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Axcelis Technologies Inc.

11/06/2025 | Press release | Distributed by Public on 11/06/2025 14:37

Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.

Certain statements within "Management's Discussion and Analysis of Financial Condition and Results of Operations" are forward-looking statements that involve risks and uncertainties, including relating to obtaining applicable regulatory and stockholder approvals, satisfying other closing conditions to the proposed transaction, the expected tax treatment of the proposed transaction, the expected timing of the proposed transaction and the integration of the businesses and the expected benefits, cost savings, accretion, synergies and growth to result therefrom. Words such as may, will, should, would, anticipates, expects, intends, plans, believes, seeks, estimates and similar expressions identify such forward-looking statements. The forward-looking statements contained herein are based on current expectations and entail various risks and uncertainties that could cause actual results to differ materially from those expressed in such forward-looking statements. Factors that might cause such a difference include, among other things, failure to obtain applicable regulatory or stockholder approvals in a timely manner or otherwise; failure to satisfy other closing conditions to the proposed transaction or to complete the proposed transaction on anticipated terms and timing; negative effects of the announcement of the proposed transaction; risks that the businesses will not be integrated successfully or that the combined company will not realize expected benefits, cost savings, accretion, synergies and/or growth, or that such benefits may take longer to realize or may be more costly to achieve than expected; the risk that disruptions from the proposed transaction will harm business plans and operations; risks relating to unanticipated costs of integration; significant transaction and/or integration costs, or difficulties in connection with the proposed transaction and/or unknown or inestimable liabilities; restrictions during the pendency of the proposed transaction that may impact the ability to pursue certain business opportunities or strategic transactions; potential litigation associated with the proposed transaction; the potential impact of the announcement or consummation of the proposed transaction on the Company's, Veeco's or the combined company's relationships with suppliers, customers, employees and regulators; and demand for the combined company's products. Actual results may differ materially from those projected in such statements due to various factors, including but not limited to: economic, political and social conditions in the countries in which the Company and Veeco, their respective customers and suppliers operate; disruption to the Company's and Veeco's respective manufacturing facilities or other operations, or the operations of Company's and Veeco's respective customers and suppliers, due to natural catastrophic events, health epidemics or terrorism; ongoing changes in the technology industry, and the semiconductor industry in particular, including future growth rates, pricing trends in end-markets, or changes in customer capital spending patterns; the Company's, Veeco's and the combined company's ability to timely develop new technologies and products that successfully anticipate or address changes in the semiconductor industry; the Company's, Veeco's and the combined company's ability to maintain their respective technology advantage and protect their respective proprietary rights; the Company's, Veeco's and the combined company's ability to compete with new products introduced by their respective competitors; the Company's, Veeco's and the combined company's ability or the ability of their respective customers to obtain U.S. export control licenses for the sale of certain products or provision of certain services to customers in China, those set forth under "Liquidity and Capital Resources" below and under "Risk Factors" in Part I, Item 1A to our 2024 Form 10-K, which discussion is incorporated herein by reference. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis only as of the date hereof. We assume no obligation to update these forward-looking statements to reflect actual results or changes in factors or assumptions affecting forward-looking statements, except as may be required by law.

Overview

We are primarily a producer of ion implantation equipment used in the fabrication of semiconductor chips in the United States, Europe, and Asia. In addition, we provide extensive worldwide aftermarket service and support, including spare parts, equipment upgrades and maintenance services to the semiconductor industry. Our product development and manufacturing activities currently occur primarily in the United States and South Korea. Our equipment and service products are highly technical and are sold through a direct sales force in the United States, Europe, and Asia. Consolidation and partnering within the semiconductor manufacturing industry has resulted in a small number of customers representing a substantial portion of our business. Our ten largest customers accounted for 53.7% of total revenue for the nine months ended September 30, 2025.

Sales of our systems in the first nine months of 2025 were down compared to the same period in the prior year, as customers have moderated the pace of investments into mature process node technologies. The overall mature process segment represented 93% of our shipped systems revenue, with 1% of shipments to advanced logic and 6% of shipments to

dynamic random-access memory ("DRAM") applications. Of the mature process segment, power device shipments comprised 55% of total systems revenue with the general mature segment representing 38%, which includes image sensor applications.

