COHU - Earnings call transcript Q3 2020

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to Cohu, Inc.

Third Quarter 2020 Financial Results Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded. now today, hand Officer. Jeff would to conference I speaker your Jones, Instructions] like the to over [Operator Chief Financial go ahead, Please sir.

Jeff Jones

call Müller. outlook. I'm good to today by quarter and and and joined and to CEO, President conference Luis results XXXX you, third discuss quarter Thank fourth our Cohu's morning, our welcome

conjunction Cohu it website available at in cohu.com If you our today's page of slide our copy with There's after earnings release, a by the section. same will may from on contacting Investor of that need a you Relations. also be may the this call the be access website Cohu's call or Replays Investor presentation concludes. call via accessed Relations in

Now to the safe harbor.

statements encourage to filings section changes. future information concerning rapid current subject with abrupt Cohu's forward-looking XX-Q. During recently but forward-looking including and the reflecting have management's slide the as presentation business. is statements current on filed statements today's by the Cohu's call, SEC, of that based and we which, the you release to even well are assessed, expectations Form XX-K will and nature, These we most its We earnings as make Form review the

Our assumes comments XXXX, occurring developments as update October these for and today, no XX, speak only of Cohu statements to call. obligation after this

the for to financial refer to Please reconciliations measures. comparable our call, non-GAAP and this certain during release slide discuss Finally, presentation will we GAAP earnings most measures.

the and Luis? CEO. I'd call to President Cohu's like over Now to Luis turn Müller,

Luis Müller

improvement continuing next third its the third quarter. our and conditions was with some is highlight guidance quarter improve Revenue pandemic, Cohu $XXX.X and the in I'll quarter, quarter, momentum throughout growth infrastructure with of from alignment exceeding business million, markets to updated the for summarize XXXX. our thanks dynamics to Good for into everyone, how our adapting business and joining discuss Thanks, driving Jeff. what expected is Today, early the morning, improving us.

some of we're shipments orders strengthened, ramps. in accelerate able support to As recurring customers' production

chain in and did fourth great going supply Our soon needs into operations a third meeting quarter and we'll as customer job team discuss. quarter partners even more the so the

Third growing in in to split export points another extend and XXXX Neon a of units. test remains Industry quarter, XG into products RF and proud increase XX% automotive, for The XX% I are a considering not in much record this quarter-over-quarter line fourth to of to for intensity. PCB incremental booking our very October successful leading so still our XXXX. great mobility. sharp product peak result We're new that quarter stages in Mobility penetration the that for couldn't greater also analysts going understands higher requirements. saw the yet ASP for We're orders third should testament ramp. In handlers believe accelerated be ultra-wide this a demand test value used strong U.S. testing in greater continues positive continue the our with more handlers customer are systems were and RFICs the systems, a package more adoption operations, very processors successfully we quarter deployment is testers Huawei. to do customers instrumentation be for for estimated customer this in RF XX% utilization products ramp into sequential such the Xcerra. applications production Task far, and XXXX this estimated other segment cell of devices Overall, test beyond redistribution fast test introduction. in third expand IoT September. recurring end an and X of and contactors. the and reaching increased with to will engineering, inspection beyond, and increasing, There and in but orders and There XG, suite been and is quarter to from into forecast from test Still smartphones. or and Wi-Fi acquisition of applications expect service teams band smartphone for I wide time a of in testers, has horizon. handlers X addressing creation unchanged, next-generation strong restrictions Cohu, industrial for we market translating are that Cohu But everyone and likely for seeing smartphone production new net of also is launched for we is where new In XX%at quarter, share. also is equipment. complexity platform. XG technology these traction application Cohu's early and delivering managing business our have a and RF XXXX demand managing XXXX. demand particularly

Finally, there China on military applications and users. export end were U.S. end-use new restrictions

It half anticipated the will started the system this in customers reasonable This recovery picking this improvement have due still is don't orders in from volume should semiconductor and for in orders we're excitement, threefold impact no power that seeing so demand led and testing as are powerful fourth base dissipation our coming thermal to The from is during initial and few customer that as the weeks a in near large automotive forecast Utilization yield conducted a We ramp the handlers semiconductors and is segment. combining near for room devices. across were time. ADAS third transition. deployments industrial diligence rate include quarter. In In order all TVs first automotive consumer well stronger back semiconductor optoelectronic quarter-over-quarter of is set the for twofold GPUs automotive at the actively industrial going rule Cohu segment, up for sooner surprise bookings from seeing is through in future. and Cohu's new and about new, benefit management new customers. computing capacity. managing on happening of the are incremental believe in sensors quarter, have to and automotive gaming micro-LEDs segments test. than and increase Also thermal mini- XXXX panel the more segment Despite increase driving we that optimize task more

our New diversification and are for supplier opportunities new edge devices creating business subsystems. handlers and thermal

have third we buying to captured from Cohu working that our earlier the tester, As test customers I test value a time OEE. cell test, for yields a deliver time yield complete design to RF In customer a and of win in elements, mentioned of to equipment an where recognized we target quarter, been overall accelerates better several through production major integration or achieving contactor. cell efficiency, call, to OSAT value handler and

to are I wins quarters. working other across markets new in We with customers coming hope describe similar demonstrate application different capability, to

the with increase front, orders, our contactor contactor now the is On sharp system attachment rate XX%. in at

