Nova Q4 2024 Earnings Report

Nova EPS Results

• Actual EPS: $1.78
• Consensus EPS: $1.82
• Beat/Miss: Missed by -$0.04
• One Year Ago EPS: N/A

Nova Revenue Results

• Actual Revenue: $194.77 million
• Expected Revenue: $186.50 million
• Beat/Miss: Beat by +$8.27 million
• YoY Revenue Growth: N/A

Nova Announcement Details

• Quarter: Q4 2024
• Date: 2/13/2025
• Time: Before Market Opens
• Conference Call Date: Thursday, February 13, 2025
• Conference Call Time: 8:30AM ET

Nova (NASDAQ:NVMI) designs, develops, produces, and sells process control systems used in the manufacture of semiconductors in Israel, Taiwan, the United States, China, Korea, and internationally. Its product portfolio includes a set of metrology platforms for dimensional, films, and materials and chemical metrology measurements for process control for various semiconductor manufacturing process steps, including lithography, etch, chemical mechanical planarization, deposition, electrochemical plating, and advanced packaging. The company serves various sectors of the integrated circuit manufacturing industry, including logic, foundries, and memory manufacturers, as well as process equipment manufacturers. Nova Ltd. was formerly known as Nova Measuring Instruments Ltd. and changed its name to Nova Ltd. in July 2021. Nova Ltd. was incorporated in 1993 and is headquartered in Rehovot, Israel.

Nova Q4 2024 Earnings Call Transcript

Presentation

[Operator]

Good day and welcome to the Nova Limited Fourth Quarter and Full Year twenty twenty four Results Conference Call. All participants will be in listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Mary Segal, CEO of MSIR.

[Operator]

Please go ahead.

[Miri Segal, Founder & CEO at MS-IR LLC]

Thank you, operator, and good day to everybody. I would like to welcome all of you to Nova's fourth quarter and full year twenty twenty four financial results conference call. With us on the line today are Gabby Weismann, President and CEO and Guy Kisner, CFO. Before we begin, I would like to remind our listeners that certain information provided on this call may contain forward looking statements and the safe harbor statement outlined in today's earnings release also pertains to this call. If you have not received a copy of the release, please view it in the Investor Relations section of the company's website.

[Miri Segal, Founder & CEO at MS-IR LLC]

Gabby will begin the call with a business update, followed by Guy with an overview of the financials. We will then open the call for the question and answer session. I'll now turn the call over to Gabby Weizmann, Nova's President and CEO. Gabby, please go ahead.

[Gabriel Waisman, President & CEO at Nova]

Thank you, Miri, and thank you all for joining us today. I will start the call by summarizing our fourth quarter and full year performance highlights. Following my commentary, Guy will review the quarterly and annual financial results in detail. Nova ended the fiscal year on a high note with record revenue and profitability, outperforming industry indices. Our revenues grew 30% year over year and reached $672,400,000 while non GAAP net income grew 38%.

[Gabriel Waisman, President & CEO at Nova]

We have cemented our position across multiple device segments and achieved numerous milestones across our product lines, including strategic penetrations into leading manufacturers, and evolving position in new segments and a growing market share. Our agile operational model and strategic focus continue to generate value to our shareholders, enabling us to drive higher profitability, while relentlessly growing our business. Our performance this year was driven by our Materials Metrology Solutions record sales, coupled with a growing adoption across market segments. Additionally, the growing revenue from advanced packaging processes underscores the importance of our dimensional and chemical metrology solutions. This broad based growth highlights the strength of our diversified portfolio and our ability to capitalize on multiple market opportunities.

[Gabriel Waisman, President & CEO at Nova]

Turning to the fourth quarter record results and our sixth consecutive quarter of growth, we exceeded the top end of our guidance in revenue and non GAAP profitability. Our record quarterly revenue was driven by the robust sales of the Veriflex, Ellipson and Metreon platforms. This success was augmented by record sales of our dimensional standalone OCD solutions that saw heightened demand due to their unique capabilities in gate all around and advanced packaging applications. These results underline our ability to meet the evolving needs of our customers and maintain our competitive edge in the market. Looking forward, Nova is poised to leverage the transition into advanced manufacturing processes and architectures.

