ACM Research, Inc. (ACMR) Earnings

Management highlights

### Strategic Transformation & Product Innovation - The company is successfully transforming into a broader multi-product semiconductor equipment company, with 36% year-over-year revenue growth led by the ECP and Advanced Packaging segments, both up over 150% year-over-year. - AI-driven demand for advanced chips is creating new opportunities for advanced packaging, as traditional wafer-level approaches reach practical limits. ACM invested early in horizontal panel-level plating and other panel-level wet process technologies over five years ago, and has now received orders for its panel-level horizontal plating tool: one production order from an existing mainland China customer, and one evaluation order from a new Asian customer, supporting both 510x515 mm and 310x310 mm panel sizes. ACM expects to be among the first companies to deliver this system to multiple customers across regions. - The proprietary hot SPM cleaning technology delivers industry-leading performance (<15 particles at 15-nano particle size) with reduced maintenance and higher uptime; more than 20 SPM tools are expected to be shipped by the end of 2026. - The Ultra-C Tahoe platform has been expanded to add wet etching and wafer reclaim capabilities, integrating multiple previously standalone processes into one tool, and has been adopted by multiple leading semiconductor manufacturers. - The new track and PECVD platforms are progressing through customer qualification, with both on track to complete production qualification by the end of 2026. ACM's proprietary one-chamber, three-chuck PECVD architecture has performed well in customer testing. ### Operational & Infrastructure Progress - First half 2026 total orders increased 105% year-over-year, with broad growth across all product categories and heavier weighting toward new products. ACM Shanghai will release backlog data as of September 30 in early October. - The first Ningbo (China) production building is in volume production, and the second building is scheduled to open by the end of 2026. Together, the two facilities will support up to $3 billion in annual output, matching the strong current order book. - The new Oregon (U.S.) demo center with a world-class cleanroom is on track to open by the end of 2026, to support customer engagement and demo activities for global clients. ACM expects to have more than 20 tools installed at customer sites outside mainland China by the end of 2026 across 10 customers in 5 countries. - Customer concentration has improved significantly: in H1 2026, only one customer accounted for over 10% of revenue (12.7% of total revenue), down from three customers representing 49.9% of total revenue in H1 2025, indicating a broadened customer base. ### Financial Position - ACM strengthened its balance sheet, ending Q2 with over $1.0 billion in net cash globally, including approximately $300 million in the U.S. following a $150 million registered direct offering completed in May 2026. This financial position supports global expansion and new product development.

Guidance

- Full year 2026 revenue guidance was adjusted to a range of $1.125 billion to $1.175 billion, up from the prior range of $1.08 billion to $1.175 billion. The new guidance implies 25% to 30% year-over-year revenue growth. - Full year 2026 shipment growth is expected to outpace revenue growth, consistent with prior expectations. - The long-term total annual revenue target of $4 billion remains unchanged, with $2.5 billion expected from mainland China and $1.5 billion from global markets. The updated total addressable market for ACM is $22 billion, a $1 billion increase from prior estimates based on latest industry data. - The long-term target gross margin range remains 42% to 48%. - For 2026, R&D expense is expected to be 16% to 18% of revenue, sales and marketing expense is expected to be ~8% of revenue, and G&A expense is expected to be 5% to 6% of revenue. The effective tax rate is expected to be 10% to 12%. - Full year 2026 capital expenditures are expected to be approximately $175 million, unchanged from prior guidance. - Management indicated 2027 is shaping up to be another good growth year, as existing backlog will flow into next year and new product platforms (track, PECVD, panel-level plating) are expected to begin contributing meaningful revenue.

Segment performance

1. Single wafer cleaning, Tahoe, and semi-critical cleaning: Revenue was $133.0 million, down 14.2% year-over-year, representing 45.4% of total Q2 2026 revenue. The segment had minimal contribution from newer SPM products in the quarter, with revenue recognition expected to follow shipments in later quarters. 2. ECP, furnace, and other technologies: Revenue was $128.5 million, up 167.7% year-over-year, representing 43.9% of total Q2 2026 revenue. Growth was driven by strong momentum in both front-end and back-end plating tools. 3. Advanced packaging (excluding ECP, including service and parts): Revenue was $31.4 million, up 153.3% year-over-year, representing 10.7% of total Q2 2026 revenue. Total Q2 2026 revenue was $292.9 million, up 36% year-over-year. Gross margin was 46.0%, operating margin was 19.2%, and the company ended the quarter with $1.0 billion in net cash.

Risks & headwinds

- Global component supply is tight, with extended lead times for many key parts sourced from international suppliers, which could impact shipment and revenue timelines in the second half of 2026. - Actual future results may differ materially from management's forward-looking statements due to inherent market and operational risks, as detailed in the company's SEC filings. - The timing and magnitude of future growth depend on semiconductor customers' overall capital spending trajectories and the company's ability to gain market share against established competitors in new product categories. - While component prices have seen minimal increases to date, ongoing supply tightness could create future margin pressure, though management does not currently expect a significant impact to full year 2026 gross margins.

Analyst Q&A

• Q: What geographies currently see the largest shipments outside mainland China, and which offer the best growth opportunities as ACM scales globally? What are the planned uses for the $300 million in U.S. cash holdings, including for inorganic expansion? /

  A: Singapore is currently seeing strong shipments for both front-end and packaging tools, with ongoing customer activity in the U.S. The new Oregon demo center opening later this year will expand demo capabilities for global customers and drive new interest. The cash is earmarked to support the long-term target of $1.5 billion in annual revenue from outside China, funding sales and R&D expansion across the U.S., Taiwan, Singapore, Asia, and Europe, to meet global demand for ACM's differentiated technologies. Management did not share details of specific inorganic plans.

• Q: What is the potential revenue contribution of ACM's products per 10,000 units of monthly 2.5D advanced packaging wafer capacity, and how is ACM positioned to gain market share in China's ongoing 2.5D packaging capacity build-out? /

  A: Cleaning typically accounts for 5-7% of total fab spending for mature fabs, and is growing to as much as 10% for advanced fabs as cleaning requirements become more stringent. Copper plating is already a $1.5 billion market for ACM, with growing demand from HBM stacking and panel-level packaging, where ACM is a pioneer in horizontal plating technology. Strong double-digit growth in ACM's plating and advanced packaging product segments already reflects rising demand for 2.5D/3D packaging, and ACM's broad product portfolio (cleaning, coating, developing, etching, stripping) is well positioned to capture share in China's ongoing capacity expansion.

• Q: Will component shortages and price increases impact gross margins, and does ACM plan to add manufacturing capacity outside mainland China as international orders grow? /

  A: While component lead times have extended, there have been minimal price increases from key suppliers so far. ACM stocked up on raw materials at the end of 2025, switched some sourcing to local suppliers where possible, and does not expect any significant impact to 2026 gross margins, which remain within the 42-48% target range. ACM already has manufacturing capability in Korea that currently produces tools for the U.S., Taiwan, and Singapore markets. If international revenue grows further, adding additional manufacturing capacity outside China is under active consideration, and the current U.S. cash balance provides sufficient funding for expansion with no near-term need for additional equity from ACM Shanghai.

• Q: Is there any update on the planned Hong Kong listing of ACM Shanghai? /

  A: There is no new update to share at this time. The company remains committed to the previously announced plan, and will provide more information at a later date.