ACM Research (ACMR -15.35%), a developer of advanced wafer cleaning and wet processing tools used in semiconductor manufacturing, released its second-quarter 2025 earnings on August 6, 2025. The key news from the release was that earnings per share (Non-GAAP) came in at $0.54, exceeding analyst expectations of $0.49. However, revenue (GAAP) was $215.4 million and did not meet the $223.4 million forecast. Despite achieving a 6.4% year-over-year increase in GAAP revenue and maintaining robust gross margins, A jump in operating expenses led to a decline in operating income and margin on a GAAP basis compared to the prior year. The quarter demonstrated continued technological momentum and market progress, but the widening gap between expenses and revenue growth presents areas to watch moving ahead.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $0.54 | $0.49 | $0.55 | (1.8%) |
| Revenue (GAAP) | $215.4 million | N/A | $202.5 million | 6.4% |
| Gross Margin (GAAP) | 48.5 % | 47.8 % | 0.7 pp | |
| Operating Income (Non-GAAP) | $41.5 million | $51.9 million | (20.1%) | |
| Net Income Attributable to ACM Research, Inc. (Non-GAAP) | $36.8 million | $37.5 million | -1.9% |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Business Overview and Recent Focus
ACM Research provides technology solutions essential for semiconductor chip fabrication. Its core business centers on single wafer cleaning tools, plating systems, and advanced packaging equipment. These tools use proprietary technologies like SAPS and TEBO, which remove impurities from silicon wafers, increasing production yields and enabling the shrinking of chip features crucial for next-generation electronics.
The company has a strong footprint in Asia, especially China, serving leading chip makers and capitalizing on its reputation for technological innovation. Over the past year, ACM Research has prioritized expanding its product range, investing heavily in research and development, and building out sales and support infrastructure beyond China. Ongoing efforts include pushing into North America and Europe, as well as adapting to the evolving competitive landscape and regulatory scrutiny.
Quarter in Review: Key Developments, Metrics, and Trends
Revenue (GAAP) reached $215.4 million, a year-over-year increase of 6.4%. However, this result lagged analyst forecasts by about $8.0 million in GAAP revenue. The company’s earnings per share (Non-GAAP) of $0.54 outpaced expectations, which points to increased efficiency or a favorable product mix.
ECP (front-end and packaging), furnace, and other technologies revenue increased 23.2% year-over-year. Advanced packaging (excluding ECP), services, and spares revenue increased 20.3% year-over-year. The core segment of single wafer cleaning and related tools increased 1.1% year-over-year. This indicates maturing demand for legacy cleaning solutions, while higher growth stems from newer product categories supporting advanced chip packaging and fabrication processes.
Gross margin (GAAP) improved to 48.5%, above the company’s long-term target range. However, operating expenses surged by over 22% year over year on a GAAP basis, and by 38.8% year-over-year on a Non-GAAP basis. This increase reflects higher research and development spending and larger outlays for expanding sales and marketing capability. As a result, Non-GAAP operating income dropped by 20.0% compared to Q2 FY2024. Negative operating leverage—expenses rising faster than revenue—led to a thinner operating margin despite healthy gross profits.
The company’s net income (Non-GAAP) was $36.8 million, with diluted Non-GAAP earnings per share of $0.54, nearly matching performance from the year-ago period. Cash and cash equivalents, plus restricted cash, and short-term and long-term time deposits, totaled $483.9 million as of June 30, 2025, while inventories climbed to $648.3 million as of June 30, 2025. Accounts receivable also increased.
Product Portfolio and Technology Initiatives
During the period, ACM Research highlighted progress in both established and emerging product families. Single wafer cleaning systems, such as those using SAPS and TEBO technology, remain the core business but are showing slower growth. These systems are designed to remove minute particles and chemical residues from wafers, critical for advanced chip manufacturing.
The ECP line, which includes plating systems for front-end and packaging applications, experienced significant adoption as more semiconductor makers invest in advanced packaging techniques. Furnace tools, essential for high-temperature annealing in chip fabrication, contributed to revenue growth as customers adopted new processes, especially for power semiconductors. The company’s Ultra C wb Wet Bench (a high-throughput cleaning tool) saw upgrades like nitrogen bubbling technology, yielding performance improvements and repeat orders. Panel-level packaging platforms (used for high-performance chip packaging) have received industry recognition, winning the 2025 3D InCites Technology Enablement Award. This reflects ACM’s drive to capture new market demand tied to the growth of artificial intelligence and complex semiconductor designs.
Looking Forward: Guidance and Investor Considerations
Management maintained FY2025 revenue guidance of $850 million to $950 million, signaling a forecast of around 15% annual growth at the midpoint for FY2025. Despite missing Q2 FY2025 GAAP revenue estimates, leadership did not adjust its FY2025 guidance. The company communicated continued optimism for increased adoption of its new and upgraded tools, particularly in China. It also pointed to forthcoming U.S. shipments in the next quarter as a sign of expanding reach.
The company did not provide detailed forward guidance on profits or operating margin for the year. Key areas for investors to monitor in coming quarters include the pace at which operating expenses are growing relative to sales, the ability to reduce inventory levels, and the impact of geographic expansion efforts. As ACM Research continues to focus on R&D-heavy growth and product innovation, expense management and customer adoption, especially outside Asia, will be critical to its financial trajectory. ACMR does not currently pay a dividend.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