[Gabriel Waisman, President & CEO at Nova]

We expect our growing exposure to new market segments and our differentiated portfolio to drive sustained growth into 2025, continuing the momentum we've built. The surge in AI related demand has been a significant driver of our market as it necessitates energy efficient computing power and accelerates the demand for advanced processing nodes and memory solutions. Our customers are leading the transition to three d architectures, which translate into multiple catalysts for our business, including larger and more complex dies that require a growing number of wafers, a higher number of layers and a leap in the number of process steps at the much smaller tolerance for error. The increasing complexity drives the need for high quality metrology solutions, which Nova is well positioned to provide. Let me share some highlights from 2024 and the recent quarter.

[Gabriel Waisman, President & CEO at Nova]

First, we are encouraged by the broad adoption of Nova's comprehensive portfolios across gable around and high bandwidth memory processes. Leading foundries, logic and memory manufacturers are increasingly integrating multiple NOVA solutions from our optical dimensions, materials and chemical metrology portfolio. This widespread adoption underscores our ability to address the complex metrology challenges associated when manufacturing the most advanced semiconductor nodes. Our unique solutions for 2.53 d structure applications are pivotal in enabling our customers to achieve the precision and efficiency required for current and next generation technologies. Our advanced packaging revenue more than doubled this year, reaching 15% of product revenue and signifying its growing importance to Nova.

[Gabriel Waisman, President & CEO at Nova]

Our integrated metrology solutions have been adopted by four of the top five advanced packaging manufacturers, while our standalone OCD market share in the segment grew significantly. With the recent addition of Centronics, we expect our revenues of advanced packaging to grow further. Centronics modular dimensional metrology technology will enable us to diversify our offering into the rapidly growing field of advanced wafer level packaging and specialty devices and into additional wafer sizes and types beyond 300 millimeter silicon wafers. Along with Nova's optical CD standalone and integrated metrology, we can offer customers a rich portfolio for critical applications in both back end and front end fabrication processes. Syntronics builds highly modular multi sensor platforms with proprietary sensors and software that expand the range of applications we can solve.

[Gabriel Waisman, President & CEO at Nova]

Some key examples that are critical to advanced packaging includes total thickness variation, topographies for roughness measurements and wafer bow and warpage. Following the deal closing announced last month, the post merger integration teams are working diligently to tighten collaboration and align activities, while maintaining focus on execution, meeting delivery timelines and business goals. Now let me review some of the highlights from our product division. In the dimensional metrology division, our integrated metrology earned new market share in multiple segments, including advanced packaging and HBM, expanding our TAM and securing our market leadership. Our standalone OCD solutions had a record year and increased our market share driven by high demand from numerous customers due to their high productivity, precision and unique offering.

[Gabriel Waisman, President & CEO at Nova]

The Nova Prism platform sales grew at high double digits this year over year with multiple engagements with both front end and advanced packaging customers. To meet market demand, we recently launched the Nova Velocity, the next generation of the successful high productivity platform, MMSR. Driven by increasing demand for productivity and yield improvements, Velocity features a unique dual chamber configuration that enables the highest productivity in standalone tools in the market. The platform's speed and robustness have been a deciding factor for a leading logic manufacturer who adopted the platform and is expected to purchase multiple tools. These achievements highlight our ability to deliver innovative solutions that cater to the needs of our customers.

[Gabriel Waisman, President & CEO at Nova]

Next, our materials metrology portfolio delivered record quarterly and annual results. As we shared in early January, the Metreon platform was adopted by a leading global memory customer for its most advanced DRAM R and D as well as DRAM and NAND high volume manufacturing lines. Metreon was selected based on its ability to perform full wafer measurements of epitaxial layers with high sensitivity and precision. We expect to receive additional orders from this customer. In addition, the platform is currently being evaluated by two of the top five customers in memory and logic, and we anticipate receiving orders from them later this year.

[Gabriel Waisman, President & CEO at Nova]

The Veriflex platform saw a market transition and broad adoption of its fourth generation becoming the tool of record for several leading foundry and memory customers. The Nova Ellipson platform performed well this year with repeat orders from a leading memory customer and penetrating to two new major customers. Looking ahead, we have strategic foundries already planning to use the platform for strain and material concentration measurements. The performance of our materials metrology portfolio attest to the value of our solutions and their critical role in advanced semiconductor manufacturing. Our chemical metrology division had a record growth year at the high double digit rate.

