Aehr Test Systems (AEHR) Q3 2025 earnings summary

Executive summary

• Q3 revenue rose 142% year-over-year to $18.3M, driven by diversification into AI processors, gallium nitride, hard-disk drive components, and the Incal acquisition, despite nine-month revenue declining 10% to $44.9M due to softness in EV power semiconductor demand.

• Non-GAAP net income for Q3 was $2.0M ($0.07/share), reversing a non-GAAP net loss of $0.9M in Q3 last year; GAAP net loss narrowed to $0.6M.

• Expanded customer base with four customers over 10% of revenue, three of which are new, including AI processors, gallium nitride, and hard-disk drive components.

• Successfully integrated Intel and Incal Technology acquisitions, consolidating operations and expanding product lines.

• Temporarily withdrew fiscal 2025 guidance due to tariff-related uncertainties and potential customer order delays.

Financial highlights

• Q3 revenue was $18.3M, up 142% year-over-year; nine-month revenue was $44.9M, down from $49.6M.

• Non-GAAP gross margin was 42.7% for Q3; GAAP gross margin was 39.2%, impacted by amortization and one-time charges.

• Non-GAAP net income was $2.0M ($0.07/share); GAAP net loss was $0.6M ($0.02/share).

• Bookings in Q3 were $24.1M, with backlog at quarter-end of $18.2M, rising to $21.8M post-quarter.

• Cash and equivalents at quarter-end were $31.4M, with no debt.

Outlook and guidance

• Fiscal 2025 guidance withdrawn due to uncertainty from recent U.S. tariff announcements and potential secondary effects on customer orders and supply chain.

• Management remains optimistic about long-term growth, citing strong backlog, customer forecasts, and expansion into AI, gallium nitride, data storage, silicon photonics, and flash memory markets.

• Flash memory mass production orders expected in fiscal 2027, following proof-of-concept and co-development phases.

• Management expects existing cash and anticipated funds from operations to cover operating activities, capital expenditures, and obligations for the next twelve months.

• Ongoing softness in power semiconductor demand for EVs is expected to continue impacting revenue, partially offset by growth in AI and U.S. markets.