Financial Data and Key Metrics Changes - The company reported revenue of $59 million for fiscal year 2025, down 11% year-over-year [46] - Non-GAAP gross margin for the full year was 44%, compared to 49.6% in the prior year [47] - Non-GAAP net income for fiscal year 2025 was $4.6 million, or $0.15 per diluted share, down from $35.8 million, or $1.21 per diluted share in fiscal year 2024 [47] - Fourth quarter revenue totaled $14.1 million, a 15% decrease compared to $16.6 million in Q4 last year [48] - Non-GAAP gross margin for Q4 was 34.7%, down from 51.5% in the same period last year [50] Business Line Data and Key Metrics Changes - AI processor burn-in accounted for over 35% of total revenue in fiscal year 2025, compared to 0% in the previous year [48] - WaferPak revenues were $4.2 million, accounting for 30% of total revenue in Q4 [49] - Sales of Sonoma, Tahoe, and Echo package part burn-in systems accounted for 44% of Q4 revenue [50] Market Data and Key Metrics Changes - The company has diversified its market focus, with silicon carbide devices making up less than 40% of revenue in fiscal year 2025, down from over 90% in fiscal year 2024 [6] - The company is expanding into new markets such as gallium nitride power semiconductors and silicon photonics integrated circuits [29][33] Company Strategy and Development Direction - The company aims to increase research and development investment to support product enhancements and expand R&D resources [40] - The focus for fiscal year 2026 includes securing and executing orders across various segments, with expectations for order growth [41] - The company plans to leverage its unique technology in wafer-level burn-in solutions to capture a significant share of the AI processor market [22][24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about long-term growth opportunities across diverse markets despite uncertainties related to tariffs [54] - The company is confident in its ability to meet potential demand in the AI market and other high-growth sectors [54] - Management noted that the silicon carbide market may experience stronger growth in fiscal year 2027, despite current forecasts suggesting a slowdown [41] Other Important Information - The company completed the integration of InCal, which is expected to create synergies and reduce facility costs by over $800,000 per year [45] - The company has no debt and continues to invest excess cash in money market funds [52] - A class action lawsuit against the company was voluntarily dismissed, with no related proceedings currently pending [53] Q&A Session Summary Question: Clarification on customer list in investor deck - The customer list includes current customers from the InCal package part burn-in side of the business, not prospects [60] Question: Will the 10% customers be named in the K filing? - The new SEC rules do not require naming customers unless prior agreements exist [62] Question: Insights on AI market potential compared to silicon carbide - The AI market is projected to be significantly larger than the silicon carbide market, with estimates suggesting three to five times the size [66]

EX-99.1 2 aehrex991.htm EX-99.1 EXHIBIT 99.1 Contacts: Aehr Test Systems Chris Siu Chief Financial Officer csiu@aehr.com PondelWilkinson, Inc. Todd Kehrli or Jim Byers Investor Contact tkehrli@pondel.com jbyers@pondel.com Fiscal Year Financial Results: Aehr Test Systems Reports Fiscal 2025 Fourth Quarter and Full Year Financial Results Page 2 of 8 An explanation of the use of non-GAAP financial measures and a reconciliation of Aehr's non-GAAP financial measures to the most directly comparable GAAP financial ...

Core Insights - Aehr Test Systems' stock increased by 35.5% in June due to positive developments in targeted end markets, indicating potential for revenue diversification and growth [1] Revenue Sources - The company primarily operates in the silicon carbide (SiC) wafer-level burn-in (WLBI) market, which accounted for 90% of its revenue in 2024 [2] - The electric vehicle (EV) market is a key driver for Aehr's SiC WLBI solutions, but high interest rates are negatively impacting EV sales [3] Market Challenges - Key customers like ON Semiconductor are facing sales declines, with expectations of a 16.5% drop in 2025, necessitating Aehr to explore other markets to mitigate weaknesses in its core business [3] New Revenue Streams - Aehr's revenue from SiC WLBI is projected to drop to less than 40%, while artificial intelligence (AI) processor burn-in is expected to represent over 35% of its business within the first year [4] - In the third quarter, four customers contributed to 10% of Aehr's revenue, with three coming from new markets [4] Positive Market Trends - Continued momentum in AI and GaN WLBI spending was noted, particularly following Nvidia's strong earnings report and its partnership with Navitas Semiconductor, which may lead to potential customer relationships for Aehr [6] Future Outlook - The growth of alternative revenue streams is beneficial for Aehr's investment case, with expectations for improved demand in SiC WLBI as EV investments rise [8] - The company's revenue and earnings remain cyclical, but diversification into new end markets is reducing reliance on EV spending, positively impacting stock performance [8]

