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What changed in VEECO INSTRUMENTS INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of VEECO INSTRUMENTS INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+220 added−165 removedSource: 10-K (2026-02-25) vs 10-K (2025-02-14)

Top changes in VEECO INSTRUMENTS INC's 2025 10-K

220 paragraphs added · 165 removed · 138 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeOur employee average tenure is more than eight years. ​ Employee Engagement ​ The engagement and satisfaction of the Veeco United Team are critical to our culture and our success. We remain committed to working with employees to strengthen the Company’s culture. We regularly conduct formal employee surveys to assess global employee engagement, leadership, work environment and culture.
Biggest changeWe remain committed to working with employees to strengthen the Company’s culture. We regularly conduct global employee surveys to assess global employee engagement, leadership, work environment, and culture. The results of our surveys are used to identify various initiatives designed to strengthen our Company.
Our systems enable customers to manufacture the magnetic heads for hard disk drives. ​ ​ ● IBD ​ ● IBE ​ ● Physical Vapor Deposition ​ ● Mechanical (Lapping and Dicing) ​ ● Diamond Like Carbon Deposition ​ 6 Table of Contents ● Wet Processing ​ Scientific & Other ​ Scientific & Other refers to advanced materials and device research such as quantum computing, and a range of manufacturing applications including optical devices (lasers, mirrors, optical filters, and anti-reflective coatings). ​ ​ ​ ​ ​ ● Ion Beam Sputtering for optical coatings ​ ● MBE for specialized laser and sensor devices ​ ● Wet Processing for sensors ​ ● ALD for a variety of applications ​ ​ System Products ​ Laser Annealing Systems ​ Our laser annealing systems meet the industry demand for ultra-short time-scale “millisecond” annealing, heating the wafer up to temperatures just below the silicon melting point, enabling thermal annealing solutions at the most advanced semiconductor process nodes.
Our systems enable customers to manufacture the magnetic heads for hard disk drives. ​ ​ ● IBD ​ ● IBE ​ ● Physical Vapor Deposition ​ ● Mechanical (Lapping and Dicing) ​ ● Diamond Like Carbon Deposition ​ ● Wet Processing ​ 7 Table of Contents Scientific & Other ​ Scientific & Other refers to advanced materials and device research such as quantum computing, and a range of manufacturing applications including optical devices (lasers, mirrors, optical filters, and anti-reflective coatings). ​ ​ ​ ​ ​ ● Ion Beam Sputtering for optical coatings ​ ● MBE for specialized laser and sensor devices ​ ● Wet Processing for sensors ​ ● ALD for a variety of applications ​ ​ System Products ​ Laser Annealing Systems ​ Our laser annealing systems meet the industry demand for ultra-short time-scale “millisecond” annealing, heating the wafer up to temperatures just below the silicon melting point, enabling thermal annealing solutions at the most advanced semiconductor process nodes.
Veeco offers a full suite of ALD systems for non-semiconductor front-end production applications across a wide range of markets and applications such as Quantum Computing, optical, electronics, micro-electro mechanical systems (“MEMS”), nanostructures, and biomedical. 8 Table of Contents ​ Other Systems ​ We have other deposition systems including Physical Vapor Deposition, Diamond-Like Carbon Deposition, and Chemical Vapor Deposition Systems primarily sold to the data storage market.
Veeco offers a full suite of ALD systems for non-semiconductor front-end production applications across a wide range of markets and applications such as Quantum Computing, optical, electronics, micro-electro mechanical systems (“MEMS”), nanostructures, and biomedical. 9 Table of Contents Other Systems ​ We have other deposition systems including Physical Vapor Deposition, Diamond-Like Carbon Deposition, and Chemical Vapor Deposition Systems primarily sold to the data storage market.
Veeco serves ● Laser Annealing ​ ● Ion Beam Deposition (“IBD”) ​ ● Ion Beam Etch (“IBE”) ​ ● Wet Processing ​ ● Advanced Packaging Lithography 5 Table of Contents the advanced packaging market with lithography as well as wet processing equipment. ​ Compound Semiconductor The Compound Semiconductor market includes Power Electronics, Photonics, RF Filters and Amplifiers, and Solar power applications. ​ Power Electronics refers to semiconductor devices used in the control and conversion of electric power in growing applications such as wireless charging of consumer electronics and automotive applications.
Veeco serves the advanced packaging market with lithography as well as wet processing equipment. ​ ● Laser Annealing ​ ● Ion Beam Deposition (“IBD”) ​ ● Ion Beam Etch (“IBE”) ​ ● Wet Processing ​ ● Advanced Packaging Lithography 6 Table of Contents Compound Semiconductor The Compound Semiconductor market includes Power Electronics, Photonics, RF Filters and Amplifiers, and Solar power applications. ​ Power Electronics refers to semiconductor devices used in the control and conversion of electric power in growing applications such as wireless charging of consumer electronics and automotive applications.
None of our competitors compete with us across all of our product lines. ​ Our principal competitors include: Aixtron; Applied Materials; Canon; Grand Plastics Technology; Mattson Technology; Screen Semiconductor Solutions; Shanghai Micro Electronics Equipment; and Suss MicroTec. ​ Intellectual Property ​ Our success depends, in part, on our proprietary technology, and we have approximately 350 patents in the United States and other countries. ​ We have patents and exclusive and non-exclusive licenses to patents owned by others covering certain of our products, which we believe provide us with a competitive advantage.
None of our competitors compete with us across all of our product lines. 10 Table of Contents ​ Our principal competitors include: Aixtron; Applied Materials; Canon; Grand Plastics Technology; Mattson Technology; Screen Semiconductor Solutions; Shanghai Micro Electronics Equipment; and Suss MicroTec. ​ Intellectual Property ​ Our success depends, in part, on our proprietary technology, and we have approximately 350 patents in the United States and other countries. ​ We have patents and exclusive and non-exclusive licenses to patents owned by others covering certain of our products, which we believe provide us with a competitive advantage.
We also provide a broad array of ion beam sources. 7 Table of Contents Advanced Packaging Lithography ​ Our lithography equipment is used in the Advanced Packaging market for applications such as FOWLP, Flip Chip (including Copper Pillar), Fan In Wafer Lever Packaging, 3D stacking, interposers and embedded die.
We also provide a broad array of ion beam sources. 8 Table of Contents Advanced Packaging Lithography ​ Our lithography equipment is used in the Advanced Packaging market for applications such as FOWLP, Flip Chip (including Copper Pillar), Fan In Wafer Lever Packaging, 3D stacking, interposers and embedded die.
Parts and upgrade sales represented approximately 15%, 17%, and 18% of our net sales for those years, respectively, and service and support sales were 5%, 5%, and 6% respectively. ​ Customers ​ We sell our products to many of the world’s semiconductor IDMs and Foundries, OSAT, HDD, and photonics manufacturers, as well as research centers and universities.
Parts and upgrade sales represented approximately 19%, 15%, and 17% of our net sales for those years, respectively, and service and support sales were 6%, 5%, and 5% respectively. ​ Customers ​ We sell our products to many of the world’s semiconductor IDMs and Foundries, OSAT, HDD, and photonics manufacturers, as well as research centers and universities.
Paul, Minnesota; Waltham, Massachusetts; and Solvegatan, Sweden. ​ Suppliers ​ We outsource certain functions to third parties, including the manufacture of several of our systems. While we rely on our outsourcing partners to perform their contracted functions, we maintain some level of internal manufacturing capability for these systems.
Paul, Minnesota; and Waltham, Massachusetts. ​ Suppliers ​ We outsource certain functions to third parties, including the manufacture of several of our systems. While we rely on our outsourcing partners to perform their contracted functions, we maintain some level of internal manufacturing capability for these systems.
The reference to our website address 11 Table of Contents does not constitute inclusion or incorporation by reference of the information contained on our website in this Form 10-K or other filings with the SEC, and the information contained on our website is not part of this document. ​ ​
The reference to our website address does not constitute inclusion or incorporation by reference of the information contained on our website in this Form 10-K or other filings with the SEC, and the information contained on our website is not part of this document. ​ ​ 12 Table of Contents
In addition, many of our products face competition from alternative technologies, some of which are more established than those used in our products. Significant factors for customer selection of our tools include system performance, accuracy, repeatability, 9 Table of Contents ease of use, reliability, cost of ownership, and technical service and support.
In addition, many of our products face competition from alternative technologies, some of which are more established than those used in our products. Significant factors for customer selection of our tools include system performance, accuracy, repeatability, ease of use, reliability, cost of ownership, and technical service and support.
As our products are sold into multiple markets, the following table describes these markets and the applicable Veeco technologies. ​ ​ Markets Description Applicable Veeco Technologies Semiconductor The Semiconductor market refers to process steps in logic and memory applications where silicon wafers are processed.
As our products are sold into multiple markets, the following table describes these markets and the applicable Veeco technologies. ​ ​ 5 Table of Contents Markets Description Applicable Veeco Technologies Semiconductor The Semiconductor market refers to process steps in logic and memory applications where silicon wafers are processed.
Veeco pays the majority or all of the costs for many of these benefits. ​ Culture of Inclusion ​ We are committed to building and sustaining a culture of inclusion where our people can be their authentic selves and are encouraged to reach their full potential.
Veeco pays the majority, or all, of the costs for many of these benefits. ​ Culture and Core Values ​ We are committed to fostering and sustaining a culture of inclusion where our people can be their authentic selves and are encouraged to reach their full potential.
Our backlog was $409.6 million and $490.7 million at December 31, 2024 and 2023, respectively. ​ Competition ​ In each of the markets that we serve, we face competition from established competitors, some of which have greater financial, engineering, and marketing resources than we do, as well as from smaller competitors.
Our backlog was $554.9 million and $409.6 million at December 31, 2025 and 2024, respectively. ​ Competition ​ In each of the markets that we serve, we face competition from established competitors, some of which have greater financial, engineering, and marketing resources than we do, as well as from smaller competitors.
Revenue from the sales of parts, upgrades, service, and support represented approximately 20%, 22%, and 24% of our net sales for the years ended December 31, 2024, 2023, and 2022, respectively.
Revenue from the sales of parts, upgrades, service, and support represented approximately 25%, 20%, and 22% of our net sales for the years ended December 31, 2025, 2024, and 2023, respectively.
Approximately 25% of our employees are involved in research and development; 56% in operations, manufacturing, service, and quality assurance; and 19% in sales, order administration, marketing, finance, information technology, general management, and other administrative functions. Our success depends on our ability to attract, retain, and motivate employees. We compete for talent with other companies and organizations.
Approximately 25% of our workforce is engaged in research and development; 56% in operations, manufacturing, service, and quality assurance; and 19% in sales, marketing, finance, information technology, general management, and other administrative functions. Our success depends on our ability to attract, retain, and motivate employees. We compete with other companies and organizations for talent.
Finally, we maintain and regularly remind our employees about our confidential third-party hotline service that can be utilized to share their concerns. ​ Compensation Philosophy ​ Our compensation philosophy is targeted to support our employees’ financial, physical, and mental health and well-being. We utilize independent surveys to ensure that our total compensation packages are competitive.
Finally, we maintain and regularly remind our employees about our confidential third-party hotline, which they can use to share their concerns. ​ Total Rewards Philosophy ​ Our total rewards philosophy is targeted to support our employees’ financial, physical, and mental health and well-being. We use independent market surveys to ensure our total compensation packages remain competitive.
We emphasize the development of future leaders and utilize a talent review process to assess high-potential and high-performing employees for future leadership roles as part of our succession management process. We monitor turnover statistics carefully since turnover is an essential indicator of employee satisfaction. Our 12-month rolling average for voluntary turnover on December 31, 2024 was approximately 7.4%.
We emphasize developing future leaders and use a talent review process to assess high-potential, high-performing employees for future leadership roles as part of our succession management. We closely monitor turnover statistics, as they are an essential indicator of employee satisfaction. Our 12-month rolling voluntary-turnover average as of December 31, 2025, was approximately 7.6%.
Hiring is done at a local level to ensure compliance with applicable regulations. We advertise job openings and source candidates broadly to attract a diverse candidate pool. As a leader in our industry, we can attract a strong candidate pool and have successfully filled vacancies.
We advertise job openings and source candidates broadly to attract a diverse candidate pool. As a leader in our industry, we can attract a strong candidate pool and have successfully filled vacancies.
We consider our relations with the Veeco United Team to be favorable. We are subject to various federal, state, and local regulations, and regularly monitor all key employment activities, such as hiring, termination, pay and working practices, to ensure compliance with such regulations.
We are subject to various federal, state, and local regulations and regularly monitor key employment activities, such as hiring, terminations, pay, and working practices, to ensure compliance with these regulations.
The results of our surveys are used to identify various initiatives designed to strengthen our Company. Our executives conduct regular meetings with our global workforce, providing employees with opportunities to engage with senior leaders and ask questions in open Q&A sessions.
Our executives host regular company-wide meetings with our global workforce, providing employees with opportunities to engage with senior leaders and ask questions in open Q&A sessions.
Refer to Item 1A, “Risk Factors,” for a description of risks associated with intellectual property. ​ People ​ Veeco’s global workforce spans thirteen countries around the world. At the end of 2024, we had 1,231 employees with 290 located in the Asia-Pacific region, 60 in the EMEA region, and 881 in the United States.
Refer to Item 1A, “Risk Factors,” for a description of risks associated with intellectual property. ​ Workforce Overview ​ Veeco’s global workforce spans 13 countries. At December 31, 2025, we employed 1,265 employees, with 297 in the Asia-Pacific region, 45 in the EMEA region, and 923 in the United States.
In addition, we may supplement the Veeco United Team with contractors and other temporary workers. ​ Our Core Values ​ All Veeco employees are expected to honor our Core Values, which define the way we conduct our business in everyday actions and choices and form the foundation of our culture: ​ ● We will always put our CUSTOMERS first ● We will never compromise on SAFETY ● We will always demonstrate RESPECT ● We will never stop IMPROVING ● We will always be ACCOUNTABLE ● We will never forget that DIVERSITY and INCLUSION make us stronger ​ 10 Table of Contents Employment, Recruitment and Development ​ Our recruitment programs are regionally focused.
We are always striving to attract talented individuals from the global candidate pool. ​ All Veeco employees are expected to honor our Core Values, which define the way we conduct our business in everyday actions and choices and form the foundation of our culture: ​ ● We will always put our customers first ● We will never compromise on safety ● We will always demonstrate respect ● We will never stop improving ● We will always be accountable ● We will never forget that diversity and inclusion make us stronger ​ Available Information ​ Our corporate website address is www.veeco.com.
Serving a global and highly interconnected customer base, we have comprehensive sales and service 4 Table of Contents operations across the Asia-Pacific, Europe, and North America regions to ensure real-time close collaboration and responsiveness. ​ Markets ​ Our products are purchased by customers in the following four end-markets: 1) Semiconductor; 2) Compound Semiconductor; 3) Data Storage; and 4) Scientific & Other. ​ Our systems are used in the production of a broad range of microelectronic components, including logic, dynamic random-access memory (“DRAM”), photonics devices (including laser diodes and micro-LEDs), power electronics, RF filters and amplifiers, magnetic heads for hard disk drives, and other semiconductor devices.
See Note 17 “Merger” to the accompanying Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K. ​ Markets ​ Our products are purchased by customers in the following four end-markets: 1) Semiconductor; 2) Compound Semiconductor; 3) Data Storage; and 4) Scientific & Other. ​ Our systems are used in the production of a broad range of microelectronic components, including logic, dynamic random-access memory (“DRAM”), photonics devices (including laser diodes and micro-LEDs), power electronics, RF filters and amplifiers, magnetic heads for hard disk drives, and other semiconductor devices.
