Thank you, operator, and good day, everyone. I would like to welcome all of you to Nova's first quarter 2026 financial results conference call.

With us on the line today are Gaby Waisman, President and CEO, and Guy Kizner, CFO. Before we begin, I would like to remind our listeners that certain information provided on this call may contain forward-looking statements, and the safe harbor statement outlined in today's earnings release also pertains to this call.

If you have not received a copy of the release, please view it in the Investor Relations section of the company's website. Gaby will begin the call with a business update, followed by Guy with an overview of the financials.

We will then open the call for the question-and-answer session. I will now turn the call over to Gaby Waisman, Nova's President and CEO.

Gaby, please go ahead.

Thank you, Miri, and thank you all for joining us today. I will start the call by summarizing our first quarter performance highlights.

Following my commentary, Guy will review the quarterly financial results in detail. Nova delivered another record quarter, exceeding guidance across financial and operational metrics.

First quarter revenue reached $235.3 million, with record profitability. This performance was supported by record revenue from memory devices, driven by robust demand for advanced DRAM, alongside strong momentum in advanced packaging and gate-all-around applications.

We achieved multiple customer wins and record sales in several of our product lines. Our focus on meaningful partnerships with our customers, operational excellence, differentiated solutions, and investment in innovative technology are key building blocks in our continuous outstanding results.

The latest Gartner market share report further attests to the resilience of our long-term strategy, showing an additional 400 basis points share gain in thin film and critical dimension metrology. This is the second consecutive year of significant share growth, cementing Nova's position as this market's second largest vendor.

AI investments remain the fundamental driver of industry growth, with a shift towards agentic AI models increasing computing and memory requirements. This is accelerating capacity expansion across logic, memory, and advanced packaging, while also introducing greater manufacturing complexity and yield challenges, driving higher process control and metrology intensity.

These dynamics reinforce the relevance of Nova's portfolio and positions us well to support production ramps, yield improvement, and demanding time-to-market requirements. Capacity expansion across all segments and tighter alignment with our customers' planning are improving our visibility and supporting our momentum.

Our customers understand the importance of early engagement, and we are working closely with them to plan capacity and inventory levels to meet the demand. As part of this planning, we are making strides in expanding our global manufacturing footprint with the construction of the new facility in Asia.

This investment is designed to increase our production capacity, optimize our cost structure, and improve load balancing across regions, while positioning us closer to key customers and supply chain partners. The new facility is expected to become operational toward the end of 2026.

Now, let me turn to some business highlights for the quarter. In memory, we delivered record revenue this quarter, driven by strong demand for advanced DRAM applications, which accounted for approximately two-thirds of our memory business.

This momentum was reflected in record sales of our METRION platform, including repeat purchases by a leading memory customer for both advanced 3D NAND and DRAM devices, as the platform continues to move from initial adoption into broader deployment. Our front-end chemical metrology solution, Nova ANCO-TEL, also achieved record sales, and we gained additional market share at a leading memory customer in Asia, with multiple tool deliveries expected over the course of the year.

At the same time, capacity expansions supported continued demand for our XPS and dimensional metrology solutions. Looking ahead, we also see robust HBM-related bookings for our Nova WMC and SEMI DFX stand-alone platforms.

In logic, increasing market demand and ramp-up of advanced device production led to record revenue from Nova's integrated metrology product line, driven by gate-all-around and new customer penetrations in mature nodes and advanced packaging. A great indicator of our strength in the logic segment is the recent recognition we received from Intel, when Nova was awarded the Intel EPIC Supplier Award, the highest honor in Intel's global supply chain.

Out of thousands of suppliers Intel works with, Nova is included in a select list of companies to receive this award in 2026. This recognition underscores the scale and depth of our engagement and collaboration with Intel.

In advanced packaging, the strong demand drove yet another record quarterly revenues. Our portfolio is well-matched with the evolving demands in 2.5 and 3D packaging production.