Company Overview - Aehr Test Systems (AEHR) shares increased by 9.3% to close at $12.75, with notable trading volume compared to typical sessions, and a total gain of 16% over the past four weeks [1][2] Business Developments - The company's optimism is linked to its diversification into new markets, specifically the gallium nitride (GaN) wafer-level burn-in (WLBI) market, with speculation that Navitas Semiconductor may become a customer [2] Financial Performance - AEHR is expected to report break-even quarterly earnings per share, reflecting a year-over-year change of -100%, with anticipated revenues of $15 million, a decrease of 9.6% from the previous year [3] - The consensus EPS estimate for AEHR has remained unchanged over the last 30 days, indicating that stock price movements may not sustain without trends in earnings estimate revisions [4] Industry Context - Aehr Test Systems operates within the Zacks Electronics - Measuring Instruments industry, where another company, Camtek (CAMT), saw a 2.5% increase in its stock price, closing at $84.1, with a 25.8% return over the past month [4] - Camtek's consensus EPS estimate has also remained unchanged at $0.79, representing a year-over-year change of +19.7% [5]

Navitas Semiconductor (NASDAQ: NVTS ) jumped from below $2 to above $8 per share in less than a month. The reason is simple. The company's power compound chips will be used by NVIDIA ( NVDA ) in certainRetail investor researching mostly semiconductors and fintech. Some general macro musings. My goal is to bring you timely and digestible research on the stocks that I cover.Analyst’s Disclosure:I/we have a beneficial long position in the shares of AEHR either through stock ownership, options, or other derivat ...

Summary of Conference Call Company and Industry Overview - The conference call primarily discusses **Airtest**, a company specializing in semiconductor testing, particularly focusing on **wafer level burn-in** and **package part burn-in** systems. The industry context includes trends in **semiconductors**, **electric vehicles (EVs)**, and **artificial intelligence (AI)** applications. Key Points and Arguments 1. **Market Trends**: The semiconductor market is projected to grow from **$500 billion** to **$1 trillion**, driven by increasing demand for reliable devices in critical applications like AI and EVs [15][18][54]. 2. **Testing Demand**: There is a rising need for testing systems due to the increasing complexity and reliability issues of semiconductors, particularly in AI processors and automotive applications [15][17][43]. 3. **Wafer Level Burn-In**: Airtest has established itself as a leader in wafer level burn-in technology, which offers significant advantages in cost and yield compared to traditional testing methods [10][11][18]. 4. **Acquisition Impact**: The acquisition of a small company in Fremont, California, has allowed Airtest to ramp up production capabilities for AI processors, significantly increasing shipments [14][41]. 5. **Customer Base Expansion**: Airtest has diversified its customer base, moving from a heavy reliance on silicon carbide for EVs to a broader range of applications, including AI and memory technologies [50][51]. 6. **Gallium Nitride (GaN)**: The company is also focusing on GaN technology, which is gaining traction in data centers and power infrastructure due to its efficiency in high-power applications [29][30]. 7. **Flash Memory Innovations**: Airtest is engaging with customers in the flash memory sector, anticipating significant changes in production methods that could benefit their testing systems [32][54]. 8. **AI Processor Testing**: The company has made strides in testing AI processors, with significant production wins and a focus on reliability to meet the demands of autonomous vehicles and robotics [36][39][54]. 9. **Revenue Model**: Airtest's revenue model includes a significant portion from consumables, which is expected to grow and potentially exceed **50%** of total revenue over time [51][52]. 10. **Challenges and Adaptations**: The company is adapting to market challenges, including tariffs and supply chain issues, by establishing sub-assembly builds outside the U.S. to mitigate risks [66][67]. Additional Important Content - **Infant Mortality in Semiconductors**: The discussion highlights the critical importance of weeding out infant mortality in semiconductors, especially in applications where reliability is paramount, such as in automotive and AI systems [16][44][46]. - **Customer Relationships**: Airtest emphasizes the importance of having leading customers in their strategy, with notable clients including **Apple** and **Intel** for their wafer level burn-in platform [58][59]. - **Future Outlook**: The company is optimistic about growth in various sectors, including AI, flash memory, and gallium nitride, with expectations for a strong year ahead [54][55]. This summary encapsulates the key insights from the conference call, focusing on Airtest's strategic positioning within the semiconductor testing industry and the broader market dynamics influencing its growth.

