Semiconductor production equipment provider Amtech Systems (NASDAQ: ASYS) reported revenue ahead of Wall Street’s expectations in Q2 CY2025, but sales fell by 26.9% year on year to $19.56 million. On the other hand, next quarter’s revenue guidance of $18 million was less impressive, coming in 1.4% below analysts’ estimates. Its non-GAAP profit of $0.06 per share was significantly above analysts’ consensus estimates.

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Company Overview

Focusing on the silicon carbide and power semiconductor sectors, Amtech Systems (NASDAQ: ASYS) produces the machinery and related chemicals needed for manufacturing semiconductors.

Revenue Growth

A company’s long-term sales performance is one signal of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Unfortunately, Amtech’s 3.5% annualized revenue growth over the last five years was sluggish. This was below our standard for the semiconductor sector and is a poor baseline for our analysis. Semiconductors are a cyclical industry, and long-term investors should be prepared for periods of high growth followed by periods of revenue contractions.

We at StockStory place the most emphasis on long-term growth, but within semiconductors, a half-decade historical view may miss new demand cycles or industry trends like AI. Amtech’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 15.8% annually.

This quarter, Amtech’s revenue fell by 26.9% year on year to $19.56 million but beat Wall Street’s estimates by 15%. Despite the beat, the drop in sales could mean that the current downcycle is deepening. Company management is currently guiding for a 25.3% year-on-year decline in sales next quarter.

We also like to judge companies based on their projected revenue growth, but not enough Wall Street analysts cover the company for it to have reliable consensus estimates.

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Product Demand & Outstanding Inventory

Days Inventory Outstanding (DIO) is an important metric for chipmakers, as it reflects a business’ capital intensity and the cyclical nature of semiconductor supply and demand. In a tight supply environment, inventories tend to be stable, allowing chipmakers to exert pricing power. Steadily increasing DIO can be a warning sign that demand is weak, and if inventories continue to rise, the company may have to downsize production.

This quarter, Amtech’s DIO came in at 171, which is 18 days above its five-year average, suggesting that the company’s inventory has grown to higher levels than we’ve seen in the past.

Key Takeaways from Amtech’s Q2 Results

We were impressed by how significantly Amtech blew past analysts’ EPS expectations this quarter. We were also excited its revenue outperformed Wall Street’s estimates by a wide margin. On the other hand, its revenue guidance for next quarter slightly missed. Overall, this print was mixed but still had some key positives amid low expectations. The stock traded up 7.1% to $4.80 immediately following the results.

So should you invest in Amtech right now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.