Release Date: May 01, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Cohu Inc (NASDAQ:COHU) reported first-quarter 2025 results in line with guidance, with revenue approximately $97 million and a non-GAAP gross margin of approximately 44%.
• Recurring orders increased by 28% quarter over quarter, indicating potential utilization improvements in the coming quarters.
• Cohu Inc (NASDAQ:COHU) secured three new design wins for their handlers, including a leading package and test subcontractor in China, supporting the local automotive industry.
• The company received repeat multi-unit orders for HBM inspection systems, continuing to increase penetration in the memory market.
• Cohu Inc (NASDAQ:COHU) successfully integrated the recently acquired TGNIs with their DI core predictive maintenance solutions, signing three new demonstration opportunities in the quarter.

Negative Points

• Test cell utilization decreased to 72% at the end of March, down 1% quarter over quarter.
• Revenue from computing, industrial, and mobile segments declined, offsetting gains in automotive and consumer segments.
• Cohu Inc (NASDAQ:COHU) recorded a non-GAAP net loss of approximately $800,000 for the first quarter.
• Cash and investments decreased by $61 million during Q1, primarily due to acquisitions and share repurchases.
• The company is cautious about future quarters due to potential impacts from tariffs and remains uncertain about the pace of recovery in the automotive segment.

Q & A Highlights

• Warning! GuruFocus has detected 3 Warning Signs with COHU.

Q: How much of the Q2 revenue guidance increase is due to recurring revenue versus HBM inspection shipments? A: Jeff Jones, CFO: The increase is split evenly, with half attributed to systems and half to recurring revenue.

Q: Does the multi-unit order for HBM inspection increase the $7 million target for the year? A: Louis Mueller, CEO: We project about $8 million in HBM revenue this year. Discussions with a second customer are ongoing, but nothing concrete yet.

Q: Can you discuss the connection between recurring revenue pickup and potential equipment demand? A: Louis Mueller, CEO: An increase in recurring revenue suggests improved utilization, which could lead to higher equipment demand. This quarter marks the first year-over-year revenue guidance increase in over three years.

Q: In which segments are you seeing a pickup in recurring orders? A: Louis Mueller, CEO: The pickup is predominantly in the mobile segment and is fairly concentrated among a few customers.

Q: Can you elaborate on the power probe card design win for silicon carbide? A: Louis Mueller, CEO: We introduced this product in late 2024 for high voltage testing. The recent customer win represents a $2 million annual opportunity, with similar potential for other customers.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.