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Aehr Test(AEHR) - 2025 Q3 - Earnings Call Transcript
AEHRAehr Test(AEHR)2025-04-09 01:14
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Financial Data and Key Metrics Changes - Revenue for Q3 totaled 18.3million,a14218.3 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 2.0million,or2.0 million, or 0.07 per diluted share, compared to a net loss of 888,000,ornegative888,000, 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 5.9million,accountingfor325.9 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 9.2millioninQ2fiscal2025,withaneffectivebacklognowstandingat9.2 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 1billionby2027,withsignificantgrowthopportunitiesinAIprocessorsandgalliumnitridesemiconductors[16][45]−Thesiliconcarbidemarketisexpectedtoexceed1 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 80billion,indicatingsubstantialpotentialforwafer−levelburn−insolutions[37][38]CompanyStrategyandDevelopmentDirection−Thecompanyisfocusedonexpandingitstotaladdressablemarkets,diversifyingitscustomerbase,anddevelopingnewproductstodrivegrowth[16][48]−Strategicexpansionintohigh−growthsectors,includingAIprocessors,galliumnitridepowersemiconductors,andflashmemory,isexpectedtoattractnewcustomersanddriverevenuegrowth[48][65]−TheintegrationofNCALTechnologyhasenabledthecompanytoscaleoutputsignificantly,achievingtwotothreetimesthepreviousrecordshipmentvolume[30]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementexpressedconfidencethattheimpactofrecenttariffannouncementswillnotsignificantlyaffectthecompanydirectly,butacknowledgedpotentialsecondaryeffectsoncustomers[11][48]−Thecompanyistemporarilywithdrawingguidanceforthecurrentfiscalyearduetouncertaintiesregardingcustomerordersandsupplychaindeliverydelays[64]−Managementremainsoptimisticaboutthelong−termgrowthpotentialacrossdiversetargetmarkets,particularlyinAIandgalliumnitridesectors[65]OtherImportantInformation−Thecompanyhasnodebtandcontinuestoinvestexcesscashinmoneymarketfunds,withcashandequivalentstotaling80 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]