Veeco Instruments Inc.

Semiconductor Equipment & Materials • Technology • Plainview, NY, United States • VECO (NMS)

Quarter: Q1 2026 Reported: February 2, 2026 Sentiment: Neutral

Veeco Instruments Inc., together with its subsidiaries, develops, manufactures, sells, and supports semiconductor and thin film process equipment primarily to make electronic devices. The company offers laser annealing, ion beam deposition and etch, metal organic chemical vapor deposition, single wafer wet processing and surface preparation, molecular beam epitaxy, advanced packaging lithography, atomic layer deposition, and other deposition systems. Its process equipment systems are used in the production of a range of microelectronic components, including logic, dynamic random-access memory, photonics devices, power electronics, radio frequency filters and amplifiers, magnetic heads for hard disk drives, and other semiconductor devices. In addition, the company markets and sells its products to integrated device manufacturers and foundries; outsourced semiconductor assembly and test companies; and hard disk drive and photonics manufacturers, as well as research centers and universities. It operates in the United States, Europe, the Middle East, and Africa, China, Rest of the Asia-Pacific, and internationally. Veeco Instruments Inc. was founded in 1945 and is headquartered in Plainview, New York.

Analysis Summary

Veeco Instruments Inc. provided a crucial update on its Q4 2025 financial performance and the ongoing merger process with Axcelis Technologies Inc. The company disclosed that approximately $15 million in revenue from Laser Annealing systems shipped to two customers in China prior to December 31, 2025, remains unrecognized. These shipments are currently held at the Port of San Francisco, pending review and processing by U.S. Customs and Border Protection (CBP) and the Bureau of Industry and Security (BIS). Due to the uncertainty surrounding export clearance, Veeco cannot determine that a significant reversal of revenue will not occur, thus deferring recognition. This potential non-recognition of $15 million would result in Veeco's Q4 2025 revenue and earnings per share falling below its previously communicated guidance ranges. The company is actively collaborating with BIS, CBP, and freight brokers to resolve the matter, though no assurances can be provided regarding the timing or outcome of the clearance.

Strategically, the merger with Axcelis Technologies is advancing through regulatory channels. Veeco announced a 'no further action letter' from the United Kingdom Investment Security Unit on January 22, 2026. Furthermore, on January 27, 2026, Axcelis and Veeco waived the condition for approval under Sweden's Investment Screening Law, determining it was not required. The final outstanding regulatory approval needed for the merger's completion is from the State Administration for Market Regulation (SAMR) of the People's Republic of China, with which both companies continue to cooperate. Shareholder approvals are also critical, with special meetings for both Axcelis and Veeco stockholders scheduled for February 6, 2026. Notably, leading proxy advisory firms, Institutional Shareholder Services Inc. and Glass, Lewis & Co., have both recommended that stockholders of both companies vote 'FOR' the respective merger-related proposals, indicating strong institutional support. The completion of the merger remains subject to these and other customary closing conditions.

Key Highlights

• Approximately $15 million in Q4 2025 revenue from Laser Annealing systems to China is currently unrecognized due to U.S. export hold.
• Failure to recognize this revenue would cause Veeco to miss its Q4 2025 revenue and EPS guidance.
• Merger with Axcelis Technologies received 'no further action' from UK Investment Security Unit.
• Condition for Swedish investment screening law approval for the merger has been waived.
• Final regulatory approval for the merger is pending from China's State Administration for Market Regulation (SAMR).
• Both Veeco and Axcelis stockholders are scheduled to vote on the merger on February 6, 2026.
• Leading proxy advisors (ISS, Glass Lewis) recommend 'FOR' approval of the merger for both companies.

Financial Metrics

eps

revenue

million

guidance

net income

million

Stock Performance (90 Days)

Data through Feb 13, 2026

Layoff Events

Earnings Calls

Positive Signals

• UK Investment Security Unit issued a 'no further action letter' for the merger.
• Condition for Swedish Investment Screening Law approval for the merger was waived.
• Institutional Shareholder Services Inc. recommended 'FOR' merger approval.
• Glass, Lewis & Co. recommended 'FOR' merger approval.
• Veeco is actively working with BIS and customers' freight brokers to resolve the customs matter.

Risks & Concerns

— Uncertainty regarding export clearance for approximately $15 million in Q4 2025 revenue, potentially leading to a guidance miss.
— Failure to obtain the final pending regulatory approval from China's State Administration for Market Regulation (SAMR) for the merger.
— Risk of not securing stockholder approvals from either Axcelis or Veeco for the merger.
— Potential for significant transaction and/or integration costs, or difficulties in combining businesses post-merger.
— Ongoing changes in the technology and semiconductor industry, including customer capital spending patterns and competitive pressures.