ACM Research, Inc. (ACMR) 2026 Q3 法說會逐字稿

Good day, ladies and gentlemen.

Thank you for standing by, and welcome to the ACM Research Third Quarter 2026 Earnings Conference Call. Currently, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. As a reminder, we are recording today's call. If you have any objections, you may disconnect at this time. I would now like to hand the conference over to your speaker today, Stephen Paleo. Please go.

Good day, everyone.

Thank you for joining us to discuss third quarter 2026 results, which we released before the US market opened today. The release is available on our website as well as from Newswire services. There is also a supplemental slide deck posted to the investor section of our website that we will reference during our prepared remarks. On the call with me today are our CEO, David Wong our CFO, Mark McKechnie and Lisa Feng, our CFO of our operating subsidiary, ACM Shanghai. Before we.

Please turn to Slide 2. Let me remind you that the remarks made during this call may include predictions, estimates and other information that might be considered forward-looking. These forward-looking statements represent ACM's current judgment for the future. However, they are subject to risks and uncertainties that could cause actual results to differ materially. Those risks are described under risk factors and elsewhere in ACM's filings with the Securities and Exchange Commission. Please do not place undue reliance on these forward-looking statements, which reflect ACM's.

Only as of the date of this call. ACM is not obliged to update you on any revisions to these forward-looking statements. Certain financial results that we provide on this call will be on a non-GAAP basis, which excludes stock-based compensation and unrealized gains and losses on short-term investments and beginning in.

And beginning in the second quarter of 2026, its impact to net income attributable to non-controlling interest. For our GAAP results and reconciliations between GAAP and non-GAAP amounts, you should refer to our earnings release, which is posted on the IR section of our website and to Slide 13. Also, unless otherwise noted, the following figures refer to third quarter 2026 and comparisons are to the third quarter 2025. I will now turn the call over to David Wein. David.

Thanks, Steven. Hello, everyone, and welcome to ACM third quarter 2026 earnings conference call.

We delivered strong results for the September quarter with revenue up 37% and shipment up 31%. We attribute the growth to one, market share gain and product cycle and two, good execution by our production and supply chain team.

Growth was led by our ECP advanced packaging categories.

I'm especially pleased with the return to our growth for our cleaning categories.

One, we are gaining market share with more cleaning steps and technology improvements. Two, our Lingua mini line is helping our engineers to duplicate our customer production environment and deliver technology improvements to the market much faster. And three, broad adoption of our single wafer SPM solution across multiple customers.

We are making good progress with our proprietary panel-level horizontal electroplating technology. In October, we announced the shipment to a customer in Asia of a 310 x 310 millimeter panel-level horizontal plating tool.

We believe this is a board first shipment of its kind and it truly marks significant milestone in our commercialization efforts. This follows earlier shipment of a larger 515 by 510 millimeter system to a Mainland China customer. I will provide more detail on this later.

I will now provide an update on our backlog.

As reported by ACM Shanghai about a month ago, total backlog as of September 29, 2026, was $2.5 billion, an 88% year-over-year increase.

The backlog includes orders across all product category with a heavier emphasis on our new products.

Year-to-date orders through September 30 were up 147%. Thanks to good execution by our sales, production and operation team, we continue to expect shipment to grow faster than revenue for 2026.

We remain confident in our growth profile.

For 2026, we see a healthy backdrop for China WFE as our customers continue to scale their production capacity.

We expect extra boost for our business from several product cycles, including SPM and the furnace. Market share gains, together with strong execution, enable us to outgrow the China WFE market.

We are optimistic that our newer platform was providing another source for growing as we expect to track PCVD.

Panel level horizontal plating to proceed from evaluation phase into commercialization phase beginning next year.

Now on to our third quarter results, please turn to Slide 3.

Revenue was $368 million, up 37%. Shipment were $343 million, up 31%. Gross margin was 41.6% and operating margin was 18%. And we ordered the quarter with we ended the quarter with a gross cash of $1.3 billion and net cash $0.9 billion. Now I'll provide a detail on product, please turn to slide 4.

Revenue from single wafer connecting Tahoe and the semi-critical connecting tool was $211 million, up to 16% and represent 37% of revenue.

ACM has developed one of the industry broader cleaning product portfolio, spanning a full range of critical cleaning and wet process steps.

Our products, including Sabtibo, Megasonic, Tahoe, backside cleaning, solvent cleaning, bevel cleaning, scrubber, wet etcher, and our proprietary socratic fauxite mixing of SPM technology.