For the nine months ended September 30, 2025, the geopolitical environment surrounding trade and tariffs did not have a meaningful impact on our financial results. It is difficult to predict the exact timing and magnitude of the tariffs, the duration for which the tariffs will be in place, and the impact the tariffs will have on our customers and suppliers. We continue to develop plans to reduce the potential impact of these tariffs by leveraging our global supply chain and manufacturing footprint.

The U.S. Department of Commerce's Bureau of Industry and Security ("BIS") issued an interim final rule (the "Affiliates Rule"), effective September 29, 2025. We continue to evaluate this rule and its potential impact on our business, but based on our preliminary review, we currently do not anticipate it to have a material impact to our China-based revenues.

On September 30, 2025, the Company, Victory Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company ("Merger Sub"), and Veeco Instruments Inc., a Delaware corporation ("Veeco"), entered into an Agreement and Plan of Merger (the "Merger Agreement"). Pursuant to the Merger Agreement, and subject to the satisfaction or waiver of the conditions specified therein, Merger Sub shall be merged with and into Veeco (the "Merger"), with Veeco surviving as a wholly-owned subsidiary of the Company.

Critical Accounting Estimates

Management's discussion and analysis of our financial condition and results of operations included herein and in our 2024 Form 10-K are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates and assumptions. Management's estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Management has not identified any need to make any material change in, and has not changed, any of our critical accounting estimates and judgments as described in "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our 2024 Form 10-K.

Results of Operations

The following table sets forth our results of operations as a percentage of total revenue:


	Three months ended				Nine months ended
	September 30,				September 30,
	2025		2024		2025		2024
Revenue:
Product	94.2	%	96.2	%	94.5	%	96.1	%
Services	5.8		3.8		5.5		3.9
Total revenue	100.0		100.0		100.0		100.0
Cost of revenue:
Product	52.5		53.2		50.3		52.1
Services	6.0		4.0		5.6		3.7
Total cost of revenue	58.5		57.2		55.9		55.8
Gross profit	41.5		42.8		44.1		44.2
Operating expenses:
Research and development	11.5		10.3		13.1		10.2
Sales and marketing	7.4		6.6		7.7		6.7
General and administrative	10.9		7.7		9.5		6.9
Total operating expenses	29.8		24.6		30.3		23.8
Income from operations	11.7		18.2		13.8		20.4
Other income (expense):
Interest income	2.6		2.6		2.8		2.4
Interest expense	(0.6)		(0.5)		(0.7)		(0.5)
Other, net	0.5		1.3		0.4		0.2
Total other income	2.5		3.4		2.5		2.1
Income before income taxes	14.2		21.6		16.3		22.5
Income tax provision	1.9		2.6		2.0		2.7
Net income	12.3	%	19.0	%	14.3	%	19.8	%

Revenue

The following table sets forth our product and services revenue:


		Three months ended						Period-to-Period				Nine months ended						Period-to-Period
		September 30,						Change				September 30,						Change
		2025			2024			$		%		2025			2024			$		%

	(dollars in thousands)
Revenue:
Product		$	201,218		$	246,826		$	(45,608)	(18.5)	%	$	567,444		$	735,626		$	(168,182)	(22.9)	%
Percentage of revenue			94.2	%		96.2	%						94.5	%		96.1	%
Services			12,393			9,738			2,655	27.3	%		33,274			29,822			3,452	11.6	%
Percentage of revenue			5.8	%		3.8	%						5.5	%		3.9	%
Total revenue		$	213,611		$	256,564		$	(42,953)	(16.7)	%	$	600,718		$	765,448		$	(164,730)	(21.5)	%

Three months ended September 30, 2025 Compared with Three months ended September 30, 2024

Product

Product revenue, which includes systems sales, sales of spare parts, product upgrades and used systems, was $201.2 million, or 94.2% of revenue, during the three months ended September 30, 2025, compared with $246.8 million, or 96.2% of revenue, for the three months ended September 30, 2024. The $45.6 million decrease in product revenue for the

three-month period ended September 30, 2025, in comparison to the same period in 2024, was primarily driven by a decrease in system sales.

Deferred revenue includes payments received in advance of system sales as well as deferral of revenue from systems sales for installation and other future performance obligations. The total amount of deferred revenue at September 30, 2025 and December 31, 2024 was $128.9 million and $138.2 million, respectively.

Services

Services revenue, which includes the labor component of maintenance and service contracts and fees for service hours provided by on-site service personnel, was $12.4 million, or 5.8% of revenue, for the three months ended September 30, 2025, compared with $9.7 million, or 3.8% of revenue, for the three months ended September 30, 2024. Although services revenue typically increases with the expansion of the installed base of systems, it can fluctuate from period to period based on capacity utilization at customers' manufacturing facilities, which affects the need for equipment service.

