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CI

COHU INC (COHU)·Q2 2025 Earnings Summary

Executive Summary

  • Revenue of $107.7M, up 11% q/q and ~3% y/y; non-GAAP EPS $0.02 vs consensus -$0.017, a beat. Non-GAAP gross margin 44.4% and Adjusted EBITDA margin 3.6% . Q2 consensus: revenue $106.0M*, EPS -$0.0167*.
  • Mix held at ~63% recurring revenue; estimated test cell utilization rose 3 pts q/q to 75%, signaling early-cycle recovery signs .
  • Management guided Q3 revenue to $125M ± $7M, GM ~44%, opex ~$50M; tax provision expected to be ~$15M due to a methodology change tied to capitalized R&D, with Q4 ETR 30–35% .
  • Strategic wins/catalysts: $28M multi-quarter Eclipse handler order (mobile/auto), PD3x instrument launch and deployment, ULTRA-S contactor qualification for precision analog, first system order in India (SiC test) .

What Went Well and What Went Wrong

What Went Well

  • Design-win momentum: $28M order for Eclipse handler across mobile and automotive, shipping through Q4’25; ~$4M recognized in Q2, ~$12M planned each in Q3 and Q4 .
  • Utilization and orders: Estimated test cell utilization increased by three points to 75%; orders improved q/q across segments, notably mobile and automotive/industrial; “recovery trajectory cycle” forming .
  • Product and market expansion: Launched PD3x instrument on Diamondx, deployed by leading display driver vendors at OSATs in Korea/Taiwan/China; first system sold in India (SiC test); ULTRA-S contactor qualified for precision analog .

What Went Wrong

  • Profitability still subdued: GAAP net loss of $16.9M (-$0.36 EPS) despite sequential revenue increase; non-GAAP profitability marginal (EPS $0.02) .
  • Computing softness and seasonality: Computing orders were slightly lower; management expects typical seasonal slowdown in Q4 (mid-single-digit pullback) .
  • Upcoming tax true-up: Material Q3 tax provision (~$15M) from methodology change (“One Big Beautiful Bill”), which may pressure EPS optics intra-quarter; Q4 ETR 30–35% .

Financial Results

Revenue, EPS, Margins vs Prior Periods and Estimates

MetricQ2 2024Q1 2025Q2 2025
Revenue ($USD Millions)$104.7 $96.8 $107.7
Revenue Consensus Mean ($USD Millions)*$105.1$96.6$106.0
GAAP EPS ($USD)-$0.34 -$0.66 -$0.36
Primary EPS Consensus Mean ($USD)*-$0.0226-$0.166-$0.0167
Non-GAAP EPS ($USD)-$0.01 -$0.02 $0.02
GAAP Gross Margin %44.8% 43.7% 43.7%
Non-GAAP Gross Margin %45.1% 44.2% 44.4%
Adjusted EBITDA ($USD Millions)$4.03 -$1.90 $3.85
Adjusted EBITDA Margin %3.8% -2.0% 3.6%

Note: Values marked with * are consensus estimates. Values retrieved from S&P Global.

Revenue Mix (Recurring %)

MetricQ4 2024Q1 2025Q2 2025
Recurring Revenue (%)62% 63% 63%

KPIs and Operating Metrics

MetricQ2 2024Q1 2025Q2 2025
Estimated Test Cell Utilization (%)n/an/a75%
Non-GAAP Operating Expenses ($USD Millions)$46.89 $48.58 $47.66
Cash & Investments ($USD Millions)$262.1 $200.8 $209.4

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)Q2 2025$106M ± $7M Actual: $107.7M Delivered above midpoint
Revenue ($USD Millions)Q3 2025n/a$125M ± $7M New
Gross Margin (%)Q3 2025n/a~44% New
Operating Expenses ($USD Millions, non-GAAP)Q3 2025n/a~$50M incl. ~$2M R&D prototype materials New
Revenue Mix (%)Q3 2025n/a~47% systems / ~53% recurring New
Interest Income (net) ($USD Millions)Q3 2025n/a~$0.9M New
Tax Provision ($USD Millions)Q3 2025n/a~$15M one-time YTD true-up (capitalized R&D) New
Effective Tax Rate (%)Q4 2025n/a30–35% New
Basic Share Count (Millions)Q3 2025n/a~46.8 New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024)Previous Mentions (Q1 2025)Current Period (Q2 2025)Trend
AI/software initiativesAcquired Tignis to expand analytics offering; targeted 50%+ ARR growth trajectory over 3 years New customers signed for AI process monitoring demos of Tignis software Booked $360k software; ARR opportunity ~$530k; DI-Core and Tignis PAICe suite positioned for AI-driven process control; early-stage evaluations continue Building pipeline; early monetization
Handlers & GPU thermaln/an/aEclipse Handler release 2.5 improves configurability and power dissipation up to 3,000W enabling high-end compute (GPU) testing; evaluations underway Expanding into AI infrastructure; validation phase
Orders & utilizationSystems revenue up sequentially in seasonally slow Q4 Recurring orders +28% q/q Utilization +3 pts to 75%; orders improved across segments; recovery forming Broadening demand; early-cycle recovery
Market/geographyn/aMulti-unit order for HBM inspection systems First India system (SiC test); PD3x deployed at OSATs in Korea/Taiwan/China Geographic diversification
Tax/regulatoryn/an/a“One Big Beautiful Bill” drives capitalized R&D tax methodology change; Q3 tax provision ~ $15M; Q4 ETR 30–35% Near-term EPS optics headwind
Precision analog & interfacesn/an/aULTRA-S contactor qualified for precision analog; ~$20M revenue opportunity cited Building specialty test exposure