I by the fluctuate will reduce Term quarter-over-quarter. rapidly financing generation previously of principal strong Xcerra of As and light acquisition associated $XX.X number our Loan with improving under B to during we cash outstanding conditions, up this explained, debt took and business In third forecast action down million. the quarter, our

communities. This been technologies all to to the safety solutions, our Now support We're incredibly customer Because our to Among pandemic business. expect pandemic, challenging looking an leaving protecting field our of can without the the ways including business customers. long-lasting resilience our to benefit at livelihood and virtual COVID-XX implemented best we're of ensure the committed Cohu our, homes. reality-assisted support from has and these, when pandemic impact and support increased their suppliers for new our lower reduced crisis like employees, supply implementing excited we're Cohu and communities. travel for our has bring safeguard technologies to to year we the stakeholders from pilot We're to customers. doing policies and such to to chain other and has employees, continuity expenses operating expenses, subsides. of ensuring experts and enhance the now finding the customers, this new

unit in Cohu infrastructure its expenses markets expanding will recovery operations automotive pandemic-driven improving GDP. and AI computing Cohu's service up segments are electrification; continue new deliver the industrial XXXX. Now challenges, XG opportunities expected next improving by growth. sales; increase a: with in operating deployments, this and market fourth to accelerating by main compounded momentum products. and guiding encouraged growing with All customer processing. products Cohu and be and unanticipated strength that and with with interest momentum ADAS the to all, grow looking projected we're revenue We'll aligning into edge lowering and quarter is GPUs; year revenue our poised for is in units; evolving meet profitability to and in global ahead, across segment new next-generation forecasting by smartphone

as at Cohu leadership a of first we I'd his the group Xcerra. quarter with Before senior Cohu's thank Ronde end Pascal and management transition from change his starting next be integrated X announce we results, in and continue past outstanding global over Pascal down of quarter time years commitment will scaling the financial he customer to like will eventually first XXXX. year for

Vice Bohrson, with by President and is Chris regard he's our highly transition, role this with only three the our to around all assume currently business will veteran high I'm conjunction business Chris Manager will Test announce Senior industry and customers, units Handler mid-February experiences, Group, strong to a report forward, pleased multiculture In and but me. held is next directly who General respected year. Cohu. Looking in handler not that Pascal's of

quarter share fourth it over third Now to Jeff details I'd turn and to quarter results on provide like guidance. to

Jeff Jones

line as XXst. exceeded model. in Cohu delivered our with Operating in higher revised higher August were Gross than Luis. our expenses Thanks, forecast, profitability model. business was guidance than business Sales and our margin QX. strong results non-GAAP were QX of

that guidance, non-GAAP comments Before QX adjustments. of non-GAAP GAAP about the talk let I to through results follow, the I'll Please figures. to me refer note QX walk balance that my and our the

For GAAP non-GAAP presentation. disclosures, see the to investor reconciliations and earnings accompanying release and

Xcerra non-GAAP The closure. $X.X assets expense in German approximately $X.X $X was This currently For facility non-GAAP and expense, noncash to intangible The charge expected to costs also GAAP stock-based delay million. the our QX a adjustments amortization was adoption charge by acquisition. customers' in-process is gain sale on severance cash restructuring million in QX were to our impairment of related R&D a approximately from development. of approximately$X.Xmillion. million approximately XXXX of and include million, due restructuring facility $X.X caused of compensation The adjustments approximately impact COVID-XXdriven QX,the to net $XXX,XXX products GAAP was include

QX is our more margin were or higher forXX% Cohu's gross provided XXX of and QX $X.X than XX. and The guidance. model. guidance. to turning business our quarter, throughout results. Revenue updated basis August In customer $XXX.X our of sales. gross million in XX% higher on guidance Operating third end points accounted no quarter. as In approximately margin was Now $XX.X in was expenses effect reductions and high million QX, the Temporary with cost million the with line in than remained line the

of effective Non-GAAP tax the non-GAAP Third guidance quarter a non-GAAP EBITDA was rate for lower from as $X.XX. approximatelyXX% quarter income losses operating adjusted tax and Europe. primarily Cohu's derived XX.X% than sales, benefits in third was result was EPS was for XX.X%. of operating and generated QX