Semiconductor devices are becoming more complex with additional process steps and more demanding cleaning requirements. We believe our broader portfolio of differentiated technology.

ACM to capture those growing opportunities.

We are fully committed to our long-term target for 60% market share in China's Canadian equipment market.

Our SPM product line is a key part of the target. As a reminder, we estimate that SPM tool represent about one-third of the total Canadian equipment market.

And our product cycle is just now beginning to contribute.

We recently introduced our enhanced version of our 570-degree C single-wafer hot SPM system, incorporating sulfuric acid recycling.

The system achieved a 70% sulfuric acid recycle rate with reasonable particle performance.

This innovation is expected to reduce sophic asset consumption by approximately 400 tons per tool annually, delivering meaningful environment and operating cost benefits.

In October at China International Industrial Fair, ACM Shanghai was presented with China International Industrial Fair Innovation Achievement Award for its single-wafer high-temperature SPM cleaning system.

This is yet another award from prestigious organization, which further highlights the innovation and technology capability of our SPM platform.

I'm pleased to repeat today that we are on track to ship more than 20 single Wave SPM tools across multiple customers for the full year of 2026.

Beyond SPM, we continue to expand. The capability and application of other differentiated cleaning technologies.

Our Ultra-C Tahoe now supporting additional wet etcher and monitor wafer reclaim application, providing customer with greater process flexibility and expanding the range of addressable application, especially in the reduction for fine particle less than 19 nanometer.

We are also getting more traction with our supercritical CO2 convenient technology.

Our differential technology with a much smaller CO2 chamber reduced CO2 usage by 30% as compared with other market solution.

At the same time, we deliver better drying performance.

This is a strong combination and we are we can take a share with this product line and expanding application from DRAM to 3D NAT and a logic application.

Revenue from ECP, furnace and other technology grow 83% and represent 30% of our total revenue.

Growth was driven primarily by strong momentum in both front-end wafer level and back-end advanced packaging electroplating application with the furnace contribute to a relatively small portion.

We see increased demand for electroplating for both logic and memory application as semiconductor manufacturing and packaging become more complex.

Our proprietary panel-level horizontal plating technology is a game-changer for the industry.

We began development for panel-level plating for more than five years ago, and the market is now coming to us.

Our patent horizontal design enables highly uniform plating across the panel, including increasingly larger dimension substrate formats.

Our 310 by 310 millimeter.

System supports copper, nickel, tin silver, gold plating process, incorporates high-speed plating paddle technology and supports tall copper pillar exceeding 300 micron with good within-die uniformity.

We have engaged with multiple customers across different regions and panel size configurations.

We also offer comprehensive set of wet processing tool for panel-level packaging, including R2-C Vacuum P Flux Cleaning and R2-C Bevel P panel bevel etcher and cleaning tool.

We are confident that ACM differentiated technology position us to enable next-generation solution as driven by the increasingly complex 2.5D and 3D packaging roadmap for the global AI.

Turning to our furnace business, we continue to make progress in expanding customer adoption.

We are advancing our capability across key applications, including silicon nitride LPCVD, polysilicon LPCVD, oxidation, thermal AOD and plasma-enhanced AOD, addressing opportunity across both memory and logic applications. We also supply high-temperature 1,150 degrees C and ultra-high temperature 1,250 C annealing furnace.

Especially address IGBT application.

As this system completes customer acceptance and the transition into production, we expect the furnace to making more meaningful contribution to our revenue in 2027.

Revenue from Advanced Packaging, which excludes ECD but includes surface and spare parts, was up 71% and we presented.

13% of the revenue mix.

This including coater, developer, etcher, stripper, scrubber and vacuum cleaning tools, supporting a broader range of advanced packaging application.

We are particularly pleased with our global progress here with active deployment in Singapore and North America across a range of those tools.

We believe our broader product portfolio and the expanding global customer relationships provision us well to capture additional opportunity as we continue to grow this business.

Turning to our Track and PCVD platform, we have made progress with customer evaluation and initial deployment of our next-generation system.

For Track, our focus remain on. Delivering industry-leading throughput and competitive process performance, addressing opportunity in KRF lithography across the stand-alone system and configuration integrated with lithography scanners.

For PECVD, we believe our differentiated chamber architecture, electrostatic chuck design and RF power source technology provide important advantages in throughput and process performance.

We are working closely with a key customer to demonstrate the performance and the capability of both platforms.

Looking ahead, we expect additional shipment in 2027 with revenue contribution and expected as customer qualification and production adoption progress through 2027 and into 2028.

Next, I will provide an update on global manufacturing and operation infrastructure.

