COHU

Onto Innovation surged 6% Tuesday and is up 85% year to date, riding AI-driven demand for its HBM and advanced packaging inspection tools. Camtek's record $133 million quarter and $600 million in YTD bookings, plus NVIDIA's $500 billion AI infrastructure financing deal, confirm accelerating demand across the semiconductor supply chain. It sounds nuts, but SoFi1 is giving new Active Invest users up to $3,000 in stock for a limited time, and all it takes is a $50 deposit to get started.2 See for yourself (Sponsor) Shares of Onto Innovation (NYSE:ONTO) are trading higher midday Tuesday, up 5.9% to $308.51 from Monday's close of $291.35. The semiconductor process control name is riding a positive AI supply chain read-through from peer Camtek's blowout quarter and a broader bid across the group. The primary catalyst is a direct read-through from Camtek (NASDAQ:CAMT), which reported Q2 2026 results on August 10, 2026. Camtek posted record revenue of $133.24 million, topping the $130.19 million consensus, with non-GAAP EPS of $0.78 versus the $0.76 estimate. The bigger tell for Onto investors was the order book. CEO Rafi Amit disclosed that year-to-date bookings have crossed $600 million, with deliveries stretching into 2027. Camtek guided Q3 revenue to $158 million to $160 million, roughly 20% sequential growth, and flagged Advanced Packaging revenue growing approximately 70% between Q1 and Q4 2026. Amit noted the surge is driven by AI-linked HBM memory and chiplet architectures. That is the same tailwind powering Onto's Dragonfly and Atlas platforms. Camtek is running into strength that Onto had already flagged in its own May 5, 2026 Q1 FY2026 8-K filing. Onto delivered record revenue of $291.95 million, up 9.5% year over year, and non-GAAP EPS of $1.42, in line with estimates. Advanced nodes revenue climbed 13% sequentially. SoFi Active Invest is offering a limited-time promotion. Open an account, fund it with $50 or more, and you could receive up to $3,000 in complimentary stock for Active Invest accounts. See for yourself by clicking here now. (Sponsor) Management guided Q2 FY2026 revenue to $320 million to $330 million, with non-GAAP EPS of $1.65 to $1.73 and non-GAAP operating margin of 28% to 28.6%. The advanced nodes segment is positioned for roughly 25% full-year growth. CEO Mike Plisinski pointed to the Dragonfly G5 inspection system landing qualifications at both a 2.5D logic customer and an HBM customer, alongside a second logic win for the Atlas G6 metrology system in gate-all-around. Those are the exact process nodes where AI capacity is being built. Sentiment across the AI supply chain also benefited from reports Tuesday that NVIDIA (NASDAQ:NVDA) is partnering with Apollo, BlackRock, and other Wall Street firms on a financing platform reportedly aimed at mobilizing more than $500 billion in third-party capital for AI infrastructure. Wells Fargo maintained an Overweight rating with a $315 price target, and analysts described the move as reinforcing NVIDIA's position and turning compute into an investable asset class. If that capital flows through into more data center buildouts, the metrology and inspection tools that qualify HBM stacks and 2.5D logic packages, Onto's core business, sit directly in the path. Onto's move today extends what has already been a strong run. Shares are up roughly 85% year to date and roughly 183% over the past year through Monday's close. The market cap sits near $15.14 billion. Camtek, for its part, is up roughly 49% year to date and jumped 13.1% over the past week heading into today. Other stocks in the semiconductor and advanced packaging space are also rallying today. Cohu (Nasdaq: COHU) is up 4.8%. The company offers optical inspection and metrology, which gets a read-through from Camtek's results. The next major data point is Onto's Q2 FY2026 earnings report, where investors will be looking for confirmation of the $320 million to $330 million revenue guide and any commentary on advanced packaging order flow that would echo Camtek's $600 million YTD bookings tally. Between now and then, keep an eye on whether today's gains hold into the close and whether the stock reclaims its recent highs. Looking to grow your money but unsure where to begin? SoFi Active Invest is offering a limited-time promotion—open a new Active Invest account, fund it with $50 or more, and you could receive up to $3,000 in complimentary stock. From $0 commission trading3 to fractional shares4 and automated investing, this app is designed to simplify investing for everyone, whether you’re just starting or already experienced. Its easy to sign up and secure your bonus.(Sponsor) Contact [email protected] for any questions or corrections.

Image source: The Motley Fool. Thursday, July 30, 2026 at 4:00 p.m. ET President and Chief Executive Officer - Luis Antonio Mueller Senior Vice President and Chief Financial Officer - Jeffrey D. Jones Vice President of Strategy and Investor Relations - Matt Hutton Operator: Good day, and thank you for standing by. We Welcome to Cohu's Second Quarter 26 Financial Results Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. You will then hear an automated message advising your hand is raised. To withdraw your question, please press 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Matt Hutton, Vice President of Strategy and Investor Relations. Please go ahead. Unidentified Speaker: Thank you, operator. Welcome to Cohu's second quarter 26 Earnings Call. Our agenda begins with Luis Mueller, Cohu's president and CEO, who will provide a business update followed by a financial review and outlook from Jeffrey D. Jones. Our senior vice president and chief financial officer. Following our prepared remarks, we will open up the call for your questions. If you need a copy of our earnings release, it can be found on our website at cohu.com or by contacting Cohu Investor Relations. A slide presentation accompanying today's call is also available in the Investor Relations section of the website. Replays of this call will be accessible via the same page after the conclusion of the call. During this call, we will be making forward looking statements that reflect management's current expectations concerning Cohu's future business. These statements are based on the information available to us at this time. But they are subject to rapid and sometimes abrupt changes. We encourage everyone to review the forward looking statements section of our slide presentation and the earnings release as well as Cohu's filings with the SEC, including the most recently filed Form 10 k And Form 10 Q. Our comments are current as of today, July 30, 2026. And Cohu does not assume any obligation to update these statements for events occurring after the call. Additionally, we will discuss certain non GAAP financial measures during this call. Please refer to our earnings release and slide presentation for reconciliation to the most comparable GAAP measures. Now I would like to turn the call over to Luis Antonio Muller, Cohu's President and CEO. Luis? Luis Antonio Muller: Good afternoon, and thank you for joining Cohu's second quarter 26 Earnings Call. We delivered a strong quarter with sales of $149 million up 38% year over year and recurring revenue of approximately 53% of total. These results reflect solid execution across the company and continued customer adoption of our solutions. Our Q2 results show progress in areas where we have focused investments. Advanced thermal test handlers for AI processors, HBM inspection, flexible ATE platforms for power and connectivity devices, and software analytics. Cohu is benefiting from durable demand drivers in AI infrastructure and edge computing, where customers are investing to address increasing power levels, production yield, and increased factory productivity. Estimated semiconductor test utilization and improved sequentially to 80% at the end of the second quarter. Typically, a turning point for capex by our core IDM customer base. The strongest segments were computing and industrial, with test utilization in the low 80s, followed by automotive and mobile in the high 70s. Bookings generally follow utilization trends. And in the second quarter, computing led with 46% of total system orders, representing an impressive 150% increase year over year driven by Eclipse growth in high performance computing. With utilization above 80%, industrial was the next largest growth area with orders up 87% year over year. The balance included consumer up 29% year over year, mobile essentially flat, year over year, and automotive down 24% year over year in a segment that continues to struggle in this recovery cycle. Let me now review the quarter by product lines starting with the areas where we see the strongest customer traction. Starting with our test handlers. Building on the momentum from Q1, we continue to expand our position in high performance computing through the adoption of our Eclipse Handler, enabled by advanced active thermal control for extreme power, and next generation JetAc Max devices used in data centers. The Eclipse delivers a configurable thermal handler that can be used across multiple device generations, helping customers reduce capital risk, extend the value of their installed base, and support faster production ramps. Our high power thermal control technology remains a key differentiator improving task quality and first pass yield. During Q2, high performance computing customers also expanded adoption of Cohu's PACE prescriptive analytics software reinforcing our strategy to improve equipment efficiency and customer value. Separately, we are increasing our presence and infrastructure at OSATs in Southeast Asia to support fabless and hyperscaler programs as they move from qualification to production ramp. Overall, this momentum reinforces an expanding high performance computing customer pipeline that we now estimate at approximately $850 million annually. This includes about $190 million in qualified annual opportunity across 4 customers $250 million in active qualification across 5 customers, and approximately $445 million in early stage engagement across 10 additional customers. Based on this progress, we are raising our fiscal 2026 high performance computing revenue estimate to between $100 million and $110 million. To support this demand, we are working with supply partners to increase capacity and we are expanding our internal manufacturing in Malaysia. We expect this expansion to double output by year end and support another step up in capacity by mid-2027. Now turning to your inspection in metrology. During Q2, we shipped additional final inspection systems for HBM3, HBM4, and HBM4e devices to a US based IDM. With a strong forecast into the second half of 2026. HBM is the memory backbone of AI training and inference infrastructure. And we continue to invest to stay ahead of customer road maps into HBM5 and beyond. We recently qualified Neon at a Taiwan based OSAT establishing strategic foothold in a high volume outsourced assembly environment, where we can pursue additional advanced package mobile, and AI adjacent inspection opportunities. We also released a new vision inspection sensor, which shortwave infrared capability that detects inner cracks in complex silicon devices. This gives customers a step change improvement and outgoing quality for advanced packages and further reinforces Neon as a reference plot for silicon inspection applications. Moving to semiconductor test, Demand is increasingly tied to 2 AI enabling requirements. Efficient power delivery and high speed connectivity across edge devices, vehicles, industrial equipment, and connected infrastructure. These systems depend on precise power management to achieve peak performance while controlling energy consumption, heat, and operating costs. Customers are increasingly adopting gallium nitride power devices for their efficiency and power density advantages. At the same time, AI enabled devices require seamless connectivity. The industry is investing in both ground based and nonterrestrial networks, including satellite constellations and high altitude platforms that extend coverage globally. Together, GaN power and advanced connectivity represent an estimated $340 million annual addressable market opportunity over the midterm. During Q2, we continue to engage with leading power and RF customers on Diamondx configurations for GaN, mobile front end, and advanced connectivity applications. Switching to software analytics. We built on last quarter's momentum and moved from early production wins toward a repeatable pattern. Land a first deployment, prove measurable value, and expand within that account. This business delivered the first $1 million revenue quarter and orders increased an impressive 140% year over year. First, land and expand is working. Last quarter, we noted that a leading high performance computing chipmaker had committed to deploying our predictive maintenance technology across its test handler fleet. We are now progressing toward what is expected to become our largest software to a single customer,. With expansion plan during the second half of the year. Second, we are deploying DI-Core AI where the data lives. Semiconductor manufacturers operate under strict data sovereignty requirements. And most cannot send process, yield, or equipment data to a public cloud. In Q2, we advanced our on-site AI appliance, which runs modern AI models autonomous agents entirely inside the customer's network. With no data leaving the factory. These agents can conduct investigations across equipment, maintenance, and test data more frequently and at a lower cost than manual analysis. These deployments are important because they convert Cohu's installed base into a recurring software revenue opportunity while helping customers improve uptime, yield learning, and factory productivity. Moving to our interface solutions, This is a key element of our recurring revenue stream, about 19% of Cohu consolidated revenue in Q2. Our high speed interface technology continue to gain traction in silicon photonics test. We booked $500 thousand in interface solutions used in optical engine test and are pursuing additional customer engagements tied to emerging requirements for co packaged optical devices. In parallel, we remain focused on increasing share of our core semiconductor customer base, where new applications and replacement of incumbent technologies create opportunities for additional Cohu content. In summary, Q2 demonstrated progress across the strategic priorities we outlined earlier this year. Scaling high performance computing handler adoption, advancing inspection solutions, expanding Diamondx into power and connectivity, converting software pilots into production deployments, and broadening interface solution adoption into optical and advanced semiconductor devices. I want to thank our customers for their partnership, our employees for their execution, and our shareholders and supply chain partners for their continued support. With that, I will turn the call over to Jeffrey to review our financial results, and outlook in more detail. Jeffrey? Jeffrey D. Jones: Thank you, Luis. Before reviewing the second quarter results and providing third quarter guidance, please note that my comments refer to non GAAP figures. Details about non GAAP financial measures, including GAAP to non GAAP reconciliation and other disclosures, are included in the earnings release and investor presentation on our website. For Q2 26, revenue of $149 million exceeded the midpoint of guidance. Recurring revenue driven primarily by consumables represented 53% of total revenue. 