Now to model. business turning the

further XXXX.At adding previously which synergies of approximately salary of achieve of we at the we've about of temporary XXXX, operating reductions, quarter, March and per as fiscal to end beginning end discussed, of to took our of the million the completed acquisition the $X April effect As expenses were $XX by EPS required $X.XX actions implemented million reduced cost model. the

Given as business compensation cash lifting conditions, Directors' the reinstating Cohu XXXX reductions these full and of guidance. cost of talk in cover salaries is base the more XXXX Board guidance. the about when of I beginning retainer QX and the improvement I'll

Now to sheet. balance moving the

$XXX are of our associated end approximately million, of and currently service supports with the at operational the need the and production debt balance cash inventory ramp experiencing. approximately Our was $XXmillion, and we receivables funding steep QX

CapEx during $X.X to QX the necessary mainly approximately a one increase capacity Philippines improved was allocation by million Cash test continues of Deleveraging $XX.Xmillion, July. since forecast the capital our operations guidance The flow to and the from QX, handler driven debt in purchases into manufacturing third significantly quarter contactor and during for was of $XX reduced operations quarter as German priority. be provided week we has During sales by Cohu directional equipment million. additions to the Japan last well as facility. fourth capital consolidate

X QX risks required for XX% uncertainty to associated bill supply be For with and chain customer be be $XXX increase marketing plus will are the the in XX% more QX million. is new in commissions business sales to acceptance, and salary we're sales model. has caused remote between revenue. QX, as low this to with guiding expense margin expected some as foreseeable QX considers end expenses, costs The customers from to months costs approximately $XX of between revenue range base such and environment resulting and for our which line remain and adapted reduced and $XXX in COVID-XX million book sales include by is as well potential to Gross with of million. at high the levels Other expenses QX revenue. operations. projected operating reinstated and interaction and between our Cohu such sequential business with variable travel future

the will which QX, full Looking impact to of salary reinstatement. beyond quarters include

approximately million. be quarterly $XX on to expenses approximately operating expect of million $XXX revenue We

adjusted midpoint the We rate expect approximately QX forecast XX%. is tax at The guidance of guidance. approximately EBITDA at XX% of non-GAAP QX be the to midpoint

As markets, and X% first profits expected the in remarks. a of our to our That of The count mitigated net order increasing is we'll approximately tax be flat diluted up U.S. With now open call QX QX from million shares. guidance. midpoint be revenue subject the various various backlog to the strong projection is questions. are across and to forecast to And reminder XXXX current concludes by approximately quarter XX.X to prepared for offshore Cohu's statutory jurisdictions. generated share loss generated profits carryforwards. in taxes rates on operating for Income foreign

Operator

[Operator first Stifel. comes Instructions] Brian Our from with Chin question

Brian Chin

and I Maybe congratulations business. And the first think of service-oriented but question, substantial. the in usually in low levels, order pickup leading pickup on coming industrial auto the the sounds recovery off sales in system certainly a your utilization you fairly and the QX here seeing, outlook maybe sort system also you're your view beyond underlying then about XQ? building and backlog this on as well? inclusive But sustainability talk drivers orders. you of can of Are

Jeff Jones

sorry. Brian, Yes.

QX. we orders X, in the yes, for are above expect increasing, As QX comments, described was same book-to-bill, the

we So are yes, building backlog.

automotive and the coming absolutely mentioned You low off rates, true. order that's of

ways have a million run there to orders get $XX about quarter than So rate. we normalized our to and million we're We still rate. we believe lower normal per think to back go $XX the to

Brian Chin

terms and side pretty broad the of just the the customer And a question is have about business. But of in strength, the kind it mobility customers geography? of across

Luis Müller

Yes, Brian, base customer it's geographic It and it well. on is. is broad as Luis.

pull As and forecast we've processors RFICs, drive. flat I it is thermal display for mentioned, application the particularly strong here for our for but an increased also seen also on a strong panel handlers

of to management IC are with well mobility as associated mobility. Some related it

Brian Chin

see you've terms business, of the this in you year, XX%-ish of strong over or of there, per RF think so. the I like years that commented part And annum the next the been sort Great. has test growing past, Luis, of in couple the perhaps TAM which maybe

industry one XG million phones would year, over last potential Samsung how shipping year. night, and higher of XXX of heard, RF about XXX the last I've for million numbers sort from, this say, next XXX that's up that think relative I'm growth number? of the to you and night. curious, of TAM That's the think sort I the a talked million

Luis Müller

Yes.

