COHU - Earnings call transcript Q2 2024

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Operator

Good day, and thank you for standing by. Welcome to Cohu's Second Quarter 2024 Financial Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to Jeff Jones, Chief Financial Officer. Please go ahead.

Jeffrey Jones

to results call and welcome second discuss and XXXX quarter third afternoon, our to conference Cohu's Good quarter outlook. by today joined our CEO, and I'm Luis President Muller.

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

to Now the harbor. safe

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

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

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

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

Luis Müller

Good afternoon.

consumer, declines XX% offset computing this automotive, with cycle. recurring with split and systems. gross to XX% line although quarter of mobile. $XXX guidance the we in non-GAAP markets, by sequentially revenue navigate increased balance, nearly the million industrial Revenue results semiconductor in were and in Systems of Second continue optoelectronic as and margin of was trough approximately

new and larger strategy markets. and for product validation years soft conditions, on on over inspection This most wins semiconductor to inspection estimated execute customer The test of our our devices. systems. $XXX was award targeting X benchmark we continue deliver million a addressable award expand design developments an customer includes platform automation recent market notable well new Despite business to of Krypton, and metrology

also Krypton our is with software last aerospace which select productivity AI Combined is an automating DI-Core yield application. Cohu's for We of customers and manufacturing. delivering our inspection, suite, back-end second a quarter part while higher had customer for push Krypton enabling

Putting revenue metrology applications driven market the over this midterm, was grow primarily $XX add million segments other Cohu's prior value $XXX into we inspection inspection. targeting our during this semiconductor to up expanding cycle mobile million where about to the We're to and perspective, by customers. business to can

We configuration a tester Taiwan. leading quarter test also business Chungli, our a X Diamondx our from Taiwan. another Diamondx And in mixed-signal and from tester We good RF in in for OSAT IoT at order IC company. a had fabless received placed to Taiwanese subcontractor test Diamondx a first leading the subcontractors selected devices

road the application enables tracking map to to efficiently products expand plan Diamondx broad tester positioning We their cost-effective the as customer that footprint, are test platform the decade. customers coming in a to

strategy, of development we the test new of instrumentation. in announced support growth June engineering Penang design In of this center for opening a in

carbide to power near-term revenue new probe While systems products, have in customer is pleased the subseasonal our automotive test card. market interface a cStrider we for landed utilization impacting are and for silicon both major

is carrying technology, enables needs probe Cohu's in power horizontal expanding high power durability carbide. current MEMS of offering improved technology temperature. Cohu's capacity The product such a newest to testing performance semiconductors testing. test utilizes semiconductor multisite pressure CStrider at meet with enables card and as enable technology designed silicon and high-voltage to for This the

drive interface us to about journey. at penetration to Xcerra of acquisition XX% points Cohu's XX% Last Our results more X the of or goal average since revenue than of this has X-year systems. higher placed started X penetration a been we almost or ago quarter years when

applying have effectively environment, increase delivering of been quarter. in R&D market improved to past same soft lowering the second sequential preserving gross the first expenses, over and a investments. test in cycles cell we're diligent playbook a the while row for margin XX%, Estimated now a utilization this X-point has In critical strong quarter

it to expect in computing capacity the triggered to X orders XX% quarter-over-quarter up see test improvements, to is has broad XX% we utilization, be and that up encouraging Although XX% around that's to mobile points points utilization. sequentially cell particularly been X

comes point X The at tempered June. XX% to end down positive news quarter-over-quarter by the automotive of utilization

the indicates that a test in focused XXXX. that the see customers analog half Cohu's optimize improved data more put pace market in developments. to ever starting the at of largest expenses cell meantime, we're cash a in semiconductor recovery utilization, product are will on likely mode In industry innovative of and wins the design now first execution than carefully flows but managing to Our

further Jeff quarter turn me to over Let it results details Jeff? and second now third on provide to quarter guidance.

