COHU earnings call summary

Prepared Highlights

• Q4 2025 revenue of $122.2M, in line with guidance, up 30% year-over-year (CFO); full-year 2025 revenue of $453M, up 13% year-over-year (CFO).
• Revenue split: 40% systems, 60% recurring in Q4 (CEO); recurring revenue grew 4% quarter-over-quarter and 25% year-over-year (CEO).
• Recurring bookings up 34% sequentially; systems demand up 47% quarter-over-quarter (CEO).
• Q4 gross margin of 40.8%, lower than guidance due to one-time inventory charges from discontinuing product lines (CFO).
• Q4 operating expenses of $49.8M, in line with guidance (CFO).
• Q4 net interest income of ~$1.9M (CFO); Q4 tax provision higher than guidance due to $5M increase in tax reserves (CFO).
• Cash and investments increased by $286M in Q4 to $484M at year-end, driven by convertible debt proceeds and cash from operations (CFO).
• Total debt of $305M, including $288M from Q4 convertible notes offering (1.5% interest, 5-year term, 32.5% conversion premium) (CFO).
• Q4 CapEx of $3.4M; full-year 2025 CapEx of $21M, including $9M for Malaysia factory purchase (CFO).
• Estimated test sterilization up 1 point to 76% at end of December; computing segment strongest at 78%, automotive at 75% (CEO).
• Top 10 customers accounted for ~63% of Q4 bookings (CEO); two customers (mobile and automotive) each >10% of Q4 sales (CFO).
• Official guidance: Q1 2026 revenue of ~$122M, plus or minus $7M; gross margin projected at ~45%; operating expenses flat at ~$50M; net interest income ~$1.9M; tax provision ~$5.5M; diluted share count ~48.5M; 2026 CapEx target ~2% of revenue (CFO).

Mgmt Quotes

• "Recurring business remained strong, representing about 60% of total revenue in the fourth quarter." (CEO)
• "We believe the strong recurring business reflects the value of our installed base and customer reliance on Cohu across their production environment." (CEO)
• "There's a clear change in customer engagement, reflecting both new program ramps and renewed investment in back-end test infrastructure." (CEO)
• "The unique inventory charges that occurred in Q4 are not projected to continue in Q1." (CFO)
• "Our focus for 2026 will be to support R&D investments that are enabling several design wins in the compute market... along with progressively increasing our cash flow generation." (CFO)

Prepared Metrics

Q&A Batch (1-5 of 6)

Q1 — Craig Ellis

• Topic: Q4 order strength and conversion timing; HBM revenue and gross margin clarification
• Key points:
  • Systems orders up 47% QoQ (handlers, thermal subsystems, testers); recurring orders up 34% QoQ (large service contracts renewing annually, interface products, handler spares).
  • ~70% of guided Q1 revenue in backlog; majority of balance ships in Q2.
  • Neon HBM revenue exited 2025 at $11M; three more systems booked in January for Q1; 2026 HBM revenue forecast $15M–$20M.
  • Q4 gross margin miss: ~350 bps due to one-time end-of-manufacturing charge; balance from mix.
• Mgmt stance: Bullish — strong order momentum bucking seasonality, HBM pipeline growing, backlog visibility supports near-term conversion.

Q2 — David Duley

• Topic: Eclipse handler activity, 2026 revenue profile, gross margin leverage, customer activity upturn
• Key points:
  • Booked first configuration of super-high-power T-Core thermal control on Eclipse handler in Q4; production unit shipped late January; capacity exists for forecasted shipments from multiple customers.
  • Eclipse shipment rate increasing Q2 into Q3; Q4 too early to call, possibly typical seasonality.
  • Gross margin: at ~$130M/quarter revenue → high 46% range (46.7%–46.8%); at ~$150M → just under 48%; at normalized ~$160M → 48%.
  • Utilization rose 1 point to 76% in seasonal Q4; recurring revenue increased sequentially four quarters in a row.
• Mgmt stance: Bullish — strong order momentum across traditional auto/industrial and Eclipse for compute/mobile; projecting another growth year in 2026 after 13% revenue growth in 2025.

Q3 — Robert Mertens

• Topic: HBM inspection win and new handler development
• Key points:
  • New HBM inspection win is with the same customer, for future HBM development in engineering lab.
  • Multiunit order for new handler under development (qualification shipment later in summer) is separate from Eclipse; targets automotive ADAS and physical AI devices.
• Mgmt stance: Neutral — factual clarification; no forward guidance on volumes or timing.

Q4 — Brian Chin (Daniela Talio)

• Topic: (No content provided in input)
• Key points: None.
• Mgmt stance: None.

Q5 — Luis Müller (response to Brian Chin)

• Topic: HBM inspection time impact and 2026 revenue linearity
• Key points:
  • Customer performs 100% inspection; new HBM generations increase device size, interconnect count, and inspection time (no specific percentage given).
  • 2026 HBM revenue ($15M–$20M) expected to be fairly linear through the year.
• Mgmt stance: Neutral — factual description of technical trends; no bullish/cautious language.

Q&A Batch (6-6 of 6)

Q6 — Unknown Analyst

• Topic: IDM vs OSAT utilization, segment trends, and analog/mixed-signal win details
• Key points:
  • Q4 utilization: IDMs ~76%, OSATs ~75%; mgmt expects Q1 utilization to flip, with OSATs potentially rising faster than IDMs.
  • Q4 segment utilization: compute 78%, auto 75%, industrial 77%, mobile 72%, consumer 76%; Q1 outlook: mobile expected to cross 75%, compute to continue rising.
  • Won a large mixed-signal automotive supplier (top 6–7 automotive semiconductor manufacturers) over a year ago; deployed tester into two of three major business units; recent order qualification from second business unit.
  • Products tested include digital controllers and PMIC devices for data center racks/boards surrounding large GPUs; expects acceleration in tester design wins, particularly digital controllers, around mid-year.
• Mgmt stance: Neutral – provides factual utilization data and segment trends without explicit bullish/cautious tone; highlights a specific win with potential mid-year acceleration but no commitment on magnitude.