Aehr Test(US:AEHR)2026-01-08 23:02Financial Data and Key Metrics Changes - Revenue for Q2 FY2026 was $9.9 million, down 27% from $13.5 million in the prior year period, primarily due to lower shipments of WaferPaks [26][27] - Bookings in Q2 FY2026 were $6.2 million, compared to $11.4 million in Q1 FY2026, with a backlog of $11.8 million at the end of the quarter [25][26] - Non-GAAP gross margin for Q2 was 29.8%, down from 45.3% a year ago, reflecting lower sales volume and a less favorable product mix [27] - Non-GAAP net loss for the quarter was $1.3 million, or negative $0.04 per diluted share, compared to net income of $0.7 million, or $0.02 per diluted share in Q2 FY2025 [28] Business Line Data and Key Metrics Changes - Wafer-level burn-in engagements expanded with significant progress in production installations across AI processors, flash memory, and silicon photonics [5][7] - Packaged part burn-in systems saw increased demand, with over $5.5 million in orders received for Sonoma systems in Q3 FY2026 to date, exceeding total orders for Q2 [17][25] - The company secured key new device wins for the Sonoma system, expected to drive additional capacity at test houses [17][18] Market Data and Key Metrics Changes - The company anticipates bookings in the second half of FY2026 to be between $60 million and $80 million, primarily driven by AI processors [5][23] - The silicon carbide market is expected to contribute minimally to bookings, while silicon photonics and gallium nitride are also expected to play a role [66] - The demand for semiconductor test and burn-in solutions is driven by the growth in AI and data center infrastructure, with a significant emphasis on reliability testing [21][22] Company Strategy and Development Direction - The company is focusing on expanding into key markets such as AI processors, gallium nitride power semiconductors, and silicon photonics, diversifying its customer base and total addressable market [22] - The strategic partnership with ISE Labs aims to deliver advanced wafer-level test and burn-in services for next-generation high-performance computing and AI applications [8] - The company is reinstating financial guidance for FY2026, expecting revenue between $25 million and $30 million for the second half of the fiscal year [23][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the outlook due to increased visibility across multiple end markets and reinstated financial guidance for FY2026 [6][22] - The company noted that the semiconductor industry is experiencing a fundamental shift towards reliability testing, driven by the increasing complexity of next-generation devices [21] - Management highlighted the potential for substantial revenue growth in FY2027, driven by strong bookings and demand for AI-related products [5][23] Other Important Information - The company ended Q2 FY2026 with $31 million in cash, up from $24.7 million at the end of Q1, primarily due to proceeds from an equity program [29] - The company is participating in several investor conferences to enhance investor relations and visibility [30] Q&A Session Summary Question: What is the potential booking strength of $60-$80 million in the second half of this fiscal year? - Management indicated that the bulk of bookings would come from wafer-level and package part burn-in for AI processors, with minimal contributions from silicon carbide [34] Question: Can the AI processor business expand meaningfully in the coming years? - Management believes the AI business could be measured in hundreds of millions of dollars in a few years, with significant demand for wafer-level burn-in systems [36] Question: What is the expected capacity for manufacturing wafer-level systems? - Management stated that they could potentially manufacture over 20 systems a month if required, indicating strong production capabilities [41] Question: Is there a potential for cannibalization between package and wafer-level burn-in? - Management acknowledged that while there may be some cannibalization, both package and wafer-level burn-in will coexist for a long time, with customers evaluating both options [60][79]