1 industrial customer accounted for more than 10% of total sales during the quarter. Gross margin was 45.5% above guidance primarily reflecting a more favorable product mix. Operating expenses were in line with guidance at $52.7 million reflecting our decision to scale resources to support the rapid increase in high performance compute opportunities. Net interest income after interest expense and a $600 thousand foreign currency loss was approximately $1.7 million. The Q2 tax provision was lower than guidance at $2.7 million due to improved profitability in The US. Non GAAP EPS for the second quarter was $0.26 and adjusted EBITDA was 12%. Moving to the balance sheet. Cash and investments increased by approximately $9 million during Q2 to $498 million and cash from operations was $10 million. No stock repurchases were completed during the quarter. Total debt is $304 million and includes $288 million from the Q4 2025 convertible debt offering. Capital expenditures were approximately $2 million mainly for manufacturing machinery, and equipment. Facility improvements, and IT equipment. We are targeting total capital expenditures to be about 2% of revenue in 2026 including the capital expansion of our Malaysia test handler manufacturing facility mentioned by Luis. Looking ahead, we expect Q3 revenue to increase 14% sequentially and 35% year-over-year to approximately $170 million, plus or minus $7 million. The increase is driven by demand tied to the ramp in high performance compute opportunities, and continued recovery in our core business segments. We are increasing our full-year 2026 revenue outlook for growth over last year to approximately 35%. Q3 gross margin is projected to be approximately 45%, and for full-year 2026, we continue to expect gross margin in the mid-40% range. The rapid expansion of high performance computing opportunities has increased demand across our supply chain and production base resulting in longer lead times and higher input costs for certain semiconductors and specialty components. We are taking proactive steps when available to secure critical components to minimize impacts on our lead times, profitability, and customer pricing. Operating expenses are expected to be about $54 million. We intend to continue investing in resources to capitalize on the growing list of HPC opportunities and we expect quarterly operating expenses through the balance of the year to remain in the low-$50 million range consistent with our Q3 guidance. In light of expanded resources to support HPC related growth, our operating model continues to demonstrate solid profitability leverage with approximately 40% of projected sequential revenue growth expected to convert to operating profit. Net interest income in Q3 after interest expense and foreign currency impacts is projected to be approximately $1.6 million at current interest rates. The Q3 tax provision is expected to be about $5.2 million, and diluted shares are projected to be approximately 55 million, including 5.8 million shares attributable to the convertible debt. And of that amount, 2.4 million shares will be fully offset by the capped call but are required for US GAAP diluted EPS calculations. In summary, our 2026 priorities remain focused on supporting the R&D investments and production ramp required to secure multiple design wins in the compute market including AI data center infrastructure, HBM memory, and physical AI applications while progressively increasing EBITDA margin and free cash flow. That concludes our prepared remarks. And now we will open the call to questions. Operator: Wait for your name to be announced. Our first question comes from Krish Sankar with TD Cowen. Krish Sankar: Hi, thanks for taking my question and congrats on solid results and guidance. Luis, I have 2 questions. The first 1, just want to check you of your pipeline of $850 million, you said your 4 customers qualified Are those 3 HPC and 1 HBM customer? And the other 5 customers in qualification, are they all HPC? For AI handlers? And when do you expect that to potentially convert into revenues? Luis Antonio Muller: Oh, hi, Krish. Yeah. You are correct on all of your statements here. We have 3 HPC, 1 HBM on the qualified. Which review about $190 million annual opportunity for revenue. And then and then we have close to $200 million in the near term qualification here. So your question on the timeline, it straddles over months. To be honest with you. We have 1 customer that is right on the edge of giving us the, you know, the green light of being qualified. I think the data all supports it we do not have the official yet. We are already, planning on shipping a production configuration for the actual production INTERCEPT device, which is a next generation. You know, we typically qualify on an existing generation device so it can do a correlation to what they have with, other systems out there. But we are shipping the production configuration here at the end of August. To get it-- I do not know if the right word is certified. So we can go on with the actual intercept. So we should get a qualification pretty soon within a month, I would say. And then you know, I think the fifth 1 on the list we are looking at early next year systems that we are 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 1 on this on this bucket of in qualification. Got it. Very helpful, Luis. And then as a quick follow-up, you mentioned about getting traction in silicon photonics for the optical engine. Can you quantify how much that opportunity would be either this year, next year, the next few years? And is this mainly an insertion 1, or which insertion are you targeting? Yeah. Today, we are shipping interface solutions, not full handlers yet. We are shipping interface solutions for insertion 3. Which is the optical engine test. And that is where we commented here on prepared remarks that we booked in the second quarter. I think it was a $500 thousand order for Interface And this is a continuation of A business we started in Q1. We are shipping or planning to ship a qualification unit for insertion 3 by the end of the year with a handler We are also, demonstrating an insertion 4 configuration with a handler to certain customers that I do not really have a specific timeline for shipment yet. I do not know if it is going to be Q4 or Q1 next year. A little tricky now getting systems to go on qualification given the production orders that we are satisfying. I have not quantified we have not quantified yet the total CPO revenue in 2027, 2028 because we view it as part of the evolution of HPC. So it is it is embedded in the $850 million pipeline at the moment. Got it. Thank you very much, guys. Congrats again. Thank you. Operator: Our next question comes from Brian Chin with Stifel. Brian Chin: Hi there. Good afternoon. Thanks. Nice results and outlook, and thanks for letting us ask a few questions. Maybe the first question looking at this the multistage pipeline graphic you have in the slides, I think last cut, it was aggregating to $750 million. Now it is $850 million you maybe break down, what that $100 million increase is And also, I think part of this maybe is that recurring portion. Can you also maybe explain and break down what you mean by recurring? Luis Antonio Muller: Okay. Yeah. Hi Brian. Yeah. 2 separate things. On the totality of the pipeline increased to $100 million, by $100 million, it is really getting better visibility in the forecast. And I think we added a couple customers on the in engagement phase as well. But, we certainly have better visibility now on the customers that are in the in qualified or qualified, I should say,, the qualified portion of the pipeline. And, the numbers are bigger what they are giving us for next year than what we had originally estimated. To your question on recurring, there are really 3 components to recurring. 1 of them is device application kits. You know, you these device life cycles are typically 18 months in production, something else. Launches, and you gotta do a new device kit for that handler. The other component is thermal heads. Do not necessarily change the entire thermal head, but as devices grow in size, so does the required thermal head coverage over the die. It could be multidise. It could be actually even multi, skyline heights on dies. So that thermal head touchdown on the die has to evolve with the product evolution. So that is a that is an upgrade element of the system. You could also include a thermal head itself if the upgrade includes higher fouling. And the third element is, basically, the maintenance of the equipment. You know, there are, spares and consumables in the equipment. Part of that today, I guess, a 4th element that is a novelty here is the softer sale. As I mentioned last quarter, we sold, I think it was about $330 thousand a year. Subscription software. Into an HPC customer in conjunction with system orders. And that has a lifetime you know, through the product life cycle. I think we estimated, a few million dollars life cycle value lifetime value of that software subscription. So that would be sort of the fourth component that I forgot to mention, but it is part of recurring. Brian Chin: Okay. Great. that is that is super helpful. Also, in terms of the full year revenue guide increase, going from 25% to 35% growth, I think it is something like $45 million on the math there. You only increase your HPC forecast by maybe, you call it, $10 million to $15 million? And so, like, I guess, the majority residual there is all the kind of the core business. Historical core business for Cohu. Can you maybe expand upon kind of what you are seeing there in terms of improvement? Luis Antonio Muller: Industrial, obviously, is taking up Yeah. that is right Brian. Seeing industrial pick up. We are seeing the utilization rate overall pick up, and part of the growth there in the 0.55% here over the last 6 quarters or so. So it is it is really a nice increase But you are right. it is the core business that is coming back led by industrial. Or maybe if I can sneak 1 last thing in. Just from a supply standpoint, Jeffrey and Luis, And if I know that the qual the in-qualification bucket is not, you know, you know, banded within, you know, 2027 or a year. Interval even, but what are you sort of targeting to be able to get capacity to in 12 months' time or whatever horizon in terms of the Malaysia expansion? And kind of what, given what the business looks like in terms of the funnel again. Hi Brian. Frankly, that is a key question. Because as part of the, you know, 35% projected growth in fiscal 26 this year, I do not think we have much more room to grow in the HP side this year. We are expanding capacity between end of Q2 and end of the year. The plan is to increase output by about 50% over the next 6 months, and that is for the HPC handlers, specifically. Between now and the middle of next year, the intent is to increase output by a little more than 100-- a little more than 100% so double essentially the output or a little more than double between now and July June, July next year. And we do see a path to triple that output between now and the end of next year if the market takes us there. On the HPC side. So that is that is essentially we are evolving that, production pipeline in Malaysia and our factory in Malaysia in line with the expansion of the business in this customer pipeline that yields $850 million. that is the idea. it is a bit easier to do it in our own side. You know, we are expanding the factory in Malaysia. We already started the fitting out the production floor. We are looking at a new construction of a building essentially office building at this point. I think it will suffice that we can clear up production space on the current facility. To be ready probably in Q1 of next year. it is quite a bit more challenge on exercising the supply chain. that is what is taking most of the attention right now. That we can get, suppliers, and more suppliers to, support the expansion plan that we have-- that we have in place and being presenting here. Great. Appreciate the updates. Thank you. Operator: Our next question comes from Kevin Garrigan with Jefferies. Kevin Garrigan: Yes. Hey, guys. Congrats on great results. Hey. Your new customers and engagement just talk a little bit more about how those opportunities developed? Are these customers that are using competing platforms and are looking to switch And, you know, how much additional opportunity do you see beyond the current pipeline that you have So you mentioned $850 million I mean, is it pretty much sky's the limit at this point? Luis Antonio Muller: Well, there is always a limit. there is a finite number of customers out there. We are not really, engaged with all of them yet. And I think we are quite honestly fairly busy here Kevin, with the sort of the 20, sorry, the 19, 20 customers that we have on the list. there is a lot to do here. there is a lot of a lot of projects, a lot of applications and qualifications in work. Will we add more? Sure. You know, as these customers flow down this pipeline and, it is it starts to get wider at the bottom, we will we will start adding a few more at the top. But you know, you