0001558370-22-016292 | 10-Q | XBRL Viewer

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Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2022	Oct. 31, 2022
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2022
Entity File Number	000-30941
Entity Registrant Name	AXCELIS TECHNOLOGIES INC
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	34-1818596
Entity Address, Address Line One	108 Cherry Hill Drive
Entity Address, City or Town	Beverly
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	01915
City Area Code	978
Local Phone Number	787-4000
Title of 12(b) Security	Common Stock, $0.001 par value
Trading Symbol	ACLS
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		32,848,622
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Entity Central Index Key	0001113232
Amendment Flag	false

Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Revenue:
Total revenue	$ 229,175	$ 176,694	$ 653,947	$ 456,744
Cost of revenue:
Total cost of revenue	125,854	100,182	361,678	259,783
Gross profit	103,321	76,512	292,269	196,961
Operating expenses:
Research and development	20,563	16,707	56,267	49,015
Sales and marketing	14,573	11,415	38,567	33,979
General and administrative	14,983	11,996	41,163	33,226
Total operating expenses	50,119	40,118	135,997	116,220
Income from operations	53,202	36,394	156,272	80,741
Other (expense) income:
Interest income	1,111	51	1,558	124
Interest expense	(1,333)	(1,269)	(4,101)	(3,572)
Other, net	(7,971)	(963)	(14,640)	(2,131)
Total other expense	(8,193)	(2,181)	(17,183)	(5,579)
Income before income taxes	45,009	34,213	139,089	75,162
Income tax provision	4,726	6,698	13,002	12,261
Net income	$ 40,283	$ 27,515	$ 126,087	$ 62,901
Net income per share:
Basic	$ 1.22	$ 0.82	$ 3.81	$ 1.87
Diluted	$ 1.21	$ 0.81	$ 3.75	$ 1.83
Shares used in computing net income per share:
Basic weighted average common shares	33,011	33,537	33,116	33,643
Diluted weighted average common shares	33,389	34,089	33,638	34,339
Product
Revenue:
Total revenue	$ 221,540	$ 169,151	$ 631,998	$ 435,916
Cost of revenue:
Total cost of revenue	118,992	93,201	342,387	240,223
Services
Revenue:
Total revenue	7,635	7,543	21,949	20,828
Cost of revenue:
Total cost of revenue	$ 6,862	$ 6,981	$ 19,291	$ 19,560

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Consolidated Statements of Comprehensive Income
Net income	$ 40,283	$ 27,515	$ 126,087	$ 62,901
Other comprehensive loss:
Foreign currency translation adjustments	(3,690)	(949)	(7,561)	(1,769)
Amortization of actuarial net gain/(loss) and other adjustments from pension plan, net of tax	8	30	25	84
Total other comprehensive loss	(3,682)	(919)	(7,536)	(1,685)
Comprehensive income	$ 36,601	$ 26,596	$ 118,551	$ 61,216

- Definition

Amount, after deduction of tax, noncontrolling interests, dividends on preferred stock and participating securities; of income (loss) available to common shareholders.

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- Definition

Amount after tax and reclassification adjustments of other comprehensive income (loss).

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+ Details

Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 308,552	$ 294,923
Short-term Investments	33,576
Accounts receivable, net	173,893	104,410
Inventories, net	226,507	194,984
Prepaid expenses and other current assets	32,614	24,929
Total current assets	775,142	619,246
Property, plant and equipment, net	38,778	34,972
Operating lease assets	11,893	9,242
Finance lease assets, net	18,265	19,238
Long-term restricted cash	749	757
Deferred income taxes	28,372	35,454
Other assets	33,062	34,331
Total assets	906,261	753,240
Current liabilities:
Accounts payable	54,020	38,025
Accrued compensation	28,557	30,732
Warranty	8,482	6,424
Income taxes	540	887
Deferred revenue	101,169	60,454
Current portion of finance lease obligation	1,164	979
Other current liabilities	13,924	12,639
Total current liabilities	207,856	150,140
Long-term finance lease obligation	45,508	46,415
Long-term deferred revenue	21,420	7,982
Other long-term liabilities	16,587	9,744
Total liabilities	291,371	214,281
Commitments and contingencies (Note 17)
Stockholders' equity:
Common stock, $0.001 par value, 75,000 shares authorized; 32,937 shares issued and outstanding at September 30, 2022; 33,240 shares issued and outstanding at December 31, 2021	33	33
Additional paid-in capital	549,735	559,883
Retained earnings (accumulated deficit)	70,893	(22,722)
Accumulated other comprehensive (loss) income	(5,771)	1,765
Total stockholders' equity	614,890	538,959
Total liabilities and stockholders' equity	$ 906,261	$ 753,240

Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands	Sep. 30, 2022	Dec. 31, 2021
Consolidated Balance Sheets
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	75,000	75,000
Common stock, shares issued	32,937	33,240
Common stock, shares outstanding	32,937	33,240

Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive Income (Loss)	Total
Balance (in shares) at Dec. 31, 2020	33,633
Balance at Dec. 31, 2020	$ 34	$ 570,102	$ (91,969)	$ 3,435	$ 481,602
Increase (Decrease) in Stockholders' Equity
Net income			16,480		16,480
Foreign currency translation adjustments				(1,372)	(1,372)
Change in pension obligation				20	20
Exercise of stock options (in shares)	268
Exercise of stock options		2,512			2,512
Issuance of common shares on restricted stock units, net of shares withheld (in shares)	81
Issuance of common shares on restricted stock units, net of shares withheld		(2,354)			(2,354)
Stock-based compensation expense		2,407			2,407
Repurchase of common stock (in shares)	(303)
Repurchase of common stock		(5,468)	(6,167)		(11,635)
Balance (in shares) at Mar. 31, 2021	33,679
Balance at Mar. 31, 2021	$ 34	567,199	(81,656)	2,083	487,660
Balance (in shares) at Dec. 31, 2020	33,633
Balance at Dec. 31, 2020	$ 34	570,102	(91,969)	3,435	481,602
Increase (Decrease) in Stockholders' Equity
Net income					62,901
Foreign currency translation adjustments					(1,769)
Change in pension obligation					84
Balance (in shares) at Sep. 30, 2021	33,406
Balance at Sep. 30, 2021	$ 33	559,913	(50,017)	1,750	511,679
Balance (in shares) at Mar. 31, 2021	33,679
Balance at Mar. 31, 2021	$ 34	567,199	(81,656)	2,083	487,660
Increase (Decrease) in Stockholders' Equity
Net income			18,906		18,906
Foreign currency translation adjustments				552	552
Change in pension obligation				34	34
Exercise of stock options (in shares)	72
Exercise of stock options		563			563
Issuance of shares under Employee Stock Purchase Plan (in shares)	15
Issuance of shares under Employee Stock Purchase Plan		509			509
Issuance of common shares on restricted stock units, net of shares withheld (in shares)	214
Issuance of common shares on restricted stock units, net of shares withheld		(4,141)			(4,141)
Stock-based compensation expense		3,377			3,377
Repurchase of common stock (in shares)	(323)
Repurchase of common stock		(5,827)	(7,531)		(13,358)
Balance (in shares) at Jun. 30, 2021	33,657
Balance at Jun. 30, 2021	$ 34	561,680	(70,281)	2,669	494,102
Increase (Decrease) in Stockholders' Equity
Net income			27,515		27,515
Foreign currency translation adjustments				(949)	(949)
Change in pension obligation				30	30
Exercise of stock options (in shares)	34
Exercise of stock options		344			344
Issuance of common shares on restricted stock units, net of shares withheld (in shares)	6
Issuance of common shares on restricted stock units, net of shares withheld		(48)			(48)
Stock-based compensation expense		3,186			3,186
Repurchase of common stock (in shares)	(291)
Repurchase of common stock	$ (1)	(5,249)	(7,251)		(12,501)
Balance (in shares) at Sep. 30, 2021	33,406
Balance at Sep. 30, 2021	$ 33	559,913	(50,017)	1,750	511,679
Balance (in shares) at Dec. 31, 2021	33,240
Balance at Dec. 31, 2021	$ 33	559,883	(22,722)	1,765	538,959
Increase (Decrease) in Stockholders' Equity
Net income			41,614		41,614
Foreign currency translation adjustments				(1,186)	(1,186)
Change in pension obligation				9	9
Exercise of stock options (in shares)	41
Exercise of stock options		491			491
Issuance of common shares on restricted stock units, net of shares withheld (in shares)	67
Issuance of common shares on restricted stock units, net of shares withheld		(3,315)			(3,315)
Stock-based compensation expense		2,701			2,701
Repurchase of common stock (in shares)	(284)
Repurchase of common stock		(5,127)	(14,873)		(20,000)
Balance (in shares) at Mar. 31, 2022	33,064
Balance at Mar. 31, 2022	$ 33	554,633	4,019	588	559,273
Balance (in shares) at Dec. 31, 2021	33,240
Balance at Dec. 31, 2021	$ 33	559,883	(22,722)	1,765	538,959
Increase (Decrease) in Stockholders' Equity
Net income					126,087
Foreign currency translation adjustments					(7,561)
Change in pension obligation					25
Balance (in shares) at Sep. 30, 2022	32,937
Balance at Sep. 30, 2022	$ 33	549,735	70,893	(5,771)	614,890
Balance (in shares) at Mar. 31, 2022	33,064
Balance at Mar. 31, 2022	$ 33	554,633	4,019	588	559,273
Increase (Decrease) in Stockholders' Equity
Net income			44,189		44,189
Foreign currency translation adjustments				(2,685)	(2,685)
Change in pension obligation				8	8
Exercise of stock options (in shares)	25
Exercise of stock options		298			298
Issuance of shares under Employee Stock Purchase Plan (in shares)	15
Issuance of shares under Employee Stock Purchase Plan		711			711
Issuance of common shares on restricted stock units, net of shares withheld (in shares)	205
Issuance of common shares on restricted stock units, net of shares withheld		(5,896)			(5,896)
Stock-based compensation expense		3,527			3,527
Repurchase of common stock (in shares)	(215)
Repurchase of common stock		(3,872)	(8,626)		(12,498)
Balance (in shares) at Jun. 30, 2022	33,094
Balance at Jun. 30, 2022	$ 33	549,401	39,582	(2,089)	586,927
Increase (Decrease) in Stockholders' Equity
Net income			40,283		40,283
Foreign currency translation adjustments				(3,690)	(3,690)
Change in pension obligation				8	8
Exercise of stock options (in shares)	30
Exercise of stock options		367			367
Issuance of common shares on restricted stock units, net of shares withheld (in shares)	8
Issuance of common shares on restricted stock units, net of shares withheld		(70)			(70)
Stock-based compensation expense		3,562			3,562
Repurchase of common stock (in shares)	(195)
Repurchase of common stock		(3,525)	(8,972)		(12,497)
Balance (in shares) at Sep. 30, 2022	32,937
Balance at Sep. 30, 2022	$ 33	$ 549,735	$ 70,893	$ (5,771)	$ 614,890

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Cash flows from operating activities
Net income	$ 126,087	$ 62,901
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	8,614	7,993
Deferred income taxes	6,416	11,558
Stock-based compensation expense	9,790	8,970
Provision for excess and obsolete inventory	3,292	2,773
Changes in operating assets and liabilities:
Accounts receivable	(77,449)	8,133
Inventories	(49,699)	(39,595)
Prepaid expenses and other current assets	(4,861)	(4,879)
Accounts payable and other current liabilities	17,695	17,933
Deferred revenue	54,814	35,189
Income taxes	(274)	(24)
Other assets and liabilities	(1,202)	1,129
Net cash provided by operating activities	93,223	112,081
Cash flows from investing activities
Expenditures for property, plant and equipment and capitalized software	(6,876)	(5,701)
Purchase of short-term investments	(33,576)
Net cash used in investing activities	(40,452)	(5,701)
Cash flows from financing activities
Net settlement on restricted stock grants	(9,281)	(6,543)
Repurchase of common stock	(44,995)	(37,493)
Proceeds from Employee Stock Purchase Plan purchases	711	509
Principal payments on finance lease obligation	(728)	(562)
Proceeds from exercise of stock options	1,156	3,419
Net cash used in financing activities	(53,137)	(40,670)
Effect of exchange rate changes on cash and cash equivalents	13,987	1,899
Net increase in cash, cash equivalents and restricted cash	13,621	67,609
Cash, cash equivalents and restricted cash at beginning of period	295,680	204,232
Cash, cash equivalents and restricted cash at end of period	$ 309,301	$ 271,841

Nature of Business

9 Months Ended

Sep. 30, 2022

Nature of Business

Nature of Business

Note 1. Nature of Business

Axcelis Technologies, Inc. (“Axcelis” or the “Company”) was incorporated in Delaware in 1995 and is a producer of ion implantation equipment used in the fabrication of semiconductor chips in the United States, Europe and Asia. In addition, we provide extensive worldwide aftermarket service and support, including spare parts, equipment upgrades, used equipment and maintenance services to the semiconductor industry.

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments which are of a normal recurring nature and considered necessary for a fair presentation of these financial statements have been included. Operating results for the interim periods presented are not necessarily indicative of the results that may be expected for other interim periods or for the year as a whole.

The balance sheet at December 31, 2021 has been derived from the audited consolidated financial statements at that date but does not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in Axcelis Technologies, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2021.

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2022

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Note 2. Summary of Significant Accounting Policies

(a) Cash, Cash Equivalents and Short-term investments

Cash and cash equivalents consist of cash on hand and highly liquid investments with original maturities of ninety days or less. Cash equivalents consist primarily of money market funds, U.S. Government and Agency Securities and deposit accounts. Cash equivalents are carried on the balance sheet at fair market value. Short-term investments are highly liquid investments with original maturities of greater than 90 days but less than one year from date of purchase and are carried on the balance sheet at fair market value. Our short-term investments consist primarily of U.S. Government and Agency securities and are classified as held-to-maturity based on our positive intent and ability to hold the securities to maturity. Income related to these securities is recorded in interest income in the Consolidated Statements of Operations.

Stock-Based Compensation

9 Months Ended

Sep. 30, 2022

Stock-Based Compensation

Stock-Based Compensation

Note 3. Stock-Based Compensation

We maintain the Axcelis Technologies, Inc. 2012 Equity Incentive Plan, as amended (the “2012 Equity Plan”), an Internal Revenue Code Section 423 plan, which became effective on May 2, 2012, and permits the issuance of options, restricted stock, restricted stock units (“RSUs”) and performance awards to selected employees, directors and consultants of the Company.

The 2012 Equity Plan is more fully described in Note 13 to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2021.

We recognized stock-based compensation expense of $3.6 million and $3.2 million for the three-month periods ended September 30, 2022 and 2021, respectively. We recognized stock-based compensation expense of $9.8 million and $9.0 million for the nine-month periods ended September 30, 2022 and 2021, respectively. These amounts include compensation expense related to RSUs, non-qualified stock options and stock to be issued to participants under the 2020 Employee Stock Purchase Plan (the “2020 ESPP”).

In the three-month periods ended September 30, 2022 and 2021, we issued 38.0 thousand and 40.0 thousand shares of common stock, respectively, upon stock option exercises and vesting of RSUs. In the three-month periods ended

September 30, 2022 and 2021, we received proceeds of $0.4 million and $0.3 million, respectively, in connection with the exercise of stock options.