[Gabriel Waisman, President & CEO at Nova]

Significant highlights include the AncoSine market share growth in front end customers and the Ancolyzer proliferation with memory customers for HBM. Additionally, we have ongoing evaluations with memory and foundry customers, which we expect to materialize later this year. Finally, our service division delivered another record quarter and year with twenty twenty four revenues growing 19% year over year, driven by increasing demand for capacity and yield improvements. In terms of market outlook, our industry continues at an upward momentum, driven by end market demand for mobile and AI and the investments in building and matching capacity in advanced logic nodes, DRAM and advanced packaging. We expect WFE to grow at mid single digits this year, driven by leading edge demand.

[Gabriel Waisman, President & CEO at Nova]

In summary, our well established fundamentals will help us increase exposure to additional opportunities in adjacent markets and processes, new customers and new critical applications. Our strategic priorities remain intact with continuous investments in our long term roadmap and by partnering with our customers across all territories. In 2025, we expect to capitalize on the opportunities created by our enhanced market position, continue our growth trajectory and outperform WFE. We will elaborate on our strategy and vision at our upcoming virtual Investor Day on March 17 and we look forward to seeing you all there. Now for some more details on our financials, let me hand over the call to Guy.

[Guy Kizner, Chief Financial Officer at Nova]

Thanks, Gabby. Good day, everyone, and thank you for joining our twenty twenty four fourth quarter conference call. I will begin by reviewing our financial achievements for the fourth quarter of twenty twenty four, then summarize our performance for the full year and finally provide guidance for the first quarter of twenty twenty five. In the fourth quarter of twenty twenty four, total revenue reached a record high of $194,800,000 making it the third consecutive quarter of record breaking results. This performance exceeded the company's guidance, reflecting a 9% quarter over quarter increase and 45% growth year over year.

[Guy Kizner, Chief Financial Officer at Nova]

These achievements demonstrate our strong ability to anticipate, capture and respond to evolving market demand. Product revenue distribution was approximately 72% from logic and foundry and approximately 28% from memory. Product revenues included three customers and four territories, which contributed each 10% or more to product revenues. In the fourth quarter, blended gross margin aligned with our guidance, achieving 56% on a GAAP basis and 58% on a non GAAP basis, well within our target model range of 57% to 59%. Operating expenses increased to $54,500,000 on a GAAP basis and $48,900,000 on a non GAAP basis.

[Guy Kizner, Chief Financial Officer at Nova]

A significant portion of the increase was directed towards expanding our R and D efforts, ensuring we stay ahead in innovation and technology leadership. Operating margin in the fourth quarter reached 28% on a GAAP basis and 33% on a non GAAP basis, surpassing the upper range of our target model of 27% to 31%. The effective tax rate in the fourth quarter was approximately 15%. Earnings per share in the fourth quarter on a GAAP basis were $1.58 per diluted share and earnings per share on a non GAAP basis were $1.94 per diluted share, exceeding the high end of our fourth quarter guidance. Moving on the annual results for the calendar year 2024, revenue increased 30% year over year.

[Guy Kizner, Chief Financial Officer at Nova]

In a year where the industry experienced moderate growth, our ability to scale at this pace demonstrate the strength of our business model, the value we bring to customers and the effectiveness of our long term strategy. The geographic revenue split in 2024 was as follows: China was 39%, Taiwan was 20%, Korea was 18%, U. S. Was 14% and other territories contributed the remaining 9%. Gross margin for the year came in at 58% on a GAAP basis and 59% on a non GAAP basis.

[Guy Kizner, Chief Financial Officer at Nova]

At the high end of the company target model of 57% to 59%. Despite cost pressures and the industry wide supply chain dynamics, we maintained robust profitability through operational efficiencies, pricing discipline and continued focus on higher value solutions. Operating margin for the year came in at 28% on a GAAP basis and 33% on a non GAAP basis. Earnings per diluted share on an annual basis came in at 5.75 on a GAAP basis and $6.69 on a non GAAP basis. Achieving a record high EPS this year underscore our ability to drive profitable growth by effectively converting top line expansion into bottom line value.

[Guy Kizner, Chief Financial Officer at Nova]

Our disciplined approach to execution, operational efficiencies and strategic investments has allowed us to scale while maintain strong financial performance. This milestone reflects the strength of our business model and our commitment to deliver sustained value to our shareholders. Turning to the balance sheet, we ended 2024 with $820,000,000 in cash, cash equivalents, bank deposit and marketable securities. During 2024, the company generated $218,000,000 in free cash flow and presented healthy parameters related to working capital management. In addition, the company deployed approximately $48,500,000 in cash as follows: Approximately $30,000,000 was deployed for share buybacks and approximately $18,500,000 was deployed to facilitate the early conversion of 9% of our outstanding convertible notes with the paramount paid in cash and the remaining balance settled in shares.