think just we that, but mean in by I phones, connectivity RF general. So don't in the and TAM,

it, taken So for granted. some of

that or about growing IoT, next that Cohu addressable years. or automotive to in is X the it for million X $XXX in market of to size Some TAM size is market

Brian Chin

$X.XX XQ. you're model, the last in target revenue in $X.XX Okay. neighborhood to might maybe it of level, Jeff. earnings. for the And quick At guiding for one Against one the suggest

the temporary the still be OpEx to the is cost back. It model. mentioned target are coming sounds than going lower had like measures You

from kind levels? would and now? at normally it's sort benefit against travel you OpEx right for perhaps of the other can guidance the quantify cuts be sorts you're So of of revenue getting you where of I of expenses it's your subtracted just, those sort reduced XQ sort guess and

Jeff Jones

quarterly Yes. to is change of will $XXX rate I Then Think to $X by move expenses. revenue I our my a it Again, revenue, $XX every at million think as with $XX Brian. look way That's about mentioned million. in a operating remarks, in it, OpEx million at good at revenue, million. way the look in

goes to OpEx $XX revenue expect as we'd be million. million, $XXX up at So to

Operator

Krish and And our Cowen next Company. question comes with Sankar from

Krish Sankar

And the had congrats on Luis, great and just results them. of guidance. a couple

First can we is so And orders or for you, is is is, kind coming of trend if give XG segment folks? either the one trending it's sales? granularity quarters, last how a of of to there it XG? mobility couple way can How how much that you half also of see year from increasing the over or

Luis Müller

power Krish, have call to say details related, the cell drivers a a were in to quarter device. all entirely can here. handlers in, processor, this, with a visibility traditional phone maybe--supplier orders our ultimately Yes. a not, XG we really it's we the application phone processor. which tell because to display The difficult the really Similarly, XG little if handy entirely going call XG because model is that down digital using orders be I testing I that are almost tester XGrelated. have don't specific know ICs, the you an may a it's are management we won't which more that When don't or used. difficult bit RF on it's or a whether But phone third handler mobility

on because So integrated. it the hard we it's how the to know to But RF, gets call device. the know easier ones, it's other

Krish Sankar

one the customers, not And RF Got path, same front-end the module Got at along How roughly it. are would old like with--amongst your market in the and enough, makers, the share all RF your Fair I Japan. it those when then you but in side, customers? the of X X there the actual, it. X end for characterize them, U.S. Luis. seems like look

Jeff Jones

OSATs. The

Luis Müller

with… talking you're OSATs, share the the With about

Krish Sankar

was OSATs. like Not the about Qualcomm, Skyworks, not Muratas the talking of Marvell, I OSATs, the the world. Qorvo,

Luis Müller

I see.

So And we the to that power have case. the market. of share had continues amplifier be the largest traditionally

share recently into amplifiers gained antenna more low-noise other have We ICs, front-end RF and switches. particularly tuners and

tell it's I So the I amplifiers. give the share increasing. It's or elements, share power take, other on rise. plus exactly but can't the on XX% say, on the would you

Krish Sankar

in your seems Auto, of it curious pretty to it. to Luis Got as final you kind it. still of the system it's orders, back a for your or of but Got low. then question, I'm expect percentage like And kind prior recovery a levels it be mode, or either Jeff. would ones? XXXX early when a some to of get

Luis Müller

that full good there, a by we predictions. beginning make we full would adhere Yes. It's things of Where expect the very first sort be hard the end the the the a--being possibly hit to into had of to anticipated quarter That's 'XX. swing 'XX last than fourth that Krish. kind market question of we XXXX, of a second continue beginning at did have and stand quarter, a coming at on and or of half of those in the end turned fourth quarter faster in recovery But third is of today quarter. quarter

going be bullish say a bit say back that time more XXXX. in but be stand where bullish can't I bit today. when, I'll I'll more automotive precisely So and be in from environment sometime a for to think normal business we we this we're

Krish Sankar

results. good on Congrats Jeff. thanks Luis, Thanks Perfect.

Luis Müller

Thanks, Krish.

Operator

our question comes Craig And B. Riley. with Thank next Ellis from you.