In the nine-month periods ended September 30, 2022 and 2021, we issued 0.4 million and 0.7 million shares of common stock, respectively, upon stock option exercises, purchases under the 2020 ESPP and vesting of RSUs. In the nine-month periods ended September 30, 2022 and 2021, we received proceeds of $1.9 million and $3.9 million, respectively, in connection with the exercise of stock options and purchases under the 2020 ESPP.

Leases

9 Months Ended

Sep. 30, 2022

Leases

Leases

Note 4. Leases

We have operating leases for office space, warehouse space, a manufacturing plant, computer and office equipment as well as vehicles used in our business operations. We have a finance lease as a result of the 2015 sale-leaseback of our corporate headquarters in Beverly, Massachusetts. All new agreements are reviewed to determine if they contain a lease component. A lease is a contract, or part of a contract, that conveys the right to control the use of identified property, plant or equipment over a period of time in exchange for consideration. We recognize the lease obligation on a discounted basis using the explicit or implicit discount rate stated within the agreement. We recognize a corresponding right-of-use asset, which is initially determined based upon the net present value of the associated liability and is adjusted for deferred costs and possible impairment, if any. For those lease agreements that do not indicate the applicable discount rate, we use our incremental borrowing rate. We have made the following policy elections: (i) operating leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet; (ii) we recognize lease expense for operating leases on a straight-line basis over the lease term; and (iii) we account for lease components and non-lease components that are fixed payments as one component. Some of our operating leases include one or more options to renew, with renewal terms that can extend the respective lease term one to five years. The exercise of lease renewal options is at our sole discretion. For lease extensions that are reasonably certain to occur, we have included these renewal periods in our calculation of the net present value of the lease obligation and related right-of-use asset. Certain leases also include options to purchase the leased property. The depreciable life of certain assets and leasehold improvements is limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. The amounts of operating and finance lease right-of-use assets and related lease obligations recorded within our consolidated balance sheets are as follows:


		September 30,		December 31,
Leases	Classification	2022		2021

Assets		(in thousands)
Operating leases	Operating lease assets	$	11,893	$	9,242
Finance lease	Finance lease assets *		18,265		19,238
Total leased assets		$	30,158	$	28,480
Liabilities
Current
Operating	Other current liabilities	$	5,071	$	4,716
Finance	Current portion of finance lease obligation		1,164		979
Noncurrent
Operating	Other long-term liabilities		6,810		4,357
Finance	Finance lease obligation		45,508		46,415
Total lease liabilities		$	58,553	$	56,467

*Finance lease assets are recorded net of accumulated depreciation of $49.4 million and includes $0.6 million of prepaid financing costs as of September 30, 2022. Finance lease assets are recorded net of accumulated depreciation of $48.6 million and includes $0.7 million of prepaid financing costs as of December 31, 2021.

All of our operating lease office locations support selling and servicing functions. Our Axcelis Asia Operations Center facility in South Korea brings production capability closer to our Asia-based customers. Operating lease expense

and depreciation and interest expense relating to our finance lease obligation are recognized within our consolidated statement of operations for the three and nine months ended September 30, 2022 and 2021 as follows:


		Three months ended				Nine months ended
		September 30,				September 30,
Lease cost	Classification	2022		2021		2022		2021

Operating lease cost		(in thousands)
Product / Services*	Cost of revenue	$	1,462	$	790	$	3,978	$	2,074
Research and development	Operating expenses		54		114		186		366
Sales and marketing*	Operating expenses		369		414		1,155		1,169
General and administrative*	Operating expenses		253		254		773		714
Total operating lease cost		$	2,138	$	1,572	$	6,092	$	4,323
Finance lease cost
Depreciation of leased assets	Cost of revenue, R&D, Sales and marketing and G&A	$	325	$	326	$	973	$	981
Interest on lease liabilities	Interest expense		1,245		1,269		3,754		3,822
Total finance lease cost		$	1,570	$	1,595	$	4,727	$	4,803

Total lease cost		$	3,708	$	3,167	$	10,819	$	9,126

* Product / services, sales and marketing and general and administrative expense also includes short-term lease and variable lease costs of approximately $0.4 million and $1.4 million for the three and nine months ended September 30, 2022, respectively, and includes short-term and variable lease costs of approximately $0.6 million and $1.4 million for the three and nine months ended September 30, 2021, respectively.

The lease of our corporate headquarters, shown below under finance leases, had an original lease term of 22 years, beginning in January 2015 and expiring in January 2037, with renewal options. All other locations are treated as operating leases, with lease terms ranging from one to ten years. The tables below reflect the minimum cash outflow regarding our current lease obligations as well as the weighted-average remaining lease term and weighted-average discount rates used in our calculation of our lease obligations and right-of-use assets as of September 30, 2022:


	Finance		Operating		Total
Maturity of Lease Liabilities	Leases		Leases		Leases

	(in thousands)
2022	$	1,498	$	2,193	$	3,691
2023		6,114		5,769		11,883
2024		6,252		2,641		8,893
2025		5,930		1,761		7,691
2026		6,008		1,404		7,412
Thereafter		67,715		758		68,473
Total lease payments	$	93,517	$	14,526	$	108,043
Less interest portion*		(46,845)		(2,645)		(49,490)
Finance lease and operating lease obligations	$	46,672	$	11,881	$	58,553

* Finance lease interest calculated using the implied interest rate; operating lease interest calculated using estimated corporate borrowing rate.


	September 30,
Lease term and discount rate	2022
Weighted-average remaining lease term (years):
Operating leases		3.2
Finance leases		14.3
Weighted-average discount rate:
Operating leases		4.5%
Finance leases		10.5%

Our cash outflows from our operating leases include rent expense and other charges associated with these leases. These cash flows are included within the operating activities section of our statement of cash flows. Our cash flows from our finance lease include both an interest component and a principal component. The table below shows our cash outflows, by lease type and related section of our statement of cash flows, as well as the non-cash amount capitalized on our balance sheet in relation to our operating lease right-of-use assets for the nine months ending September 30, 2022 and 2021, respectively:



	Nine months ended September 30,
Cash paid for amounts included in the measurement of lease liabilities	2022		2021

	(in thousands)
Operating cash outflows from operating leases	$	6,092	$	4,323
Operating cash outflows from finance leases		3,754		3,821
Financing cash outflows from finance leases		728		562
Operating lease assets obtained in exchange for operating lease liabilities		5,494		6,396
Finance lease assets obtained in exchange for new finance lease liabilities		—		—

Revenue

9 Months Ended

Sep. 30, 2022

Revenue

Revenue

Note 5. Revenue

To reflect the organization of our business operations, we divide revenue into two categories: revenue from sales of new systems and revenue arising from the sale of used systems, parts and labor to customers who own systems, which we refer to as “Aftermarket.”

Revenue by categories used by management are as follows:


	Three months ended				Nine months ended
	September 30,				September 30,
	2022		2021		2022		2021

	(in thousands)
Systems	$	171,092	$	126,166	$	488,243	$	307,295
Aftermarket		58,083		50,528		165,704		149,449
Total Revenue	$	229,175	$	176,694	$	653,947	$	456,744

We also consider revenue by geography. Revenue is allocated to geographic markets based upon the location to which our products are shipped and in which our services are performed. Revenue in our principal geographic markets is as follows:


	Three months ended				Nine months ended
	September 30,				September 30,
	2022		2021		2022		2021

	(in thousands)
North America	$	36,036	$	11,847	$	95,633	$	31,560
Asia Pacific		166,342		137,870		484,286		357,903
Europe		26,797		26,977		74,028		67,281
Total Revenue	$	229,175	$	176,694	$	653,947	$	456,744

Our system sales revenue transactions give rise to contract liabilities (in the case of pre-payments and the fair value of goods and services to be delivered after the system delivery, such as installation and certain warranty obligations).