can imagine who the names are. Right? I am not gonna rattle them on a call. I should not. But they are essentially, the fabless and hyperscalers that are developing or have developed their own semiconductor GPUs or custom ASIC devices, network processors, you know, and their variety of names there, including, you know, tensor and whatnot that they have their own names for their custom ASIC devices. Right? So those are the cons constituents on this, on this customer pipeline. Kevin Garrigan: Got it. Okay. Yeah. That makes a ton of sense. And then can you just talk about the you mentioned higher input costs. Any specific components that you can kind of call out and know, are these components something that you expect to be, you know, a potential headwind for getting systems out the door at some point? Jeffrey D. Jones: Hey Kevin. it is Jeffrey. At the moment, it is mainly memory. Memory is sort of leading in the higher cost and longer lead times. And so we have taken advantage of advanced purchases and looked out over multiple quarters and made buys based on the quantities that we need for that time frame. So it is not it is not a, you know, an issue for Q3. And our guidance has taken into consideration all of the risks and potential constraints. So at the moment, we are we are working through it like Luis said, though, it is probably the biggest challenge at the moment is ramping supply chain. Kevin Garrigan: Okay. Perfect. Thanks, guys, and congrats. Luis Antonio Muller: Thank you. Operator: Our next question comes from Craig Ellis with B. Riley Securities. Craig Ellis: Yes. Thanks for taking the question and nice job on the execution, guys. I will start with some things that are just near term. You mentioned that we are looking for third quarter growth up 14% quarter-on-quarter. With HPC and some of the traditional businesses contributing to growth But can you provide a little bit more detail on the relative contribution of each as we look at this quarter's growth. Jeffrey D. Jones: Yeah. Hey. Hey Craig. it is roughly about 50% HPC driven and 50% core business. So about $10 million out of each. Craig Ellis: Got it. Thanks for that, Jeffrey. And then as we look ahead to the fourth quarter, remind us what you would think the seasonality would be a Q4&And then as we look ahead, are there any particular items we should be aware of as we think about more 1-off things that could be impacting the business beyond the third quarter? Operator: To answer the first part of your question, we have stated that we now see revenue increasing about 35% year-over-year. Jeffrey D. Jones: So that puts us in a range of about $610 million to $615 million for the year. And to get there, that would basically be Q4 sort of flattish To Q3. Luis Antonio Muller: Yeah. As far as seasonality Craig, utilization now, broadly hovering at 80%, right, in a couple markets here at 82, couple markets are at 77%, 78%. We are right at that threshold that you know, if we see a seasonality, Pull back, I think it would quickly accelerate again in Q1. We are not really sure exactly, how that is gonna play in Q4. So at the moment, we are we are viewing this core business kinda staying flattish going into q 4. As I mentioned before, I think I think we are kind of maxed out on the HPC side in Q4 as well. We are still building that capacity through the end of this year. So that is the positive news. We did get a we did get here in early Q3 a single customer order for $26 million again for our Eclipse 6 systems, for the HP market, and that is largely gonna largely gonna ship in Q4 as well. So that Eclipse output capacity is, is filling up quickly here in the fourth quarter already. Yes. You have got really good visibility on the fourth quarter. And going back to the comment on capacity and being pretty high with that relative to capacity, Louise. What are the what are the levers that you have that can give you some wiggle room in the 0.5% to 1% increase. Around midyear to the extent that you do have any? Well, I do not know if it is wiggle room, Craig. it is it is really a lot of hard work. From supply chain side and operations. Side with the expansion of the factory in Malacca. We are also doing a, a small expansion in The Philippines because that is where we build the thermal heads. So necessarily call it wiggle room, but I think we are on track right now. To, like I said, to really double our output between the quarter just finished and beginning of next year end of this year, beginning of next year. So really looking forward to being able to deliver a $200 million to $250 million incremental HPC $200 million to $250 million HPC revenue year or more. I mean, it depends. I think we have some wiggle room is more into next year where we could we could potentially triple the output as the market takes us there. Got it. Yep. Okay. So the step up is exiting this year to next year, not a year from now. Okay. Clear point. Thanks for all that help, Luis. Thanks, Jeffrey. You are welcome. Operator: Our next question comes from David Duley with Steelhead Securities. David Duley: Good afternoon. Thanks for taking my question. I am sorry to kind of continue along the HPC questions. When I look at your funnel chart this quarter of qualified customers, you have 4 for $150 million, and last quarter, it was 3 for $100 million. So there is 1 customer kind of adding to the qualified segment of the added up to about $50 million. I am kinda wondering when you look at the 5 other customers that are in Qual, how should we think about them? Mix of those customers? Are they all do I just take 5 and divide by the average there? Or how should we think about how each customer adds to the qualified SAM. Luis Antonio Muller: Yeah. Hi David. So we do have-- no. No, there is there is a bit of a range here. You know, we have we have customers that we view as 30 low-$30 million annual opportunity. We have a couple of customers that are likely to be individually $60 million annual opportunity. And, I am looking at a table here. And that is about the range, actually. it is a sort of $30 million to $60 million on a per individual customer basis. Okay. Thank you. You are welcome. You just gave us gave me 1 of my other questions, which is the way your capacity expansion is unfolding you will be able to double the revenue stream of your of your Eclipse high performance computing segment in 2027. Yes. In into early 27. And then from there, I think tying a little bit with Craig Ellis' question, we do have some wiggle room to expand further from there. And we will see how this funnel develops. And then we will drive that expansion in 2027. But for now, you just hang your head on We will be able to double the output we just finished in Q2 of this year. By the end of this year, meaning into early 27. Now remember, that is more than where we started in 2026. So the reality is if we are delivering $100 million to $110 million this year, we should have the capacity to do more than $200 million, probably closer to $250 million by the beginning of next year, all things being, you know, linear throughout the year. And from there, we can expand more in 2027 to, exit at a higher rate in 2027 again and are okay. And as far as just remind us who the key competition is for some of these slots and you know, Or are a lot of these brand new that, you know, where it is a jump ball, or is there someone that is kind of the incumbent with a lot of these customers? it is pretty much a single competitor, so to speak. I mean, you can you can claim there is a second 1, a 2nd competitor out there, but I would say there is primarily a single competitor, which has been the, you know, forever supplier at the, test subcontractor. it is a Han Precision from Taiwan. Has been the primary competitor in this space. And as power levels are increasing in these more complex processors. Right? All sorts of classification of processors. The management of power dissipation is becoming much more prevalent. And driving a much stronger interest by you know, like I said, the fabless and the hyperscalers into finding a solution to the problem. Which Cohu's Thermotechnologies, 1 big company here in The Bay Area said, Cohu's thermal technologies are sort of the best thermal in the market. Period. End of story. Let's figure a way to make this happen. Okay. Well, that is great to hear. Now just switching gears, final question for me is when you look at your core business, it kind of-- you obviously, you are guiding flattish. that is, you know, seasonality is being overcome by the return of the cyclical business, so to speak. And, you know, I think when I listened to the big OSAT in Taiwan's conference call last night, they were basically they uptick their growth rate for wire bonding core assembly business from 13% this year to 20% for calendar 26, and they expect that growth rate to continue. So I am kind of wondering and their utilization rates are also in 80%-85%, and the quote was we cannot keep up with purchasing equipment. So I am wondering what your core customer behavior is You know, there is a list of 8 or 10 of these guys. And they are not all some of them are automotive exposed. And so I think probably that those guys are not inflecting yet. But could you talk about the customers that are, and what their behavior is? Are they coming in and asking for big orders? And big slots and whatnot? Yeah. We are seeing the earlier inflection on the industrial space as we commented here. And yes, indeed. The ones that have inflected so far are coming in for the sort of traditional volume that we have seen in the past where they are ordering you know, somewhere between 10 and 20 systems in 1 PO. So that is sort of coming back to that original pattern that we are familiar with from the past. Predominantly with industrial based customers. And I think you can see from the earnings release which ones are kind of spearheading the return to business? Thanks very much, and congratulations on nice results. Thanks David. Operator: Our next question comes from Denis Pyatchanin with Needham and Company. Analyst: Great. Thank you very much. So I have a question about the HPC rates. So I think previously it was about $90 million expected for calendar 26. Now I think it is about $105 million so $15 million incrementally higher. Maybe you can tell us, is more of the upside coming from Eclipse handlers or the Neon HBM inspection systems? Luis Antonio Muller: Hi Denis. Yeah. You are right. If you pick up the midpoint of the ranges we gave before and now, it is really a $15 million increase. Note that the new range is also tighter. You know, we originally had an $80 million to $100 million range, and now we are we are calling 100 to 110. This whole increase is on the Eclipse HPC side and entirely there. Got it. Thank you. Analyst: And then I have a question related to some of these challenges with components specifically related to memory. So do you think you will be able to pass on some of these costs to your customers within the next say, 3 or 6 months, or will you basically have to kind of eat that into your gross margin? Jeffrey D. Jones: Hey Denis. We have just started conversations with customers. So I would say stay tuned on that. Thank you. Analyst: Well, that is it for me. Thanks a lot. Operator: Our next question comes from Quinn Fredrickson with Baird. Analyst: Hey, afternoon guys. Thanks for taking the question. Just on the cyclical piece, specifically on automotive, I think you mentioned in your prepared remarks that orders were soft there. It sounds like 1 of the few areas that was the case So what is your visibility on the timing of a turn in that business? Yeah. Luis Antonio Muller: Quinn, it is a it is a good question. I think that is a market has been a little bit more sporadic. We had if I am not mistaken here, we had a bit of a bump in the last 2 quarters in the automotive And then and then the last quarter, it kinda came back down a bit. Again. So I think it is been it is been bouncing around I would expect, frankly, that automotive would not be at 80% up until probably late Q1 or Q2 of next year. That will be my expectation. But like I said, it is been the 1 that is lagging a bit across, the end markets on the core business side. Thanks. that is helpful. Analyst: And then on OpEx, can you discuss just your ability to pursue the full $850 million HPC pipeline Would you be able to pursue that full pipeline at this third quarter level of about $54 million of OpEx? Or would there be additional investment you would have to make? Jeffrey D. Jones: That is the plan and the forecast at the moment is to stay at this. And we think it is a bit elevated from a prior model. But to continue to invest and have OpEx remain pretty constant at this at this level, about $54 million. So we think that is that is a good level that provides the resources necessary to capitalize on these opportunities. Luis Antonio Muller: Great. And just to help clarify as well Quinn, for you and for others, When we talk about the $850 million that is sort of an annual spend. Right? that is what we see these customers spending annually on this class of equipment, which is largely Eclipse for HPC. So if we were to capture the totality of this opportunity, you know, now, immediately, we would see an $850 million revenue stream next year. that is not the case. You know, we are qualifying over time. And we will see how this evolves. The market is also changing and growing, but that is to clarify that it is not $850 million over multiple years. it is 850 spent per year by the customers that we are talking about here. Right. that is helpful. Thanks. Operator: Our next question comes from Vedvati Shrotre with Evercore ISI. Vedvati Shrotra: Thanks for taking my question. The first 1 I have is so with AgenTake AI, we are seeing the CPU to GPU ratio changing. Right? We are seeing a higher CPU ratio versus CPU. How does this sort of play for you in the HPC opportunity? Like, where do you see how do you see how do you see yourself participating in this kind of shift? Luis Antonio Muller: Hi Vedvati. This is Luis. First of all, you are you are correct. We are seeing a much-- very strong demand on the CPU side Traditionally, I would say the CPUs would have been at slightly lower levels than the GPU, but that is actually changing. And, CPU power in test, I should say, is, it is really a approaching the GPU levels. How does it change? I do not