​ Cautionary Statement Regarding Forward Looking Statements ​ Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to facilitate an understanding of our business and results of operations. This MD&A should be read in conjunction with our Consolidated Financial Statements and the accompanying Notes to Consolidated Financial Statements included elsewhere in this Form 10-Q. The following discussion contains forward-looking statements and should also be read in conjunction with the cautionary statement set forth at the beginning of this Form 10-Q. ​ The following section generally discusses 2026 and 2025 items and year-to-year comparisons between 2026 and 2025. Discussions of 2025 items that are not included in this Form 10-Q can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Item 2 of our Quarterly Report on Form 10-Q for the interim period ended June 30, 2025, filed on August 6, 2025. ​ Executive Summary ​ We are an innovative manufacturer of semiconductor process equipment. Our proven ion beam, laser annealing, lithography, MOCVD, and single wafer wet processing technologies play an integral role in the fabrication and packaging of advanced semiconductor devices. With equipment designed to optimize performance, yield and cost of ownership, Veeco holds leading technology positions in the markets we serve. To learn more about Veeco’s systems and service offerings, visit www.veeco.com. ​ Merger with Axcelis Technologies, Inc. ​ On September 30, 2025, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Axcelis Technologies, Inc., a Delaware corporation (“Axcelis”), and Victory Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Axcelis (“Merger Sub”). 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 Axcelis. The Merger Agreement was approved by our board of directors (except for one (1) independent director who serves on the Axcelis’ board of directors as well who recused himself) and, on February 6, 2026, by the stockholders of each company. The completion of the Merger remains subject to the satisfaction or (to the extent permissible) waiver of customary closing conditions, including the final pending regulatory approval from the State Administration for Market Regulation of the People’s Republic of China, and is currently expected to close in the second half of 2026. ​ For more information regarding the Merger, see Note 10 “Merger” to the accompanying Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q. ​ Business Update ​ Overview ​ The Semiconductor industry experienced robust growth in 2025 and, looking ahead, industry analysts are forecasting long-term growth of the industry, driven by secular growth trends such as artificial intelligence (“AI”), high-performance computing, advanced connectivity, and the electrification of the automotive industry. Additionally, government investments in the Semiconductor industry are projected to accelerate global spending in next-generation technologies. ​ Growth in the Semiconductor industry driven by AI investments, coupled with increasing technological complexity of Semiconductor chips, are expected to drive long-term growth in Wafer Fab Equipment (“WFE”) spending. In an effort to improve chip performance, optimize power consumption, and reduce costs, today’s most advanced Semiconductor manufacturers are shrinking device geometries, investing in more complex transistor designs such as Gate-All-Around and exploring 3D architectures. As a result, growth of the WFE market is forecasted to keep pace with long-term growth 25 Table of Contents of the Semiconductor industry, which we believe should benefit semiconductor capital equipment providers, including Veeco. ​ Veeco’s technologies are at the forefront of enabling new technical innovations in the manufacturing of high-performance AI chips, advanced connectivity and High-Bandwidth Memory (“HBM”). We continue to invest in new technologies to expand our Serviceable Available Market (“SAM”) to a broad range of new applications. ​ Semiconductor Market ​ Semiconductor revenue comprised 68% of second quarter total revenue primarily driven by system shipments of our Laser Spike Annealing (“LSA”) technology, and our Advanced Packaging technology, particularly for our wet processing products. Semiconductor revenue increased 5% from the comparable prior period due to increase in sales to our leading-edge foundry/logic and memory customers. ​ In logic and foundry, we have long-standing and trusted customer relations and our annealing solutions continue to gain traction at advanced node customers. Our LSA platform is production tool of record at all three Tier 1 logic customers, driving repeat business. Additionally, our next-generation Nanosecond