Jeffrey Jones

Thanks, Luis.

included financial and of through our I and to release that non-GAAP are please accompanying measures, and which QX including my presentation, walk other QX guidance, the investor located note to the I'll figures. earnings about follow, comments results in Investor disclosures, Information Before the on reconciliations the website. non-GAAP refer are that the non-GAAP GAAP page

represented QX systems revenue total in financial QX Now line and revenue stable our Recurring delivered QX. XX% is revenue with Cohu the revenue, and guidance. results. of consumable-driven $XXX.X profitability million. which largely in was than to revenue, turning more

sales. for second than accounted of quarter, customer no XX% more During the

driven margin by resilient costs. for lower in guidance and than was Operating business. gross expenses QX by million $X.X by line recurring labor-related XX.X%, lower Cohu's driven QX and $XX.X and were labor million approximately with guidance

of approximately income non-GAAP $XXX,XXX, loss was currency EBITDA of was adjusted and X.X%. quarter breakeven, $X.X a income, and net million. Second operating approximately foreign was expense interest Interest

loss in valuation from ] with for loss tax no loss. to was consists second income $X.X tax provision a due pretax against QX U.S. the EPS assets. quarter QX deferred The allowance but [ $X.XX U.S. profits foreign on expense reflects of our the tax of the foreign Non-GAAP million tax combined a profits benefit

Now operations flow by $X.X during million moving $X used due in QX positive to cash revenues. generated $X decreased balance Cohu stock. to from common to despite of million cash $XXX the shares million investments repurchase sheet. trough of million mainly to We Overall and XXX,XXX QX

$X our our to to support automation strategy through expand Overall, with our interface growth operations our opportunities $X remains businesses. factories program. our related in CapEx share and balance in with shareholders markets sheet investment Philippines technology served strong portfolio repurchase in return QX capital was to supporting for and million million, approximately Malaysia, and to and the line Cohu's

weakness Now $X to outlook. plus continued million, historical We're remains reflecting to facilities of And million, cell quarter-over-quarter, our customers end threshold guiding $XX capacity. production although the range or test for add increased moving QX customers' the test utilization minus below QX markets. to revenue be across it in at more

high-margin profitability financial margin resilience revenue better Cohu's is consistent products cycles. this to than cash the in provides and level target due forecasted adds at our QX to model differentiated recurring industry to part flow stable approximately and of be XX%, which through business, gross

infrastructure and our device factories' recovers market expect with revenue a better broader We with gross semiconductor again increase recovery of when margin our costs. absorption to

Operating expenses developments. reduction million are to $X due certain projected as QX about approximately primarily for a quarter-over-quarter and labor to product million optimizations decrease to $XX completed in we

the action have we noted As navigating through without on taken expenses product prior earnings to new cycle. calls, I sacrificing of trough this critical reduce investments while operating

a in we're second to average As operating per half million now the this $XX of result, year. expenses modeling approximately quarter

foreign impacts, at of current to be interest interest rates. expense We're income, approximately interest million currency projecting and QX net $X.X

We X%. expect to QX EBITDA be adjusted approximately

tax to The The million QX tax markets shares. this expect approximately the foreign navigate without non-GAAP be share from Until cycle. profile benefit of expected basic to million U.S. provision approximately provision count XX loss. we expected on profits be through a QX as is we similar recover, $X.X tax is for because

open now to and remarks, questions. call our concludes the That we'll

Operator

[Operator from of Instructions] will question Our come line with the Stifel. Brian Chin first

Brian Chin

color first like XQ and and a in markets I mobility questions. can little outlook revenue guess key the few equipment across also automotive? recurring A you industrial versus on by just provide

Jeffrey Jones

the recurring Brian, versus I'll systems. provide

for QX, in we're to So XX% expecting systems. recurring XX% revenue, of be the about

Luis Müller

Yes.

you can look Brian. at think the I presentation,

automotive, We systems of X%; stronger X%; have a X%; -- out and industrial revenue by it the the revenue distribution markets came consumer, as X%. by computing, in at total -- followed mobile where percentage the

Brian Chin

for do similar expect a composition those markets? And like in you QX

Luis Müller

mobile No. computing we When markets you look the in of automotive. sort and strengthening demand saw and continued weakness in forward,

the to is forward up what get So climb maybe mobile closer and computing I going the will segment. think ladder you see

Brian Chin

Got it.