Your open. line is

Craig Ellis

the following on salaries your wanted question. given taking you you're be team, that start with robust the with getting totally And comment what execution. regarding and doing a for up real just made Krish's guys. congratulations execution to for reinstating Thanks to normalized I question the

ADAS-related that in strong and understanding is my applications. has So a EV very position Cohu power

strong thinking we're higher in go-forward these intensity intensity in the for be a to Wouldn't or areas? is capability either actually about when something, X 'XX basis on your to 'XX. position expect So given relative for business' secular growth order its how we order

Luis Müller

I that's is to grow. think the Craig, expect yes, go. ultimately, Yes, Luis. to direction the And market this we

we'll XXXX. from we already of be we where beyond point, We seems that to see adoption think to trajectory ADAS drive that, of sometime But in Krish's the prior and the quarterly accelerating. back be electrification chain today. to stand So the rate the

through into to couple So automotive thing the then the we ramp XXXX are time to beyond are now you where high-end is, heavily that I a exactly of testing coming management microprocessors centered automotive call around in But if go see vehicles. management power or every know we also we ADAS think years certain. don't in and order dissipative, sensors very applications frame. has could battery therefore, it or is if were and potential ago. microcontrollers, ADAS devices believe systems, then for related that The one translates on applications that or is battery we also now

continue the stronger. are of auto. here several years growth coming market those I yes, in the automotive propel are And that So back to we'll next segments think the for

Craig Ellis

leverage. That's on Jeff, And The Were think model gross that in one-timers the quarter. just the And we if to about target for then, any a great, in implications not, helpful. margins forward? number? how any see clarification going there XX%, versus gross great very margin the

Jeff Jones

No one-timers in Craig, QX, gross XX% margin. no.

if, a and largely have the weighted and had the onetime still matter gross say margin could line probably gross accurate. gross is a the costs model some modeling would of that bit. fact, down margin I business looking some forward As we costs margin, But

It's changing follow million, that's in expenses I model. about $XXX guidance, on need levels and the the So revenue $XX update and of on the where the came the then the operating and change in roughly would in with gross an about current margin million fluctuating XX% sales. at that different the I

Craig Ellis

it. Got

some the get to into helpful color regarding calendar very of visibility 'XX. then And Okay.

'XX? calendar seasonality, exit XQ how stronger, XQ for more seasonality year where you relatively calendar calendar confident? can normal and our robust visibility implications characterize you So exiting at as just from your we're given velocity look And in you're where versus 'XX, 'XX are Luis, what is the the

Luis Müller

Okay.

take let's Craig. pieces that, those So then,

talking think here XXXX see we've that and it's strength what into about quarter. The is the mobility, into So going to continue beyond. aligned much I fourth very going deployment been XG for is, with XXXX we

Brian, who think to in which Brian the grow cell unit phone finally even further deployment about to Chin, unit are technologies. the it was made of next comment sales, year I sales, XG projected addition

we're optimistic you mobility we're the market, for very two, compound the particularly think RFIC I looking, RFICs, test. So

also We a auto. lot have of optimism about

As on here of anticipated. Seasonality the about then go which years. And ADAS and big another trends time, one and of industry question sensors, deployment driving faster we several continue EV turning all next big that another to we see potentially just and described EV is as the of this here talked technology and have becomes and growth that's area is than at for have sort these ADAS, originally those and And we answer tougher of will times had we short because same happening a X trends mega normal we the XG usually to anything automotive. semiconductor simply deployment normal. in

yet you So gets year, next talk and when for have a have at don't I more semiconductors seasonality defer that a bit big I'm X segments same for about by another then view to it going clear time. hard the and next have comment Craig, seasonality quarter on to little year. to ramping for

Craig Ellis

color the you Luis, understandable, totally provided. and That's that appreciate

If Cohu? a for around point made you points was you history, seen you? would last look the regarding In be megatrends at back play. comparable at dynamics the favorable your what multiple for when time experience, Just this you've

Luis Müller

Okay.

particularly was XXXX, in up very a control ago. had, in the I window few look for If laptops. servers that more market. the technology at few threshold driver sell cross not way in which I we control major mistaken, the And to I recent if history, power a emissions was think to that want had for processors, years But that opened history, the automotive that singular dissipation using market know strong smartphone strong automotive it mobility, go was in thermal processor, was, back for was that point with XXXX, back the years, a the application during test, XXXX, active So I U.S., tighter we're computers, sorry, the a if Europe into I'm same us there. time, and I more technology, say it we application found our and its time China.

So that was don't guess a I this in things time. at don't recall recent big to a look the history, would big But I little I time. have recall deeper big I happening the X things one, at here. too. two having same same happening

yes, answer there, think Craig. that's I So my

Operator

And Deutsche Sidney our next question Ho comes with Bank. from

Your line open. is now

Sidney Ho

out? do what's of product attach particular opportunity ramped Thanks And And test the that question that, this quickly first put guys be strong congrats my have you how around guide. on and brings? question. Maybe you're your can rate quarter the revenue that Maybe in the can on for terms taking context the RF think is you that product seeing module, announced. new with installed that And you base? some