[Guy Kizner, Chief Financial Officer at Nova]

At the January 2025, we completed the acquisition of Centronics metrology, deploying approximately $60,000,000 in cash for the transaction. As a result, Centronics' financial results will be consolidated into Nova starting in February 2025. The acquisition aligns with our strategic growth priorities and we expect it to be accretive on a non GAAP basis within twelve months. Our guidance reflect the impact of this combination. Now, let's move to our guidance, which factors in the acquisition.

[Guy Kizner, Chief Financial Officer at Nova]

We currently expect revenue for the quarter to be between $2.00 $5,000,000 and $215,000,000 GAAP earnings per diluted share to range from 1.75 to $1.91 non GAAP earnings per diluted share to range from $2 to $2.16 At the midpoint of our first quarter twenty twenty five estimates, we anticipate the following: gross margins of approximately 57% on a GAAP basis and approximately 59% on a non GAAP basis operating expenses on a GAAP basis to increase to approximately $60,000,000 operating expenses on a non GAAP basis to increase to approximately $54,000,000 financial income on a non GAAP basis to remain similar to that of the fourth quarter Effective tax rate is expected to be approximately 15%. With that, we will be pleased to take your questions. Operator?

[Operator]

We will now begin the question and answer session. The first question comes from Atif Malik with Citi. Please go ahead.

[Atif Malik, Analyst at Citigroup]

Hi. Thank you for taking my questions and nice results. Gabby, the first question on Advanced Packaging. So you doubled your sales last year, 15% of product sales. I assume majority of the sales were driven by your OncoSys or chemical metrology products.

[Atif Malik, Analyst at Citigroup]

Can you talk about your aspirations for Advanced Packaging sales for the current year?

[Gabriel Waisman, President & CEO at Nova]

Definitely. Thank you so much for the question. So first, the Advanced Packaging had contribution from both our chemical metrology division as well as the dimensional metrology division. We have our integrated metrology in all of the top five Advanced Packaging manufacturers and we have a significant adoption of our Prism, standalone OCD platform. So it's both divisions that contributed to this growth.

[Gabriel Waisman, President & CEO at Nova]

And we do expect this year to expect to continue and grow by double digit growth.

[Atif Malik, Analyst at Citigroup]

Great.

[Gabriel Waisman, President & CEO at Nova]

On top of that, perhaps one more thing that with your permission I'd like to add is that with the addition of Syntronix, we do expect to fuel our growth as we move in with this platform to additional customers and grow the adoption over there as well.

[Atif Malik, Analyst at Citigroup]

Great. And one for Guy on the services growth last year, a very strong nineteen percent growth. Some of your peers have talked about a more muted services growth this year, primarily because of 200 millimeter equipment slowdown in China. So if you can talk about the services growth outlook for this year as well as any impact from the restrictions that came on late last year to either services or system sales this year?

[Guy Kizner, Chief Financial Officer at Nova]

Yes, of course. So this year, as you mentioned, service businesses grow by 19%. This growth was fueled also by increasing utilization of the tools in 2024 compared to 2023. When we're looking ahead, our model assumes for the service to grow between 10% to 15% and this is what we expect for 2025 as well.

[Atif Malik, Analyst at Citigroup]

And the impact from restrictions?

[Guy Kizner, Chief Financial Officer at Nova]

We don't see a significant impact on the services from the restriction part.

[Atif Malik, Analyst at Citigroup]

Thanks.

[Operator]

The next question comes from Vivek Arya with Bank of America. Please go ahead.

[Duksan Jang, Research Analyst at Bank of America]

Hi. This is Duxan Zhang on behalf of Vivek. Thanks for taking our question. On memory versus foundry logic, I'm curious how you're thinking about the demand into 2025 and which segment do you expect to grow faster? Thank you.

[Gabriel Waisman, President & CEO at Nova]

Thank you. So we do expect Advanced Logic and Advanced Packaging to lead the pack in 2025 with the growth. We definitely see the HBM segment as part of the Advanced Packaging growing with the metrology intensity as well. But the bottom line is it's definitely Advanced Logic and Advanced Packaging.