Contract liabilities are as follows:


	September 30,		December 31,
	2022		2021

	(in thousands)
Contract liabilities	$	122,589	$	68,436

Contract liabilities are reflected as deferred revenue on the consolidated balance sheet and relate to payments invoiced or received in advance of completion of performance obligations under a contract. Contract liabilities are recognized as revenue upon the fulfillment of performance obligations.


	Three months ended				Nine months ended
	September 30,				September 30,
	2022		2021		2022		2021

	(in thousands)
Balance, beginning of the period	$	71,549	$	35,518	$	68,436	$	23,058
Deferral of revenue		70,706		38,867		108,472		55,011
Recognition of deferred revenue		(19,666)		(16,145)		(54,319)		(19,829)
Balance, end of the period	$	122,589	$	58,240	$	122,589	$	58,240

The majority of our system transactions have payment terms of 90% due upon shipment of the system and 10% due upon acceptance. Aftermarket transaction payment terms usually provide that payment is due either within 30 or 60 days after the service is provided or parts delivered.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI http://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
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-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Receivables and Allowances for Credit Losses

9 Months Ended

Sep. 30, 2022

Receivables and Allowances for Credit Losses

Receivables and Allowances for Credit Losses

Note 6. Receivables and Allowances for Credit Losses

All trade receivables are reported on the Consolidated Balance Sheets at their amortized cost adjusted for any write-offs and net of allowances for credit losses.

Axcelis maintains an allowance for credit losses, which represent an estimate of expected losses over the remaining contractual life of our receivables, considering current market conditions and estimates for supportable forecasts when appropriate. The estimate is a result of the Company’s ongoing assessments and evaluations of collectability, historical loss experience, and future expectations in estimating credit losses in our receivable portfolio. Axcelis uses historical loss experience rates and applies them to a related aging analysis while also considering customer and/or economic risk where appropriate. Determination of the proper amount of allowances requires management to exercise judgment about the timing, frequency and severity of credit losses that could materially affect the provision for credit losses and, as a result, net earnings. The allowance takes into consideration numerous quantitative and qualitative factors that include receivable type, historical loss experience, loss migration, delinquency trends, collection experience, current

economic conditions, trade restrictions, estimates for supportable forecasts, when appropriate, and credit risk characteristics.

Axcelis evaluates the credit risk of the customer when extending credit based on a combination of various financial and qualitative factors that may affect our customers’ ability to pay. These factors may include the customer’s financial condition, past payment experience, and credit bureau report, as well as the value of the underlying collateral.

Management performs detailed reviews of Axcelis’ receivables on a quarterly basis to assess the adequacy of the allowances and to determine if any impairment has occurred. Amounts determined to be uncollectable are charged directly against the allowances, while amounts recovered on previously written-off accounts increase the allowances. Changes to the allowances for credit losses are maintained through adjustments to the provision for credit losses, which are charged to current period earnings.

The following table shows changes of the allowances for credit losses related to trade receivables for the three and nine months ended September 30, 2022 and 2021, respectively:

Three months ended

Nine months ended

September 30,

2022

2021

2022

2021

(in thousands)

Balance, beginning of period

—

Provision for credit losses

—

Charge-offs

—

Recoveries

—

Balance, end of period

—

Computation of Net Earnings per Share

9 Months Ended

Sep. 30, 2022

Computation of Net Earnings per Share

Computation of Net Earnings per Share

Note 7. Computation of Net Earnings per Share

Basic earnings per share is computed by dividing income available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) for the period. The computation of diluted earnings per share is similar to basic earnings per share, except that the denominator is increased by the number of additional common shares that would have been outstanding if the potentially dilutive common shares issuable on exercise of stock options and vesting of RSUs had been issued, calculated using the treasury stock method.

The components of net earnings per share are as follows:


	Three months ended				Nine months ended
	September 30,				September 30,
	2022		2021		2022		2021

	(in thousands, except per share amounts)
Net income available to common stockholders	$	40,283	$	27,515	$	126,087	$	62,901
Weighted average common shares outstanding used in computing basic income per share		33,011		33,537		33,116		33,643
Incremental options and RSUs		378		552		522		696
Weighted average common shares used in computing diluted net income per share		33,389		34,089		33,638		34,339
Net income per share
Basic	$	1.22	$	0.82	$	3.81	$	1.87
Diluted	$	1.21	$	0.81	$	3.75	$	1.83

Diluted weighted average common shares outstanding does not include 5,046 and 347 common equivalent shares issuable with respect to outstanding equity awards for the three-month periods ended September 30, 2022 and 2021, respectively, or 6,692 and 413 common equivalent shares issuable with respect to outstanding equity awards for the nine-month periods ended September 30, 2022 and 2021, respectively, as their effect would have been anti-dilutive.

Accumulated Other Comprehensive (Loss) Income

9 Months Ended

Sep. 30, 2022

Accumulated Other Comprehensive (Loss) Income

Accumulated Other Comprehensive (Loss) Income

Note 8. Accumulated Other Comprehensive (Loss) Income

The following table presents the changes in accumulated other comprehensive (loss) income, net of tax, by component, for the nine months ended September 30, 2022:


	Foreign		Defined benefit
	currency		pension plan		Total

	(in thousands)
Balance at December 31, 2021	$	2,064	$	(299)	$	1,765
Other comprehensive loss and pension reclassification		(7,561)		25		(7,536)
Balance at September 30, 2022	$	(5,497)	$	(274)	$	(5,771)

Cash, cash equivalents and restricted cash

9 Months Ended

Sep. 30, 2022

Cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash

Note 9. Cash, cash equivalents and restricted cash

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets to the total of the amounts shown in the statement of cash flows:


	September 30,		December 31,
	2022			2021

	(in thousands)
Cash and cash equivalents	$	308,552	$	294,923
Long-term restricted cash		749		757
Total cash, cash equivalents and restricted cash	$	309,301	$	295,680

As of September 30, 2022, we had $0.8 million in restricted cash representing the total of (i) cash collateral for a $0.7 million letter of credit relating to workers’ compensation insurance and (ii) a $0.1 million deposit relating to customs activity.

Inventories, net

9 Months Ended

Sep. 30, 2022

Inventories, net

Inventories, net

Note 10. Inventories, net

The components of inventories are as follows:


	September 30,		December 31,
	2022		2021

	(in thousands)
Raw materials	$	165,568	$	133,784
Work in process		43,641		43,164
Finished goods (completed systems)		17,298		18,036
Inventories, net	$	226,507	$	194,984

When recorded, inventory reserves reduce the carrying value of inventories to their net realizable value. We establish inventory reserves when conditions exist that indicate inventory may be in excess of anticipated demand or is obsolete based upon assumptions about future demand for the Company’s products or market conditions. We regularly evaluate the ability to realize the value of inventories based on a combination of factors including the following: forecasted sales or usage, estimated product end of life dates, estimated current and future market value and new product introductions. Purchasing and usage alternatives are also explored to mitigate inventory exposure.

Product Warranty

9 Months Ended

Sep. 30, 2022

Product Warranty

Product Warranty

Note 11. Product Warranty

We generally offer a one-year warranty for all of our systems, the terms and conditions of which vary depending upon the product sold. For all systems sold, we accrue a liability for the estimated cost of standard warranty at the time of system shipment and defer the portion of systems revenue attributable to the fair value of non-standard warranty. Costs for non-standard warranty are expensed as incurred. Factors that affect our warranty liability include the number of installed units, historical and anticipated product failure rates, material usage and service labor costs. We periodically assess the adequacy of our recorded liability and adjust the amount as necessary.