In fiscal 2024, we hired 134 employees, 102 within the United States, 28 in the Asia-Pacific region, and 4 in the EMEA region. ​ We track and report key talent metrics, including workforce demographics, talent pipeline and diversity. We invest in professional development programs to provide opportunities for individuals to advance their careers in either technical/individual contributor or leadership tracks.
In fiscal 2025, we hired 162 employees: 141 in the United States, 20 in the Asia-Pacific region, and 1 in the EMEA region. ​ We track and report key talent metrics, including workforce demographics, talent pipeline strength, and diversity representation.
We expect all Veeco employees to complete a minimum of 20 hours of training per year to support their personal growth. We offer training and development programs both virtually and in person to benefit employees worldwide.
We invest in professional development programs to provide individuals with opportunities to advance their careers in either the technical/individual contributor or leadership tracks. All employees are expected to complete at least 20 hours of annual training to support continuous learning and professional development. We offer training and development programs both virtually and in person to benefit employees worldwide.
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We are always striving to attract talented individuals from a global candidate pool. ​ Available Information ​ Our corporate website address is www.veeco.com.
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Serving a global and highly interconnected customer base, we have comprehensive sales and service operations across the Asia-Pacific, Europe, and North America regions to ensure real-time close collaboration and responsiveness. ​ Merger with Axcelis Technologies, Inc. ​ On September 30, 2025, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Axcelis Technologies, Inc., a Delaware corporation (“Axcelis”), and Victory Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Axcelis (“Merger Sub”).
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Pursuant to the Merger Agreement, and subject to the satisfaction or waiver of the conditions specified therein, Merger Sub shall be merged with and into Veeco (the “Merger”), with Veeco surviving as a wholly-owned subsidiary of Axcelis.
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The Merger Agreement was approved by Veeco’s board of directors (except for one (1) independent director who serves on the Axcelis board of directors as well and thus recused himself) and, on February 6, 2026, by the stockholders of each company, but is still pending certain regulatory approvals and other customary mutual closing conditions.
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Competition for skilled talent, particularly in engineering, manufacturing, and technical roles, remains intense across our industry. We actively monitor talent availability and retention trends to support the continuity of critical skills. We consider our relations with the Veeco United Team to be favorable.
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In addition, we may supplement the Veeco United Team with contractors and other temporary workers. ​ Talent Strategy and Development ​ We recruit regionally and hire locally to ensure compliance with applicable regulations and to strengthen alignment with local talent markets. Hiring is done at a local level to ensure compliance with applicable regulations.
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Our average employee tenure is more than 8 years. Both voluntary turnover and tenure rates compare favorably to industry benchmarks and reflect strong employee engagement and retention. ​ ​ 11 Table of Contents Employee Engagement ​ The engagement and satisfaction of the Veeco United Team are critical to our culture and our success.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAs a result, any conversion of the Notes that we elect to settle in shares may materially increase the risk that we could experience an ownership change for these purposes in the future. ​ The capped call transactions may affect the value of the 2027 Notes and our common stock. ​ With respect to the 2027 Notes, we have entered into capped call transactions with certain option counterparties.
Biggest changeAs a result, any conversion of the Notes that we elect to settle in shares may materially increase the risk that we could experience an ownership change for these purposes in the future. ​ Risks Related to the Merger with Axcelis Technologies, Inc. ​ The planned merger with Axcelis Technologies, Inc. is subject to certain closing conditions, including the receipt of consents and approvals from governmental authorities, which may impose unexpected delays in the completion of the merger, or the merger may not be completed at all. ​ On September 30, 2025, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Axcelis Technologies, Inc., a Delaware corporation (“Axcelis”), and Victory Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Axcelis (“Merger Sub”).
Our non-U.S. sales and operations are subject to risks inherent in conducting business outside the United States, many of which are beyond our control including: ​ ● political and social attitudes, laws, rules, regulations, and policies within countries that favor local companies over U.S. companies, including government-supported efforts to promote local competitors; ● global trade issues and uncertainties with respect to trade policies, including tariffs, trade sanctions, and international trade disputes, and the ability to obtain required import and export licenses; ● differing legal systems and standards of trade which may not honor our contractual or intellectual property rights and which may place us at a competitive disadvantage; ● pressures from foreign customers and foreign governments for us to increase our operations and sourcing in the foreign country, which may necessitate the sharing of sensitive information and intellectual property rights; 12 Table of Contents ● conflicting and changing governmental laws and regulations, including varying labor laws and tax regulations; ● reliance on various information systems and information technology to conduct our business, making us vulnerable to cyberattacks by third parties or breaches due to employee error, misuse, or other causes, that could result in business disruptions, loss of or damage to our intellectual property and confidential information (and that of our customers and other business partners), reputational harm, transaction errors, processing inefficiencies, and other adverse consequences; ● regional or global economic downturns or recessions, varying foreign government support, unstable political environments, and other changes in foreign economic conditions; ● the impact of regional or global health epidemics; ● difficulties in managing a global enterprise, including staffing, managing distributors and representatives, and repatriating cash; ● longer sales cycles and difficulties in collecting accounts receivable; and ● different customs and ways of doing business. ​ To date, our operations have not been materially adversely affected by global conflicts including Russia’s invasion of Ukraine or the conflict in the Middle East.
Our non-U.S. sales and operations are subject to risks inherent in conducting business outside the United States, many of which are beyond our control including: ​ ● global trade issues and uncertainties with respect to trade policies, including tariffs, trade sanctions, and international trade disputes, and the ability to obtain required import and export licenses; ● political and social attitudes, laws, rules, regulations, and policies within countries that favor local companies over U.S. companies, including government-supported efforts to promote local competitors; ● differing legal systems and standards of trade which may not honor our contractual or intellectual property rights and which may place us at a competitive disadvantage; ● pressures from foreign customers and foreign governments for us to increase our operations and sourcing in the 14 Table of Contents foreign country, which may necessitate the sharing of sensitive information and intellectual property rights; ● conflicting and changing governmental laws and regulations, including varying labor laws and tax regulations; ● reliance on various information systems and information technology to conduct our business, making us vulnerable to cyberattacks by third parties or breaches due to employee error, misuse, or other causes, that could result in business disruptions, loss of or damage to our intellectual property and confidential information (and that of our customers and other business partners), reputational harm, transaction errors, processing inefficiencies, and other adverse consequences; ● regional or global economic downturns or recessions, varying foreign government support, unstable political environments, and other changes in foreign economic conditions; ● the impact of regional or global health epidemics; ● difficulties in managing a global enterprise, including staffing, managing distributors and representatives, and repatriating cash; ● longer sales cycles and difficulties in collecting accounts receivable; and ● different customs and ways of doing business. ​ To date, our operations have not been materially adversely affected by global conflicts including Russia’s invasion of Ukraine or the conflict in the Middle East.
The market price of our common shares could continue to fluctuate in response to several factors, including among others: ● difficult macroeconomic conditions, economic recessions, international trade disputes, unfavorable geopolitical events, and general stock market uncertainties, such as those occasioned by a global liquidity crisis and a failure of large financial institutions; ● actual or anticipated variations in our results of operations; ● issues associated with the performance of our products, or the performance of our internal systems such as our 24 Table of Contents customer relationship management (“CRM”) system or our enterprise resource planning (“ERP”) system; ● announcements of financial developments or technological innovations; ● our failure to meet the performance estimates of investment research analysts; ● changes in recommendations and financial estimates by investment research analysts, and decisions by investment research analysts to cease coverage of our Company; ● margin trading, short sales, hedging and derivative transactions involving our common stock; ● our failure to successfully implement cost reduction initiatives and restructuring activities, if and when required; ● our failure to maintain an effective system of disclosure controls and internal control over financial reporting, which may result in our inability to timely and accurately report our financial results or difficulties in satisfying internal control evaluations and attestation requirements of Section 404 of the Sarbanes Oxley Act of 2002; and ● the commencement of, and rulings on, litigation and legal proceedings. ​ Securities class action litigation is often brought against a company following periods of volatility in the market price of its securities.
The market price of our common shares could continue to fluctuate in response to several factors, including among others: ● difficult macroeconomic conditions, economic recessions, international trade disputes, unfavorable geopolitical events, and general stock market uncertainties, such as those occasioned by a global liquidity crisis and a failure of large financial institutions; ● actual or anticipated variations in our results of operations; ● issues associated with the performance of our products, or the performance of our internal systems such as our customer relationship management (“CRM”) system or our enterprise resource planning (“ERP”) system; ● announcements of financial developments or technological innovations; ● our failure to meet the performance estimates of investment research analysts; ● changes in recommendations and financial estimates by investment research analysts, and decisions by investment research analysts to cease coverage of our Company; ● margin trading, short sales, hedging and derivative transactions involving our common stock; ● our failure to successfully implement cost reduction initiatives and restructuring activities, if and when required; ● our failure to maintain an effective system of disclosure controls and internal control over financial reporting, which may result in our inability to timely and accurately report our financial results or difficulties in satisfying internal control evaluations and attestation requirements of Section 404 of the Sarbanes Oxley Act of 2002; and ● the commencement of, and rulings on, litigation and legal proceedings. ​ Securities class action litigation is often brought against a company following periods of volatility in the market price of its securities.
Any of these factors, many of which are beyond our control, could materially and adversely affect our business, financial condition, operating results, cash flow, and stock price. ​ Risks Related to Our Business and Industry ​ Unfavorable market conditions have adversely affected, and may continue to adversely affect, our operating results. ​ Conditions of the markets in which we operate are volatile and may experience significant deterioration.
Any of these factors, many of which are beyond our control, could materially and adversely affect our business, financial condition, operating results, cash flow, and stock price. ​ Risks Related to Our Business and Industry ​ Unfavorable market conditions have adversely affected, and may adversely affect, our operating results. ​ Conditions of the markets in which we operate are volatile and may experience significant deterioration.
Licenses or proper license exceptions may be required for the shipment of our products to certain customers or countries. Obtaining an export license or determining whether an export license exception exists often requires considerable effort by us and cooperation from the customer, which can add time to the order fulfillment process.
Licenses or proper license exceptions may be required for the shipment of our products to or within certain customers or countries. Obtaining an export license or determining whether an export license exception exists often requires considerable effort by us and cooperation from the customer, which can add time to the order fulfillment process.
We may experience significant interruptions in our manufacturing operations, delays in our ability to timely deliver products or services, increased costs, or customer order cancellations as a result of: ​ ● the failure or inability of our suppliers to timely deliver quality parts; ● volatility in the availability and cost of materials; ● difficulties or delays in obtaining required import or export approvals; ● information technology or infrastructure failures; ● natural disasters and other events beyond our control, such as earthquakes, tsunamis, fires, floods, storms, power outages and potential impacts of climate change; or ● other causes such as regional or global economic downturns or recessions, international trade disruptions, health epidemics, political instability, terrorism, or acts of war, which could result in delayed deliveries, manufacturing inefficiencies, increased costs, or order cancellations. ​ In addition, in the event of an unanticipated increase in demand for our products, our need to rapidly increase our business and manufacturing capacity may be limited by our working capital constraints and those of our suppliers, which 17 Table of Contents may cause or exacerbate interruptions in our manufacturing and supply chain operations.
We may experience significant interruptions in our manufacturing operations, delays in our ability to timely deliver products or services, increased costs, or customer order cancellations as a result of: ​ ● the failure or inability of our suppliers to timely deliver quality parts; ● volatility in the availability and cost of materials; ● difficulties or delays in obtaining required import or export approvals; ● information technology or infrastructure failures; ● natural disasters and other events beyond our control, such as earthquakes, tsunamis, fires, floods, storms, power outages and potential impacts of climate change; or ● other causes such as regional or global economic downturns or recessions, international trade disruptions, health epidemics, political instability, terrorism, or acts of war, which could result in delayed deliveries, manufacturing inefficiencies, increased costs, or order cancellations. ​ In addition, in the event of an unanticipated increase in demand for our products, our need to rapidly increase our business and manufacturing capacity may be limited by our working capital constraints and those of our suppliers, which may cause or exacerbate interruptions in our manufacturing and supply chain operations.
Each of these events could have a material adverse effect on our business, financial condition, and results of operations. ​ Our environmental, social and governance (“ESG”) goals and strategies could be costly to implement, and we are exposed to risks associated with failures to comply with evolving and varying sustainability-related requirements. ​ From time to time the Company communicates its strategies, commitments and targets relating to ESG matters, including initiatives pertaining to climate change, human rights, diversity and inclusion, among others.
Each of these events could have a material adverse effect on our business, financial condition, and results of operations. ​ Our environmental, social and governance (“ESG”) goals and strategies could be costly to implement, and we are exposed to risks associated with failures to comply with evolving and varying sustainability-related requirements. ​ From time to time the Company communicates its strategies, commitments and targets relating to ESG matters, including initiatives pertaining to climate change and human rights, among others.
These and other developments or changes in federal or international tax laws, rules, practices or rates (including future changes or modifications to existing practices) could have an adverse material impact on our ability to utilize our deferred tax 22 Table of Contents attributes, our effective tax rate and results of operations including cash flows and financial position. ​ In addition, as of each reporting date, we evaluate the realizability of our deferred tax assets which may result in the recognition and/or release of a valuation allowance.
These and other developments or changes in federal or international tax laws, rules, practices or rates (including future changes or modifications to existing practices) could have an adverse material impact on our ability to utilize our deferred tax attributes, our effective tax rate and results of operations, including cash flows and financial position. ​ In addition, as of each reporting date, we evaluate the realizability of our deferred tax assets which may result in the 25 Table of Contents recognition and/or release of a valuation allowance.
Adverse changes in business conditions or worse-than-expected performance by acquired companies could negatively impact our estimates of future operations and result in impairment charges to acquired assets. For example, during the fourth quarter of 2024, we recorded an asset impairment charge of $28.1 million related to the intangible assets acquired as part of our acquisition of Epliluvac AB.
Adverse changes in business conditions or worse-than-expected performance by acquired companies could negatively impact our estimates of future operations and result in impairment charges to acquired assets. For example, during the fourth quarter of 2024, we recorded an asset impairment charge of $28.1 million related to the intangible assets acquired as part of our acquisition of Epiluvac AB.
Dependence upon sales emanating from a limited number of regions increases 16 Table of Contents our risk of exposure to local difficulties and challenges, such as those associated with regional economic downturns, political instability, trade wars and other trade disruptions, fluctuating currency exchange rates, natural disasters, social unrest, regional epidemics, terrorism, and acts of war.
Dependence upon sales emanating from a limited number of regions increases our risk of exposure to local difficulties and challenges, such as those associated with regional economic downturns, political instability, trade wars and other trade disruptions, fluctuating currency exchange rates, natural disasters, social 19 Table of Contents unrest, regional epidemics, terrorism, and acts of war.
Any failure to achieve or satisfy ESG-related regulations, requirements or targets could adversely impact the demand for our products, subject us to significant costs and liabilities, and result in reputational harm. ​ We have adopted certain measures that may have anti-takeover effects, which may make an acquisition of the Company by another company more difficult. ​ We have adopted, and may in the future adopt, certain measures that may have the effect of delaying, deferring, or preventing a takeover or other change in control of the Company, which a holder of our common stock may not consider to be in the holder’s best interest.
Any failure to achieve or satisfy ESG-related regulations, requirements or targets could adversely impact the demand for our products, subject us to significant costs and liabilities, and result in reputational harm. ​ 32 Table of Contents We have adopted certain measures that may have anti-takeover effects, which may make an acquisition of the Company by another company more difficult. ​ We have adopted, and may in the future adopt, certain measures that may have the effect of delaying, deferring, or preventing a takeover or other change in control of the Company, which a holder of our common stock may not consider to be in the holder’s best interest.
