Veeco Instruments Inc. has recently released its 10-Q report, providing insight into the company's financial condition and operational performance. Veeco Instruments Inc. specializes in developing, manufacturing, selling, and supporting semiconductor and thin film process equipment primarily used in the production of various microelectronic components, including logic, dynamic random-access memory, and photonics devices. The company also serves integrated device manufacturers, foundries, outsourced semiconductor assembly and test companies, as well as hard disk drive and photonics manufacturers, among others. Veeco Instruments Inc. was founded in 1945 and is headquartered in Plainview, New York.
In the 10-Q report, Veeco Instruments Inc. highlighted its performance in the Semiconductor industry, which experienced a decline in sales in 2023 to approximately $550 billion after several years of growth following the pandemic. Industry analysts are forecasting long-term growth in the Semiconductor industry, driven by trends such as artificial intelligence, high-performance computing, mobile connectivity, and the electrification of the automotive industry. Additionally, government investments in the Semiconductor industry are expected to accelerate spending globally in next-generation technologies.
The company's Semiconductor revenue increased by 3% in the second quarter of 2024 from the comparable prior year period, constituting 63% of total revenue. This growth was led by record Laser Annealing revenue, with Veeco's laser annealing solutions gaining share in advanced nodes in logic. The company secured business with a new Tier 1 logic customer for advanced anneal applications and received a multi-tool laser annealing order from a leading edge logic foundry for their 2nm gate-all-around process. In the memory market, a Tier 1 memory customer placed several Laser Spike Annealing orders for high volume production of HBM and advanced DRAM devices.
Veeco Instruments Inc. also serves customers in the Compound Semiconductor, Data Storage, and Scientific & Other markets. While sales in the Compound Semiconductor market declined, the Data Storage market saw increased demand for the company's Ion Beam Deposition technology, driven by cloud-based storage. Sales in the Scientific & Other market, largely driven by sales to governments, universities, and research institutions, declined.
The report also provided a detailed breakdown of the financial results for the three months ended June 30, 2024, compared to the same period in 2023. Net sales for the second quarter of 2024 amounted to $175,879, representing a 9% increase from the comparable prior year period. This increase was primarily driven by sales in the Data Storage and Semiconductor markets. Gross profit for the same period increased by 12%, primarily due to higher sales volume and increased gross margins.
Research and development expenses increased for the three months ended June 30, 2024, mainly due to an increase in project materials and personnel-related expenses as the company invests in new research and development. Selling, general, and administrative expenses also increased, primarily due to higher variable expenses associated with the increase in revenue and profitability. Amortization expense decreased compared to the comparable prior year period.
The company recorded net interest income of $0.3 million for the three months ended June 30, 2024, compared to net interest expense of $0.6 million for the comparable prior year period. The increase in net interest income was primarily due to higher interest rates for the second quarter of 2024, against the comparable prior year period.
Income tax expense for the three months ended June 30, 2024, was $2.1 million, compared to $1.3 million for the comparable prior period. The effective tax rate for the second quarter of 2024 was favorably impacted by tax benefits related to Foreign-Derived Intangible Income and research and development tax credits.
The 10-Q report provided a comprehensive overview of Veeco Instruments Inc.'s business performance, financial results, and strategic initiatives, giving investors and stakeholders valuable insights into the company's operations and outlook. As a result of these announcements, the company's shares have moved 0.3% on the market, and are now trading at a price of $35.12. For more information, read the company's full 10-Q submission here.
