Nova Measuring Instruments Ltd. (NASDAQ:NVMI) Q3 2018 Earnings Conference Call - Final Transcript

Nov 01, 2018 • 09:00 am ET

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Nova Measuring Instruments Ltd. (NASDAQ:NVMI) Q3 2018 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good day and welcome to the Nova Measuring Instruments Limited Third Quarter 2018 Results Conference Call. Today's conference is being recorded.

At this time, I would like to turn the conference over to Miri Segal of MS-IR. Please go ahead.

Executive
Miri Segal

Thank you, operator, and good day, everybody. I would like to welcome all of you to Nova's Third Quarter 2018 Financial Results Conference Call.

With us on the line today are Mr. Eitan Oppenhaim, President and CEO; and Mr. Dror David, CFO.

(Forward-Looking Cautionary Statements)

Eitan will begin the call with a business update, followed by Dror with an overview of the financials. We will then open the call for the question-and-answer session.

I'll now hand over the call to Mr. Eitan Oppenhaim, Nova's President and CEO. Eitan, please go ahead.

Executive
Eitan Oppenhaim

Thank you, Miri, and thank you all for joining our third quarter 2018 financial results conference call.

I will start the call today by speaking about our third quarter results and performance highlights. I will conclude by providing guidance for the fourth quarter of 2018. Following my commentary, Dror will review the quarter's financial results in detail.

Nova continued to perform well, setting quarterly record revenue at the high end of the guidance and exceeding the profitability guidance for the quarter. These achievements are further evidence of our steady progress, demonstrating consistent execution of our long-term plan to diversify our product offering, differentiate our solution and expand our available markets. We are very encouraged by this progress as the company continues to achieve solid results despite the increased market volatility.

Following our quarterly earnings and the guided revenue for December quarter, we expect 2018 to be our sixth consecutive growth year with revenues at record high. With this milestone clearly in our reach, we are progressing steadily towards our long-term target of $300 million in revenues annually. We plan to achieve this aggressive plan through continuous growth of our organic product lines, which are well supported by significant investments in developing new disruptive solutions. In fact, the expected revenue mix this year reflects a growing portion of new differentiated applications which can be sold today exclusively by Nova. As a result, we are generating opportunities that set us apart from the traditional competition and diversify our growth.

Our solid results are highlighted by growing revenue from the Memory segment, which reached a quarterly record with substantial contribution from all leading customers. In addition, following our press release this quarter, we initiated the deliveries of our dimensional OCD and materials solutions to the most advanced 5-nanometer technology nodes. Our strong performance is also reflected in our diversified customer mix, which yielded 5 large customers this quarter, 3 of which are leading memory providers. As a result, Memory contributed approximately 65% to our overall product revenue, setting new Memory record. The significant progress we made in growing our market share in memory, which resulted in increased annual revenues, deserves emphasis considering the recent softness in Foundry, which was the main revenue driver