Aehr Test Systems Q4 FY2025 earnings call

• Gayn Erickson discussed market diversification, including significant progress in AI processor wafer level burn-in, with AI processor burn-in moving from 0% of revenue in 2024 to over 35% in 2025. Also mentioned progress in gallium nitride power semiconductors, hard disk drive market, silicon photonics integrated circuits, and silicon carbide market.
• Chris Siu talked about the integration of InCal, which was completed on July 31, 2024. He discussed financial results, noting revenue of $59 million in fiscal 2025, down 11% year over year, and annual bookings of $61.1 million, up over 24% from prior year. Also mentioned the balance sheet, with cash, cash equivalents, and restricted cash totaling $26.5 million at the end of Q4 2025.

In fiscal 2025, silicon carbide wafer level burn-in, which accounted for over 90% of revenue in fiscal 2024, made up less than 40% of revenue in fiscal 2025. AI processor burn-in went from 0% in 2024 to over 35% of revenue in 2025. For Q4 2025, revenue totaled $14.1 million, a 15% decrease from Q4 2024. WaferPak revenues were $4.2 million, accounting for 30% of total revenue in Q4 2025. Package part burn-in systems (Sonoma, Tahoe, Echo) accounted for 44% of Q4 2025 revenue. Annual revenue in fiscal 2025 was $59 million, down 11% year over year. Non-GAAP gross margin for full year 2025 was 44% vs. 49.6% in prior year. Annual bookings in fiscal 2025 were $61.1 million, up over 24% from prior year.

Management has temporarily withheld guidance for fiscal 2026 due to tariff-related uncertainties. Anticipate order growth across all segments in fiscal 2026 with the possible exception of silicon carbide. Reassess guidance policy as clarity develops.

• Tariff uncertainties impacting the timing of specific orders, shipments, and supply chain deliveries.
• Legal risks related to the class action and derivative lawsuits filed against the company, although the class action was voluntarily dismissed and the derivative lawsuit was dismissed without prejudice.
• Uncertainties in customer orders, shipments, and supply chain deliveries affecting business operations.

Q: How should we think about the list of marquee names in the investor deck, are they current/previous customers or prospects?

A: The list reflects current customers from the InCal package part burn-in side, not prospects. Prior to new SEC rules, could name 10% customers, but now no longer required to name them unless prior agreements exist.

Q: Regarding gross margin drop, what's the main reason?

A: Mix of revenue, with some wafer level burn-in orders not materializing, shift towards packaged part systems with lower margin, and full burden of InCal facility during the quarter.

Q: Thoughts on TSMC and foundries in relation to AI processors?

A: Talk about TSMC and other foundries, design houses, and OSATs involved in AI processor ecosystem. TSMC and Intel are key foundries, design houses like Marvell, Broadcom are involved in design, and OSATs handle outsourcing.

Q: How long for new AI clients to pass qualifications?

A: First client evaluation could take one or two quarters, with potential for orders after evaluation success. Enthusiasm higher with actual evidence, but still some variables and risks.