First, Lingdang, please turn to Slide 8.

Our first Lingdang building continues to operate in volume production, and we are currently ramping up our second building. Together, the two buildings can support up to $3 billion in annual output, providing a significant capacity to scale our business over time.

I'm pleased to report that we expect shipment in the fourth quarter of 2026 to increase from third quarter levels, and we also plan for good growth in shipment for 2027 and Dr.

Next, our Oregon facility, we return to Slide 9.

We are preparing for the official opening of our Oregon operation very soon.

This is an important milestone to support customers outside Mainland China.

The facility including Class 100 cleaning room for product demonstration and customer evaluation, along with the cleaning room for storage, preassembly, manufacturing and technical support capability.

We believe US-based demo lab and production facility will support our effort to scale our global business.

In addition, we continue to strengthen our operation across Asia.

In Korea, we are expanding the capability of ACM Hangoku, including manufacturing, engineering and technical supporting resource to serve our growing international customer base.

And in Singapore, we are adding local resource to support customer installation, service and ongoing technical engagement.

Our global business continued to gain momentum. As we discussed last quarter, we expect to have more than 20 tools in store at the customer site outside Mainland China by end of the year by year-end 2026, represent approximately 10 customers across five countries.

We are particularly encouraged by our progress in North America, Singapore and other parts of Asia, where our global sales as a service team are expanding customer relationships and are supporting deployment across a growing range of product and applications.

This engagement are helping us establish a stronger foundation for future business as customer gain experience with our technology and evaluate opportunity for broader adoption.

The progress we are making demonstrate the competitiveness of our technology and their position ACM for meaningful long-term growth outside mainland China.

Now I'll provide our outlook for the full year 2026, please send to Slide 10.

As a result of good execution by our sales and operation team, significant backlog and several major product cycle, we are raising our outlook as follows.

We now expect the 2026 revenue to be $1.24 billion to $1.28 billion.

38% to 42% year-over-year.

This compares to our previous range of $1.125 billion to $1.175 billion.

We continue to expect full-year shipment growth to outpace revenue growth.

We believe our expanding differentiated. Product portfolio, global infrastructure and global customer relationships position ACM to capture new market opportunity and advance toward our long-term revenue target of $4 billion.

With that, let me turn the call over to Mark to review our financial results in more detail.

Thank you, David. Good day, everyone. Please turn to Slide 11.

Unless I note otherwise, I will refer to non-GAAP financial measures, which exclude stock-based compensation and unrealized gain loss on short-term investments. A reconciliation of these non-GAAP measures to comparable GAAP measures is included in our earnings release. Also, unless otherwise noted, the following figures refer to the third quarter of 2026 and comparisons are with the third quarter of 2025.

Will now provide the financial highlights. Revenue was $367.7 million, up 36.6%. Revenue for single wafer cleaning, Tahoe and semi-critical cleaning was $210.7 million, up 16.1% and represented 57.3% of sales. Revenue for ECP, front-end packaging, furnace and other technologies was $109.5 million, up 82.9% and represented 29.8% of sales.

For advanced packaging, excluding ECP, services and spares of $47.5 million, up 71.2% and represented 12.9% of sales.

Total shipments for $343.5 million.

Up 30.6%. 2026, we continue to expect shipment growth to outpace revenue growth. Gross margin was 41.6% versus 42.1%. Gross margin was slightly below our long-term target model. This was due in part to product mix, foreign exchange and the inventory provision for the quarter. We maintain our 42% to 48% long-term target range and product mix can cause fluctuations on a quarterly basis. For the fourth quarter, we expect gross. To improve modestly from the third quarter level.

Operating expenses were $86.7 million, up 12.7%.

R&D was 12.8% of sales and marketing was 6.7% and G&A was 4%. For 2026, we planned for R&D in the 15% to 17% range, sales and marketing in the 7% to 8% range and G&A in the 5% range.

Operating income was $66.2 million versus $36.5 million. Operating margin was 18.0% as compared to 13.6%. Income tax expense was $1.9 million versus $2.7 million. For 2026, we expect our effective tax rate in the 10% range. Net income attributable to ACM Research was $40.5 million versus $28.4 million.

Non-GAAP net income excluded $10.7. Million in stock-based compensation expense and the unrealized loss on short-term investments, together with its effect on non-controlling interest. Net income per diluted share was $0.55 versus $0.41.

Now onto the balance sheet and cash flow items. Cash equivalents, restricted cash and time deposits were $1.28 billion at the end of the third quarter. Net cash, which includes short-term and long-term debt, was $0.9 billion.