The changes in our standard product warranty liability are as follows:


	Nine months ended
	September 30,
	2022		2021

	(in thousands)
Balance at January 1 (beginning of year)	$	6,924	$	4,612
Warranties issued during the period		7,454		5,277
Settlements made during the period		(4,633)		(3,099)
Changes in estimate of liability for pre-existing warranties during the period		(78)		(452)
Balance at September 30 (end of period)	$	9,667	$	6,338

Amount classified as current	$	8,482	$	5,741
Amount classified as long-term		1,185		597
Total warranty liability	$	9,667	$	6,338

Fair Value Measurements

9 Months Ended

Sep. 30, 2022

Fair Value Measurements

Fair Value Measurements

Note 12. Fair Value Measurements

Certain assets on our balance sheets are reported at their fair value. Fair value is defined as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

(a) Fair Value Hierarchy

The accounting guidance for fair value measurement requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is as follows:

Level 1 - applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2 - applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability, such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3 - applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

(b) Fair Value Measurements

Our money market funds and short-term investments with initial maturities of three months or less are included in cash and cash equivalents in the consolidated balance sheets. Other investments have a maturity of greater than three months but less than one year are included within short-term investments in the consolidated balance sheets.

The following table sets forth our assets by level within the fair value hierarchy:


	September 30, 2022
	Fair Value Measurements
	Level 1		Level 2		Level 3		Total

	(in thousands)
Assets
Cash equivalents and other short-term investments:
Cash equivalents (money market funds, U.S. Government Securities and Agency Investments)	$	272,667	$	—	$	—	$	272,667
Short-term investments (U.S. Government Securities and Agency Investments)		33,576		—		—		33,576
Total	$	306,243	$	—	$	—	$	306,243


	December 31, 2021
	Fair Value Measurements
	Level 1		Level 2		Level 3		Total

	(in thousands)
Assets
Cash equivalents:
Money market funds, U.S. Government Securities and Agency Investments	$	261,090	$	—	$	—	$	261,090

(c) Other Financial Instruments

The carrying amounts reflected in the consolidated balance sheets for accounts receivable, prepaid expenses and other current assets and non-current assets, restricted cash, accounts payable and accrued expenses approximate fair value due to their short-term maturities.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Financing Arrangements

9 Months Ended

Sep. 30, 2022

Financing Arrangements

Financing Arrangements

Note 13. Financing Arrangements

On January 30, 2015, we sold our corporate headquarters facility in Beverly, Massachusetts for $48.9 million. As part of the sale, we also entered into a 22-year lease agreement of our headquarters facility. This sale-leaseback is accounted for as a financing lease under generally accepted accounting principles and, as such, we have recorded a financing obligation of $46.7 million as of September 30, 2022. The associated lease payments include both an interest component and payment of principal, with the remaining liability being extinguished at the end of the original lease term. We posted a security deposit of $5.9 million in the form of an irrevocable letter of credit at the time of the closing. This letter of credit reduces our availability under our credit facility, as described in the next paragraph.

On July 31, 2020, we entered into a Senior Secured Credit Facilities Credit Agreement (the “Credit Agreement”) with Silicon Valley Bank, in its capacity as administrative agent and collateral agent for itself and as a lender, and such other banks and financial institutions or entities that from time to time join as lenders under the Credit Agreement. The Credit Agreement provides for a revolving credit facility in an aggregate principal amount not to exceed $40.0 million. Our obligations under the Credit Agreement are secured by a security interest, senior to any current and future debts and to any security interest, in all of our rights, title, and interest in, to and under substantially all of our assets, subject to limited exceptions, including permitted liens. The revolving credit facility terminates on July 31, 2023. As of September 30, 2022, we were in compliance with all covenant requirements of the Credit Agreement. As of such date, no borrowings had been made under the Credit Agreement, although a letter of credit for $5.9 million reduces the funds available for borrowing under the credit line. We entered into a First Amendment to the Credit Agreement with Silicon Valley Bank in March 2021 to (i) align the covenants with our stock repurchase program, and (ii) establish terms to transition from a Eurodollar based interest rate option to an interest rate benchmark using a secured overnight financing rate (known as “SOFR”) published by the Federal Reserve Bank of New York.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
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+ Details

Income Taxes

9 Months Ended

Sep. 30, 2022

Income Taxes

Income Taxes

Note 14. Income Taxes

Income tax expense was $4.7 million for the three months ended September 30, 2022, compared to $6.7 million for the three months ended September 30, 2021. The $2.0 million decrease was primarily due to the Foreign Derived Intangible Income (“FDII”) deduction on export sales. Income tax expense was $13.0 million during the nine months ended September 30, 2022, compared with $12.3 million for the nine months ended September 30, 2021. The $0.7 million increase was primarily due to a $63.9 million increase in pretax income offset by the FDII deduction on export sales.

The effective tax rate for the three and nine months ended September 30, 2022 was less than the U.S. statutory rate of 21% due to forecasted FDII, Federal research and development tax credits and a favorable discrete item related to equity compensation that reduces the annual tax rate. The effective tax rate for the three and nine months ended September 30, 2021 was less than the U.S. statutory rate of 21% due to favorable discrete items related to equity compensation in the period and Federal research and development tax credits that reduce the annual tax rate.

The deferred income taxes of $28.4 million and $35.5 million as of September 30, 2022 and December 31, 2021, respectively, reflect the net tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, as well as the tax effect of carryforwards. We have recorded a $9.3 million valuation allowance in the U.S. against certain tax credits and state net operating losses due to the uncertainty of their realization. Realization of our net deferred tax assets is dependent on future taxable income. We believe it is more likely than not that such assets will be realized; however, ultimate realization could be impacted by market conditions and other variables not known or anticipated at this time.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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+ Details

Concentration of Risk

9 Months Ended

Sep. 30, 2022

Concentration of Risk

Concentration of Risk

Note 15. Concentration of Risk

For the three months ended September 30, 2022, one customer accounted for 13.8% of total revenue. For the three months ended September 30, 2021, one customer accounted for 26.7% of total revenue.

For the nine months ended September 30, 2022, one customer accounted for 14.8% of total revenue. For the nine months ended September 30, 2021, two customers accounted for 18.5% and 14.1% of total revenue, respectively.

At September 30, 2022, one customer accounted for 13.2% of accounts receivable. At December 31, 2021, two customers accounted for 29.1% and 13.6% of accounts receivable, respectively.

Share Repurchase

9 Months Ended

Sep. 30, 2022

Share Repurchase

Share Repurchase

Note 16. Share Repurchase

In February 2022, our Board of Directors approved stock repurchases of up to $100 million of our common stock, beginning in March 2022. During the nine months ended September 30, 2022, we purchased 0.7 million shares at an average cost of $64.85 per share. The timing and actual number of shares repurchased under this program will depend on various factors including price, corporate and regulatory requirements, alternative investment opportunities and other market conditions.

Shares repurchased by us are accounted for when the transaction is settled. Shares repurchased are returned to the status of authorized but unissued shares. Accordingly, the repurchases are deducted from common stock for par value and from additional paid-in capital for the excess over par value. If additional paid-in capital has been exhausted, the excess over par value is deducted from retained earnings. Direct costs incurred to acquire the shares are included in the total cost of the shares.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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+ Details

Contingencies

9 Months Ended

Sep. 30, 2022

Contingencies

Contingencies

Note 17. Contingencies

(a) Litigation

We are from time to time a party to litigation that arises in the normal course of our business operations. We are not presently a party to any litigation that we believe might have a material adverse effect on our business operations.