Core Insights - Aehr Test Systems' shares increased by 12.5% in the week, reflecting a positive trend in semiconductor stocks and potential new customer growth [1] Company Overview - Aehr Test Systems is experiencing a shift in its customer base and revenue sources in 2025, making it challenging to predict future performance [2] - Traditionally, ON Semiconductor has been Aehr's largest customer, primarily for silicon carbide wafer-level burn-in (SiC WLBI) solutions, which accounted for 90% of Aehr's business in 2024 [3] Revenue Changes - In the current fiscal year, SiC WLBI sales are projected to drop to less than 40%, with AI processors burn-in representing over 35% of revenue [3] - The automotive electric vehicle (EV) market's struggles have impacted ON Semiconductor and other SiC companies [3] Customer Diversification - Aehr has diversified its customer base, with four customers contributing to 10% of its revenue in the third quarter, indicating a shift away from reliance on ON Semiconductor [4] - The new customers include two in AI processor markets and one in the gallium nitride (GaN) WLBI market, suggesting a strategic pivot towards emerging technologies [4] Market Potential - Potential new customers may include major players like Nvidia or other hyperscalers in the AI sector, with Navitas Semiconductor possibly being the GaN customer [6] - Nvidia's recent earnings report supports the notion that the AI market continues to grow, which bodes well for Aehr's future prospects [6] Investor Sentiment - Positive news from customers in Aehr's end markets has led to increased investor interest and stock price appreciation [7]

Revenue Performance - Revenue increased to $18.3 million for the three months ended February 28, 2025, up 142% from $7.6 million for the same period in 2024, driven by increased shipments to a new semiconductor customer[112]. - Revenue for the nine months ended February 28, 2025, decreased to $44.9 million, down 10% from $49.6 million for the same period in 2024, primarily due to decreased shipments in the power semiconductor sector[113]. - Revenue from the United States increased by 544% to $10.6 million for the three months ended February 28, 2025, compared to $1.6 million for the same period in 2024[114]. - Asia's revenue decreased by 36% to $27.9 million for the nine months ended February 28, 2025, compared to $43.3 million for the same period in 2024, primarily due to softness in power semiconductor demand[114]. Profitability - Gross profit for the three months ended February 28, 2025, increased to $7.2 million, a 128% increase from $3.2 million for the same period in 2024, despite a decrease in gross margin to 39.2%[118]. - Gross profit for the nine months ended February 28, 2025, decreased to $19.7 million, down 18% from $24.1 million for the same period in 2024, with gross margin decreasing to 43.8%[119]. Expenses - Research and development expenses increased to $3.1 million for the three months ended February 28, 2025, a 47% increase from $2.1 million for the same period in 2024[120]. - Selling, general and administrative expenses rose to $5.2 million for the three months ended February 28, 2025, a 69% increase from $3.1 million for the same period in 2024[122]. Acquisitions - The company completed the acquisition of Incal Technology, Inc. on July 31, 2024, contributing to revenue growth in package parts burn-in products[111]. - Net cash used in investing activities increased by $30.5 million for the nine months ended February 28, 2025, primarily due to the acquisition of Incal for $11.1 million and increased spending on property and equipment[132]. Cash Flow and Financial Position - Cash, cash equivalents, and restricted cash decreased to $31.4 million as of February 28, 2025, from $47.7 million as of February 29, 2024[128]. - Net cash used in operating activities decreased by $5.6 million for the nine months ended February 28, 2025, compared to the prior period, driven by a net loss and lower revenue[130]. - Net cash provided by financing activities increased by $0.7 million for the nine months ended February 28, 2025, due to a reduction in shares repurchased for tax withholdings[133]. Other Financial Information - The company has not recorded any impairment charges during the three and nine months ended February 28, 2025[109]. - Interest and other income, net decreased by 58% to $245,000 for the three months ended February 28, 2025, and by 35% to $1,168,000 for the nine months ended February 28, 2025, primarily due to lower interest income from reduced cash balances and lower yields from investments[124][125]. - The company recognized an income tax benefit of $(231,000) for the three months ended February 28, 2025, compared to an expense of $7,000 for the same period in 2024, reflecting losses in the U.S.[126][127]. - The company does not have any off-balance sheet arrangements or undisclosed borrowings[134]. - As a smaller reporting company, the company is not required to provide quantitative and qualitative disclosures about market risk[135].