One such example is the Nova WMC that addresses the critical issue of increased warpage and non-uniform surfaces introduced by new advanced packaging schemes that bring forth new material and structural challenges. AI and broader scaling limitations are among the drivers of hybrid bonding processes.

Adoption is progressing faster than expected in several advanced device segments. Because the process depends on direct copper-to-copper interfaces and ultrafine-pitch interconnects, it is highly metrology-intensive, requiring tight control of surface planarity, alignment accuracy, and interface integrity throughout multiple process steps.

Our portfolio positions us well to support this transition. This has already translated into strong positioning of our optical and chemical metrology platforms across top-tier manufacturers.

Turning to services, we delivered record service revenue this quarter, marking the 13th consecutive quarter of sequential growth. This consistent performance reflects the expanding scale and increasing utilization of our installed base and the deep operational engagement our teams have with customers worldwide.

To summarize my part, Nova delivered an all-around record quarter, highlighting the value of our tools and services. Customer schedule considerations are expected to have a positive impact on the first half of the year, and we expect the second half to run higher.

We are setting the stage and solidifying our investments in technology and infrastructure towards the anticipated industry growth. Now, for some more details on our financials, let me hand over the call to Guy.

Thanks, Gaby. Good day, everyone.

I will begin by reviewing our financial achievements for the first quarter of this year, and then provide guidance for the second quarter. We delivered record revenue of $235.3 million in the first quarter of 2026, exceeding the high end of our guidance range.

Revenue grew 6% quarter-over-quarter and 10% year-over-year, demonstrating the strength of customer demand and the momentum of our product portfolio. Revenue mix was approximately 66% from logic and foundry customers and 34% from memory customers, reflecting a broad-based contribution across our end markets.

We also continue to benefit from a diversified customer and geographic footprint, with four customers and five geographic regions each contributing more than 10% of total product revenue. In the first quarter, blended gross margins were 57.7% on a GAAP basis and 59.4% on a non-GAAP basis, in the upper end of our target model range of 57% to 60%.

The strong gross margins performance was driven by a favorable product mix alongside continued growth in our services business, which contributed positively to overall gross margin performance. Operating expenses in the first quarter totaled $64.9 million on a GAAP basis and $59.4 million on a non-GAAP basis.

We continue to invest strategically in R&D and go-to-market capabilities to accelerate innovation, support our expanding product roadmap, and capture future growth opportunities. Operating margins in the first quarter reached 30% on a GAAP basis and 34% on a non-GAAP basis, exceeding the upper end of our target model range of 28% to 33%.

This performance highlights the strength of our operating model and our continued focus on profitable growth. The effective tax rate in the first quarter was approximately 17%, modestly above our guidance, primarily reflecting the geographic and entity mix of income in the quarter.

We expect these dynamic to normalize as the year progresses. Earning per share in the first quarter on a GAAP basis were $2.04 per diluted share, and earning per share on a non-GAAP basis were $2.33 per diluted share, exceeding the high end of our first quarter guidance and driven by a record quarterly performance.

Next, I would like to share the details of our guidance for the second quarter of 2026. We currently expect revenue for the quarter to be between $245 million and $255 million.

GAAP earning per diluted share to range from $2.10 to $2.24. Non-GAAP earning per diluted share to range from $2.34 to $2.48.

At the midpoint of our second quarter 2026 estimates, we anticipate the following: gross margins of approximately 57% on a GAAP basis and approximately 59% on a non-GAAP basis; operating expenses on a GAAP basis to increase to approximately $72 million; operating expenses on a non-GAAP basis to increase to approximately $66 million; financial income on a non-GAAP basis is expected to be approximately $16 million; effective tax rate is expected to be approximately 15%. As we conclude, we are pleased with our strong start to 2026, delivering record revenue and record profitability for the quarter.

