10-Q

/s/ Mark Weaver

May 7, 2026

Mark Weaver

Interim Chief Financial Officer

(Principal Financial Officer and Duly Authorized Officer)

PART I. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

AMTECH SYSTEMS, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(in thousands, except share data)


	March 31, 2026			September 30, 2025
Assets	(Unaudited)
Current Assets
Cash and cash equivalents	$	24,417		$	17,904
Accounts receivable (less allowance for credit losses of $125 and $113 at March 31, 2026 and September 30, 2025, respectively)		18,933			19,878
Inventories		19,692			18,743
Income taxes receivable		73			80
Other current assets		3,427			3,572
Total current assets		66,542			60,177
Property, Plant and Equipment - Net		9,444			10,227
Right-of-Use Assets - Net		17,332			18,293
Intangible Assets - Net		1,003			1,091
Goodwill		908			908
Deferred Income Taxes - Net		1,023			1,023
Other Assets		1,144			1,154
Total Assets	$	97,396		$	92,873

Liabilities and Shareholders’ Equity
Current Liabilities
Accounts payable	$	9,749		$	7,735
Accrued compensation and related taxes		2,088			1,609
Accrued warranty expense		324			394
Other accrued liabilities		862			726
Current maturities of finance lease liabilities and long-term debt		144			126
Current portion of long-term operating lease liabilities		2,171			1,903
Contract liabilities		6,902			6,461
Income taxes payable		961			1,528
Total current liabilities		23,201			20,482
Finance Lease Liabilities and Long-Term Debt		129			168
Long-Term Operating Lease Liabilities		16,311			17,316
Income Taxes Payable		417			663
Other Long-Term Liabilities		1,339			859
Total Liabilities		41,397			39,488
Commitments and Contingencies (Note 9)
Shareholders’ Equity
Preferred stock; 100,000,000 shares authorized; none issued		—			—
Common stock; $0.01 par value; 100,000,000 shares authorized; shares issued and outstanding: 14,497,089 and 14,354,797 at March 31, 2026 and September 30, 2025, respectively		145			144
Additional paid-in capital		130,856			130,057
Accumulated other comprehensive loss		(419	)		(959	)
Retained deficit		(74,583	)		(75,857	)
Total Shareholders’ Equity		55,999			53,385
Total Liabilities and Shareholders’ Equity	$	97,396		$	92,873

The accompanying notes are an integral part of these condensed consolidated financial statements.

AMTECH SYSTEMS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(Unaudited)

(in thousands, except per share data)


	Three Months Ended March 31,						Six Months Ended March 31,
	2026			2025			2026			2025
Revenues, net	$	20,468		$	15,580		$	39,441		$	39,965
Cost of sales		10,699			15,905			21,178			30,927
Gross profit (loss)		9,769			(325	)		18,263			9,038

Selling, general and administrative		7,153			7,115			14,031			15,166
Research, development and engineering		822			832			1,664			1,709
Loss on disposal of fixed assets		—			205			—			229
Goodwill impairment		—			20,353			—			20,353
Intangible asset impairment		—			2,569			—			2,569
Severance expense		—			184			—			256
Operating income (loss)		1,794			(31,583	)		2,568			(31,244	)
Interest income		117			27			231			31
Interest expense		(9	)		(6	)		(15	)		(13	)
Foreign currency (loss) gain		(271	)		—			(469	)		401
Other		37			22			42			42
Income (loss) before income tax provision		1,668			(31,540	)		2,357			(30,783	)
Income tax provision		502			272			1,083			717
Net income (loss)	$	1,166		$	(31,812	)	$	1,274		$	(31,500	)
Income (Loss) Per Share:
Net income (loss) per basic share	$	0.08		$	(2.23	)	$	0.09		$	(2.21	)
Net income (loss) per diluted share	$	0.08		$	(2.23	)	$	0.09		$	(2.21	)
Weighted average shares outstanding:
Basic		14,432			14,296			14,397			14,284
Diluted		14,941			14,296			14,832			14,284

The accompanying notes are an integral part of these condensed consolidated financial statements.

AMTECH SYSTEMS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

(in thousands)


	Three Months Ended March 31,					Six Months Ended March 31,
	2026		2025			2026		2025
Net income (loss)	$	1,166	$	(31,812	)	$	1,274	$	(31,500	)
Foreign currency translation adjustment		300		115			540		(596	)
Comprehensive income (loss)	$	1,466	$	(31,697	)	$	1,814	$	(32,096	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

AMTECH SYSTEMS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Shareholders’ Equity

(Unaudited)

(in thousands)


	Common Stock							Accumulated Other						Total
	Shares		Par Value		Additional Paid- In Capital			Comprehensive (Loss) Income			Retained Deficit			Shareholders' Equity
Balance at September 30, 2024		14,259	$	143	$	128,466		$	(720	)	$	(45,531	)	$	82,358
Net income		—		—		—			—			312			312
Translation adjustment		—		—		—			(711	)		—			(711	)
Stock compensation expense		—		—		333			—			—			333
Stock options exercised		30		—		150			—			—			150
Balance at December 31, 2024		14,289	$	143	$	128,949		$	(1,431	)	$	(45,219	)	$	82,442
Net loss		—		—		—			—			(31,812	)		(31,812	)
Translation adjustment		—		—		—			115			—			115
Stock compensation expense		—		—		290			—			—			290
RSU vested		25		—		—			—			—			—
Stock options exercised		—		—		—			—			—			—
Balance at March 31, 2025		14,314		143		129,239			(1,316	)		(77,031	)		51,035

Balance at September 30, 2025		14,355	$	144	$	130,057		$	(959	)	$	(75,857	)	$	53,385
Net income		—		—		—			—			108			108
Translation adjustment		—		—		—			240			—			240
Stock compensation expense*		—		—		199			—			—			199
Issuance of common stock under employee stock plans, net of shares withheld for payroll taxes		6		—		(28	)		—			—			(28	)
Stock options exercised		29		—		192			—						192
Balance at December 31, 2025		14,390	$	144	$	130,420		$	(719	)	$	(75,749	)	$	54,096
Net income		—		—		—			—			1,166			1,166
Translation adjustment		—		—		—			300			—			300
Stock compensation expense*		—		—		263			—			—			263
Issuance of common stock under employee stock plans, net of shares withheld for payroll taxes		57		1		(147	)								(146	)
Stock options exercised		50		—		320			—			—			320
Balance at March 31, 2026		14,497		145		130,856			(419	)		(74,583	)		55,999

* Excludes stock-based compensation expense classified as a liability of $50,000 in the first quarter of fiscal 2026 and $65,000 in the second quarter of fiscal 2026.

The accompanying notes are an integral part of these condensed consolidated financial statements.

AMTECH SYSTEMS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)


	Six Months Ended March 31,
	2026			2025
Operating Activities
Net income (loss)	$	1,274		$	(31,500	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		1,241			1,573
Write-down of inventory		452			6,618
Goodwill impairment		—			20,353
Intangible asset impairment		—			2,569
Non-cash share-based compensation expense		577			623
Loss on disposal of fixed assets		—			229
Provision for allowance for credit losses		12			63
Changes in operating assets and liabilities:
Accounts receivable		933			5,736
Inventories		(1,402	)		(556	)
Other assets		1,116			1,639
Accounts payable		2,182			(253	)
Accrued income taxes		(806	)		(167	)
Accrued and other liabilities		176			(1,093	)
Contract liabilities		441			(2,757	)
Net cash provided by operating activities		6,196			3,077
Investing Activities
Purchases of property, plant and equipment		(475	)		(152	)
Net cash used in investing activities		(475	)		(152	)
Financing Activities
Proceeds from the exercise of stock options		512			150
Payments on long-term debt		(79	)		(47	)
Borrowings on long-term debt		21			—
Payment of payroll taxes on stock-based compensation through shares withheld		(175	)		—
Net cash provided by financing activities		279			103
Effect of Exchange Rate Changes on Cash and Cash Equivalents		513			(688	)
Net Increase in Cash and Cash Equivalents		6,513			2,340
Cash and Cash Equivalents, Beginning of Period		17,904			11,086
Cash and Cash Equivalents, End of Period	$	24,417		$	13,426
Supplemental Cash Flow Information:
Income tax payments, net	$	1,170		$	884
Interest paid	$	16		$	11

The accompanying notes are an integral part of these condensed consolidated financial statements.