Annealing (“NSA”) system tool addresses critical low-thermal budget applications such as contact annealing, 3D device integration and materials modification. In the second quarter, for our NSA system we announced that a Tier 1 customer successfully completed their evaluation and placed a follow-on order for a second system to ship in the second half of 2026. We also announced in the second quarter, that the third Tier 1 logic customer received an NSA evaluation tool. We have now successfully engaged all three Tier 1 logic and foundry customers with our NSA technology, and we continue working closely with them to support high-volume manufacturing. ​ In the memory market, we continue to expand our presence as there is significant long-term opportunity as AI-driven computing architecture accelerates demand for Dynamic Random Access Memory (“DRAM”) and NAND technologies. These technology transitions are creating new thermal processing and material requirements that align well with our differentiated annealing capabilities. The memory industry is at the early stages of adopting laser-based technologies for annealing applications. We continue to make solid progress with leading memory customers, including serving as the production tool of record at a Tier 1 HBM customer, that is accelerating their investments in 2026. We are also advancing an LSA evaluation system at a second Tier 1 DRAM customer, with potential for follow-on orders in 2027 and 2028. Customer engagement continues to expand with a third DRAM customer, with potential to enter an evaluation agreement over the coming quarters. Furthermore, we are encouraged by several NAND customers who are exploring applications for our LSA and NSA platforms, which are continuing to advance well. ​ We also have two Ion Beam Deposition 300 (“IBD300”) systems under evaluation at leading DRAM memory customers. Our IBD300 system provides Veeco with another opportunity to expand our SAM to advanced node applications where low resistance films are critical. These initial systems are being evaluated for advanced memory applications, such as DRAM bitline metallization. ​ The ongoing adoption of EUV Lithography for advanced node semiconductor manufacturing continues to drive demand for our Ion Beam Deposition (“IBD”) EUV system for mask blanks. Leading logic and memory manufacturers expect EUV and High Numerical Aperture (“High-NA”) lithography to be integral to their future roadmaps. Our IBD technology is a key enabler of the EUV mask blank Multiple Layer Mirror deposition. Our product roadmap is well positioned as the industry adopts next-generation High-NA EUV lithography, and we are expanding our EUV related business to EUV pellicles, which are increasingly being used to protect defect-free masks and improve productivity as EUV utilization scales. We continue to win production business at a Tier 1 foundry and engage new customers for EUV pellicles. ​ In Advanced Packaging (“AP”), which includes our wet processing and lithography systems, we continue to experience increased demand as AI-related investments accelerate adoption of heterogenous integration of advanced 2.5D and 3D architectures. In the second quarter, we had an increase in orders for our wet processing and lithography systems from leading OSAT customers. We are also working with a Tier 1 foundry on a panel wet processing tool opportunity, and we are encouraged by our engagement. AP continues to provide meaningful momentum to Veeco, as we progress through 26 Table of Contents the year, bringing increased visibility through 2027. The sustained interest from leading customers in our ability to enable their extreme ramp and AP roadmap supports our confidence in the outlook for the business. ​ Looking ahead, we anticipate growth in the semiconductor market in leading-edge investment driven by AI investments. ​ Compound Semiconductor Market ​ Compound Semiconductor revenue increased by 45% in the second quarter from the comparable prior year period, comprising 11% of total revenue. In the Compound Semiconductor market, we have a broad portfolio of products which are gaining momentum due to a significant inflection point within the industry due to the AI data center infrastructure build-out. ​ We continue to benefit from the growing demand tied to AI, particularly through our exposure to Silicon Photonics and the Indium Phosphide (“InP”) lasers used for optical connectivity applications. Industry investment remains focused on hyperscalers' need for higher bandwidth and optical connectivity across increasingly large AI data clusters. As bandwidth requirements continue to accelerate, the industry is increasingly focused on overcoming the "copper