[Second Quarter 2025 Results Overview](index=1&type=section&id=Second%20Quarter%202025%20Results%20Overview) This section provides a comprehensive overview of Cohu's financial performance, operational achievements, and business outlook for the second quarter of fiscal year 2025 [Financial Performance Summary](index=1&type=section&id=Financial%20Performance%20Summary) Cohu reported Q2 FY2025 net sales of $107.7 million, a GAAP net loss of $16.9 million, and non-GAAP net income of $0.7 million Q2 FY2025 and 6 Months FY2025 Financial Summary | Metric (in millions, except per share) | Q2 FY2025 | Q1 FY2025 | Q2 FY2024 | 6 Months FY2025 | 6 Months FY2024 | | :------------------------------------ | :-------- | :-------- | :-------- | :-------------- | :-------------- | | **GAAP Results** | | | | | | | Net sales | $107.7 | $96.8 | $104.7 | $204.5 | $212.3 | | Net loss | $(16.9) | $(30.8) | $(15.8) | $(47.7) | $(30.4) | | Net loss per share | $(0.36) | $(0.66) | $(0.34) | $(1.02) | $(0.65) | | **Non-GAAP Results** | | | | | | | Net income (loss) | $0.7 | $(0.8) | $(0.6) | $(0.1) | $0.0 | | Net income (loss) per share | $0.02 | $(0.02) | $(0.01) | $(0.00) | $0.00 | - Total cash and investments at the end of second quarter 2025 increased by **$8.6 million** to **$209.4 million**[4](index=4&type=chunk) [Operational Highlights and Strategic Wins](index=1&type=section&id=Operational%20Highlights%20and%20Strategic%20Wins) Q2 FY2025 results aligned with guidance, driven by increased test cell utilization and significant design-win orders - Estimated test cell utilization increased by **3 points quarter-over-quarter** to **75%**[6](index=6&type=chunk) - Secured a **$28 million design-win order** from a customer serving mobile and automotive end-markets, with shipping through Q4'25[5](index=5&type=chunk)[6](index=6&type=chunk) - Opened new opportunities with the **first system sold in India**, introduced a new Eclipse handler model, and qualified ULTRA-S contactor for precision analog IC test[5](index=5&type=chunk) [Third Quarter 2025 Business Outlook](index=1&type=section&id=Third%20Quarter%202025%20Business%20Outlook) Cohu anticipates third quarter 2025 sales to be within a range of $125 million +/- $7 million - Cohu expects third quarter 2025 sales to be in a range of **$125 million +/- $7 million**[5](index=5&type=chunk) [Company Profile and Disclosures](index=3&type=section&id=Company%20Profile%20and%20Disclosures) This section outlines Cohu's business, its use of non-GAAP financial measures, forward-looking statements, and investor communication details [About Cohu](index=3&type=section&id=About%20Cohu) Cohu is a global technology leader providing test, automation, inspection, and metrology products and services to the semiconductor industry - Cohu is a global technology leader supplying test, automation, inspection and metrology products and services to the semiconductor industry[8](index=8&type=chunk) - Cohu's products enable optimized yield and productivity, accelerating customers' manufacturing time-to-market[8](index=8&type=chunk) [Use of Non-GAAP Financial Information](index=3&type=section&id=Use%20of%20Non-GAAP%20Financial%20Information) Cohu uses non-GAAP measures to provide insights into operational trends and financial performance by excluding specific charges - Non-GAAP financial measures supplement GAAP results by excluding charges for share-based compensation, amortization of purchased intangible assets, restructuring costs, manufacturing transition and severance costs, impairments, acquisition-related costs, depreciation of purchase accounting adjustments, fair value adjustment to contingent consideration, pension curtailment gain, amortization of cloud-based software implementation costs, and loss on extinguishment of debt[9](index=9&type=chunk) - Management uses non-GAAP measures to evaluate operational trends, financial performance, cash generating capacity, make operational decisions, determine executive compensation, forecast future results, and compare to annual operating plans[10](index=10&type=chunk) [Forward-Looking Statements and Risk Factors](index=3&type=section&id=Forward%20Looking%20Statements) The report contains forward-looking statements subject to risks including industry volatility, market erosion, and supply chain challenges - Forward-looking statements include projections regarding test cell utilization, revenue growth in vertical markets, new market entries, product introductions, and the FY2025 outlook[11](index=11&type=chunk) - Key risk factors include new product investment success, semiconductor industry seasonality and volatility, erosion in mobile, automotive and industrial market sales, supply chain management, inflationary pressures, intense competition, customer concentration, geopolitical instability, and cybersecurity breaches[12](index=12&type=chunk) - Actual results and future business conditions could differ materially due to various factors, as discussed in Cohu's SEC filings (Form 10-K and 10-Q)[12](index=12&type=chunk)[13](index=13&type=chunk) [Conference Call and Investor Information](index=1&type=section&id=Conference%20Call%20Information) Details regarding Cohu's Q2 2025 earnings conference call and investor relations contact information are provided - A live conference call and webcast to discuss Q2 2025 results was held on July 31, 2025, at 1:30 p.m. Pacific