These challenges, together with other challenges associated with operating a global business, may adversely affect our ability to recognize revenue, our gross margins on the revenue we do recognize, and our other operating results. ​ Changes in U.S. trade policy and export controls and ongoing trade disputes between the U.S. and China have adversely affected, and may continue to adversely affect, our business, results of operations, and financial condition. ​ The U.S. government has implemented, and may continue to implement, changes in trade policy which have adversely affected and could continue to adversely affect the Company’s ability to sell and service its products to and for customers located in China and in certain other countries. ​ Over the past several years, the U.S.
These challenges, together with other challenges associated with operating a global business, may adversely affect our ability to recognize revenue, our gross margins on the revenue we do recognize, and our other operating results. ​ Changes in trade policies, export controls, and the ongoing trade dispute between the U.S. and China have adversely affected, and may continue to adversely affect, our business, results of operations, and financial condition. ​ The U.S. government has implemented, and may continue to implement, changes in trade policy which have adversely affected and could continue to adversely affect the Company’s ability to sell and service its products to and for customers located in China and in certain other countries. ​ Over the past several years, the U.S.
Future or ongoing disruptions or incidents, whether from attacks on our technology environment 20 Table of Contents or from computer viruses, natural disasters, terrorism, war or other causes, could result in a material disruption in our business operations, force us to incur significant costs and engage in litigation, harm our reputation, and subject us to liability under laws, regulations, and contractual obligations. ​ We may be unable to effectively enforce and protect our intellectual property rights. ​ Our success depends in part upon the protection of our intellectual property rights.
Future or ongoing disruptions or incidents, whether from attacks on our technology environment or from computer viruses, natural disasters, terrorism, war or other causes, could result in a material disruption in our business operations, force us to incur significant costs and engage in litigation, harm our reputation, and subject us to liability under laws, regulations, and contractual obligations. ​ We may be unable to effectively enforce and protect our intellectual property rights. ​ Our success depends in part upon the protection of our intellectual property rights.
Significant judgment is required when assessing and selecting capital investments, and we could invest in projects that are ultimately less profitable than other projects which we do not select, ultimately harming our business, results of operations and financial condition. ​ We are exposed to various risks associated with global regulatory requirements. ​ As a public company with global operations, we are subject to the laws of the United States and multiple foreign jurisdictions, and the rules and regulations of various governing bodies, which may differ among jurisdictions.
Significant judgment is required when assessing and selecting capital investments, and we could invest in projects that are ultimately less profitable than other projects which we do not select, ultimately harming our business, results of operations and financial condition. ​ 22 Table of Contents We are exposed to various risks associated with global regulatory requirements. ​ As a public company with global operations, we are subject to the laws of the United States and multiple foreign jurisdictions, and the rules and regulations of various governing bodies, which may differ among jurisdictions.
While such technologies offer significant opportunities, they also pose complex and novel risks, including operational risks (such as factual errors or inaccuracies in work product developed using AI), the unintended release of proprietary information, costs of compliance associated with evolving AI laws, regulations and standards, privacy concerns with respect to data dissemination, risks related to intellectual property rights (with respect 15 Table of Contents to both the inputs to the program and ownership rights to AI work product), and risks related to AI’s impact on the workforce.
While such technologies offer significant opportunities, they also pose complex and novel risks, including operational risks (such as factual errors or inaccuracies in work product developed using AI), the unintended release of proprietary information, costs of compliance associated with evolving AI laws, regulations and standards, privacy concerns with respect to data dissemination, risks related to intellectual property rights (with respect to both the inputs to the program and ownership rights to AI work product), and risks related to AI’s impact on the workforce.
Divestitures may expose us to unanticipated liabilities (including those arising from representations and warranties made to 19 Table of Contents a buyer regarding the businesses) and to ongoing obligations to support the businesses following such divestitures, any and all of which could adversely affect our financial condition and results of operations. ​ As a general principle, we seek to invest our capital in areas that we believe best align with our business strategy and will help optimize future returns.
Divestitures may expose us to unanticipated liabilities (including those arising from representations and warranties made to a buyer regarding the businesses) and to ongoing obligations to support the businesses following such divestitures, any and all of which could adversely affect our financial condition and results of operations. ​ As a general principle, we seek to invest our capital in areas that we believe best align with our business strategy and will help optimize future returns.
In addition, as of December 31, 2024, we had an undrawn senior secured revolving credit facility (the “Credit Facility”) in an aggregate principal amount of $225.0 million, including a $15.0 million letter of credit sublimit. ​ These debt facilities (collectively, the “Debt Facilities”), contain certain covenant and other restrictions that may limit our ability to, among other things, incur additional debt or create liens, sell certain assets, and merge or consolidate with third parties, which may, in turn, preclude us from responding to changes in business and economic conditions, engaging in transactions that might otherwise be beneficial to us.
In addition, as of December 31, 2025, we had an undrawn senior secured revolving credit facility (the “Credit Facility”) in an aggregate principal amount of $250.0 million, including a $15.0 million letter of credit sublimit. ​ These debt facilities (collectively, the “Debt Facilities”), contain certain covenant and other restrictions that may limit our ability to, among other things, incur additional debt or create liens, sell certain assets, and merge or consolidate with third parties, which may, in turn, preclude us from responding to changes in business and economic conditions, engaging in transactions that might otherwise be beneficial to us.
Our inability to attract, retain, and motivate key personnel could have a significant negative effect on our business, financial condition, and results of operations. ​ We are subject to risks of non-compliance with environmental, health, and safety regulations. ​ We are subject to environmental, health, and safety regulations in connection with our business operations, including but not limited to regulations relating to the development, manufacture and use of our products, recycling and disposal of related materials, and the operation and use of our facilities and real property.
Our inability to attract, retain, and motivate key personnel could have a significant negative effect on our business, financial condition, and results of operations. ​ 31 Table of Contents We are subject to risks of non-compliance with environmental, health, and safety regulations. ​ We are subject to environmental, health, and safety regulations in connection with our business operations, including but not limited to regulations relating to the development, manufacture and use of our products, recycling and disposal of related materials, and the operation and use of our facilities and real property.
These expectations, standards and requirements may impact the manner in which we do business, our costs of doing business, our reputation, and the willingness of our stakeholders to engage with, invest in, or retain us. ​ We are also subject to various sustainability laws and regulations, such as the State of California’s new climate change disclosure rules, the European Union’s Corporate Sustainability Reporting Directive, and the U.S.
These expectations, standards and requirements may impact the manner in which we do business, our costs of doing business, our reputation, and the willingness of our stakeholders to engage with, invest in, or retain us. ​ We are also subject to various sustainability laws and regulations, such as the State of California’s climate change disclosure rules, and the European Union’s Corporate Sustainability Reporting Directive.
Any or all of these factors could materially and adversely affect our business, financial condition, and results of operations. ​ We rely on a limited number of suppliers, some of whom are our sole source for particular components. ​ Certain of the parts, components, and sub-assemblies included in our products are obtained from a single source or a limited group of suppliers.
Any or all of these factors could materially and adversely affect our business, financial condition, and results of operations. 20 Table of Contents ​ We rely on a limited number of suppliers, some of whom are our sole source for particular components. ​ Certain of the parts, components, and sub-assemblies included in our products are obtained from a single source or a limited group of suppliers.
A loss in collections on our accounts receivable would have a negative impact on our financial condition and results of operations. ​ We are subject to foreign currency exchange risks. ​ We are exposed to foreign currency exchange rate risks that are inherent in our anticipated sales, purchase commitments, and assets and liabilities that are denominated in currencies other than the U.S. dollar.
A loss in collections on our accounts receivable would have a negative impact on our financial condition and results of operations. 24 Table of Contents ​ We are subject to foreign currency exchange risks. ​ We are exposed to foreign currency exchange rate risks that are inherent in our anticipated sales, purchase commitments, and assets and liabilities that are denominated in currencies other than the U.S. dollar.
These risks have been exacerbated by an increase in employees working from home, global conflicts and geopolitical tensions (including increasing tension between the U.S. and China governments), and by the possible use of AI to directly attack information systems with greater speed and efficiency than human bad actors. ​ We have experienced, and our third-party providers have experienced, cybersecurity attacks, some of which have been, and may continue to be, successful.
These risks have been exacerbated by an increase in employees working from home, global conflicts and geopolitical tensions (including increasing tension between the U.S. and China governments), and by the possible use of new technologies, including AI and quantum computing, to directly attack information systems with greater speed and efficiency than human bad actors. ​ We have experienced, and our third-party providers have experienced, cybersecurity attacks, some of which have been, and may continue to be, successful.
These risks are particularly prevalent in the semiconductor market, which is often characterized by long customer qualification times, typically twelve to eighteen months. Once qualified, 18 Table of Contents the ramp to volume production can take an additional extended period of time, often twelve to twenty-four months.
These risks are particularly prevalent in the semiconductor market, which is often characterized by long customer qualification times, typically twelve to eighteen months. Once qualified, the ramp to volume production can take an additional extended period of time, often twelve to twenty-four months.
While we take steps to mitigate our exposure in this regard, if the sale of these products is cancelled or delayed and we are unable to return or dispose of this inventory on favorable economic terms, we may incur additional carrying costs for the inventory or otherwise record charges associated with this inventory. ​ We may be unable to obtain required export licenses for the sale of our products. ​ Whether with respect to sales to customers located in China or otherwise, products which (i) are manufactured in the United States, (ii) incorporate controlled U.S. origin parts, technology, or software, or (iii) are based on U.S. technology, are subject to the U.S.
While we take steps to mitigate our exposure in this regard, if the sale of these products is cancelled or delayed and we are unable to return or dispose of this inventory on favorable economic terms, we may incur additional carrying costs for the inventory or otherwise record charges associated with this inventory. ​ We may be unable to obtain required export licenses for the sale of our products. ​ Whether with respect to sales to customers located in China or otherwise, products which (i) are manufactured in the United States, (ii) incorporate controlled U.S. origin parts, technology, or software, or (iii) are based on certain U.S. technology or made using certain tools with a U.S. nexus, are subject to the U.S.
Such activities could interfere with our ability to execute our strategic plans, be costly and time consuming, disrupt 26 Table of Contents our operations, and divert the attention of management and our employees. ​ ​ Item 1B. Unresolved Staff Comments ​ None. ​
Such activities could interfere with our ability to execute our strategic plans, be costly and time consuming, disrupt our operations, and divert the attention of management and our employees. ​ ​ Item 1B. Unresolved Staff Comments ​ None. ​
Increased competitive pressure could also lead to intensified price competition resulting in lower profit margins. ​ We operate in industries characterized by rapid technological change. ​ Each of the industries in which we operate is subject to rapid technological change.
Increased competitive pressure could also lead to intensified price competition resulting in lower profit margins. ​ 17 Table of Contents We operate in industries characterized by rapid technological change. ​ Each of the industries in which we operate is subject to rapid technological change.
Furthermore, we are regularly audited by various tax authorities, and these audits may result in increased tax provisions which could negatively affect our operating results in the periods in which such determinations are made or changes occur. ​ Our current debt facilities may contain certain restrictions, covenants and repurchase provisions that may limit our ability to raise the funds necessary to meet our working capital needs, which may include the cash conversion of the Notes or repurchase of the Notes for cash upon a fundamental change. ​ As of December 31, 2024, we had $26.5 million in principal amounts outstanding in 2025 Notes, $25.0 million in principal amounts outstanding in 2027 Notes, and $230.0 million in principal amounts outstanding in 2029 Notes (together, the “Notes”).
Furthermore, we are regularly audited by various tax authorities, and these audits may result in increased tax provisions which could negatively affect our operating results in the periods in which such determinations are made or changes occur. ​ Our current debt facilities may contain certain restrictions, covenants and repurchase provisions that may limit our ability to raise the funds necessary to meet our working capital needs, which may include the cash conversion of the Notes or repurchase of the Notes for cash upon a fundamental change. ​ As of December 31, 2025, we had $230.0 million in principal amounts outstanding in 2029 Convertible Senior Notes (the “Notes”).
In addition, even if holders do not elect to convert the Notes, we could be required under applicable accounting rules to reclassify all or a 23 Table of Contents portion of the outstanding principal of the Notes as a current rather than long-term liability, which could result in a material reduction of our net working capital. ​ Issuance of our common stock, if any, upon conversion of the Notes, as well as the capped call transactions and the hedging activities of the option counterparties, may impair or reduce our ability to utilize or our research and development credits carryforwards in the future. ​ Pursuant to U.S. federal and state tax rules, a corporation is generally permitted to deduct from taxable income in any year net operating losses (“NOLs”) carried forward from prior years and to reduce from tax liabilities in any year foreign tax credits and R&D credits carried forward from prior years. ​ As of December 31, 2024, we had U.S. federal R&D credits carryforwards of approximately $35.1 million expiring in varying amounts between 2035 and 2044.
In addition, even if holders do not elect to convert the Notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the Notes as a current rather than long-term liability, which could result in a material reduction of our net working capital. ​ 26 Table of Contents Issuance of our common stock, if any, upon conversion of the Notes, as well as the capped call transactions and the hedging activities of the option counterparties, may impair or reduce our ability to utilize or our research and development credits carryforwards in the future. ​ Pursuant to U.S. federal and state tax rules, a corporation is generally permitted to deduct from taxable income in any year net operating losses (“NOLs”) carried forward from prior years and to reduce from tax liabilities in any year foreign tax credits and R&D credits carried forward from prior years. ​ As of December 31, 2025, we had U.S. federal R&D credits carryforwards of approximately $28.3 million expiring in varying amounts between 2040 and 2045.
New product introductions 14 Table of Contents or enhancements by us or our competitors could cause a decline in sales or loss of market acceptance of our existing or prior generation products.
New product introductions or enhancements by us or our competitors could cause a decline in sales or loss of market acceptance of our existing or prior generation products.
Commerce Department’s Unverified List and Entity List (including Swaysure Technology Co., Ltd. and Semiconductor Manufacturing International Corporation and certain related entities), and the expansion of the “foreign direct product rule” to restrict the sale of certain products if Huawei Technologies Co., Ltd. or its affiliates are parties to a transaction involving the products. ​ The effect of these changes, among others, is that U.S. companies are now required to obtain export licenses – now at times with a presumption of denial -- before providing commodities, software, and technology (which are subject to the regulations) to customers for whom licensing requirements did not previously apply.
Commerce Department’s Unverified List and Entity List (including Swaysure Technology Co., Ltd., Semiconductor Manufacturing International Corporation, and certain similar and related entities), and the expansion of the foreign direct product rule to restrict the sale of certain products if certain named China customers or their affiliates are parties to a transaction involving the products. ​ The effect of these changes, among others, is that U.S. companies are now required to obtain export licenses – now at times with a presumption of denial – before providing commodities, software, and technology (which are subject to the regulations) to customers for whom licensing requirements did not previously apply.
Our percentage revenue from the sale of products and the provision of services to non-U.S. customers was 77% for fiscal year 2024.
Our percentage revenue from the sale of products and the provision of services to non-U.S. customers was 85% for fiscal year 2025.
These heightening restrictions, together with the prospect of additional governmental action (which may include, for example, significant increases in tariffs on a broad array of goods), has adversely affected, and is likely to continue to adversely affect, demand for our products and the results of our operations. ​ The changes in U.S. trade policy and export controls, as well as sanctions imposed by the U.S. against certain Chinese companies, have triggered retaliatory action by China (including China’s recent ban on exports to the United States of critical minerals gallium, germanium and antimony) and could trigger further retaliation (including the possible escalation of geopolitical tensions between China and Taiwan).