wall," where traditional electrical interconnects become less efficient at supporting higher-speed data transmission. At the same time, hyperscalers continue to advance optical networking architectures, including evolution of EML pluggables, Silicon Photonics pluggables, as well as the longer-term solutions of near-package and co-packaged optics. Collectively, these trends are driving broader adoption of optical connectivity throughout the AI infrastructure ecosystem. These architectures increasingly rely on InP laser technologies, which are critical to next-generation AI networking and optical interconnect solutions. ​ Overall, our SAM expansion is driven by two key market inflections. First, the exponential growth of optical connectivity bandwidth requirement due to agentic AI, leading to a corresponding growth in high-power InP Continuous Wave laser demand and thus InP epitaxy. Second, the exponential growth in power demand is simultaneously driving the number of laser diodes, but more importantly power required per laser diode, leading to higher reliability requirements from laser facet coating solutions. ​ Our portfolio spans multiple steps of the laser manufacturing process, including Lumina MOCVD Arsenide Phosphide batch platform for the epitaxy steps, Wafer Etch and Wafer Storm for etching and metal lift-off, and our Spector IBD for the laser diode facet coatings. ​ First, the MOCVD epitaxy steps play a crucial role and we are continuing to penetrate the market with our Lumina MOCVD InP Platform as leading photonics customers expand capacity. In the second quarter, a global leader in optical and photonic technologies selected our Lumina+ MOCVD system to fabricate InP lasers for innovative communication solutions in the datacom industry. Second, we are a market leader with our WaferEtch and WaferStorm wet processing technologies for advanced etching and surface preparation. Third, we remain a market leader with our Spector IBD tool for the critical laser facet coating step. From ongoing customer engagements, we believe our IBD technology remains differentiated from traditional approaches, as the industry transitions to higher powered lasers which demand stricter film specifications. ​ Additionally, in the Compound Semiconductor market there are Other Photonics applications driving growth for our products, including red MircoLEDs, low earth orbit solar cells and augmented/virtual reality applications. ​ Lastly, our Propel300mm GaN on Si product continues to be a strong long-term driver tied to AI data center power efficiency, electrification, and high-power density applications. At a leading power IDM customer, we have an evaluation for our Propel300 system in place, and we received a pilot-line order for a multi-chamber system at the end of 2025. We believe we are well positioned to participate in future capacity expansions. ​ We expect our compound semiconductor market to grow as AI, power efficiency and advanced connectivity continue to reshape the industry. ​ 27 Table of Contents Data Storage Market ​ Data Storage market revenue increased by 80% in the second quarter from the comparable prior year period, comprising 11% of total revenue. We address the Data Storage market with sales of our Ion Beam technology and wet process systems driven by demand for cloud and AI data centers. We expect full year 2026 to more than double and continue to be booked well into 2027. We are engaged with our customers on their roadmaps, including for Heat Assisted-Magnetic-Recording (“HAMR”) technology, giving us strong momentum in this market. ​ Scientific & Other Market ​ Scientific & Other market revenue increased by 28% in the second quarter from the comparable prior year period, comprising 10% of total revenue. Sales in the Scientific & Other market are largely driven by sales to government-funded laboratories, universities, and research institutions. We address the Scientific & Other market with several technologies, including MBE, ALD, MOCVD, Wet Processing, and IBD/IBE, which support diverse R&D and niche low-volume production applications. ​ ​ Results of Operations ​ For the three months ended June 30, 2026 and 2025 ​ The following table presents revenue and expense line items reported in our Consolidated Statements of Operations for the indicated periods in 2026 and 2025 and the period-over-period dollar and percentage changes for those line items. Our results of operations are reported as one business segment, represented by our single operating segment. