Good day, ladies and gentlemen. Thank you for standing by. Welcome to the ACM Research Fiscal Fourth Quarter and Fiscal Year 2024 Earnings Conference Call. Currently all participants are in a listen-only mode. Later we will conduct a question-and-answer session, instructions will follow at that time. As a reminder we are recording today's call. If you have any objections you may disconnect at this time. Now -- I will now turn the call to Mr. Steven Pelayo, Managing Director of The Blueshirt Group. Steven, please go ahead.

Great. Good day, everyone. Thank you for joining us to discuss fourth quarter and fiscal year 2024 results, which we released before the U.S. market opened today. The release is available on our website, as well as from Newswire services. There is also a supplemental slide deck posted to the investor section of our website that we will reference during our prepared remarks. On the call with me today are our CEO David Wang, our CFO Mark McKechnie, and Lisa Feng, our CFO of our operating subsidiary ACM Shanghai. Before we continue, please turn to slide two. Let me remind you that remarks made during this call may include predictions, estimates, or other information that might be considered forward-looking. These forward-looking statements represent ACM's current judgment for the future. However, they are subject to risks and uncertainties that could cause actual results to differ materially. Those risks are described under Risk Factors and elsewhere in ACM's filings with the Securities and Exchange Commission. Please do not place undue reliance on these forward-looking statements, which reflect ACM's opinions only as of the date of this call. ACM is not obliged to update you on any revisions to these forward-looking statements. Certain of the financial results that we provide on this call will be on a non-GAAP basis, which excludes stock-based compensation and an unrealized gain and loss on short-term investments. For our GAAP results and reconciliations between GAAP and non-GAAP amounts, you should refer to our earnings release, which is posted on the IR section of our website and the slides 14 and 15. Also, unless otherwise noted, the following figures refer to the fourth-quarter and full-year of 2024 in comparisons are with the fourth-quarter and full-year of 2023. With that, I'll now turn the call over to David Wang. David?

Thanks, Steven. Hello, everyone, and welcome to ACM Research fourth quarter and fiscal year 2024 earnings conference call. Before I review the results, I will address recent regulatory update from U.S. government. On December 2nd, the U.S. Department of Commerce added a 140 company to its Entity List, two of our subsidiary ACM Shanghai and ACM Korea and other entity under their structure were added to the Entity List. As we have noted, we are one of many that were added and we are not notified of any specific wrongdoing. To be clear, ACM Research, Inc., the U.S. company, we were founded in California in 1998, it is our subsidiary that we are added to the Entity List and announced ACM Research, Inc. Move on regarding the operation of ACM Shanghai in Mainland China, the new regulation will make it difficult, if not impossible, to ACM Shanghai to obtain components from the U.S. On that note, we have been working to localize our supply chain for some time. Events of the past few years, including the U.S. restrictions of 2022 have made it even more important for ACM Shanghai to localize in the supply chain. Thus, we have reduced our U.S. source components to just a small subset. And with our status on Entity List, we are working quickly to complete the transition. Bottom line, we remain committed to support our customer and complying with all global regulations. We think the impact to their -- to our production is manageable and we do not expect a significant interruption of our business. Regarding our global customer, outside of Mainland China, the new Department of Commerce rule mainly restricted U.S. export to ACM Shanghai and ACM Korea. They do not directly affect U.S. company buying two [automation] (ph). We are therefore confident…

