Core Points - Cohu, Inc. will participate in the 14th Annual NYC Summit Investor Conference on December 16, 2025 [1] - Presentation materials will be available on the company's investor page [1] Company Overview - Cohu is a global technology leader providing test, automation, inspection, and metrology products and services to the semiconductor industry [3] - The company's product portfolio is designed to optimize yield and productivity, thereby accelerating manufacturing time-to-market for customers [3]

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Financial Data and Key Metrics Changes - Consolidated revenue for Q3 2025 reached $126.2 million, exceeding guidance and reflecting a sequential improvement for the fourth consecutive quarter [11][6] - Non-GAAP gross margin was reported at 44.1%, consistent with guidance, indicating the value differentiation of products and resilience of the recurring business model [11][6] - Operating expenses for Q3 were $48 million, which was $2 million lower than guidance due to timing of R&D material [11][12] - Cash and investments decreased by $11.2 million during Q3, primarily due to cash used in operations to support a 17% growth in sales quarter over quarter [12] Business Line Data and Key Metrics Changes - Recurring revenue accounted for 55% of total revenue in Q3, driven by strength in interface solutions and test handler spares systems [11][4] - Systems revenue represented 45% of total revenue, with notable orders for NEON HBM inspection tools and Eclipse handlers [6][5] - New business wins included approximately $1.7 million in orders for automated test equipment and optical inspection systems [7][8] Market Data and Key Metrics Changes - Revenue from customers based in China accounts for only a low single-digit percentage of total consolidated results, indicating limited exposure to geopolitical risks [9] - The company anticipates a seasonal slowdown in Q4, partially offset by ongoing market recovery, particularly in computing and high bandwidth memory inspection [9] Company Strategy and Development Direction - The company announced a strategic convertible notes offering, raising gross proceeds of $287.5 million to support future growth and strategic initiatives [13] - The focus is on advancing growth initiatives including mergers, acquisitions, and partnerships, with a new Vice President of Strategy appointed [4] - The company is pivoting towards AI applications, particularly in high-performance computing and generative AI, with expectations of increased revenue contribution from these areas in 2026 [23][41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining top-line momentum into 2026, particularly in the HBM business and new customer engagements [21][23] - The company expects Q4 revenue to be approximately $122 million, reflecting a seasonal decline but continued growth in recurring revenue [14] - Management noted that the cyclical recovery in automotive and industrial markets remains muted, but there are signs of initial demand returning in early 2026 [58] Other Important Information - The company is maintaining its 2025 capital expenditure target of approximately $20 million, which includes a facility purchase completed in Q1 [12] - The repayment structure of the convertible notes includes net share settlement, limiting shareholder dilution [13] Q&A Session Summary Question: What is driving the improved system revenue momentum? - Management indicated that the momentum was largely associated with the Eclipse handler and NEON HBM inspection tools, with confidence in continued progress in the HBM business [21][22] Question: How does the Eclipse handler's thermal control subsystem contribute to wins? - The higher wattage requirements for newer AI processors are driving demand, and the platform is designed to scale with these advancements [24][26] Question: What is the expected revenue contribution from computing in 2026? - Management expects computing to contribute in the low teens percentage of revenue, indicating growth potential in this segment [28] Question: How will the recent convertible raise be utilized? - The company plans to pursue both organic development and acquisitions, with a focus on strengthening the balance sheet and being opportunistic in M&A [45] Question: What is the outlook for automotive and industrial markets? - Management noted that while recovery has been elusive, there are signs of initial demand returning, particularly in Q1 and Q2 of next year [58]

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Q3'25 FINANCIAL RESULTS October 29, 2025 © Cohu, Inc. All rights reserved. Page 1 Cautionary Statement Regarding Forward-Looking Statements Forward-Looking Statements: Certain statements contained in this presentation may be considered forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, including statements regarding order and market trends, design wins, new product introductions or new market opportunities; progress and impact of manufacturing infrast ...

