Cohu(US:COHU)2026-02-12 22:32Financial Data and Key Metrics Changes - Fourth quarter revenue reached $122 million, a 30% increase year-over-year, with 40% from systems and 60% from recurring revenue [5][10] - Full year revenue for 2025 was $453 million, up 13% year-over-year, indicating a market recovery trajectory [6][10] - Gross margin for Q4 was 40.8%, lower than guidance due to one-time inventory charges, with expectations for Q1 gross margin to return to approximately 45% [11][14] Business Line Data and Key Metrics Changes - Recurring business accounted for about 60% of total revenue in Q4, with recurring bookings up 34% sequentially [4][10] - Systems demand increased by 47% quarter-over-quarter, driven by higher equipment orders from major global customers [4][10] - Recurring revenue grew 4% quarter-over-quarter and 25% year-over-year, reflecting strong customer reliance on Cohu [5][10] Market Data and Key Metrics Changes - Test serialization trends improved, with estimated test serialization at 76% by the end of December, particularly strong in computing (78%) and automotive (75%) segments [7][10] - The top ten customers accounted for approximately 63% of Q4 bookings, indicating a healthy level of diversification [5][10] Company Strategy and Development Direction - Cohu is focusing on high-performance computing, HBM memory, and AI-related high-growth opportunities, streamlining offerings to better align with customer needs [11][12] - The company aims to support R&D investments enabling design wins in compute markets, including AI data center infrastructure [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating regional shifts and aligning with customers investing in long-term technology transitions [9][10] - The company anticipates a balanced mix of recurring and system revenue, with positive momentum entering 2026 [10][15] Other Important Information - Cash and investments increased by $286 million during Q4, totaling $484 million at year-end, primarily due to proceeds from convertible debt and operational cash generation [12] - Total debt stands at $305 million, including $288 million from the Q4 convertible debt offering [12] Q&A Session Summary Question: Order activity in Q4 - Management noted systems orders were up 47% quarter-over-quarter, with recurring orders up 34% [18][20] Question: Revenue from Neon high bandwidth memory - The company exited 2025 with $11 million in HBM revenue and forecasts $15 million to $20 million for 2026 [22][23] Question: Eclipse activity and capacity - Management confirmed capacity to meet demand for the Eclipse handler, with production ramping expected in the second quarter [25][26] Question: Customer activity changes - Management observed increased demand from traditional customers and strong pull for the Eclipse product line in compute and mobile applications [34][36] Question: IDM versus OSAT performance - Utilization rates for IDMs were slightly higher than OSATs in Q4, with expectations for OSATs to potentially increase faster in Q1 [49][50]