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, ​ ​ Change ​ ​ ​ 2026 ​ ​ 2025 ​ ​ Period to Period ​ ​ ​ (dollars in thousands) ​ Net sales ​ ​ ​ $ 193,481 ​ ​ ​ 100% ​ ​ $ 166,104 ​ ​ ​ 100% ​ ​ $ 27,377 ​ ​ ​ 16% ​ ​ ​ ​ Cost of sales ​ 118,649 61% ​ ​ 97,377 59% ​ ​ 21,272 22% ​ ​ Gross profit ​ 74,832 39% ​ ​ 68,727 41% ​ ​ 6,105 9% ​ ​ Operating expenses, net: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Research and development ​ 33,343 17% ​ ​ 31,560 19% ​ ​ 1,783 6% ​ ​ Selling, general, and administrative ​ 27,629 14% ​ ​ 23,927 14% ​ ​ 3,702 15% ​ ​ Amortization of intangible assets ​ 607 0% ​ ​ 821 0% ​ ​ (214) (26)% ​ ​ Merger costs ​ 1,464 1% ​ ​ — 0% ​ ​ 1,464 * ​ ​ Other operating expense (income), net ​ (64) (0)% ​ ​ 49 0% ​ ​ (113) * ​ ​ Total operating expenses, net ​ 62,979 33% ​ ​ 56,357 34% ​ ​ 6,622 12% ​ ​ Operating income ​ 11,853 6% ​ ​ 12,370 7% ​ ​ (517) (4)% ​ ​ Interest income, net ​ 1,171 1% ​ ​ 905 1% ​ ​ 266 29% ​ ​ Other income (expense), net ​ ​ — ​ 0% ​ ​ ​ (653) ​ (0)% ​ ​ ​ 653 ​ (100)% ​ ​ Income before income taxes ​ 13,024 7% ​ ​ 12,622 8% ​ ​ 402 3% ​ ​ Income tax expense (benefit) ​ 1,167 1% ​ ​ 889 1% ​ ​ 278 31% ​ ​ Net income ​ $ 11,857 6% ​ ​ $ 11,733 7% ​ ​ $ 124 1% ​ ​ * Not meaningful 28 Table of Contents Net Sales The following is an analysis of sales by market and by region: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, ​ ​ Change ​ ​ ​ 2026 ​ ​ 2025 ​ ​ Period to Period ​ ​ ​ (dollars in thousands) ​ Sales by end-market ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Semiconductor ​ $ 130,678 68% ​ ​ $ 123,874 75% ​ ​ $ 6,804 5% ​ ​ Compound Semiconductor ​ 20,527 11% ​ ​ 14,197 9% ​ ​ 6,330 45% ​ ​ Data Storage ​ 22,201 11% ​ ​ 12,354 7% ​ ​ 9,847 80% ​ ​ Scientific & Other ​ 20,075 10% ​ ​ 15,679 9% ​ ​ 4,396 28% ​ ​ Total ​ $ 193,481 100% ​ ​ $ 166,104 100% ​ ​ $ 27,377 16% ​ ​ Sales by geographic region ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ United States ​ $ 59,068 31% ​ ​ $ 21,852 13% ​ ​ $ 37,216 170% ​ ​ EMEA ​ 16,003 8% ​ ​ 18,533 11% ​ ​ (2,530) (14)% ​ ​ China ​ ​ 48,085 ​ 25% ​ ​ ​ 27,490 ​ 17% ​ ​ ​ 20,595 75% ​ ​ Rest of APAC ​ 69,798 36% ​ ​ 98,186 59% ​ ​ (28,388) (29)% ​ ​ Rest of World ​ 527 - ​ ​ 43 - ​ ​ 484 * ​ ​ Total ​ $ 193,481 100% ​ ​ $ 166,104 100% ​ ​ $ 27,377 16% ​ ​ * Not meaningful Sales increased for the three months ended June 30, 2026 against the comparable prior year period across all markets. By geography, sales increased in the United States, and China regions, partially offset by decreased sales in the Rest of APAC, and EMEA regions. Sales in the Rest of APAC region for the three months ended June 30, 2026 included sales in Taiwan, Singapore, and Japan of $43.4 million, $10.5 million, and $9.8 million, respectively. Sales in the Rest of APAC region for the three months ended June 30, 2025 included sales in Taiwan, Singapore, and Japan of $45.5 million, $23.4 million, and $14.8 million respectively. In light of the global nature of our business, we are impacted by conditions in the various countries in which we and our customers operate, including the recent tariff and trade dynamics. We expect there will continue to be year-to-year variations in our future sales distribution across markets and geographies. ​ Gross Profit ​ For the three months ended June 30, 2026, gross profit increased against the comparable prior period primarily due to an increase in sales volume, partially offset by a decrease in gross margins. Gross margins decreased principally due to unfavorable product mix and higher spending, including logistics costs. Additionally other factors will cause our gross margins to fluctuate each period, including the impact of the evolving tariffs landscape, which includes refunds on previously paid tariffs, newly implemented tariffs, or changes to existing tariffs. ​ Research and Development ​ The markets we serve are characterized by continuous technological development and product innovation, and we invest in various research and development initiatives to maintain our competitive advantage and achieve our growth objectives. Research and development expenses increased for the three months ended June 30, 2026 against the comparable prior period due to an increase in personnel-related expenses. ​ Selling, General, and Administrative ​ Selling, general, and administrative expenses increased for the three months ended June 30, 2026 against the comparable prior period due to variable incentive related compensation and commission expenses based on increased order volume. 