know that it really changes. You know, the whole intention and purpose of our product configuration is to be flexible. And be able to straddle across applications without having to change the capital equipment. But changing the configuration instead, perhaps upgrading thermal heads, for different applications. So we do a pretty good job right now straddling both CPU and GPU and reusability of the equipment. So it does not quite matter to us where the market and that ratio goes because that is 1 of the fundamental value propositions of our Eclipse system. You can you can do both the thermal management at the higher power levels, but you can also use the same equipment at, straddling down to lower power levels and across different applications. Understand. So how about the penetration Like, there are 3 across the x 86 and the ARM ecosystem. Like, how are you thinking about the pipeline and the penetration of the customers? At the CPU suppliers. it is I mean, I would have to go count to tell you where we are today. I do not know at the top of my head. But I am not going to venture to say you know, we well, I am not gonna venture to say. I am going to say I would have to go count But it is, again, not that relevant to us. We have probably strongest shipments in Q2 that were maybe x86. Or maybe that is gonna be Q3 shipments. I would have to go look But it straddles across both Understand. Vedvati Shrotra: Okay. And then 1 last question. So on-- you talked about sort of the, you know, input cost and also alluded to your kind of the supply chain of shortages. So maybe can you talk about how your lead times have changed, in the last 3 months? For the Eclipse tools? Jeffrey D. Jones: Yeah. I mean, just for clarification, we have not seen any shortages yet. And, again, when we have got the opportunity to make some prebuys, we are doing it, and that is worked for us pretty well. However, these pre buys particularly on mainly on integrated circuits, are purchased at an increased cost. And so that there is the higher input cost. Although we have we are securing the supply, it is coming out a little bit higher cost. And as I mentioned before, we are just initiating discussions now with customers about how we pass that on. Luis Antonio Muller: And your Eclipse handler right now is I think the lead times are still in check. We are we are holding well to 13, 14 weeks. From receipt of PO. With that said, we have signals that the orders are coming. We have the customer forecast, and so we are getting ahead of it, so to speak, getting-- you know,, part of what Jeffrey just said. So when we get the PO itself, we can respond. Now like I said, we earlier, we got, couple weeks ago, we got, $26 million single customer order. Right? As you can imagine, there are tens of systems. We are not gonna ship all that quantity in 13 weeks, lead time. We have got a certain capacity per week. And that quantity is gonna fill up multiple weeks of shipment. So 13 weeks to the first system shipment, but straddles across multiple weeks from there. And, and then gearing up for the subsequent order from another customer that we will ship in the latter part of Q4. Understand. Thank you very much. You are welcome. Thanks, Vedvati. Operator: Our next question comes from Christian Schwab with Craig Hallum. Christian Schwab: Great. Thanks for letting me sneak in a question here. Great quarter and guide. I just have 1 question. it is been quite some time since we have been operating in our core business with 80%-plus utilization. And customers just ordering to add capacity Can you remind us historically when capacity is added when utilization rates go above 80%, and the demand environment looks to be continued, how many quarters or how long does capacity typically get added? We talked about initial orders kind of being, you know, 10 to 20, which was in line with historical norms for systems. But how long does that happen for? Jeffrey D. Jones: Yeah, we would say about 6 quarters is probably the typical average or call it a cycle. If and I have got this table in front of me and it goes back to 2021 and that was a pretty unique time frame in 2021 and 2022, and we happened to be above 80% utilization for 8 quarters or at least 7. So I think 6 is probably the norm. Christian Schwab: Great. Fantastic. And then, lastly is, you know, I know we started a few quarters ago talking a little bit more aggressively or about M&A. But given the fact that the core business and, you know, the AI market growth is-- well, we are, you know, chasing extremely strong demand. Are you still looking at M&A? Do we want to get distracted With M&A when the core business is so strong? Unidentified Speaker: Yeah. Hi. This is Matt. Yeah. I think you are right. Right? The number 1 priority is obviously execution. There definitely are opportunities to accelerate in some areas. Our growth areas are in HPC. And in software, and we will continue to look at bill versus buy opportunities there. But, yeah, I think you nailed it. it is execution and looking at other ways to possibly accelerate some of our growth areas. Christian Schwab: Fantastic. No other questions. Congrats on the strong results again. Jeffrey D. Jones: Thank you. Thanks, Christian. Operator: That concludes today's question and answer session. I would like to turn the call back to Matt Hutton for closing remarks. Unidentified Speaker: Thanks, operator. Before we sign off, I would like to note that we will be attending the following investor conferences over the next 3 months. The Needham Virtual Semiconductor Conference on August 19, the Jefferies Semiconductor Conference on August 24 in Chicago, and the CEO Summit on October 13 in San Francisco. If you plan on attending any of these conferences, please reach out to your conference contacts or let us know, and we will arrange for a 1-on-1 meeting. I am also pleased to announce that Cohu will host an investor day on November 10 in New York City. We will provide a deeper look at our strategy, and long term financial framework. Additional event details will be shared closer to the date. Thank you for joining today's call. We look forward to speaking with you soon. Operator: This concludes today's conference call. You for participating. You may now disconnect. Before you buy stock in Cohu, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Cohu wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $386,727!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,232,139!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 3, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Cohu (COHU) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Find winning stocks in any market cycle. Join 7 million investors using Simply Wall St's investing ideas for FREE. Cohu (COHU) just paired its second quarter 2026 earnings release with fresh third quarter sales guidance, giving you updated numbers to assess the stock after a strong year so far. See our latest analysis for Cohu. The latest guidance has landed after a choppy stretch for Cohu’s stock, with a 1-day share price return of 3.32% and a 30-day share price return down 30.56%. Year to date the share price return is 95.00% and the 1-year total shareholder return is 150.86%, pointing to strong longer term momentum despite recent volatility. If you are watching how demand for test equipment around AI and high performance computing shapes opportunities, this is also a good moment to scan a broader set of AI hardware plays using the 55 AI infrastructure stocks Cohu now sits almost 34% below the average analyst price target and close to 20% above one intrinsic value estimate. After this sharp swing, where does a reasonable fair value range really fall for the stock today? Cohu's most followed narrative pegs fair value around $60, which sits meaningfully above the latest close at $47.99 and frames the current pullback in a very different light. Read the complete narrative. Want the full story behind that fair value gap? The narrative leans heavily on faster revenue expansion, rising margins, and a richer future earnings multiple. The key details sit in the projections and the discount rate that ties them all together. Result: Fair Value of $60 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, Cohu’s upside case still hinges on cyclical end markets and customer concentration, so a slower auto or AI spend cycle could quickly challenge that 20% undervalued story. Find out about the key risks to this Cohu narrative. The most followed Cohu narrative leans on earnings and multiples, yet the Simply Wall St DCF result points in the opposite direction. On this model, Cohu at $47.99 sits above an estimated future cash flow value of $40.05, which implies an overvalued outcome instead of a 20% discount. Which lens do you trust more for your own work? For readers who prefer to anchor on projected cash generation rather than earnings multiples, it can be helpful to see exactly how those assumptions stack up in the SWS DCF model. Look into how the SWS DCF model arrives at its fair value. Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Cohu for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 55 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity. With Cohu split between clear risks and appealing rewards, this is a good time to move quickly, study the latest data and shape your own view with the 3 key rewards and 2 important warning signs If Cohu has sharpened your interest, do not stop here. Fresh opportunities keep emerging, and casting a wider net now can make a real difference later. Target long term compounding potential by reviewing companies that pass the 55 high quality undervalued stocks with quality fundamentals and prices that still look reasonable. Prioritise resilience by scanning the 81 resilient stocks with low risk scores, focusing on stocks with lower risk scores that could help steady your overall portfolio. Spot early standouts before the crowd pays attention by using the screener containing 19 high quality undiscovered gems and keeping an eye on underfollowed businesses with solid numbers. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include COHU. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

This article first appeared on GuruFocus. Release Date: July 30, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Strong Q2 2026 results with sales of $149 million, up 38% year-over-year, and Q3 revenue guidance of approximately $170 million, up 35% year-over-year. High-performance computing (HPC) pipeline expanded to approximately $850 million annually, with fiscal 2026 HPC revenue estimate raised to $100-$110 million. Recurring revenue reached 53% of total revenue, driven by consumables, software, and interface solutions, providing a stable revenue base. Test utilization improved to 80%, a typical turning point for capacity additions, with computing orders up 150% and industrial orders up 87% year-over-year. Software analytics business delivered its first $1 million revenue quarter, with orders up 140% year-over-year, and is expanding with a major HPC customer. Manufacturing capacity expansion in Malaysia is on track to double output by year-end, supporting future HPC growth. Gross margin of 45.5% exceeded guidance, reflecting favorable product mix, and operating leverage is strong with 40% of sequential revenue growth converting to operating profit. Automotive segment orders declined 24% year-over-year, and utilization remains below 80%, with recovery not expected until late Q1 or Q2 2027. Supply chain constraints, particularly for memory and specialty components, are leading to longer lead times and higher input costs, which may pressure margins. Operating expenses increased to $52.7 million in Q2 and are expected to remain elevated at ~$54 million in Q3, reflecting investments in HPC resources. HPC capacity is currently maxed out, limiting near-term revenue growth potential until the Malaysia expansion is fully operational. The company faces a single dominant competitor in the HPC handler market, which could intensify competitive pressures. Q4 revenue is expected to be flattish sequentially, as core business seasonality and HPC capacity constraints limit growth. Higher input costs for components may not be fully passed on to customers, potentially impacting gross margins in the near term. Warning! GuruFocus has detected 2 Warning Sign with COHU. Is COHU fairly valued? Test your thesis with our free DCF calculator. Q: Of your $850 million HPC pipeline, are the 4 qualified customers 3 HPC and 1 HBM, and when do you expect the 5 customers in qualification to convert into revenue? A: Luis Mueller (President and CEO): Yes, you are correct. We have 3 HPC and 1 HBM in the qualified bucket, representing about $190 million in annual opportunity. For the qualification bucket, one customer is right on the edge of giving us the green light. We are shipping a production configuration at the end of August and should get the official qualification within a month. The fifth customer on the list is looking at early next year, with a 6-month qualification process putting us around mid-Q1. Q: Can you break down the $100 million increase in the HPC pipeline from $750 million to $850 million, and explain the recurring revenue components? A: Luis Mueller (President and CEO): The increase is due to better visibility in the forecast and a couple of new customers added in the early engagement phase. The qualified portion of the pipeline has also grown as customers are giving us bigger numbers for next year. On recurring revenue, there are 3 main components: device application kits (which change with each 18-month device life cycle), thermal heads (which must evolve as devices grow in size and power), and equipment maintenance (spares and consumables). A fourth, newer element is software subscriptions, like the $330,000 annual subscription we sold to an HPC customer, which has a lifetime value of a few million dollars. Q: The full-year revenue guide increased from 25% to 35% growth. How much of that is HPC versus the core business, and what are you seeing in the core? A: Luis Mueller (President and CEO) and Jeff Jones (SVP and CFO): The HPC forecast increased by about $10-15 million, so the majority of the $45 million increase is from the core business coming back, led by industrial. We are seeing utilization rates pick up overall, and recurring revenue has grown at a CAGR of about 5% over the