Management Commentary

  • “Second quarter 2025 results were in line with guidance, test cell utilization is up a few points across all Cohu segments, and we secured a $28 million design-win order from a customer serving mobile and automotive end-markets.” — Luis Müller, CEO .
  • “Revenue for the quarter was $107.7 million… Q2 gross margin was 44.4%… Operating expenses for Q2 were $47.7 million… non-GAAP EPS for the second quarter was $0.02.” — Jeff Jones, CFO .
  • “We secured our first system order from a customer in India for silicon carbide test… and launched the PD3x instrument on Diamondx, already deployed by leading display driver IC vendors at OSATs in Korea, Taiwan and China.” — Luis Müller .
  • “We will ship and recognize about $12 million in each Q3 and Q4 from the $28 million order.” — Jeff Jones .

Q&A Highlights

  • $28M order cadence and mix: ~$4M recognized in Q2; ~$12M expected each in Q3 and Q4; predominantly digital mobile with automotive portion; characterized as business expansion at an existing customer .
  • Recovery trajectory and Q4 seasonality: Orders improved across most segments; management anticipates typical Q4 slowdown (~mid-single-digit) before continuing recovery into 2026 .
  • Eclipse Handler positioning: Release 2.5 delivers single-platform configurability across passive, ATC mobile, tri-temp auto/compute, and up to 3,000W dissipation for latest-gen GPUs; evaluations at fabless and OSATs underway .
  • Utilization details: Overall up to 75%; IDMs +5 pts q/q, OSATs +1 pt q/q .
  • Tax and EPS optics: Q3 tax provision expected to be ~$15M due to R&D capitalization change; Q4 ETR 30–35% .

Estimates Context

  • Q2 2025: Revenue $107.7M vs Street $106.0M* (beat ~1.6%); non-GAAP EPS $0.02 vs Street -$0.017* (beat) .
  • Q3 2025: Management guides $125M ± $7M; Street revenue $125.0M* is roughly aligned; Street EPS -$0.198* may need downward revision given the ~$15M tax provision true-up in Q3 (methodology change), impacting quarterly EPS optics .
  • FY 2025 consensus revenue ~$452.8M*; trajectory depends on execution of mobile/auto systems shipments and incremental GPU/precision analog opportunities.

Note: Values marked with * are consensus estimates. Values retrieved from S&P Global.

Key Takeaways for Investors

  • Sequential acceleration: Revenue +11% q/q to $107.7M; utilization at 75% and orders improving across segments support recovery narrative .
  • Beat on EPS and revenue: Non-GAAP EPS $0.02 and revenue outperformed Street, aided by mix and recurring stability at ~63% .
  • Multi-quarter visibility: $28M Eclipse handler order provides shipment cadence into Q4 with ~$12M planned in both Q3 and Q4 .
  • Q3 guide solid, tax optics noisy: Guide implies ~flat to modest beat vs revenue consensus; however ~$15M tax provision true-up will weigh on reported EPS in Q3; Q4 ETR 30–35% .
  • Strategic product breadth expanding: PD3x (display drivers), Eclipse 2.5 (GPU thermal), ULTRA-S (precision analog) plus first India system (SiC) broaden addressable opportunities into 2026 .
  • Balance sheet resilience: Cash/investments rose to $209.4M; total debt ~$18M; opex on track with restructuring plan; share repurchase authorization ~$23M remaining .
  • Near-term trading lens: Watch order momentum in mobile/auto and any early GPU handler wins; monitor Q3 tax true-up impact on EPS vs quality-of-earnings (underlying GM/opex tracking to plan) .