Release Date: October 31, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Cohu Inc (COHU, Financial) reported a sequential increase in systems revenue in the automotive and mobile segments, with mobile showing a 13% year-over-year growth.
- The company secured a significant test cell design win with a top five automotive semiconductor manufacturer, enhancing its position in the power management device testing market.
- Cohu Inc (COHU) made progress in entering the memory and silicon carbide power semiconductor markets, with a notable customer order for its neon inspection metrology platform.
- The company is expanding its recurring revenue through its AI inspection software, which has shown promising customer engagement and interest.
- Cohu Inc (COHU) maintains a strong balance sheet with $269 million in cash and investments, supporting its growth strategy and share repurchase program.
Negative Points
- Cohu Inc (COHU) experienced declines in the computing, consumer, and industrial segments, offsetting gains in other areas.
- The company's Q3 gross margin, while strong, benefited from one-time factors such as the utilization of previously reserved inventory.
- Operating expenses were lower than guidance due to delays in new hires and higher vacation utilization, indicating potential challenges in workforce management.
- The Q3 tax provision reflected tax expenses on foreign profits without a benefit from the US loss, due to a valuation allowance against deferred tax assets.
- Cohu Inc (COHU) anticipates a flat revenue outlook for Q4, indicating ongoing challenges in navigating the cyclical trough of the semiconductor market.
Q & A Highlights
Q: Luis, regarding the mobile segment, is the recent strength a sign of a turnaround, or was it just seasonal?
A: Luis Muller, CEO: Mobile revenue was up 13% year-on-year, and bookings increased sequentially across all market segments, except consumer. This suggests a potential turnaround as we head into 2025.
Q: Can you elaborate on the revenue potential for the neon and die-level burn-in tests next year?
A: Luis Muller, CEO: The market sizing is split among suppliers. For HBM inspection, we are entering a market largely dominated by HMI. We expect to intercept a production ramp in the summer, but it's too early to predict how quickly we'll capture market share.
Q: Jeff, you mentioned orders tracking up 10% for Q1. Does this imply sequential revenue growth?
A: Jeffrey Jones, CFO: Yes, we project Q1 revenue to be 10% higher than Q4, indicating a break from normal seasonality patterns, which haven't been seen for nearly two years.
Q: Regarding the automotive business, is the improvement due to a specific customer, or is it a broader trend?
A: Luis Muller, CEO: Automotive bookings and revenue improved quarter-over-quarter and year-over-year, indicating a broader trend rather than being driven by a single customer.
Q: Can you provide more details on the HBM opportunity and competition?
A: Luis Muller, CEO: We are not competing with companies like Camtech or Onto. Our focus is on stacked die inspection metrology, which is different from their wafer-level inspection.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
