AEHR Q2 2026 Earnings Call Summary

1. Key Financial Results and Metrics

Revenue: $9.9 million, down 27% from $13.5 million in Q2 2025.
Bookings: $6.2 million, a decline from $11.4 million in Q1 2026; backlog at $11.8 million.
Gross Margin: Non-GAAP gross margin at 29.8%, down from 45.3% year-over-year, attributed to lower sales volume and a less favorable product mix.
Operating Expenses: Non-GAAP operating expenses of $5.7 million, down 4% from Q2 2025.
Net Loss: Non-GAAP net loss of $1.3 million, or negative $0.04 per diluted share, compared to net income of $0.7 million or $0.02 per diluted share in Q2 2025.
Cash Position: Ended the quarter with $31 million in cash, up from $24.7 million in Q1 2026, primarily due to an equity program.

2. Strategic Updates and Business Highlights

Market Focus: Emphasis on semiconductor test and burn-in markets, particularly driven by AI and data center infrastructure.
Wafer-Level Burn-In: Significant progress in engagements and installations for AI processors, flash memory, and silicon photonics.
New Partnerships: Expanded partnership with ISE Labs for wafer-level test and burn-in services.
Product Development: Development of new fine-pitch WaferPaks for high-current AI processors and a next-generation Sonoma system capable of 2,000 watts per device.
Customer Engagements: Strong customer interest in both wafer-level and packaged-part burn-in solutions, particularly for AI processors.

3. Forward Guidance and Outlook

Revenue Guidance for H2 FY26: Expected between $25 million and $30 million.
Bookings Forecast: Anticipated bookings of $60 million to $80 million in the second half of FY26, primarily driven by AI processor demand.
Long-Term Growth: Positive outlook for fiscal 2027 with substantial growth expected from AI-related bookings.

4. Bad News, Challenges, or Points of Concern

Declining Revenue: Significant drop in revenue year-over-year, primarily due to lower shipments of WaferPaks.
Gross Margin Pressure: Declining gross margins due to a less favorable product mix and lower sales volume.
Delayed Benchmarks: Some customer benchmarks for wafer-level burn-in have taken longer than expected, impacting timelines for new orders.
Market Volatility: Concerns regarding the semiconductor market's volatility, especially in silicon carbide and GaN segments, which may affect future orders.

5. Notable Q&A Insights

AI Processor Demand: Majority of anticipated bookings are linked to AI processors, with potential for significant revenue growth in the coming years.
Capacity Manufacturing: Aehr is capable of manufacturing over 20 systems per month if demand increases.
Customer Transition: Customers may initially use packaged-part burn-in before transitioning to wafer-level burn-in for new products, depending on their specific needs and product launches.
Flash Memory Benchmarking: Customers are expected to return with feedback on completed benchmarks in the next couple of months, with potential orders anticipated thereafter.

Overall, while Aehr Test Systems faces challenges with declining revenue and gross margins, the company is strategically positioned for growth in the AI and semiconductor testing markets, with strong customer engagement and a positive long-term outlook.

AEHR — Aehr Test Systems