Nine months ended September 30, 2025 Compared with Nine months ended September 30, 2024

Product

Product revenue was $567.4 million, or 94.5% of revenue, during the nine months ended September 30, 2025, compared with $735.6 million, or 96.1% of revenue, for the nine months ended September 30, 2024. The $168.2 million decrease in product revenue for the nine-month period ended September 30, 2025, in comparison to the same period in 2024, was primarily driven by a decrease in system sales.

Services

Services revenue was $33.3 million, or 5.5% of revenue, for the nine months ended September 30, 2025, compared with $29.8 million, or 3.9% of revenue, for the nine months ended September 30, 2024.

Revenue Categories used by Management

In addition to the line item revenue categories discussed above, management also regularly disaggregates revenue in the following categories, which it finds relevant and useful:

●

Systems and Aftermarket revenues, in which "Aftermarket" is:

The portion of Product revenue relating to spare parts, product upgrades and used equipment, combined with

Services revenue, which is the labor component of Aftermarket revenues;

(Aftermarket purchases reflect current fab utilization as opposed to Systems purchases which reflect capital investment decisions by our customers, which have differing economic drivers);

●

Revenue by geographic regions, since economic factors impacting customer purchasing decisions may vary by geographic region; and

●

Revenue by our customer market segments, since they can be subject to different economic drivers at different periods of time, impacting a customer's likelihood of purchasing capital equipment during any particular period. Currently, management references three customer market segments: memory, mature process technology and advanced logic.

Aftermarket and Systems Revenue

Three months ended September 30, 2025 Compared with Three months ended September 30, 2024

Included in total revenue of $213.6 million during the three months ended September 30, 2025 is revenue from our Aftermarket business of $69.9 million, compared with $55.5 million of Aftermarket revenue for the three months ended September 30, 2024. Aftermarket revenue fluctuates from period to period based on capacity utilization at customers' manufacturing facilities, which affects the sale of spare parts and demand for equipment service. Aftermarket revenue can also fluctuate from period to period based on the demand for system upgrades or used equipment. The remaining $143.7 million of revenue for the three months ended September 30, 2025 was systems revenue, compared with $201.1 million of systems revenue for the three months ended September 30, 2024. Systems revenue fluctuates from period to period based on our customers' capital spending.

Nine months ended September 30, 2025 Compared with Nine months ended September 30, 2024

Included in total revenue of $600.7 million during the nine months ended September 30, 2025 is revenue from our Aftermarket business of $186.2 million, compared with $170.3 million of Aftermarket revenue for the nine months ended September 30, 2024. The remaining $414.5 million of revenue for the nine months ended September 30, 2025 was systems revenue, compared with $595.1 million of systems revenue for the nine months ended September 30, 2024.

Gross Profit / Gross Margin

The following table sets forth our gross profit / gross margin:


		Three months ended						Period-to-Period				Nine months ended						Period-to-Period
		September 30,						Change				September 30,						Change
		2025			2024			$		%			2025			2024		$		%

	(dollars in thousands)
Gross Profit:
Product		$	89,140		$	110,447		$	(21,307)	(19.3)	%	$	265,403		$	336,577		$	(71,174)	(21.1)	%
Product gross margin			44.3	%		44.7	%						46.8	%		45.8	%

Services			(334)			(477)			143	(30.0)	%		(487)			1,854			(2,341)	(126.3)	%
Services gross margin			(2.7)	%		(4.9)	%						(1.5)	%		6.2	%
Total gross profit		$	88,806		$	109,970		$	(21,164)	(19.2)	%	$	264,916		$	338,431		$	(73,515)	(21.7)	%
Gross margin			41.5	%		42.8	%						44.1	%		44.2	%

Three months ended September 30, 2025 Compared with Three months ended September 30, 2024

Product

Gross margin from product revenue was 44.3% for the three months ended September 30, 2025, compared to 44.7% for the three months ended September 30, 2024. The slight decrease in gross margin resulted from a less favorable mix of system shipments.

Services

Gross margin from services revenue was (2.7)% for the three months ended September 30, 2025, compared to (4.9)% for the three months ended September 30, 2024. The increase in gross margin is attributable to changes in the mix of service contracts and fluctuations of service expenses. Occasionally, we experience negative gross margin on service revenue as contract costs can vary significantly from one period to another based on customer demand.

