Good day, and welcome to the Nova Ltd. Third Quarter 2023 Results Conference Call. All participants will be in the listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, you may press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Ms. Miri Segal, Chief Executive Officer of MS-IR. Please go ahead. Welcome all of you to Nova's third quarter 2023 financial results conference call. With us on the line today are Mr. Gaby Waisman, President and Chief Executive Officer, and Mr. Dror David, Chief Financial Officer. Before we begin, may I remind our listeners that certain information provided on this call may contain forward-looking statements, and the safe harbor statement outlined in today's earnings release also pertains to this call. If you have not received a copy of the release, please view it in the investor relations section of the company's website. Gaby 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 turn the call over to Mr. Gaby Waisman, Nova's President and Chief Executive Officer. Gaby, please go ahead. Thank you, Miri, and welcome everyone to our third quarter financial results conference call. I will start the call today by speaking about our quarterly performance highlights and the market dynamics as they relate to Nova. Following my commentary, Dror will review the financial results in detail and present the guidance for the fourth quarter. Nova's performance this quarter exceeded the company's revenue and profitability guidance, and our goal is to maintain similar business levels in the next quarter as well, making the second half of 2023 stronger than the first. These results once again demonstrate the strength of our diverse portfolio, driven by our expanding exposure to new applications and our ability to leverage market opportunities. Nova's revenue and margins in this quarter, and in 2023 thus far, validate our flexible and resilient business model, as well as the actions we took over the past year to address changes in the market. As we look ahead towards 2024, we expect Nova to resume its growth and outperformance trajectory. We were able to deliver better results than our earlier projections by adding several new customers, by leveraging the growth in our materials metrology offerings, by increasing the adoption of new technologies in our chemical and optical metrology solutions, and by the growth of our service business. In every one of these areas, we continue to execute and push forward in accordance with our long-term strategic plan to reach $1 billion in revenues. Before I turn to review some of the business highlights of this quarter, I'd like to address the situation in Israel and its implications for Nova. Nova is first and foremost committed to supporting our customers and meeting delivery times and business obligations. We have a well-prepared and thought-out business continuity plan in place, designed on a global basis. Our global operations continue to run as intended, and there has been no impact on our performance and no disruption to our delivery schedule, thanks to the commitment and dedication of our employees. We appreciate the support and trust we received from our customers, suppliers, and the investment community, and we are resolved to continue and conduct business according to plan. Now, let's turn to the business highlights of the third quarter. We noted that we expect the company to return to a growth trajectory in 2024, and already we can observe the seeds of the main drivers of this growth. The most encouraging sign is the restored balance between memory and foundry logic, which was largely skewed over the past year. In Q3, our memory sales grew by more than 75% compared to the previous quarter and amounted to 35% of our product revenue. We expect this trend to continue into Q4, with DRAM investment, including high-bandwidth memory, acting as the main driver, while NAND shows signs of stabilization. As evidence of the former, we have two new DRAM implementations of Nova Prism and Nova VeraFlex of the most advanced version of the platform. I want to note the opportunity we see in memory offerings for our XPS technology. Despite some demand softness in 2023, VeraFlex platform sales hit a record high this quarter and further expanded its customer base. Moreover, half the tools we manufacture are for our most advanced version of the platform, the VeraFlex IV, which significantly reduces the cost per measurement and provides a much higher value for the customer. In addition to this ongoing demand, VeraFlex offers a unique value in its capacity to solve specific, highly advanced applications. While in the past, these applications have been driven by logic manufacturing, we now see them rapidly evolving into both DRAM and NAND production, and Nova's experience in this domain is generating high demand and rapid adoption. Ladies and gentlemen, we seem to have lost the management line. Please stay with us while we reconnect with the management. Ladies and gentlemen, we thank you for your patience. We have the line for the management reconnected. Gaby, you may go... Please go ahead. Thank you, Operator. Another growth driver is our innovative and unique technologies and portfolio. Let's take, for example, the proliferation of our Elipson materials metrology platform. We already have multiple systems at customer sites. We have received several repeat orders, and the system has been selected by customers as the tool of record for advanced nodes due to its ability to provide