Axcelis Technologies reported higher third-quarter revenue and earnings as demand improved for its semiconductor manufacturing equipment. The company also pointed to stronger bookings across several end markets and forecast a further increase in revenue in the final quarter of 2026.
The results show revenue and GAAP earnings growth from a year earlier, while operating margins were lower. Axcelis said foreign-exchange headwinds weighed on gross margin.
Key details
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Revenue rose 11% year over year to $237.8 million for the three months ended Sept. 30, from $213.6 million a year earlier. CEO Russell Low said systems revenue grew sequentially and bookings increased, with demand recovering across the company’s markets.
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Demand trends varied by market. Axcelis cited continued momentum in memory and more activity in power and general mature markets. Customer Support and Installed Base (CS&I) revenue set another quarterly record, according to the company.
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GAAP net income increased to $37.8 million from $26.0 million. Diluted earnings per share rose to $1.21 from $0.83.
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Margins were mixed and generally lower year over year. GAAP gross margin was 41.0%, versus 41.6%, while GAAP operating margin was 11.5%, versus 11.7%. On a non-GAAP basis, gross margin was 41.2%, compared with 41.8%, and operating margin was 16.6%, down from 18.2%.
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Non-GAAP diluted earnings per share were $1.26, up from $1.21. Non-GAAP net income was $39.2 million, versus $37.9 million, and adjusted EBITDA was $44.0 million, compared with $43.2 million.
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Axcelis expects fourth-quarter revenue of about $275 million, with GAAP diluted earnings per share of about $1.15 and non-GAAP diluted earnings per share of about $1.50. The revenue forecast is roughly 16% above third-quarter revenue. The earnings estimates use different accounting measures, so they should be read separately.
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Management expects positive momentum into 2027. Low said investment in next-generation technologies is beginning to produce results and that the company anticipates further growth next year. Interim CFO David Ryzhik said Axcelis continues to generate healthy cash flow and has a strong balance sheet, but the company did not provide cash-flow or balance-sheet figures in the results release.
Plain-English implications
The quarter reflects an improving demand environment alongside continued strength in service and installed-base revenue. Revenue and GAAP earnings grew from a year ago, but lower margins—particularly on a non-GAAP operating basis—show that the improvement in sales did not translate into higher operating profitability margins in the quarter.