Nova Q2 Earnings Call Highlights

Nova Q2 Earnings Call Highlights

Record Q2 performance: Nova reported revenue of $255 million, up 8% sequentially and 16% year over year, while non-GAAP EPS of $2.51 exceeded guidance. Management cited broad-based demand and expects another year of double-digit growth. Advanced logic and packaging drive expansion: Advanced-logic revenue more than doubled sequentially, while advanced packaging reached nearly one-quarter of product revenue, supported by AI-related and high-bandwidth-memory investments. Nova now expects packaging to represent about 25% of full-year product revenue. Strong outlook and financial flexibility: Nova forecast third-quarter revenue of $277 million to $287 million and non-GAAP EPS of $2.70 to $2.85. The company ended the quarter with more than $1.7 billion in cash and investments and reported improving visibility into customer demand through 2027, despite muted 3D NAND spending. Nova NASDAQ: NVMI reported record second-quarter revenue of $255 million, up 8% sequentially and 16% from a year earlier, as demand increased across its semiconductor process-control portfolio. The company said revenue reached the high end of its guidance range, while non-GAAP diluted earnings per share of $2.51 exceeded the high end of its outlook. President and CEO Gaby Waisman said the quarter marked a milestone for the company, with revenue surpassing $250 million and non-GAAP EPS exceeding $2.50. He said Nova expects another year of double-digit growth, supported by customer capacity investments, wider adoption of its products and market-share gains. Demand was broad-based across its portfolio, Waisman said, citing advanced logic and advanced packaging applications as leading contributors. He also said the company is developing the next phase of its long-term growth plan and expects to provide additional details at an Investor Day planned for the first quarter of 2027. Advanced Logic and Packaging Drive Demand Revenue associated with advanced logic more than doubled sequentially as customers expanded production capacity, according to Waisman. He said demand spanned multiple product lines and divisions, reflecting the process-control requirements of leading-edge logic manufacturing. Nova’s VeraFlex XPS materials-metrology platform continued to gain traction in gate-all-around manufacturing, with customers increasing the number of tools deployed per fab, Waisman said. The company recently expanded its California clean room, doubling its U.S. manufacturing capacity. The company also reported record sales for Nova ancosys, its front-end chemical metrology solution, supported by advanced-memory and mature-logic applications. Waisman attributed the performance to rising adoption, deeper engagement with existing customers and market-share gains. Advanced packaging contributed nearly one-quarter of total product revenue during the second quarter, reaching a record level. Waisman said customer investments in advanced packaging and high-bandwidth memory capacity for AI-related devices supported the growth. The Nova WMC dimensional-metrology platform gained traction, including a tool-of-record selection from a leading foundry customer for multilayer measurements in advanced packaging production flows. Waisman said Nova expects advanced packaging to account for about 25% of product revenue for the full year, compared with the company’s earlier expectation of between 20% and 25%. Margins, Cash Position and Third-Quarter Outlook CFO Guy Kizner said second-quarter GAAP gross margin was 57%, while non-GAAP gross margin was 58%. GAAP operating expenses totaled $68 million and non-GAAP operating expenses...