AMTECH SYSTEMS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE AND SIX MONTHS ENDED MARCH 31, 2026 AND 2025

(UNAUDITED)

1. Basis of Presentation and Significant Accounting Policies

Nature of Operations and Basis of Presentation – Amtech provides equipment, consumables and services for semiconductor device packaging, wafer production and device fabrication. Our products are used to fabricate and package semiconductor devices, such as graphic processing units (GPUs) used in AI applications, silicon carbide (SiC) and silicon (Si) power devices and other optical, analog and digital devices. We sell these products to semiconductor device packaging, electronic assembly and device fabrication companies worldwide.

We serve niche markets in industries that are experiencing technological advances, and which historically have been very cyclical. Therefore, our future profitability and growth depend on our ability to develop or acquire and market profitable new products and on our ability to adapt to cyclical trends.

The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”), and consequently do not include all disclosures normally required by accounting principles generally accepted in the United States of America (“GAAP”). In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements contain all adjustments necessary, all of which are of a normal and recurring nature, to present fairly our financial position, results of operations and cash flows. Certain information and note disclosures normally included in financial statements have been condensed or omitted pursuant to the rules and regulations of the SEC. The condensed consolidated balance sheet at September 30, 2025, has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2025.

Our fiscal year is from October 1 to September 30. Unless otherwise stated, references to particular years, quarters, months or periods refer to our fiscal years ending or ended September 30, and the associated quarters, months, and periods of those fiscal years.

The consolidated results of operations for the three and six months ended March 31, 2026, are not necessarily indicative of the results to be expected for the full fiscal year.

Principles of Consolidation – The consolidated financial statements include the accounts of the Company and our wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates – The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Reclassifications – Certain reclassifications have been made to prior year financial statement footnotes to conform to the current year presentation. These reclassifications, which include the breakout of contract liability activity, had no effect on the previously reported consolidated financial statements for any period.

Accounts Receivable and Allowance for Credit Losses – Accounts receivable are recorded at the sales price of products sold to customers on trade credit terms. We establish a valuation allowance to reflect our best estimate of expected losses inherent in our accounts receivable balance. The allowance is based on our evaluation of the aging of the receivables, historical write-offs, the current economic environment and communications with the customer. We write off individual accounts against the allowance when we no longer believe that it is probable that we will collect the receivable because we have become aware of a customer’s inability to meet its financial obligations.

Intangible Assets – Intangible assets acquired in business combinations are capitalized and subsequently amortized on a straight-line basis over their estimated useful life. We review our intangible assets for impairment when events or circumstances indicate the carrying value may not be recoverable. When indicators exist, recoverability of assets is measured by a comparison of the carrying value of the asset group to the estimated undiscounted future net cash flows expected to be generated by the asset group. If the asset group is determined not to be recoverable, the Company performs an analysis of the fair value of the individual long-lived assets and will recognize an impairment loss when the fair value is less than the carrying value of such long-lived assets. Additional information on impairment testing of intangible assets can be found in Notes 1 and 8 of our Annual Report on Form 10-K for the year ended September 30, 2025.

In the second quarter of fiscal year 2025, we recorded an impairment of definite lived intangible assets in our Semiconductor Fabrication Solutions segment. See Note 6 for a description of the facts and circumstances leading to the intangible asset impairment.

Goodwill – Goodwill is recorded when the purchase price paid for an acquisition exceeds the estimated fair value of the net identified tangible and intangible assets acquired. Goodwill is not subject to amortization but is tested for impairment annually or when it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If it is concluded that there is an impairment we would recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value (although the loss would not exceed the total amount of goodwill allocated to the reporting unit). Additional information on impairment testing of goodwill can be found in Notes 1 and 9 of our Annual Report on Form 10-K for the year ended September 30, 2025.

In the second quarter of fiscal year 2025, we recorded an impairment of goodwill in our Semiconductor Fabrication Solutions and Thermal Processing Solutions segments. See Note 6 for a description of the facts and circumstances leading to goodwill impairment.

Contract Liabilities – Contract liabilities are reflected in current liabilities on the Condensed Consolidated Balance Sheets as all performance obligations are expected to be satisfied within the next 12 months. Contract liabilities relate to payments invoiced or received in advance of completion of performance obligations under a contract. Contract liabilities are recognized as revenue upon the fulfillment of performance obligations. Contract liabilities consist of customer deposits and deferred revenue as of March 31, 2026 and September 30, 2025.

The following is a summary of activity for contract liabilities, in thousands:


	Three Months Ended March 31,						Six Months Ended March 31,
	2026			2025			2026			2025
Beginning balance	$	7,132		$	6,658		$	6,461		$	8,965
New deposits		656			265			1,642			5,239
Deferred revenue		31			168			27			132
Revenue recognized		(917	)		(883	)		(1,228	)		(8,128	)
Ending balance	$	6,902		$	6,208		$	6,902		$	6,208

Warranty – A limited warranty is provided free of charge, generally for periods of 12 to 36 months to all purchasers of our new products and systems. Accruals are recorded for estimated warranty costs at the time revenue is recognized. While our warranty costs have historically been within our expectations and we believe that the amounts accrued for warranty expenditures are sufficient for all systems sold through March 31, 2026, we cannot guarantee that we will continue to experience a similar level of predictability regarding warranty costs. In addition, technological changes or previously unknown defects in raw materials or components may result in more extensive and frequent warranty service than anticipated, which could result in an increase in our warranty expense.

The following is a summary of activity in accrued warranty expense, in thousands:


	Six Months Ended March 31,
	2026			2025
Beginning balance	$	394		$	602
Additions for warranties issued during the period		20			30
Costs incurred during the period		(4	)		(16	)
Changes in estimate for pre-existing warranties		(86	)		(189	)
Ending balance	$	324		$	427

Shipping Expense – Shipping and handling fees associated with outbound freight are expensed as incurred and included in selling, general and administrative expenses. Shipping expense was $45,000 and $0.2 million for the three months ended March 31, 2026 and 2025, respectively, and $0.2 million and $0.7 million for the six months ended March 31, 2026 and 2025, respectively.

Employee Retention Tax – The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) provided an employee retention credit (“ERC”) which was a refundable tax credit against certain employment taxes. The Consolidated Appropriations Act (the “Appropriations Act”) extended and expanded the availability of the employee retention credit through December 31, 2021. The Appropriations Act amended the employee retention credit to be equal to 70% of qualified wages paid to employees during the 2021 calendar year. The Company qualified for the employee retention credit for qualified wages through December 2021, and filed a cash refund claim during the calendar year ended December 31, 2023. During the three months ended March 31, 2026, the Company received approximately $0.2 million under the ERC program and during the three months ended June 30, 2025, the Company received approximately $2.1 million under the ERC program. In both fiscal quarters, the ERC was recognized as a reduction to payroll tax expense. Accordingly, for the three months ended March 31, 2026, the ERC was a reduction against general and administrative costs of $0.2 million and for the three months ended June 30, 2025, the ERC was a reduction against cost of sales, selling, general and administrative, and research, development and engineering of $1.0 million, $0.8 million, and $0.3 million, respectively.

Concentrations of Credit Risk – Our customers are primarily manufacturers of semiconductor substrates and devices and electronic assemblies. Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash and trade accounts receivable. Credit risk is managed by performing credit evaluations of the customers’ financial condition, by requiring significant deposits where appropriate, and by actively monitoring collections. Letters of credit are required of certain customers depending on the size of the order, type of customer or its creditworthiness, and country of domicile.

As of March 31, 2026, no customer represented 10% of accounts receivable. As of September 30, 2025, two Thermal Processing Solutions customers represented 15% and 13%, respectively, of accounts receivable.

We maintain our cash and cash equivalents in multiple financial institutions. Balances in the United States, which account for approximately 77% and 75% of total cash balances as of March 31, 2026 and September 30, 2025, respectively, are primarily invested in financial institutions insured by the FDIC as well as a money market account. The remainder of our cash is maintained with financial institutions with reputable credit in China, the United Kingdom, Singapore and Malaysia. We maintain cash in bank accounts in amounts which at times may exceed federally insured limits. At March 31, 2026 and September 30, 2025, Amtech’s balances exceeded insured limits by approximately $17.1 million and $12.0 million, respectively. We have not experienced any losses on such accounts.

Refer to Note 11 to Condensed Consolidated Financial Statements for information regarding major customers, foreign sales and revenue in other countries subject to fluctuation in foreign currency exchange rates.

Fair Value of Financial Instruments – We group our financial assets and liabilities measured at fair value on a recurring basis into three levels, based on the markets in which the assets and liabilities are traded, and the reliability of the assumptions used to determine fair value. These levels are:

Level 1 – Valuation is based upon quoted market prices for identical instruments traded in active markets.