device performance indicators previously available only via electric testing. This selection, as tool of record, reflects the potential for additional orders as production transitions to high volume manufacturing. We are seeing more process steps diverted to the system, displacing other metrology techniques and solving applications on the device, measuring unique material characteristics that in the past were limited to test structures and blanket wafers. Furthermore, as in the case of VeraFlex, initial demand stemmed from advanced R&D Gate-All-Around applications. But now we see new in-line metrology applications in memory devices that were simply not performed before Elipson became available. If we look at Metrion, here, too, we have a growing customer base, and we expect to add some of the world's leading global logic and memory manufacturers to the list by the end of 2024. Another growth stimulus came in the form of a recent sale of our Nova FIT machine learning software solution to a leading global manufacturer, driven by a new capability called MapPro. MapPro provides high-resolution, full wafer sampling for early detection of process excursions, avoiding increased physical wafer measurements and leading to a faster yield learning curve and improved process control. The third engine to propel our business in 2024 is advanced packaging, an area where we see multiple achievements and opportunities for Nova. The Nova Prism 2 was recently selected by a leading foundry as part of its most advanced node toolset to address hybrid bonding process applications and additional advanced packaging metrology challenges. We have initial orders for multiple systems, with more expected due to Prism's unique ability to make robust measurements in the presence of underlay variations, a capability critical to effective production. Following a highly successful demo, another leading logic manufacturer is also evaluating Prism 2 for advanced packaging applications, such as through-silicon via, as a better and more effective alternative to its current vendor. In addition, we recently received orders for integrated metrology and for Nova's direct metal replenishment solution, targeted for advanced packaging from leading memory customers. Elsewhere, we are working closely with our customers to bring vital capabilities to bear on problems they encounter as they reach inflection points in CMP and plating processes of advanced packaging and face unprecedented challenges. Finally, I want to highlight our service business, which secured record-high revenues this quarter. While current utilization levels may impact short-term growth rates, we offset this effect by increasing the contract portion of our total service revenue by approximately 20% year-over-year. With that, I would like to recap our third quarter results. Nova had a strong quarter against the backdrop of market softness and in an increasingly complex environment. As we look ahead into the next quarter and the coming year, we expect to continue our strong execution. We trust that the fundamentals of both our company and the semiconductor industry will steer us into a trajectory of growth and outperformance. Before I turn it over to Dror, I'd like to thank our global and Israeli teams for their support, commitment, resilience, and dedication. We are fortunate to have an incredible team that is committed to our success. Now, for some more details on the financials, let me hand over the call to Dror. Thanks, Gaby. Good day, everyone, and thank you for joining our 2023 third quarter conference call. Total revenues in the third quarter of 2023 were $129 million, exceeding the company guidance for the third quarter as a result of several specific customer pull-ins of deliveries originally scheduled for the fourth quarter of 2023. Product revenue distribution was approximately 65% from logic and foundry and approximately 35% from memory. Product revenues included four main territories and four main customers that contributed 10% or more each to product revenue. The continued wider territory distribution reflects continued territorial diversification, driven by increasing investments from the Western territories of the U.S. and Europe. Blended gross margin in the third quarter was 56% on a GAAP basis and 58% on a non-GAAP basis, within the company non-GAAP targets model of 57% to 59%. Following cost containment measures implemented by the management to align expenses with the current business environment, operating expenses in the third quarter decreased by approximately 10% relative to the previous quarter and came in at $38 million on a GAAP basis and $35 million on a non-GAAP basis. Operating margins in the third quarter were 27% on a GAAP basis and 31% on a non-GAAP basis, at the high end of the company's non-GAAP targets model of 27% to 31%. Financial income in the quarter remained elevated following higher yields on cash reserves and came in at $5 million. The effective tax rate in the third quarter was approximately 14%. Earnings per share in the third quarter exceeded company guidance and were $1.05 per diluted share on a GAAP basis, and $1.23 on a non-GAAP basis. In terms of cash flow for the fourth quarter, the company generated $43 million in free cash flow, constituting more than 30% of total revenues. Finally, I would like to share the details of our guidance for the fourth quarter of 2023. Currently, we expect revenues to be between $123 million to $132 million, GAAP