Nine months ended September 30, 2025 Compared with Nine months ended September 30, 2024

Product

Gross margin from product revenue was 46.8% for the nine months ended September 30, 2025, compared to 45.8% for the nine months ended September 30, 2024. The increase in gross margin resulted from a favorable mix of system shipments and an increased mix of parts and upgrades with higher margins.

Services

Gross margin from services revenue was (1.5)% for the nine months ended September 30, 2025, compared to 6.2% for the nine months ended September 30, 2024. The decrease in gross margin is attributable to changes in the mix of service contracts and fluctuations of service expenses. Occasionally, we experience negative gross margin on service revenue as contract costs can vary significantly from one period to another based on customer demand.

Operating Expenses

The following table sets forth our operating expenses:


		Three months ended						Period-to-Period				Nine months ended						Period-to-Period
		September 30,						Change				September 30,						Change
		2025			2024			$		%		2025			2024			$		%

	(dollars in thousands)
Research and development		$	24,640		$	26,395		$	(1,755)	(6.6)	%	$	78,832		$	77,843		$	989	1.3	%
Percentage of revenue			11.5	%		10.3	%						13.1	%		10.2	%
Sales and marketing			15,838			16,808			(970)	(5.8)	%		45,965			51,483			(5,518)	(10.7)	%
Percentage of revenue			7.4	%		6.6	%						7.7	%		6.7	%
General and administrative			23,308			19,854			3,454	17.4	%		56,976			52,842			4,134	7.8	%
Percentage of revenue			10.9	%		7.7	%						9.5	%		6.9	%
Total operating expenses		$	63,786		$	63,057		$	729	1.2	%	$	181,773		$	182,168		$	(395)	(0.2)	%
Percentage of revenue			29.8	%		24.6	%						30.3	%		23.8	%

Our operating expenses consist primarily of personnel costs, including wages, commissions, incentive-based compensation, stock-based compensation and related benefits and taxes; project material costs related to the design and development of new products and enhancement of existing products; and professional fees, travel and depreciation expenses.

Personnel costs are our largest expense, representing $32.5 million, or 50.9%, of our total operating expenses for the three months ended September 30, 2025, compared to $35.5 million, or 56.3%, of our total operating expenses for the three months ended September 30, 2024. Personnel costs were $103.8 million, or 57.1%, of our total operating expenses for the nine months ended September 30, 2025, compared to $107.2 million, or 58.9%, of our total operating expenses for the nine months ended September 30, 2024. The lower personnel costs for the three months ended September 30, 2025 are primarily due to decreases in salary and benefits expenses, partially offset by increases in variable compensation, expatriate and separation program expenses. The lower personnel costs for the nine months ended September 30, 2025 are primarily due to decreases in salary, temporary employee, and expatriate expenses, partially offset by an increase in variable compensation and separation program expenses.

Research and Development


		Three months ended						Period-to-Period				Nine months ended							Period-to-Period
		September 30,						Change				September 30,							Change
		2025			2024				$	%		2025			2024				$	%

	(dollars in thousands)
Research and development		$	24,640		$	26,395		$	(1,755)	(6.6)	%	$	78,832		$	77,843		$	989	1.3	%
Percentage of revenue			11.5	%		10.3	%						13.1	%		10.2	%

Our ability to remain competitive depends largely on continuously developing innovative technology, with new and enhanced features and systems and introducing them at competitive prices on a timely basis. Accordingly, based on our strategic plan, we establish annual research and development budgets to fund programs that we expect will solve customers' high value, high impact, ion implantation challenges.

Three months ended September 30, 2025 Compared with Three months ended September 30, 2024

Research and development expense was $24.6 million during the three months ended September 30, 2025, a decrease of $1.8 million, or 6.6%, compared with $26.4 million during the three months ended September 30, 2024. The decrease is primarily due to lower personnel expenses, driven by a decrease in wages.

Nine months ended September 30, 2025 Compared with Nine months ended September 30, 2024

Research and development expense was $78.8 million during the nine months ended September 30, 2025, an increase of $1.0 million, or 1.3%, compared with $77.8 million during the nine months ended September 30, 2024. The increase is primarily due to several small expense category fluctuations.

