Amtech Systems reports improved financial performance and a strategic shift towards AI-driven growth opportunities in Q4 earnings call.

And provide exceptional service. End markets include medtech and Defense applications, among others, where we have strong customer engagement enabled by our foundry service and differentiated capabilities so we can develop sticky reoccurring revenue streams.

Over the past 18 months, we've made tremendous progress optimizing our operating model and improving our cost structure. We implemented a series of cost reduction initiatives that included the elimination of some unprofitable products and a shift of some products to outsource partners to reduce labor and fixed overhead costs. These initiatives, which include consolidation of our manufacturing footprint from seven sites to four sites, resulted in $13 million of annualized savings. Looking ahead, we expect to realize additional savings by subletting underutilized factories. These actions have significantly reduced our EBITDA breakeven point, improved our ability to scale profitably with higher volumes. With the majority of major optimization initiatives completed, we are now focused on growth initiatives to fully capitalize on AI equipment opportunities and increase our reoccurring revenue. Our improved financial performance, prospects for continued operating cash flow generation, capex light business model and a strong balance sheet have provided us with the flexibility to return capital to shareholders while also investing in growth opportunities. So Amtech's Board of Directors has authorized a share repurchase program of up to $5 million of the company's common stock for a one year period. In summary, we have a strong foundation for growth driven by AI market opportunities and differentiated capabilities. The changes we've made to optimize our business model and streamline our product portfolio have created strong operating leverage which positions us well to elevate profitability as we grow and create meaningful shareholder value. With that, I'll turn it over to Wade for further details on the financial results.

Great. Thank you Bob. Net revenues increased sequentially from the third quarter, driven primarily by strong demand in Asia for refloat ovens used in AI applications. The decrease in net revenues compared to the same period last year reflects higher AI related revenues offset by substantially lower mature node semiconductor revenues primarily for sales and wafer cleaning equipment and parts in our semi fabrication solutions segment. In our thermal processing solutions segment, diffusion furnaces and high temperature furnaces drove the decline in sales. GAAP Gross margin decreased by 0.3 million sequentially from the prior quarter and decreased 1 million compared to the same prior year period. The decrease from the prior quarter was due to the one time employee retention credit received in the third quarter of 2025. The decrease in gross margin from the same prior year period is primarily due to lower sales volume in the mature node semiconductor market. Gross margin as a percentage of sales increased from 40.7% in the same prior year period up to 44.4% this current year quarter driven by cost save initiatives and product mix. Compared against the third quarter of 2025 and excluding the ERC one time credit gross margin would have been 41.5% versus the current fourth quarter of 44.4%. Gross margin showing a nice sequential improvement. Selling general and administrative expenses decreased 1 million sequentially from the prior quarter and decreased 2.4 million compared to the same prior year period. The decrease from the prior quarter and the same prior year period is primarily due to cost reduction efforts around overhead expenses and cost structure changes to reduce our fixed costs. Research, development and engineering expenses increased by 0.2 million sequentially from the prior quarter and decreased 0.4 million compared to the same prior year period. The increase from the prior quarter is primarily due to growth initiatives and the decrease compared to the same prior year period is primarily due to a more focused approach to our investments in innovation. GAAP net income for the fourth quarter of fiscal 2025 was 1.1 million or $0.07 per share. This compares to GAAP net income of 0.1 million or $0.01 per share for the preceding quarter and GAAP net loss of 0.5 million or $0.04 per share for the fourth quarter of fiscal 2024. Non GAAP net income for the fourth quarter of fiscal 2025 was 1.4 million or $0.10 per share. This compares to non GAAP net income of 0.9 million or $0.06 per share for the preceding quarter and non GAAP net loss of $7,000 or $0.00 per share for the fourth quarter of fiscal 2024. Unrestricted cash and cash equivalents at September 30, 2025 were 17.9 million compared to 11.1 million at September 30, 2024, due primarily to the Company's focus on operational cash generation, working capital optimization, strong accounts receivable collections from customers, accounts payable management, and the employee retention credit. Now turning to our outlook for the first quarter fiscal ending December 31, 2025, the company expects revenue in the range of 18 to 20 million. AI related equipment sales for the thermal processing solutions segment is anticipated to partially offset the transitions in our business related to mature node semiconductor product lines. With the benefit of previously implemented structural and operational cost reductions. AMTEC expects to deliver solid operating leverage, resulting in adjusted EBITDA margins in the high single digits. Amtech remains focused on driving further efficiency gains and cost optimization across all operations. Positioning the company to expand margins and generate more consistent profitability going forward. Operations can be significantly impacted, positively or negatively, by the timing of orders, system shipments, logistical challenges, and the financial results of semiconductor manufacturers. Additionally, although the company has been generating more revenues from recurring and consumable sales, the balance of the business is from semiconductor equipment industries, which can be cyclical and inherently impacted by changes in market demand and capacity utilization. The outlook provided during our call today and in our earnings press release is based on an assumed exchange rate between the United States dollar and foreign currencies. Changes in the value of foreign currencies in relation to the United States dollar could cause actual results to differ from expectations. As you may have seen in our 8K filing, I have submitted my resignation as Chief Financial Officer effective as of the close of business on December 29, 2025. My decision to step down is not a result of any dispute or disagreement with Amtech Systems. The decision is based upon my personal and family interests in mind. I'll be assuming an executive role at a different company. I have agreed to serve in a consulting capacity for a period of up to six months to assist with the closing of the first quarter of fiscal 2026, preparation and filing of the 2026 Annual Meeting Proxy statement, and the transition of my duties to a new cfo. Amtech Systems plans to launch a search for a new CFO immediately. I want to take a moment to thank the Amtech Systems team who has achieved and improved substantially under my tenure. I also want to thank Bob Daigle for his tremendous vision and leadership as CEO. I've learned so much and I will be eternally grateful for the opportunity. Thank you, and I will now turn the call over to the operator for questions.