Level 2 – Valuation is based on quoted market prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.

Level 3 – Valuation is generated from model-based techniques that use significant assumptions not observable in the market. Valuation techniques include use of discounted cash flow models and similar techniques.

It is our policy to use observable inputs whenever reasonably practicable to minimize the use of unobservable inputs when developing fair value measurements. When available, we use quoted market prices to measure fair value. If market prices are not available, the fair value measurement is based on models that use primarily market-based parameters including interest rate yield curves, option volatilities and currency rates. In certain cases, where market rate assumptions are not available, we are required to make judgments about assumptions market participants would use to estimate the fair value of a financial instrument. Changes in the underlying assumptions used, including discount rates and estimates of future cash flows, could significantly affect current or future valuations.

Cash and Cash Equivalents – Included in cash and cash equivalents in the Consolidated Balance Sheets are money market funds and time deposit accounts. Cash equivalents are classified as Level 1 in the fair value hierarchy.

Receivables and Payables – The recorded amounts of these financial instruments, including accounts receivable and accounts payable, approximate their fair value because of the short maturities of these instruments.

Impact of Recently Issued Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” (“ASU 2024-03”), which requires disclosure of additional information about specific expense categories underlying certain income statement expense line items. This ASU is effective for our annual periods beginning October 1, 2027, and interim periods beginning October 1, 2028, and requires either prospective or retrospective application. We are currently evaluating the impact of this ASU on our disclosures.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”), which requires additional annual income tax disclosures. These additional disclosures include providing a tabular rate reconciliation comprised of eight specific categories, the disaggregation of income taxes paid between federal, state, and foreign jurisdictions, and the disaggregation of income from continuing operations before income tax expense and income tax expense from continuing operations between domestic and foreign. ASU 2023-09 eliminates the disclosure of the nature and estimate of reasonably possible changes to unrecognized tax benefits in the next 12 months or that an estimated range cannot be made. ASU 2023-09 is effective for fiscal years beginning on or after December 15, 2024, with early adoption permitted, and can be applied on a prospective or retrospective basis. The adoption of this guidance is not expected to have a material impact on the Company’s financial position, results of operations, or cash flows, and is expected to impact disclosures only.

There were no other new accounting pronouncements issued or effective as of March 31, 2026 that had or are expected to have a material impact on our consolidated financial statements.

2. Long-Term Debt

Our finance lease liabilities and long-term debt consists of the following, in thousands:


	March 31, 2026			September 30, 2025
Finance leases	$	273		$	294
Less: current portion of finance lease liabilities and long-term debt		(144	)		(126	)
Finance Lease Liabilities and Long-Term Debt	$	129		$	168

Interest expense on finance lease liabilities and long-term debt was $8,000 and $6,000 for the three months ended March 31, 2026 and 2025, respectively, and $16,000 and $11,000 for the six months ended March 31, 2026 and 2025, respectively.

Finance Lease Obligations

Our finance lease obligations totaled $0.3 million as of March 31, 2026 and September 30, 2025, respectively.

The current and long-term portions of our finance leases are included in the current and long-term portions of finance lease liabilities and long-term debt in the table above and in our Condensed Consolidated Balance Sheets as of March 31, 2026 and September 30, 2025. See Note 5 for additional information.

3. Earnings Per Share

Basic earnings per share (“EPS”) is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted EPS is computed similarly to basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if potentially dilutive common shares had been issued. Dilutive potential common shares include outstanding restricted stock units (“RSUs”) and stock options. In the case of a net loss, diluted earnings per share is calculated in the same manner as basic EPS.

For the three and six months ended March 31, 2026, options for 75,000 and 62,357 weighted average shares, respectively, were excluded from the diluted EPS calculations because they were anti-dilutive. For the three and six months ended March 31, 2025, options for 952,657 and 946,037 weighted average shares, respectively, were excluded from the diluted EPS calculations because they were anti-dilutive. These shares could become dilutive in the future.

A reconciliation of the components of the basic and diluted EPS calculations follows, in thousands, except per share amounts:


	Three Months Ended March 31,					Six Months Ended March 31,
	2026		2025			2026		2025
Numerator:
Net income (loss)	$	1,166	$	(31,812	)	$	1,274	$	(31,500	)

Denominator:
Weighted-average shares used to compute basic EPS		14,432		14,296			14,397		14,284
Dilutive potential common shares due to stock options (1)		404		—			330		—
Dilutive potential common shares due to RSUs (1)		105		—			105		—
Weighted-average shares used to compute diluted EPS		14,941		14,296			14,832		14,284

Income (loss) per share:
Net income (loss) per basic share	$	0.08	$	(2.23	)	$	0.09	$	(2.21	)
Net income (loss) per diluted share	$	0.08	$	(2.23	)	$	0.09	$	(2.21	)

(1) The number of common stock equivalents is calculated using the treasury method and the average market price of our shares during the period.

4. Inventories

The components of inventories are as follows, in thousands:


	March 31, 2026		September 30, 2025
Purchased parts and raw materials	$	10,058	$	9,763
Work-in-process		7,371		7,113
Finished goods		2,263		1,867
	$	19,692	$	18,743

5. Leases

The following table provides information about the financial statement classification of our lease balances reported within the Condensed Consolidated Balance Sheets, in thousands:


	March 31, 2026		September 30, 2025
Assets
Right-of-use assets - operating	$	17,332	$	18,293
Right-of-use assets - finance		236		247
Total right-of-use assets	$	17,568	$	18,540
Liabilities
Current
Operating lease liabilities	$	2,171	$	1,903
Finance lease liabilities		144		126
Total current portion of long-term lease liabilities		2,315		2,029
Long-term
Operating lease liabilities		16,311		17,316
Finance lease liabilities		129		168
Total long-term lease liabilities		16,440		17,484
Total lease liabilities	$	18,755	$	19,513

The following table provides information about the financial statement classification of our lease expenses reported in the Condensed Consolidated Statements of Operations, in thousands:


		Three Months Ended March 31,				Six Months Ended March 31,
Lease cost	Classification	2026		2025		2026		2025
Operating lease cost	Cost of sales	$	471	$	460	$	939	$	919
Operating lease cost	Selling, general and administrative		366		364		733		727
Operating lease cost	Research, development and engineering		—		3		—		6
Finance lease cost	Cost of sales		9		—		9		—
Finance lease cost	Selling, general and administrative		26		25		59		50
Total lease cost		$	872	$	852	$	1,740	$	1,702

Future minimum lease payments under non-cancelable leases as of March 31, 2026 are as follows, in thousands:


	Operating Leases		Finance Leases		Total
Remainder of 2026	$	1,739	$	80	$	1,819
2027		3,293		120		3,413
2028		3,361		42		3,403
2029		3,434		35		3,469
2030		3,495		20		3,515
Thereafter		8,252		—		8,252
Total lease payments		23,574		297		23,871
Less: Interest		5,092		24		5,116
Present value of lease liabilities	$	18,482	$	273	$	18,755

Subsequent to March 31, 2026, on April 1, 2026, the Company remeasured certain operating lease liabilities and corresponding right‑of‑use (“ROU”) assets to reflect changes in lease payments resulting from a modification and reassessment of lease terms. The remeasurement was accounted for as a modification under ASC 842. The impact of this remeasurement is not reflected in the accompanying consolidated balance sheets as of March 31, 2026, nor in the undiscounted future minimum lease payment table above, and will be recognized beginning in the third quarter of 2026. The remeasurement is expected to decrease operating lease ROU assets and corresponding operating lease liabilities by approximately $0.4 million.

The following table provides information about the remaining lease terms and discount rates applied:


	March 31, 2026			September 30, 2025
Weighted average remaining lease term
Operating leases	7.08 years			7.57 years
Finance leases	2.59 years			2.76 years
Weighted average discount rate
Operating leases		6.90	%		6.91	%
Finance leases		7.00	%		6.85	%

6. Goodwill and Intangible Assets

The Company accounts for goodwill at acquisition-date fair value and other finite intangibles at acquisition-date fair value less accumulated amortization. See Note 1 for a summary of the Company’s policies relating to goodwill and intangible assets.