These heightening restrictions, together with the prospect of additional governmental action (which has included and may include increases in tariffs, domestic and foreign, on a broad array of goods), has adversely affected, and is likely to continue to adversely affect, demand for our products and the results of our operations. ​ The changes in U.S. trade policy and export controls, as well as sanctions imposed by the U.S. against certain Chinese companies, have triggered retaliatory action by China (including China’s 2025 ban on exports to the United States of rare earth minerals which are used in certain of our products) and could trigger further retaliation (including the possible escalation of geopolitical tensions between China and Taiwan).
The trading price of our common shares has fluctuated significantly and could decline independent of the overall market, and shareholders could lose all or a substantial part of their investment. For example, in 2024 our stock price ranged from a closing high of $48.47 to a closing low of $25.99.
The trading price of our common shares has fluctuated significantly and could decline independent of the overall market, and shareholders could lose all or a substantial part of their investment. For example, in 2025 our stock price ranged from a closing high of $33.10 to a closing low of $17.35.
As part of BEPS 2.0, the OECD has focused on ensuring multinational businesses with consolidated global revenues in excess of 750 million euros pay their tax in the 'right place' (Pillar 1) and at least at a 'minimum rate' (Pillar 2), including ensuring that multinational enterprises are paying tax at an effective rate of 15% or higher in every jurisdiction in which they operate, regardless of the local headline tax rate or the impact of local tax reliefs.
As part of BEPS 2.0, the OECD has focused on ensuring multinational businesses with consolidated global revenues in excess of 750 million euros pay their tax in the 'right place' (Pillar 1) and at least at a 15% 'minimum rate' (Pillar 2) or higher in every jurisdiction in which they operate.
These and other costs could be substantial and our reputation could be harmed, resulting in a reduced demand for our products and a negative impact to our business. ​ In addition, our success is also subject to the risk of future disruptive technologies, including machine learning and artificial intelligence (“AI”).
These and other costs could be substantial and our reputation could be harmed, resulting in a reduced demand for our products and a negative impact to our business. ​ We are exposed to risks related to the use of artificial intelligence by us and by our competitors. ​ Our success is subject to the risk of future disruptive technologies, including machine learning and artificial intelligence (“AI”).
Securities and Exchange Commission’s rules on climate-related risks. Compliance with such laws and regulations, as well as increased scrutiny from regulators, could result in additional costs and expose us to new risks.
Compliance with such laws and regulations, as well as increased scrutiny from regulators, could result in additional costs and expose us to new risks.
AI technology is complex and rapidly evolving and its implementation can be costly. There is no guarantee that our use of AI will enhance our technologies, benefit our business operations, or produce products and services that are preferred by our customers. Our competitors may be more successful in their use of AI and may develop superior products and services.
AI technology is complex and rapidly evolving and its implementation can be costly. There is no guarantee that our use of AI will 18 Table of Contents enhance our technologies, benefit our business operations, or produce products and services that are preferred by our customers.
Export Administration Regulations (“EAR”) when exported to and re-exported from international jurisdictions, in addition to the local jurisdiction’s export regulations applicable to individual shipments. Currently, our laser annealing, MOCVD, MBE, SiC and certain other systems and products are controlled for export under the EAR.
Export Administration Regulations (“EAR”) when exported, re-exported, or transferred to or within international jurisdictions. Local jurisdictions’ export regulations may also be applicable to individual shipments. Currently, our laser annealing, MOCVD, MBE, SiC and certain other systems and products are controlled for export under the EAR.
We may be subject to the Pillar Two requirements in the future should our global revenues exceed the Pillar Two thresholds. While we do not currently expect Pillar Two to have a material impact on our effective tax rate, we are in the process of assessing and monitoring potential impacts and developments.
While we do not currently expect Pillar Two and OBBBA to have a material impact on our effective tax rate, we are in the process of assessing and monitoring potential impacts and developments.
Additionally, in the event the conditional conversion features of the Notes are triggered (as is currently the case for the 2027 Notes through March 31, 2025), holders of Notes will be entitled to convert the Notes at any time during specified periods at their option.
Additionally, in the event the conditional conversion features of the Notes are triggered, holders of Notes will be entitled to convert the Notes at any time during specified periods at their option.
The administrative processing, attendant delays and risk of ultimately not obtaining required export approvals pose a particular disadvantage to the Company relative to certain of our non-U.S. competitors and increase our exposure to foreign and Chinese domestic competition. This difficulty and uncertainty has adversely affected our ability to compete for and win business from customers in China.
The administrative processing, attendant delays and risk of ultimately not obtaining required export approvals pose a particular disadvantage to the Company relative to certain of our non-U.S. competitors and increase our exposure to foreign and Chinese domestic competition.
These changes have had, and will likely continue to have, a negative effect on our ability to sell and service certain equipment in China. The heightened export restrictions may also result in shipping delays, as the new regulations are interpreted and applied, and may inhibit technical discussions with existing or prospective customers, negatively impacting our ability to pursue sales opportunities.
The heightened export restrictions have resulted, and may continue to result, in confusion and shipping delays, as the new regulations are interpreted and applied, and may inhibit technical discussions with existing or prospective customers, negatively impacting our ability to pursue sales opportunities.
The process of seeking patent protection is lengthy and expensive, and we cannot be certain that pending or future applications will result in issued patents or in patents which provide meaningful protection or commercial advantage.
We own various U.S. and international patents and have additional pending patent applications relating to certain of our products and technologies. 23 Table of Contents The process of seeking patent protection is lengthy and expensive, and we cannot be certain that pending or future applications will result in issued patents or in patents which provide meaningful protection or commercial advantage.
We rely primarily on patent, copyright, trademark, and trade secret laws, as well as nondisclosure and confidentiality agreements and other methods, to protect our proprietary information, technologies, processes, and brand identity. We own various U.S. and international patents and have additional pending patent applications relating to certain of our products and technologies.
We rely primarily on patent, copyright, trademark, and trade secret laws, as well as nondisclosure and confidentiality agreements and other methods, to protect our proprietary information, technologies, processes, and brand identity.
If we do not effectively manage our outsourcing efforts or if third party providers do not perform as anticipated, we may not realize the benefits of productivity improvements and we may experience operational difficulties, increased costs, manufacturing and installation interruptions or delays, inefficiencies in the structure and operation of our supply chain, loss of intellectual property rights, quality issues, increased product time-to-market, and an inefficient allocation of our human resources, any or all of which could materially and adversely affect our business, financial condition, and results of operations. ​ The timing of our orders, shipments, and revenue recognition may cause our quarterly operating results to fluctuate significantly. ​ We derive a substantial portion of our net sales in any fiscal period from the sale of a relatively small number of high-priced systems.
If we do not effectively manage our outsourcing efforts or if third party providers do not perform as anticipated, we may not realize the benefits of productivity improvements and we may experience operational difficulties, increased costs, manufacturing and installation interruptions or delays, inefficiencies in the structure and operation of our supply chain, loss of intellectual property rights, quality issues, increased product time-to-market, and an inefficient allocation of our human resources, any or all of which could materially and adversely affect our business, financial condition, and results of operations. ​ Our sales cycle is long and unpredictable. ​ Historically, we have experienced long and unpredictable sales cycles (the period between our initial contact with a potential customer and the time that we recognize revenue from resulting sales to that customer).
Foreign customers affected by U.S. government sanctions or threats of sanctions may respond by developing their own solutions to replace our products or by utilizing our foreign 13 Table of Contents competitors’ products.
This difficulty and uncertainty has adversely affected our ability to compete for and win business from customers in 15 Table of Contents China. Foreign customers affected by U.S. government sanctions or threats of sanctions may respond by developing their own solutions to replace our products or by utilizing our foreign competitors’ products.
Such events could result from acts of terrorism, natural disasters, or operational failures and may result in injury or loss of life to 25 Table of Contents our employees and others, environmental contamination, and property damage.
Furthermore, some of our operations involve the storage, handling, and use of hazardous materials that may pose a risk of fire, explosion, or environmental release. Such events could result from acts of terrorism, natural disasters, or operational failures and may result in injury or loss of life to our employees and others, environmental contamination, and property damage.
We adjust our backlog for such cancellations and contract modifications, among other items. A downturn in one or more of our businesses could result in an increase in order cancellations and postponements. ​ We write-off excess and obsolete inventory based on historical trends, future usage forecasts, and other factors including the amount of backlog we have on hand.
We adjust our backlog for such cancellations and contract modifications, among other items. A downturn in one or more of our businesses could result in an increase in 21 Table of Contents order cancellations and postponements.
Some of our competitors have greater financial, engineering, manufacturing, and marketing resources than us. Other competitors are located in regions with lower labor costs and other reduced costs of operation.
Other competitors are located in regions with lower labor costs and other reduced costs of operation.
If negative conditions in the credit markets, such as a recommencement of increases in interest rates, prevent our customers from obtaining credit or necessary financing, 21 Table of Contents product orders in these channels may decrease, which could result in lower revenue. In addition, we may experience cancellations of orders in backlog, rescheduling of customer deliveries, and attendant pricing pressures.
In the event of a downturn, many of our customers may delay or reduce their purchases of our products and services. If negative conditions in the credit markets, including increases in interest rates, prevent our customers from obtaining credit or necessary financing, product orders in these channels may decrease, which could result in lower revenue.
Non-compliance with the EAR or other applicable export regulations could result in a wide range of penalties including the denial of export privileges, fines, criminal penalties, and the seizure of commodities.
Furthermore, circumstances may arise where shipments are detained or export clearance is uncertain, which may impact the timing of revenue recognition or our ability to recognize revenue at all. Non-compliance with the EAR or other applicable export regulations could result in a wide range of penalties including the denial of export privileges, fines, criminal penalties, and the seizure of commodities.
In the event that an export regulatory body determines that any of our shipments violate applicable regulations, we could be fined significant sums and our export capabilities could be restricted, which could have a material adverse impact on our business and reputation. ​ We face significant competition. ​ We face significant competition throughout the world, which may increase as certain markets in which we operate continue to evolve.
In the event that an export regulatory body determines that any of our shipments violate applicable regulations, we could be fined significant sums and our export capabilities could be restricted, which could have a material adverse impact on our business and reputation. 16 Table of Contents ​ We are exposed to risks and uncertainties related to changes in global trade policies, global trade disputes, and increased tariffs. ​ In February of 2025, the U.S.
In addition, the Chinese government may restrict us from participating in the China market or may prevent us from competing effectively with Chinese companies. ​ Further, trade-related government actions – including for example the addition, past and future, of China-based companies to the U.S.
In addition, the Chinese government may restrict us from participating in the China market or may prevent us from competing effectively with Chinese companies. ​ In the fourth quarter of 2025, two of our laser annealing systems shipped to customers in China were detained at the Port of San Francisco pending review by U.S.
This activity could also cause fluctuations in the market price of our common stock and the 2027 Notes, which could affect the ability of the noteholders to convert the 2027 Notes and, to the extent the activity occurs during any observation period related to a conversion of the 2027 Notes, it could affect the number of shares and value of the consideration that noteholders will receive upon conversion of the 2027 Notes. ​ General Risk Factors ​ The price of our common shares is volatile and could decrease. ​ The stock market in general and the market for technology stocks in particular has experienced significant volatility.
Miller and certain of our directors and officers to view the Merger differently than you may view it as a stockholder. ​ General Risk Factors ​ The price of our common shares is volatile and could decrease. ​ The stock market in general and the market for technology stocks in particular has experienced significant volatility.
Removed
Item 1A. Risk Factors ​ Key Risk Factors That May Impact Future Results ​ Stockholders should carefully consider the risk factors described below when evaluating the Company.
Added
Item 1A. Risk Factors ​ Risk Factor Summary ​ An investment in shares of our common stock is subject to a number of risks that may prevent us from achieving our business objectives or otherwise adversely affect our business, results of operations or financial condition. The following list contains a summary of some, but not all, of these risks.
Removed
Our quarterly results have fluctuated significantly in the past and we expect this trend to continue. ​ Our sales cycle is long and unpredictable. ​ Historically, we have experienced long and unpredictable sales cycles (the period between our initial contact with a potential customer and the time that we recognize revenue from resulting sales to that customer).
Added
You should read this summary together with the more detailed description of each risk factor contained below before making an investment decision. ​ Risks Related to Our Business and Industry ​ ● Unfavorable market conditions have adversely affected, and may adversely affect, our operating results. ● We are exposed to risks of operating a global business. ● Changes in trade policies, export controls, and the ongoing trade dispute between the U.S. and China have adversely affected, and may continue to adversely affect, our business, results of operations, and financial condition. ● We may be unable to obtain required export licenses for the sale of our products. ● We are exposed to risks and uncertainties related to changes in global trade policies, global trade disputes, and increased tariffs. ● The timing of our orders, shipments, and revenue recognition may cause our quarterly operating results to fluctuate significantly. ● We face significant competition. ● We operate in industries characterized by rapid technological change. ​ Risks Related to Intellectual Property and Cybersecurity ​ ● Disruptions in our information technology systems or data security incidents could result in significant financial, legal, regulatory, business, and reputational harm to us. ● We may be unable to effectively enforce and protect our intellectual property rights. ​ Financial, Accounting and Capital Market Risks ​ ● Our operating results may be adversely affected by tightening credit markets. ● We are subject to foreign currency exchange risks. ● We may be required to take impairment charges on assets. ● Our current debt facilities may contain certain restrictions, covenants and repurchase provisions that may limit our ability to raise the funds necessary to meet our working capital needs, which may include the cash conversion of the Notes or repurchase of the Notes for cash upon a fundamental change. ​ Risks Related to the Planned Merger with Axcelis Technologies, Inc. ​ ● The planned merger with Axcelis Technologies, Inc. is subject to certain closing conditions, including the receipt of consents and approvals from governmental authorities, which may impose unexpected delays in the completion of the merger, or the merger may not be completed at all. ● Failure to complete the Merger in a timely manner or at all could materially and adversely affect our stock price and future business and financial results. ● The pendency of the Merger could materially and adversely affect our business and operations. ● Our current stockholders will have a reduced ownership interest and voting power in the combined company after the Merger. ​ 13 Table of Contents General Risk Factors ​ ● The price of our common shares is volatile and could decrease. ● Our inability to attract, retain, and motivate employees could have a material adverse effect on our business. ● We are subject to risks of non-compliance with environmental, health, and safety regulations. ​ Key Risk Factors That May Impact Future Results ​ Stockholders should carefully consider the risk factors described below when evaluating the Company.
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In the event of a downturn, many of our customers may delay or reduce their purchases of our products and services.
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These changes have had, and will likely continue to have, a negative effect on our ability to sell and service certain equipment and for certain end users in China.
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The 2025 Notes subsequently matured in January 2025 and were settled through the issuance of Company shares to the noteholders.
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Customs and Border Protection (“CBP”) prior to export. Title, risk of loss and control transferred to the customers prior to year-end and we had satisfied the contractual conditions to seek payment under the applicable letters of credit.
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The capped call transactions were expected generally to reduce the potential dilution upon conversion of the 2027 Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted 2027 Notes, as the case may be, with such reduction and/or offset subject to a cap. ​ The option counterparties or their affiliates may enter into or modify hedge positions by entering into or unwinding various derivatives with respect to our common stock and/or purchasing or selling our common stock or other securities of ours in secondary market transactions prior to the maturity of the 2027 Notes (and are likely to do so during any observation period related to a conversion of the 2027 Notes).
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While both systems were subsequently released by CBP and thus recognized into revenue during the year ended December 31, 2025, we can provide no assurances as to whether U.S. government policy will impact future shipments to the impacted customers or other customers in China. ​ Further, trade-related government actions – including for example the addition, past and future, of China-based companies to the U.S.
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Furthermore, some of our operations involve the storage, handling, and use of hazardous materials that may pose a risk of fire, explosion, or environmental release.