29 Table of Contents Merger Costs ​ During the three months ended June 30, 2026, we incurred an additional $1.5 million in legal, accounting, consulting fees and employee-related costs in connection with the proposed Merger. ​ Interest Income (Expense) ​ We recorded net interest income of $1.2 million for the three months ended June 30, 2026, compared to net interest income of $0.9 million for the comparable prior year period. The increase in net interest income was primarily due to reduced interest expense on the 2025 Notes as they matured on January 15, 2025 and the 2027 Notes that were settled on May 15, 2025. ​ Income Taxes ​ Our tax expense for the three months ended June 30, 2026, was $1.2 million, compared to $0.9 million of tax expense for the comparable prior period. For the three months ended June 30, 2026, the effective tax rate was favorably impacted by the tax benefits related to Foreign-Derived Deduction Eligible Income and research and development tax credits. Additionally, the effective tax rate was also impacted by a discrete income tax benefit resulting from share-based compensation windfall. For the three months ended June 30, 2025, the effective tax rate was lower than the U.S. statutory tax rate primarily relating to tax benefits related to Foreign-Derived Intangible Income and research and development tax credits. ​ ​ For the six months ended June 30, 2026 and 2025 ​ The following table presents revenue and expense line items reported in our Consolidated Statements of Operations for the indicated periods in 2026 and 2025 and the period-over-period dollar and percentage changes for those line items. Our results of operations are reported as one business segment, represented by our single operating segment. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, ​ ​ Change ​ ​ 2026 ​ ​ 2025 ​ ​ Period to Period ​ ​ (dollars in thousands) Net sales ​ ​ ​ $ 351,822 ​ ​ ​ 100% ​ ​ $ 333,396 ​ ​ ​ 100% ​ ​ $ 18,426 ​ ​ ​ 6% ​ Cost of sales ​ 221,162 63% ​ ​ 196,202 59% ​ ​ 24,960 13% ​ Gross profit ​ 130,660 37% ​ ​ 137,194 41% ​ ​ (6,534) (5)% ​ Operating expenses, net: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Research and development ​ 63,218 18% ​ ​ 60,074 18% ​ ​ 3,144 5% ​ Selling, general, and administrative ​ 53,645 15% ​ ​ 48,955 15% ​ ​ 4,690 10% ​ Amortization of intangible assets ​ 1,312 0% ​ ​ 1,642 0% ​ ​ (330) (20)% ​ Merger costs ​ ​ 3,476 ​ 1% ​ ​ ​ — ​ 0% ​ ​ ​ 3,476 ​ * ​ Other operating expense (income), net ​ (186) (0)% ​ ​ 5 0% ​ ​ (191) * ​ Total operating expenses, net ​ 121,465 35% ​ ​ 110,676 33% ​ ​ 10,789 10% ​ Operating income ​ 9,195 3% ​ ​ 26,518 8% ​ ​ (17,323) (65)% ​ Interest income (expense), net ​ 2,346 1% ​ ​ 1,741 1% ​ ​ 605 35% ​ Other income (expense), net ​ ​ — ​ 0% ​ ​ ​ (653) ​ (0)% ​ ​ ​ 653 ​ * ​ Income before income taxes ​ 11,541 3% ​ ​ 26,953 8% ​ ​ (15,412) (57)% ​ Income tax expense (benefit) ​ 8 0% ​ ​ 3,926 1% ​ ​ (3,918) (100)% ​ Net income ​ $ 11,533 3% ​ ​ $ 23,027 7% ​ ​ $ (11,494) (50)% ​ * Not meaningful 30 Table of Contents Net Sales The following is an analysis of sales by market and by region: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, ​ ​ Change ​ ​ 2026 ​ ​ 2025 ​ ​ Period to Period ​ ​ (dollars in thousands) Sales by end-market ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Semiconductor ​ $ 239,720 68% ​ ​ $ 247,697 74% ​ ​ $ (7,977) (3)% Compound Semiconductor ​ 39,335 11% ​ ​ 28,594 9% ​ ​ 10,741 38% Data Storage ​ 32,414 10% ​ ​ 19,059 6% ​ ​ 13,355 70% Scientific & Other ​ ​ 40,353 11% ​ ​ ​ 38,046 11% ​ ​ ​ 2,307 6% Total ​ $ 351,822 100% ​ ​ $ 333,396 100% ​ ​ $ 18,426 6% Sales by geographic region ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ United States ​ $ 91,293 26% ​ ​ $ 45,914 14% ​ ​ $ 45,379 99% EMEA ​ 31,787 9% ​ ​ 30,870 9% ​ ​ 917 3% China ​ 68,041 19% ​ ​ 98,382 30% ​ ​ (30,341) (31)% Rest of APAC ​ 160,162 46% ​ ​ 158,162 47% ​ ​ 2,000 1% Rest of World ​ ​ 539 ​ - ​ ​ ​ 68 ​ - ​ ​ ​ 471 ​ * Total ​ $ 351,822 100% ​ ​ $ 333,396 100% ​ ​ $ 18,426 6% * Not meaningful Sales increased for the six months ended June 30, 2026 against the comparable prior year period driven by an increase in sales in the Data Storage, Compound Semiconductor, and Scientific & Other markets, partially offset by a decrease in sales in the Semiconductor market. By geography, sales increased in the United States, Rest of APAC, and EMEA, regions, partially offset by decreased sales in the China region. Sales in the Rest of APAC region for the six months ended June 30, 2026 included sales in Taiwan, Japan, and Singapore of $109.0 million, $19.1 million, and $14.0 million, respectively. Sales in the Rest of APAC region for the six months ended June 30, 2025 included sales in Taiwan, Singapore, and Japan of $78.0 million, $29.4 million, and $28.7 million, respectively. In light of the global nature of our business, we are impacted by conditions in the various countries in which we and our customers operate, including the recent tariff and trade