Intangible Assets

The Company’s intangible assets, net consists of the following, in thousands:


		March 31,			September 30,
	Amortization Period	2026			2025
Customer relationships	6-10 years		4,409			4,409
Trade names	3-15 years		2,679			2,679
			7,088			7,088
Accumulated amortization			(3,127	)		(3,039	)
Less asset impairments:
Customer relationships			(2,111	)		(2,111	)
Trade names			(847	)		(847	)
Intangible assets, net		$	1,003		$	1,091

The estimated aggregate amortization expense for each of the five succeeding fiscal years as of March 31, 2026 is as follows, in thousands:


Year ending September 30:	Amount
2026	$	88
2027		177
2028		177
2029		177
2030		138
Thereafter		246
Total	$	1,003

The aggregate amortization expense during the three months ended March 31, 2026 and 2025 was $44,000 and $0.1 million, respectively. The aggregate amortization expense during the six months ended March 31, 2026 and 2025 was $0.1 million and $0.3 million, respectively.

We review our intangible assets for impairment when events or circumstances indicate the carrying value may not be recoverable. For the period ended March 31, 2025, the Company lowered its guidance for the second quarter of fiscal year 2025 and reset projections for the rest of the year due to a prolonged weakness in the mature node semiconductor market driven by high inventory, tepid demand, and geopolitical tensions. As disclosed in the Goodwill section below, this resulted in a triggering event for impairment of goodwill. The results of the goodwill impairment test indicated that the book value of our Semiconductor Fabrication Solutions segment and Thermal Processing Solutions segment was in excess of fair value and was impaired. Prior to recognizing any impairment of goodwill, we tested the related long-lived assets for impairment in our Semiconductor Fabrication Solutions and Thermal Processing Solutions segments. We tested each identified asset group within each segment by first performing a recoverability test, comparing projected undiscounted cash flows from the use and eventual disposition of each asset group to its carrying value. This test indicated that the undiscounted cash flows were not sufficient to recover the carrying value of certain asset groups within our Semiconductor Fabrication Solutions segment. We then compared the carrying value of the individual long-lived assets within those asset groups against their fair value in order to determine if impairment existed. Determining the fair value of those asset groups involves the use of significant estimates and assumptions, including projections of revenues and expenses and related cash flows based on assumed long-term growth rates and demand trends, and estimated discount rates based on the asset group's weighted average return on assets, as derived from various methods. The fair value of the intangible assets was estimated using various valuation methodologies, including the multi-period excess earnings method and the relief from royalty method and the distributor method. These fair value measurements fall under Level 3 of the fair value hierarchy. As a result, we recorded a total impairment charge for intangible assets in our Semiconductor Fabrication Solutions segment of $2.6 million during the quarter ended March 31, 2025. The $2.6 million impairment consists of $1.8 million for customer relationships and $0.8 million for trade names primarily at Entrepix.

Goodwill

The Company evaluates goodwill at the reporting unit level, which, for the Company, is at the level of the reportable segments, Thermal Processing Solutions and Semiconductor Fabrication Solutions. The changes in carrying amount

of goodwill allocated to each of the reporting segments for the six months ended March 31, 2026 is as follows, in thousands:


	Thermal Processing Solutions			Semiconductor Fabrication Solutions			Total Goodwill
Goodwill	$	5,905		$	15,356			21,261
Accumulated impairment losses		(4,997	)		(15,356	)		(20,353	)
Balance at September 30, 2025		908			—			908
Goodwill acquired		—			—			—
Impairment of goodwill		—			—			—
Balance at March 31, 2026	$	908		$	—		$	908
Goodwill	$	908			—		$	908
Accumulated impairment losses		—			—			—
Balance at March 31, 2026	$	908		$	—		$	908

We review goodwill for impairment when events or circumstances indicate the carrying value may not be recoverable. For the period ended March 31, 2025, the Company lowered its guidance for the second quarter of fiscal year 2025 and reset projections for future periods due to prolonged weakness in the mature node semiconductor market driven by high inventory, tepid demand, and geopolitical tensions. This triggering event indicated a need to test goodwill for impairment. The goodwill impairment test indicated book value was in excess of fair value by $15.4 million for our Semiconductor Fabrication Solutions segment and $5.0 million for our Thermal Processing Solutions segment. As a result, we recorded a $20.4 million impairment charge in the period ended March 31, 2025.

Determining the fair value of a reporting unit involves the use of significant estimates and assumptions. Our goodwill impairment test uses a weighting of the income approach and the market approach to estimate a reporting unit’s fair value. The income approach is based on a discounted future cash flow analysis that uses certain assumptions including: projections of revenues and expenses and related cash flows based on assumed long-term growth rates and demand trends; expected future investments and working capital requirements to sustain and grow the business; and estimated discount rates based on the reporting unit’s weighted average cost of capital as derived by the Capital Asset Pricing Model and other methods, which includes observable market inputs and other data from identified comparable companies. The same estimates are also used internally for our capital budgeting process, and for long-term and short-term business planning and forecasting. We test the reasonableness of the inputs and outcomes of our discounted cash flow analysis against available comparable market data, and we also perform a reconciliation of our total market capitalization to the estimated fair value of all of our reporting units. The market approach is based on the application of appropriate market-derived multiples selected from (i) comparable publicly-traded companies and/or (ii) the implied transaction multiples derived from identified merger and acquisition activity in the market. Multiples are then selected based on a comparison of the reviewed data to that of the reporting unit and applied to relevant historical and forecasted financial parameters such as levels of revenues, EBITDA, EBIT or other metrics. The calculation of fair value falls under Level 3 of the fair value hierarchy.

If the future performance of these reporting units fall short of our expectations, if there are significant changes in operations due to changes in market conditions or if our stock price declines, we could be required to recognize additional material impairment charges in future periods.

7. Income Taxes

Our effective tax rate was 46.0% and (2.3%)% for the six months ended March 31, 2026 and 2025, respectively. The effective tax rate for the six months ended March 31, 2026 differs from the U.S. statutory tax rate of 21% primarily due to foreign income taxed at a foreign rate different than 21%, for permanent items and changes in valuation allowances. For the three months ended March 31, 2026 and 2025, we recorded income tax expense of $0.5 million and $0.3 million, respectively. For the six months ended March 31, 2026 and 2025 we recorded income tax expense of $1.1 million and $0.7 million, respectively. The quarterly income tax provision is calculated using an estimated annual effective tax rate, based upon expected annual income, permanent items, statutory rates and planned tax strategies in the various jurisdictions in which we operate. However, losses in certain jurisdictions and discrete items are excluded from the determination of the estimated annual effective tax rate.

8. Equity and Stock-Based Compensation

Stock-based compensation expense was $0.3 million in the three months ended March 31, 2026 and 2025, respectively, and $0.6 million in the six months ended March 31, 2026 and 2025, respectively. Stock-based compensation expense is included in selling, general and administrative expenses.

The following table summarizes our stock option activity during the six months ended March 31, 2026:


	Options			Weighted Average Exercise Price
Outstanding at beginning of period		919,741		$	6.67
Granted		65,000			8.82
Exercised		(79,159	)		6.43
Forfeited		(29,150	)		5.33
Outstanding at end of period		876,432		$	6.89
Exercisable at end of period		689,434		$	7.04
Weighted average fair value of options granted during the period	$	4.99

The fair value of options was estimated at the applicable grant date using the Black-Scholes option pricing model with the following assumptions:


	Six Months Ended March 31,
	2026			2025
Risk free interest rate		4	%		4	%
Expected term	5 years			5 years
Dividend rate		—	%		—	%
Volatility		63	%		61	%

The following table summarizes our RSU activity during the six months ended March 31, 2026:


	Number			Weighted Average Grant Date Fair Value
Nonvested at beginning of year		168,024		$	4.98
Granted		78,955			13.11
Released		(77,564	)		4.97
Forfeited		(16,666	)		4.99
Nonvested at end of period		152,749		$	9.19

Stock Repurchase Plan

On December 9, 2025, our Board of Directors (the “Board”) approved a new stock repurchase program, pursuant to which we may repurchase up to $5.0 million of our outstanding Common Stock over a one-year period. Repurchases under the program will be made in open market transactions at prevailing market prices, in privately negotiated transactions, or by other means in compliance with the rules and regulations of the SEC; however, we have no obligation to repurchase shares and the timing, actual number, and value of shares to be repurchased is subject to management’s discretion and will depend on our stock price and other market conditions. We may, in the sole discretion of the Board, terminate the repurchase program at any time while it is in effect. Repurchased shares may be retired or kept in treasury for further issuance. There were no repurchases during the quarter ended March 31, 2026, and $5.0 million remains available for repurchases.