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Government issued proclamations imposing a 25% tariff on imports of steel and aluminum products (including derivative products). In April 2025, the U.S. Government announced a baseline tariff of 10% on imported products from all countries, plus additional individualized reciprocal tariffs on countries with whom the United States has the largest trade deficits.
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In response, affected foreign countries, including China and members of the European Union, announced, threatened and imposed retaliatory tariffs on U.S. imports.
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The tariff landscape continues to shift and evolve (including the recent Supreme Court decision on the legality of certain tariffs), creating considerable uncertainty for U.S. manufacturers, particularly those – such as Veeco – with global sales, supply chains and international operations. ​ Tariffs and other duties have increased, and will likely continue to increase, the cost of our parts and components.
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These increased costs have negatively impacted our margins and have caused us, in certain instances, to increase our prices to our customers, which may reduce demand for our products.
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Our customers, who may be confronted with the prospect of price and/or cost increases resulting from U.S. tariffs and tariffs imposed by their home country governments, may seek to cancel equipment orders with us, attempt to renegotiate terms in a manner unfavorable to Veeco, or cease to do business with us altogether.
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Furthermore, the current tariff landscape favors certain of our competitors with foreign manufacturing operations, which are not subject to U.S. tariffs nor foreign country tariffs imposed on the import of U.S. origin products. ​ The volatility and unpredictability of international trade policies and conditions add further complexity to our operations, making it extremely challenging to forecast and plan effectively.
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We are not able to predict future trade policy of the United States or of any foreign country in which we do business.
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The continuation or exacerbation of the current trade environment will adversely impact our costs and the demand for our products, which in turn could have a material adverse effect on our business, operating results and financial condition. ​ The timing of our orders, shipments, and revenue recognition may cause our quarterly operating results to fluctuate significantly. ​ We derive a substantial portion of our net sales in any fiscal period from the sale of relatively small number of high-priced systems.
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Our quarterly results have fluctuated significantly in the past and we expect this trend to continue. ​ We face significant competition. ​ We face significant competition throughout the world, which may increase as certain markets in which we operate continue to evolve. Some of our competitors have greater financial, engineering, manufacturing, and marketing resources than us.
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Our competitors may be more successful in their use of AI and may develop superior products and services.
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Also, our backlog may be impacted if we are unable to complete shipments to customers because of export control issues. ​ We write-off excess and obsolete inventory based on historical trends, future usage forecasts, and other factors including the amount of backlog we have on hand.
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In addition, we may experience cancellations of orders in backlog, rescheduling of customer deliveries, and attendant pricing pressures.
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In January 2026, the OECD released a “side-by-side” package introducing new safe harbors and providing an exemption for U.S.-based multinational companies from parts of the global minimum tax framework. This guidance is intended to simplify compliance and is generally favorable to the Company; it needs to be adopted by each country to be considered enacted for financial accounting purposes.
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We may be subject to the Pillar Two requirements in the future should our global revenues exceed the Pillar Two thresholds. In addition, changes to U.S. tax laws will significantly impact how U.S. multinational corporations are taxed on U.S. and foreign earnings.
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On July 4, 2025, the enactment of the One Big Beautiful Bill Act (“OBBBA”) provides significant corporate tax reforms, including the permanent reinstatement of deducting domestic research and development expenditures, and modifying the Global Intangible Low-Taxed Income (“GILTI”) and Foreign-Derived Intangible Income (“FDII”) rules.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeConsistent with the Company’s overall ERM practices, our cybersecurity program focuses on the following areas: ● Vigilance: The Company maintains a global presence, with cybersecurity threat operations operating 24/7 around the world with a specific goal of detecting, containing and responding to cybersecurity threats and incidents. ● Collaboration: The Company has established collaboration mechanisms with public and private entities, including intelligence and enforcement agencies, industry groups and third-party service providers to identify and assess cybersecurity risks. ● Systems Safeguards: The Company deploys technical safeguards that are designed to protect the Company’s information systems from cybersecurity threats, including firewalls, intrusion prevention and detection systems, anti-malware functionality, access controls and ongoing vulnerability assessments. ● Third-Party Management : The Company maintains a comprehensive, risk-based approach to identifying and overseeing cybersecurity risks presented by third parties, such as vendors, service providers and other users of the Company’s systems. ● Education: The Company provides periodic training for personnel regarding cybersecurity threats, with such training scaled to reflect the roles, responsibilities, and access of the relevant Company personnel. ● Incident Response Planning: The Company has established and maintains incident response plans that address the Company’s response to a cybersecurity incident, and such plans are tested on an ongoing basis. ● Communication and Coordination: The Company utilizes a cross-functional approach to address the risk from cybersecurity threats and has formed an Information Security Leadership Group which includes management personnel from information technology, operations, legal, internal audit and other key business functions.
Biggest changeWe generally approach cybersecurity threats through a cross-functional, multi-layered approach, with the specific goals of: (i) identifying, preventing and mitigating cybersecurity threats to the Company; (ii) maintaining the confidence of our customers, clients and business partners; (iii) preserving the confidentiality of internal and external information; and (iv) protecting the Company’s intellectual property. 33 Table of Contents Consistent with the Company’s overall ERM practices, our cybersecurity program focuses on the following areas: ● Vigilance: The Company maintains a global presence, with cybersecurity threat operations operating 24/7 around the world with a specific goal of detecting, containing and responding to cybersecurity threats and incidents. ● Collaboration: The Company has established collaboration mechanisms with public and private entities, including intelligence and enforcement agencies, industry groups and third-party service providers to identify and assess cybersecurity risks. ● Systems Safeguards: The Company deploys technical safeguards that are designed to protect the Company’s information systems from cybersecurity threats, including firewalls, intrusion prevention and detection systems, anti-malware functionality, access controls and ongoing vulnerability assessments. ● Third-Party Management : The Company maintains a comprehensive, risk-based approach to identifying and overseeing cybersecurity risks presented by third parties, such as vendors, service providers and other users of the Company’s systems. ● Education: The Company provides periodic training for personnel regarding cybersecurity threats, with such training scaled to reflect the roles, responsibilities, and access of the relevant Company personnel. ● Incident Response Planning: The Company has established and maintains incident response plans that address the Company’s response to a cybersecurity incident, and such plans are tested on an ongoing basis. ● Communication and Coordination: The Company utilizes a cross-functional approach to address the risk from cybersecurity threats and has formed an Information Security Leadership Group which includes management personnel from information technology, operations, legal, internal audit and other key business functions.
Our Chief Information Security Officer holds graduate degrees in cybersecurity and business administration and has attained multiple professional certifications including CISSP, CISA and CISM. ​ The Company’s Chief Information Security Officer, in coordination with the Information Security Leadership Group, works collaboratively across the Company to implement a program designed to protect the Company’s information systems from cybersecurity threats and to promptly respond to any cybersecurity incidents.
Our Chief Information Security Officer holds graduate degrees in cybersecurity and business administration and has attained multiple professional certifications including CISSP, CISA and CISM. ​ 34 Table of Contents The Company’s Chief Information Security Officer, in coordination with the Information Security Leadership Group, works collaboratively across the Company to implement a program designed to protect the Company’s information systems from cybersecurity threats and to promptly respond to any cybersecurity incidents.
The Company regularly engages third parties to perform assessments on our cybersecurity measures, including information security maturity assessments and independent reviews of our information security control environment and operating effectiveness and adjusts its cybersecurity processes and practices as necessary. 27 Table of Contents The Audit Committee oversees the management of risks from cybersecurity threats, including the policies, processes and practices that the Company’s management implements to address risks from cybersecurity threats.
The Company regularly engages third parties to perform assessments on our cybersecurity measures, including information security maturity assessments and independent reviews of our information security control environment and operating effectiveness and adjusts its cybersecurity processes and practices as necessary.
Removed
We generally approach cybersecurity threats through a cross-functional, multi-layered approach, with the specific goals of: (i) identifying, preventing and mitigating cybersecurity threats to the Company; (ii) maintaining the confidence of our customers, clients and business partners; (iii) preserving the confidentiality of internal and external information; and (iv) protecting the Company’s intellectual property.
Added
The Audit Committee oversees the management of risks from cybersecurity threats, including the policies, processes and practices that the Company’s management implements to address risks from cybersecurity threats.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changePaul, MN 43,000 R&D; Manufacturing; Sales & Service; Administration Somerset, NJ 38,000 R&D; Sales & Service; Administration ​ ​ ​ ​ ​ ​ ​ ​ ​ Approximate Lease Leased Facilities Location ​ Size (sq. ft.) ​ Use ​ Expiration San Jose, CA 100,000 R&D; Manufacturing; Sales & Service; Administration 2037 Somerset, NJ 57,000 Warehouse 2027 Horsham, PA 49,000 R&D; Manufacturing; Sales & Service; Administration 2033 Waltham, MA 17,000 R&D; Sales & Service; Administration 2030 Solvegatan, Sweden 4,000 R&D; Manufacturing; Sales & Service; Administration 2028 ​ In addition to the above, our foreign sales and service subsidiaries lease office space in China, Germany, Japan, Malaysia, Philippines, Singapore, South Korea, Thailand, and Taiwan.
Biggest changePaul, MN 43,000 R&D; Manufacturing; Sales & Service; Administration Somerset, NJ 38,000 R&D; Sales & Service; Administration ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Approximate ​ ​ ​ ​ ​ ​ ​ ​ ​ Lease Leased Facilities Location ​ Size (sq. ft.) ​ Use ​ Expiration San Jose, CA 100,000 R&D; Manufacturing; Sales & Service; Administration 2037 Somerset, NJ 57,000 Warehouse 2027 Horsham, PA 49,000 R&D; Manufacturing; Sales & Service; Administration 2033 Waltham, MA 17,000 R&D; Sales & Service; Administration 2030 ​ In addition to the above, our foreign sales and service subsidiaries lease office space in China, Germany, Japan, Malaysia, Philippines, Singapore, South Korea, Thailand, and Taiwan.
Properties ​ Our corporate headquarters and principal research and development, manufacturing, and sales and service facilities as of December 31, 2024 are as follows: ​ ​ ​ ​ ​ ​ ​ Approximate Owned Facilities Location ​ Size (sq. ft.) ​ Use Plainview, NY 80,000 Corporate Headquarters; R&D; Sales & Service; Administration Somerset, NJ 80,000 R&D; Manufacturing; Sales & Service; Administration St.
Properties ​ Our corporate headquarters and principal research and development, manufacturing, and sales and service facilities as of December 31, 2025 are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Approximate ​ ​ ​ ​ ​ ​ Owned Facilities Location ​ Size (sq. ft.) ​ Use Plainview, NY 80,000 Corporate Headquarters; R&D; Sales & Service; Administration Somerset, NJ 80,000 R&D; Manufacturing; Sales & Service; Administration St.
We believe our facilities are adequate to meet our current needs. ​ 28 Table of Contents
We believe our facilities are adequate to meet our current needs. ​

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings ​ The discussion under the heading Legal Proceedings within Note 10, “Commitments and Contingencies” to the Consolidated Financial Statements is incorporated herein by reference. ​ Item 4. Mine Safety Disclosures ​ Not Applicable. ​ 29 Table of Contents PART II ​
Biggest changeItem 3. Legal Proceedings ​ The discussion under the heading Legal Proceedings within Note 10, “Commitments and Contingencies” to the Consolidated Financial Statements is incorporated herein by reference. ​ Item 4. Mine Safety Disclosures ​ Not Applicable. ​ 35 Table of Contents PART II ​

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 29 ​ ​ PART II 30 ​ ​ Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 30 ​ ​ Stock Performance Graph 31 ​ ​ Item 6. [Reserved] 31 ​ ​ Item 7.
Biggest changeItem 4. Mine Safety Disclosures 35 ​ ​ PART II 36 ​ ​ Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 36 ​ ​ Stock Performance Graph 37 ​ ​ Item 6. [Reserved] 37 ​ ​ Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations 32 ​ ​ Item 7A. Quantitative and Qualitative Disclosures about Market Risk 41 ​ ​ Item 8. Financial Statements and Supplementary Data 42 ​ ​
Management’s Discussion and Analysis of Financial Condition and Results of Operations 38 ​ ​ Item 7A. Quantitative and Qualitative Disclosures about Market Risk 47 ​ ​ Item 8. Financial Statements and Supplementary Data 47 ​ ​

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe Board of Directors will determine future dividend policy based on our consolidated results of operations, financial condition, capital requirements, and other circumstances. 30 Table of Contents ​ Stock Performance Graph ​ ​ ASSUMES $100 INVESTED ON DEC. 31, 2019 ASSUMES DIVIDENDS REINVESTED FISCAL YEAR ENDING DEC. 31 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2019 2020 2021 2022 2023 2024 Veeco Instruments Inc. 100.00 118.22 193.87 126.52 211.30 182.50 S&P Smallcap 600 100.00 111.29 141.13 118.41 137.42 149.37 RDG MidCap Technology 100.00 132.76 81.82 36.09 38.89 40.63 ​ ​ ​
Biggest changeThe Board of Directors will determine future dividend policy based on our consolidated results of operations, financial condition, capital requirements, and other circumstances. ​ 36 Table of Contents ​ Stock Performance Graph ​ ​ ASSUMES $100 INVESTED ON DEC. 31, 2020 ASSUMES DIVIDENDS REINVESTED FISCAL YEAR ENDING DEC. 31 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2020 ​ ​ ​ 2021 ​ ​ ​ 2022 ​ ​ ​ 2023 ​ ​ ​ 2024 ​ ​ ​ 2025 Veeco Instruments Inc. 100.00 164.00 107.03 178.74 154.38 164.63 S&P Smallcap 600 100.00 126.82 106.40 123.48 134.22 142.30 RDG MidCap Technology 100.00 61.63 27.18 29.30 30.61 29.40 ​ ​
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities ​ Our common stock is quoted on The NASDAQ Global Select Market under the symbol “VECO.” As of February 7, 2025, there were approximately 110 stockholders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities ​ Our common stock is quoted on The NASDAQ Global Select Market under the symbol “VECO.” As of February 19, 2026, there were approximately 104 stockholders of record of our common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

44 edited+13 added−19 removed18 unchanged
Biggest changeOur results of operations are reported as one business segment, represented by our single operating segment. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ Change ​ ​ 2024 ​ 2023 ​ Period to Period ​ ​ (dollars in thousands) Net sales $ 717,301 100 % $ 666,435 100 % $ 50,866 8 % Cost of sales ​ 413,296 58 % 381,376 57 % 31,920 8 % Gross profit ​ 304,005 42 % 285,059 43 % 18,946 7 % Operating expenses, net: ​ ​ ​ ​ ​ ​ Research and development ​ 124,507 17 % 112,853 17 % 11,654 10 % Selling, general, and administrative ​ 99,663 14 % 92,756 14 % 6,907 7 % Amortization of intangible assets ​ 6,983 1 % 8,481 1 % (1,498) (18) % Asset impairment ​ 28,131 4 % — — % 28,131 * ​ Other operating expense (income), net ​ (22,260) (3) % 1,029 — % (23,289) * % Total operating expenses, net ​ 237,024 33 % 215,119 32 % 21,905 10 % Operating income ​ 66,981 9 % 69,940 10 % (2,959) (4) % Interest income (expense), net ​ 1,853 0 % (1,187) (0) % 3,040 * % Other income (expense), net ​ ​ — — % ​ (97,091) (15) % ​ 97,091 * ​ Income (loss) before income taxes ​ 68,834 10 % (28,338) (4) % 97,172 * ​ Income tax expense (benefit) ​ (4,880) (1) % 2,030 — % (6,910) * ​ Net income (loss) ​ $ 73,714 10 % $ (30,368) (5) % $ 104,082 * ​ * Not meaningful ​ Net Sales ​ The following is an analysis of sales by end-market and by region: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ Change ​ ​ 2024 ​ 2023 ​ Period to Period ​ ​ (dollars in thousands) Sales by end-market ​ ​ ​ ​ Semiconductor ​ $ 466,611 65 % $ 412,724 62 % $ 53,887 13 % Compound Semiconductor ​ 77,591 11 % 87,258 13 % (9,667) (11) % Data Storage ​ 98,852 14 % 88,473 13 % 10,379 12 % Scientific & Other ​ 74,247 10 % 77,980 12 % (3,733) (5) % Total ​ $ 717,301 100 % $ 666,435 100 % $ 50,866 8 % Sales by geographic region ​ ​ ​ ​ United States ​ $ 164,564 23 % $ 162,790 24 % $ 1,774 1 % EMEA ​ 61,730 9 % 76,697 12 % (14,967) (20) % China ​ ​ 255,619 36 % ​ 217,942 33 % ​ 37,677 17 % Rest of APAC ​ 234,591 32 % 208,693 31 % 25,898 12 % Rest of World ​ 797 — % 313 — % 484 155 % Total ​ $ 717,301 100 % $ 666,435 100 % $ 50,866 8 % ​ 35 Table of Contents Total sales increased for the year ended December 31, 2024 against the comparable prior year period in the Semiconductor and Data Storage markets, partially offset by a decrease in the Compound Semiconductor, and Scientific & Other markets.