[Duksan Jang, Research Analyst at Bank of America]

Got it. And then one on gross margins, obviously, a recovery into Q1, but that's also at the high end of your long term range. So could you talk about the drivers that are driving the expansion in Q1? And then what would it take for you to reach above that 60 again? Thank you so much.

[Guy Kizner, Chief Financial Officer at Nova]

So, our gross margin, we remain committed to our target model and believe that given the business dynamics we anticipate heading into 2025, we will continue to demonstrate strong gross margins. Our ability to sustain healthy gross margin reflect the value we bring to our customers through differentiated technology, strong execution and operational efficiencies. While there may be some quarter to quarter fluctuation due to product mix, end market dynamics, end market conditions, we are confident that our long term margin profile remain intact. So, as we mentioned before, the quarter over quarter changes can fluctuate mainly due to product mix, but on an annual basis, we will be in on our target model. Reaching above 60% is challenging, but it's the main unknown is basically how successful we will be with the new product and so forth.

[Guy Kizner, Chief Financial Officer at Nova]

So, our model dictates the and reflects the current business dynamics that we have.

[Operator]

The next question comes from Ezra Weyner with Jefferies. Please go ahead.

[Ezra Weener, VP - Equity Research at Jefferies LLC]

Thanks for taking my questions. Two quick ones. One, we're seeing HVM two different kind of stories out of your peers. How do you see the competitive market and capacity build there? And then the second is China.

[Ezra Weener, VP - Equity Research at Jefferies LLC]

Obviously, you guys have a pretty high amount of revenue coming from China. What do you see there kind of long term as a lot of your peers are seeing that come down? Thank you.

[Gabriel Waisman, President & CEO at Nova]

So in terms of HBM, so first of all, we see Advanced Packaging growing very significantly for us. We're at the infant stages with regards to our Dimensional Metrology portfolio and the majority of our business with Advanced Packaging at the moment is with the logic side with the 2.5 the architectures. But there's definitely build up on HBM. And as I mentioned, the process control intensity is growing over there as well, which means that we have a higher appeal to both our chemical and dimensional portfolio. So we do see growth in high bandwidth manufacturing as well.

[Gabriel Waisman, President & CEO at Nova]

Could you repeat the question about China?

[Ezra Weener, VP - Equity Research at Jefferies LLC]

Yes. Just you guys have pretty high China exposure and a lot of your peers are seeing their China exposure come down as some of these fold in sales come up. Just want to know what you're seeing in China as per all of 2025?

[Gabriel Waisman, President & CEO at Nova]

Sure. So in 2024, the China share of our overall sales was 39%. Our strength there is in line with industry peers. And due to the fact that growth this year will come from advanced nodes, we see the share of China declining.

[Ezra Weener, VP - Equity Research at Jefferies LLC]

Thank

[Ezra Weener, VP - Equity Research at Jefferies LLC]

you.

[Operator]

The next question comes from Vedmati Srouce with Evercore ISI. Please go ahead.

[Vedvati Shrotre, Director at Evercore]

Hi. Thanks for taking my question. So I have two questions.

[Vedvati Shrotre, Director at Evercore]

One is, could you talk about

[Vedvati Shrotre, Director at Evercore]

your contributions from the Syntronix acquisition, what you expect for this year and what your target growth rates are longer term? And then what's the margin profile of this portfolio versus the materials metrology or chemical metrology portfolio?

[Gabriel Waisman, President & CEO at Nova]

So the line is a bit broken, Prabhati, so I hope I understood the questions correctly. But overall, Syntronics last year had about 10% of the $200,000,000 TAM market. Our first quarter forecast already includes the revenue from the relative period Centronics will report under Nova. We closed the deal on January 30 and we do expect an upside to materialize as we progress with the post merger integration. And we are very enthusiastic by the level of engineering we see in the solutions and the fast growth of Syntronix main markets.

[Guy Kizner, Chief Financial Officer at Nova]

And regarding the question about the financial model, so Syntronics aligned well with our financial model, which is one of our criteria in our due diligence process for any acquisition. And as we previously stated, the deal is accretive and we expect it to contribute positively to our financial results. So, I would say it's more or less fit to our financial model in terms of gross margins and operating margins as well.

[Vedvati Shrotre, Director at Evercore]

Understood. And then on the chemical metrology, you're increasing your the footprint, the manufacturing footprint there. How like what would the have you kind of quantified the revenue potential you could get from those facilities?