Time/4:30 p.m. Eastern Time[6](index=6&type=chunk) - Investor relations information and press releases are available on Cohu's website at www.cohu.com[14](index=14&type=chunk) - Investor Relations contact: Jeffrey D. Jones at 858-848-8106[14](index=14&type=chunk) [GAAP Consolidated Financial Statements](index=6&type=section&id=GAAP%20Consolidated%20Financial%20Statements) This section presents Cohu's GAAP consolidated statements of operations and balance sheets for the reported periods [Consolidated Statements of Operations (GAAP)](index=6&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) Presents Cohu's GAAP net sales and net loss for the three and six months ended June 28, 2025, including the Tignis acquisition Consolidated Statements of Operations (GAAP) - Key Figures | Metric (in thousands, except per share) | Three Months Ended June 28, 2025 | Three Months Ended June 29, 2024 | Six Months Ended June 28, 2025 | Six Months Ended June 29, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net sales | $107,680 | $104,701 | $204,477 | $212,315 | | Cost of sales (excluding amortization) | $60,571 | $57,779 | $115,051 | $116,144 | | Research and development | $23,188 | $21,342 | $46,340 | $43,678 | | Selling, general and administrative | $29,866 | $32,118 | $59,877 | $67,200 | | Amortization of purchased intangible assets | $10,081 | $9,748 | $19,933 | $19,543 | | Restructuring charges | $1,210 | $13 | $7,838 | $22 | | Loss from operations | $(17,236) | $(16,299) | $(44,562) | $(34,272) | | Net loss | $(16,880) | $(15,769) | $(47,684) | $(30,404) | | Basic loss per share | $(0.36) | $(0.34) | $(1.02) | $(0.65) | | Diluted loss per share | $(0.36) | $(0.34) | $(1.02) | $(0.65) | - The acquisition of Tignis, Inc. was completed on January 7, 2025, and its results have been included since that date[16](index=16&type=chunk) [Condensed Consolidated Balance Sheets (GAAP)](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) Details Cohu's assets, liabilities, and equity as of June 28, 2025, highlighting changes in cash, investments, and goodwill Condensed Consolidated Balance Sheets (GAAP) - Key Figures | Metric (in thousands) | June 28, 2025 | December 30, 2024 | | :------------------------------ | :------------ | :---------------- | | Cash and investments | $209,411 | $262,092 | | Accounts receivable | $90,826 | $91,619 | | Inventories | $137,831 | $141,861 | | Total current assets | $491,013 | $534,307 | | Property, plant & equipment, net | $77,111 | $74,786 | | Goodwill | $282,525 | $234,639 | | Intangible assets, net | $96,718 | $110,717 | | Total assets | $1,010,193 | $999,415 | | Short-term borrowings | $9,830 | $633 | | Total current liabilities | $100,565 | $85,184 | | Long-term debt | $7,253 | $7,052 | | Cohu stockholders' equity | $830,543 | $856,891 | | Total liabilities & stockholders' equity | $1,010,193 | $999,415 | - On January 7, 2025, the Company made a cash payment of **$34.9 million**, net of cash received, to acquire Tignis, Inc.[17](index=17&type=chunk) [Supplemental Non-GAAP Reconciliations](index=8&type=section&id=Supplemental%20Reconciliation%20of%20GAAP%20Results%20to%20Non-GAAP%20Financial%20Measures) This section provides detailed reconciliations of GAAP to non-GAAP financial measures for both quarterly and six-month periods [Three Months Ended June 28, 2025](index=8&type=section&id=Three%20Months%20Ended%20June%2028%2C%202025) Provides detailed reconciliations from GAAP to non-GAAP financial measures for the three months ended June 28, 2025 [Net Income (Loss) Reconciliation (Three Months Ended)](index=8&type=section&id=Net%20Income%20%28Loss%29%20Reconciliation%20-%203%20Months) Reconciles GAAP net loss to non-GAAP net income for Q2 FY2025, adjusting for various non-GAAP items and tax effects Net Income (Loss) Reconciliation (Three Months Ended) | Metric (in thousands, except per share) | June 28, 2025 | March 29, 2025 | June 29, 2024 | | :------------------------------------ | :------------ | :------------- | :------------ | | Net loss - GAAP basis | $(16,880) | $(30,804) | $(15,769) | | Non-GAAP adjustments | $17,383 | $21,542 | $16,587 | | Tax effect of non-GAAP adjustments | $1,757 | $8,476 | $(1,400) | | Pension curtailment gain | $(1,530) | - | - | | Net income (loss) - non-GAAP basis | $730 | $(786) | $(582) | | GAAP net loss per share - diluted | $(0.36) | $(0.66) | $(0.34) | | Non-GAAP net income (loss) per share - diluted | $0.02 | $(0.02) | $(0.01) | [Gross Profit Reconciliation (Three Months Ended)](index=12&type=section&id=Gross%20Profit%20Reconciliation%20-%203%20Months) Reconciles GAAP gross profit to non-GAAP gross profit for Q2 FY2025, primarily adjusting for restructuring charges in cost of sales Gross Profit Reconciliation (Three Months Ended) | Metric (in thousands) | June 28, 2025 | March 29, 2025 | June 29, 2024 | | :-------------------- | :------------ | :------------- | :------------ | | Gross profit - GAAP basis (excluding amortization) | $47,109 | $42,317 | $46,922 | | Non-GAAP adjustments to cost of sales | $696 | $482 | $252 | | Gross profit - Non-GAAP basis | $47,805 | $42,799 | $47,174 | | GAAP gross profit (% of net sales) | 43.7% | 43.7% | 44.8% | | Non-GAAP gross profit (% of net sales) | 44.4% | 44.2% | 45.1% | [Adjusted EBITDA Reconciliation (Three Months Ended)](index=12&type=section&id=Adjusted%20EBITDA%20Reconciliation%20-%203%20Months) Reconciles