last 6 quarters. The core business is returning to traditional order patterns, with industrial customers placing orders for 10-20 systems in a single PO. Q: What is your capacity expansion plan for HPC handlers, and how much revenue can you support in 2027? A: Luis Mueller (President and CEO): We are expanding capacity between end of Q2 and end of the year to increase output by about 50% for HPC handlers. Between now and mid-2027, the intent is to more than double output, with a path to triple it by the end of next year if the market takes us there. We are expanding our factory in Malaysia and doing a small expansion in the Philippines for thermal heads. If we deliver $100-110 million this year, we should have capacity to do more than $200 million, probably close to $250 million, by the beginning of next year. Q: Can you quantify the silicon photonics opportunity for optical engine test, and which insertion are you targeting? A: Luis Mueller (President and CEO): Today we are shipping interface solutions for insertion 3 (optical engine test), and we booked a $0.5 million order in Q2. We are planning to ship a qualification unit for insertion 3 with a handler by the end of the year, and we are demonstrating an insertion 4 configuration. We haven't quantified total CPO revenue for 2027-2028 because we view it as part of the evolution of HPC, so it's embedded in the $850 million pipeline. Q: How should we think about the mix of the 5 customers in qualification, and what is the range of annual opportunity per customer? A: Luis Mueller (President and CEO): There is a range. We have customers that represent low $30 million annual opportunities, and a couple of customers that are likely to be individually $60 million annual opportunities. So it's roughly a $30-60 million range on a per-customer basis. Q: Who is the key competition for these HPC handler slots, and are these new opportunities or incumbent switches? A: Luis Mueller (President and CEO): It's pretty much a single competitor, primarily Hon Precision from Taiwan, which has been the forever supplier at test subcontractors. As power levels increase and processors become more complex, power dissipation management is becoming more prevalent, driving stronger interest from fabless companies and hyperscalers to find a solution. Our thermal technology is considered the best in the market, which is driving adoption. Q: On the automotive segment, which is lagging, what is your visibility on the timing of a turn? A: Luis Mueller (President and CEO): Automotive has been a bit more sporadic, bouncing around with a bump in the last 2 quarters and then coming back down. I would expect automotive would not be at 80% utilization until probably late Q1 or Q2 of next year. It's been the one lagging across the end markets on the core business side. Q: Can you pursue the full $850 million HPC pipeline at the current OpEx level of about $54 million, or would additional investment be required? A: Jeff Jones (SVP and CFO): That is the plan and forecast at the moment. We think this level is elevated from the prior model, but we intend to continue investing and keep OpEx fairly constant at about $54 million. That provides the resources necessary to capitalize on these opportunities. To clarify, the $850 million represents annual spend, not multi-year, so if we captured the totality immediately, we would see an $850 million revenue stream next year. Q: With agentic AI changing CPU-to-GPU ratios, how does this play into your HPC opportunity? A: Luis Mueller (President and CEO): We are seeing very strong demand on the CPU side, with CPU power levels approaching GPU levels. However, this doesn't change our strategy because our Eclipse system is designed to be flexible and straddle across applications without changing capital equipmentjust changing configurations like thermal heads. This reusability is a fundamental value proposition, so it doesn't matter to us where the market ratio goes. Q: How have lead times changed for Eclipse tools in the last 3 months, and are you seeing component shortages? A: Luis Mueller (President and CEO): We haven't seen For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Delivered 38% year-over-year sales growth driven by robust adoption of advanced thermal test handlers for AI processors and HBM inspection. Semiconductor test utilization improved sequentially to 80% at the end of Q2, signaling a historical turning point for capital expenditure among core IDM customers. Computing led system orders with a 150% year-over-year increase, primarily fueled by the Eclipse handler's growth in high-performance computing (HPC). Industrial segment orders rose 87% year-over-year as utilization in that sector reached the low 80s, while automotive remains the primary laggard in the current recovery cycle. Strategic focus on software analytics achieved a milestone $1 million revenue quarter, utilizing an 'on-site AI appliance' to meet strict customer data sovereignty requirements. High-performance computing customer pipeline expanded to an estimated $850 million annually, encompassing 19 identified customers across various qualification stages. Recurring revenue reached 53% of total sales, supported by consumables, device application kits, and a growing subscription software model. Raised fiscal 2026 revenue growth outlook to approximately 35% year-over-year, implying a full-year range of $610 million to $615 million. Increasing HPC revenue estimates to between $100 million and $110 million for fiscal 2026, with Q4 capacity already largely committed. Executing a manufacturing expansion in Malaysia to increase HPC handler output by 50% by year-end 2026 and double output by mid-2027., with plans to potentially triple output by late 2027. Anticipating Q3 revenue of approximately $170 million, driven equally by HPC ramps and a continued recovery in core industrial business segments. Projecting gross margins to remain in the mid-40% range for the full year, despite headwinds from higher input costs for memory and specialty components. Supply chain constraints and longer lead times for semiconductors and memory have resulted in higher input costs, prompting proactive advanced purchases. Operating expenses are expected to remain elevated in the low-$50 million range to support rapid R&D and production scaling for HPC opportunities. Automotive segment remains a headwind, with management not expecting utilization to reach the 80% threshold until late Q1 or Q2 of 2027. Capital expenditures are targeted at 2% of revenue for 2026, primarily focused on the Malaysia facility expansion and thermal head production in the Philippines. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management clarified the $850 million represents annual customer spend potential, not a multi-year total. Qualification for near-term customers is expected to conclude between late Q3 2026 and mid-Q1 2027. One major customer is currently transitioning from qualification on legacy devices to production configurations for next-generation intercepts. Internal manufacturing output for HPC handlers is planned to double by the middle of 2027., with a path to triple output if market demand persists. The primary bottleneck is exercising the supply chain for specialty components rather than internal floor space. Lead times for the Eclipse handler are currently maintained at 13 to 14 weeks, though large volume orders are shipped incrementally over several weeks. Cohu identifies a single primary competitor, Han Precision, which has historically dominated the OSAT market. Management believes their thermal technology is a key differentiator as power dissipation becomes the primary challenge for hyperscalers and fabless GPU designers. The Eclipse system's ability to straddle both CPU and GPU applications without changing base capital equipment is a core value proposition. Higher costs are currently concentrated in integrated circuits and memory components. Management has initiated discussions with customers regarding potential price pass-throughs to offset these increased costs. Q3 guidance already accounts for known risks and current component cost structures.

Image source: The Motley Fool. Thursday, July 30, 2026 at 4:00 p.m. ET President and Chief Executive Officer - Luis Antonio Mueller Senior Vice President and Chief Financial Officer - Jeffrey D. Jones Vice President of Strategy and Investor Relations - Matt Hutton Operator: Good day, and thank you for standing by. We Welcome to Cohu's Second Quarter 26 Financial Results Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. You will then hear an automated message advising your hand is raised. To withdraw your question, please press 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Matt Hutton, Vice President of Strategy and Investor Relations. Please go ahead. Unidentified Speaker: Thank you, operator. Welcome to Cohu's second quarter 26 Earnings Call. Our agenda begins with Luis Mueller, Cohu's president and CEO, who will provide a business update followed by a financial review and outlook from Jeffrey D. Jones. Our senior vice president and chief financial officer. Following our prepared remarks, we will open up the call for your questions. If you need a copy of our earnings release, it can be found on our website at cohu.com or by contacting Cohu Investor Relations. A slide presentation accompanying today's call is also available in the Investor Relations section of the website. Replays of this call will be accessible via the same page after the conclusion of the call. During this call, we will be making forward looking statements that reflect management's current expectations concerning Cohu's future business. These statements are based on the information available to us at this time. But they are subject to rapid and sometimes abrupt changes. We encourage everyone to review the forward looking statements section of our slide presentation and the earnings release as well as Cohu's filings with the SEC, including the most recently filed Form 10 k And Form 10 Q. Our comments are current as of today, July 30, 2026. And Cohu does not assume any obligation to update these statements for events occurring after the call. Additionally, we will discuss certain non GAAP financial measures during this call. Please refer to our earnings release and slide presentation for reconciliation to the most comparable GAAP measures. Now I would like to turn the call over to Luis Antonio Muller, Cohu's President and CEO. Luis? Luis Antonio Muller: Good afternoon, and thank you for joining Cohu's second quarter 26 Earnings Call. We delivered a strong quarter with sales of $149 million up 38% year over year and recurring revenue of approximately 53% of total. These results reflect solid execution across the company and continued customer adoption of our solutions. Our Q2 results show progress in areas where we have focused investments. Advanced thermal test handlers for AI processors, HBM inspection, flexible ATE platforms for power and connectivity devices, and software analytics. Cohu is benefiting from durable demand drivers in AI infrastructure and edge computing, where customers are investing to address increasing power levels, production yield, and increased factory productivity. Estimated semiconductor test utilization and improved sequentially to 80% at the end of the second quarter. Typically, a turning point for capex by our core IDM customer base. The strongest segments were computing and industrial, with test utilization in the low 80s, followed by automotive and mobile in the high 70s. Bookings generally follow utilization trends. And in the second quarter, computing led with 46% of total system orders, representing an impressive 150% increase year over year driven by Eclipse growth in high performance computing. With utilization above 80%, industrial was the next largest growth area with orders up 87% year over year. The balance included consumer up 29% year over year, mobile essentially flat, year over year, and automotive down 24% year over year in a segment that continues to struggle in this recovery cycle. Let me now review the quarter by product lines starting with the areas where we see the strongest customer traction. Starting with our test handlers. Building on the momentum from Q1, we continue to expand our position in high performance computing through the adoption of our Eclipse Handler, enabled by advanced active thermal control for extreme power, and next generation JetAc Max devices used in data centers. The Eclipse delivers a configurable thermal handler that can be used across multiple device generations, helping customers reduce capital risk, extend the value of their installed base, and support faster production ramps. Our high power thermal control technology remains a key differentiator improving task quality and first pass yield. During Q2, high performance computing customers also expanded adoption of Cohu's PACE prescriptive analytics software reinforcing our strategy to improve equipment efficiency and customer value. Separately, we are increasing our presence and infrastructure at OSATs in Southeast Asia to support fabless and hyperscaler programs as they move from qualification to production ramp. Overall, this momentum reinforces an expanding high performance computing customer pipeline that we now estimate at approximately $850 million annually. This includes about $190 million in qualified annual opportunity across 4 customers $250 million in active qualification across 5 customers, and approximately $445 million in early stage engagement across 10 additional customers. Based on this progress, we are raising our fiscal 2026 high performance computing revenue estimate to between $100 million and $110 million. To support this demand, we are working with supply partners to increase capacity and we are expanding our internal manufacturing in Malaysia. We expect this expansion to double output by year end and support another step up in capacity by mid-2027. Now turning to your inspection in metrology. During Q2, we shipped additional final inspection systems for HBM3, HBM4, and HBM4e devices to a US based IDM. With a strong forecast into the second half of 2026. HBM is the memory backbone of AI training and inference infrastructure. And we continue to invest to stay ahead of customer road maps into HBM5 and beyond. We recently qualified Neon at a Taiwan based OSAT establishing strategic foothold