In This Article:
Release Date: January 13, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
-
Aehr Test Systems (NASDAQ:AEHR) reported significant progress in expanding its product reach into large and fast-growing markets, including AI processors and gallium nitride power semiconductors.
-
The company secured its first AI processor customer for wafer-level burn-in, marking a technological and commercial breakthrough.
-
Aehr Test Systems (NASDAQ:AEHR) has diversified its market presence, with AI processors expected to comprise up to 40% of total revenue this fiscal year.
-
The acquisition of Intel technology has accelerated market diversification, particularly in AI processors, enhancing the company's product offerings.
-
The company maintains a strong balance sheet with no debt and continues to invest in scaling its business and pursuing new market opportunities.
Negative Points
-
Aehr Test Systems (NASDAQ:AEHR) faced a 37% decline in second-quarter revenue compared to the same period last year, primarily due to softness in the silicon carbide power semiconductor market.
-
The company experienced a decline in non-GAAP gross margin to 45.3% from 51.6% last year, attributed to lower overall revenue levels.
-
There are ongoing legal challenges, including a lawsuit in China for intellectual property infringement, which could incur higher legal fees in the coming quarters.
-
The company acknowledged the risk of geopolitical trade and intellectual property issues affecting bookings and revenue from Chinese customers.
-
Aehr Test Systems (NASDAQ:AEHR) has not provided multi-year forecasts, creating uncertainty about the timing of long-term sustainable growth.
Q & A Highlights
Q: What is the outlook for Aehr Test Systems' long-term sustainable growth, and when can we expect to see significant top-line growth? A: Gayn Erickson, President and CEO, mentioned that while they have not provided multi-year forecasts, they are optimistic about growth in fiscal year '26 and beyond. The company is focusing on expanding into new markets such as AI processors, gallium nitride, and flash memory, which are expected to drive revenue growth. Erickson emphasized that while silicon carbide remains important, the company is diversifying its focus to capture opportunities in these emerging markets.
Q: Were there any tools on the shipping dock at the end of the quarter, and is the backlog more of a timing issue? A: Gayn Erickson confirmed that there were indeed tools on the shipping dock, and it was primarily a timing issue. Some customers requested concessions at the end of the fiscal quarter, which delayed the finalization of purchase orders. However, these orders are now being expedited for shipment.