Financial Data and Key Metrics Changes - Revenue for Q3 totaled $18.3 million, a 142% increase compared to $7.6 million in Q3 last year, driven primarily by shipments of the new high-power Fox XP solution for AI processors [55][56] - Non-GAAP gross margin for Q3 was 42.7%, slightly up from 42.5% in the same period last year, despite a less favorable product mix and one-time charges [58] - Non-GAAP net income for Q3 was $2.0 million, or $0.07 per diluted share, compared to a net loss of $888,000, or negative $0.03 per diluted share in Q3 fiscal 2024 [62] Business Line Data and Key Metrics Changes - AI processors burn-in now represents over 35% of the company's business, a significant increase from previous years where silicon carbide accounted for over 90% [17][54] - WaferPak revenues were $5.9 million, accounting for 32% of total revenue in Q3, down from 63% in the same period last year [56] - Bookings for Q3 were $24.1 million, compared to $9.2 million in Q2 fiscal 2025, with an effective backlog now standing at $21.8 million [57] Market Data and Key Metrics Changes - The total addressable market for wafer-level and packaged part burn-in markets is projected to exceed $1 billion by 2027, with significant growth opportunities in AI processors and gallium nitride semiconductors [16][45] - The silicon carbide market is expected to exceed $10 billion by 2029, driven by electric vehicles and other industrial applications [41] - The NAND market in 2025 is projected to exceed $80 billion, indicating substantial potential for wafer-level burn-in solutions [37][38] Company Strategy and Development Direction - The company is focused on expanding its total addressable markets, diversifying its customer base, and developing new products to drive growth [16][48] - Strategic expansion into high-growth sectors, including AI processors, gallium nitride power semiconductors, and flash memory, is expected to attract new customers and drive revenue growth [48][65] - The integration of NCAL Technology has enabled the company to scale output significantly, achieving two to three times the previous record shipment volume [30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that the impact of recent tariff announcements will not significantly affect the company directly, but acknowledged potential secondary effects on customers [11][48] - The company is temporarily withdrawing guidance for the current fiscal year due to uncertainties regarding customer orders and supply chain delivery delays [64] - Management remains optimistic about the long-term growth potential across diverse target markets, particularly in AI and gallium nitride sectors [65] Other Important Information - The company has no debt and continues to invest excess cash in money market funds, with cash and equivalents totaling $31.4 million at the end of Q3 [63] - The integration of the InCal acquisition is progressing well, with plans to complete it by the end of the fiscal year [51][52] Q&A Session Summary Question: Impact of tariffs on end markets - Management indicated that the impact of tariffs is more about specific customers and geographies rather than entire markets, with ongoing assessments to mitigate risks [70][71] Question: Shipping backlog and guidance - Management acknowledged that not all backlog will ship in the current quarter, with some shipments planned for future quarters [88][89] Question: Growth expectations across diversified markets - Management expressed optimism about growth in silicon carbide, AI processors, and gallium nitride, with expectations for increased demand in the coming years [96][100]

Company Performance - Aehr Test Systems reported quarterly earnings of $0.07 per share, exceeding the Zacks Consensus Estimate of $0.01 per share, compared to a loss of $0.03 per share a year ago, representing an earnings surprise of 600% [1] - The company posted revenues of $18.31 million for the quarter ended February 2025, surpassing the Zacks Consensus Estimate by 4.02%, and compared to year-ago revenues of $7.56 million [2] - Over the last four quarters, Aehr Test Systems has surpassed consensus EPS estimates three times and topped consensus revenue estimates two times [2] Stock Performance - Aehr Test Systems shares have declined approximately 56.6% since the beginning of the year, while the S&P 500 has decreased by 13.9% [3] - The current consensus EPS estimate for the upcoming quarter is $0.12 on $22.8 million in revenues, and $0.23 on $67 million in revenues for the current fiscal year [7] Industry Outlook - The Electronics - Measuring Instruments industry, to which Aehr Test Systems belongs, is currently in the top 20% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that industry performance can significantly impact stock performance [5][8]