earnings per diluted share to range from $0.96 to $1.11, and non-GAAP earnings per diluted share to range from $1.16 to $1.31. At the midpoint of the fourth quarter estimate, we anticipate the following: Gross margins to be approximately 56% on a GAAP basis and approximately 58% on a non-GAAP basis, at the midpoint of the company non-GAAP target model. Operating expenses to increase to approximately $42 million on a GAAP basis and $37 million on a non-GAAP basis. Looking forward, we expect operating expenses to gradually increase in 2024. Financial income to be similar to that of the third quarter, and the tax rate to be approximately 8% in the fourth quarter of the year, lower than the company's 14% model, due to end-of-year tax adjustments and statute of limitations. Taking into consideration the midpoint of the fourth quarter guidance, we expect the company to conclude 2023 with an excellent non-GAAP profitability metrics of approximately 59% in blended gross margins and approximately 30% in operating margins, both at the higher end of the company target model. This expected exceptional performance reflects the company agile and resilient operational model in different business scenarios, the increasing value of our new product generations, and the prudent cost control initiatives implemented by the management earlier this year. To conclude my remarks, I would like to highlight the cash reserves of the company, which increased to $614 million and provide the required for flexibility to pursue organic and non-organic business development activities towards executing the company's $1 billion strategic plan. With that, I will turn the call back to Gaby. Gaby? Thank you, Dror. Our prepared remarks are now concluded. We would be happy to take your questions. Operator? Thank you. We will now begin the question-and-answer session. To ask a question, you may press Star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handsets before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question comes from Vivek Arya, with Bank of America Securities. Please go ahead. Thank you for taking my question, and I hope the team is holding up well. Our best wishes. For my first question, I'm curious what your assumption is for kind of the baseline WFE growth in calendar 2024, because you are doing very well exiting this year. So I'm curious how you're thinking about just the market growth and then the drivers of share gains. You know, as I look at where sort of, you know, broad investor expectations are for Nova for next year, it's sort of in the mid-teens kind of sales growth. So I'm just curious, what do you think the market is doing and what could be the potential drivers of this kind of growth for Nova for next year? Our assumption for next year, based on the market research that we have and also some feedback from the customers. Obviously, we are in the process of planning next year, is that the market will grow in the mid-single-digit levels in 2024. Okay. And what helps you kind of, you know, gain share as part of that mid-single digit growth environment? I mentioned the growth drivers that we have for 2024 in both our material metrology portfolio as well as advanced packaging. Both are going to drive, of course, alongside with adoption of our new technology and generations of tool, the take-up in 2024. Okay. And then for my quick follow-up, I'm curious, how much is the packaging exposure for Nova now, and where do you think it gets to next year? So we've seen the adoption of both our dimensional metrology and material metrology tools in advanced packaging, together with the chemical metrology that has been traditionally in packaging and now, of course, driving some of our business in high bandwidth memory. This is, I would say, in the initial steps of adoption, but we have seen this year that the business grew over 40%, and we expect it to continue and grow further in 2024. Thank you. Thank you. The next question comes from Charles Shi, with Needham & Company. Please go ahead. Good afternoon, Gaby, Dror, thanks for taking my questions. I wanna start with the very strong result coming from the memory end market. If I look at the actual revenue you reported in Q3, looks like on a run rate basis, it's already probably above last year's memory revenue for the whole year. So really kind of curious that, 'cause the dynamics here you're seeing is a little bit different. Can you kind of break it down why the memory was doing so well in Q3? Provide a little bit more color. I understand there's some key technology adoptions there. But more importantly, what's the foundry logic to memory split into the next quarter? Do you expect more of the same, or maybe some of the memory strength may revert back? I mean, may weaken a little bit. I'm just kind of curious. Thanks. Definitely, Charles. So, first, in terms of the ratios next in Q4, I believe it will be around a similar level as in the third quarter, related of course to the memory side of the business. And, with regards to the memory take-up, especially in DRAM and high bandwidth memory, but not only, we've seen the adoption of our material metrology portfolio in applications that were traditionally driven or adopted by logic into memory as well. So it's the new customers and additional applications that are driving that, alongside with the adoption of the Nova Prism, which is offering a unique technology with the underlayer variation capabilities that offer a superior solution to our