in a high volume outsourced assembly environment, where we can pursue additional advanced package mobile, and AI adjacent inspection opportunities. We also released a new vision inspection sensor, which shortwave infrared capability that detects inner cracks in complex silicon devices. This gives customers a step change improvement and outgoing quality for advanced packages and further reinforces Neon as a reference plot for silicon inspection applications. Moving to semiconductor test, Demand is increasingly tied to 2 AI enabling requirements. Efficient power delivery and high speed connectivity across edge devices, vehicles, industrial equipment, and connected infrastructure. These systems depend on precise power management to achieve peak performance while controlling energy consumption, heat, and operating costs. Customers are increasingly adopting gallium nitride power devices for their efficiency and power density advantages. At the same time, AI enabled devices require seamless connectivity. The industry is investing in both ground based and nonterrestrial networks, including satellite constellations and high altitude platforms that extend coverage globally. Together, GaN power and advanced connectivity represent an estimated $340 million annual addressable market opportunity over the midterm. During Q2, we continue to engage with leading power and RF customers on Diamondx configurations for GaN, mobile front end, and advanced connectivity applications. Switching to software analytics. We built on last quarter's momentum and moved from early production wins toward a repeatable pattern. Land a first deployment, prove measurable value, and expand within that account. This business delivered the first $1 million revenue quarter and orders increased an impressive 140% year over year. First, land and expand is working. Last quarter, we noted that a leading high performance computing chipmaker had committed to deploying our predictive maintenance technology across its test handler fleet. We are now progressing toward what is expected to become our largest software to a single customer,. With expansion plan during the second half of the year. Second, we are deploying DI-Core AI where the data lives. Semiconductor manufacturers operate under strict data sovereignty requirements. And most cannot send process, yield, or equipment data to a public cloud. In Q2, we advanced our on-site AI appliance, which runs modern AI models autonomous agents entirely inside the customer's network. With no data leaving the factory. These agents can conduct investigations across equipment, maintenance, and test data more frequently and at a lower cost than manual analysis. These deployments are important because they convert Cohu's installed base into a recurring software revenue opportunity while helping customers improve uptime, yield learning, and factory productivity. Moving to our interface solutions, This is a key element of our recurring revenue stream, about 19% of Cohu consolidated revenue in Q2. Our high speed interface technology continue to gain traction in silicon photonics test. We booked $500 thousand in interface solutions used in optical engine test and are pursuing additional customer engagements tied to emerging requirements for co packaged optical devices. In parallel, we remain focused on increasing share of our core semiconductor customer base, where new applications and replacement of incumbent technologies create opportunities for additional Cohu content. In summary, Q2 demonstrated progress across the strategic priorities we outlined earlier this year. Scaling high performance computing handler adoption, advancing inspection solutions, expanding Diamondx into power and connectivity, converting software pilots into production deployments, and broadening interface solution adoption into optical and advanced semiconductor devices. I want to thank our customers for their partnership, our employees for their execution, and our shareholders and supply chain partners for their continued support. With that, I will turn the call over to Jeffrey to review our financial results, and outlook in more detail. Jeffrey? Jeffrey D. Jones: Thank you, Luis. Before reviewing the second quarter results and providing third quarter guidance, please note that my comments refer to non GAAP figures. Details about non GAAP financial measures, including GAAP to non GAAP reconciliation and other disclosures, are included in the earnings release and investor presentation on our website. For Q2 26, revenue of $149 million exceeded the midpoint of guidance. Recurring revenue driven primarily by consumables represented 53% of total revenue. 1 industrial customer accounted for more than 10% of total sales during the quarter. Gross margin was 45.5% above guidance primarily reflecting a more favorable product mix. Operating expenses were in line with guidance at $52.7 million reflecting our decision to scale resources to support the rapid increase in high performance compute opportunities. Net interest income after interest expense and a $600 thousand foreign currency loss was approximately $1.7 million. The Q2 tax provision was lower than guidance at $2.7 million due to improved profitability in The US. Non GAAP EPS for the second quarter was $0.26 and adjusted EBITDA was 12%. Moving to the balance sheet. Cash and investments increased by approximately $9 million during Q2 to $498 million and cash from operations was $10 million. No stock repurchases were completed during the quarter. Total debt is $304 million and includes $288 million from the Q4 2025 convertible debt offering. Capital expenditures were approximately $2 million mainly for manufacturing machinery, and equipment. Facility improvements, and IT equipment. We are targeting total capital expenditures to be about 2% of revenue in 2026 including the capital expansion of our Malaysia test handler manufacturing facility mentioned by Luis. Looking ahead, we expect Q3 revenue to increase 14% sequentially and 35% year-over-year to approximately $170 million, plus or minus $7 million. The increase is driven by demand tied to the ramp in high performance compute opportunities, and continued recovery in our core business segments. We are increasing our full-year 2026 revenue outlook for growth over last year to approximately 35%. Q3 gross margin is projected to be approximately 45%, and for full-year 2026, we continue to expect gross margin in the mid-40% range. The rapid expansion of high performance computing opportunities has increased demand across our supply chain and production base resulting in longer lead times and higher input costs for certain semiconductors and specialty components. We are taking proactive steps when available to secure critical components to minimize impacts on our lead times, profitability, and customer pricing. Operating expenses are expected to be about $54 million. We intend to continue investing in resources to capitalize on the growing list of HPC opportunities and we expect quarterly operating expenses through the balance of the year to remain in the low-$50 million range consistent with our Q3 guidance. In light of expanded resources to support HPC related growth, our operating model continues to demonstrate solid profitability leverage with approximately 40% of projected sequential revenue growth expected to convert to operating profit. Net interest income in Q3 after interest expense and foreign currency impacts is projected to be approximately $1.6 million at current interest rates. The Q3 tax provision is expected to be about $5.2 million, and diluted shares are projected to be approximately 55 million, including 5.8 million shares attributable to the convertible debt. And of that amount, 2.4 million shares will be fully offset by the capped call but are required for US GAAP diluted EPS calculations. In summary, our 2026 priorities remain focused on supporting the R&D investments and production ramp required to secure multiple design wins in the compute market including AI data center infrastructure, HBM memory, and physical AI applications while progressively increasing EBITDA margin and free cash flow. That concludes our prepared remarks. And now we will open the call to questions. Operator: Wait for your name to be announced. Our first question comes from Krish Sankar with TD Cowen. Krish Sankar: Hi, thanks for taking my question and congrats on solid results and guidance. Luis, I have 2 questions. The first 1, just want to check you of your pipeline of $850 million, you said your 4 customers qualified Are those 3 HPC and 1 HBM customer? And the other 5 customers in qualification, are they all HPC? For AI handlers? And when do you expect that to potentially convert into revenues? Luis Antonio Muller: Oh, hi, Krish. Yeah. You are correct on all of your statements here. We have 3 HPC, 1 HBM on the qualified. Which review about $190 million annual opportunity for revenue. And then and then we have close to $200 million in the near term qualification here. So your question on the timeline, it straddles over months. To be honest with you. We have 1 customer that is right on the edge of giving us the, you know, the green light of being qualified. I think the data all supports it we do not have the official yet. We are already, planning on shipping a production configuration for the actual production INTERCEPT device, which is a next generation. You know, we typically qualify on an existing generation device so it can do a correlation to what they have with, other systems out there. But we are shipping the production configuration here at the end of August. To get it-- I do not know if the right word is certified. So we can go on with the actual intercept. So we should get a qualification pretty soon within a month, I would say. And then you know, I think the fifth 1 on the list we are looking at early next year systems that we are 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 1 on this on this bucket of in qualification. Got it. Very helpful, Luis. And then as a quick follow-up, you mentioned about getting traction in silicon photonics for the optical engine. Can you quantify how much that opportunity would be either this year, next year, the next few years? And is this mainly an insertion 1, or which insertion are you targeting? Yeah. Today, we are shipping interface solutions, not full handlers yet. We are shipping interface solutions for insertion 3. Which is the optical engine test. And that is where we commented here on prepared remarks that we booked in the second quarter. I think it was a $500 thousand order for Interface And this is a continuation of A business we started in Q1. We are shipping or planning to ship a qualification unit for insertion 3 by the end of the year with a handler We are also, demonstrating an insertion 4 configuration with a handler to certain customers that I do not really have a specific timeline for shipment yet. I do not know if it is going to be Q4 or Q1 next year. A little tricky now getting systems to go on qualification given the production orders that we are satisfying. I have not quantified we have not quantified yet the total CPO revenue in 2027, 2028 because we view it as part of the evolution of HPC. So it is it is embedded in the $850 million pipeline at the moment. Got it. Thank you very much, guys. Congrats again. Thank you. Operator: Our next question comes from Brian Chin with Stifel. Brian Chin: Hi there. Good afternoon. Thanks. Nice results and outlook, and thanks for letting us ask a few questions. Maybe the first question looking at this the multistage pipeline graphic you have in the slides, I think last cut, it was aggregating to $750 million. Now it is $850 million you maybe break down, what that $100 million increase is And also, I think part of this maybe is that recurring portion. Can you also maybe explain and break down what you mean by recurring? Luis Antonio Muller: Okay. Yeah. Hi Brian. Yeah. 2 separate things. On the totality of the pipeline increased to $100 million, by $100 million, it is really getting better visibility in the forecast. And I think we added a couple customers on the in engagement phase as well. But, we certainly have better visibility now on the customers that are in the in qualified or qualified, I should say,, the qualified portion of the pipeline. And, the numbers are bigger what they are giving us for next year than what we had originally estimated. To your question on recurring, there are really 3 components to recurring. 