(b) Indemnifications

Our system sales agreements typically include provisions under which we agree to take certain actions, provide certain remedies and defend our customers against third-party claims of intellectual property infringement under specified conditions and indemnify customers against any damage and costs awarded in connection with such claims. We have not incurred any material costs as a result of such indemnifications and have not accrued any liabilities related to such obligations in the accompanying consolidated financial statements.

Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2022

Summary of Significant Accounting Policies

Cash, Cash Equivalents and Short-term investments

(a) Cash, Cash Equivalents and Short-term investments

Leases (Tables)

9 Months Ended

Sep. 30, 2022

Leases

Schedule of operating and finance lease right-of-use assets and related lease obligations


		September 30,		December 31,
Leases	Classification	2022		2021

Assets		(in thousands)
Operating leases	Operating lease assets	$	11,893	$	9,242
Finance lease	Finance lease assets *		18,265		19,238
Total leased assets		$	30,158	$	28,480
Liabilities
Current
Operating	Other current liabilities	$	5,071	$	4,716
Finance	Current portion of finance lease obligation		1,164		979
Noncurrent
Operating	Other long-term liabilities		6,810		4,357
Finance	Finance lease obligation		45,508		46,415
Total lease liabilities		$	58,553	$	56,467

*Finance lease assets are recorded net of accumulated depreciation of $49.4 million and includes $0.6 million of prepaid financing costs as of September 30, 2022. Finance lease assets are recorded net of accumulated depreciation of $48.6 million and includes $0.7 million of prepaid financing costs as of December 31, 2021.

Schedule of lease costs


		Three months ended				Nine months ended
		September 30,				September 30,
Lease cost	Classification	2022		2021		2022		2021

Operating lease cost		(in thousands)
Product / Services*	Cost of revenue	$	1,462	$	790	$	3,978	$	2,074
Research and development	Operating expenses		54		114		186		366
Sales and marketing*	Operating expenses		369		414		1,155		1,169
General and administrative*	Operating expenses		253		254		773		714
Total operating lease cost		$	2,138	$	1,572	$	6,092	$	4,323
Finance lease cost
Depreciation of leased assets	Cost of revenue, R&D, Sales and marketing and G&A	$	325	$	326	$	973	$	981
Interest on lease liabilities	Interest expense		1,245		1,269		3,754		3,822
Total finance lease cost		$	1,570	$	1,595	$	4,727	$	4,803

Total lease cost		$	3,708	$	3,167	$	10,819	$	9,126

* Product / services, sales and marketing and general and administrative expense also includes short-term lease and variable lease costs of approximately $0.4 million and $1.4 million for the three and nine months ended September 30, 2022, respectively, and includes short-term and variable lease costs of approximately $0.6 million and $1.4 million for the three and nine months ended September 30, 2021, respectively.

Schedule of future minimum operating and finance leases


	Finance		Operating		Total
Maturity of Lease Liabilities	Leases		Leases		Leases

	(in thousands)
2022	$	1,498	$	2,193	$	3,691
2023		6,114		5,769		11,883
2024		6,252		2,641		8,893
2025		5,930		1,761		7,691
2026		6,008		1,404		7,412
Thereafter		67,715		758		68,473
Total lease payments	$	93,517	$	14,526	$	108,043
Less interest portion*		(46,845)		(2,645)		(49,490)
Finance lease and operating lease obligations	$	46,672	$	11,881	$	58,553

* Finance lease interest calculated using the implied interest rate; operating lease interest calculated using estimated corporate borrowing rate.

Schedule of weighted-average remaining lease term and discount rates


	September 30,
Lease term and discount rate	2022
Weighted-average remaining lease term (years):
Operating leases		3.2
Finance leases		14.3
Weighted-average discount rate:
Operating leases		4.5%
Finance leases		10.5%

Schedule of cash outflows by lease type



	Nine months ended September 30,
Cash paid for amounts included in the measurement of lease liabilities	2022		2021

	(in thousands)
Operating cash outflows from operating leases	$	6,092	$	4,323
Operating cash outflows from finance leases		3,754		3,821
Financing cash outflows from finance leases		728		562
Operating lease assets obtained in exchange for operating lease liabilities		5,494		6,396
Finance lease assets obtained in exchange for new finance lease liabilities		—		—

Revenue (Tables)

9 Months Ended

Sep. 30, 2022

Revenue

Schedule of revenue by discipline


	Three months ended				Nine months ended
	September 30,				September 30,
	2022		2021		2022		2021

	(in thousands)
Systems	$	171,092	$	126,166	$	488,243	$	307,295
Aftermarket		58,083		50,528		165,704		149,449
Total Revenue	$	229,175	$	176,694	$	653,947	$	456,744

Schedule of revenue by geographic markets


	Three months ended				Nine months ended
	September 30,				September 30,
	2022		2021		2022		2021

	(in thousands)
North America	$	36,036	$	11,847	$	95,633	$	31,560
Asia Pacific		166,342		137,870		484,286		357,903
Europe		26,797		26,977		74,028		67,281
Total Revenue	$	229,175	$	176,694	$	653,947	$	456,744

Schedule of Contract liabilities


	September 30,		December 31,
	2022		2021

	(in thousands)
Contract liabilities	$	122,589	$	68,436


	Three months ended				Nine months ended
	September 30,				September 30,
	2022		2021		2022		2021

	(in thousands)
Balance, beginning of the period	$	71,549	$	35,518	$	68,436	$	23,058
Deferral of revenue		70,706		38,867		108,472		55,011
Recognition of deferred revenue		(19,666)		(16,145)		(54,319)		(19,829)
Balance, end of the period	$	122,589	$	58,240	$	122,589	$	58,240

Receivables and Allowances for Credit Losses (Tables)

9 Months Ended

Sep. 30, 2022

Receivables and Allowances for Credit Losses

Schedule of allowances for credit losses related to trade receivables

Three months ended

Nine months ended

September 30,

2022

2021

2022

2021

(in thousands)

Balance, beginning of period

—

Provision for credit losses

—

Charge-offs

—

Recoveries

—

Balance, end of period

—

Computation of Net Earnings per Share (Tables)

9 Months Ended

Sep. 30, 2022

Computation of Net Earnings per Share

Schedule of components of net income per share


	Three months ended				Nine months ended
	September 30,				September 30,
	2022		2021		2022		2021

	(in thousands, except per share amounts)
Net income available to common stockholders	$	40,283	$	27,515	$	126,087	$	62,901
Weighted average common shares outstanding used in computing basic income per share		33,011		33,537		33,116		33,643
Incremental options and RSUs		378		552		522		696
Weighted average common shares used in computing diluted net income per share		33,389		34,089		33,638		34,339
Net income per share
Basic	$	1.22	$	0.82	$	3.81	$	1.87
Diluted	$	1.21	$	0.81	$	3.75	$	1.83

Accumulated Other Comprehensive (Loss) Income (Tables)

9 Months Ended

Sep. 30, 2022

Accumulated Other Comprehensive (Loss) Income

Schedule of changes in accumulated other comprehensive loss, net of tax


	Foreign		Defined benefit
	currency		pension plan		Total

	(in thousands)
Balance at December 31, 2021	$	2,064	$	(299)	$	1,765
Other comprehensive loss and pension reclassification		(7,561)		25		(7,536)
Balance at September 30, 2022	$	(5,497)	$	(274)	$	(5,771)

Cash, cash equivalents and restricted cash (Tables)

9 Months Ended

Sep. 30, 2022

Cash, cash equivalents and restricted cash

Schedule of reconciliation of cash, cash equivalents and restricted cash


	September 30,		December 31,
	2022			2021

	(in thousands)
Cash and cash equivalents	$	308,552	$	294,923
Long-term restricted cash		749		757
Total cash, cash equivalents and restricted cash	$	309,301	$	295,680

Inventories, net (Tables)