And Just for higher I'd Do utilization retirement base. been cannibalization test after lower of operating imagine a or years, installed many some utilization at not cell your anticipate me. year-end? maybe more couple trending quarters of there's for some you if into

to you to handler into you start As revenue do are seeing spares visibility tick next of that or sort test you XQ precursor anticipate trend? And the half maybe pickup of year, in shipment first a have revenue that kit up? any

Luis Müller

Yes.

there. So questions multiple

be venture goes, of quarter at I typically to perhaps flattish model a seasonally that or utilization that. lower up don't the point the As and end utilization for is don't of Brian. far say considering year to year. the we demand, sitting X will utilization, have that really end forecast as would But XX% a a We by for

computing that's on takes here. between and mobile It front. goes on and the improvements and puts utilization in automotive where So the from all depends really

your of in have you equipment the at which that because have suboptimizing right don't even the quite to of of parts, run expenses. of that happen equipment. much spare where are were, we're production, of interface of negatively conserve cannibalization seeing certainly cannibalization that to they question they what other about certain honestly, forgot sales they think as but how impacts customers, sort the that our need customers negatively I has And now elements has and sales I trying impacted impacted utilization products are talked simply

we'll first thing in signs We expect a demand in demand spares -- that real equipment. increase we the be before first surge a will see see the

have We in second not the quarter. seen that

Brian Chin

auto, Yes. market industrial that multiple-part my declines companies, in do much And just there. of and the How memory to mobility year even you double-digit sort handler Got relation year. this ex test part like the something down see of maybe guess market ATE? clarify to pointed in the they this test it. question to -- ATE I

because ask I maintenance rates like also that But these sub really maintenance levels. look or even run equipment

I this I year? following bounce And imagine so, handler was the that mean, deep last when low, was was market And it back. market maybe what maybe pretty the the XXXX? trend was year the in a

Luis Müller

don't I it. but Yes. maybe I have specific have don't does, a year-over-year, Jeff

think tips second. think I is handler think -- But it for about the it I in here this market. a

I the of think we yes, the into XX% it's It's in perhaps actually sequence -- long last lasting definitely year-over-year fairly kind quarter-over-quarter today. middle where since teens a decline, you of about it's now think if lasting in sort the year are double-digit 'XX. of decline even

it's have a we prolonged sort So look at see on test if even test and now go XX%, XX%, right basis space. you XX% cycles, drought not handler like of revenue having uncommon you a year-over-year are up in to the the test when

that with is And discussion mobile well as the the automotive near now then is right general corner 'XX. in in don't for is the market of of term, of I the for the recovery turn think prediction where you than here what market. said, and the in particularly the positive, other computing a the XXXX But some on industrial customers -- wildcard with indicatives have beginning

Operator

Cole the Ross come of will from question & next with Our line Company. Needham

Ross Cole

have mentioned you So had And know qualified. X with I had Krypton, been that mentioned Krypton customers. previously, had you you new

Or you mentioned? So the it same? is the the customers are qualification separate these from had previously

Luis Müller

issued at the release here June press a in automotive a customer of a We Europe. qualification major end at about

we're Now talking about X.

June, also that also part coincidentally, second at One had the qualified of end we the of that was an release, a European one customer but customer press is European customers. of both very X these Krypton

of customers automotive the release for part in the of said, starters. So one press June. application aerospace in one the I qualify, one middle X were did an of for And we have like we space, these

Ross Cole

industrial as sounds and I a little well. second you Great. expect longer. a like question can continue auto if And then still It weakness to ask

that it first? to mobile to recovery -- said? You're seeing the place recovery start expecting you around PC you the taking taking were sounds first the like And half start mode 'XX,

Luis Müller

the turn the this mean -- we're fourth see the mobile, demand here Computing and we're in seeing year will we and the going already. see expectation quarter. I to still revenue

is be automotive continues unfortunate to that weak. the the think I to counter

the the the in kind you year. in this automotive to improving so of quarter And net for with demand weakness of mobile have fourth computing and out

Operator

line will Our with question Instructions] Duley [Operator next Securities. come Steelhead of from the David

David Duley

from talked bit new of business couple piece about little more was opportunities might carbide you win, guess you wondering silicon power won for cards me. is a elaborate I probe think A the carbide which the silicon card of why questions in if I are I a and you for of on guys. you a business. what probe and kind

