AEHR TEST SYSTEMS Q1 FY2025 earnings call

Key Market Highlights - Silicon Carbide: Stabilization in the silicon carbide power semiconductor market with EV suppliers moving to integrated modules, driving demand for wafer level burn-in. Aehr has been testing silicon carbide wafers and expects new customer systems in fiscal year. - Gallium Nitride: In negotiations with first GaN customer for volume production wafer level test and burn-in, with GaN seen as a significant up-and-coming market. - Artificial Intelligence Processors: Evaluation with an AI accelerator company is far along, using high-power FOX-XP systems for wafer level production burn-in. - Acquisition of Incal Technology: Expanded product portfolio to include packaged part reliability burn-in and test solutions, with positive customer feedback. - Hard Disk Drive: Key customer in hard disk drive space forecasting production ramp up driving orders for FOX-CP systems. - NAND Flash Memory: Ongoing benchmark with a leading flash memory manufacturer, aiming to complete proof-of-concept by end of fiscal year.

In the first quarter, revenue was $13.1 million, down 36% from $20.6 million in Q1 last year. WaferPak revenues came in at $12.1 million, accounting for 92% of total revenue in the first quarter, significantly higher than 55% in the prior year's first quarter. Non-GAAP gross margin for the first quarter was 54.7% compared to 48.7% year-over-year. Non-GAAP operating expenses were $5.5 million, essentially flat year-over-year. Non-GAAP net income was $2.2 million or $0.07 per diluted share. Backlog as of Q1 was $16.6 million.

Reaffirmed financial guidance for fiscal 2025 with total revenue of at least $70 million and net profit before taxes of at least 10% of revenue. Anticipate approximately 85% of annual revenue from wafer level burn-in and 15% from packaged part burn-in via Incal acquisition.

Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements, as discussed in the company's most recent periodic and current reports filed with the SEC.

Q: On silicon carbide, any color on additional customers and ramping?

A: Some customers are same as anticipated last year, others new. Systems expected to be placed end of this year to spring, ramping into fall. - Q: On AI processor opportunity, color?

A: It's a revenue-generating AI processor company, with data supporting wafer-level burn-in feasibility. Mix of package part burn-in and wafer level, with advantages to moving to wafer level. - Q: On backlog breakdown and WaferPak mix?

A: Backlog includes Incal and Aehr business. WaferPak mix shifting, with more non-SiC systems. - Q: On silicon carbide and other applications ramp cadence?

A: 4 of next 5 customers start with XPs, due to in-house testing and comfort with process. - Q: On optical I/O and co-packaged optics?

A: Intel, AMD, NVIDIA are big dogs driving road map for optical communication, with Aehr positioned to benefit.