Thank you. We will now begin the question and answer session. To ask a question, you may press Star then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press Star then two. At this time, we will pause momentarily to assemble our roster. And the first question will come from Craig Irwin with Roth Capital Partners. Please go ahead. Hello, Craig? Craig, your line may be muted. It's open on our end.

Yes, I was on mute. I apologize for that. Thank you for taking my questions. So, Bob, can you maybe talk a little bit about your visibility with AI customers? I don't know if you can maybe just give us general color on backlog and backlog trends or orders and order indications and maybe even Just the direct investment you're seeing. In the different facilities that you're selling into there as far as the customer commitments.

Yes, let me walk through that, Craig. So again, broadly speaking, we're seeing very strong demand. And I would characterize, my sense right now is most and most of the equipment in the pipeline has been really being put into existing facilities. But what we're hearing is there are new facilities being built as well. So I think there's plans that go out there quite a while in terms of our visibility and backlog. It's one of these situations and I think we've talked about this before. We have. You know, a very efficient, effective manufacturing organization for this back end equipment. We can basically for the most part book and ship within the same quarter. Our lead times will run six weeks or so for this equipment out of our Shanghai factory. So typically we're getting orders and in most cases shipping within the same quarter. Having said that, there is an increased level of business where we're, in some cases they're telling us, you know, we're still finishing up a factory and it's going to be in, for example, the, you know, the March quarter or in some cases the June quarter before they want to take delivery. So I'd say we're getting a little bit more visibility out there because of, you know, other critical constraints in installing equipment. But for the most part our volume has been driven by book and ship in current quarters.

Understood, understood. You know, you've explained the nature of the business in the past and it makes sense that it's not necessarily changing, just moving very well. So that makes sense. One area you guys have really impressed me over the last couple years is on the execution, bringing down OpEx. Right. The $13 million in savings. Can, can you maybe frame out for us what the sublet savings could be from the underutilized facilities? And I don't know if you can get more specific about, you know, which facilities and whether or not these are sales or. Things where you're already leased but you can, you're subleasing or if there's assets that can be sold.

Yeah, no, these are, these are leases of underutilized facilities. And both in, in both segments, I'd say combined, we're probably looking at, once we sublet both facilities, let's say 700 to a million in annualized savings associated with those.

Okay, excellent, excellent. Then, you know, to change subjects again, there's quite a lot of interest out there about new applications for silicon carbide. You know, some of these AI chip producers are apparently looking at different substrates for, you know, future generations of chips. You know, I know you guys get involved very early on with different customer groups as far as development necessary for new processes. You know, are you seeing some new customers maybe come in or new opportunities come in, you know, that might broaden your participation away from tps into substrates. For. Some of the AI momentum we're.

Seeing in the market. Yeah, if it migrates to silicon carbide for processing, it would be more on a consumable side of things, Craig, that we would participate. I actually, I thought what you were going to reference is there's a lot of. Literature and discussion around the fact that the data centers themselves are going to likely distribute, you know, instead of having low voltage power across the facility, go to high voltage and step it down at the rack. And that allows them to significantly reduce the amount of copper needed for busing across these AI data centers. So I'm hearing more about that where basically. With EV pretty, pretty depressed right now across the industry, it's a potential growth driver for silicon carbide where it's the power electronics for these data centers. I've heard a little bit about silicon carbide as substrates and again, I think for us it would be more, it could translate into consumables if that materializes.

Yeah, I can clarify that for you, I'm sure, you know, but you're probably limited as far as what you can say. But so I'll say it publicly. I know that the, the silicon carbide produced by Wolfspeed is used by EPC Power, a private company based in California for the EPC Power blocks sold by Vertiv. And those use 3.3 kV MOSFETs, which are much higher power than the MOSFETs EVs. And that is, that is the primary product going in on the leading edge data centers today. So I do know that DC is adopting silicon carbide for power. What I was curious about and really where things could get insanely interesting is if it's a substrate for the actual. For the AI chips themselves and not just the power.

Yeah, and my sense would be that's a ways out if that develops. I think I haven't heard anything imminent on that front. I guess I would say.

Craig.

The next question will come from Michael Legg with Ladenburg. Please go ahead.