Financial Performance - Third quarter 2025 net sales were $126.2 million, a 17.2% increase from $107.7 million in Q2 2025 and a 32.4% increase from $95.3 million in Q3 2024[4] - GAAP net loss for Q3 2025 was $4.1 million, compared to a loss of $16.9 million in Q2 2025 and $18.1 million in Q3 2024, resulting in a loss per share of $0.09[4] - Non-GAAP net loss for Q3 2025 was $2.8 million, or $0.06 per share, compared to a profit of $0.7 million in Q2 2025[3] - GAAP net loss for the three months ended September 27, 2025, was $4,101 thousand, compared to a loss of $16,880 thousand in the previous quarter, showing an improvement of approximately 75.7%[19] - Non-GAAP net loss for the same period was $2,834 thousand, a significant improvement from a loss of $3,797 thousand year-over-year[19] - The company reported a net loss of $4,101 thousand for Q3 2025, an improvement from a net loss of $16,880 thousand in Q2 2025 and $18,056 thousand in Q3 2024[23] Revenue and Profitability - Gross margin for Q3 2025 was 43.8%, with a non-GAAP gross margin of 44.1%[7] - GAAP gross profit for Q3 2025 was $55,264 thousand, up from $47,109 thousand in Q2 2025 and $44,657 thousand in Q3 2024, representing a 17.5% increase quarter-over-quarter and a 23.7% increase year-over-year[23] - Non-GAAP gross profit for Q3 2025 was $55,658 thousand, with a gross profit margin of 44.1%, compared to 44.4% in Q2 2025 and 47.1% in Q3 2024[23] - Adjusted EBITDA for Q3 2025 was $11,652 thousand, which is 9.2% of net sales, significantly higher than $3,848 thousand (3.6%) in Q2 2025 and $2,148 thousand (2.3%) in Q3 2024[23] - For the nine months ended September 27, 2025, GAAP gross profit was $144,690 thousand, with a gross profit margin of 43.7%, compared to 45.8% for the same period in 2024[25] - Non-GAAP adjusted EBITDA for the nine months ended September 27, 2025, was $13,602 thousand, representing 4.1% of net sales, compared to 2.9% in the same period of 2024[25] Cash and Investments - Total cash and investments at the end of Q3 2025 were $198.2 million, with no share repurchases during the quarter[4] - Cash and investments decreased from $262,092 thousand to $198,157 thousand, a decline of about 24.4%[18] Strategic Initiatives - The company is focusing on growth in AI data center markets with new products like Neon HBM inspection and Eclipse test handler[7] - Cohu completed the acquisition of Tignis, Inc. on January 7, 2025, integrating its operations into the company[17] - The company is strategically deploying proceeds from a recent convertible debt offering to support innovation initiatives[5] Future Outlook - Cohu expects fourth quarter 2025 sales to be in the range of $122 million +/- $7 million, reflecting a cautious outlook[5] Balance Sheet - Total assets increased to $1,021,271 thousand as of September 27, 2025, compared to $999,415 thousand on December 30, 2024, reflecting a growth of approximately 2.3%[18] - Total current liabilities increased to $116,912 thousand from $85,184 thousand, reflecting a rise of approximately 37.3%[18] - Goodwill increased to $282,293 thousand as of September 27, 2025, from $234,639 thousand, representing a growth of about 20.3%[18] Operating Expenses - Operating expenses on a GAAP basis for Q3 2025 were $64,980 thousand, up from $64,345 thousand in Q2 2025 and $60,426 thousand in Q3 2024[23] - Non-GAAP operating expenses for Q3 2025 were $47,948 thousand, compared to $47,658 thousand in Q2 2025 and $45,239 thousand in Q3 2024[23] - The company’s total operating expenses for the nine months ended September 27, 2025, were $198,968 thousand, compared to $190,869 thousand for the same period in 2024[25] - Share-based compensation included in cost of sales for the three months ended September 27, 2025, was $341 thousand, up from $270 thousand in the same period last year[19] Loss from Operations - Loss from operations on a GAAP basis for the nine months ended September 27, 2025, was $54,278 thousand, compared to $50,041 thousand for the same period in 2024, indicating a decline of about 8.9%[21] - Non-GAAP income from operations for the nine months ended September 27, 2025, was $2,073 thousand, compared to a loss of $783 thousand in the same period last year[21]

