Besi: Orders Double Thanks to AI, but Gross Margin Erodes

Significant Increase in Orders

Besi recorded orders of 269.7 million euros in the first quarter, up 104.5% from the same period a year earlier, when they amounted to 131.9 million. On a quarterly basis, orders grew by 7.7% (250.4 million euros in the fourth quarter of 2025). This growth is driven by a 'broad progression across all customer markets' of Besi, with 'particular strength' in hybrid bonding, mobile, and photonic applications. The manufacturer notes that unit orders for hybrid bonding systems more than doubled compared to the previous quarter, exceeding the previous peak recorded in the second quarter of 2024. The growth is attributed to 'greater production capacity than anticipated' at a client and repeat orders from a memory client for HBM applications. Revenue increased by 28.3% year-over-year to 184.9 million euros (compared to 144.1 million a year earlier) and by 11.1% sequentially (166.4 million in the previous quarter), fueled by 'higher shipments for high-end mobile applications and 2.5D cloud computing'.

Net Profit and Margins Improve Despite Cost Pressures

Net profit increased by 63.8% year-over-year to 51.6 million euros (31.5 million a year earlier) and by 20.6% sequentially (42.8 million in the fourth quarter of 2025). This improvement results from 'superior revenue growth, disciplined expense management, and leverage benefits' from Besi's business model. The net margin was established at 27.9%, up 6.0 points from 21.9% a year earlier. However, the gross margin contracted to 63.5%, down 0.1 point year-over-year (63.6% in the first quarter of 2025), and down 0.4 point sequentially (63.9% in the previous quarter). Besi emphasizes that 'a price increase helped offset the rise in component and energy cost inflation'. Operating profit increased by 62.6% year-over-year to 63.9 million euros (39.3 million a year earlier). EBITDA progressed by 58.2% to 73.7 million euros (46.6 million a year earlier). Basic earnings per share rose to 0.65 euros, up 62.5% from 0.40 euros a year earlier.

Anticipations for the Second Quarter of 2026

For the second quarter of 2026, Besi anticipates a revenue increase of 30% to 40% compared to the 184.9 million euros in the first quarter, supported by 'the order book and customer feedback'. The gross margin is expected in the range of 64% to 66%, marking an improvement from the 63.5% of the last quarter. Operating expenses are expected to increase by 0% to 10% compared to the 53.5 million euros of the first quarter of 2026. Besi anticipates a 'significant expansion of net profit and profit margins for the second quarter of 2026 compared to the first quarter of 2026 and the second quarter of 2025'. The liquidity position has significantly strengthened: net cash reached 103.3 million euros, up 186.9% compared to 36.0 million euros in the fourth quarter of 2025 (or down 56.1% compared to 159.4 million euros in the first quarter of 2025). This improvement reflects 'increased profitability and enhanced cash generation'. Regarding hybrid bonding, Besi reports that adoption has expanded to 20 clients and that adoption prospects have improved with 'a series of new product announcements and use cases' for logic, memory, co-packaged optics, and consumer applications. The company anticipates an intensification of the adoption pace 'as the period planned for AI-related product introductions approaches between 2027 and 2030'. Investor challenge: Besi must convert this record order backlog into deliveries in an environment where margins remain weakened by inflation, while demonstrating the sustainability of the demand for hybrid bonding beyond the current capacity-building phase.