Performance-Based Restricted Stock Units

As of March 31, 2026, we incurred $115,000 of equity compensation expense associated with our outstanding performance-based RSUs. The ultimate dollar value of the RSUs depends on the percentage increase in Amtech’s EBITDA above 8% during fiscal year 2026 and is classified as a liability within accrued compensation and related taxes on the Condensed Consolidated Balance Sheets.

9. Commitments and Contingencies

Purchase Obligations – As of March 31, 2026, we had unrecorded purchase obligations in the amount of $4.5 million. These purchase obligations consist of outstanding purchase orders for goods and services. While the amount represents purchase agreements, the actual amounts to be paid may be less in the event that any agreements are renegotiated, canceled or terminated.

Legal Proceedings and Other Claims – From time to time, we are a party to claims and actions for matters arising out of our business operations. We regularly evaluate the status of the legal proceedings and other claims in which we are involved to assess whether a loss is probable or there is a reasonable possibility that a loss, or an additional loss, may have been incurred and determine if accruals are appropriate. If accruals are not appropriate, we further evaluate each legal proceeding to assess whether an estimate of possible loss or range of possible loss can be made for disclosure. Although the outcome of claims and litigation is inherently unpredictable, we believe that we have adequate provisions for any probable and estimable losses. It is possible, nevertheless, that our consolidated financial position, results of operations or liquidity could be materially and adversely affected in any period by the resolution of a claim or legal proceeding. Legal expenses related to defense, negotiations, settlements, rulings and advice of outside legal counsel are expensed as incurred.

Employment Contracts – We have employment contracts and change in control agreements with, and severance plans covering, certain officers and management employees under which severance payments would become payable in the event of specified terminations without cause or terminations under certain circumstances after a change in control. If severance payments under the current employment contracts or severance plans were to become payable, the severance payments would generally range from six to twelve months of salary.

10. Reportable Segments

In the operation of the business, management, including our Chief Operating Decision Maker (“CODM”), who is also our Chief Executive Officer, reviews certain financial information, including segmented internal profit and loss statements. The primary profitability measure used by the CODM to review segment operating results is net income. The CODM uses net income to allocate resources during our annual planning process and throughout the year, as well as to assess the performance of our segments, primarily by monitoring actual results compared to prior period and expected results.

Amtech has two operating segments that are structured around the types of product offerings provided to our customers. In addition, the operating segments may be further distinguished by the Company’s respective brands. These two operating segments comprise our two reportable segments discussed below. Our two reportable segments are as follows:

Thermal Processing Solutions – We design, manufacture, sell and service thermal processing equipment and related controls for use by leading semiconductor manufacturers, and in electronics, automotive and other industries.

Semiconductor Fabrication Solutions – We produce consumables parts and services, and equipment for producing silicon carbide, silicon and gallium nitride wafers, optical components and a variety of crystalline materials.

Information concerning our reportable segments is as follows, in thousands:


	Three Months Ended March 31, 2026
	Thermal Processing Solutions			Semiconductor Fabrication Solutions			Total

Revenue	$	14,735		$	5,733		$	20,468
Less:
Material		5,566			2,016			7,582
Labor		796			605			1,401
Overhead		1,244			472			1,716
Gross profit		7,129			2,640			9,769
Selling & marketing		1,933			301			2,234
General & administrative		1,406			1,658			3,064
Research & development		631			191			822
Operating income		3,159			490			3,649
Interest income		27			15			42
Interest expense		(6	)		(3	)		(9	)
Other segment items (1)		(695	)		3			(692	)
Non-segment items (2)		—			—			(1,824	)
Net income	$	2,485		$	505		$	1,166

(1) Other segment items consists primarily of expenses related to foreign currency gain or loss and income tax provision. Thermal Processing Solutions and Semiconductor Fabrication Solutions income tax provision was $0.5 million and $1,000, respectively.

(2) Non-segment items consists primarily of expenses related to corporate salaries and professional services expenses, income tax, interest income and interest expense.


	Three Months Ended March 31, 2025
	Thermal Processing Solutions			Semiconductor Fabrication Solutions			Total

Revenue	$	10,575		$	5,005		$	15,580
Less:
Material		7,663			4,229			11,892
Labor		1,427			896			2,323
Overhead		1,135			555			1,690
Gross profit (loss)		350			(675	)		(325	)
Selling & marketing		1,752			245			1,997
General & administrative		1,188			1,829			3,017
Research & development		644			188			832
Loss on sale of fixed assets		141			64			205
Goodwill impairment		4,997			15,356			20,353
Intangible asset impairment		—			2,569			2,569
Severance expense		29			151			180
Operating loss		(8,401	)		(21,077	)		(29,478	)
Interest income		7			3			10
Interest expense		(6	)		—			(6	)
Other segment items (1)		(188	)		(3	)		(191	)
Non-segment items (2)		—			—			(2,147	)
Net loss	$	(8,588	)	$	(21,077	)	$	(31,812	)

(2) Non-segment items consists primarily of expenses related to corporate salaries and professional services expenses, income tax, interest income and interest expense.


	Six Months Ended March 31, 2026
	Thermal Processing Solutions			Semiconductor Fabrication Solutions			Total

Revenue	$	28,715		$	10,726		$	39,441
Less:
Material		10,946			3,922			14,868
Labor		1,603			1,259			2,862
Overhead		2,444			1,004			3,448
Gross profit		13,722			4,541			18,263
Selling & marketing		3,791			536			4,327
General & administrative		2,539			3,452			5,991
Research & development		1,302			362			1,664
Operating income		6,090			191			6,281
Interest income		47			32			79
Interest expense		(12	)		(3	)		(15	)
Other segment items (1)		(1,478	)		2			(1,476	)
Non-segment items (2)		—			—			(3,595	)
Net income	$	4,647		$	222		$	1,274

(2) Non-segment items consists primarily of expenses related to corporate salaries and professional services expenses, gain on sale of assets, income tax, interest income and interest expense.


	Six Months Ended March 31, 2025
	Thermal Processing Solutions			Semiconductor Fabrication Solutions			Total

Revenue	$	29,259		$	10,706		$	39,965
Less:
Material		16,180			6,090			22,270
Labor		3,109			2,085			5,194
Overhead		2,290			1,173			3,463
Gross profit		7,680			1,358			9,038
Selling & marketing		4,135			512			4,647
General & administrative		2,409			3,833			6,242
Research & development		1,401			308			1,709
Loss on sale of fixed assets		165			64			229
Goodwill impairment		4,997			15,356			20,353
Intangible asset impairment		—			2,569			2,569
Severance expense		101			151			252
Operating loss		(5,528	)		(21,435	)		(26,963	)
Interest income		9			3			12
Interest expense		(10	)		(3	)		(13	)
Other segment items (1)		(26	)		(4	)		(30	)
Non-segment items (2)		—			—			(4,506	)
Net loss	$	(5,555	)	$	(21,439	)	$	(31,500	)

(2) Non-segment items consists primarily of expenses related to corporate salaries and professional services expenses, gain on sale of assets, income tax, interest income and interest expense.


	Three Months Ended March 31,				Six Months Ended March 31,
	2026		2025		2026		2025
Depreciation and amortization:
Thermal Processing Solutions	$	261	$	258	$	516	$	521
Semiconductor Fabrication Solutions		344		540		680		1,007
Non-segment related*		22		23		45		45
	$	627	$	821	$	1,241	$	1,573

* Non-segment related to depreciation and amortization expense at corporate.


	March 31, 2026		September 30, 2025
Identifiable Assets:
Thermal Processing Solutions	$	58,501	$	56,019
Semiconductor Fabrication Solutions		24,110		26,040
Non-segment related*		14,785		10,814
	$	97,396	$	92,873

* Non-segment related assets include cash, fixed assets, and other assets

11. Major Customers and Foreign Sales

During the six months ended March 31, 2026, no customer represented 10% of our net revenues. During the six months ended March 31, 2025, one Thermal Processing Solutions segment customer represented 14% of our net revenues.

Our net revenues were from customers in the following geographic regions:


	Six Months Ended March 31,
	2026			2025
United States		29	%		28	%
Canada		3	%		1	%
Mexico		2	%		1	%
Other		1	%		2	%
Total Americas		35	%		32	%
China		24	%		13	%
Malaysia		6	%		3	%
Taiwan		11	%		27	%
Other		11	%		7	%
Total Asia		52	%		50	%
Germany		1	%		2	%
Hungary		—	%		4	%
Czech Republic		1	%		2	%
Other		11	%		10	%
Total Europe		13	%		18	%
		100	%		100	%

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our “Condensed Consolidated Financial Statements” in Item 1 of this Quarterly Report on Form 10-Q (“Quarterly Report”) and our consolidated financial statements and related notes included in “Item 8. Financial Statements and Supplementary Data” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2025 (the “2025 Form 10-K”).