GAAP net loss to Adjusted EBITDA for Q2 FY2025, reflecting adjustments for tax, interest, amortization, and other non-GAAP items Adjusted EBITDA Reconciliation (Three Months Ended) | Metric (in thousands) | June 28, 2025 | March 29, 2025 | June 29, 2024 | | :-------------------- | :------------ | :------------- | :------------ | | Net income - GAAP Basis | $(16,880) | $(30,804) | $(15,769) | | Income tax provision (benefit) | $2,049 | $4,838 | $1,286 | | Interest expense | $126 | $198 | $144 | | Interest income | $(1,386) | $(1,613) | $(2,333) | | Amortization of purchased intangible assets | $10,081 | $9,852 | $9,748 | | Depreciation | $3,377 | $3,232 | $3,413 | | Amortization of cloud-based software implementation costs | $709 | $709 | $709 | | Pension curtailment gain | $(1,530) | - | - | | Other non-GAAP adjustments | $7,302 | $11,690 | $6,827 | | Adjusted EBITDA | $3,848 | $(1,898) | $4,025 | | Net income - GAAP Basis (% of net sales) | (15.7)% | (31.8)% | (15.1)% | | Adjusted EBITDA (% of net sales) | 3.6% | (2.0)% | 3.8% | [Operating Expense Reconciliation (Three Months Ended)](index=12&type=section&id=Operating%20Expense%20Reconciliation%20-%203%20Months) GAAP operating expenses for Q2 FY2025 were $64.3 million. After non-GAAP adjustments, non-GAAP operating expenses were $47.7 million Operating Expense Reconciliation (Three Months Ended) | Metric (in thousands) | June 28, 2025 | March 29, 2025 | June 29, 2024 | | :-------------------- | :------------ | :------------- | :------------ | | Operating Expense - GAAP basis | $64,345 | $69,643 | $63,221 | | Non-GAAP adjustments to operating expenses | $(16,687) | $(21,060) | $(16,335) | | Operating Expenses - Non-GAAP basis | $47,658 | $48,583 | $46,886 | [Six Months Ended June 28, 2025](index=10&type=section&id=Six%20Months%20Ended%20June%2028%2C%202025) Provides detailed reconciliations from GAAP to non-GAAP financial measures for the six months ended June 28, 2025 [Net Income (Loss) Reconciliation (Six Months Ended)](index=10&type=section&id=Net%20Income%20%28Loss%29%20Reconciliation%20-%206%20Months) For the first six months of FY2025, GAAP net loss was $47.7 million. After non-GAAP adjustments, the non-GAAP net loss was $0.1 million Net Income (Loss) Reconciliation (Six Months Ended) | Metric (in thousands, except per share) | June 28, 2025 | June 29, 2024 | | :------------------------------------ | :------------ | :------------ | | Net loss - GAAP basis | $(47,684) | $(30,404) | | Non-GAAP adjustments | $38,925 | $33,821 | | Tax effect of non-GAAP adjustments | $10,233 | $(3,399) | | Pension curtailment gain | $(1,530) | - | | Net income (loss) - non-GAAP basis | $(56) | $18 | | GAAP net loss per share - diluted | $(1.02) | $(0.65) | | Non-GAAP income (loss) per share - diluted | $(0.00) | $0.00 | [Gross Profit Reconciliation (Six Months Ended)](index=13&type=section&id=Gross%20Profit%20Reconciliation%20-%206%20Months) For the first six months of FY2025, GAAP gross profit was $89.4 million. With non-GAAP adjustments, the non-GAAP gross profit was $90.6 million Gross Profit Reconciliation (Six Months Ended) | Metric (in thousands) | June 28, 2025 | June 29, 2024 | | :-------------------- | :------------ | :------------ | | Gross profit - GAAP basis (excluding amortization) | $89,426 | $96,171 | | Non-GAAP adjustments to cost of sales | $1,178 | $475 | | Gross profit - Non-GAAP basis | $90,604 | $96,646 | | GAAP gross profit (% of net sales) | 43.7% | 45.3% | | Non-GAAP gross profit (% of net sales) | 44.3% | 45.5% | [Adjusted EBITDA Reconciliation (Six Months Ended)](index=13&type=section&id=Adjusted%20EBITDA%20Reconciliation%20-%206%20Months) For the first six months of FY2025, Cohu reported an Adjusted EBITDA of $2.0 million, after various non-GAAP adjustments Adjusted EBITDA Reconciliation (Six Months Ended) | Metric (in thousands) | June 28, 2025 | June 29, 2024 | | :-------------------- | :------------ | :------------ | | Net loss - GAAP Basis | $(47,684) | $(30,404) | | Income tax provision | $6,887 | $(414) | | Interest expense | $324 | $433 | | Interest income | $(2,999) | $(5,042) | | Amortization of purchased intangible assets | $19,933 | $19,543 | | Depreciation | $6,609 | $6,842 | | Amortization of cloud-based software implementation costs | $1,418 | $1,418 | | Pension curtailment gain | $(1,530) | - | | Loss on extinguishment of debt | - | $241 | | Other non-GAAP adjustments | $18,992 | $14,254 | | Adjusted EBITDA | $1,950 | $6,871 | | Net loss - GAAP Basis (% of net sales) | (23.3)% | (14.3)% | | Adjusted EBITDA (% of net sales) | 1.0% | 3.2% | [Operating Expense Reconciliation (Six Months Ended)](index=13&type=section&id=Operating%20Expense%20Reconciliation%20-%206%20Months) GAAP operating expenses for the first six months of FY2025 were $134.0 million. After non-GAAP adjustments, non-GAAP operating expenses were $96.2 million Operating Expense Reconciliation (Six Months Ended) | Metric (in thousands) | June 28, 2025 | June 29, 2024 | | :-------------------- | :------------ | :------------ | | Operating Expense - GAAP basis | $133,988 | $130,443 | | Non-GAAP adjustments to operating expenses | $(37,747) | $(33,346) | | Operating Expenses - Non-GAAP basis | $96,241 | $97,097 |