competition. Got it. So, maybe a quick follow-up. Was China—I mean, we know one Chinese customer which, I mean, your U.S. peers previously thought they couldn't ship to that particular customer, they're shipping in second half this year. Was that particular customer contributing to some of the Q3 strength? The answer is yes. Thanks, Dror So, maybe the next question I wanna ask, just a follow-up to Vivek's question. So your market assumption for next year, 5%, no, I mean, you said mid-single-digit, I wanna correct. H1 next year, but, what's the H1/H2 profile you're seeing? It's like the first half, more or less, I mean, extending the second half, 2023 run rate and maybe a recovery in the second half, or you are seeing something like more gradual, more linear into next year? Thanks. We believe that the second half of next year is going to be stronger than the first half, driven by leading edge and recoveries in the memory side. Got it. So is it fair to assume, like, the first half, probably... I mean, maybe this is more specific to your business. You probably will also try to keep the business at a similar level as Q3, Q4 this year. Charles, we obviously are not giving specific guidances for specific quarters beyond the fourth one, so. Yeah, fair enough. Thanks. Sure. Thank you. The next question is from Vedvati Shrotre with Jefferies. Please go ahead. Hi, thanks for taking my question. So the first one, I wanted to double-click on the memory growth, the growth you're seeing in memory. So I understand that it's driven by adoption of your material metrology tools, but could you give us a sense of what's the technology transition that's really driving this growth? Is there something different that, architecture-wise, that wasn't there before, that is really pushing the adoption here? So thank you, Vedvati. Basically, and first and foremost, I'd like to highlight the fact that it's driven by material metrology adoption, but not only. So we see this across the board with both our optical and chemical, and specifically, I mentioned also the orders we received from memory customers on our direct metal replenishment, which is part of the chemical metrology offering that we have, which is also, of course, driving some of that growth related to high-bandwidth memory. In addition, what you're asking is interesting and related to two product platforms. One is the VeraFlex, in which we can see some of the Gate-All-Around applications that were initially driving the adoption in XPS. We see those, some of those applications in memory devices as well. Also, we see the adoption of Elipson, and that perspective as an enabler to some of those applications that were either not performed well before or are now enabled by this solution as well. So all of those are offering, I would say, I'll not necessarily say an inflection point in the DRAM specifically, but definitely an inflection point for us in terms of the adoption of both those platforms that I mentioned. Got it. And so maybe, maybe, pushing on that, so can you characterize how big of an increase it was driven by, you know, your chemical metrology versus, versus just these, DRAM type applications? HBM versus DRAM is, is what I'm trying to gauge. So HBM in the third quarter was relatively low. We expect it to become stronger in the fourth quarter. So most of that was driven by the adoption of the material metrology solution, and in part, of course, by optical. Okay, got it. And then for my second question, so there's some weakness in foundry logic. Could you give us a sense of how that splits out between leading edge versus trailing nodes, and comment on the areas of strength or pockets of weakness you're seeing there? So obviously, the ratio of trailing nodes is relatively high. But we expect advanced nodes to take the lead sometime, I would say, in the first half of next year. Is that primarily driven by Gate-All-Around adoption, essentially? Most of the companies have talked about 2025 being a Gate-All-Around ramp, and so you'd start to see the benefits flow through before the ramps come in? Correct. Got it. Thank you. Sure. Thank you. All right. The next question comes from Mark Miller with The Benchmark Company. Please go ahead. Congratulations on your quarter and outlook. I'm just wanted to get a little more understanding. You said there were pull-ins from the fourth quarter. Was that due to memory, specifically high-bandwidth memory? I'm just wondering what pull-ins were being driven by. Yes, it's these pull-ins were around memory, but not only HBM. Okay. Taiwan Semiconductor announced that it was pushing out, its one of its first Arizona plant due to staffing. Has that had any impact on your, your backlog or any impact at all on your, your, your forecast? So we are working very closely with, with all of our customers and, and naturally we keep a very close, contact in order to understand the exact, delivery plan. So we are working closely with, with all of our customers, including Taiwan, in making sure that, we're fully aligned and, we have, approved so in the third quarter as well, and I expect it to continue on the fourth quarter. Thank you. Thank you. This concludes our question and answer session. I would now like to turn the conference back over to Mr. Gaby Waisman, Nova's President and Chief Executive Officer, for any closing remarks. Over to you, sir. Thank you, operator, and thank you all for joining our call today. Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.