaries as of December 31, 2024 to be indefinitely reinvested and, accordingly, no U.S. income taxes have been provided thereon. As of December 31, 2024, there was no cash associated with indefinitely reinvested foreign earnings. We have not, nor do we anticipate the need to, repatriate funds to the United States to satisfy domestic liquidity needs arising in the ordinary course of business. Upon repatriation of those earnings, in the form of dividends or otherwise, we could be subject to withholding taxes payable to the various foreign tax jurisdictions.
Previous wording
On April 5, 2023, we terminated the Senior Secured Credit Facilities Credit Agreement, as amended (the “Credit Agreement”), with Silicon Valley Bank that we entered into on July 31, 2020. The Credit Agreement provided for a revolving credit facility covering borrowings and letters of credit in an aggregate principal amount not to exceed $40.0 million. Our obligations under the Credit Agreement were secured by a security interest, senior to any current and future debts and to any security interest, in all of our rights, title, and interest in, to and under substantially all of our assets, subject to limited exceptions, including permitted liens. Upon termination, these liens and all other obligations under the credit agreement, were released. A letter of credit issued by Silicon Valley Bank, a division of First Citizens Bank & Trust Company (successor by purchase to the Federal Deposit Insurance Corporation as Receiver for Silicon Valley Bridge Bank, N.A.) as successor to Silicon Valley Bank, in the amount of $5.9 million, securing our lease on our corporate headquarters was terminated on December 28, 2023. The underlying cash collateral held at Silicon Valley Bank was released on December 28, 2023, in conjunction with the letter of credit termination. A replacement, cash collateralized, letter of credit was issued on December 14, 2023 with UBS Bank USA and is classified as long-term restricted cash on our balance sheet at December 31, 2023.
Current wording
We have a cash collateralized letter of credit of $5.9 million, which is classified as long-term restricted cash on our balance sheet at December 31, 2024.
Previous wording
We believe that based on our current market, revenue, expense and cash flow forecasts, our existing cash, cash equivalents, short-term investments and borrowing capacity will be sufficient to satisfy our anticipated cash requirements for the short and long-term.
Current wording
We believe that based on our current market, revenue, expense and cash flow forecasts, our existing cash, cash equivalents and short-term investments will be sufficient to satisfy our anticipated cash requirements for the short and long-term.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
and Exchange Commission on February 23, 2024, as amended by Amendment No. 1 thereto, filed with the Securities and Exchange Commission on February 28, 2024.
Current report — wording carried from elsewhere
leaseback”) as well as foreign exchange gains and losses attributable to both fluctuations of the U.S. dollar against the local currencies of certain of the countries in which we operate and forward currency exchange contracts.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Costs for non-standard warranty are expensed as incurred. Factors that affect our warranty liability include the number of installed units, historical and anticipated product failure rates, material usage and service labor costs. We periodically assess the adequacy of our recorded liability and adjust the amount as necessary.