Cohu(COHU)2024-11-01 03:25Financial Data and Key Metrics Changes - Revenue for Q3 2024 was $95.3 million, with a gross margin of approximately 47.1%, benefiting from new products and lower manufacturing costs [6][18] - Recurring revenue represented 67% of total revenue, demonstrating resilience during market downturns [6][18] - Operating expenses were $45.2 million, lower than guidance by approximately $1.6 million, leading to a non-GAAP operating income close to breakeven [19][22] - Non-GAAP EPS for Q3 was a loss of $0.08 [21] Business Line Data and Key Metrics Changes - Systems revenue increased sequentially in automotive and mobile segments, while declines were noted in computing, consumer, and industrial segments [6] - The mobile segment accounted for 12% of consolidated revenue and posted a 13% year-over-year revenue growth [6] - Significant design wins were achieved in the automotive semiconductor market, indicating strong potential for future revenue growth [7] Market Data and Key Metrics Changes - The high bandwidth memory (HBM) market is estimated at approximately $23 billion, projected to grow about 22% annually through the end of the decade [8] - The silicon carbide market is expected to grow at a 25% CAGR through 2029, with Cohu positioned to capitalize on this growth [12] Company Strategy and Development Direction - Cohu is realigning investments towards high-growth opportunities in memory and silicon carbide power semiconductor markets [8][15] - The company is expanding its recurring revenue through subscription-based software solutions aligned with Industry 4.0 trends [14][15] - Cohu aims to enhance its technology portfolio and expand served markets while returning capital to shareholders through share repurchase programs [22][23] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about improvements in mobile revenue and overall bookings across market segments, indicating a potential recovery in 2025 [30][41] - The company anticipates Q4 revenue to be flat compared to Q3, with a projected 10% increase in Q1 2025 revenue [24][35] - Management noted that the automotive segment has shown improvement in bookings and revenue, suggesting a recovery trajectory [49][50] Other Important Information - Cohu's balance sheet remains strong, supporting investment opportunities and capital returns [22][23] - The company is participating in several investor conferences over the next three months, indicating ongoing engagement with the investment community [62] Q&A Session Summary Question: Mobile business strength and future outlook - Management confirmed that mobile revenue was up 13% year-on-year and bookings were up sequentially across all market segments, indicating optimism for 2025 [30] Question: Revenue potential for Neon and die level burn-in tests - Management indicated that the market sizing for HBM inspection is competitive, with initial orders expected to ramp up in 2025 [31][32] Question: Orders tracking and revenue expectations - Management noted that orders are forecasted to be over 1 in Q4, with anticipated revenue in Q1 expected to be 10% higher than Q4 [35] Question: Automotive business performance - Management highlighted improvements in automotive bookings and revenue, suggesting a recovery from a depressed market environment [49][50] Question: HBM opportunity and competition - Management clarified that Cohu is not competing directly with certain companies in the wafer inspection space, focusing instead on stacked die inspection metrology [54]