Aehr Test Systems (AEHR) Q2 2025 earnings summary

Executive summary

• Q2 FY25 revenue was $13.5M, down 37% year-over-year, mainly due to softness in the silicon carbide and power semiconductor markets, partially offset by contributions from the Incal Technology acquisition.

• Net loss for the quarter was $1.0M (GAAP), compared to net income of $6.1M in the prior year; non-GAAP net income was $0.7M.

• Achieved first AI processor and GaN customer wins for wafer-level and package part burn-in, with initial volume orders and market expansion into silicon photonics, data storage, and flash memory.

• Bookings in Q2 FY25 were $9.2M, with backlog at $12.4M; effective backlog rose to $26.6M after subsequent Q3 bookings.

• Legal proceedings include a shareholder class action lawsuit and ongoing IP litigation in China.

Financial highlights

• Q2 FY25 revenue: $13.5M, a 37% decline from $21.4M in Q2 FY24; six-month revenue was $26.6M, down from $42.1M.

• Gross margin for Q2 FY25 was 40.1% (GAAP), down from 51.1% last year, impacted by product mix and amortization of acquired intangibles.

• Non-GAAP net income: $0.7M ($0.02 per diluted share), down from $6.7M ($0.23 per share) last year.

• Cash and equivalents: $35.2M at quarter end, with no debt.

• Cash used in operations was $3.5M for the first six months.

Outlook and guidance

• Reaffirmed FY25 guidance: at least $70M in revenue and non-GAAP net profit before taxes of no less than 10% of revenue.

• Management expects long-term sustainable growth, with inflection possible in FY26 and beyond as new markets ramp.

• Quarterly revenue can be volatile due to timing of large orders; some Q2 shipments delayed to Q3.

• Existing cash resources and anticipated funds from operations are expected to satisfy operating and capital requirements for the next twelve months.

• Continued softness in power semiconductor demand for electric vehicles expected to impact near-term results.