The continued momentum across our business reflects healthy customer demand, the value of our product portfolio, and disciplined execution across the organization. Looking ahead, we remain focused on investing in innovation, supporting our customers' evolving needs, and driving sustainable long-term growth while continuing to deliver strong financial results.

With that, we will be pleased to take your questions. Operator?

Hi, thanks for taking my questions. This is Elizabeth for Atif.

I guess my first question is, Gaby, in your prepared remarks, you talk about you had multiple customers winning in several products lines. I was wondering if you could elaborate a little bit on that.

Is it more on memory or foundry logic customers, and is it driven mostly by new products or really overall strength across the portfolio? Thanks.

Thank you so much, Elizabeth, for the question. It's across logic and memory and across several of our product lines.

I believe I mentioned they are chemical metrology solutions, and I also indicated the fact that we have a broader adoption of our inline SIMS, the METRION solution. We see some wins across our product portfolio and definitely across segments.

Got it. Then on the share gain perspective this year, are you expecting similar outperformance compared versus last two years?

Where do you see the most share gain opportunities this year? Is it more from front end or packaging side?

In terms of the share gain, I indicated the fact that based on the Gartner report recently published, we grew about, 400 basis points in, 2025 compared to 2024, and this is the second consecutive year, of, growth, making us the second largest vendor in this, space. We definitely aim to continue and drive market share.

This is a primary objective that we have [unclear] value that we, offer to our [unclear] and, we we look at, all segments. Advanced packaging is definitely one of them.

We have, good traction, with advanced packaging customers, across the board, top-tier customers as well as growth in the Chinese advanced packaging, realm. We also see some, initial, good traction, and adoption in, hybrid in hybrid bonding, also with, top-tier, customers and, a higher metrology intensity there, which gives us, which, gives us good opportunity, to grow our market share as a result of the, metrology challenges such as, flatness or interconnect, yield.

We we see good opportunities across the board, and definitely advanced packaging in particular is a is a growth area for us.

Great. Thanks, Gaby.

Hi, thanks so much for taking my question. To start, could you give us your sense of where you think Nova's growth could end up for the full year, maybe relative to WFE and maybe in context with some of the systems revenue guides and full-year WFE guides that some of your peers have given?

Very strong memory mix this quarter. How do you expect the mix between foundry logic and memory to kind of look for this year for you, relative to prior years?

Thank you.

Thank you, Michael, for the question. In terms of WFE, the way we read the market today, we expect WFE to reach mid-teens growth, and this is higher than what we were looking at back in February.

We are expecting to outperform this number. The growth is driven by both logic, memory, advanced packaging, and within memory, of course, it's primarily DRAM.

We did give a target, as part of our strategic plan, to reach $1 billion in revenue by 2027, and we are on track, of course, to reach this number. As we are not providing guidance beyond that, but we're definitely on track.

In terms of memory versus logic, we saw a growth in the memory share this quarter compared to last year, and I expect memory to become more dominant this year compared to the last one on the backdrop of investments in advanced DRAM.

Great. Thank you.

For my follow-up, I just want to ask about gross margins. Nice strength there in the first half of this year, the upper end of your target.

What were the drivers kind of led to you being able to kind of sustain at this 59% level? Do you think staying at these levels is possible through the second half, just what are the puts and takes there?

Thank you very much.

Our target model, as I mentioned, is 57% to 60%. Currently, based on the business dynamic and obviously based on the first half results, we see gross margins for 2026 will be within the same rate that we are giving the guidance for the first half of the year.

I would say this will be sustainable during the year.

Thank you.

Thank you for letting me ask a question. I want to follow up on the WFE growth benchmark for this year.

As mid-teens is a little bit lower than what the process tool companies have talked about this year, cuz they're talking about growth well into the 20s. Some of the drivers for WFE this year are just greenfield DRAM and 3-nanometer logic, where I perceive the process control intensity to be a little bit lower than 2-nanometer, where the process control intensity is quite high.