9 Months Ended

Sep. 30, 2022

Inventories, net

Schedule of components of inventories


	September 30,		December 31,
	2022		2021

	(in thousands)
Raw materials	$	165,568	$	133,784
Work in process		43,641		43,164
Finished goods (completed systems)		17,298		18,036
Inventories, net	$	226,507	$	194,984

Product Warranty (Tables)

9 Months Ended

Sep. 30, 2022

Product Warranty

Schedule of product warranty liability


	Nine months ended
	September 30,
	2022		2021

	(in thousands)
Balance at January 1 (beginning of year)	$	6,924	$	4,612
Warranties issued during the period		7,454		5,277
Settlements made during the period		(4,633)		(3,099)
Changes in estimate of liability for pre-existing warranties during the period		(78)		(452)
Balance at September 30 (end of period)	$	9,667	$	6,338

Amount classified as current	$	8,482	$	5,741
Amount classified as long-term		1,185		597
Total warranty liability	$	9,667	$	6,338

Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2022

Fair Value Measurements

Schedule of Company's assets and liabilities by level within the fair value hierarchy


	September 30, 2022
	Fair Value Measurements
	Level 1		Level 2		Level 3		Total

	(in thousands)
Assets
Cash equivalents and other short-term investments:
Cash equivalents (money market funds, U.S. Government Securities and Agency Investments)	$	272,667	$	—	$	—	$	272,667
Short-term investments (U.S. Government Securities and Agency Investments)		33,576		—		—		33,576
Total	$	306,243	$	—	$	—	$	306,243


	December 31, 2021
	Fair Value Measurements
	Level 1		Level 2		Level 3		Total

	(in thousands)
Assets
Cash equivalents:
Money market funds, U.S. Government Securities and Agency Investments	$	261,090	$	—	$	—	$	261,090

Stock-Based Compensation (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended						9 Months Ended
Stock-Based Compensation (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2022	Sep. 30, 2021
Stock-Based Compensation
Stock-based compensation expense		$ 3,600			$ 3,200			$ 9,800	$ 9,000
Proceeds from exercise of stock options								$ 1,156	$ 3,419
Common Stock
Stock-Based Compensation
Exercise of stock options (in shares)		30,000	25,000	41,000	34,000	72,000	268,000
Common Stock \| Employee Stock Purchase Plan
Stock-Based Compensation
Exercise of stock options (in shares)	40,000.0	38,000.0						400,000	700,000
Proceeds from exercise of stock options		$ 400			$ 300			$ 1,900	$ 3,900

Leases (Details)	9 Months Ended
Leases (Details)	Sep. 30, 2022
Lessee, Lease, Description [Line Items]
Option to extend	true
Minimum
Lessee, Lease, Description [Line Items]
Renewal term	1 year
Maximum
Lessee, Lease, Description [Line Items]
Renewal term	5 years

Leases - Operating and Finance Lease Right-of-use-assets and Related Lease Obligations (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Leases
Operating lease assets	$ 11,893	$ 9,242
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	Operating lease assets	Operating lease assets
Finance lease assets	$ 18,265	$ 19,238
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	Finance lease assets	Finance lease assets
Total leased assets	$ 30,158	$ 28,480
Operating liabilities current	$ 5,071	$ 4,716
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	Other Liabilities, Current	Other Liabilities, Current
Finance liabilities current	$ 1,164	$ 979
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List]	Finance liabilities current	Finance liabilities current
Operating liabilities noncurrent	$ 6,810	$ 4,357
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	Other Liabilities, Noncurrent	Other Liabilities, Noncurrent
Finance liabilities noncurrent	$ 45,508	$ 46,415
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	Finance liabilities noncurrent	Finance liabilities noncurrent
Total lease liabilities	$ 58,553	$ 56,467
Operating Lease, Liability, Statement of Financial Position [Extensible List]	Other Liabilities, Current, Other Liabilities, Noncurrent	Other Liabilities, Current, Other Liabilities, Noncurrent
Finance lease, accumulated depreciation	$ 49,400	$ 48,600
Prepaid financing costs	$ 600	$ 700

Leases - Lease Cost (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Leases - Lease Cost (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Lease cost
Total operating lease cost	$ 2,138	$ 1,572	$ 6,092	$ 4,323
Depreciation of leased assets	325	326	973	981
Interest on lease liabilities	1,245	1,269	3,754	3,822
Total finance lease cost	1,570	1,595	4,727	4,803
Total lease cost	3,708	3,167	10,819	9,126
Short-term lease and variable lease costs	400	600	1,400	1,400
Product / Services
Lease cost
Total operating lease cost	1,462	790	3,978	2,074
Research and development
Lease cost
Total operating lease cost	54	114	186	366
Sales and marketing*
Lease cost
Total operating lease cost	369	414	1,155	1,169
General and administrative*
Lease cost
Total operating lease cost	$ 253	$ 254	$ 773	$ 714

Leases - Future Minimum Cash Outflow and Weighted-average Remaining Lease Term and Discount Rate (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Future minimum lease payments finance lease
2022	$ 1,498
2023	6,114
2024	6,252
2025	5,930
2026	6,008
Thereafter	67,715
Total lease payments	93,517
Less interest portion	(46,845)
Finance lease obligations	46,672
Future minimum lease payments operating lease
2022	2,193
2023	5,769
2024	2,641
2025	1,761
2026	1,404
Thereafter	758
Total lease payments	14,526
Less interest portion	(2,645)
Operating lease obligations	11,881
Future minimum lease payments finance and operating lease
2022	3,691
2023	11,883
2024	8,893
2025	7,691
2026	7,412
Thereafter	68,473
Total lease payments	108,043
Less interest portion	(49,490)
Total lease liabilities	$ 58,553	$ 56,467
Lease term and discount rate
Operating leases -Weighted-average remaining lease term (in years)	3 years 2 months 12 days
Finance leases - Weighted-average remaining lease term (in years)	14 years 3 months 18 days
Operating leases - Weighted-average discount rate	4.50%
Finance leases - Weighted-average discount rate	10.50%
Finance lease term	22 years
Minimum
Lease term and discount rate
Operating lease term	1 year
Maximum
Lease term and discount rate
Operating lease term	10 years

Leases - Cash Flow by Lease Type (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Leases
Operating cash outflows from operating leases	$ 6,092	$ 4,323
Operating cash outflows from finance leases	3,754	3,821
Financing cash outflows from finance leases	728	562
Operating lease assets obtained in exchange for operating lease liabilities	$ 5,494	$ 6,396

Revenue (Details)	9 Months Ended
Revenue (Details)	Sep. 30, 2022
Systems
Disaggregation of Revenue
Payment upon shipment of tool, as a percent	90.00%
Payment upon installation, as a percent	10.00%
Aftermarket \| Minimum
Disaggregation of Revenue
Payment upon delivery of parts, period	30 days
Aftermarket \| Maximum
Disaggregation of Revenue
Payment upon delivery of parts, period	60 days

Revenue - Revenue by discipline & geographical areas (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Disaggregation of Revenue
Total Revenue	$ 229,175	$ 176,694	$ 653,947	$ 456,744
North America
Disaggregation of Revenue
Total Revenue	36,036	11,847	95,633	31,560
Asia Pacific
Disaggregation of Revenue
Total Revenue	166,342	137,870	484,286	357,903
Europe
Disaggregation of Revenue
Total Revenue	26,797	26,977	74,028	67,281
Systems
Disaggregation of Revenue
Total Revenue	171,092	126,166	488,243	307,295
Aftermarket
Disaggregation of Revenue
Total Revenue	$ 58,083	$ 50,528	$ 165,704	$ 149,449

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

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Revenue - Contract liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Jun. 30, 2022	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Dec. 31, 2020
Revenue
Contract liabilities	$ 122,589	$ 71,549	$ 68,436	$ 58,240	$ 35,518	$ 23,058

