Amtech (ASYS) Q3 Revenue Beats by 15%

Key Points

• GAAP revenue rose to $19.6 million in Q3 FY2025, beating analyst expectations by 15.3%, Revenue fell approximately 27% compared to Q3 FY2024.

• Non-GAAP EPS came in at $0.06 marking a swing from a GAAP net loss in Q2 FY2025.

• Gross margin (GAAP) improved to 47% in Q3 FY2025, driven partly by a one-time Employee Retention Credit.

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Amtech Systems (NASDAQ:ASYS), a supplier of thermal processing and semiconductor equipment, reported its fiscal third quarter results on August 6, 2025. The company’s earnings release highlighted a return to profitability (GAAP net income) and revenue growth versus the previous quarter, exceeding Wall Street estimates on both top and bottom lines. Amtech posted $19.6 million in GAAP revenue, ahead of the expected $17.0 million, and Non-GAAP earnings per share (EPS) of $0.06 However, compared to the same period last year, both revenue and profit were lower, with GAAP revenue down 27% year-over-year. The overall assessment is that Amtech staged a strong sequential recovery, driven by demand in advanced packaging, but still lags last year's performance as mature segment sales remain subdued.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q2 2025 earnings report.

Business Overview and Strategic Focus

Amtech Systems manufactures specialized equipment and consumables used in the semiconductor industry. It provides reflow ovens, diffusion furnaces, and consumable products like polishing chemicals and spare parts for both front-end wafer fabrication and back-end packaging.

Recently, Amtech has focused on broadening its consumables business to reduce exposure to industry cycles, while also investing in products serving high-growth areas such as electric vehicles and artificial intelligence (AI). Its strategy hinges on technological innovation, expansion of recurring revenue streams, and targeted cost cuts to maintain financial health during semiconductor downturns.

Quarter in Review: Key Developments and Data

The third quarter saw a sharp turnaround from prior results, with both revenue and profitability rebounding. Amtech exceeded internal and analyst forecasts, driven mainly by strong shipments of reflow ovens for advanced packaging used in AI applications. CEO Bob Daigle commented, "Our performance was above expectations, with GAAP revenue of $19.6 million, an increase of 26% over the prior quarter." This improvement was especially notable after a weak Q2, which was marked by shipment delays and inventory write-downs.

Segment performance showed that Thermal Processing Solutions, which includes equipment like reflow ovens, posted GAAP revenue of $14.2 million, up from $10.6 million in Q2 but down from $18.0 million in Q3 FY2024. This segment’s gross margin (GAAP) was 45% in Q3 FY2025, compared to just 3% in the second quarter, reflecting the mix shift toward higher-margin advanced packaging sales and lower write-downs. Semiconductor Fabrication Solutions, which now relies heavily on consumables and services due to slow capital investment at mature chip factories, generated $5.3 million in GAAP revenue with a GAAP gross margin of 52%, also bouncing back from last quarter’s negative GAAP gross margin.

Gross margin (GAAP) for the company rose to 47%. This figure was boosted by a one-time $1.0 million Employee Retention Credit refund. Excluding this, adjusted gross margin was around 41.5%, still an improvement from 36.5% non-GAAP in Q3 FY2024. Tight controls on selling, general, and administrative (SG&A) costs helped maintain operating leverage, with these expenses falling by $0.8 million year over year. Research and development (R&D) expense also dropped, reflecting delayed project activities and further cost savings.

Amtech reported operating income of $0.9 million, and adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) of $2.2 million. The improved cash flow position led cash and equivalents to increase to $15.6 million at quarter-end, but the company continues to benefit from last year’s Entrepix buy in recurring consumables revenue.

Recurring and consumable product sales remain central to stability in subdued markets. Approximately 25% of Thermal Processing Solutions revenue and the majority of Semiconductor Fabrication Solutions revenue now comes from consumables, parts, and services.

Product Families and Industry Trends

Amtech’s product offerings include thermal processing equipment (reflow ovens and diffusion furnaces) and consumable products like chemical-mechanical planarization (CMP) materials, essential for chip surface preparation. Demand for reflow ovens in advanced semiconductor packaging, especially those used for AI and data center components, fueled much of the quarter’s growth. The consumables segment, supported by service contracts and spare parts, has helped offset the softness in new equipment orders from mature node semiconductor factories, which make older-generation chips for automotive and industrial uses.

The mature node segment, which is highly cyclical and still operating at low utilization rates, continued to drag on overall sales. However, momentum in advanced packaging and stability in recurring consumable sales limited the revenue shortfall. Order bookings climbed to $21.7 million, up from $15.7 million in the prior quarter, indicating demand is at least holding for select product lines.

Amtech’s ongoing shift toward recurring revenue, underpinned by the 2023 Entrepix acquisition and consumables focus, is intended to provide more reliable revenue through industry cycles, improving its financial resilience.

A notable one-time event affecting results was the $1.0 million Employee Retention Credit refund, which temporarily lifted gross margin. Excluding this, cost improvements and operating model optimizations over the last 18 months -- totaling $13 million in annualized savings -- continue to bear fruit, making the business more efficient and increasing flexibility as demand recovers.

Financial Outlook and Investor Watch Points

Management provided guidance, projecting revenue between $16 million and $19 million. This range suggests a decrease from current levels. Adjusted EBITDA margins are expected to remain in the mid-single digits, as ongoing cost controls and AI-related equipment sales partly offset persistent weakness in mature segment capex spending. No projections were made for full-year profit or revenue beyond the next quarter, as management continues to be cautious about semiconductor industry cycles and order timing. ASYS does not currently pay a dividend.

Key watch points for the coming quarters include bookings and backlog trends (as backlog remains below prior-year levels), the normalization of gross margins without one-time benefits, and the pace of recovery in mature node equipment orders. Investors are also closely tracking the mix between capital equipment and consumables, which will influence stability if demand for new factory equipment remains volatile.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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