Thank you, David. Good day, everyone. Please turn to slide 11. Unless I know it otherwise I'll refer to non-GAAP financial measures, which excludes stock-based compensation, unrealized gain/loss on short-term investments. Reconciliation of these non-GAAP measures to comparable GAAP measures is included in our earnings release. Also, unless otherwise noted, the following figures refer to the fourth quarter and full-year of 2024, comparisons are with the fourth quarter and full-year of 2023. I'll now provide financial highlights. Revenue was $223.5 million for the fourth quarter, up 31.2%. For the full-year 2024, revenue was $782.1 million, up 40.2%. Revenue for single-wafer cleaning, Tahoe and semi-critical cleaning was $155.2 million, up 26.9%. For the full-year 2024, this category grew by 43.3%. Revenue for ECP-fronted packaging, furnace and other technologies was $51.7 million, up 60.9%. For the full year 2024, this category grew by 46.2%, and revenue for advanced packaging, excluding HCP services and spares was $16.6 million, up 4.2%. For the full year 2024, this category grew by 3.3%. Total shipments were $264 million for the fourth quarter versus $140 million in Q4 of 2023. For the full-year 2024, shipments were $973 million, up 63.1%. Gross margin was 49.8% for the fourth quarter versus 46.8%. For the full-year 2024, gross margin was 50.4% versus 49.8% in 2023. We have updated our long-term business model to a gross margin target range of 42% to 48% versus the prior range of 40% to 45%. We do expect our gross margin to vary from period to period due to a variety of factors such as sales volume, product mix and currency impacts. Operating expenses were $58.4 million for the fourth quarter, up 34%. For the full year 2024, operating expenses were $193.4 million, up 25.2%. Revenue grew faster than OpEx for the year, demonstrating a…

[Operator Instructions] And our first question coming from the line of Charles Shi with Needham & Company. Your line is now open.

Hello. Yes, just wanted…

Hi, Charles. Good morning.

Good morning.

Yes, good morning. The line cut up a little bit. Just want to make sure it's my turn. So maybe the first question that you guys reiterated fiscal ‘25 revenue outlook. It's the same outlook you provided in January, low point -- at the low-end, up 9% year-on-year growth, at the high-end 21% year-on-year growth. Can you provide a little bit of color on what goes into the assumptions to the low-end versus the high-end, and what are the scenarios? I think the press release, you did mention that various spending scenarios by your customers this year baked into the range of the guidance. I want to get a little bit more color on that. Thanks.

Okay, Charles. Actually, this prediction of the revenue is real based on the last year our shipment which is some of them were record revenue this year. Obviously, we can see the customer PO, customer -- their expansion plan, probably just a moment I can say about Q2-Q3, and there is still some Q4, we cannot see that, right? So that's the -- that's why really from the -- in early time of the year, we give the -- this low-end and high-end projection, right? So cover of the detail assumption there. I cannot elaborate too much detail, but anyway, there's a range we put there. So maybe the time go through Q2, or looking for Q4, and that moment made more clear in Q4 we can readjust to our revenue projection. So that's a typical process. We do that every year.

Got it. And maybe a quick follow-up. Sounds like you're saying you have good visibility at least through the third quarter. This year, it's only like Q4 a little bit unclear at this point. Is that correct?

Yes. I think there some Q3 was still -- maybe add more, right, this moment still early year of the year, but definitely, we see the PO Q3. But Q4 was still, I said, not clear, right? So that will be waiting, say maybe Q2 timeline or end of the Q2, we can see that more clearly in the Q4 timeline.

Yes, Charles. And that's pretty normal visibility at this time of the year. We go through our year-end planning process and then come back early in the year and kind of test that. And of course, we took a look at it before we reported here on the quarter. So it's pretty standard visibility going into the year. As David noted, it's based on the POs that we have in hand. It's based on also kind of the forecasted POs that we still would probably get as we move through the year and then the timing of some of the customer acceptances from first tools last year, yes.

Basically averaging our manufacturing time is about six months right now, five to six. So that will be the right part of the projection for the -- looking there two quarter, right? Yes.

Yes. Got it. The other question I think usually before Chinese New Year, there's a little bit of a -- I would call, information black hole about the outlook for the new year, but now we are coming out of that and especially in light of the recent export control by the U.S. and obviously a few of your customers were added to Entity List. And it's getting a little bit hard to predict what would be the impact of export control, because we did see YMTC, which was added in ‘22, it came back to your 10% customer list, but there is another customer [Indiscernible] 2024, 10% customer list that got recently added. So maybe we can get a little bit sense based on what you're seeing right now, the export control rules, do they have an impact, positive or negative, on your customers' spending plan in 2025 and any sort of movement you're seeing at a little bit of micro-level, customer-to-customer level, if anything you can provide, that would be great? Thank you.

