Cohu (COHU) Q2 2026 earnings summary

Executive summary

• Q2 2026 revenue reached $149 million, up 38% year-over-year, with recurring revenue at 53% of total and broad-based improvement across end markets, especially in AI-based computing and industrial segments.

• High-performance computing (HPC) pipeline expanded to $850 million annually, with FY26 HPC revenue estimate raised to $100–$110 million and increased customer qualification and production ramp.

• Test cell utilization improved to 80% at quarter-end, and significant progress was made in advanced thermal test handlers, inspection systems, flexible ATE platforms, and software analytics.

• Manufacturing capacity expansion in Malaysia is underway to double output by year-end 2026 and potentially triple by end of 2027.

• Strategic restructuring initiated in 2025 is largely complete, resulting in improved cost structure and a pension curtailment gain of $1.53 million in Q2 2026.

Financial highlights

• Gross margin was 45.5% non-GAAP (45.4% GAAP), above guidance, due to favorable product mix and higher business volume.

• Adjusted EBITDA margin was 12.3%; non-GAAP EPS was $0.26; GAAP net loss was $0.2 million, a significant improvement from prior year.

• Operating expenses were $52.7 million non-GAAP and $67.3 million GAAP, in line with guidance.

• Cash and investments increased to $498.2 million at quarter-end; cash from operations was $10.5 million in Q2.

• Total debt stands at $304 million, including $288 million from a Q4 2025 convertible debt offering.

Outlook and guidance

• Q3 2026 revenue expected to be ~$170 million (±$7 million), a 14% sequential and 35% year-over-year increase.

• Full-year 2026 revenue growth outlook raised to approximately 35% year-over-year.

• Q3 gross margin projected at ~45%; full-year gross margin expected in the mid-40% range.

• Operating expenses to remain around $54 million per quarter for the rest of the year.

• Adjusted EBITDA for Q3 2026 is projected at ~16%.