Biggest changeOur results of operations are reported as one business segment, represented by our single operating segment. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ Change ​ ​ 2025 ​ 2024 ​ Period to Period ​ ​ (dollars in thousands) Net sales ​ ​ ​ $ 664,294 100 % $ 717,301 100 % $ (53,007) (7) % Cost of sales ​ 398,885 60 % 413,296 58 % (14,411) (3) % Gross profit ​ 265,409 40 % 304,005 42 % (38,596) (13) % Operating expenses, net: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Research and development ​ 119,641 18 % 124,507 17 % (4,866) (4) % Selling, general, and administrative ​ 98,906 15 % 99,663 14 % (757) (1) % Amortization of intangible assets ​ 3,136 0 % 6,983 1 % (3,847) (55) % Merger costs ​ 8,908 1 % — — % 8,908 * ​ Asset impairment ​ — — % 28,131 4 % (28,131) * ​ Other operating expense (income), net ​ (889) (0) % (22,260) (3) % 21,371 (96) % Total operating expenses, net ​ 229,702 35 % 237,024 33 % (7,322) (3) % Operating income ​ 35,707 5 % 66,981 9 % (31,274) (47) % Interest income, net ​ 4,333 1 % 1,853 0 % 2,480 * ​ Other income (expense), net ​ ​ (653) (0) % ​ — — % ​ (653) * ​ Income before income taxes ​ 39,387 6 % 68,834 10 % (29,447) * ​ Income tax expense (benefit) ​ 3,997 1 % (4,880) (1) % 8,877 * ​ Net income ​ $ 35,390 5 % $ 73,714 10 % $ (38,324) * ​ * Not meaningful ​ Net Sales ​ The following is an analysis of sales by end-market and by region: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ Change ​ ​ 2025 ​ 2024 ​ Period to Period ​ ​ (dollars in thousands) Sales by end-market ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Semiconductor ​ $ 476,559 72 % $ 466,611 65 % $ 9,948 2 % Compound Semiconductor ​ 59,557 9 % 77,591 11 % (18,034) (23) % Data Storage ​ 39,238 6 % 98,852 14 % (59,614) (60) % Scientific & Other ​ 88,940 13 % 74,247 10 % 14,693 20 % Total ​ $ 664,294 100 % $ 717,301 100 % $ (53,007) (7) % Sales by geographic region ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ United States ​ $ 101,387 15 % $ 164,564 23 % $ (63,177) (38) % EMEA ​ 50,794 8 % 61,730 9 % (10,936) (18) % China ​ ​ 181,812 27 % ​ 255,619 36 % ​ (73,807) (29) % Rest of APAC ​ 330,183 50 % 234,591 32 % 95,592 41 % Rest of World ​ 118 — % 797 — % (679) (85) % Total ​ $ 664,294 100 % $ 717,301 100 % $ (53,007) (7) % ​ 41 Table of Contents Total sales decreased for the year ended December 31, 2025 against the comparable prior year period in the Data Storage and Compound Semiconductor markets, partially offset by increases in the Scientific & Other and Semiconductor markets.
Nanosecond annealing provides Veeco with an opportunity to expand our laser annealing SAM for new advanced node logic and memory applications, including low thermal budget anneals for Gate-All-Around transistors and advanced 3D devices. ​ The ongoing adoption of EUV Lithography for advanced node semiconductor manufacturing continues to drive demand for our Ion Beam Deposition LDD system for mask blanks.
Nanosecond annealing provides Veeco with an opportunity to expand our laser annealing SAM for new advanced node logic and memory applications, including low thermal budget anneals for Gate-All-Around transistors and advanced 3D devices. ​ The ongoing adoption of EUV Lithography for advanced node semiconductor manufacturing continues to drive demand for our Ion Beam Deposition EUV system for mask blanks.
Refer to Note 10, “Commitments and Contingencies”, of the Notes to the Consolidated Financial Statements for further discussion related to our lease obligations. ​ We believe that we have sufficient capital resources and cash flows from operations to support the above mentioned short-term obligations. ​ Critical Accounting Estimates ​ Our discussion and analysis of our financial condition and results of operations are based upon our Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States.
Refer to Note 10, “Commitments and Contingencies”, of the Notes to the Consolidated Financial Statements for further discussion related to our lease obligations. ​ We believe that we have sufficient capital resources and cash flows from operations to support the above mentioned short-term obligations. 45 Table of Contents Critical Accounting Estimates ​ Our discussion and analysis of our financial condition and results of operations are based upon our Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States.
The following discussion contains forward-looking statements and should also be read in conjunction with the cautionary statement set forth at the beginning of this Form 10-K. ​ The following section generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
The following discussion contains forward-looking statements and should also be read in conjunction with the cautionary statement set forth at the beginning of this Form 10-K. ​ The following section generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024.
We are also evaluating other pronouncements recently issued but not yet adopted, including ASU 2023-09 and ASU 2024-03. The adoption of these pronouncements is not expected to have a material impact on our consolidated financial statements. Refer to Note 1, “Significant Accounting Policies,” for additional information. ​
We are also evaluating other pronouncements recently issued but not yet adopted, including ASU 2024-03. The adoption of these pronouncements is not expected to have a material impact on our consolidated financial statements. Refer to Note 1, “Significant Accounting Policies,” for additional information. ​
We address the Scientific & Other market with several technologies, including MBE, ALD, MOCVD, Wet Processing, and IBD/IBE, which support scientific, optical coating and other applications, and sales in this market declined slightly in 2024 from the prior year. ​ 34 Table of Contents Results of Operations ​ Years Ended December 31, 2024 and 2023 ​ The following table presents revenue and expense line items reported in our Consolidated Statements of Operations for 2024 and 2023 and the period-over-period dollar and percentage changes for those line items.
We address the Scientific & Other market with several technologies, including MBE, ALD, MOCVD, Wet Processing, and IBD/IBE, which support scientific, optical coating and other applications, and sales in this market increased slightly in 2025 from the prior year. ​ 40 Table of Contents Results of Operations ​ Years Ended December 31, 2025 and 2024 ​ The following table presents revenue and expense line items reported in our Consolidated Statements of Operations for 2025 and 2024 and the period-over-period dollar and percentage changes for those line items.
Veeco’s technologies are at the forefront of enabling new technical innovations in the manufacture of high-performance AI chips and High-Bandwidth Memory (“HBM”). We continue to invest in new technologies to expand our SAM to a broad range of new applications. ​ Semiconductor revenue increased by 13% in 2024 from the prior year, comprising 65% of total revenue.
Veeco’s technologies are at the forefront of enabling new technical innovations in the manufacture of high-performance AI chips and High-Bandwidth Memory (“HBM”). We continue to invest in new technologies to expand our SAM to a broad range of new applications. ​ Semiconductor revenue increased by 2% in 2025 from the prior year, comprising 72% of total revenue.
As a result, growth of the WFE market is forecasted to keep pace with long-term growth of the Semiconductor industry, which we believe should benefit semiconductor capital equipment providers, including Veeco. ​ Our strategy of investing in advanced logic and memory has enabled our Semiconductor business to outperform WFE growth for four consecutive years.
As a result, growth of the WFE market is forecasted to keep pace with long-term growth of the Semiconductor industry, which we believe should benefit semiconductor capital equipment providers, including Veeco. ​ Our strategy of investing in advanced logic and memory has enabled our Semiconductor business to continue to grow.
Leading logic and memory customers expect EUV and High-Numerical Aperture (“High-NA”) lithography to be integral to their future roadmaps, which our Ion Beam Deposition technology is a key enabler of.
Leading logic and memory customers expect EUV and High Numerical Aperture (“High-NA”) lithography to be integral to their future roadmaps, with our Ion Beam Deposition technology serving as a key enabler.
We generally do not enter into purchase commitments extending beyond one year. At December 31, 2024, we have $18.7 million of offsetting supplier deposits that will be applied against these purchase commitments.
We generally do not enter into purchase commitments extending beyond one year. At December 31, 2025, we have $9.8 million of offsetting supplier deposits that will be applied against these purchase commitments.
At December 31, 2024 and 2023, cash and cash equivalents of $45.1 million and $46.8 million, respectively, were held outside the United States. As of December 31, 2024, we had $21.2 million of accumulated undistributed earnings generated by our non-U.S. subsidiaries for which the U.S. repatriation tax has been provided.
At December 31, 2025 and 2024, cash and cash equivalents of $23.6 million and $45.1 million, respectively, were held outside the United States. As of December 31, 2025, we had $25.6 million of accumulated undistributed earnings generated by our non-U.S. subsidiaries for which the U.S. repatriation tax has been provided.
Approximately $9.6 million of undistributed earnings would be subject to foreign withholding taxes if distributed back to the United States and we accrued $1.2 million for foreign withholding taxes for the undistributed earnings. ​ We believe that our projected cash flow from operations, combined with our cash and short-term investments, will be sufficient to meet our projected working capital requirements, contractual obligations, and other cash flow needs for the next twelve months, including scheduled interest payments on our convertible senior notes, purchase commitments, and payments required under our operating leases. ​ 37 Table of Contents A summary of the cash flow activity for the year ended December 31, 2024 and 2023 is as follows: ​ Cash Flows from Operating Activities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 2023 ​ ​ (in thousands) ​ Net income (loss) ​ $ 73,714 ​ $ (30,368) ​ Non-cash items: ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization ​ 25,143 ​ 24,966 ​ Non-cash interest expense ​ 1,257 ​ 1,118 ​ Deferred income taxes ​ (8,729) ​ (2,211) ​ Share-based compensation expense ​ 35,879 ​ 28,558 ​ Loss on extinguishment of debt ​ ​ — ​ ​ 97,091 ​ Asset impairment ​ 28,131 ​ — ​ Impairment of equity investment ​ ​ 404 ​ ​ — ​ Provision for bad debts ​ ​ — ​ ​ 316 ​ Change in contingent consideration ​ (21,242) ​ 701 ​ Changes in operating assets and liabilities ​ (70,742) ​ (58,497) ​ Net cash provided by (used in) operating activities ​ $ 63,815 ​ $ 61,674 ​ ​ Net cash provided by operating activities was $63.8 million for the year ended December 31, 2024 and was due to net income of $73.7 million and adjustments for non-cash items of $60.8 million, partially offset by a decrease in cash flow from changes in operating assets and liabilities of $70.7 million.
Approximately $12.3 million of undistributed earnings would be subject to foreign withholding taxes if distributed back to the United States and we accrued $1.1 million for foreign withholding taxes for the undistributed earnings. ​ We believe that our projected cash flow from operations, combined with our cash and short-term investments, will be sufficient to meet our projected working capital requirements, contractual obligations, and other cash flow needs for the next twelve months, including scheduled interest payments on our convertible senior notes, purchase commitments, and payments required under our operating leases. ​ 43 Table of Contents A summary of the cash flow activity for the year ended December 31, 2025 and 2024 is as follows: ​ Cash Flows from Operating Activities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ (in thousands) Net income ​ $ 35,390 ​ $ 73,714 Non-cash items: ​ ​ ​ ​ ​ ​ Depreciation and amortization ​ 20,020 ​ 25,143 Non-cash interest expense ​ 1,118 ​ 1,257 Deferred income taxes ​ (2,982) ​ (8,729) Share-based compensation expense ​ 37,047 ​ 35,879 Asset impairment ​ — ​ 28,131 Impairment of equity investment ​ ​ — ​ ​ 404 Change in contingent consideration ​ (925) ​ (21,242) Changes in operating assets and liabilities ​ (20,175) ​ (70,742) Net cash provided by (used in) operating activities ​ $ 69,493 ​ $ 63,815 ​ Net cash provided by operating activities was $69.5 million for the year ended December 31, 2025 and was due to net income of $35.4 million and adjustments for non-cash items of $54.3 million, partially offset by a decrease in cash flow from changes in operating assets and liabilities of $20.2 million.
There is a yearly commitment fee of 25 to 35 basis points, based on the Company’s secured net leverage ratio, charged on the unused portion of the Facility. ​ Contractual Obligations and Commitments ​ We have commitments under certain contractual arrangements to make future payments for goods and services, including purchase obligations of $177.4 million as of December 31, 2024 for inventory used in the manufacture of our products, as well as equipment and project materials used to support research and development activities.
There is a yearly commitment fee of 20 to 30 basis points, based on the Company’s secured net leverage ratio, charged on the unused portion of the Facility. ​ In connection with the Merger, the convertible senior notes will be assumed by Axcelis. ​ Contractual Obligations and Commitments ​ We have commitments under certain contractual arrangements to make future payments for goods and services, including purchase obligations of $150.8 million as of December 31, 2025 for inventory used in the manufacture of our products, as well as equipment and project materials used to support research and development activities.
These initial systems are being evaluated for advanced memory applications, such as DRAM bitline. ​ 33 Table of Contents In Advanced Packaging, our Wet Processing systems are used for several applications, and we continue to see strong demand driven by Heterogenous Integration and 3D Packaging for AI.
These initial systems are being evaluated for advanced memory applications, such as DRAM bitline. ​ In Advanced Packaging, we have seen significant growth in our business year-over-year. Our Wet Processing systems are used for several applications, and we continue to see strong demand driven by Heterogenous Integration and 3D Packaging for AI and high-performance computing.
Included within the Rest of APAC region for the year ended December 31, 2024 were sales in Taiwan and Japan of $115.3 million and $67.4 million, respectively, while sales within Rest of APAC region for the year ended December 31, 2023 included sales in Japan, Taiwan, and Singapore of $74.7 million, $62.7 million, and $32.2 million, respectively.
Included within the Rest of APAC region for the year ended December 31, 2025 were sales in Taiwan and Japan of $178.8 million and $69.0 million, respectively, while sales within Rest of APAC region for the year ended December 31, 2024 included sales in Taiwan and Japan of $115.3 million and $67.4 million, respectively.
In light of the global nature of our business, we are impacted by conditions in the various countries in which we and our customers operate. ​ Gross Profit ​ In 2024, gross profit increased compared to 2023 primarily due to an increase in sales volume, partially offset by decreased gross margins.
In light of the global nature of our business, we are impacted by conditions in the various countries in which we and our customers operate, including the recent tariff and trade dynamics. ​ Gross Profit ​ In 2025, gross profit decreased compared to 2024 primarily due to a decrease in sales volume and gross margins.
Sales in the Semiconductor industry are estimated to have increased year-over-year in 2024 to around $650 billion dollars. Looking ahead, industry analysts are forecasting long-term growth of the industry, driven by secular growth trends such as artificial intelligence, high-performance computing, mobile connectivity, and the electrification of the automotive industry.