Financial Performance & Targets - FY24 revenue was $402 million[8] - FY24 gross margin was approximately 45%[8] - The company targets a mid-term (3-5 years) revenue of $600-$800 million[15, 47] - The mid-term gross margin target is 48-50%[47] - The company has an effective capital allocation strategy with R&D investment and share repurchase[49] Market & Growth Opportunities - The company estimates its serviceable addressable market (SAM) to be approximately $2 billion in 2024[13] - The company is expanding its market opportunities from $2 billion to $3 billion SAM[20] - The company estimates the HBM market to be approximately $4 billion in 2024 with a CAGR of 68% through 2030[22] - The company estimates the SiC market to be approximately $3.6 billion in 2024 with a CAGR of 14% through 2030[27] Recurring Revenue - Approximately 65% of total revenue for FY24 is recurring revenue[8] - The annual renewal rate on service contracts is approximately 93%[45]

Group 1: Earnings Performance - Cohu reported a quarterly loss of $0.02 per share, significantly better than the Zacks Consensus Estimate of a loss of $0.16, representing an earnings surprise of 87.50% [1] - The company posted revenues of $96.8 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 0.21% and down from $107.61 million year-over-year [2] - Over the last four quarters, Cohu has surpassed consensus EPS estimates two times and topped consensus revenue estimates just once [2] Group 2: Stock Performance and Outlook - Cohu shares have declined approximately 40.1% since the beginning of the year, compared to a decline of 5.3% for the S&P 500 [3] - The current consensus EPS estimate for the upcoming quarter is -$0.08 on revenues of $101.2 million, and for the current fiscal year, it is $0.02 on revenues of $430.3 million [7] - The estimate revisions trend for Cohu is currently unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Group 3: Industry Context - The Electronics - Manufacturing Machinery industry, to which Cohu belongs, is currently in the bottom 5% of over 250 Zacks industries, suggesting a challenging environment [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Cohu's stock performance [5]

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was approximately $97 million, with a non-GAAP gross margin of approximately 44% [5][11] - Q1 non-GAAP net loss was approximately $800,000, with a non-GAAP EPS of a $0.02 loss [12] - Cash and investments decreased by $61 million during Q1, primarily due to acquisitions and share repurchases [13] Business Line Data and Key Metrics Changes - Revenue was split 63% recurring and 37% systems, with systems revenue increasing sequentially in automotive and consumer segments, offset by declines in computing, industrial, and mobile [6][11] - Recurring orders increased by 28% quarter over quarter, indicating strong non-capital equipment revenue streams [7] Market Data and Key Metrics Changes - Estimated test cell utilization was down 1 point quarter over quarter to 72% [7] - The automotive and industrial market accounted for more than 10% of sales from one customer in Q1 [12] Company Strategy and Development Direction - The company implemented a restructuring program to reduce manufacturing and operating expenses, with benefits expected to start in Q2 [5][6] - The focus is on expanding into new market segments and enhancing technology portfolios, particularly in the memory market and AI process monitoring [8][10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about business prospects due to design wins and increased recurring orders, with no significant changes in customer buying patterns due to tariffs [10][15] - The second quarter is expected to see a revenue increase of approximately 10% quarter over quarter, with guidance set at approximately $106 million [15] Other Important Information - Total debt increased by approximately $9 million due to a revolving credit facility used for facility purchases [13] - The company is exploring strategic acquisition opportunities and has paused share buybacks for Q2 [80] Q&A Session Summary Question: Revenue increase in Q2 guidance - Approximately half of the $9 million revenue increase is attributed to improvements in recurring revenue and half to systems [19] Question: Multi-unit order for inspection - Projecting about $8 million of revenue in HBM this year, with discussions ongoing with a second customer [20][21] Question: Connection between recurring revenue and equipment demand - An increase in recurring orders is expected to lead to improved utilization, which may indicate future capital equipment demand [24] Question: Segments with recurring order pickup - The recurring order pickup is predominantly in the mobile segment and is fairly concentrated among a few customers [28] Question: Power probe card design win - The opportunity for revenue from the power probe card is estimated at about $2 million per year per customer, with initial revenue expected to be a fraction of that this year [32] Question: Handler business in China - The company has captured a small number of startup fabless companies in China, with total design wins expected to generate $6.5 million in orders this year [35] Question: Customer needs for systems and recurring products - Customers are showing increased interest in systems, but management remains cautious about predicting future demand [40][42] Question: Test cell utilization rates - Uptick in buying is usually dictated by utilization, with OSATs typically leading in recovery cycles [67] Question: Automotive market turnaround - The automotive market is expected to recover slowly, with utilization and recurring orders anticipated to increase [69] Question: Restructuring impact on revenue levels - After restructuring, operating expenses are expected to be around $47 million at a revenue level of $100 million [75] Question: Capital allocation and buyback strategy - The company is reviewing acquisition opportunities and has paused buybacks for now, focusing on offsetting dilution from equity compensation plans [80]

