Aehr Test Systems Q1 FY2026 earnings call

Gayn Erickson discussed markets targeted for semiconductor test and burn-in, emphasizing growth related to data center infrastructure and AI. Strong momentum in sales and customer engagement in wafer level and packaged part test and burn-in for AI processors. Lead production customer for Sonoma ultra-high power package part burn-in systems placed follow-on orders. Enhancements to Sonoma system, including increased power per device, boosted parallelism, and full automation. Collaboration with customers on future generations of test and burn-in systems. Success with InCal Technology acquisition, providing insight into AI processor customers' burn-in requirements. Growth in other segments: silicon photonics, hard disk drives, gallium nitride, and silicon carbide semiconductors. Update on flash memory level burn-in benchmark and high bandwidth flash (HBF) developments. Facility renovation completed, increasing manufacturing capacity and supporting growth.

First quarter revenue was $11 million, down from $13.1 million in the same period last year. Revenue was primarily driven by demand for FOX CP and XP products. Contact revenues, including WaferPaks and beams/bips, totaled $2.6 million, making up 24% of total revenue, significantly lower than the previous year's 92%. Non-GAAP gross margin for the first quarter was 37.5%, down from 54.7% year over year due to lower sales volume and less favorable product mix. Backlog at the end of Q1 was $15.5 million, with $2 million bookings received in the first five weeks of 2026.

Started the year without formal guidance due to ongoing tariff-related uncertainty. Confident in broad-based growth opportunities across AI and other markets but remain cautious. No immediate plans for additional capital expenditures for facility expansion.

Tariff-related uncertainty impacting guidance and operations. Challenges with test system bring-up affecting the flash memory level burn-in benchmark. Potential for actual results to differ from forward-looking statements due to various risks and uncertainties.

Q: When will there be a material improvement in bookings to drive revenue?

A: Anticipate additional capacity from lead AI customer, with bookings and revenue potentially more than last year, but timing is uncertain, with second half of fiscal 2026 likely.

Q: Target number of customers shipping to by fiscal year end?

A: Have discrete quantity targets for package part and wafer level, with ASIC suppliers and GPU/processor suppliers engaging, but timing varies.

Q: Gating factor for customers choosing Sonoma over wafer level burn-in?

A: Customers are used to package part burn-in, but Aehr is neutral, showing systems and demonstrating feasibility, with transition to wafer level driven by yield advantages and cost savings.

Q: Cost of waiting to burn in at motherboard/package vs. wafer level?

A: Burning in at system level is inefficient and costly; wafer level burn-in is more cost-effective and feasible in terms of power infrastructure.

Q: Impact of AMD hookup with OpenAI on evaluation process?

A: In conversation with top AI suppliers, including those involved, but no specific detail on impact on evaluation process.

Q: Optical IO opportunity and machine upgrades?

A: Forecast includes both upgrades to existing machines and new machines, with backward compatibility and full automation capabilities.

Q: HBF opportunity and enterprise flash application?

A: Working with same company on HBF requirements, with new system configuration being a superset of previous requirements, potentially better for Aehr.