Aehr Test Systems (AEHR) Q1 2025 earnings summary

Executive summary

• Q1 fiscal 2025 revenue was $13.1 million, down 36% year-over-year, but non-GAAP net income and revenue exceeded consensus estimates despite a challenging macroeconomic environment and weak EV demand.

• Major revenue drivers included silicon carbide wafer-level burn-in test systems and WaferPak contactors, with growing contributions from AI processors, gallium nitride, power, HDD, and flash memory markets.

• The acquisition of InCAL Technology expanded the product portfolio, especially in high-power test solutions for AI and HPC processors, with integration progressing and positive customer feedback.

• Bookings reached $16.8 million and backlog stood at $16.6 million as of August 30, 2024.

• Asia accounted for 95.9% of total revenue, with all regions experiencing declines due to lower system shipments.

Financial highlights

• Q1 revenue was $13.1 million, down from $20.6 million year-over-year; product revenue was $12.2 million and services revenue $1.0 million.

• Non-GAAP gross margin rose to 54.7% (GAAP: 54.0%) from 48.7% (GAAP: 48.4%) year-over-year, driven by favorable product mix.

• Non-GAAP net income was $2.2 million ($0.07 per diluted share), down from $5.2 million ($0.18 per share) in Q1 FY24; GAAP net income was $0.7 million ($0.02 per share), down from $4.7 million ($0.16 per share).

• Operating income was $0.2 million (GAAP), down from $4.1 million a year ago; non-GAAP operating income was $1.65 million.

• Cash, cash equivalents, and restricted cash totaled $40.8 million at quarter end, down from $51.1 million a year ago, after $10.6 million was used for the InCAL acquisition.

Outlook and guidance

• Fiscal 2025 guidance reaffirmed: at least $70 million in revenue and pre-tax net profit of at least 10% of revenue.

• Management expects momentum in silicon carbide and new market contributions in AI, GaN, and data storage.

• Approximately 85% of annual revenue expected from wafer-level burn-in, 15% from package part burn-in (boosted by InCAL acquisition).

• Management expects existing cash resources and anticipated funds from operations to meet operating and capital needs for the next twelve months.

• No material changes to risk factors or business outlook since the last annual report.