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was approximately $97 million, with a non-GAAP gross margin of about 44% [5][12] - Non-GAAP net loss for Q1 was approximately $800,000, resulting in a non-GAAP EPS loss of $0.02 [13] - Cash and investments decreased by $61 million during Q1, primarily due to acquisitions and share repurchases [14] Business Line Data and Key Metrics Changes - Revenue was split 63% recurring and 37% systems, with systems revenue increasing in automotive and consumer segments but declining in computing, industrial, and mobile [6][12] - Recurring orders increased by 28% quarter over quarter, indicating strong non-capital equipment revenue streams [7] Market Data and Key Metrics Changes - Test cell utilization was down to 72% in March, with expectations for improved accuracy in segmenting utilization by market in the future [7][11] - The automotive market is showing signs of recovery, with expectations for utilization to increase gradually [67] Company Strategy and Development Direction - The company implemented a restructuring program to reduce manufacturing and operating expenses, with benefits expected to start in Q2 2025 [5][6] - Focus on expanding into new market segments and enhancing technology portfolio, particularly in AI process monitoring solutions [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about business prospects due to design wins and increased recurring orders, with no significant changes in customer buying patterns due to tariffs [11][41] - The second quarter is expected to see a revenue increase of approximately 10% quarter over quarter, with gross margin forecasted at around 45% [15] Other Important Information - The company has repurchased approximately 4 million shares for about $117 million, with $23 million remaining for future buybacks [14] - The integration of the recently acquired Tignis is progressing well, with increased customer interest [50] Q&A Session Summary Question: How much of the $9 million revenue increase in Q2 guidance is from recurring revenue versus HBM inspection shipments? - Approximately half of the increase is from recurring revenue and half from systems [20] Question: Does the multi-unit order for inspection increase the revenue target for the full year? - Projecting about $8 million of revenue in HBM this year, with discussions ongoing with a second customer [21][22] Question: How do recurring orders connect with equipment demand? - An increase in recurring orders is expected to lead to improved utilization, which may indicate future capital equipment demand [24][25] Question: In which segments is the pickup in recurring orders occurring? - The recurring order pickup is predominantly in the mobile segment, but it is fairly concentrated among a small number of customers [28][29] Question: What is the expected revenue opportunity from the power probe card design win? - The opportunity is about $2 million per year per customer, with a fraction expected this year due to timing [32] Question: How is the automotive market expected to perform? - The automotive market is expected to recover slowly, with utilization and recurring orders anticipated to increase [67]

Financial Performance - Q1'25 revenue was $968 million[8], slightly below the guidance of $97 million +/- $7 million[26] - Q1'25 non-GAAP gross margin was 442%[10], compared to 418% in Q4'24[10] and 460% in Q1'24[10] - Q1'25 adjusted EBITDA was -20%[12], similar to Q4'24[12] - Q1'25 non-GAAP EPS was -$002[26], an improvement from -$015 in Q4'24[26] Balance Sheet and Cash Flow - Cash and investments decreased from $262 million in Q4'24 to $201 million in Q1'25[27] - Total debt increased from $9 million in Q4'24 to $18 million in Q1'25[27] - Cash flow from operations was -$102 million in Q1'25[27] - Net cash per share decreased from $542 in Q4'24 to $393 in Q1'25[28] Q2'25 Outlook - Q2'25 revenue is forecasted to be $106 million +/- $7 million[30], an increase of approximately 10% compared to Q1'25[32] - Q2'25 gross margin is expected to be around 45%[30] - Q2'25 operating expenses are projected to be approximately $48 million[30], down from $486 million in Q1'25[30] - Q2'25 adjusted EBITDA is expected to be around 4%[30]