Looking ahead, industry analysts are forecasting long-term growth of the industry, driven by secular growth trends such as artificial intelligence, high-performance computing, mobile connectivity, and the electrification of the automotive industry.
This increase was driven by our Laser Annealing business with both leading and mature node customers. Our laser annealing solutions continue to gain acceptance at advanced logic nodes, highlighted by recent order activity involving both new and existing customers. In 2024, we received laser annealing orders from, and shipped systems to several leading-edge logic customers, including for customers’ Gate-All-Around processes.
This increase was driven by our Laser Annealing business with both leading and mature node customers. Our laser annealing solutions continue to gain acceptance at advanced logic nodes, highlighted by recent order activity involving both new and existing customers.
By geography, sales increased in the China, and Rest of APAC regions, partially offset by a decrease in the EMEA region.
By geography, sales decreased in the China, U.S., and EMEA regions, partially offset by an increase in the Rest of APAC Region.
The 2023 income tax expense of $2.0 million was primarily comprised of 1) a $16.2 million income tax expense related to pre-tax income from operations, and 2) a $2.0 million income tax expense related to share-based compensation, partially offset by 3) a $7.5 million income tax benefit related to Foreign-Derived Intangible Income, 4) a $7.7 million income tax benefit associated with research and development tax credits, and 5) a $1.0 million income tax benefit associated with the loss on extinguishment of convertible notes under Section 249 of the Internal Revenue Code of 1986, as amended (Section 249). ​ Liquidity and Capital Resources ​ Our cash and cash equivalents, restricted cash, and short-term investments are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2024 2023 ​ ​ (in thousands) Cash and cash equivalents ​ $ 145,595 ​ $ 158,781 Restricted cash ​ 224 ​ 339 Short-term investments ​ 198,719 ​ 146,664 Total ​ $ 344,538 ​ $ 305,784 ​ A portion of our cash and cash equivalents is held by our subsidiaries throughout the world, frequently in each subsidiary’s respective functional currency, which is typically the U.S. dollar.
The 2024 income tax benefit was primarily attributed to 1) $12.2 million of income tax benefits associated with asset impairments, 2) a $7.9 million income tax benefit related to research and development tax credits, and 3) a $5.1 million income tax benefit related to Foreign-Derived Intangible Income, partially offset by 4) a $20.3 million income tax expense related to pre-tax income from operations. ​ Liquidity and Capital Resources ​ Our cash and cash equivalents, restricted cash, and short-term investments are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ (in thousands) Cash and cash equivalents ​ $ 163,466 ​ $ 145,595 Restricted cash ​ — ​ 224 Short-term investments ​ 226,763 ​ 198,719 Total ​ $ 390,229 ​ $ 344,538 ​ A portion of our cash and cash equivalents is held by our subsidiaries throughout the world, frequently in each subsidiary’s respective functional currency, which is typically the U.S. dollar.
At December 31, 2024, outstanding bank guarantees and letters of credit totaled $18.1 million and unused bank guarantees and letters of credit of $21.6 million were available to be drawn upon. ​ 39 Table of Contents Lease Obligations ​ As of December 31, 2024, our operating lease obligation was $53.1 million relating to various operating lease arrangements for certain facilities.
At December 31, 2025, outstanding bank guarantees and letters of credit totaled $2.4 million and unused bank guarantees and letters of credit of $40.6 million were available to be drawn upon. ​ Lease Obligations ​ As of December 31, 2025, our future minimum lease payments was $48.9 million relating to various operating lease arrangements for certain facilities.
The Company has no immediate plans to draw down on the facility, which expires in December of 2026. Interest under the facility is variable based on the Company’s secured net leverage ratio and is expected to bear interest based on SOFR plus a range of 150 to 225 basis points, if drawn.
Interest under the facility is variable based on the Company’s secured net leverage ratio and is expected to bear interest based on SOFR plus a range of 125 to 200 basis points, if drawn.
The cash used in investing activities during the year ended December 31, 2023 was attributable to net cash used in the acquisition of Epiluvac, and capital expenditures, partially offset by changes in net investment activity. ​ 38 Table of Contents Cash Flows from Financing Activities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2024 2023 ​ ​ (in thousands) ​ Settlement of equity awards, net of withholding taxes ​ $ (10,761) ​ $ (6,391) ​ Contingent consideration payment ​ ​ (1,818) ​ ​ (2,500) ​ Proceeds from issuance of 2029 Notes, net of issuance costs ​ ​ — ​ ​ 223,202 ​ Extinguishment of Convertible Notes ​ ​ — ​ ​ (218,991) ​ Net cash provided by (used in) financing activities ​ $ (12,579) ​ $ (4,680) ​ ​ The cash used in financing activities for the year ended December 31, 2024 was related to cash used to settle taxes related to employee equity programs and a contingent consideration payment related to the Epiluvac acquisition, partially offset by cash received under the Employee Stock Purchase Plan.
The cash used in investing activities during the year ended December 31, 2024 was primarily attributable to net cash used for capital expenditures, and net investment activity, partially offset by proceeds from the sale of productive assets. ​ 44 Table of Contents Cash Flows from Financing Activities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ (in thousands) Settlement of equity awards, net of withholding taxes ​ $ (4,355) ​ $ (10,761) Debt issuance costs ​ ​ (885) ​ ​ — Repayment of convertible debt ​ ​ (5,229) ​ ​ — Contingent consideration payment ​ ​ — ​ ​ (1,818) Net cash provided by (used in) financing activities ​ $ (10,469) ​ $ (12,579) ​ The cash used in financing activities for the year ended December 31, 2025 was related to cash used to settle taxes related to employee equity programs, settlement of the 2027 Notes, and debt issuance costs associated with the execution of the Fourth Amendment of the Loan and Security Agreement, partially offset by cash received under the Employee Stock Purchase Plan.
The 2024 income tax benefit was primarily attributed to 1) $12.2 million of income tax benefits associated with asset impairments, 2) a $7.9 million income tax benefit related to research and development tax credits, and 3) a $5.1 million income tax benefit related to Foreign-Derived Intangible Income, partially offset by 4) a $20.3 million income tax expense related to pre-tax income from operations.
The 2025 income tax expense was primarily attributed to 1) a $8.3 million income tax expense associated with pre-tax income from operations, 2) a $3.1 million income tax expense related to adjustments made for share-based compensation, and 3) a $1.4 million income tax expense related to non-deductible merger costs, partially offset by 4) a $5.7 million income tax benefit related to foreign-derived intangible income, and 5) a $3.6 million tax benefit associated with research and development tax credits.
The net cash used in financing activities for the year ended December 31, 2023 was related to the partial repurchase of the 2025 Notes and 2027 Notes, repayment of the 2023 Notes, a contingent consideration payment related to the Epiluvac acquisition, as well as cash used to settle taxes related to employee equity programs, partially offset by proceeds from issuance of the 2029 Notes. ​ Convertible Senior Notes and Revolving Credit Facility ​ We have $26.5 million outstanding principal balance of 3.50% convertible senior notes that bear interest at a rate of 3.50% per year, payable semiannually in arrears on January 15 and July 15 of each year, and mature on January 15, 2025, unless earlier purchased by the Company, redeemed, or converted.
The cash used in financing activities for the year ended December 31, 2024 was related to cash used to settle taxes related to employee equity programs and a contingent consideration payment related to the Epiluvac acquisition, partially offset by cash received under the Employee Stock Purchase Plan. ​ Convertible Senior Notes and Revolving Credit Facility ​ We have $230.0 million outstanding principal balance of convertible senior notes that bear interest at a rate of 2.875% per year, payable semiannually in arrears on June 1 and December 1 of each year, and mature on June 1, 2029, unless earlier purchased by the Company, redeemed, or converted. ​ We believe that we have sufficient capital resources and cash flows from operations to support scheduled interest payments on this debt.
The changes in operating assets and liabilities were largely attributable to increases in inventories largely related to evaluation systems at customer facilities, contract assets, prepaid expenses and other current assets, and decreases in accounts payable, and contract liabilities. ​ Cash Flows from Investing Activities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2024 2023 ​ ​ (in thousands) ​ Capital expenditures ​ $ (18,113) ​ $ (27,930) ​ Changes in investments, net ​ (48,467) ​ 4,973 ​ Acquisitions of businesses, net of cash acquired ​ ​ — ​ ​ (30,373) ​ Proceeds from the sale of productive assets ​ ​ 2,033 ​ ​ — ​ Net cash provided by (used in) investing activities ​ $ (64,547) ​ $ (53,330) ​ ​ The cash used in investing activities during the year ended December 31, 2024 was primarily attributable to net cash used for capital expenditures, and net investment activity, partially offset by proceeds from the sale of productive assets.
The changes in operating assets and liabilities were largely attributable to an increase in inventories largely related to higher work-in-process and evaluation systems at customer facilities, an increase in contract assets, and a decrease in contract liabilities. ​ Cash Flows from Investing Activities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ (in thousands) Capital expenditures ​ $ (16,200) ​ $ (18,113) Changes in investments, net ​ (25,278) ​ (48,467) Proceeds from the sale of productive assets ​ ​ — ​ ​ 2,033 Net cash provided by (used in) investing activities ​ $ (41,478) ​ $ (64,547) ​ The cash used in investing activities during the year ended December 31, 2025 was primarily attributable to net cash used for capital expenditures and net investment activity.
The changes in operating assets and liabilities were largely attributable to an increase in inventories largely related to higher work-in-process and evaluation systems at customer facilities, an increase in contract assets, and a decrease in contract liabilities. ​ Net cash provided by operating activities was $61.7 million for the year ended December 31, 2023 and was due to net loss of $30.4 million and adjustments for non-cash items of $150.5 million, partially offset by a decrease in cash flow from changes in operating assets and liabilities of $58.5 million.
The changes in operating assets and liabilities were largely attributable to an increase in inventories and accounts receivable, partially offset by an increase in contract liabilities. ​ Net cash provided by operating activities was $63.8 million for the year ended December 31, 2024 and was due to net income of $73.7 million and adjustments for non-cash items of $60.8 million, partially offset by a decrease in cash flow from changes in operating assets and liabilities of $70.7 million.
Discussions of 2023 items and year-to-year comparisons between 2023 and 2022 that are not included in this Form 10-K can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed on February 16, 2024. ​ Executive Summary ​ We are an innovative manufacturer of semiconductor process equipment.
Discussions of 2024 items and year-to-year comparisons between 2024 and 2023 that are not included in this Form 10-K can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed on February 14, 2025. ​ Merger with Axcelis Technologies, Inc. ​ On September 30, 2025, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Axcelis Technologies, Inc., a Delaware corporation (“Axcelis”), and Victory Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Axcelis (“Merger Sub”).
Given the uncertainty regarding the impacts on our business resulting from the general macroeconomic environment, we are focused on the proactive management of expenses. ​ Amortization Expense ​ Amortization expense decreased in 2024 compared to 2023 primarily due to changes in amortization expense to reflect expected cash flows of certain intangible assets, as well as certain other intangible assets becoming fully amortized in 2023. ​ Asset Impairment ​ During 2024, we recorded a non-cash impairment charge of $28.1 million related to intangible assets of our SiC technology acquired from Epiluvac in 2023, due to our market penetration not meeting expectations. ​ Other Operating Expense (Income), Net ​ Net other operating income in 2024 was primarily due to a $21.2 million reduction in the expected earn-out payments to be made to the previous shareholders of Epiluvac, as well as proceeds from the sale of productive assets . ​ Interest Income (Expense) ​ For the year ended December 31, 2024, we recorded net interest income of $1.9 million, compared to $1.2 million of net interest expense for the prior year.
Research and development expenses decreased in 2025 compared to 2024 primarily due to personnel-related and operating-related expenses as part of our efforts to manage costs. ​ Selling, General, and Administrative ​ Selling, general, and administrative expenses remained consistent for the year ended December 31, 2025 against the comparable prior period. ​ Amortization Expense ​ Amortization expense decreased in 2025 compared to 2024 primarily due to changes in amortization expense to reflect expected cash flows of certain intangible assets, as well as certain other intangible assets becoming fully amortized and the full impairment of the Epiluvac related intangibles in 2024. ​ Merger Costs ​ During the year ended December 31, 2025, we incurred approximately $8.9 million in legal, accounting, consulting fees and employee-related costs in connection with the proposed Merger. ​ Asset Impairment ​ During 2024, we recorded a non-cash impairment charge of $28.1 million related to intangible assets of our SiC technology acquired from Epiluvac in 2023, due to our market penetration not meeting expectations. ​ Other Operating Expense (Income), Net ​ Other operating income for the year ended December 31, 2025 was $0.9 million, primarily comprised of a reduction in the expected earn-out payment to the previous shareholders of Epiluvac.
We also shipped and recognized revenue on our first NSA system to a leading logic customer in the fourth quarter. In the memory market, we continue to ship systems to a Tier 1 customer for high volume production of HBM and advanced DRAM devices.
In 2025, we received laser annealing orders from, and shipped systems to several leading-edge logic customers and had multiple repeat orders from a DRAM customer. In the memory market, we continue to ship systems to Tier 1 customers for high volume production of HBM and advanced DRAM devices.
Deferred tax assets and liabilities are adjusted to reflect the effects of enacted changes in tax rates, laws and status, including changes in tax incentives. ​ Recent Accounting Pronouncements ​ We adopted ASU 2020-06 effective January 1, 2022 and ASU 2023-07 effective December 31, 2024.
Deferred tax assets and 46 Table of Contents liabilities are adjusted to reflect the effects of enacted changes in tax rates, laws and status, including changes in tax incentives. ​ Recent Accounting Pronouncements ​ We adopted ASU 2020-06 Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity effective January 1, 2022, ASU 2023-09 Improvements to Income Tax Disclosures (Topic 740) effective December 31, 2024, ASU 2024-04 Debt – Debt with Conversion and Other Options (Subtopic 470-20) effective June 30, 2025.
While our growth strategy is predominately focused on advanced node logic and memory, LSA shipments to mature node customers have continued to increase in 2023 and 2024, predominantly driven by new greenfield fabs and capacity additions in China. ​ We have two next generation laser annealing systems under evaluation at Tier 1 foundry and logic customers.
Our growth strategy remains predominately focused on advanced node logic and memory customers. ​ We have two next generation laser annealing systems under evaluation at Tier 1 foundry and logic customers. We also shipped and recognized revenue on our NSA500 tool to a logic customer in 2025.
We expect our gross margins to fluctuate each period due to product mix and other factors. ​ Research and Development ​ The markets we serve are characterized by continuous technological development and product innovation, and we invest in various research and development initiatives to maintain our competitive advantage and achieve our growth objectives.
We expect higher costs in future periods as we incur tariffs on imported materials from overseas suppliers, as well as higher costs from domestic suppliers incurring tariffs on their imports. ​ Research and Development ​ The markets we serve are characterized by continuous technological development and product innovation, and we invest in various research and development initiatives to maintain our competitive advantage and achieve our growth objectives.
For items that are not sold separately, we estimate SSPs generally using an expected cost plus margin approach.
The SSPs are determined based on the prices at which we separately sell systems, upgrades, components, spare parts, installation, maintenance, and service plans. For items that are not sold separately, we estimate SSPs generally using an expected cost plus margin approach.
Gross margins decreased principally due to unfavorable product mix of sales and higher service costs.
Gross margins decreased principally due to unfavorable product mix of sales and higher production and tariff related costs. We expect our gross margins to fluctuate each period due to product mix and other factors. Additionally, other factors will cause our gross margins to fluctuate each period.