Revenue - Deferred revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Revenue
Balance, beginning of the period	$ 71,549	$ 35,518	$ 68,436	$ 23,058
Deferral of revenue	70,706	38,867	108,472	55,011
Recognition of deferred revenue	(19,666)	(16,145)	(54,319)	(19,829)
Balance, end of the period	$ 122,589	$ 58,240	$ 122,589	$ 58,240

Computation of Net Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2022	Sep. 30, 2021
Computation of Net Earnings per Share
Net income available to common stockholders	$ 40,283	$ 44,189	$ 41,614	$ 27,515	$ 18,906	$ 16,480	$ 126,087	$ 62,901
Weighted average common shares outstanding used in computing basic income per share	33,011			33,537			33,116	33,643
Incremental options and RSUs	378			552			522	696
Weighted average common shares used in computing diluted net income per share	33,389			34,089			33,638	34,339
Net income per share
Basic	$ 1.22			$ 0.82			$ 3.81	$ 1.87
Diluted	$ 1.21			$ 0.81			$ 3.75	$ 1.83
Anti-dilutive common equivalent shares excluded from calculation	5,046			347			6,692	413

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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- Definition

Amount, after deduction of tax, noncontrolling interests, dividends on preferred stock and participating securities; of income (loss) available to common shareholders.

+ References

+ Details

Accumulated Other Comprehensive (Loss) Income (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Changes in accumulated other comprehensive income, net of tax
Balance at December 31, 2021			$ 1,765
Other comprehensive income and pension reclassification	$ (3,682)	$ (919)	(7,536)	$ (1,685)
Balance at September 30, 2022	(5,771)		(5,771)
Foreign currency
Changes in accumulated other comprehensive income, net of tax
Balance at December 31, 2021			2,064
Other comprehensive income and pension reclassification			(7,561)
Balance at September 30, 2022	(5,497)		(5,497)
Defined benefit pension plans
Changes in accumulated other comprehensive income, net of tax
Balance at December 31, 2021			(299)
Other comprehensive income and pension reclassification			25
Balance at September 30, 2022	$ (274)		$ (274)

- Definition

Accumulated change in equity from transactions and other events and circumstances from non-owner sources, net of tax effect, at period end. Excludes Net Income (Loss), and accumulated changes in equity from transactions resulting from investments by owners and distributions to owners. Includes foreign currency translation items, certain pension adjustments, unrealized gains and losses on certain investments in debt and equity securities, other than temporary impairment (OTTI) losses related to factors other than credit losses on available-for-sale and held-to-maturity debt securities that an entity does not intend to sell and it is not more likely than not that the entity will be required to sell before recovery of the amortized cost basis, as well as changes in the fair value of derivatives related to the effective portion of a designated cash flow hedge.

+ References + Details

- Definition

Amount after tax and reclassification adjustments of other comprehensive income (loss).

+ References

+ Details

Cash, cash equivalents and restricted cash (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021	Sep. 30, 2021	Dec. 31, 2020
Cash and cash equivalents	$ 308,552	$ 294,923
Long-term restricted cash	749	757
Total cash, cash equivalents and restricted cash	309,301	$ 295,680	$ 271,841	$ 204,232
Letter of credit related to workers' compensation insurance	700
Deposit related to customs activity	100
Revolving credit facility
Restricted cash which relates to support of outstanding letters of credit	$ 800

Inventories, net (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Inventories, net
Raw materials	$ 165,568	$ 133,784
Work in process	43,641	43,164
Finished goods (completed systems)	17,298	18,036
Inventories, net	$ 226,507	$ 194,984

Product Warranty (Details) - USD ($) $ in Thousands	9 Months Ended
Product Warranty (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Product Warranty
Product warranty period	1 year
Changes in standard product warranty liability
Balance at January 1 (beginning of year)	$ 6,924	$ 4,612
Warranties issued during the period	7,454	5,277
Settlements made during the period	(4,633)	(3,099)
Changes in estimate of liability for pre-existing warranties during the period	(78)	(452)
Balance at September 30 (end of period)	9,667	6,338
Product warranty classification
Amount classified as current	8,482	5,741	$ 6,424
Amount classified as long-term	1,185	597
Total warranty liability	$ 9,667	$ 6,338	$ 6,924

Fair Value Measurements (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Fair Value Measurements
Short-term investments (money market funds, U.S. Government Securities and Agency Investments)	$ 33,576
Recurring \| Estimate of fair value measurement
Fair Value Measurements
Cash equivalents (money market funds, U.S. Government Securities and Agency Investments)	272,667
Recurring \| Money market funds, US Government Securities and Agency Investments \| Estimate of fair value measurement
Fair Value Measurements
Cash equivalents (money market funds, U.S. Government Securities and Agency Investments)		$ 261,090
Short-term investments (money market funds, U.S. Government Securities and Agency Investments)	33,576
Total	306,243
Recurring \| Level 1
Fair Value Measurements
Cash equivalents (money market funds, U.S. Government Securities and Agency Investments)	272,667
Recurring \| Level 1 \| Money market funds, US Government Securities and Agency Investments
Fair Value Measurements
Cash equivalents (money market funds, U.S. Government Securities and Agency Investments)		$ 261,090
Short-term investments (money market funds, U.S. Government Securities and Agency Investments)	33,576
Total	$ 306,243

Financing Arrangements (Details) - USD ($) $ in Thousands	Jan. 30, 2015	Sep. 30, 2022	Dec. 31, 2021	Jul. 31, 2020
Financing Arrangements
Long-term finance lease obligation		$ 45,508	$ 46,415
Sale leaseback obligation
Financing Arrangements
Long-term finance lease obligation		46,700
Security deposit		5,900
Beverly Property Owner LLC \| Building
Financing Arrangements
Proceeds from sale of corporate headquarters	$ 48,900
Lease term	22 years
Silicon Valley Bank \| Revolving credit facility
Financing Arrangements
Maximum borrowing capacity under the credit facility				$ 40,000
Borrowings amount		0
Silicon Valley Bank \| Revolving credit facility \| Letter of credit
Financing Arrangements
Letter of credit		$ 5,900

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Valuation allowance
Income tax expense	$ 4,726	$ 6,698	$ 13,002	$ 12,261
Increase (decrease) in income tax expense	(2,000)		700
Increase in pretax income			63,900
Deferred tax assets, net	28,372		28,372		$ 35,454
Deferred tax assets valuation allowance	$ 9,300		$ 9,300
Maximum
Valuation allowance
Statutory income tax rate (as a percent)	21.00%	21.00%	21.00%	21.00%

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Concentration of Risk (Details) - customer	3 Months Ended		9 Months Ended		12 Months Ended
Concentration of Risk (Details) - customer	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Total revenue \| Customer concentration risk
Concentration of Risk
Number of customers	1	1	1	2
Total revenue \| Customer concentration risk \| First customer
Concentration of Risk
Percentage of concentration risk	13.80%	26.70%	14.80%	18.50%
Total revenue \| Customer concentration risk \| Second customer
Concentration of Risk
Percentage of concentration risk				14.10%
Accounts receivable \| Credit concentration risk
Concentration of Risk
Number of customers			1		2
Accounts receivable \| Credit concentration risk \| First customer
Concentration of Risk
Percentage of concentration risk			13.20%		29.10%
Accounts receivable \| Credit concentration risk \| Second customer
Concentration of Risk
Percentage of concentration risk					13.60%

Share Repurchase (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	9 Months Ended
	Sep. 30, 2022	Feb. 28, 2022
Share Repurchase
Share repurchase program common stock authorized amount		$ 100
Number of shares repurchased	0.7
Average cost	$ 64.85