[Q1 2025 Financial Highlights](index=1&type=section&id=Cohu%20Reports%20First%20Quarter%202025%20Results) [Q1 2025 Performance Summary](index=1&type=section&id=Q1%202025%20Performance%20Summary) Cohu reported Q1 2025 net sales of **$96.8 million**, a GAAP net loss of **$30.8 million**, and a non-GAAP net loss of **$0.8 million**, with **$200.8 million** in cash and investments Q1 2025 Financial Performance Overview | Metric (in millions, except per share) | Q1 FY 2025 | Q4 FY 2024 | Q1 FY 2024 | | :--- | :--- | :--- | :--- | | **GAAP Results** | | | | | Net Sales | $96.8 | $94.1 | $107.6 | | Net Loss | $(30.8) | $(21.4) | $(14.6) | | Net Loss per Share | $(0.66) | $(0.46) | $(0.31) | | **Non-GAAP Results** | | | | | Net Income (Loss) | $(0.8) | $(7.1) | $0.6 | | Net Income (Loss) per Share | $(0.02) | $(0.15) | $0.01 | - Total cash and investments at the end of Q1 2025 were **$200.8 million**, with the company repurchasing **432,288 shares** for approximately **$8.6 million** during the quarter[3](index=3&type=chunk) - Key operational highlights for Q1 2025 include revenue of **$96.8 million** with approximately **63%** recurring, a non-GAAP gross margin of **44.2%**, and a **28% increase** in recurring orders quarter-over-quarter[5](index=5&type=chunk) [Business Outlook and Management Commentary](index=1&type=section&id=Business%20Outlook%20and%20Management%20Commentary) Management expressed optimism regarding design-wins and customer expansion, forecasting Q2 2025 sales in the range of **$106 million +/- $7 million** - CEO Luis Müller highlighted multiple design-wins, customer expansion for testers, handlers, and inspection systems, and new customer engagements for Tignis AI process monitoring software[4](index=4&type=chunk) - Cohu expects second quarter 2025 sales to be in a range of **$106 million +/- $7 million**[4](index=4&type=chunk) [Financial Statements](index=5&type=section&id=Financial%20Statements) [Consolidated Statements of Operations](index=5&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) Q1 2025 net sales decreased to **$96.8 million**, with loss from operations widening to **$27.3 million** and net loss reaching **$30.8 million**, including **$6.6 million** in restructuring charges Consolidated Statements of Operations (in thousands) | Metric | Three Months Ended Mar 29, 2025 | Three Months Ended Mar 30, 2024 | | :--- | :--- | :--- | | Net sales | $96,797 | $107,614 | | Loss from operations | $(27,326) | $(17,973) | | Net loss | $(30,804) | $(14,635) | | Diluted loss per share | $(0.66) | $(0.31) | - The company recorded restructuring charges of **$6.6 million** in Q1 2025, compared to a negligible amount in Q1 2024[14](index=14&type=chunk) - The results for the quarter ended March 29, 2025 include the operations of Tignis, Inc., which was acquired on January 7, 2025[15](index=15&type=chunk) [Condensed Consolidated Balance Sheets](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of March 29, 2025, total assets were **$975.5 million**, with cash and investments at **$200.8 million**, impacted by the **$34.9 million** Tignis acquisition Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | March 29, 2025 | December 30, 2024 | | :--- | :--- | :--- | | Cash and investments | $200,808 | $262,092 | | Total current assets | $478,762 | $534,307 | | Goodwill | $272,598 | $234,639 | | Total assets | $975,537 | $999,415 | | Total current liabilities | $92,024 | $85,184 | | Total liabilities & stockholders' equity | $975,537 | $999,415 | - On January 7, 2025, the Company made a cash payment of **$34.9 million**, net of cash received, to acquire Tignis, Inc., which impacted the cash balance[16](index=16&type=chunk) [Non-GAAP Financial Measures & Reconciliations](index=3&type=section&id=Non-GAAP%20Financial%20Measures) [Explanation of Non-GAAP Measures](index=3&type=section&id=Use%20of%20Non-GAAP%20Financial%20Information) Cohu uses non-GAAP measures to provide supplemental operational performance insights by excluding items like share-based compensation, amortization, and restructuring costs - Non-GAAP measures exclude charges and related tax effects for share-based compensation, amortization of purchased intangible assets, restructuring costs, acquisition-related costs, and other specific items[8](index=8&type=chunk) - Management uses non-GAAP measures for operational decision-making, forecasting, determining executive compensation, and comparing performance to its annual operating plan[9](index=9&type=chunk) [Reconciliation of GAAP to Non-GAAP Results](index=7&type=section&id=Supplemental%20Reconciliation%20of%20GAAP%20Results%20to%20Non-GAAP%20Financial%20Measures%20(Unaudited)) Q1 2025 GAAP net loss of **$30.8 million** was reconciled to a non-GAAP net loss of **$0.8 million**, primarily by excluding amortization, restructuring, and share-based compensation Q1 2025 Reconciliation of GAAP to Non-GAAP Net Loss (in thousands) | Description | Amount | | :--- | :--- | | **Net loss - GAAP basis** | **$(30,804)** | | Share-based compensation | $6,230 | | Amortization of purchased intangible assets | $9,852 | | Restructuring charges | $6,628 | | Other adjustments | $(1,168) | | Tax effect of non-GAAP adjustments | $8,476 | | **Net loss - non-GAAP basis** | **$(786)** | [Supplemental Reconciliations (Gross Profit & EBITDA)](index=9&type=section&id=Supplemental%20Reconciliation%20of%20GAAP%20Results%20to%20Non-GAAP%20Financial%20Measures%20(Unaudited)%202) Q1 2025 non-GAAP gross margin was **44.2%**, with Adjusted EBITDA at negative **$1.9 million**, reconciled from a GAAP net loss of **$30.8 million** Gross Profit Margin Reconciliation | Metric | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | GAAP gross profit | 43.7% | 41.9% | 45.8% | | Non-GAAP gross profit | 44.2% | 41.8% | 46.0% | Q1 2025 Adjusted EBITDA Reconciliation (in thousands) | Description | Amount | | :--- | :--- | | **Net loss - GAAP Basis** | **$(30,804)** | | Income tax provision | $4,838 | | Interest expense (net) | $(1,415) | | Amortization & Depreciation | $13,802 | | Other non-GAAP adjustments | $11,690 | | **Adjusted EBITDA** | **$(1,898)** | [Forward-Looking Statements and Other Information](index=3&type=section&id=Forward%20Looking%20Statements) [Forward-Looking Statements and Risk Factors](index=3&type=section&id=Forward%20Looking%20Statements%20and%20Risk%20Factors) The report contains forward-looking statements subject to risks including semiconductor industry cyclicality, intense competition, inflationary pressures, geopolitical instability, and customer concentration - Forward-looking statements are based on current beliefs and assumptions and are not guarantees of future performance, including projections, new products, and market growth[10](index=10&type=chunk) - The company faces numerous risks, including the seasonal, cyclical, and unpredictable nature of the semiconductor industry, intense competition, inflationary pressures, geopolitical instability, and reliance on a limited number of customers[11](index=11&type=chunk)

Financial Performance - For the fiscal year ended December 28, 2024, Cohu's net sales decreased 36.9% year-over-year to $401.8 million due to lower demand in automotive, industrial, and mobile applications [198]. - Cohu's consolidated net sales decreased 36.9% from $636.3 million in fiscal 2023 to $401.8 million in fiscal 2024, primarily due to lower demand in various sectors [220]. - Gross margin decreased to 44.9% in fiscal 2024 from 47.6% in fiscal 2023, attributed to lower business volume impacting fixed cost leverage [221]. - Net loss for fiscal 2024 was $69.8 million, compared to net income of $28.2 million in fiscal 2023 [239]. - Cash provided by operating activities in fiscal 2024 totaled $2.8 million, a significant decrease from $101.5 million in fiscal 2023 [247]. Acquisitions - Cohu completed the acquisition of MCT on January 30, 2023, and EQT on October 2, 2023, both of which are included in the consolidated results of operations [197]. - Cohu acquired MCT on January 30, 2023, and EQT on October 2, 2023, contributing to consolidated results from the acquisition dates [218]. - Amortization of purchased intangible assets increased to $39.1 million in fiscal 2024 from $36.4 million in fiscal 2023, driven by EQT's acquisition [226]. Debt and Financing - Cohu repaid $29.3 million of its Term Loan Credit Facility on February 9, 2024, and repurchased 915,504 shares of common stock for approximately $27.0 million during fiscal 2024 [198]. - Total indebtedness as of December 28, 2024, was $8.8 million, including $1.7 million under term loans and $6.5 million under construction loans [242]. - Cash used in financing activities in fiscal 2024 totaled $59.0 million, a decrease from $68.1 million in fiscal 2023 [249]. - Repayments of short-term borrowings and long-term debt in fiscal 2024 totaled $31.3 million, including $29.3 million in cash prepayments of the Term Loan Credit Facility [249]. - As of December 30, 2023, the company had approximately $29.3 million of long-term debt under a Term Loan Credit Facility, with interest payments based on a base rate plus a margin of up to 2.0% per annum or SOFR plus a margin of up to 3.0% per annum [274]. - The company repaid the remaining outstanding principal of $29.3 million on February 9, 2024 [274]. Cash Flow and Investments - In fiscal 2024, net cash provided by investing activities totaled $21.9 million, compared to a net cash used of $30.2 million in fiscal 2023 [248]. - Cash used for purchases of short-term investments in fiscal 2024 was $78.6 million, while cash generated from sales and maturities was $114.2 million [248]. - Additions to property, plant, and equipment in fiscal 2024 amounted to $10.6 million, down from $16.1 million in fiscal 2023 [248]. - The company expects to continue making capital expenditures to support its business and anticipates that current working capital will be sufficient for at least the next twelve months [263]. - At December 28, 2024, the investment portfolio included short-term, fixed-income investment securities with a fair value of approximately $55.7 million [271]. Tax and Valuation - The company maintains a gross deferred tax asset balance of approximately $138.2 million, with a valuation allowance of approximately $114.5 million as of December 28, 2024 [206]. - The company has determined there was no impairment of goodwill as of October 1, 2024, as the estimated fair values of reporting units exceeded their carrying values [210]. Foreign Currency and Risk Management - Fluctuations in foreign currency exchange rates impacted the company's stockholders' equity, which decreased by $16.8 million due to foreign currency translation as of December 28, 2024, compared to December 30, 2023 [277]. - A hypothetical 10% devaluation of the U.S. dollar would result in an approximate $28.3 million positive translation adjustment recorded in other comprehensive income within stockholders' equity [278]. - Conversely, a hypothetical 10% appreciation of the U.S. dollar would lead to an approximate $28.3 million negative translation adjustment recorded in other comprehensive income within stockholders' equity [278]. - The company has entered into foreign currency forward contracts to hedge against future movements in foreign exchange rates affecting U.S. Dollar denominated assets and liabilities [276]. - The company began