Aehr Test ((AEHR)) has held its Q4 earnings call. Read on for the main highlights of the call.
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Aehr Test Systems’ recent earnings call painted a picture of both achievement and challenge. The company celebrated significant strides in new market expansions, particularly with AI processors, which now form a substantial part of its revenue. However, the call also highlighted hurdles such as a decline in overall revenue and gross margins, compounded by tariff-related uncertainties and restructuring costs.
AI Processor Revenue Surge
Aehr Test Systems reported a remarkable increase in revenue from AI processors, which accounted for over 35% of their total revenue in fiscal 2025. This is a significant leap from the previous year when AI processors contributed nothing to the revenue stream. This shift underscores the company’s strategic pivot towards AI technology.
Expansion in New Markets
The company has made significant progress in diversifying its market presence. Aehr Test Systems has expanded into gallium nitride power semiconductors, data storage devices, and silicon photonics integrated circuits, marking a strategic move to broaden its technological footprint.
Wafer Level Burn-In System Milestone
Aehr Test Systems achieved a major milestone with the development and customer acceptance of the first-ever wafer level burn-in system for AI processors. This advancement is crucial for ensuring the reliability of AI processors, which require extensive testing.
Record Bookings
The company reported record annual bookings of $61.1 million for fiscal 2025, representing a 24% increase from the previous fiscal year. This growth in bookings highlights the strong demand for Aehr Test Systems’ offerings.
Revenue Decline
Despite the positive developments, Aehr Test Systems faced a revenue decline of 11% year-over-year, bringing in $59 million. This decrease reflects the broader challenges the company is navigating.
Gross Margin Decline
The company’s non-GAAP gross margin fell to 44% from 49.6% the previous year. This decline in profitability is a concern that the company will need to address moving forward.
Impact of Tariff Uncertainty
Tariff-related uncertainties have caused delays in shipments and have led to a cautious approach in providing guidance for fiscal 2026. These external factors are impacting the company’s operational efficiency.
Restructuring Charges
Aehr Test Systems incurred one-time restructuring charges of $864,000 due to the closure of the InCal facility. This move is part of the company’s efforts to streamline operations and reduce costs.
Forward-Looking Guidance
Looking ahead, Aehr Test Systems is optimistic about its growth prospects, particularly in the AI sector. The company anticipates further order growth in fiscal 2026, despite the challenges posed by tariff uncertainties. The strategic focus on AI processors and market diversification is expected to drive future success.
In summary, Aehr Test Systems’ earnings call reflected a mixed sentiment of achievement and challenge. While the company has made significant strides in AI processor revenue and market diversification, it faces hurdles such as declining revenue and gross margins. The forward-looking guidance remains optimistic, with expectations of continued growth in the AI sector.