After two years of slow order activity driven by consumer markets, we are beginning to see an increase in quoting and order activity from IDM’s, foundries, and OSAT’s driven by capacity expansions for AI and mobile markets. ​ Looking ahead, we anticipate seeing growth in leading-edge investment driven by new nodes and AI-related demand, including investment in Gate-All-Around nodes, High-Bandwidth Memory, and 3D packaging for AI.
We are seeing an uptick in the order activity from several OSAT customers driven by AI and consumer markets recovery. ​ Looking ahead, we anticipate seeing growth in the semiconductor market in leading-edge investment driven by new nodes and AI-related demand, including investment in Gate-All-Around nodes, High-Bandwidth Memory, and 3D packaging for AI. ​ Veeco also serves the Compound Semiconductor market with a broad portfolio of technologies, including Wet Processing, MOCVD, MBE and Ion Beam, for Power Electronics, Photonics, and 5G RF applications.
The increase in net interest income was primarily related to an increase of interest income of approximately $2.3 million due to a higher interest rate environment for 2024 compared to 2023. 36 Table of Contents Additionally, the Company had a decrease of interest expense of approximately $0.7 million due to a reduction in convertible note and bank guarantee interest expenses. ​ Other Income (Expense) ​ For the year ended December 31, 2023, we recorded a loss on extinguishment of approximately $97.1 million related to the repurchase and retirement of approximately $206.0 million aggregate principal amount of our 2025 and 2027 Notes. ​ Income Taxes ​ Our income tax benefit for the year ended December 31, 2024, was $4.9 million, compared to income tax expense of $2.0 million for the prior year.
Additionally, the company had an increase of approximately $0.6 million of interest income due to a higher average cash balances for 2025 compared to 2024. ​ Income Taxes ​ Our income tax expense for the year ended December 31, 2025, was $4.0 million, compared to income tax benefit of $4.9 million for the prior year.
Our product roadmap is well positioned as the industry adopts next-generation High-NA EUV lithography, and we are expanding our EUV related business to new mask blank applications. ​ We also have two Ion Beam Deposition “IBD300” systems under evaluation at leading memory customers.
Our product roadmap is well positioned as the industry adopts next-generation High-NA EUV lithography, and we are expanding our EUV related business to EUV pellicles which are increasingly 39 Table of Contents being used to improve the productivity of EUV steps.
Management uses judgements in identifying performance obligations, determining stand-alone selling price (“SSP”) for each distinct performance obligation and allocating consideration from an arrangement to the individual performance obligations based on the SSP. The SSPs are determined based on the prices at which we separately sell systems, upgrades, components, spare parts, installation, maintenance, and service plans.
Management uses judgements in identifying performance obligations, determining stand-alone selling price (“SSP”) for each distinct performance obligation, allocating consideration from an arrangement to the individual performance obligations based on the SSP, determining when transfer of control occurs to the customer, and estimating potential variable consideration including the probability that a significant reversal in the amount of cumulative revenue recognized will not occur.
Our IBD300 system provides Veeco with another opportunity to expand our SAM to advanced node applications where low resistance films are critical.
Our IBD-EUV system is used to form the high transparency membrane used in pellicles. ​ We have two Ion Beam Deposition (“IBD300”) systems under evaluation at leading DRAM memory customers, which we have extended the evaluation into 2026. Our IBD300 system provides Veeco with another opportunity to expand our SAM to advanced node applications where low resistance films are critical.
We evaluate usage requirements by analyzing historical usage, anticipated demand, alternative uses of materials, and other qualitative factors.
We evaluate usage requirements by analyzing historical usage, anticipated demand, alternative uses of materials, and other qualitative factors. Unanticipated changes in demand for our products may require a write down of inventory that could materially affect our operating results. ​ Income Taxes ​ We estimate our income taxes in each of the jurisdictions in which we operate.
In the fourth quarter, we announced over $50 million in orders for our Wet Processing systems from a leading foundry, a HBM manufacturer, and OSATs. Our Advanced Packaging lithography systems are used for packaging applications such as fan out wafer level packaging and other advanced packaging solutions.
Our Advanced Packaging lithography systems are used for packaging steps such Cu pillar and microbumps used in fan out wafer level packaging and other 2.5 and 3D advanced packaging solutions.
To learn more about Veeco’s systems and service offerings, visit www.veeco.com. ​ Veeco executed well during 2024, accomplishing a number of milestones, including: ​ ● Solidly executing our multi-year growth strategy highlighted by several strategic wins.
To learn more about Veeco’s systems and service offerings, visit www.veeco.com. ​ Veeco executed well during 2025, and accomplished a number of milestones, including: ​ ● Accomplished year-on-year revenue semiconductor market growth, accounting for 72% of total Company revenue ● Shipped a Laser Spike Annealing (“LSA”) system to a second Tier 1 memory customer for evaluation in its advanced DRAM R&D group.
As a result, we expect an approximate $60 to $70 million reduction in revenue in our Data Storage business in 2025. ​ Sales in the Scientific & Other market are largely driven by sales to governments, universities, and research institutions.
Orders received in the third and fourth quarter of 2025 for our ion beam and wet processing equipment from demand for cloud and AI Data Centers, will drive revenue growth in 2026, principally in the second half. ​ Sales in the Scientific & Other market are largely driven by sales to governments, universities, and research institutions.
Removed
We shipped and recognized revenue on our first Nanosecond Annealing (“NSA”) system at a leading-edge logic customer, shipped a 300mm GaN on Si evaluation system to a Tier 1 power device customer, and reached an agreement to ship an LSA evaluation system to another leading memory customer in 2025; ​ ● Shipped multiple Laser Annealing systems to Tier 1 logic and memory customers for new architectures and technologies such as Gate-All-Around and High Bandwidth Memory; ​ ● Won additional customer orders in Advanced Packaging with our strong position in wet processing as PTOR for a process step in Heterogenous Integration and 3D Packaging for AI; ​ ● Maintained investments toward our largest Served Available Market (“SAM”) growth opportunities in the Semiconductor and Compound Semiconductor markets, including strategic investments in R&D and our evaluation program; ​ ● Achieved year-on-year revenue growth for the Company, including record revenue in the Semiconductor market, which grew 13% and outperformed Wafer Fabrication Equipment (“WFE”) spending growth for the fourth consecutive year. ​ We believe these accomplishments position us well to capture our largest SAM growth opportunities in the coming years. 32 Table of Contents Business Update ​ The Semiconductor industry has historically demonstrated cyclicality based on fluctuations in global chip demand and production capacity.
Added
Pursuant to the Merger Agreement, and subject to the satisfaction or waiver of the conditions specified therein, Merger Sub shall be merged with and into Veeco (the “Merger”), with Veeco surviving as a wholly-owned subsidiary of Axcelis.
Removed
At the same time, recent engagement with customers in China has moderated, and we expect a decline in China revenue heading into 2025. ​ Veeco also serves customers in the Compound Semiconductor, Data Storage, and Scientific & Other markets.
Added
The Merger Agreement was approved by our board of directors (except for one (1) independent director who serves on the Axcelis’ board of directors as well who recused himself) and, on February 6, 2026, by the stockholders of each company, but is still pending regulatory approvals and other customary mutual closing conditions.
Removed
We address the Compound Semiconductor market with a broad portfolio of technologies, including Wet Processing, MOCVD, MBE and Ion Beam, for Power Electronics, Photonics, and 5G RF applications. Sales in the Compound Semiconductor market declined in 2024 from the prior year.
Added
For more information regarding the previously announced merger with Axcelis, see Note 17 “Merger” to the accompanying Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K. ​ Executive Summary ​ We are an innovative manufacturer of semiconductor process equipment.
Removed
Looking ahead, in the Silicon Carbide market, the slowdown in EV adoption has weakened demand as some customers continue their transition to 200mm production. Additionally, market penetration of our previously acquired Silicon Carbide technology has not met our expectations.
Added
Penetrating the annealing market in the memory space, with our LSA system is an important growth opportunity. ● Achieved steady growth in our Advanced Packaging business year-over-year driven by AI-related demand.
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In GaN Power, emerging use cases have driven some traditional silicon power electronics manufacturers to consider adoption of GaN at 300mm, and we have an evaluation system outstanding at a Tier 1 Power device customer.
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Won multiple orders for advanced wet processing and lithography systems from leading foundries, supporting critical end markets through AI, automotive, aerospace, defense, and communications. ● Received multiple orders in the Compound Semiconductor market for our Propel 300mm GaN on Silicon and Lumina+ Arsenide Phosphide new platforms, supporting end markets for AI data centers and low earth orbit space grade solar cells; these are revenue growth opportunities for 2026, principally in the second half. 38 Table of Contents ● Received several orders in the Data Storage market for our ion beam and wet processing equipment from demand for cloud and AI data centers; these are revenue growth opportunities for 2026, principally in the second half. ● Continued investments in next-generation technologies with our Nanosecond Annealing (“NSA”) system being evaluated at two Tier 1 logic customers and our Ion Beam Deposition 300 (“IBD300”) system being evaluated at two DRAM customers.
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We are also seeing photonics opportunities in areas such as solar and MicroLEDs. ​ We address the Data Storage market with sales of our Ion Beam technology. Demand for our Ion Beam products is driven by demand for cloud-based storage. Revenue from our Data Storage products increased in 2024 as compared to the prior year.
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We believe these inflection points position us well to capture our largest SAM growth opportunities in 2026 and beyond. ​ Business Update ​ Sales in the Semiconductor industry are estimated to have increased year-over-year in 2025 to approximately $770 billion dollars, according to Gartner.
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Looking ahead, while customer utilizations are improving, they remain well below peak levels from a few years ago and customers are not investing to expand new system capacity in 2025 as they bring idle capacity back on line.
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We also shipped a LSA evaluation system to a second leading memory customer in the fourth quarter of 2025. While we continue to ship LSA systems to mature node customers in China, as anticipated this business has moderated and we expect to continue to see a decline heading into 2026.
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Research and development expenses increased in 2024 compared to 2023 primarily due to personnel-related expenses as we invest in new research and development and additional applications for our technology in order to be well-positioned to capitalize on emerging global megatrends and support longer term growth in Semiconductor and Compound Semiconductor markets.
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Sales in the Compound Semiconductor market for 2025 declined from the prior year.
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However, expenses as a percentage of revenue have remained flat when compared to the prior period. ​ Selling, General, and Administrative ​ Selling, general, and administrative expenses increased in 2024 compared to 2023. However, expenses as a percentage of revenue have remained flat when compared to the prior period.
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However, we had significant order activity in the second half of 2025 for our new Propel 300 millimeter GaN on Silicon and Lumina+ arsenide phosphide platforms supporting GaN power, photonics and solar, which will drive revenue growth for 2026, principally in the second half. ​ Lastly, Veeco also addresses the Data Storage and Scientific & Other markets.
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These 2025 Notes subsequently matured in January 2025 and were settled through the issuance of Company shares to the noteholders.
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In the Data Storage market we experienced a decline in revenue from 2025 compared to the prior year. However, we have seen new order activity and increased customer utilization rates driven by growth in end-market demand in data centers (AI and cloud) and as customers gain traction in new technologies like Heat Assisted-Magnetic-Recording (“HAMR”).
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In addition, we have $25.0 million outstanding principal balance of 3.75% convertible senior notes that bear interest at a rate of 3.75% per year, payable semiannually in arrears on June 1 and December 1 of each year, and mature on June 1, 2027, unless earlier purchased by the Company, redeemed, or converted.
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Other operating income for the year ended December 31, 2024 was $22.3 million, primarily comprised of a reduction in the expected earn-out payments to the previous shareholders of Epiluvac, as well as proceeds from the sale of productive assets. 42 Table of Contents ​ Interest Income, net ​ For the year ended December 31, 2025, we recorded net interest income of $4.3 million, compared to $1.9 million of net interest income for the prior year.
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These 2027 Notes are currently convertible by shareholders and callable by the Company until March 31, 2025.
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The increase in net interest income was primarily related to a decrease of interest expense of approximately $1.9 million due to a reduction in convertible note and bank guarantee interest expenses.
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In addition, we have $230.0 million outstanding principal balance of 2.875% convertible senior notes that bear interest at a rate of 2.875% per year, payable semiannually in arrears on June 1 and December 1 of each year, and mature on June 1, 2029, unless earlier purchased by the Company, redeemed, or converted. ​ Furthermore, we have access to a $225.0 million revolving credit facility to provide for our working capital needs and reimburse drawings under letters of credit and for other general corporate purposes.
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In addition, in June 2025, we increased the total funds available to us through our revolving credit facility from $225 million to $250 million and extended the maturity until June 16, 2030, subject to a springing maturity date of March 2, 2029. The Company has no immediate plans to draw down on the facility.
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Unanticipated changes in demand for our products may require a write down of inventory that could materially affect our operating results. ​ 40 Table of Contents Long-lived Assets ​ The carrying values of long-lived assets, including identifiable intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
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If circumstances require a long-lived asset or asset group be tested for possible impairment, a recoverability test is performed utilizing undiscounted cash flows expected to be generated by that asset or asset group compared to its carrying amount.
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If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, impairment is recognized to the extent the carrying amount exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models or, when available, quoted market values and third-party appraisals.
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It is not possible for us to predict the likelihood of any possible future impairments or, if such an impairment were to occur, the magnitude of any impairment. Intangible assets with finite useful lives, including purchased technology, customer-related intangible assets, patents, trademarks, backlog, and software licenses, are subject to amortization over the expected period of economic benefit to us.
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We evaluate whether events or circumstances have occurred that warrant a revision to the remaining useful lives of intangible assets.
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In cases where a revision is deemed appropriate, the remaining carrying amounts of the intangible assets are amortized over the revised remaining useful life. ​ Income Taxes ​ We estimate our income taxes in each of the jurisdictions in which we operate.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe economic impact of currency exchange rate 41 Table of Contents movements is complex because such changes are often linked to variability in real growth, inflation, interest rates, governmental actions, and other factors. These changes, if material, could cause us to adjust our financing and operating strategies.
Biggest changeThe economic impact of currency exchange rate movements is complex because such changes are often linked to variability in real growth, inflation, interest rates, governmental actions, and other factors. These changes, if material, could cause us to adjust our financing and operating strategies.
Our net sales denominated in currencies other than the U.S. dollar represented approximately 5% of total net sales in 2024. ​ A 10% change in foreign exchange rates would have an immaterial impact on the consolidated results of operations since most of our sales outside the United States are denominated in U.S. dollars. ​
Our net sales denominated in currencies other than the U.S. dollar represented approximately 4% of total net sales in 2025. ​ A 10% change in foreign exchange rates would have an immaterial impact on the consolidated results of operations since most of our sales outside the United States are denominated in U.S. dollars. ​
We execute derivative transactions with highly-rated financial institutions to mitigate counterparty risk. ​ Our net sales to customers located outside of the United States represented approximately 77% of our total net sales in 2024. We expect that net sales to customers outside the United States will continue to represent a large percentage of our total net sales.
We execute derivative transactions with highly-rated financial institutions to mitigate counterparty risk. ​ Our net sales to customers located outside of the United States represented approximately 85% of our total net sales in 2025. We expect that net sales to customers outside the United States will continue to represent a large percentage of our total net sales.
Our investment portfolio includes fixed-income securities with a fair value of approximately $198.7 million at December 31, 2024. These securities are subject to interest rate risk and, based on our investment portfolio at December 31, 2024, a 100 basis point increase in interest rates would result in a decrease in the fair value of the portfolio of $1.3 million.
Our investment portfolio includes fixed-income securities with a fair value of approximately $226.8 million at December 31, 2025. These securities are subject to interest rate risk and, based on our investment portfolio at December 31, 2025, a 100 basis point increase in interest rates would result in a decrease in the fair value of the portfolio of $1.8 million.

Other VECO 10-K year-over-year comparisons