Luis Müller

this can here. line. don't see revenue answer we some if is by product We questions Luis. Well, But I I don't--Sidney, break think--let's your out really of

at As RF I mentioned earlier, we market. addressable a are looking

RF market to addressable are share penetrating that do things We for $XXX extends $XXX this today about growing now is can the an we X today, in amplifiers. not RF as mentioned million Cohu is beyond amplifiers that a next So we in to into do have there years. earlier. very everything power power million strong X And I

into all our to the plans. revenue if That over we $XXX get million particular line in this today. for successfully Cohu, in but have to doesn't product of time, revenue there is today, execute close don't I to RF we what to think want answer grow opportunity I really

Sidney Ho

can utilization, seasonality about think sort talk talked whether With think think here. mentioned you question and in to you you past is the you but--also obviously, Okay. is my try utilization. XX% mobility seeing pretty in which at end is, up, about do you to cell line overall sales utilization XX%, saw there when fair. expect That's you Maybe pick system sales you about markets pickup I these on system see follow-up good one, some test about accelerating? of Obviously, starts a cell start is

Luis Müller

business more I utilization about Yes. in for for an see it gives Yes. with We us what is--the optimism strong And you. right, XX% agree now OSATs. that's you're XXXX.The strong is particularly now, strong applications and at particularly right It mobility. is particularly utilization

happening seeing utilization. is now below that business all Like for of there capital more these notwithstanding what's to automotive. average, the orders, automotive devices. I room is need new of utilization, XG XX%.And are increase like said, addition think think to you still utilization are we're pivot utilization I sharp points the seeing said, in order on that I technology in type but deployment, in it's being these improvement customers for in there we driving ADAS, test technologies major almost a

got you've of general here that on the top we effect utilization have. discussions compounded a So

Sidney Ho

question Okay. for last Maybe one me.

about on can I improve comment kind areas you your up to net flat know seasonality? X%, do mode maybe that in some answered trying quarter to For of a there that of just still talk may is the seasonality still what or or question you to if in are But kind are previous out Or think figure of to you growth? the get first are expecting about may areas being about you exist. revenue this you decline in, areas? to are not you of catch-up

Jeff Jones

segments. rate We're particular, go have we an in saw say, of and Yes. But industrial. would seeing a and and automotive in in bit normalized sort pickup. in you're correct, industrial. do a Sidney, a to still, a probably utilization to in we're increase catch-up back get automotive those I in to We run mode ways of

industrial. still and So I with for that fact catch-up mode agree auto absolutely the in

Operator

from Duley David next with our Steelhead question comes Securities. And

David Duley

You about idea an RF have intensive prepared remarks, comment times. in XG that how test are talking made intensive more or you earlier Do test I handling RF your a think you're about parts much about? the

Luis Müller

that this there Luis. it's what But of and generally that specific some on and to it for program in in device, Yes, on prior times I do. the is I you are RF. specific test, going device. down, do speaking, that's without tabulated yes, Generally way speaking, numbers, time the was bring that obvious test desire of techniques. introduce some test generally what test test from it guess, David, on up. these have products, it why customers are to are new times terms in sort going increasing intensity, being generation And the generation new I examples is up of capabilities call

David Duley

take what, from you Or your far? is going Can a XX%? stab, have up experience, seen XX% thus by you what or it

Luis Müller

that I've we've depending on bring parity have test XX% there things seen obviously, programs. different down to been is I but seen, able devices, seen I've increases it from, on to to, XX%,

David Duley

$XX up the as And of call guidance quarter? contributing December like growth which in the that nice will as to million, for the it's million roughly, be Okay. incremental $XX far quarter, it, segments December

Jeff Jones

a It's as industrial. in test XG, RF pickup well going mobility, automotive and to as be

David Duley

dragging how curious to I'm in improvement And $XX quarter could made? you I'm not much close a of just kind out you've kind on help was quarterly us how understand December it of a, basis $XX of dragging rates. are $XX guidance, the as automotive getting think a trying It's how or quarter an your obviously to And to far segment, figure million million. much you normal by run back anymore. But million as I of by

Jeff Jones

Yes. did away normalized Dave, from now million same calculation. $XX QX, million today. $XX a run to And think that are tell about rate after we we that I'll you, we

segment. the that So see that And we on you there. hit kind gap of That's it see in head the currently. we improvement

close think Luis can XXXX. said, gap in we as that, that So I sometime

Luis Müller

Yes. That's opportunity from where now, incremental are Dave. the we

David Duley

quarter September level. Yes, the from revenue

Jeff Jones

Yes.

Luis Müller

Yes.

David Duley

Okay.

So before you were I $XX in mid-XXXX. basis entire get weren't you can sure $XX run million to you quarterly getting could on a by And back rate. you the update sometime million is, when or saying you guess, achieve think back the that

Luis Müller

Yes.

