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    COHU
    Earnings call· Jun 2026(Q2 FY26)

    COHU Q2 FY26 earnings call COHU

    Jul 30, 2026 Source

    Executive summary

    Cohu Q2 FY26 — Strong HPC Momentum and Core Business Recovery Drive Revenue Growth

    Cohu delivered a robust Q2 FY26, driven by significant traction in high-performance computing and a recovering core business, with test utilization reaching 80%. The company raised its full-year HPC revenue outlook and is actively expanding manufacturing capacity to meet growing demand, particularly for AI processors and HBM inspection. While the automotive segment remains soft, Cohu is focused on leveraging its thermal technology differentiation and expanding software analytics to capitalize on durable AI infrastructure and edge computing trends.

    Highlights

    5

    • Q2 revenue of $149 million, up 38% year-over-year, exceeding midpoint of guidance.

    • High-performance computing (HPC) revenue estimate raised to $100 million-$110 million for FY26.

    • Semiconductor test utilization improved sequentially to 80% at quarter-end, with computing and industrial in the low 80s.

    • Computing segment orders increased 150% year-over-year, driven by high-performance computing.

    • Software analytics delivered its first $1 million revenue quarter, with orders up 140% year-over-year.

    Concerns

    3

    • Automotive segment orders were down 24% year-over-year, continuing to struggle in the recovery cycle.

    • Higher input costs and longer lead times for certain semiconductors and specialty components, particularly memory.

    • HPC output capacity is maxed out in Q4 FY26, limiting further growth in the short term despite strong demand.

    Guidance & targets

    12
    CategoryTargetConfidence
    Q3 Revenue
    $170 million, plus or minus $7 million
    high materiality
    High
    Full-year 2026 Revenue Growth
    approximately 35%
    high materiality
    High
    Q3 Gross Margin
    approximately 45%
    medium materiality
    High
    Full-year 2026 Gross Margin
    mid-40% range
    medium materiality
    High
    Q3 Operating Expenses
    about $54 million
    medium materiality
    High
    Quarterly Operating Expenses (balance of year)
    low $50 million range
    medium materiality
    High
    Operating Profit Conversion
    approximately 40%
    medium materiality
    High
    Q3 Net Interest Income
    approximately $1.6 million
    low materiality
    High
    Q3 Tax Provision
    about $5.2 million
    low materiality
    High
    Diluted Shares
    approximately 55 million
    low materiality
    High
    Fiscal 2026 High-Performance Computing Revenue
    between $100 million and $110 million
    high materiality
    High
    Malaysia Manufacturing Capacity Expansion
    double output by year-end
    high materiality
    High

    Segment performance

    5
    SegmentRevenueYoYQoQMargin
    Computing
    Orders driven by eclipse growth in high-performance computing.
    Test utilization: low 80sShare of total system orders: 46%
    		—150%——
    Industrial
    Next largest growth area after computing, with orders up significantly.
    Test utilization: low 80s
    		—87%——
    Consumer
    Orders up year-over-year.
    		—29%——
    Mobile
    Orders essentially flat year-over-year.
    Test utilization: high 70s
    		—flat——
    Automotive
    Orders down year-over-year in a segment that continues to struggle in this recovery cycle.
    Test utilization: high 70s
    		—-24%——

    Operational metrics

    21
    Non-GAAP gross margin
    45.5%
    Q2 FY26

    Above guidance, primarily reflecting a more favorable product mix.

    Adjusted EBITDA
    12%
    Q2 FY26
    Cash and investments balance
    $498 millionincreased by approximately $9 million during Q2
    end of Q2 FY26
    Total debt
    $304 million
    end of Q2 FY26

    Includes $288 million from the Q4 2025 convertible debt offering.

    Capital expenditures
    $2 million
    Q2 FY26

    Mainly for manufacturing machinery and equipment, facility improvements and IT equipment.

    Target capital expenditures as % of revenue
    about 2%
    2026

    Includes the capital expansion of the Malaysia test handler manufacturing facility.

    Recurring revenue as % of total revenue
    53%
    Q2 FY26

    Driven primarily by consumables.

    Software analytics revenue
    $1 million
    Q2 FY26

    First $1 million revenue quarter for this business.

    Software analytics orders growth
    140%YoY
    Q2 FY26
    Interface solutions bookings
    $0.5 million
    Q2 FY26

    Booked in Q2 for optical engine test, continuation of business started in Q1.

    Net interest income
    $1.7 million
    Q2 FY26

    After interest expense and a $600,000 foreign currency loss.

    Foreign currency loss
    $600,000
    Q2 FY26

    Included in net interest income calculation.

    Tax provision
    $2.7 millionlower than guidance
    Q2 FY26

    Due to improved profitability in the U.S.

    Non-GAAP EPS
    $0.26
    Q2 FY26
    Diluted shares attributable to convertible debt
    5.8 million
    Q3 FY26 projection

    2.4 million shares will be fully offset by the capped call but are required for U.S. GAAP diluted EPS calculations.

    HPC revenue estimate
    $105 millionup $15 million from prior midpoint
    FY26

    Midpoint of the raised fiscal 2026 high-performance computing revenue estimate ($100 million to $110 million).

    HPC pipeline (qualified annual opportunity)
    $190 million
    annual

    Part of the total $850 million annual HPC customer pipeline.

    HPC pipeline (active qualification)
    $250 million
    annual

    Part of the total $850 million annual HPC customer pipeline, with close to $200 million in near-term qualification.

    HPC pipeline (early-stage engagement)
    $445 million
    annual

    Part of the total $850 million annual HPC customer pipeline.