1 of them is device application kits. You know, you these device life cycles are typically 18 months in production, something else. Launches, and you gotta do a new device kit for that handler. The other component is thermal heads. Do not necessarily change the entire thermal head, but as devices grow in size, so does the required thermal head coverage over the die. It could be multidise. It could be actually even multi, skyline heights on dies. So that thermal head touchdown on the die has to evolve with the product evolution. So that is a that is an upgrade element of the system. You could also include a thermal head itself if the upgrade includes higher fouling. And the third element is, basically, the maintenance of the equipment. You know, there are, spares and consumables in the equipment. Part of that today, I guess, a 4th element that is a novelty here is the softer sale. As I mentioned last quarter, we sold, I think it was about $330 thousand a year. Subscription software. Into an HPC customer in conjunction with system orders. And that has a lifetime you know, through the product life cycle. I think we estimated, a few million dollars life cycle value lifetime value of that software subscription. So that would be sort of the fourth component that I forgot to mention, but it is part of recurring. Brian Chin: Okay. Great. that is that is super helpful. Also, in terms of the full year revenue guide increase, going from 25% to 35% growth, I think it is something like $45 million on the math there. You only increase your HPC forecast by maybe, you call it, $10 million to $15 million? And so, like, I guess, the majority residual there is all the kind of the core business. Historical core business for Cohu. Can you maybe expand upon kind of what you are seeing there in terms of improvement? Luis Antonio Muller: Industrial, obviously, is taking up Yeah. that is right Brian. Seeing industrial pick up. We are seeing the utilization rate overall pick up, and part of the growth there in the 0.55% here over the last 6 quarters or so. So it is it is really a nice increase But you are right. it is the core business that is coming back led by industrial. Or maybe if I can sneak 1 last thing in. Just from a supply standpoint, Jeffrey and Luis, And if I know that the qual the in-qualification bucket is not, you know, you know, banded within, you know, 2027 or a year. Interval even, but what are you sort of targeting to be able to get capacity to in 12 months' time or whatever horizon in terms of the Malaysia expansion? And kind of what, given what the business looks like in terms of the funnel again. Hi Brian. Frankly, that is a key question. Because as part of the, you know, 35% projected growth in fiscal 26 this year, I do not think we have much more room to grow in the HP side this year. We are expanding capacity between end of Q2 and end of the year. The plan is to increase output by about 50% over the next 6 months, and that is for the HPC handlers, specifically. Between now and the middle of next year, the intent is to increase output by a little more than 100-- a little more than 100% so double essentially the output or a little more than double between now and July June, July next year. And we do see a path to triple that output between now and the end of next year if the market takes us there. On the HPC side. So that is that is essentially we are evolving that, production pipeline in Malaysia and our factory in Malaysia in line with the expansion of the business in this customer pipeline that yields $850 million. that is the idea. it is a bit easier to do it in our own side. You know, we are expanding the factory in Malaysia. We already started the fitting out the production floor. We are looking at a new construction of a building essentially office building at this point. I think it will suffice that we can clear up production space on the current facility. To be ready probably in Q1 of next year. it is quite a bit more challenge on exercising the supply chain. that is what is taking most of the attention right now. That we can get, suppliers, and more suppliers to, support the expansion plan that we have-- that we have in place and being presenting here. Great. Appreciate the updates. Thank you. Operator: Our next question comes from Kevin Garrigan with Jefferies. Kevin Garrigan: Yes. Hey, guys. Congrats on great results. Hey. Your new customers and engagement just talk a little bit more about how those opportunities developed? Are these customers that are using competing platforms and are looking to switch And, you know, how much additional opportunity do you see beyond the current pipeline that you have So you mentioned $850 million I mean, is it pretty much sky's the limit at this point? Luis Antonio Muller: Well, there is always a limit. there is a finite number of customers out there. We are not really, engaged with all of them yet. And I think we are quite honestly fairly busy here Kevin, with the sort of the 20, sorry, the 19, 20 customers that we have on the list. there is a lot to do here. there is a lot of a lot of projects, a lot of applications and qualifications in work. Will we add more? Sure. You know, as these customers flow down this pipeline and, it is it starts to get wider at the bottom, we will we will start adding a few more at the top. But you know, you can imagine who the names are. Right? I am not gonna rattle them on a call. I should not. But they are essentially, the fabless and hyperscalers that are developing or have developed their own semiconductor GPUs or custom ASIC devices, network processors, you know, and their variety of names there, including, you know, tensor and whatnot that they have their own names for their custom ASIC devices. Right? So those are the cons constituents on this, on this customer pipeline. Kevin Garrigan: Got it. Okay. Yeah. That makes a ton of sense. And then can you just talk about the you mentioned higher input costs. Any specific components that you can kind of call out and know, are these components something that you expect to be, you know, a potential headwind for getting systems out the door at some point? Jeffrey D. Jones: Hey Kevin. it is Jeffrey. At the moment, it is mainly memory. Memory is sort of leading in the higher cost and longer lead times. And so we have taken advantage of advanced purchases and looked out over multiple quarters and made buys based on the quantities that we need for that time frame. So it is not it is not a, you know, an issue for Q3. And our guidance has taken into consideration all of the risks and potential constraints. So at the moment, we are we are working through it like Luis said, though, it is probably the biggest challenge at the moment is ramping supply chain. Kevin Garrigan: Okay. Perfect. Thanks, guys, and congrats. Luis Antonio Muller: Thank you. Operator: Our next question comes from Craig Ellis with B. Riley Securities. Craig Ellis: Yes. Thanks for taking the question and nice job on the execution, guys. I will start with some things that are just near term. You mentioned that we are looking for third quarter growth up 14% quarter-on-quarter. With HPC and some of the traditional businesses contributing to growth But can you provide a little bit more detail on the relative contribution of each as we look at this quarter's growth. Jeffrey D. Jones: Yeah. Hey. Hey Craig. it is roughly about 50% HPC driven and 50% core business. So about $10 million out of each. Craig Ellis: Got it. Thanks for that, Jeffrey. And then as we look ahead to the fourth quarter, remind us what you would think the seasonality would be a Q4&And then as we look ahead, are there any particular items we should be aware of as we think about more 1-off things that could be impacting the business beyond the third quarter? Operator: To answer the first part of your question, we have stated that we now see revenue increasing about 35% year-over-year. Jeffrey D. Jones: So that puts us in a range of about $610 million to $615 million for the year. And to get there, that would basically be Q4 sort of flattish To Q3. Luis Antonio Muller: Yeah. As far as seasonality Craig, utilization now, broadly hovering at 80%, right, in a couple markets here at 82, couple markets are at 77%, 78%. We are right at that threshold that you know, if we see a seasonality, Pull back, I think it would quickly accelerate again in Q1. We are not really sure exactly, how that is gonna play in Q4. So at the moment, we are we are viewing this core business kinda staying flattish going into q 4. As I mentioned before, I think I think we are kind of maxed out on the HPC side in Q4 as well. We are still building that capacity through the end of this year. So that is the positive news. We did get a we did get here in early Q3 a single customer order for $26 million again for our Eclipse 6 systems, for the HP market, and that is largely gonna largely gonna ship in Q4 as well. So that Eclipse output capacity is, is filling up quickly here in the fourth quarter already. Yes. You have got really good visibility on the fourth quarter. And going back to the comment on capacity and being pretty high with that relative to capacity, Louise. What are the what are the levers that you have that can give you some wiggle room in the 0.5% to 1% increase. Around midyear to the extent that you do have any? Well, I do not know if it is wiggle room, Craig. it is it is really a lot of hard work. From supply chain side and operations. Side with the expansion of the factory in Malacca. We are also doing a, a small expansion in The Philippines because that is where we build the thermal heads. So necessarily call it wiggle room, but I think we are on track right now. To, like I said, to really double our output between the quarter just finished and beginning of next year end of this year, beginning of next year. So really looking forward to being able to deliver a $200 million to $250 million incremental HPC $200 million to $250 million HPC revenue year or more. I mean, it depends. I think we have some wiggle room is more into next year where we could we could potentially triple the output as the market takes us there. Got it. Yep. Okay. So the step up is exiting this year to next year, not a year from now. Okay. Clear point. Thanks for all that help, Luis. Thanks, Jeffrey. You are welcome. Operator: Our next question comes from David Duley with Steelhead Securities. David Duley: Good afternoon. Thanks for taking my question. I am sorry to kind of continue along the HPC questions. When I look at your funnel chart this quarter of qualified customers, you have 4 for $150 million, and last quarter, it was 3 for $100 million. So there is 1 customer kind of adding to the qualified segment of the added up to about $50 million. I am kinda wondering when you look at the 5 other customers that are in Qual, how should we think about them? Mix of those customers? Are they all do I just take 5 and divide by the average there? Or how should we think about how each customer adds to the qualified SAM. Luis Antonio Muller: Yeah. Hi David. So we do have-- no. No, there is there is a bit of a range here. You know, we have we have customers that we view as 30 low-$30 million annual opportunity. We have a couple of customers that are likely to be individually $60 million annual opportunity. And, I am looking at a table here. And that is about the range, actually. it is a sort of $30 million to $60 million on a per individual customer basis. Okay. Thank you. You are welcome. You just gave us gave me 1 of my other questions, which is the way your capacity expansion is unfolding you will be able to double the revenue stream of your of your Eclipse high performance computing segment in 2027. Yes. In into early 27. And then from there, I think tying a little bit with Craig Ellis' question, we do have some wiggle room to expand further from there. And we will see how this funnel develops. And then we will drive that expansion in 2027. But for now, you just hang your head on We will be able to double the output we just finished in Q2 of this year. By the end of this year, meaning into early 27. Now remember, that is more than where we started in 2026. So the reality is if we are delivering $100 million to $110 million this year, we should have the capacity to do more than $200 million, probably closer to $250 million by the beginning of next year, all things being, you know, linear throughout the year. And from there, we can expand more in 2027 to, exit at a higher rate in 2027 again and are okay. And as far as just remind us who the key competition is for some of these slots and you know, Or are a lot of these brand new that, you know, where it is a jump ball, or is there someone that is kind of the incumbent with a lot of these customers? it is pretty much a single competitor, so to speak. I mean, you can you can claim there is a second 1, a 2nd competitor out there, but I would say there is primarily a single competitor, which has been the, you know, forever supplier at the, test subcontractor. it is a Han Precision from Taiwan. Has been the primary competitor in this space. And as power levels are increasing in these more complex processors. Right? All sorts of classification of processors. The management of power dissipation is becoming much more prevalent. And driving a much stronger interest by you know, like I said, the fabless and the hyperscalers into finding a solution to the problem. Which Cohu's Thermotechnologies, 1 big company here in The Bay Area said, Cohu's thermal technologies are sort of the best thermal in the market. Period. End of story. Let's figure a way to make this happen. Okay. Well, that is great to hear. Now just switching gears, final question for me is when you look at your core business, it kind of-- you obviously, you are guiding flattish. that is, you know, seasonality is being overcome by the return of the cyclical business, so to speak. And, you know, I think when I listened to the big OSAT in Taiwan's conference call last night, they were basically they uptick their growth rate for wire bonding core assembly business from 13% this year to 20% for calendar 26, and they expect that growth rate to continue. So I am kind of wondering and their utilization rates are also in 80%-85%, and the quote was we cannot keep up with purchasing equipment. So I am wondering what your core customer behavior is You know, there is a list of 8 or 10 of these guys. And they are not all some of them are automotive exposed. And so I think probably that those guys are not inflecting yet. But could you talk about the customers that are, and what their behavior is? Are they coming in and asking for big orders? And big slots and whatnot? Yeah. We are seeing the earlier inflection on the industrial space as we commented here. And yes, indeed. The ones that have inflected so far are coming in for the sort of traditional volume that we have seen in the past where they are ordering you know, somewhere between 10 and 20 systems in 1 PO. So that is sort of coming back to that original pattern that we are familiar with from the past. Predominantly with industrial based customers. And I think you can see from the earnings release which ones are kind of spearheading the return to business? Thanks very much, and congratulations on nice results. Thanks David. Operator: Our next question comes from Denis Pyatchanin with Needham and Company. Analyst: Great. Thank you very much. So I have a question about the HPC rates. So I think previously it was about $90 million expected for calendar 26. Now I think it is about $105 million so $15 million incrementally higher. Maybe you can tell us, is more of the upside coming from Eclipse handlers or the Neon HBM inspection systems? Luis Antonio Muller: Hi Denis. Yeah. You are right. If you pick up the midpoint of the ranges we gave before and now, it is really a $15 million increase. Note that the new range is also tighter. You know, we originally had an $80 million to $100 million range, and now we are we are calling 100 to 110. This whole increase is on the Eclipse HPC side and entirely there. Got it. Thank you. Analyst: And then I have a question related to some of these challenges with components specifically related to memory. So do you think you will be able to pass on some of these costs to your