COHU INC Q4 FY2024 earnings call

▪ Full year 2024 revenue was ~$402M with non-GAAP gross margin of 45%. ▪ Q4 revenue was within guidance but impacted by a $2.1 million inventory reserve charge. ▪ Entered memory and silicon carbide power semiconductor markets with orders for HBM inspection and die-level burn-in, expecting $7M revenue from HBM in 2025. ▪ Interface product team had a design win for testing 800G switches in data centers. ▪ Believes in AI's value for semiconductor manufacturing, acquired Tignis, and sees software revenue potential to grow at 50%+ annually over 3 years. ▪ Focus on growing in data center and EDGE AI applications through new product investments.

Full year 2024 revenue was approximately $402 million. Fourth quarter revenue was $94.1 million, within guidance range. Recurring revenue represented 62% of Q4 revenue and 65% of full year 2024 revenue. Systems revenue saw increases in computing, industrial, and consumer segments but declines in automotive and mobile due to inventory correction. Estimated test cell utilization at the end of December was 73%, with OSATs at 76% and IDMs at 70%.

▪ Q1 2025 revenue guided to approximately $97 million plus or minus $7 million. ▪ First quarter gross margin forecasted at approximately 44%. ▪ Q1 operating expenses forecasted at approximately $49 million, about $4 million higher than Q4. ▪ Projected Q1 interest income, net of interest expense and foreign currency impacts, to be approximately $1.3 million. ▪ Q1 non-GAAP tax provision expected to be approximately $3 million.

▪ Inventory correction in automotive and mobile segments impacting systems revenue. ▪ Market downturns and volatility affecting overall business performance. ▪ Dependence on successful execution of new product investments and market recovery for growth.

Q: Could you provide details on Tignis revenue and breakeven?

A: Tignis 2025 revenue likely sub-$1 million, taking a few years to reach breakeven.

Q: What's the revenue impact of new drivers in 2025?

A: HBM ~$7M, silicon carbide ~$5M, software ~$1M, and automotive design win ~$10M-$15M, totaling ~$25M-$30M incremental.

Q: What's the gross margin on incremental 2025 business?

A: High 40s initially, growing to 50% as software grows.

Q: Are A&I markets on their way to 80% utilization?

A: Auto and industrial have inventory to work through, with potential recovery in second half.

Q: Can you elaborate on segment revenues for 2024 and 2025 projections?

A: 2024 systems revenue by market: 9% automotive, 6% industrial, 11% mobile, 4% consumer, 3% compute, 2% IoT. 2025 projections see automotive/industrial recovery followed by mobile.

Q: When will HBM and die-level burn-in revenue be recognized?

A: HBM is Q1 revenue recognition, die-level burn-in is second half 2025.

Q: How do order pushouts affect Q1 outlook?

A: Due to customer order pushouts, Q1 revenue is lower, with orders spread throughout 2025.

Q: How stable is recurring revenue?

A: Recurring revenue has about 1/3 the volatility of systems revenue and is expected to remain fairly steady.

Q: How will software be executed in terms of go-to-market?

A: Tignis' own growth vector continues, and Tignis' technology will be leveraged on DI-Core PdM tools for back-end broader applications.