    GaN power and advanced connectivity addressable market
    $340 million
    annual

    Estimated market opportunity for Cohu's Diamondx configurations.

    Software subscription sale
    $330,000
    annual

    Annual subscription software sold into an HPC customer in conjunction with system orders.

    Industry KPIs

    6
    MetricValueDetails
    Lead times13-14 weeksweeks
    Ai data center revenue$100 million to $110 millionUSD
    Fab capacity utilization80%%
    Bookings net order intake$26 millionUSD
    Design wins socket pipeline$850 million annuallyUSD
    End market segment revenue mixComputing: 46% of total system orders; Industrial: orders up 87% YoY; Consumer: up 29% YoY; Mobile: essentially flat YoY; Automotive: down 24% YoY%

    Orderbook & backlog

    1
    Single customer order for Eclipse systems$26 millionearly Q3 FY26

    Largely going to ship in Q4 FY26.

    Product announcements

    2
    ProductTypeDetails
    New vision inspection sensor with short-wave infrared capabilitylaunch
    Agentic AI appliancelaunch

    Capital programs

    1
    Malaysia test handler manufacturing facility expansionunderway

    Benefit: double output by year-end [2026] and support another step-up in capacity by mid-2027; path to triple output by end of 2027

    Expanding internal manufacturing in Malaysia to support HPC demand. Plan to increase output by about 50% over the next 6 months and more than 100% between now and mid-2027. Also doing a small expansion in the Philippines for thermal heads.

    Risks & headwinds

    4
    Automotive Segment Weaknessuntil late Q1 or Q2 FY27

    Orders down 24% YoY in Q2 FY26

    Supply Chain Constraints & Cost Increases

    Higher input costs and longer lead times for certain semiconductors and specialty components, particularly memory.

    Mitigation: Taking proactive steps to secure critical components through advanced purchases and exploring passing on costs to customers.

    HPC Capacity LimitationsQ4 FY26

    HPC output capacity maxed out in Q4 FY26

    Mitigation: Actively expanding manufacturing capacity in Malaysia and the Philippines to double output by mid-2027 and potentially triple by end of 2027.

    Customer ConcentrationQ2 FY26

    One industrial customer accounted for more than 10% of total sales during Q2 FY26.

    What to watch in Q3 FY26

    5

    HPC customer qualification

    Within a month (for one customer), mid-Q1 FY27 (for another)
    Current5 customers in active qualification, one 'right on the edge' of qualification.
    TargetQualification of at least one additional customer.

    Why it matters

    Conversion of qualified customers directly impacts future HPC revenue growth and validates the pipeline.

    We have one customer that is right on the edge of giving us the green light of being qualified... we should get a qualification pretty soon within a month, I would say. And then I think the fifth one on the list, we're looking at early next year, systems that we're shipping late August and I think accounting for about a 6-month qualification process, I think would put us sort of mid-Q1 for the last one on this bucket of in qualification.

    Q&A highlights

    6

    Clarification on the 4 qualified customers (HPC vs HBM) and the 5 in-qualification customers, and when they might convert to revenue.

    Luis confirmed 3 HPC and 1 HBM customer are qualified, representing about $190 million annual opportunity. For the 5 in-qualification customers, one is expected to qualify within a month, and another by mid-Q1 next year, with shipments for production configurations already planned.

    “We have 3 HPC, 1 HBM on the qualified, which we view about $190 million annual opportunity for revenue. And then we have close to $200 million in the near-term qualification here.”

    asked by Sreekrishnan Sankarnarayanan · answered by Luis Müller

    2 min read5 chapters

    Detailed Narrative

    01

    High-Performance Computing (HPC) Momentum

    Cohu is seeing strong adoption of its Eclipse handler and Jet MAX devices for high-performance computing, driven by advanced active thermal control for extreme power and next-generation data center devices. The company's high-power thermal control technology is a key differentiator, improving test quality and first-pass yield. This momentum has led to an expanding HPC customer pipeline, now estimated at approximately $850 million annually, with specific qualified and in-qualification opportunities.

    02

    Inspection and Metrology Advancements

    In Q2, Cohu shipped additional final inspection systems for HBM 3, HBM 4, and HBM 4E devices to a U.S.-based IDM, with strong forecasts into H2 2026. The company qualified its Neon platform at a Taiwan-based OSAT for advanced package, mobile, and AI-adjacent inspection. A new vision inspection sensor with short-wave infrared capability was released, enhancing detection of inner cracks in complex silicon devices.

    03

    Semiconductor Test for AI-Enabling Requirements

    Demand in semiconductor test is increasingly tied to efficient power delivery and high-speed connectivity for edge devices, vehicles, industrial equipment, and connected infrastructure. Cohu is engaging with customers on Diamondx configurations for GaN power devices and advanced connectivity applications, addressing an estimated $340 million annual addressable market opportunity over the midterm.

    04

    Software Analytics Growth and AI Appliance

    The software analytics business achieved its first $1 million revenue quarter, with orders up 140% YoY, demonstrating a successful "land and expand" strategy. Cohu is deploying Agentic AI on-site with an AI appliance that runs models entirely within customer networks, addressing data sovereignty concerns and converting the installed base into recurring software revenue opportunities by improving uptime, yield learning, and factory productivity.

    05

    Interface Solutions and Optical Engine Test

    Interface solutions, representing 19% of consolidated revenue, are gaining traction in silicon photonics test, with $500,000 in bookings for optical engine test. Cohu is pursuing additional engagements for co-packaged optical devices and aims to increase its share within its core semiconductor customer base through new applications and technology replacements.

    AI-generated summary of the company’s earnings call. Not investment advice.