VECO Q2 Earnings Beat Estimates on Strong AI-Driven Demand

Robust AI-driven demand, strong order activity, deeper customer engagement and continued execution of its manufacturing expansion strategy supported revenue growth.

Over the last four quarters, VECO has surpassed the consensus estimate for EPS two times, while beating twice, with an average surprise of 14.55%.

Veeco's Margins Face Pressure From Higher Costs

GAAP gross profit increased to $74.8 million from $68.7 million in the year-ago quarter. However, GAAP gross margin contracted 270 basis points year over year to 38.7%, while non-GAAP gross margin declined 310 basis points to 39.5%. 

Research and development expenses increased 5.6% year over year to $33.3 million, while selling, general and administrative expenses rose 15.4% to $27.6 million. As a result, GAAP operating income slipped to $11.9 million from $12.4 million, whereas non-GAAP operating income remained flat at $23.1 million.

Veeco's Balance Sheet

Veeco ended the quarter with cash and cash equivalents of $214.5 million compared with $163.5 million at the end of 2025. Short-term investments declined sequentially to $214.9 million from $226.8 million. 

Accounts receivable increased sequentially to $148.4 million from $110.7 million, inventories rose to $292.5 million from $275.3 million and contract liabilities increased to $123.7 million from $74.2 million. Long-term debt edged up sequentially to $226.5 million from $226 million.

VECO Issues Q3 and 2026 Outlook

For the third quarter of 2026, Veeco expects revenues between $200 million and $220 million. It projects GAAP earnings in the range of 20-34 cents per share and non-GAAP earnings between 35 cents and 49 cents per share. 

For 2026, the company expects revenues between $780 million and $810 million. It forecasts GAAP earnings in the range of 78 cents to $1.02 per share and non-GAAP earnings between $1.36 and $1.61 per share.

Zacks Rank & Stocks to Consider

VECO currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Zacks Computer and Technology sector are Lumentum LITE, Applied Materials AMAT and Analog Devices ADI, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of Lumentum have surged 123% year to date. The Zacks Consensus Estimate for LITE’s fiscal 2026 earnings is pegged at $8.19 per share, up by 5 cents over the past 30 days, indicating an increase of 297.6% year over year.

Shares of Applied Materials have jumped 107.9% year to date. The Zacks Consensus Estimate for AMAT’s fiscal 2026 earnings is pegged at $12.14 per share, up by 3 cents over the past 30 days, indicating a rise of 28.9% year over year.

Analog Devices shares have surged 39.2% year to date. The Zacks Consensus Estimate for ADI’s fiscal 2026 earnings is pegged at $12.42 per share, up by 10 cents over the past 30 days, indicating an increase of 33.9% year over year.

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