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Axcelis Technologies reported first-quarter 2026 financial results slightly above expectations, supported by continued strength in memory-related demand and growth in its customer support and installed base business.
Revenue for Q1 2026 reached $199.0 million, up modestly from $192.6 million in the prior-year period. However, profitability declined, with GAAP net income falling to $9.2 million from $28.6 million a year earlier, reflecting lower margins and continued market softness in certain end segments. Gross margin declined to 40.5% from 46.1%, while operating margin dropped to 4.0%.
The company highlighted DRAM and high-bandwidth memory (HBM) demand as key growth drivers, benefiting from accelerating AI infrastructure deployment. Customer support and installed-base services (CS&I) also remained a strategic strength, becoming increasingly important as Axcelis expands its global installed equipment footprint.
At the same time, management noted that continued digestion of excess capacity in power semiconductor and mature-node markets is offsetting growth in memory. This reflects ongoing cyclical weakness in portions of the power semiconductor ecosystem following significant investment expansion over the past several years.
Despite the softer margin environment, Axcelis maintained a strong balance sheet with approximately $570 million in cash and continued positive free cash flow generation, providing flexibility to support future growth initiatives and ongoing R&D investments.
Looking ahead, the company expects second-quarter 2026 revenue of approximately $205 million and anticipates a stronger second half of the year supported by improving order trends. Axcelis also reaffirmed expectations for its planned merger with Veeco Instruments to close in the second half of 2026.
From a market perspective, Axcelis’ results reinforce the divergence currently shaping semiconductor capital equipment markets: strong AI-driven memory investment, particularly in HBM, contrasted with slower recovery in mature-node and power semiconductor capacity additions. The company’s growing services business also highlights a broader industry trend toward recurring revenue streams and lifecycle support as installed tool bases expand globally.
Original – Axcelis Technologies