Luis Müller

you're line is a probe for us. power a This new Yes, -- correct. new great product card a And completely is question. --

business. carbide This contactors been has including have successful been actually. We and differentiated industry for supplying power silicon a business for a us, the

known bring into a singulated us customers to environment, good the probe And environment. asked a die, sort card in what of we're test doing die probe have basically

customers exactly done the have we've asked. what So

And have customers PO. behind mode. in qualified the product, it initial And other an qualification X has customer placed the first right we

excited So high solution bring multi-size devices pretty we very high testing a from very believe because to current, we're that voltages. to is differentiated you customers' of quite a allows do here it feedback that at new

David Duley

could either guys? help opportunity understand us of the you is you what be market might size what or And this for the

Luis Müller

I yes. too. asked question, recall yes, Yes, that you

No. spending customer Yes. year. million about about We're see this -- Sorry particular we broke that. in, $X that at looking a we being their

can let's of So get. how see that much we

David Duley

topics to Okay. And Diamondx. changing then the

IoT, guess. in signal win another I win think and mixed I a mentioned you

Luis Müller

Yes.

David Duley

do Diamondx -- maybe help your understand, is all help for you think of you expansion again, opportunities same of TAM either the guys? in in opportunity detail. question or how the us you Appreciate is big the Can platform the total, the

Luis Müller

in Diamondx Frankly, mixed-signal have be Yes. little side. we This that leading configuration one. more a not at -- opportunity sort that a is one, to precision But Taiwan. vague have in OSAT I'm on a this it going the a to of it's much there's

to to was selection are time. for tester that into million pinpoint target of things The that largely it's business. difficult by company will this us tend or little We this Whether it a fabless be a not, driven that of $X OSAT. chunks sort at

And fabless then chunks. story in other was a $X application, RF company. OSAT RF one Also, same and the our also We IoT by at here. device Taiwanese Taiwan target million on an driven

in at the know, you this its moment. shape As RF market not best is

at So ] as next that I we're looking opportunity an million a for $X think [ into byte year.

Operator

of Our Popuri next question will ] Riley. come from the B. Mayur [ line with

Unknown Analyst

Craig pick we look that for is the is to kind at of in of shape when a calling I'm what recovery, like can see can are Riley. leading B. My recovery we and how take starting just the eventual indicators some up? that at question to from look

Luis Müller

Yes. at market market driver. And Not by It's look end one question. a monolithic you've every semiconductor got market, right? good realistically, goes to tandem. It's not it in or market

seen but GPU comparing have has obviously, AI several the much not been -- or that for on benefit quarters the we've for DRAM for center just data seen the few and of a Cohu, application. market a that, seeing HBM That now. rise we're going So quarters with now

mobile Cohu market. memory computing market today. now shoots that, of some with to green Reminder, to we're of in in doesn't starting see Along participate show recovery. We're the started seeing the signs sort server

quarter. some said I As revenue the materialize before, that in of we see fourth

big starts is at we're think behind still for to customers point question does is and on us recover? I QX based a included that comes story. What is And likely probably what automotive be XXXX mark that industrial with today, seeing conversations to the

is automotive. because that's Cohu very Cohu's important largest market And segment for

last be last down the was will come the up. naturally come in cycle automotive and this to So back to

understand. mark, second it Question year, is will to what we're quarter, is first next happen when that quarter exactly trying

a So going to next market segment go through segment over market but started, probably recovery has the phases by year. it's

Operator

to turn call remarks. Jeff the like That concludes I'd session. to back for closing today's Jones question-and-answer

Jeffrey Jones

Conference Thank few are on XX, on Citi the August City we'll Evercore Conference sign New September in Conference the on conferences and in Needham they mention XX Chicago also I'd on over that Conference in to months. next X. you. in be York August And XX, some participating like the Chicago And before the Virtual Jefferies we the off, August

So with or at if research know me a you're let of please us meeting. reach conferences, interested to in any meeting the respective to schedule those out analyst

So thank you call, joining look today's for with you to soon. speaking we and forward

Operator

for you Thank call. conference today's concludes This participating.

You may disconnect. now

Cohu (COHU) 31 Jul 242024 Q2 Earnings call transcript