AEHR TEST SYSTEMS (AEHR)·Q1 2025 Earnings Summary

Executive Summary

• Q1 FY2025 revenue was $13.12M and non-GAAP EPS was $0.07; both were ahead of Street consensus, while GAAP diluted EPS was $0.02. Management explicitly stated the quarter finished “ahead of consensus estimates” on both top and bottom lines .
• Mix skewed heavily to consumables: WaferPak revenue was $12.1M (92% of total), supporting recurring revenue resilience; non-GAAP gross margin improved to 54.7% on favorable mix .
• Guidance maintained: FY2025 revenue ≥$70M and net profit before taxes ≥10% of revenue were reaffirmed, sustaining prior July guidance .
• Strategic catalysts: the Incal acquisition closed July 31 and Sonoma ultra-high-power packaged-part burn-in won initial production orders from a hyperscaler, broadening AI exposure .

What Went Well and What Went Wrong

What Went Well

• Consumables strength: “WaferPak revenues came in at $12.1 million and accounted for 92% of our total revenue,” driving a 54.7% non-GAAP gross margin on mix .
• Guidance confidence: “We finished the first quarter with revenue and non-GAAP net income ahead of consensus estimates” and reaffirmed full-year guidance for revenue and pre-tax margin .
• AI packaged-part burn-in traction: “First volume production orders for Incal’s new Sonoma ultra-high-power semiconductor packaged part test and burn-in solution… placed by a large-scale data center hyperscaler” .

What Went Wrong

• Year-over-year decline: Revenue fell from $20.62M in Q1 FY2024 to $13.12M, with non-GAAP EPS down from $0.18 to $0.07; GAAP diluted EPS fell from $0.16 to $0.02 .
• Macro/EV headwinds lingered: Management flagged a “challenging market and macroeconomic environment,” consistent with the Q3 FY2024 commentary on EV-related SiC order delays .
• Cash down on acquisition: Total cash and equivalents declined to $40.8M from $49.3M due to $10.6M net cash paid for Incal Technology .

Financial Results

Gross margin trend (non-GAAP):

Segment breakdown:

KPIs:

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We finished the first quarter with revenue and non-GAAP net income ahead of consensus estimates and are off to a good start to our fiscal year” .
• “Last month, we were pleased to announce the first volume production orders for Incal’s new Sonoma ultra-high-power semiconductor packaged part test and burn-in solution… placed by a large-scale data center hyperscaler” .
• CFO: “Non-GAAP gross margin for the first quarter came in at 54.7%… primarily due to favorable product mix of higher-margin WaferPaks” .
• CFO: “We generated $2.4M in operating cash flows in Q1… cash, cash equivalents and restricted cash were $40.8M… resulting from the $10.6M… used to fund the acquisition of Incal Technology” .

Q&A Highlights

• AI pipeline clarity: Management reiterated the AI wafer-level burn-in evaluation is with a revenue-generating company and explicitly stated “it’s not NVIDIA,” with potential for packaged-part burn-in via Sonoma and longer-term wafer-level solutions .
• Customer onboarding momentum: Several new customers are expected to start directly with FOX‑XP, skipping NP, given Aehr’s in-house wafer testing and process support .
• Mix shift: Near-term product mix expected to be more balanced and to include non‑SiC systems, diversifying beyond EV cycles .
• China approach and IP: Aehr plans a hybrid direct/rep model, demo infrastructure, and IP protections to address local procurement dynamics .
• Backlog disclosure discipline: Management avoided triangulating backlog composition to protect competitive details, while noting Incal backlog contributes meaningfully .

Estimates Context

Values retrieved from S&P Global.
Interpretation: Both revenue and EPS were beats versus consensus, consistent with management’s commentary of finishing “ahead of consensus” for the quarter .

Key Takeaways for Investors

• Strong consumables-led quarter: WaferPak revenue of $12.1M (92% of total) drove a margin uplift to 54.7% non-GAAP; recurring mix supports earnings durability in softer system cycles .
• Guidance intact: FY2025 revenue ≥$70M and pre-tax margin ≥10% reaffirmed; this steadies expectations after FY2024 execution .
• AI optionality: Early production orders for Sonoma and ongoing wafer-level AI burn-in evaluation expand Aehr’s TAM beyond SiC EVs; potential multi-year AI burn-in opportunity across both package and wafer levels .
• Balanced mix ahead: Management expects non‑SiC systems to contribute more near term, diversifying beyond EV-related silicon carbide swings .
• Cash deployed strategically: $10.6M cash used for Incal; liquidity remains solid with $40.8M cash and no debt, enabling continued R&D and commercial scaling .
• Regional demand supportive: Asia EV momentum (especially China/Korea) continues to underpin long-term SiC burn-in needs; Aehr is enhancing local presence while safeguarding IP .
• Near-term trading lens: Emphasize the dual beat, guidance maintenance, and AI burn-in orders as positive catalysts; monitor bookings progression and mix normalization as system orders recover .