Overview

We provide equipment, consumables and services for semiconductor device packaging, wafer production and device fabrication. Our products are used to fabricate and package semiconductor devices, such as graphic processing units (GPUs) used in AI applications, silicon carbide (SiC) and silicon (Si) power devices and other optical, analog and digital devices. We sell these products to semiconductor device packaging, electronic assembly and device fabrication companies worldwide.

We operate in two reportable segments, based primarily on the industries they serve: (i) Thermal Processing Solutions and (ii) Semiconductor Fabrication Solutions. Our Thermal Processing Solutions includes conveyorized reflow equipment for advanced semiconductor packaging and electronic assembly, high temperature conveyorized furnaces for power semiconductor substrate and electronic components manufacturing, and diffusion furnaces for SiC and Si power device production. Our Semiconductor Fabrication Solutions includes consumables, equipment and services for wafer polishing, dicing and cleaning.

The markets we serve are historically cyclical, but not seasonal, with constantly evolving technical requirements and can be subject to tariffs and sourcing restrictions driven by geopolitical tensions. Our revenue is impacted by these broad industry trends.

Growth and Investment Strategy

We believe there are three key secular trends that are key to our future growth:

•

Artificial Intelligence - With Artificial Intelligence (AI), we believe our reflow oven systems are the favored choice for Outsourced Semiconductor Assembly and Test Services (OSATS) providers who perform advanced packaging of the AI chips.

•

Supply Chain Resiliency - There is a global trend of creating supply chain resiliency by expanding and/or relocating operations outside of mainland China. We believe these factory openings will create demand for new equipment and services in growing regions like Southeast Asia and Mexico.

•

Advanced Mobility - Advanced Mobility encompasses both the development and adoption of electric vehicles and charging infrastructure, including both electric vehicle (EV) and hybrid electric vehicles (HEV), as well as advanced automotive electronics including Advanced Driver Assistance Systems (ADAS), infotainment and telematics. Our products intersect these markets in multiple ways: CMP consumables and wafer cleaning systems for the SiC substrates used in the EV power inverters; thermal processing systems for producing EV battery cooling systems and ceramic substrates for HEV power semiconductor packaging; and reflow ovens for ADAS, infotainment and telematics component assemblies.

We continue to invest in research and development to expand our Thermal Processing Solutions reflow equipment product line for AI applications. Our goal is to expand our addressable market by enabling mass production of higher density packages. We are also investing in application development and R&D resources to accelerate growth of our Semiconductor Fabrications Solutions business by expanding our consumables product portfolio and providing exceptional technical support and service to customers. Historically, we have grown our business primarily through acquisitions, including the businesses that currently comprise our two reportable segments in the Thermal Processing Solutions and Semiconductor Fabrication Solutions industries: BTU, PR Hoffman, Intersurface Dynamics and

Entrepix. We also have a complementary strategy of pursuing organic growth, particularly during times when we lack sufficient capital resources to pursue growth through acquisitions. We intend to continue to pursue acquisitions to supplement organic growth and have added market development resources globally to accelerate organic growth.

Results of Operations

The following table sets forth certain operational data as a percentage of net revenue for the periods indicated:


	Three Months Ended March 31,						Six Months Ended March 31,
	2026			2025			2026			2025
Revenues, net		100	%		100	%		100	%		100	%
Cost of sales		52	%		102	%		54	%		77	%
Gross margin		48	%		(2	)%		46	%		23	%
Selling, general and administrative		35	%		46	%		35	%		38	%
Research, development and engineering		4	%		5	%		4	%		4	%
Loss on disposal of fixed assets		—	%		1	%		—	%		1	%
Goodwill impairment		—	%		131	%		—	%		51	%
Intangible asset impairment		—	%		17	%		—	%		6	%
Severance expense		—	%		1	%		—	%		1	%
Operating income (loss)		9	%		(203	)%		7	%		(78	)%
Interest income		1	%		1	%		—	%		—	%
Interest expense		—	%		—	%		—	%		—	%
Foreign currency (loss) gain		(2	)%		—	%		(1	)%		1	%
Other		—	%		—	%		—	%		—	%
Income (loss) before income taxes		8	%		(202	)%		6	%		(77	)%
Income tax provision		2	%		2	%		3	%		2	%
Net income (loss)		6	%		(204	)%		3	%		(79	)%

Net Revenue

Net revenue consists of revenue recognized upon shipment or delivery of equipment. Spare parts sales are recognized upon shipment and service revenue is recognized upon completion of the service activity, which is generally ratable over the term of the service contract. Since the majority of our revenue is generated from large system sales, revenue, gross profit and operating income can be materially impacted by the timing of system shipments.

Our net revenue by reportable segment was as follows, dollars in thousands:


	Three Months Ended March 31,									Six Months Ended March 31,
Segment	2026		2025		Change		% Change			2026		2025		Change			% Change
Thermal Processing Solutions		14,735	$	10,575	$	4,160		39	%		28,715	$	29,259	$	(544	)		(2	)%
Semiconductor Fabrication Solutions		5,733		5,005		728		15	%		10,726		10,706		20			—	%
Total net revenue	$	20,468	$	15,580	$	4,888		31	%	$	39,441	$	39,965	$	(524	)		(1	)%

Total net revenue for the three months ended March 31, 2026 and 2025 was $20.5 million and $15.6 million, respectively, an increase of approximately $4.9 million or 31%. Total net revenue for the six months ended March 31, 2026 and 2025 was $39.4 million and $40.0 million, respectively, a decrease of approximately $0.5 million or 1%. Our Thermal Processing Solutions results for the second quarter increased primarily due to higher belt furnace, reflow oven diffusion furnace, and part shipments as well as an increase in our service business. Our Thermal Processing Solutions results for the six months ended decreased primarily due to lower belt furnace and horizontal diffusion furnace shipments, partially offset by higher shipments of reflow ovens and parts in addition to an increase in our service business. We are seeing year-over-year growth in our advanced packaging SPG reflow oven business due to

AI chip demand. Our Semiconductor Fabrication Solutions results for the second quarter increased primarily due to increased shipments of our polishing and wafer cleaning equipment, and increased demand for our consumables.

Orders and Backlog

New orders booked by reportable segment were as follows, dollars in thousands:


	Three Months Ended March 31,										Six Months Ended March 31,
Segment	2026		2025		Change			% Change			2026		2025		Change			% Change
Thermal Processing Solutions	$	17,004	$	10,562	$	6,442			61	%	$	33,199	$	23,729	$	9,470			40	%
Semiconductor Fabrication Solutions		4,145		5,139		(994	)		(19	)%		8,604		10,042		(1,438	)		(14	)%
Total new orders	$	21,149	$	15,701	$	5,448			35	%	$	41,803	$	33,771	$	8,032			24	%

Our backlog by reportable segment was as follows, dollars in thousands:


	March 31,
Segment	2026		2025		Change			% Change
Thermal Processing Solutions	$	19,139	$	15,315	$	3,824			25	%
Semiconductor Fabrication Solutions		3,113		3,804		(691	)		(18	)%
Total backlog	$	22,252	$	19,119	$	3,133			16	%

As of March 31, 2026, one of our Thermal Processing Solutions segment customers individually accounted for 28% of our backlog. Additionally, one customer of both our Thermal Processing Solutions and Semiconductor Fabrication Solutions segments accounted for 23% of our backlog. No other customer accounted for more than 10% of our backlog as of March 31, 2026. The orders included in our backlog are generally credit approved customer purchase orders believed to be firm and are generally expected to ship within the next twelve months. Our backlog at any point in time is not necessarily representative of actual sales for succeeding periods, nor is backlog any assurance that we will realize profit from completing these orders. During the six months ended March 31, 2026, the increase in Thermal Processing Solutions new order bookings was primarily driven by strong demand in Asia for AI application products.