Core Insights - The article discusses the investment opportunities in Cohu, Inc., a niche player in the back-end semiconductor manufacturing industry, highlighting the anticipation of positive developments in the company [1]. Group 1: Company Overview - Cohu, Inc. is positioned in the back-end semiconductor manufacturing sector, which is currently facing challenges [1]. Group 2: Investment Opportunities - The investment group "Value In Corporate Events" focuses on identifying actionable ideas from major corporate events such as IPOs, mergers & acquisitions, and earnings reports [1]. - The group aims to cover 10 significant events monthly to uncover the best investment opportunities [1].

Core Viewpoint - Cohu, Inc. has announced the pricing of $260.0 million aggregate principal amount of 1.50% convertible senior notes due 2031 in a private offering to qualified institutional buyers [1] Group 1 - The offering is structured under Rule 144A of the Securities Act of 1933, allowing for a private placement to specific institutional investors [1]

Group 1 - U.S. stocks experienced a decline, with the Dow Jones index dropping over 150 points on Wednesday [1] - Freeport-McMoRan Inc. shares fell 16.4% to $37.94 after the company provided lower third-quarter sales guidance [1] - The company reported a tragic incident at the Grasberg Block Cave mine, resulting in two fatalities and five team members missing [1] Group 2 - Zhengye Biotechnology Holding Limited shares decreased by 28.2% to $5.02 [4] - YD Bio Ltd shares fell 15% to $17.91 [4] - Harmony Biosciences Holdings, Inc. shares dropped 14.6% to $27.36 after failing to meet primary endpoints in a clinical trial [4] - Needham reduced the price target for Harmony Biosciences from $48 to $41 [4] - Cohu, Inc. shares declined 12.7% to $19.85 following an announcement of convertible senior notes offering [4] - Rigel Pharmaceuticals, Inc. shares decreased by 12.7% to $29.69 [4] - BGM Group Ltd. shares fell 12.2% to $10.31 [4] - Worthington Enterprises, Inc. shares dipped 11.3% to $53.43 after reporting first-quarter results [4] - QMMM Holdings Limited shares decreased by 11% to $97.00 [4] - Astera Labs, Inc. shares fell 10.6% to $205.65 [4] - Sandisk Corporation shares dipped 8.2% to $97.68 [4]

Group 1: Market Overview - U.S. stocks experienced a decline, with the Dow Jones index dropping more than 150 points on Wednesday [1] Group 2: Company-Specific News - Freeport-McMoRan Inc. shares fell 16.4% to $37.94 after the company provided third-quarter sales guidance [1] - The company reported a tragic incident at the Grasberg Block Cave mine, resulting in the fatal injuries of two team members and five others remaining missing [1] - Zhengye Biotechnology Holding Limited shares decreased by 28.2% to $5.02 [4] - YD Bio Ltd shares fell 15% to $17.91 [4] - Harmony Biosciences Holdings, Inc. shares dropped 14.6% to $27.36 after its Phase 3 clinical trial for ZYN002 in Fragile X syndrome did not meet primary endpoints, leading Needham to lower its price target from $48 to $41 [4] - Cohu, Inc. shares declined 12.7% to $19.85 following the announcement of an offering of convertible senior notes [4] - Rigel Pharmaceuticals, Inc. shares fell 12.7% to $29.69 [4] - BGM Group Ltd. shares decreased by 12.2% to $10.31 [4] - Worthington Enterprises, Inc. shares dipped 11.3% to $53.43 after reporting first-quarter results [4] - QMMM Holdings Limited shares fell 11% to $97.00 [4] - Astera Labs, Inc. shares declined 10.6% to $205.65 [4] - Sandisk Corporation shares dipped 8.2% to $97.68 [4]