Sales and Marketing


		Three months ended						Period-to-Period				Nine months ended						Period-to-Period
		September 30,						Change				September 30,						Change
		2025			2024			$		%		2025			2024			$		%

	(dollars in thousands)
Sales and marketing		$	15,838		$	16,808		$	(970)	(5.8)	%	$	45,965		$	51,483		$	(5,518)	(10.7)	%
Percentage of revenue			7.4	%		6.6	%						7.7	%		6.7	%

Our sales and marketing expenses result primarily from the sale of our equipment and services through our direct sales force.

Three months ended September 30, 2025 Compared with Three months ended September 30, 2024

Sales and marketing expense was $15.8 million during the three months ended September 30, 2025, a decrease of $1.0 million, or 5.8%, compared with $16.8 million during the three months ended September 30, 2024. The decrease is primarily due to lower personnel expenses, driven by a decrease in wages.

Nine months ended September 30, 2025 Compared with Nine months ended September 30, 2024

Sales and marketing expense was $46.0 million during the nine months ended September 30, 2025, a decrease of $5.5 million, or 10.7%, compared with $51.5 million during the nine months ended September 30, 2024. The decrease is primarily due to lower personnel expenses, driven by decreases in wages.

General and Administrative


		Three months ended						Period-to-Period				Nine months ended						Period-to-Period
		September 30,						Change				September 30,						Change
		2025			2024			$		%		2025			2024			$		%

	(dollars in thousands)
General and administrative		$	23,308		$	19,854		$	3,454	17.4	%	$	56,976		$	52,842		$	4,134	7.8	%
Percentage of revenue			10.9	%		7.7	%						9.5	%		6.9	%

Our general and administrative expenses result primarily from the costs associated with our executive, finance, information technology, legal and human resource functions.

Three months ended September 30, 2025 Compared with Three months ended September 30, 2024

General and administrative expense was $23.3 million during the three months ended September 30, 2025, an increase of $3.5 million, or 17.4%, compared with $19.9 million during the three months ended September 30, 2024. The increase is primarily due to an increase in merger related professional fees partially offset by a decrease in bad debt expense.

Nine months ended September 30, 2025 Compared with Nine months ended September 30, 2024

General and administrative expense was $57.0 million during the nine months ended September 30, 2025, an increase of $4.1 million, or 7.8%, compared with $52.8 million during the nine months ended September 30, 2024. The increase is primarily due to an increase in merger related professional fees partially offset by a decrease in bad debt expense.

Other Income (Expense)


		Three months ended						Period-to-period				Nine months ended						Period-to-period
		September 30,						change				September 30,						change
		2025			2024			$		%		2025			2024			$		%

	(dollars in thousands)
Other income (expense):		$	5,130		$	8,452		$	(3,322)	(39.3)	%	$	15,088		$	15,366		$	(278)	(1.8)	%
Percentage of revenue			2.5	%		3.4	%						2.5	%		2.1	%

Other income (expense) consists of interest earned and accretion on our invested cash balances, interest expense relating to the finance lease obligation we incurred in connection with the 2015 sale of our headquarters facility and other financing obligations as well as foreign exchange gains and losses attributable to both fluctuations of the U.S. dollar against local currencies of the countries in which we operate and forward currency exchange contracts.

Three months ended September 30, 2025 Compared with Three months ended September 30, 2024

Other income was $5.1 million for the three months ended September 30, 2025, compared with other income of $8.5 million for the three months ended September 30, 2024. The $3.3 million decrease in other income (expense) compared to the same prior year period was primarily due to a decrease in net foreign exchange gains of $2.2 million and a decrease in interest income of $1.1 million. Net foreign exchange gains for the three months ended September 30, 2025 includes $2.6 million of gains related to forward currency exchange contracts, partially offset by foreign exchange losses of $1.7 million. Net foreign exchange gains for the three months ended September 30, 2024 includes foreign exchange gains of $6.4 million, partially offset by foreign exchange losses of $3.3 million from forward currency exchange contracts.

Nine months ended September 30, 2025 Compared with Nine months ended September 30, 2024

Other income was $15.1 million for the nine months ended September 30, 2025, compared with other income of $15.4 million for the nine months ended September 30, 2024. The $0.3 million decrease in other income (expense) compared to the same prior year period was primarily due to a decrease in interest income of $1.6 million partially offset by an increase in net foreign exchange gains of $1.0 million. Net foreign exchange gains for the nine months ended September

30, 2025 includes $4.4 million of losses related to forward currency exchange contracts, offset by foreign exchange gains of $6.5 million. Net foreign exchange gains for the nine months ended September 30, 2024 includes foreign exchange gains of $0.5 million and foreign exchange gains of $0.5 million from forward currency exchange contracts.

