Semiconductor production equipment provider Amtech Systems (NASDAQ:ASYS) reported Q3 CY2025 results topping the market’s revenue expectations, but sales fell by 17.7% year on year to $19.84 million. On the other hand, next quarter’s revenue guidance of $19 million was less impressive, coming in 2.6% below analysts’ estimates. Its non-GAAP profit of $0.10 per share was significantly above analysts’ consensus estimates.
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Amtech (ASYS) Q3 CY2025 Highlights:
- Revenue: $19.84 million vs analyst estimates of $17 million (17.7% year-on-year decline, 16.7% beat)
- Adjusted EPS: $0.10 vs analyst estimates of $0.01 (significant beat)
- Adjusted EBITDA: $2.64 million vs analyst estimates of $200,000 (13.3% margin, significant beat)
- Revenue Guidance for Q4 CY2025 is $19 million at the midpoint, below analyst estimates of $19.5 million
- Operating Margin: 9.3%, up from 0.1% in the same quarter last year
- Free Cash Flow Margin: 10.2%, up from 5.4% in the same quarter last year
- Inventory Days Outstanding: 155, down from 171 in the previous quarter
- Market Capitalization: $126.2 million
“Stronger than expected results in the fourth quarter were driven by AI applications,” commented Mr. Bob Daigle, Chief Executive Officer of Amtech.
Company Overview
Focusing on the silicon carbide and power semiconductor sectors, Amtech Systems (NASDAQ:ASYS) produces the machinery and related chemicals needed for manufacturing semiconductors.
Revenue Growth
A company’s long-term performance is an indicator of its overall quality. Any business can have short-term success, but a top-tier one grows for years. Unfortunately, Amtech’s 3.9% annualized revenue growth over the last five years was mediocre. This fell short of our benchmark for the semiconductor sector and is a rough starting point for our analysis. Semiconductors are a cyclical industry, and long-term investors should be prepared for periods of high growth followed by periods of revenue contractions.
We at StockStory place the most emphasis on long-term growth, but within semiconductors, a half-decade historical view may miss new demand cycles or industry trends like AI. Amtech’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 16.3% annually. 
This quarter, Amtech’s revenue fell by 17.7% year on year to $19.84 million but beat Wall Street’s estimates by 16.7%. Despite the beat, the drop in sales could mean that the current downcycle is deepening. Company management is currently guiding for a 22.1% year-on-year decline in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 9.9% over the next 12 months. Although this projection indicates its newer products and services will fuel better top-line performance, it is still below the sector average.
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Product Demand & Outstanding Inventory
Days Inventory Outstanding (DIO) is an important metric for chipmakers, as it reflects a business’ capital intensity and the cyclical nature of semiconductor supply and demand. In a tight supply environment, inventories tend to be stable, allowing chipmakers to exert pricing power. Steadily increasing DIO can be a warning sign that demand is weak, and if inventories continue to rise, the company may have to downsize production.
This quarter, Amtech’s DIO came in at 155, which is 1 more days than its five-year average. These numbers suggest that despite the recent decrease, the company’s inventory levels are slightly above the long-term average.
Key Takeaways from Amtech’s Q3 Results
It was good to see Amtech beat analysts’ EPS expectations this quarter. We were also excited its revenue outperformed Wall Street’s estimates by a wide margin. On the other hand, its revenue guidance for next quarter missed. Overall, we think this was a decent quarter with some key metrics above expectations. The stock traded up 5.8% to $9.98 immediately following the results.
Amtech had an encouraging quarter, but one earnings result doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.