Just level September about one we booking talked $XX here, were million, We $XX at quick an million. the when looking correction Dave. quarter incremental

didn't translates So a talk into but obviously, as But fourth we about number. bookings, quarter September that booking revenue.

David Duley

it elaborate your thermal just think Traditionally, bit? I in of is, you I or a you market, -- markets other you thought other those APU parts the mentioned question I Final heard thermal thought talk the Could little for to I sounded handlers. gone have handlers. me Okay. but about like from segment

Luis Müller

control That's thermal I'm which in same referencing picking applications. also the mean handlers thermal described. handlers technology business for handlers. we're control of thermal thermal in including that used automotive. With handlers, the test ones for technology, now I by now which Sure. seeing all, active Yes, cryogenic the what with active first But admit, up, like that talking here, With those on I'm the terminology you in automotive. X said, to cold I'm have automotive GPUs, I things converging ADAS are when now are about cryogenic APUs, are

automotive So processor is the if market, market. meeting will, the it's pretty much you

Operator

And question comes with Schwab our Christian next Craig-Hallum. from

Christian Schwab

Congratulations outlook. on and a great great quarter

may applications side, ends. meaningful opportunity millimeter move RF if I'm into power RF I'm XG just as you you amplifiers, On we if opportunity you have could the any wondering, wondering have talk just where about, front outside wave, for other

If micro the in versus as accelerate areas? in infrastructure and positioned pico one you go those well into active for and should 'XX out roll cells small we more have either you opportunity an that 'XX, cells, will of cells devices are RF XG

Luis Müller

stations. product RFICs and to But mean phone quarter, into smartphones. and instruments of or have still we capability the fixed third product socket. suite get Yes the good of get Many these of we just delivered some. for the Wi-Fi this they're have used stations, share, here the on outside RF that I mean are Others, not X going on product deliver we in yes, I and ultra-wideband.

because but mix, it's do really still. there's is answer yes, more need the that So we to

Christian Schwab

answered. Thank questions you. my other Most been great. all Well, have of

Operator

with Davidson. our from Diffely question And Tom you. comes D.A. next Thank

Your open. line is

Tom Diffely

Great. Thank good you and morning.

the more question one So RF. on XG

driven business the RF by in pieces, you? cell how guess the underpenetrated contactor? So of over the tester, for just inside order I is the seller segments the of which the full handler, versus those your best much other of words,

Christian Schwab

majority separate In some as But So without tester here, and pieces. numbers, not. they're have--the Christian completely is selling together. in handler the we're business Actually, the and still handlers in cases separate. on the selling many of being our today [Indiscernible] RF testers we cases, they come

customer the been of integration to to RF value time us the from to it quarter, have production really a recognize And we in the matters production the particularly as bringing an the in yield. promoting. really get to to That solution simplifies did third the customer essentially complete and get We mobile space.

in stiff You have of have in and you probably is of a device front life measured a cycle you a and competition. years, significant couple ramp that

that production important. to fast is incredibly getting yield So

to of the be today take that I here, finally customer on to RF, other in hope OSAT individual our a table got few segments on to quarters. cell. customers. sort recognize complete But we've proposition and bring again, same So tester a sale. We're with pieces, value and to working sales the to only that an not that handler, but And complete complete, the of future not are like in here contactor as able separate majority different

Tom Diffely

already then Okay. then. I get already it sections that, with that contactors have the tester, into a an opportunity guess that handler there's And then have going along sounds to like the a

avenue growth for So, contactor it's you a forward? nice going

Luis Müller

Yes.

selling of something to selling opportunity. we customer million We on the next order year incremental think of that that package. revenue And basically. sell more have--we there's customer, hereof then $XX have something another We that of adding a complete $XX a yet chance million with by the or to don't quantified

Tom Diffely

get like guidance, model model only above points that model. points of XXXbasis truly your maybe upwards. It points And be, it's not or above the XXXbasis what XXX from your basis about the Great. when Okay. so. maybe XX% should EBITDA, you might That's Jeff, then, look the comments that it's adjusted part sounds earlier at the

Jeff Jones

out the Tom. right. And have on working we're of should now. that's it of before model right, year. refresh Yes, We a That's the the end

Tom Diffely

it. for Look time. your to Thanks forward great. Okay.

Operator

with question Our from [Operator comes Co. & you. Charles Shi Needham Thank next Instructions]

Charles Shi

line my I dropped. has if apologize. question my margin. apologize, really really My to first already going answered, is was back question I And gross been the

some of mix driven the absorption. from you probably lower in kind products? model, higher fourth from not base, some much the for about going is product handlers, auto, Like onetime line and item greater indicate of those the quarter, line margin growth quarter, shift the by is the get I if with you Does in mid-term the the for quarter. probably will the cost revenue your a that the understand of of there relatively the so much get demand that pretty of the would your there fourth there mentioned, third auto in third guys guided is think which no on surge upside model a long-term things better quarter I You but fourth gross quarter, margin and customers.

