Key Highlights

  • Net sales increased 26% to USD 209.4 million in the third quarter from USD 165.9 million, and Net Income reached USD 13.6 million, or USD 0.21 per diluted share.
  • About USD 8 million of Revenue went unrecognized on a laser annealing system shipped to China and held pending U.S. export review.
  • Compound semiconductor sales surged 268% to USD 40.2 million and data storage sales jumped 101% to USD 20.0 million, while scientific and other sales dropped 48%.
  • Gross Margin eased to about 38% from 41%, and cash plus short-term investments hit USD 482.5 million on September 30, 2026.

An Export Hold Trims Recognized Revenue

Veeco (NASDAQ:VECO) submitted its third-quarter filing on November 4, 2026, covering the period that closed September 30, 2026. The chipmaking equipment supplier disclosed that a laser annealing tool bound for a Chinese buyer was held up and remains under review by U.S. Customs and Border Protection along with the Bureau of Industry and Security. Although control had shifted, Veeco has not sought payment, so it left about USD 8 million of revenue unbooked, since a major Reversal cannot be excluded. Semiconductor revenue still increased 14% to USD 135.3 million, whereas China revenue dropped 46% to USD 24.6 million. Sales across the rest of Asia-Pacific advanced 16% to USD 95.1 million, with USD 53.0 million from Taiwan and USD 17.2 million from Singapore.

AI Demand Lifts Compound Semiconductor and Storage

Compound semiconductor revenue accounted for 19% of total sales, fueled by optical connectivity linked to AI data centers, notably indium phosphide lasers. Data storage made up 10% of sales, and management expects that market's full-year revenue to about double. U.S. revenue surged 145% to USD 65.0 million. Gross Profit reached USD 80.4 million, yet the margin eased to 38.4% from 40.8% (calculated) because of product mix and capacity investment, partly offset by USD 2.8 million of Tariff refunds. Operating Income came to USD 14.1 million, up from USD 10.6 million, after absorbing USD 2.3 million of merger-related expenses. R&D outlays grew 21% to USD 35.1 million, and SG&A rose 16% to USD 28.5 million, with incentive pay and commissions tied to bigger order flow contributing.

The Axcelis Merger Remains the Larger Story

Under the September 2025 agreement with Axcelis Technologies, each Veeco share converts into 0.3575 Axcelis shares in an all-stock combination, leaving Veeco holders with about 41.6% of the merged company. Shareholders signed off on February 6, 2026. Only China's State Administration for Market Regulation still needs to bless the transaction, with completion anticipated by the end of the first quarter of 2027. Nine-month net income was USD 25.2 million compared with USD 34.3 million, and operating income declined 37%. Revenue for the period climbed 12% to USD 561.2 million, while China sales fell 36% to USD 92.6 million over the same span. Net interest income reached USD 1.8 million in the quarter.

Where Things Stand

Yes, reported sales can still grow while a shipment sits unrecognized, though recognition hinges on how the review resolves. Veeco (NASDAQ:VECO) lifted sales 26% and Earnings Per Share to USD 0.21 from USD 0.17, yet about USD 8 million remains off the books and gross margin slipped. The customs review outcome decides when that revenue lands. Next markers are the customs result and Chinese regulatory clearance for the Axcelis merger. The filing offered no numeric earnings guidance, though gross profit rose 19% to USD 80.4 million.