Thanks, Bob. Now that you've done a great job. Cleaning up the balance sheet and getting. Costs in line and your comment on. Over serving the underserved kind of. Can you talk a Little bit about. The opportunity in the service area.

Yes. So what we're focused on is really high value niche opportunities or areas of the market where. Let me characterize it this way, if you're a large semiconductor application area, you tend to get pretty high service levels and product availability is always there and you get development support for new products, new applications. And what we're finding are opportunities and they tend to be a little bit more niche in the medical area and the defense area where. For a large player the volumes may not be all that meaningful, but for us it creates a nice, nice opportunity for, you know, this reoccurring revenue stream. So we're leveraging our foundry service where, you know, we do contract development. We do, we can help qualify products with some of these OEMs basically to, you know, get our products in, into some of these applications as an alternative to some of the large incumbents. And again, it's just going to take time to develop because it requires qualification. But it is very sticky business. It has a nice margin profile and I think it helps develop some very strong connection with some key customers because.

We'Re there to support them where in many cases others aren't. Okay, great. And then just to follow up on the CFO search, can you give us any update on your progress there? Yes.

So. We just started and we'll keep everybody informed as things develop, but. We'Re still early in the search.

Okay, great, thank you.

The next question will come from Mark Miller with the Benchmark company. Please go ahead.

I just wanted to clarify, you indicated that the spread between equipment and recurring revenues was 60, 40. Was that for both the thermal processing and the semi fab sales or was it some differences there?

Yeah, it's overall, I'd say the majority of the semi fabrication solutions. Are the consumables, parts, service and probably of the TPS segment. I'll give you a rough number. Let's say 80% equipment, 20%. You know, on the reoccurring side.

In terms of your backlog, is it, you said you've been focusing on higher margin products. What does it look like in terms of the margin profile of your existing backlog? Is it better than what you've been reporting recently?

Yeah, we basically cleaned that up for the most part. Mark, you know, when we talk a year, year and a half ago, we had. A lot of things in our backlog had, I would characterize, as substandard margins and you know, pretty much moved beyond that now. So what's sitting there is of high quality for the majority of it okay.

You indicated that auto remains soft for you, but I was a little surprised by that because it's my understanding, at least for EVs that auto sales in China are better this year than last year.

Yeah, I think, yeah. Most of the, most of our exposure in the auto industry is with the Western oem. So let's say US European players, less so in mainland China. So in my comments frankly referred to the semiconductor industry that serves the Western world.

Thank you.

The next question will come from George Maremma with Pareto Ventures. Please go ahead.

Hi. Thanks. Taking the call. Good to talk to you about. Hi George, a couple of questions. Do you guys expect. Any effect from the ramp up of Blackwell versus Hopper and also kind of the ramp up of these custom ASICs like TPUs, et cetera?

From our perspective, they're basically using understanding very similar processes and equipment capabilities. So I think to the extent they ramp and it's more volume that's beneficial. But in terms of significant technology differences at this stage, I wouldn't say there isn't much impact on us if the mix shifts.

Okay. And then as you look out to 26 in terms of your focused R and D on innovative investments and new. Products. Any update on any new products.

For 26 and new initiatives? Yes, let's talk about the initiatives. And again there's really two areas of focus for our investments. On the thermal process solutions side of things, it really is around. Enabling. Continuous processing for higher density, higher, you know, tighter pitch devices where. We think it could potentially open open opportunities to participate in more of the processes that are used for these GPUs, TPUs and electron and frankly even the electronic assembly of dense boards for the, for the AI data servers. So I think, you know, that's our emphasis for TPS is really around how do we participate in more of the process. And by the way, that equipment has a high level of complexity and you know, the requirements are more stringent. So we think the ASP would also be meaningfully higher. Then on the SFS side of things, our investment is really on driving our growth in our consumables, particularly specifically our chemicals business where we have some very strong capabilities on the application development that leverage, you know, basically leveraging our foundry, we have very strong technology folks in our R and D labs, our formulators. So and we think there's based on the engagement level, we think there are customers that can significantly benefit from our capabilities and support. So that's where we're investing very much. Line of sight though I said this before, we're a small company. We work on these aren't grand initiatives. If we build it, they'll come kind of things that working on things that are very much involve customer engagement so that the goal here is to convert R and D efforts into meaningful revenue as quickly as possible.

And then one last one. Has there been any change in the competitive landscape in thermal area?

Nothing that I'm aware is visible to George. I think it's pretty much a very similar situation in that space.

Great. Thank you. All right, thank you, George.

Ladies and gentlemen, at this time we've reached the end of the question and answer session. I'd like to turn the floor back over to management for any closing remarks.

All right, thank you. Well, first of all, in closing, I'd like to thank Wade for his service to Amtech over the past 16 months and his assistance as we transition the responsibilities to a new cfo. Our back office processes and systems have greatly improved as a result of Wade's efforts, and I wish him the best in his role in his new company. And in closing, I also want to thank everybody on the call today or those who will participate in the recast for their interest in amtech and for joining our conference call today. And we look forward to updating you on our progress in the months to come. Have a good evening, everyone.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.