Just how should we think about your ability to outperform WFE in what can be perceived as a little bit of a challenging year for process control? Thank you.

Thank you, Shane, for the question. It's too early to call how process control specifically will look like this year, but Nova capitalizes of growth vectors of both process and process control, which is a factor in driving growth.

In process, for example, where our integrated products are embedded in dimensional, as well as chemical metrology that are correlative to the growth in the process sector. Process control, where our dimensional metrology, such as our stand-alone products, are well positions, and obviously material metrology portfolio plays, and also the lab-to-fab growing factor in terms of adoption, where we address emerging critical applications for advanced nodes.

All in all, whether it's going to be the mid-teens or a bit higher numbers, this is continuously updated, as over the last few months. We do expect to outperform, but it's too early to say how process control looks like versus process.

As I mentioned, we tap into both.

Understood. That's very clear.

For my follow-up, we're seeing a broadening of leading-edge logic investment with one of the players you actually mentioned in your prepared remarks talking a lot more about increasing process control intensity in line inspection, but we're also seeing just a lot more investment in 3-nanometer. Just how are you looking at the dynamics right now in leading-edge logic just given the breadth of players expanding, but maybe a little bit more investment on N-plus-one?

Thank you.

Thank you for that. Yes, we are well positioned across all gate-all-around players, and we're very, of course, honored to take part of their growth and providing them support on process control.

We continue to invest in R&D in order to maintain our differentiation and provide value as we did in the past. We are seeing a growing investment in areas such as 3-nanometer.

Obviously, the metrology intensity in the gate-all-around is higher, but we do tap into the growth of those advanced FinFET technologies as well, and obviously that would intensify once investment shifts or continues to grow on the gate-all-around as well.

Thank you very much.

Hey, guys. Thanks for taking the questions.

I guess first, maybe could you give us an update on where lead times stand today and how we should think about your visibility, both in terms of kind of customer orders and how those customer conversations are going, or those extending into kind of 2027, 2028 at this point? Thanks.

Thank you, Matthew. First, we do have improved visibility towards next year.

Customers are definitely planning further ahead, and we're working closely with them to, I would say, plot capacity and inventory levels. We do see some pull-ins, by the way, driving the first half higher than originally forecasted, as you've seen from our guidance.

In some cases, we are already receiving orders and planning the 2027 deliveries. Our lead times are still shorter than some of our peers, but we do have higher visibility, as I mentioned before, and more confidence in our annual performance.

I would also say that in terms of timing of the deliveries, this is definitely driven by the customers based on their demand structure.

Got you. That's helpful.

Then for a follow-up on the supply side, given this robust demand backdrop, how are you thinking about that capacity today? Are any constraints arising on your side?

If we're in kind of a $180 billion-plus WFE world next year, is that something you can support and continue outgrowing the market? Thanks.

I did indicate the fact that we're launching a new production center in Asia that is going to be operational towards the end of this year. This is part of our answer to the growing demand, making sure that we have the right capacity to support our customers.

We see, I would say, some pressure on the supply chain, and we're mitigating that by working with a few suppliers in order to have the agility and flexibility to support the demand. We're also seeing, by the way, some cost pressure at the supplier level, mainly tied to the higher chip prices and other factors, but we have been able to manage and mitigate by applying active cost management and leveraging long-term relationships, and the bottom line and the most important is that we are managing suppliers to meet demand.

All right.

Thanks, guys.

Hi, thanks for taking my question. Maybe the first one, Gaby, can you talk a little bit about your positioning in X-ray technology?

We are hearing from your peers, there seems to be expanding opportunities for X-ray. There are things like CD measurement as well as things like a void detection for hybrid bonding.

We know Nova is a leader in X-ray, especially XPS. What's your view on the latest, let's say, market landscape in X-ray?

How does Nova view those opportunities we're hearing? How do you plan to capture those opportunities?

Thanks.