Total. Inventory net was $851.2 million. This consisted of raw materials net at $465.5 million, work in progress net at $122.7 million, finished goods inventory net at $263.1 million. This primarily consists of first tools under evaluation at our customer sites, along with finished goods located at ACM's facilities. Cash used by operations was $70.4 million, capital expenditures were $25.2 million. For the full year 2026, we continue to expect capital expenditures of about $175 million. That concludes our prepared remarks. Now let's open the call for any questions that you may have. Operator, please go ahead.

As a reminder, to ask a question, you will need to press 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press 1 and 1 again. Please stand by as we compile a Q&A roster.

Our first question comes from the line of Suji De Silva of Roth Capital. Please go ahead, your line is open.

Hi, David. Hi, Mark. Lisa. Congratulations on the progress here. Very strong.

Good job.

So the new products seem to be growing nicely here. What do you think the mix of those will be a year or two out versus where they are now? Because I think that'll help drive some of the growth in the margin opportunity for you guys.

Oh, David, you're muted. Hey, David, I think you're muted. Yeah.

Second. Let me get that.

Here we go. We can hear you now, David. We can hear you.

Sure.

Well, okay.

Actually, you mean the new product, right? Our tracker, PCVD, right? And, for the electroplating. Yes, I think the, well, again, right, this new product will be also where we emphasize differential technology and when it come out and will be also, we think, we're being a good. Margin for our product, especially this horizontal electroplating, right, got a good recognition from customer and also our track system started getting into their pre-production together with scanner or the PCVD made the progress too. So as this new product joined or including a furnace too, right, joined to our.

Revenue stream, and we think we're still give us maintain and even some product increase our gross margin.

Yeah. Hey, Suzy, maybe I'll answer to that. I mean, the mix of the new products next year, one thing is in the backlog, I think David mentioned that the mix was skewed a bit towards some of our newer products.

I mean, we've got a lot teed up for new products next year that they'll contribute in different shipping. First, then to revenue, but our SPM product cycle is just starting to kick in pretty nicely.

I think Furnace, we've got a lot of tools that are under evaluation, and so that's really small, and we expect that to kick in pretty nice next year.

And then, of course, Track PECVD and this panel-level plating tools are really early stage, so a lot of growth potential from all those starting next year.

That sounds great. And then on the same question in terms of mix and how that trends next year or two for the global customers versus the China customers, it seems both are growing, but it seems like you're landing in more regions and geographies globally. So curious how that the global customer mix increases over the next year or two?

Yeah, actually, we see there more of our international customer interest into our technology, right? And this year, we have more of an advanced packaging tool installed in the Singapore region and also we do have other customer interest to our technology in the US, in Korea and also in Taiwan region, right? So we see that also customer even in Europe.

So we are this year, by end of this year, we have a 22 being stored in the region outside mainland China, so I should say next year, we have a much better outcome, right, for the global customer.

Yeah. Hey, Suji, the one thing I'd add, it's, you kind of -- we'll, of course, give our guidance like we always do it in January of next year. But, for the global customers to hit 10% of our revenue, at these levels, it's $120 million plus. And so we're not really ready to talk about the mix that will hit.

I guess the challenge is our business in China with our product cycles is growing at a pretty good clip. So it's.

But we expect the Internet, the global customers to really grow in terms of revenue this year, of course, next year, and for many years to come as we scale that up.

Yeah, and I understand China's growing strong as well. Last quick question, supply chain, are you guys seeing any constraints? And then what's the timing to Linggang's second building being up and running? How long do you think that'll take?

I think the second building where the finished decoration and we start moving the people and start using that right now. So with that, the second building being put into their manufacturing space almost double, right. Of course, we're going to hire more people, train the other technician and workers and to really get a double of the capacity.

Next one is really, I want to say this supply chain constraint, right? And probably everybody has same problem since this increasing too fast. But we're still doing very well and to working with our vendor supplier. So basically, we give them six months and even longer, one year forecast. Then we give those primary, I want to say their.

The supplier forecast, we want to increase the capacity. But some people, some can do, maybe some cannot meet our requirement. Therefore, I'm looking for a second source, third source and to meet those requirements. So our team with this is working very well. And again, it's a lot of challenging and there are. Our team made a lot of progress for this supply chain management and control.

Yeah, Suji, Dave, if you don't mind just a few things, I mean, our supply chain team is really critical, right? I mean, they've helped us drive the growth over the past years. We've been through some interesting market conditions.