dynamics. We expect there will continue to be year-to-year variations in our future sales distribution across markets and geographies. ​ Gross Profit ​ For the six months ended June 30, 2026, gross profit decreased against the comparable prior period due to a decrease in gross margins, partially offset by an increase in sales volume. Gross margins decreased principally due to unfavorable product mix and higher spending, including logistics costs. Additionally other factors will cause our gross margins to fluctuate each period, including the impact of the evolving tariffs landscape, which includes refunds on previously paid tariffs, newly implemented tariffs, or changes to existing tariffs. ​ Research and Development ​ The markets we serve are characterized by continuous technological development and product innovation, and we invest in various research and development initiatives to maintain our competitive advantage and achieve our growth objectives. Research and development expenses increased for the six months ended June 30, 2026 against the comparable prior period due to an increase in personnel-related expenses. ​ Selling, General, and Administrative ​ Selling, general, and administrative expenses increased for the six months ended June 30, 2026 against the comparable prior period due variable incentive related compensation and commission expenses based on increased order volume. 31 Table of Contents Merger Costs ​ During the six months ended June 30, 2026, we incurred an additional $3.5 million in legal, accounting, consulting fees and employee-related costs in connection with the proposed Merger. ​ Interest Income (Expense) ​ We recorded net interest income of $2.3 million for the six months ended June 30, 2026, compared to net interest income of $1.7 million for the comparable prior year period. The increase in net interest income was primarily due to reduced interest expense on the 2025 Notes as they matured on January 15, 2025 and the 2027 Notes that were settled on May 15, 2025. ​ Income Taxes ​ Our tax expense for the six months ended June 30, 2026 was immaterial, compared to $3.9 million of tax expense for the comparable prior period. For the six months ended June 30, 2026, the effective tax rate was favorably impacted by the tax benefits related to Foreign-Derived Deduction Eligible Income and research and development tax credits. Additionally, the effective tax rate was also impacted by a discrete income tax benefit resulting from share-based compensation windfall. For the six months ended June 30, 2025, the effective tax rate was favorably impacted by tax benefits related to Foreign-Derived Intangible Income and research and development tax credits, partially offset by a discrete income tax expense resulting from the share-based compensation shortfall. ​ Liquidity and Capital Resources ​ Our cash and cash equivalents, restricted cash, and short-term investments are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ December 31, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ (in thousands) Cash and cash equivalents ​ $ 214,458 ​ $ 163,466 Short-term investments ​ 214,940 ​ 226,763 Total ​ $ 429,398 ​ $ 390,229 ​ At June 30, 2026 and December 31, 2025, cash and cash equivalents of $46.6 million and $23.6 million, respectively, were held outside the United States. As of June 30, 2026, we had $29.2 million of accumulated undistributed earnings generated by our non-U.S. subsidiaries for which the U.S. tax has previously been provided. Approximately $14.2 million of undistributed earnings will be subject to foreign withholding taxes if distributed back to the United States and we have accrued $1.4 million for foreign withholding taxes for the undistributed earnings. ​ We believe that our projected cash flow from operations, combined with our cash and short-term investments, will be sufficient to meet our projected working capital requirements, contractual obligations, and other cash flow needs for the next twelve months, including scheduled principal and interest payments on our convertible senior notes, purchase commitments, and payments required under our operating leases. ​ 32 Table of Contents A summary of the cash flow activity for the six months ended June 30, 2026 and 2025 is as follows: ​ Cash Flows from Operating Activities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, ​ ​ ​ ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ ​ ​ (in thousands) ​ Net income ​ $ 11,533 ​ $ 23,680 ​ Non-cash items: ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization ​ 9,941 ​ 10,136 ​ Non-cash interest expense ​ 534 ​ 550 ​ Deferred income taxes ​ (981) ​ 667 ​ Share-based compensation expense ​ 17,726 ​ 18,859 ​ Provision for bad debts ​ ​ 14 ​ ​ — ​ Changes in operating assets and liabilities ​ 20,602 ​ (24,858) ​ Net cash provided by (used in) operating activities ​ $ 59,369 ​ $ 29,034 ​ ​ Net cash provided by operating activities was $59.4 million for the six months ended June 30, 2026 and was due to net income of $11.5 million, adjustments for non-cash items of $27.2 million, and an increase in cash flow from changes in operating assets and liabilities of $20.6 million. The changes in operating assets and liabilities were largely attributable to an increase in contract liabilities, accrued expenses, and accounts payable, partially offset by an increase in accounts receivables, and inventories. Net cash provided by operating activities was $29.0 million for the six months ended June 30, 2025 and was due to net income of $23.7 million and adjustments for non-cash items of $30.2 million, partially offset by a decrease in cash flow from changes in operating assets and liabilities of $24.9 million. The changes in operating assets and liabilities were largely attributable to a decrease in contract liabilities and increases in accounts receivables, and inventories, partially offset by a decrease in prepaid expenses and accrued expenses. ​ Cash Flows from Investing Activities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, ​ ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ ​ ​ (in thousands) ​ Capital expenditures ​ $ (8,813) ​ $ (10,350) ​ Changes in investments, net ​ 11,872 ​ 34,408 ​ Net cash provided by (used in) investing activities ​ $ 3,059 ​ $ 24,058 ​ ​ ​ The cash provided by investing activities during the six months ended June 30, 2026 was primarily attributable to net cash provided for investment activity, partially offset by capital expenditures. The cash provided by investing activities during the six months ended June 30, 2025 was primarily attributable to net cash provided for investment activity, partially offset by capital expenditures. Cash Flows from Financing Activities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, ​ ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ ​ ​ (in thousands) ​ Settlement of equity awards, net of withholding taxes ​ $ (11,405) ​ $ (3,868) ​ Debt issuance costs ​ ​ — ​ ​ (885) ​ Repayment of convertible debt ​ ​ — ​ ​ (5,229) ​ Net cash provided by (used in) financing activities ​ $ (11,405) ​ $ (9,982) ​ ​ The cash used in financing activities for the six months ended June 30, 2026 was related to cash used to settle taxes related to employee equity programs, offset by cash received under the Employee Stock Purchase Plan. The cash used in financing activities for the six months ended June 30, 2025 was related to cash used to settle taxes related to employee 33 Table of Contents equity programs, settlement of the 2027 Notes, and debt issuance costs associated with the execution of the Fourth Amendment of the Loan and Security Agreement, partially offset by cash received under the Employee Stock Purchase Plan. ​ Convertible Senior Notes ​ We have $230.0 million outstanding principal balance of convertible senior notes that bear interest at a rate of 2.875% per year, payable semiannually in arrears on June 1 and December 1 of each year, and mature on June 1, 2029, unless earlier purchased by the Company, redeemed, or converted. The 2029 Notes are currently convertible by noteholders until September 30, 2026. ​ We believe that we have sufficient capital resources and cash flows from operations to support scheduled interest payments on this debt. In addition, in June 2025, we increased the total funds available to us through our revolving credit facility from $225 million to $250 million and extended the maturity until June 16, 2030, subject to a springing maturity date of March 2, 2029. The Company has no immediate plans to draw down on the facility. Interest under the facility is variable based on the Company’s secured net leverage ratio and is expected to bear interest based on SOFR plus a range of 125 to 200 basis points, if drawn. There is a yearly commitment fee of 20 to 30 basis points, based on the Company’s secured net leverage ratio, charged on the unused portion of the Facility. ​ In connection with the Merger, the convertible senior notes will be assumed by Axcelis. ​ Contractual Obligations and Commitments ​ We have commitments under certain contractual arrangements to make future payments for goods and services. These contractual arrangements secure the rights to various assets and services to be used in the future in the normal course of business. We expect to fund these contractual arrangements with cash generated from operations in the normal course of business. ​