Thank you, Charles, for the question. There are multiple challenges and inflection points at both the front end and in advanced packaging for X-ray applications, and there's also a broad spectrum of technologies that can address these challenges.

Of course, X-ray is one of them. We believe that X-ray could play out in a very significant role in addressing those challenges.

We have a strategy that taps into hybrid metrology. This is something that was at our cornerstone of the strategy that we have for years now, and we do have a broad portfolio, both optical and X-ray, both homegrown.

We have engaged in collaboration with the customers on those aspects or those challenges. As an example, we published several papers, one with Samsung on hybrid OCD plus Raman plus machine learning, with IBM on hybrid OCD with X-ray and machine learning.

We also see emerging XPS and material metrology in other spheres, both in the front end, as I mentioned, including advanced packaging. We are also seeing emerging XPS and material metrology competition, and we have it from both a local vendor in China as well as other potential growing competition in years to come.

We are investing in our roadmap to broaden our competitive advantage and provide value to our customers in order to maintain our dominant position in this space.

Thanks, Gaby. Can you talk about your China expectations for this year?

I recall last time you talk about maybe flat to slightly up, but has anything changed? How you view your China growth this year?

Thank you.

China is a significant part of our business and also from the overall WFE spending. As a result of advanced nodes growth, China's share of our revenue is expected to decrease, as we've already seen last year compared to 2024.

In the long term, we expect China to stabilize in the range of 25% to 30% of our business. We see also an increase in demand in China for packaging with a multitude of new customer engagements around advanced packaging and high-bandwidth memory.

China is also a very competitive market, as and we focus on ensuring and reassuring our customers with offering the best-of-breed products and the best possible value and cost of ownership as a differentiating factor. We are encouraged to see some potential growth in China this year.

There is some positive momentum in the business in China compared to last quarter.

Thank you. Appreciate that.

Yeah. Hi, thanks for taking my question.

The first one I have is, you're seeing your logic customers sort of put their roadmap together. How are you thinking about the $500 million gate-all-around revenue target?

What do you think happens to the gate-all-around revenues next year?

Thank you, Vedvati. We're on track for the forecasted $500 million, the cumulative gate-all-around revenue that we provided, and we are very well positioned with all gate-all-around manufacturers across the portfolio.

We do see growth in gate-all-around investments in 2027 compared to this year as well.

Understood. Also on the similar lines, what are you thinking about advanced packaging growth this year or into the second half versus the first half this year?

I would say that advanced packaging for Nova is edging towards the mid-20s of our product revenue this quarter, with the majority coming from logic. Looking forward, we also see healthy high-bandwidth memory bookings.

For the year in general, we see similar levels of growth in advanced packaging to what our peers have already mentioned.

Understood. Thank you.

Again,

Hi, this is Trip Smith on for Tom O'Malley. Thank you for the question today.

Just wanted to step back to gross margins. Gross margins are coming down sequentially in the guide in your range.

Just curious the drivers there and why a bit of a step-down.

We guided the gross margin for the second quarter for non-GAAP for 59%. Usually when we are guiding, it's plus-minus 1%, it's within the same magnitude, I would say.

Okay. Thank you.

Then just as a follow-up, I was curious about the timeline around hybrid bonding. You guys have talked about it being a driver there, just curious what you're seeing in that market and any color there would be great.

Thank you.

We're very encouraged by the traction that we see in hybrid bonding. We have already a good positioning with the top-tier customers.

We see a higher metrology intensity in hybrid bonding. I indicated the fact that we see challenges such as flatness, such as CMP uniformity within wafer and within die, warpage, edge roll-off, interconnect yield, and a multitude of challenges that are emerging.

Obviously, this is providing a higher intensity, and on top of the advanced packaging, which already seen incremental metrology steps compared to the past. We do see some pull-ins for hybrid bonding with some customers, especially memory.

There's definitely an opportunity for us to continue and tap into this part of advanced packaging.

Thank you.

Thank you, operator, and thank you all for joining our call today.