In this case we think we're doing ACM is not going to be the one to hold up our customers, right? And so David was pretty clear, Q3 shipments were pretty strong, we expect Q4 shipments to be even higher, right? And that's you go back and look at some of our past years, a lot of times you have kind of a flat to down Q4, but I think the execution from the team, the Slingong facility is on, comes on at exactly the right time and.

We used our cash, our balance sheet to grow our raw materials this quarter, so we used a little bit of cash, but I think that was the right thing to do to scale up for our production.

Understood. Thanks. I'll pass it along, guys. Congrats to you.

Yeah. Thanks, Fuji.

Thank you, Fuji.

We'll now take our next question. Please stand by.

Our next question comes from the line of Bintuo Ni of Daiwa Securities. Please go ahead. Your line is open.

Great.

Thank you, David and Mark. Thanks for letting me ask. So first question is that we had a pretty volatile gross margin. Now it's back to 41 in the quarter you mentioned, also the inventory provisions. Can I share more about the inventory provisions and also is it also happening in fourth quarter as well?

Yeah, let me hit on that and then I'll kind of hit that one and I'd let David talk a little bit about our strategies here. But the inventory provision, it wasn't particularly high here in the third quarter.

Last second-half of last year, we had some challenges there, but this time it was kind of within a normal range.

So we feel like we've got that managed, and so it'll be in kind of similar levels next quarter and even quarterly for next year, the provision.

The bigger impact was really, I think, on the product mix and even the foreign exchange on the quarter.

David, you might want to say something about kind of how we focus on world-class products, right, kind of the longer-term strategy for our gross margins.

Yes, I would say that the real gross margin. Long run and it's really we rely on our differential product, right?

And with our cleaning cover plating and also furnace, we're developing TSVD also track, we all rely on our differential technology.

So our product and with the market even in China sell a lot.

We cannot see anybody can copy our differential technology with all well patent and also treat the secret protection.

So with our product, if we are succeeding become the number one performance, I mean succeeding in the top tier of the global player and that product will be really have a good margin in China market.

If anybody, I said, cannot copy ACM tool.

Even somehow similar to come out with the top tiers guys tool, their portfolio is still below us. That's our confidence we can maintain long-term and Gross margin in the market in China. Of course, those differentiated patent protector psychology also can sell outside Mainland China and also outside Mainland China pricing also good too. So for that long run consideration, we have confidence we can maintain our gross margin in the 42% to 48%. That's great.

Thank you.

My second question is about orders. You had, if I hear correctly, you had 147% order gross, 9.6.

I think your first half order gross was 100%. So third quarter was very strong. So how much is driven by volume and how much is driven by share gains?

Thank you.

You want to touch on that?

Yeah, let me hit on that, and I think, David, I'll help you with that. So it's the market in China has been pretty solid, right? And we think it's still pretty kind of early in the investment days in China.

We don't grow in our shipments 30% and the orders at the level we're growing, we think we're growing a lot faster than the market, both in terms of orders, revenue and shipments.

And so, I don't know how to break it out between the market, the China WFE market, but it's always our goal to grow faster than the China WFE market.

Yeah, I want to see that is China market still in their, I want to say their growing stage.

A lot of logical fab and also the memory fab continue and increase their capacity.

Also, I want to say the demand and also the data center and automobile and also robotics will continue driving China market well.

So also, I want to say that probably.

You want to see the building space and also space is probably about two year, a few year compared with outside growth, right, in terms of also technology. So we see that even peak reach so far people talk about global 2028, maybe the peak or 2029 peak.

We think China peak will be behind that year or two year. So that's why we have a real strong confidence to the revenue in the long run in the next five years for China WFE market.

Great.

Thank you very much and congratulations on the good development lately. Thanks a lot.

As a reminder, to ask a question, you will need to press star 1 and 1 on your telephone and wait for your name to be announced. Please stand by as we compile a Q&A roster. If there are no further questions, speakers please continue.

Okay, thanks everyone.

Before we conclude, I do want to give everyone a quick reminder of our upcoming investor conferences. On November 18, we will participate in the 15th Annual Roth Technology Conference at the Hard Rock.

Hotel in New York City. On November 19, we'll participate with the Daiwa Miami Corporate Day at the Mondrian South Beach in Miami. December 2 and 3, we'll present at the UBS Global Technology and AI Conference in Scottsdale, Arizona. And on December 15, we'll present at the 15th Annual New York City Summit at Maestros in New York City. Attendance at the conference is by invitation only. For interested investors, please contact your respective sales representatives to register and schedule one-on-one meetings with this concludes our call and you may now disconnect. Take care.