Gross Profit and Gross Margin

Gross profit is the difference between net revenue and cost of goods sold, amortization of intangibles and intangible asset impairment. Cost of goods sold consists of purchased material, labor and overhead to manufacture equipment and spare parts and the cost of service and support to customers for installation, warranty and paid service calls. Gross margin is gross profit as a percent of net revenue. Our gross profit and gross margin by business segment were as follows, dollars in thousands:


	Three Months Ended March 31,													Six Months Ended March 31,
Segment	2026		Gross Margin			2025			Gross Margin			Change		2026		Gross Margin			2025		Gross Margin			Change
Thermal Processing Solutions	$	7,129		48	%	$	350			3	%	$	6,779	$	13,722		48	%	$	7,680		26	%	$	6,042
Semiconductor Fabrication Solutions		2,640		46	%		(675	)		(13	)%		3,315		4,541		42	%		1,358		13	%		3,183
Total gross profit (loss)	$	9,769		48	%	$	(325	)		(2	)%	$	10,094	$	18,263		46	%	$	9,038		23	%	$	9,225

Our gross margins can be affected by capacity utilization, material costs, and the type and volume of machines and consumables sold each quarter. Gross margin for the three months ended March 31, 2026 and 2025 was $9.8 million, 48% of net revenue, and $(0.3) million, (2)% of net revenue, respectively, an increase of $10.1 million. Gross margin for the six months ended March 31, 2026 and 2025 was $18.3 million, 46% of net revenue, and $9.0 million, 23% of net revenue, respectively, an increase of $9.2 million.

Gross margin on products from both our Thermal Processing Solutions segment and our Semiconductor Fabrication Solutions segment increased in the current period ended March 31, 2026 compared to the three and six months ended March 31, 2025, due to favorable product mix and the inventory write down associated with the discontinuation of low margin product lines in the prior year periods. We experienced moderate increases in material costs across all our segments during both periods. In response, we reviewed our pricing plans and supplier agreements, sharing cost increases with our customers where possible; however, we continue to experience pricing pressure from our customers. We are also continuing to explore additional partnerships with contract manufacturers, who can leverage their buying power on a larger scale.

Selling, General and Administrative

Selling, general and administrative (“SG&A”) expenses consist of the cost of employees, consultants and contractors, facility costs, sales commissions, shipping costs, promotional marketing expenses, legal and accounting expenses, bad debt expense and employee incentive accruals.

SG&A expenses for the three months ended March 31, 2026 and 2025 were $7.2 million and $7.1 million, respectively. SG&A expenses for the six months ended March 31, 2026 decreased to $14.0 million from $15.2 million for the six months ended March 31, 2025. This decrease was primarily due to lower personnel costs and variable costs partially offset by higher incentive compensation in the six months ended March 31, 2026 due to improved financial performance.

Research, Development and Engineering

Research, development and engineering (“RD&E”) expenses consist of the cost of employees, consultants and contractors who design, engineer and develop new products and processes as well as materials and supplies used in producing prototypes. RD&E expenses may vary from period to period depending on the engineering projects in process. Expenses related to engineers working on strategic projects or sustaining engineering projects are recorded in RD&E. However, from time to time we add functionality to our products or develop new products during engineering and manufacturing to fulfill specifications in a customer’s order, in which case the cost of development, along with other costs of the order, are charged to cost of goods sold. Occasionally, we receive reimbursements through governmental research and development grants which are netted against these expenses when certain conditions have been met.

RD&E expense, net of grants earned, for the three months ended March 31, 2026 and 2025 was $0.8 million, respectively, and $1.7 million in the six months ended March 31, 2026 and 2025, respectively. RD&E expenses, net of grant earned, are consistent year over year.

Goodwill Impairment

During the six months ended March 31, 2026, we recognized no impairment of our goodwill as no triggering event was identified.

In the second quarter of fiscal year 2025, we recognized impairment of our goodwill of $15.4 million at our Semiconductor Fabrication Solutions segment and $5.0 million at our Thermal Processing Solutions segment as a result of a triggering event identified at the end of the second fiscal quarter. See Note 6 for a description of the facts and circumstances leading to the goodwill impairment.

Intangible Asset Impairment

During the six months ended March 31, 2026, we recognized no impairment of our definite lived intangible assets.

In the second quarter of fiscal year 2025, we recognized impairment of our definite lived intangible assets of $2.6 million at our Semiconductor Fabrication Solutions segment. As disclosed above, this impairment was recorded within operating expenses in the Condensed Consolidated Statement of Operations. See Note 6 for a description of the facts and circumstances leading to the intangible asset impairments.

Severance Expense

Severance expense was $0 and $0.2 million for the three months ended March 31, 2026 and 2025, respectively. Severance expense was $0 and $0.3 million for the six months ended March 31, 2026 and 2025, respectively. For the three and six months ended March 31, 2026 and 2025, the amounts relate to staff reductions at our Thermal Processing Solutions and Semiconductor Fabrication Solutions segments.

Income Taxes

Our effective tax rate was 46.0% and (2.3%) for the six months ended March 31, 2026 and 2025, respectively. The effective tax rate for the six months ended March 31, 2026 differs from the U.S. statutory tax rate of 21% primarily due to foreign income taxed at a foreign rate different than 21%, for permanent items and changes in valuation allowances. For the three months ended March 31, 2026 and 2025, we recorded income tax expense of $0.5 million and $0.3 million, respectively. For the six months ended March 31, 2026 and 2025, we recorded income tax expense of $1.1 million and $0.7 million, respectively. The quarterly income tax provision is calculated using an estimated annual effective tax rate, based upon expected annual income, permanent items, statutory rates and planned tax strategies in the various jurisdictions in which we operate. However, losses in certain jurisdictions and discrete items are excluded from the determination of the estimated annual effective tax rate.

On July 4, 2025, the President signed into law significant federal tax legislation, H.R.1 (commonly known as the One Big Beautiful Bill Act or OBBBA). The legislation includes numerous changes to U.S. corporate income tax law, including but not limited to: permanent 100% bonus depreciation for qualified property, immediate expensing of domestic research and experimental expenditures, modifications to the limitation on business interest expense, changes to the international tax regime, and expanded limitations on the deductibility of executive compensation under IRC Section 162(m). Most provisions are effective for tax years beginning after December 31, 2024, with certain transition rules and exceptions.

OBBBA is not expected to have a material impact on our consolidated financial statements due to the full valuation allowance in the US. We continue to monitor additional guidance issued relating to OBBBA and assess the impact to our financial statements.

Our future effective income tax rate depends on various factors, such as the amount of income (loss) in each tax jurisdiction, tax regulations governing each region, non-tax deductible expenses incurred as a percent of pre-tax income and the effectiveness of our tax planning strategies.

Liquidity and Capital Resources

Cash and Cash Flow

We believe that our existing sources of liquidity and cash flows that we expect to generate from our operations will be sufficient to fund our operations, currently planned capital expenditures and R&D efforts, for at least the next 12 months. We regularly review and evaluate the adequacy of our cash flows and banking relationships to ensure that we have the appropriate access to cash to fund both our near-term operating needs and our long-term strategic initiatives.

The following table sets forth for the periods presented certain consolidated cash flow information, in thousands:


	Six Months Ended March 31,
	2026			2025
Net cash provided by operating activities	$	6,196		$	3,077
Net cash used in investing activities		(475	)		(152	)
Net cash provided by financing activities		279			103
Effect of exchange rate changes on cash and cash equivalents		513			(688	)
Net increase in cash and cash equivalents		6,513			2,340
Cash and cash equivalents, beginning of period		17,904			11,086
Cash and cash equivalents, end of period	$	24,417		$	13,426

A summary of our cash position as of March 31, 2026 and September 30, 2025, is as follows, in thousands, except the current ratio:


	March 31, 2026		September 30, 2025
Cash and cash equivalents	$	24,417	$	17,904
Working capital	$	43,341	$	39,695
Current ratio (current assets to current liabilities)	2.9:1		2.9:1

The increase in cash and cash equivalents from September 30, 2025 of $6.5 million was primarily due to an increase in accounts payable and increased collections from customers, partially offset by higher inventory. We maintain a portion of our cash and cash equivalents in Renminbis, a Chinese currency, at our operations in China; therefore, changes in the exchange rates have an impact on our cash balances. The $3.6 million increase in working capital from September 30, 2025, was primarily due to increases in cash and cash equivalents.

During periods of weakening demand, we typically generate cash from operating activities, which we may decide to reinvest in our business via strategic projects. Conversely, we are more likely to use operating cash flows for working capital requirements during periods of higher growth. Our sources of capital in the past have included the sale of equity securities in private and public transactions, the incurrence of long-term debt and customer deposits.

Cash Flows from Operating Activities

Cash provided by our operating activities was $6.2 million for the six months ended March 31, 2026, compared to $3.1 million provided by operating activities for the six months ended March 31, 2025. We increased our accounts payable, accrued liabilities, and contract liabilities, offset by a decrease in accounts receivable, for the six months ended March 31, 2026.