hedging foreign currency risk associated with net investment positions in certain foreign subsidiaries in the third quarter of fiscal 2024 [277]. - The company’s strategy aims to mitigate risks and volatility associated with foreign currency transaction gains or losses through foreign currency forward contracts [276]. Operational Focus - Cohu's long-term market drivers remain intact, with optimism about the increasing use of semiconductors, particularly in artificial intelligence applications [199]. - The company continues to focus on developing innovative products and capturing new customers, driven by increasing semiconductor complexity and quality demands [199]. - Cohu's inventory valuation includes reserves for estimated excess and obsolete inventory, which may impact gross margin if future demand is lower than projected [204]. Expenses - Research and development (R&D) expenses in fiscal 2024 were $84.8 million, or 21.1% of net sales, compared to $88.6 million, or 13.9% of net sales in fiscal 2023 [223]. - Selling, general and administrative (SG&A) expenses as a percentage of net sales increased to 31.9% in fiscal 2024 from 20.8% in fiscal 2023, despite a decrease in total SG&A expenses from $132.2 million to $128.0 million [225]. - Cohu's share-based compensation expense is calculated based on the market price of common stock on the grant date, affecting financial results [216].

Financial Data and Key Metrics Changes - Full year 2024 revenue was approximately $402 million, with a non-GAAP gross margin of 45% [8][21] - Q4 revenue was $94.1 million, within guidance, but gross margin was impacted by a $2.1 million inventory reserve charge, resulting in a gross margin of 41.8% [9][21] - Operating expenses for Q4 were lower than guidance at $45.3 million, leading to a non-GAAP operating loss of approximately $6 million [22] Business Line Data and Key Metrics Changes - Recurring revenue represented 62% of total revenue in Q4 and 65% for the full year 2024, indicating a stable revenue stream [20] - Systems revenue increased sequentially in computing, industrial, and consumer segments, but declined in automotive and mobile due to inventory corrections [10] - The company entered the memory and silicon carbide power semiconductor markets, expecting to generate $7 million in revenue from HBM inspection systems in 2025 [11][12] Market Data and Key Metrics Changes - Estimated test cell utilization at the end of December increased to 73%, with OSATs at 76% and IDMs at 70% [10] - Automotive and industrial markets are experiencing significant inventory corrections, with expectations of recovery in the second half of 2025 [56][68] Company Strategy and Development Direction - The company is focusing on aligning new products with compute applications, particularly in the data center market and AI at the EDGE [12][16] - Cohu aims to establish itself as a key player in AI-driven semiconductor manufacturing, with a projected annual growth rate of 50% or more for software revenue over the next three years [16] - The acquisition of Tignis is expected to enhance Cohu's software capabilities and expand its market reach [16][96] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges posed by ongoing inventory corrections in the automotive and industrial sectors, predicting another two quarters of adjustment [56][57] - The company is optimistic about growth opportunities in data centers and AI applications, despite the current market conditions [55][56] - Q1 2025 revenue is guided to be approximately $97 million, impacted by customer requests to delay shipments [26] Other Important Information - Cash and investments decreased by $7 million during Q4, with a total of $262 million remaining on the balance sheet [24][25] - The company had no share repurchase activity in Q4, having repurchased approximately 915,000 shares for $27 million through the end of Q3 2024 [25] Q&A Session Summary Question: Revenue impact of new businesses - Management expects HBM to contribute about $7 million, silicon carbide about $5 million, and software around $1 million in 2025, totaling $25 million to $30 million from new drivers [38][39] Question: Utilization levels in automotive and industrial - Automotive and industrial markets are still digesting inventory, with expectations of recovery in the second half of 2025 [46][56] Question: Diamondx win details - The key parameter for winning the Diamondx business was cost of test, addressing various semiconductor applications [51] Question: Recovery in revenue line - Management is focusing on expanding penetration in high-growth segments like data centers, with a cautious outlook on market recovery [54][56] Question: Segment revenue projections for 2025 - Automotive and industrial are expected to recover first, followed by mobile, with specific revenue projections not yet available for 2025 [68] Question: Stability of recurring revenue - Recurring revenue is expected to remain stable, with historical data showing it has about one-third the volatility of systems revenue [84]

Q4'24 FINANCIAL RESULTS February 13, 2025 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 growth opportunity for acquired business and technology; effects of test cell utilization on future business; impact of key business drivers for recurring revenue and systems; design wins or new product introductions; annual renewal ra ...