Jeff Jones

Yes.

right. You're

You're right, Charles.

mix I well, some, it forecasted. have on think the right you different we hit was than there there's head. what QX,

of in obviously, recurring indicated down of drop margin the quarter-over-quarter basis. handler related on systems. Some in bit mix mentioned, the that We the that that a we will systems, to but a Luis you that revenue bring the see pickup of recurring bit delivered. a with blended more as a a big revenue, And

head. right So it you've the on hit

Charles Shi

thing is business. side next the maybe the about So really the RF tester of

asked. person person, already I other think one

but sort of and the quarter little for You be XXXX bit tester quarter, the will years, the with upside third of RF Are the expecting obviously, year next couple for for said fourth still strong possibly side? you difficult. XX% growth year-over-year the into next growth the in a XX% comp

Luis Müller

a So growth in year. I test we don't test a for XG technology year. do next out into X particular in to for phones reasons. expect number deployment know in that Nevertheless, see RF growth next of XXXX mentioned still we We're RF continued probably actually yes, doubling

is smartphone next to forecast, market also unit growth forecast In now year. for addition

continuing mentioned in after elements deployment. the tester an also think growth are introduce I go we effect RF and compounded I of of front-end the that So products to other new is that IC. expected RF

that increment that's revenue. X said, Each those I to $XXX to X market As I segment million about $XXX to going million about to next our we years. the growing design wins, mean over segment this market of get addressable

Charles Shi

of So about the the the question side really next business. automotive

equipment proceed sort of growth were automotive we bit you we unit So a semis are recovery expecting to the today forward like little should of recovery. pull the because see were surprised of the automotive seeing

applications the why cycle management there of technology there? handler here. earlier-than-expected some of recovered. or to some the For there now? really targeting the, are in maybe the some subsystems better refresh for components are technology upgrade recovery waiting of So going unit some now thermal needed you instead And are new the getting Maybe example, are on cut

Luis Müller

Yes.

next correct. question happen to has it's, Your to were late We so answer, with year. surprised. early automotive QX mid- bit the or QX recovery even To were of you're a already the you, Charles, expecting we be honest

has market. also an is it mentioned managing we technology where to correct you're has to, thermal, sooner have in come hitting for do a dissipative the or pivot automotive time, At thermal So And here earlier actually processor as devices. than the dissipative control I thermal, the of with expected demand that market much this question, temperature ourselves. to we same testing in

installed the automotive So we're market. that today. control base we're where is applications technology selling thermal active handlers. They finding have And technology cryogenic in change that now capacity our on tri-temp a don't

automotive component is happening the XX%. yet, dropped new I'm utilization out, we're still or a are on And definitely here they is you call not for a ramp, were I products. there automotive. but below in So technology as earlier, said seeing if sure Because in

shift. So it a is technology

Charles Shi

the XX% customer Maybe based know my quarters, you how for one tester, moving on testing see with do their coming of particular customer last apparently you that testers, is of modular into your modular your IDM have the from a leading you testing and And a some impact business? question, see logic customer, in-house really I how couple XX do is don't of trend that along?

Luis Müller

we're weakening no customers, for interest of in active to I from is going and same business in quarter-over-quarter same traction segment. technology. customer, end for this know the So GPUs see continue don't pretty next microprocessors some year, other processors business staying robust there seeing that there year. the market much our level that what's control exactly talking particularly of but to account at network through At time, happen about on the and that thermal the and we

a too segment up opportunities So XXXX, quantify actually the new may it's in but them. for early some open little computing and us talk to

Operator

the And to speakers showing back at call further like time, not to any any I'm further now questions. your turn this remarks. for I'd

Jeff Jones

Xnd. you. Cohu knowledge December more let off, for Thank an and provide be conference know our before and hope products, you we I strategy growth. in-depth about I'd differentiation you join with will conference And will hosting investor a gain This markets you on analyst that opportunity to like to Cohu's sign virtual and us. can

CEO conferences Midwest we on on look during the December today's meeting In joining December QX a and November XX, XXth Annual conference. number investor you. forward we'll upcoming you thank for XX are D.A. in the Davidson participating XX Investor and XX.So be an the Cohu Summit you Conference call, and the Growth addition The on at to to with of Conference meeting conference, would Stifel virtual and welcome with conferences

Operator

participation. and call. your today's for you gentlemen, conference Thank concludes this Ladies

disconnect. a have all may good You Everyone, day.

Cohu (COHU) 1 Nov 202020 Q3 Earnings call transcript