Income Tax Provision


		Three months ended							Period-to-period				Nine months ended							Period-to-period
		September 30,							change				September 30,							change
		2025			2024				$		%		2025			2024				$		%

	(dollars in thousands)
Income tax provision		$	4,164			$	6,789		$	(2,625)	(38.7)	%	$	12,290			$	20,593		$	(8,303)	(40.3)	%
Percentage of revenue			1.9	%			2.6	%						2.0	%			2.7	%

Income tax expense was $4.2 million for the three months ended September 30, 2025, compared to $6.8 million for the three months ended September 30, 2024. The $2.6 million decrease was primarily due to the decrease in pre-tax book income. The reported ETR for the three months ended September 30, 2025 was 13.8% compared to 12.3% for the three months ended September 30, 2024. The ETR increase was primarily due to the impact of the One Big Beautiful Bill Act. The ETR for the nine months ended September 30, 2025 was less than the U.S. statutory rate of 21% primarily attributable to Foreign Derived Intangible Income deduction and Federal research and development tax credits.

Liquidity and Capital Resources

At September 30, 2025, we had $187.5 million in unrestricted cash and cash equivalents, $262.1 million in short-term investments and $143.2 million in long-term investments, in addition to $7.6 million in restricted cash. Management believes that maintaining a strong cash balance is necessary to fund a continuing ramp in our business which can require significant cash investment to meet sudden demand. Additionally, we are using cash to repurchase shares as part of our stock repurchase program and are considering both organic and inorganic opportunities to drive future growth, for which cash resources will be necessary.

Our liquidity is affected by many factors. Some of these relate specifically to the operations of our business, for example, the rate of sales of our products, and others relate to the uncertainties of global economic conditions, including tariff programs implemented in countries in which we operate as well as the availability of credit and the condition of the overall semiconductor equipment industry. Our industry requires ongoing investments in operations and research and development that are not easily adjusted to reflect changes in revenue. As a result, profitability and cash flows can fluctuate more widely than revenue. Stock repurchases, as discussed below, also reduce our cash balances.

During the nine months ended September 30, 2025 and 2024, we generated $124.9 million and $128.0 million, respectively, of cash related to operating activities.

Investing activities for the nine months ended September 30, 2025 resulted in cash generated of $37.2 million, $9.0 million of which was used for capital expenditures and $506.6 million of which was used to purchase short-term and long-term investments, offset by $552.8 million related to maturities and sales of short-term investments. Investing activities for the nine months ended September 30, 2024 resulted in cash outflows of $117.8 million, $7.5 million of which was used for capital expenditures and $433.9 million of which was used to purchase short-term investments, offset by $323.6 million related to maturities of short-term investments.

Financing activities for the nine months ended September 30, 2025 resulted in a cash usage of $99.9 million. During the first nine months of 2025, (i) $95.9 million in cash was used to repurchase our common stock, (ii) $4.3 million was used for payments to government tax authorities for income tax withholding on employee compensation arising from the vesting of RSUs, where units are withheld by us to cover taxes, and (iii) $1.0 million was used to reduce the liability under the finance lease of our corporate headquarters. These amounts were partially offset by $1.2 million of proceeds related to the purchase of shares under our 2020 ESPP during the first nine months of 2025. In comparison, financing activities for the nine months ended September 30, 2024 resulted in cash usage of $56.6 million, of which (i) $45.4 million related to the repurchase of our common stock (ii) $11.4 million related to payments made to government tax authorities for income tax withholding on employee compensation arising from the vesting of RSUs, and (iii) $1.1 million relating to the reduction of our finance lease liability. These amounts were partially offset by $1.2 million of proceeds related to the purchase of shares under our 2020 ESPP during the first nine months of 2024.

As of September 30, 2025, we had a security deposit of $5.9 million related to the lease of our corporate headquarters in the form of a cash collateralized letter of credit, which is classified as long-term restricted cash on our balance sheet.

We believe that based on our current market, revenue, expense and cash flow forecasts, our existing cash and cash equivalents will be sufficient to satisfy our anticipated cash requirements for the short- and long-term.

Commitments and Contingencies

Significant commitments and contingencies at September 30, 2025 are consistent with those discussed in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," and Note 16 to the consolidated financial statements included in our 2024 Form 10-K.

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