Well, I mean, this is a very broad question, real customer is different, right? And I want to say definitely some customers get an impact, right, because they put on Entity List. And some customer, we still see their expansion. So it's really hard to give you the general description, right? At this moment, we're also working with the customer to figure out how much impact -- we're still on the process to access and evaluation this kind of impact.

Got it. So maybe the last question, looks like the plating furnace product-line, you have three segments and you're reporting that particular segment has done pretty well and probably growing even faster than the wet clean product-line. I think you just mentioned plating, you become a leading supplier in China and especially for the front-end, I was kind of curious like, what do you see the market-share of plating and especially in the front-end and versus packaging. Can you give a little bit color on that front-end versus back-end for plating and where the share is and where do you think the trend is going for ACM? Thank you.

Yes. I think our market-share is about 30%, 30% to 35%. And it actually both in the front and back-end, right, it's almost like the same. So, we're still in the one-third, 35% -- 30% to 35% of the market-share in China.

Got it. Thank you.

Okay. Thank you, Charles.

Thanks, Charles.

Thank you. [Operator Instructions] Our next question coming from the line of Mark Miller with The Benchmark Company. Your line is now open.

Once again, congratulations on a very nice quarter. I was just wondering a number of equipment firms -- semi-equipment firms are projecting strong growth in their AP-related sales for 2025. What are you thinking about in terms of the AP sales you're expecting this year?

Oh, the advanced packaging. You're talking about that…

Yes, yes.

Okay. Well, yes, I think we do see the advanced packaging growing. And, obviously, all this kind of a 2.5D and the 3D in the proposal is one thing. And there are certain other, I want to say, advanced packaging going on here. So we see that expansion basically. And I think this year probably will be better than last year in terms of advanced packaging.

Yes, Mark, one thing I'd point out, it's a little tricky, because some of our ECP group includes both the front-end and the back-end packaging, right? So and then our advanced packaging group is everything, but the ECPs. So it's -- when -- at some point, we'll -- we can give some more detail when that becomes a bigger percentage of overall revenue, but it's -- at this point, it's hard to kind of see that our back-end packaging group.

Also I want to add to that is -- Mark, is also the panel packaging is still the play, right? So, we do have three products in the market. We see that will start contributing to our revenue in 2025 too. So that's another new field or new part of the technology we work on.

Okay. I was just wondering if you could give us some sort of estimate how your sales breakdown related to, say, memory, logic and electric vehicles, what percent of your sales are related to each of those three areas?

Yes. Mark, it's tough. We don't generally break that out. I think you can look at our 10% customers and kind of take a guess, right? So we've got four of them that were a little over 50% of our business. And so -- yeah, we generally don't look at it by those end-markets like that and we haven't broken them out. We get that request though so we could look into perhaps updating you on that in the future. But at this point, we don't have the detailed breakdown.

Okay. You said that four customers accounted for roughly 50% of your -- or over 50% of your business. Is that correct?

I think that's right. Yes, it was over 52% for the four customers. Yes.

Thank you.

Yes.

Thank you. [Operator Instructions] And I see there are no further questions in the queue at this time. I will now turn it back to Mr. David Wang for any closing remarks.

Okay. Thank you, operator, and thank you all for participating on today's call and for your support. Before we close, Steven is going to mention our upcoming Investor relation events. Steven, please.

Great. Thanks, David. Before we conclude, I just want to give everyone a quick reminder on our upcoming investor conferences. On March 17, we will present at the 37th Annual Roth Conference in Dana Point, California. Attendance at the conference is by invitation only. For interested investors, please contact your respective sales representative to register and schedule one-on-one meetings with the management team. With that, this concludes the call and you may now disconnect. Take care.