Cash Flows from Investing Activities

Cash used in investing activities was $0.5 million for the six months ended March 31, 2026, compared to $0.2 million used in investing activities in the six months ended March 31, 2025. Both periods consist solely of capital expenditures.

Cash Flows from Financing Activities

For the six months ended March 31, 2026 and 2025, cash provided by financing activities was $0.3 million and $0.1 million, respectively, primarily due to the exercise of stock options.

Off-Balance Sheet Arrangements

As of March 31, 2026, we had no off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K promulgated by the SEC that have or are reasonably likely to have a current or future effect on financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

Contractual Obligations

Unrecorded purchase obligations were $4.5 million as of March 31, 2026, compared to $4.0 million as of September 30, 2025, an increase of $0.5 million.

Other than as described in Note 2, there were no material changes to the contractual obligations included in "Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our 2025 Form 10-K.

Critical Accounting Estimates

"Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Quarterly Report discusses our condensed consolidated financial statements that have been prepared in accordance with GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of the condensed consolidated financial statements, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period.

On an ongoing basis, we evaluate our estimates and judgments, including those related to revenue recognition, income taxes, inventory valuation, business combination, goodwill, and long-lived asset impairment. We base our estimates and judgments on historical experience, expectations regarding the future and on various other factors that we believe to be reasonable under the circumstances. The results of these estimates and judgments form the basis for making conclusions about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

A critical accounting estimate is one that is both important to the presentation of our financial position and results of operations, and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. These uncertainties are discussed in Part I, Item 1A of our 2025 Form 10-K. We believe our critical accounting estimates relate to the more significant judgments and estimates used in the preparation of our consolidated financial statements.

We believe the critical accounting estimates discussed in the section entitled “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies” in our 2025 Form 10-K represent the most significant judgments and estimates used in the preparation of our consolidated financial statements. There have been no material changes in our critical accounting estimates during the six months ended March 31, 2026.

Impact of Recently Issued Accounting Pronouncements

For discussion of the impact of recently issued accounting pronouncements, see “Part I, Item 1. Financial Information” under “Impact of Recently Issued Accounting Pronouncements.”

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company, as defined by Rule 12b-2 of the Exchange Act and in Item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations and, therefore, are not required to provide the information requested by this Item.

Item 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures.

We maintain “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is (1) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (2) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Our management, including our Chief Executive Officer (“CEO”) and our Chief Financial Officer (“CFO”), has carried out an evaluation of the design and operation of our disclosure controls and procedures as of March 31, 2026, pursuant to Exchange Act Rules 13a-15(e) and 15(d)-15(e). Based upon that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective, as of March 31, 2026, in ensuring that material information related to us required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to management, including the principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

During the fiscal quarter ended March 31, 2026, there were no changes in our internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

For discussion of legal proceedings, see Note 9 to our condensed consolidated financial statements under “Part I, Item 1. Financial Information” under “Commitments and Contingencies” of this Quarterly Report, which section is incorporated by reference into this Part II, Item 1.

Item 1A. Risk Factors

We refer you to documents filed by us with the SEC, specifically “Item 1A. Risk Factors” in our 2025 Form 10-K, which identifies important risk factors that could materially affect our business, financial condition and future results. We also refer you to the factors and cautionary language set forth in the section entitled “Cautionary Statements Regarding Forward-Looking Statements” immediately preceding “Item 1. Financial Statements” of this Quarterly Report. This Quarterly Report, including the accompanying condensed consolidated financial statements and related notes, should be read in conjunction with such risks and other factors for a full understanding of our operations and financial condition. The risks described in our 2025 Form 10-K and any described herein are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or operating results. Except as set forth below, there have been no material changes to the risk factors previously disclosed in our 2025 Form 10-K.

Armed Conflict Involving Iran and Related Geopolitical Instability Could Disrupt Global Semiconductor Supply Chains and Adversely Affect Our Business, Financial Condition and Results of Operations.

The ongoing armed conflict involving Iran has introduced significant geopolitical uncertainty to the Middle East and surrounding regions. The conflict, including direct military operations, has the potential to escalate and draw in additional state and non-state actors, destabilize critical trade routes, and trigger broader economic disruptions. The semiconductor industry in which we operate is particularly sensitive to such disruptions given its reliance on globally integrated supply chains, specialized raw materials and energy-intensive manufacturing processes.

Hostilities involving Iran could lead to disruptions in global energy markets, including significant increases in the price of oil and natural gas, given Iran’s strategic position near the Strait of Hormuz, through which a substantial portion of global oil shipments transit. Energy price volatility could increase our operating costs and the costs borne by our customers, potentially dampening demand for our products and services. In addition, the conflict could disrupt maritime shipping lanes and air freight routes in the region, resulting in delays and increased costs for the transportation of raw materials, components and finished goods across our global supply chain.

The conflict could also result in the imposition of new or expanded economic sanctions, export controls or trade restrictions by the United States or other governments, which could limit our ability to source materials, transact with certain counterparties or sell our products in certain markets. We derive a significant portion of our revenue from customers in Asia, including China, Taiwan, Malaysia and other countries that may be directly or indirectly affected by shifts in geopolitical alliances and trade flows resulting from the conflict. Furthermore, heightened geopolitical tensions could accelerate the trend toward supply chain regionalization and decoupling, which, while potentially creating opportunities in certain markets, could also disrupt established customer relationships and distribution channels.

In addition, armed conflict in the region could adversely affect macroeconomic conditions globally, contribute to inflationary pressures, increase volatility in foreign currency exchange rates and financial markets, and reduce business confidence and capital spending by our customers. Any prolonged period of conflict or instability could exacerbate the cyclical nature of the semiconductor industry and delay or reduce our customers’ investment in new equipment, consumables and services. We cannot predict the duration or outcome of the conflict, or the full extent of its impact on our business, results of operations, financial condition or stock price.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

During the three months ended March 31, 2026, none of our directors or officers (as defined in Rule 16a-1(f) promulgated under the Securities Exchange Act of 1934, as amended) adopted, terminated, or modified a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K).

Item 6. Exhibits

     EXHIBIT

     INCORPORATED BY REFERENCE

     FILED

     NO.

     EXHIBIT DESCRIPTION

     FORM

     FILE NO.

     EXHIBIT NO.

     FILING DATE

     HEREWITH

     10.1
 
     Offer Letter, dated December 9, 2025, with Mark Weaver 

     10-Q

     000-11412

     10.1

     February 5, 2026

     31.1

     Certification Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as Amended

     X

     31.2

     Certification Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as Amended

     X

     32.1

     Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

     X

     32.2

     Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

     X

     101.INS

     Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.

     X

     101.SCH

     Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents

     X

     104

     Cover Page Interactive Data File (embedded within the Inline XBRL document)

     X


Arizona		86-0411215
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

58 South River Drive Suite 370, Tempe, Arizona		85288
(Address of principal executive offices)		(Zip Code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	ASYS	NASDAQ Global Select Market


Large Accelerated Filer	☐	Accelerated Filer	☐
Non-Accelerated Filer	☒	Smaller Reporting Company	☒
		Emerging Growth Company	☐


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	Page
Cautionary Statement Regarding Forward-Looking Statements	3
PART I. FINANCIAL INFORMATION	4
Item 1. Financial Statements	4
Condensed Consolidated Balance Sheets March 31, 2026 (Unaudited) and September 30, 2025	4
Condensed Consolidated Statements of Operations (Unaudited) Three and Six Months Ended March 31, 2026 and 2025	5
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) Three and Six Months Ended March 31, 2026 and 2025	6
Condensed Consolidated Statements of Shareholders’ Equity (Unaudited) Three and Six Months Ended March 31, 2026 and 2025	7
Condensed Consolidated Statements of Cash Flows (Unaudited) Six Months Ended March 31, 2026 and 2025	8
Notes to Condensed Consolidated Financial Statements (Unaudited)	9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Overview	24
Results of Operations	25
Liquidity and Capital Resources	28
Off-Balance Sheet Arrangements	29
Contractual Obligations	29
Critical Accounting Estimates	30
Impact of Recently Issued Accounting Pronouncements	30
Item 3. Quantitative and Qualitative Disclosures About Market Risk	30
Item 4. Controls and Procedures	30
PART II. OTHER INFORMATION	32
Item 1. Legal Proceedings	32
Item 1A. Risk Factors	32
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 3. Defaults Upon Senior Securities	33
Item 4. Mine Safety Disclosures	33
Item 5. Other Information	33
Item 6. Exhibits	34
SIGNATURES	35