[Gabriel Waisman, President & CEO at Nova]

So we've just opened up a completely new facility in Bad Roerich in Germany. This facility, which is also environmentally friendly, hosts all the different units of the chemical metrology division under one roof and is a state of the art building. We do expect the capacity to be able to drive the business forward. Obviously, as the business continues on its upward momentum, we will adjust the capacities accordingly.

[Vedvati Shrotre, Director at Evercore]

Okay. Thank you.

[Operator]

The next question comes from Matthew Prisco with Cantor. Please go ahead.

[Matthew Prisco, Director at Cantor Fitzgerald]

Hey guys, thanks for taking the question. I guess first, can you walk us through the drivers of the strong sequential growth into 1Q across maybe end market products and including what the Syntronix acquisition contribution is? And then over the past few quarters, you've been increasing revenues roughly $15,000,000 to $20,000,000 per quarter. Are those types of sequential increases sustainable as

[Matthew Prisco, Director at Cantor Fitzgerald]

we move through $2,025,000,000 dollars? Thanks.

[Gabriel Waisman, President & CEO at Nova]

So we don't give forecasts for the entire year. What we do expect to outperform WFE. I think that we have very strong end markets driving the industry, whether it's AI or HPC and mobile.

[Gabriel Waisman, President & CEO at Nova]

We are all acquainted with the fundamentals over there that translate both to investments in advanced nodes, especially advanced logic as well as the advanced packaging. And we definitely see our position across those markets as fundamental in order to support our continued growth into the year.

[Matthew Prisco, Director at Cantor Fitzgerald]

And anything on the 1Q color, where you are seeing that strength and

[Matthew Prisco, Director at Cantor Fitzgerald]

what the Syntronix contribution is?

[Gabriel Waisman, President & CEO at Nova]

So as I mentioned, the first quarter forecast include the revenues from the relative period Centronics will report under Nova and you can deduct from the fact that Centronics had about 10% of a $200,000,000 TAM market last year as to the level of business that we expect and especially at least in the first quarter.

[Matthew Prisco, Director at Cantor Fitzgerald]

Perfect. And then as a follow-up, can you help walk us through the translation of these material metrology design wins to revenue? For instance, Metrion's recent selection by a leading memory manufacturer, does that mean shipping one tool to a fab for high volume production? And then how quickly does that tool proliferate across fabs? And then what's the process and typical timing of customers expanding the number of tools per fab?

[Matthew Prisco, Director at Cantor Fitzgerald]

Just any color into how we can think about better modeling the opportunity going forward?

[Gabriel Waisman, President & CEO at Nova]

So first of all, we're very excited about this recent adoption focusing on R and D for DRAM as well as three d NAND. We do expect proliferation into high volume manufacturing with this customer And we believe that this market, which is for measuring the profile of multiple layers in these kinds of areas to continue and drive the adoption. We mentioned the fact that we have at the moment two additional valuations with key logic and memory manufacturers that we expect to materialize later this year. And this is the first introduction of such an in line SIMS tool. We expect the adoption to start with about one tool per fab as we experienced when XPS was adopted fifteen to twenty years ago and then of course increase the number of tools per fab as more applications and higher utilization of the tool will happen.

[Gabriel Waisman, President & CEO at Nova]

So eventually we believe and we hope that the kind of adoption rate that happened with XPS will repeat itself with the Metreon. We can't anticipate the exact timing of such an adoption of more than one or two tools per fab, but we have a lot of room to grow with the Metreon both with a number of customers as well as with a number of fabs as capacity grows and we are very excited about the opportunity as it unveils with the Metreon.

[Matthew Prisco, Director at Cantor Fitzgerald]

Helpful. Thanks guys.

[Operator]

The next question comes from Mark Miller with The Benchmark Company. Please go ahead.

[Mark Miller, Equity Research Analyst at The Benchmark Company LLC]

Let me just express my congratulations on another record quarter. This is becoming routine for you guys. I was just wondering if you could discuss where you're seeing significant share gains and what markets?

[Gabriel Waisman, President & CEO at Nova]

Thank you so much, Mark, for the comments. So we see a few areas in which we saw share gains. So first of all, in terms of the Prism standalone OCD, we saw share gains in both advanced manufacturing as well as advanced packaging. We saw increase in market share on the front end side of the chemical metrology portfolio. We saw obviously high utilization and additional adoption of the XPS tools in material metrology.

