Cohu(US:COHU)2025-05-01 21:32Financial 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]