Cohu Inc ((COHU)) has held its Q1 earnings call. Read on for the main highlights of the call.
Cohu Inc. Earnings Call Reflects Positive Momentum Amid Challenges
The recent earnings call for Cohu Inc. was marked by a generally positive sentiment, underscored by increased recurring orders and a favorable outlook for the second quarter. Despite these optimistic signals, the call also acknowledged a net loss in the first quarter and a decrease in cash reserves, presenting a mixed financial picture.
Increased Recurring Orders
Cohu Inc. reported a significant 28% increase in recurring orders quarter-over-quarter. This growth highlights the value of the company’s non-capital equipment revenue streams and suggests potential improvements in utilization in the upcoming quarters.
Positive Q2 Revenue Outlook
The company provided guidance for a 10% increase in Q2 revenue, projecting approximately $106 million. This growth is driven by a rise in recurring revenue orders and the expansion of HBM inspection systems, indicating a robust demand for Cohu’s offerings.
Customer Design Wins in Q1
Cohu achieved several customer design wins in the first quarter, including three new opportunities with a leading package and test subcontractor in China and a win with the Diamondx tester at a European fabless supplier. These wins have resulted in purchase orders totaling $6.5 million, with a potential annual revenue of $18 million.
Successful Integration of Tignis Acquisition
The integration of Tignis into Cohu’s operations has been successful, with the first quarter seeing the combination of Tignis and Cohu’s DI-Core solutions. This integration has led to three new demonstration opportunities, signaling positive synergy and potential for future growth.
Q1 Non-GAAP Net Loss
Cohu reported a non-GAAP net loss of approximately $800,000 in the first quarter, translating to a non-GAAP EPS loss of $0.02. This loss reflects some of the financial challenges the company is navigating.
Decreased Cash and Investments
The company’s cash and investments decreased by $61 million during the first quarter, ending at $201 million. This reduction was primarily due to the acquisition of Tignis, share repurchases, and operational expenditures.
Decline in Test Cell Utilization
Test cell utilization experienced a slight decline, dropping by one point to 72% at the end of March. This decrease indicates a minor setback in operational efficiency.
Forward-Looking Guidance
Looking ahead, Cohu Inc. anticipates a revenue increase of 10% quarter-over-quarter in the second quarter of 2025, reaching approximately $106 million. The company expects a gross margin of 45% and plans to reduce operating expenses through a restructuring program. This program aims to lower expenses to $47 million per quarter when revenue is around $100 million. The company remains optimistic about its business prospects, with no significant changes in customer buying patterns due to tariffs.
In summary, Cohu Inc.’s earnings call painted a picture of cautious optimism. While the company faces challenges such as a net loss and decreased cash reserves, the positive trends in recurring orders and revenue outlook suggest potential for growth. The successful integration of Tignis and strategic customer wins further bolster confidence in Cohu’s future performance.