[Gabriel Waisman, President & CEO at Nova]

And we also gained some share on the integrated metrology, especially as we entered into the advanced packaging space, both in the 2.5D architectures in logic as well as in high bandwidth manufacturing.

[Mark Miller, Equity Research Analyst at The Benchmark Company LLC]

In terms of your memory sales, could you give a little more color in terms of what percent of the memory sales were high bandwidth memory and what if any you're seeing from NAND?

[Gabriel Waisman, President & CEO at Nova]

So I think that we need to address it as more as DRAM versus NAND or HBM versus other architectures with your permission. So obviously DRAM was stronger than NAND and if we put HBM as part of the DRAM, then that was the majority in terms of our memory business. HBM growth of course is higher in that respect compared to the DRAM one.

[Mark Miller, Equity Research Analyst at The Benchmark Company LLC]

Thank you.

[Operator]

The next question comes from Charles Gee with Needham. Please go ahead.

[Charles Shi, Managing Director - Senior Analyst at Needham & Company]

Hi.

[Charles Shi, Managing Director - Senior Analyst at Needham & Company]

Congratulations on the truly exceptional results. Really congrats to the Nova team here. I have a question, maybe two questions, let me ask the first one. The Q1 guidance, if I flatline that numbers, that would imply a roughly speaking 25% year on year growth in 2025. And I think you guided that WFE probably mid single digit.

[Charles Shi, Managing Director - Senior Analyst at Needham & Company]

And I thought historically you were expecting outperformance roughly 1.5x. But any reason for us to have a little bit more confidence that you're going to five times the rate of WFE this year? Of course, you guys did well outperform in 2024, but what are the reasons for us to believe that, that vast outperformance will continue in 'twenty five?

[Gabriel Waisman, President & CEO at Nova]

Thank you for the comments, Charles. I think that the I think it has to do with two or three major issues. One is the position that we have, especially with the unique value driven by the technologies that we offer. The second one is expanding our position into advanced packaging and seeing higher adoption. And the third one, of course, which drives that as well is the Syntronics acquisition that gives us an opportunity to expand to additional customers than the ones that we are exposed to today.

[Gabriel Waisman, President & CEO at Nova]

I would top it all of course by the fact that we have a strong position in advanced logic and that gives us grounds to believe that we have the fundamentals, the infrastructure in order to drive the growth into 2025.

[Charles Shi, Managing Director - Senior Analyst at Needham & Company]

Thanks. Maybe another question on Gate All Around. I believe you mentioned that Gate All Around revenue in 2024 was roughly high single digit of the product revenue based on your latest reporting. It sounds like it's $40,000,000 ish. I think most of your peers are guiding get GATEhold around revenue doubling, but your guidance seems to suggest there's a little bit more than doubling for you guys.

[Charles Shi, Managing Director - Senior Analyst at Needham & Company]

Mind if you provide a little bit more color and as well in terms of where you're tracking to that $500,000,000 in cumulative gate all around revenue from $24,000,000 to $26,000,000. Any additional quantitative color would be very helpful. Thank you.

[Gabriel Waisman, President & CEO at Nova]

I'm not sure I can add more to the fact that we are committed to the $500,000,000 from Gatorade around until 2026. We haven't changed our position in that respect. We will try to give more color during the Investor Day on March 17, but I think that the tracking that number gives a lot in terms of our confidence in making it this year as well.

[Charles Shi, Managing Director - Senior Analyst at Needham & Company]

Thanks, Kathy.

[Gabriel Waisman, President & CEO at Nova]

Sure.

[Operator]

This concludes our question and answer session. I would like to turn the conference back over to Gabby Weisman, Nova's President and CEO for closing remarks.

[Gabriel Waisman, President & CEO at Nova]

Thank you, operator, and thank you all for joining our call today.

[Operator]

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

Participants

Executives

• Gabriel Waisman, President & CEO
• Guy Kizner, Chief Financial Officer

Analysts

• Miri Segal, Founder & CEO at MS-IR LLC
• Atif Malik, Analyst at Citigroup
• Duksan Jang, Research Analyst at Bank of America
• Ezra Weener, VP - Equity Research at Jefferies LLC
• Vedvati Shrotre, Director at Evercore
• Matthew Prisco, Director at Cantor Fitzgerald
• Mark Miller, Equity Research Analyst at The Benchmark Company LLC
• Charles Shi, Managing Director - Senior Analyst at Needham & Company