customers within the next say, 3 or 6 months, or will you basically have to kind of eat that into your gross margin? Jeffrey D. Jones: Hey Denis. We have just started conversations with customers. So I would say stay tuned on that. Thank you. Analyst: Well, that is it for me. Thanks a lot. Operator: Our next question comes from Quinn Fredrickson with Baird. Analyst: Hey, afternoon guys. Thanks for taking the question. Just on the cyclical piece, specifically on automotive, I think you mentioned in your prepared remarks that orders were soft there. It sounds like 1 of the few areas that was the case So what is your visibility on the timing of a turn in that business? Yeah. Luis Antonio Muller: Quinn, it is a it is a good question. I think that is a market has been a little bit more sporadic. We had if I am not mistaken here, we had a bit of a bump in the last 2 quarters in the automotive And then and then the last quarter, it kinda came back down a bit. Again. So I think it is been it is been bouncing around I would expect, frankly, that automotive would not be at 80% up until probably late Q1 or Q2 of next year. That will be my expectation. But like I said, it is been the 1 that is lagging a bit across, the end markets on the core business side. Thanks. that is helpful. Analyst: And then on OpEx, can you discuss just your ability to pursue the full $850 million HPC pipeline Would you be able to pursue that full pipeline at this third quarter level of about $54 million of OpEx? Or would there be additional investment you would have to make? Jeffrey D. Jones: That is the plan and the forecast at the moment is to stay at this. And we think it is a bit elevated from a prior model. But to continue to invest and have OpEx remain pretty constant at this at this level, about $54 million. So we think that is that is a good level that provides the resources necessary to capitalize on these opportunities. Luis Antonio Muller: Great. And just to help clarify as well Quinn, for you and for others, When we talk about the $850 million that is sort of an annual spend. Right? that is what we see these customers spending annually on this class of equipment, which is largely Eclipse for HPC. So if we were to capture the totality of this opportunity, you know, now, immediately, we would see an $850 million revenue stream next year. that is not the case. You know, we are qualifying over time. And we will see how this evolves. The market is also changing and growing, but that is to clarify that it is not $850 million over multiple years. it is 850 spent per year by the customers that we are talking about here. Right. that is helpful. Thanks. Operator: Our next question comes from Vedvati Shrotre with Evercore ISI. Vedvati Shrotra: Thanks for taking my question. The first 1 I have is so with AgenTake AI, we are seeing the CPU to GPU ratio changing. Right? We are seeing a higher CPU ratio versus CPU. How does this sort of play for you in the HPC opportunity? Like, where do you see how do you see how do you see yourself participating in this kind of shift? Luis Antonio Muller: Hi Vedvati. This is Luis. First of all, you are you are correct. We are seeing a much-- very strong demand on the CPU side Traditionally, I would say the CPUs would have been at slightly lower levels than the GPU, but that is actually changing. And, CPU power in test, I should say, is, it is really a approaching the GPU levels. How does it change? I do not know that it really changes. You know, the whole intention and purpose of our product configuration is to be flexible. And be able to straddle across applications without having to change the capital equipment. But changing the configuration instead, perhaps upgrading thermal heads, for different applications. So we do a pretty good job right now straddling both CPU and GPU and reusability of the equipment. So it does not quite matter to us where the market and that ratio goes because that is 1 of the fundamental value propositions of our Eclipse system. You can you can do both the thermal management at the higher power levels, but you can also use the same equipment at, straddling down to lower power levels and across different applications. Understand. So how about the penetration Like, there are 3 across the x 86 and the ARM ecosystem. Like, how are you thinking about the pipeline and the penetration of the customers? At the CPU suppliers. it is I mean, I would have to go count to tell you where we are today. I do not know at the top of my head. But I am not going to venture to say you know, we well, I am not gonna venture to say. I am going to say I would have to go count But it is, again, not that relevant to us. We have probably strongest shipments in Q2 that were maybe x86. Or maybe that is gonna be Q3 shipments. I would have to go look But it straddles across both Understand. Vedvati Shrotra: Okay. And then 1 last question. So on-- you talked about sort of the, you know, input cost and also alluded to your kind of the supply chain of shortages. So maybe can you talk about how your lead times have changed, in the last 3 months? For the Eclipse tools? Jeffrey D. Jones: Yeah. I mean, just for clarification, we have not seen any shortages yet. And, again, when we have got the opportunity to make some prebuys, we are doing it, and that is worked for us pretty well. However, these pre buys particularly on mainly on integrated circuits, are purchased at an increased cost. And so that there is the higher input cost. Although we have we are securing the supply, it is coming out a little bit higher cost. And as I mentioned before, we are just initiating discussions now with customers about how we pass that on. Luis Antonio Muller: And your Eclipse handler right now is I think the lead times are still in check. We are we are holding well to 13, 14 weeks. From receipt of PO. With that said, we have signals that the orders are coming. We have the customer forecast, and so we are getting ahead of it, so to speak, getting-- you know,, part of what Jeffrey just said. So when we get the PO itself, we can respond. Now like I said, we earlier, we got, couple weeks ago, we got, $26 million single customer order. Right? As you can imagine, there are tens of systems. We are not gonna ship all that quantity in 13 weeks, lead time. We have got a certain capacity per week. And that quantity is gonna fill up multiple weeks of shipment. So 13 weeks to the first system shipment, but straddles across multiple weeks from there. And, and then gearing up for the subsequent order from another customer that we will ship in the latter part of Q4. Understand. Thank you very much. You are welcome. Thanks, Vedvati. Operator: Our next question comes from Christian Schwab with Craig Hallum. Christian Schwab: Great. Thanks for letting me sneak in a question here. Great quarter and guide. I just have 1 question. it is been quite some time since we have been operating in our core business with 80%-plus utilization. And customers just ordering to add capacity Can you remind us historically when capacity is added when utilization rates go above 80%, and the demand environment looks to be continued, how many quarters or how long does capacity typically get added? We talked about initial orders kind of being, you know, 10 to 20, which was in line with historical norms for systems. But how long does that happen for? Jeffrey D. Jones: Yeah, we would say about 6 quarters is probably the typical average or call it a cycle. If and I have got this table in front of me and it goes back to 2021 and that was a pretty unique time frame in 2021 and 2022, and we happened to be above 80% utilization for 8 quarters or at least 7. So I think 6 is probably the norm. Christian Schwab: Great. Fantastic. And then, lastly is, you know, I know we started a few quarters ago talking a little bit more aggressively or about M&A. But given the fact that the core business and, you know, the AI market growth is-- well, we are, you know, chasing extremely strong demand. Are you still looking at M&A? Do we want to get distracted With M&A when the core business is so strong? Unidentified Speaker: Yeah. Hi. This is Matt. Yeah. I think you are right. Right? The number 1 priority is obviously execution. There definitely are opportunities to accelerate in some areas. Our growth areas are in HPC. And in software, and we will continue to look at bill versus buy opportunities there. But, yeah, I think you nailed it. it is execution and looking at other ways to possibly accelerate some of our growth areas. Christian Schwab: Fantastic. No other questions. Congrats on the strong results again. Jeffrey D. Jones: Thank you. Thanks, Christian. Operator: That concludes today's question and answer session. I would like to turn the call back to Matt Hutton for closing remarks. Unidentified Speaker: Thanks, operator. Before we sign off, I would like to note that we will be attending the following investor conferences over the next 3 months. The Needham Virtual Semiconductor Conference on August 19, the Jefferies Semiconductor Conference on August 24 in Chicago, and the CEO Summit on October 13 in San Francisco. If you plan on attending any of these conferences, please reach out to your conference contacts or let us know, and we will arrange for a 1-on-1 meeting. I am also pleased to announce that Cohu will host an investor day on November 10 in New York City. We will provide a deeper look at our strategy, and long term financial framework. Additional event details will be shared closer to the date. Thank you for joining today's call. We look forward to speaking with you soon. Operator: This concludes today's conference call. You for participating. You may now disconnect. Before you buy stock in Cohu, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Cohu wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $397,081!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,166,221!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of July 30, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Cohu (COHU) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in Cohu, Inc.? Here are five stocks we like better. Cohu’s Q2 revenue rose 38% year over year to $149 million, exceeding the guidance midpoint, while non-GAAP gross margin reached 45.5% and EPS was $0.26. Management forecast Q3 revenue of approximately $170 million and raised its full-year 2026 growth outlook to about 35%, or roughly $610 million–$615 million. High-performance computing demand accelerated sharply: computing orders increased 150% year over year, and Cohu raised its 2026 HPC revenue estimate to $100 million–$110 million. The company’s HPC customer pipeline expanded to approximately $850 million, led by Eclipse handler opportunities. Cohu is expanding manufacturing capacity in Malaysia and through suppliers, targeting a 50% increase in HPC handler output over the next six months and more than double the output by mid-2027. Automotive remains the weakest major market, with utilization not expected to reach 80% until late Q1 or Q2 2027. These 3 Stocks Have Soared in 2026—Can They Keep Climbing? Cohu (NASDAQ:COHU) reported second-quarter 2026 revenue of $149 million, up 38% from a year earlier and above the midpoint of its guidance, as demand for high-performance computing equipment and a recovery in several core semiconductor markets supported results. President and CEO Luis Müller said recurring revenue, primarily from consumables, represented approximately 53% of quarterly sales. The company cited customer adoption of its thermal test handlers for AI processors, high-volume manufacturing inspection products, automated test platforms for power and connectivity devices, and software analytics offerings. → Why SK hynix Could Be the Best AI Chip Stock to Buy Now There’s A Buying Opportunity Opening Up With Cadence Design “Cohu is benefiting from durable demand drivers in AI infrastructure and edge computing,” Müller said, pointing to customer investments aimed at managing higher power levels, improving production yield and increasing factory productivity. Müller said estimated semiconductor test utilization rose sequentially to 80% at the end of the second quarter, a level that has historically marked a turning point for capital spending among the company’s integrated device manufacturer customers. Computing and industrial utilization were in the low 80% range, while automotive and mobile utilization was in the high 70% range. → 3 Value ETFs to Consider as Growth Stocks Lag Behind MarketBeat Week in Review – 7/17 - 7/21 Computing accounted for 46% of total system orders in the quarter, with orders rising 150% year over year, driven by growth in Eclipse handlers for high-performance computing applications. Industrial orders increased 87% from a year earlier, consumer orders rose 29%, mobile was essentially flat, and automotive orders fell 24%. The automotive market continues to lag other end markets in the current recovery cycle. Müller said he does not expect automotive utilization to reach 80% until late in the first quarter or the second quarter of 2027. → 5 AI Stocks Are Pulling Back—Which Growth Catalysts Still Look Strongest? CFO Jeff Jones said Cohu expects its third-quarter revenue increase to be split roughly evenly between high-performance computing and the company’s core business, with each contributing about $10 million of growth sequentially. Cohu raised its estimate for fiscal 2026 high-performance computing revenue to $100 million to $110 million, from its prior range of $80 million to $100 million. Müller said the increase is entirely tied to the Eclipse handler business rather than Neon inspection systems for high-bandwidth memory. The company now estimates its annual high-performance computing customer pipeline at approximately $850 million, including: About $190 million of qualified annual opportunity across four customers, consisting of three high-performance computing customers and one HBM customer. Approximately $250 million of active qualification opportunities across five customers. Roughly $445 million of early-stage engagement across 10 additional customers. Müller said qualified customer opportunities range from roughly $30 million to $60 million annually per customer. One customer in the qualification group could receive official qualification within about a month, while another may complete its process around the middle of the first quarter of 2027, based on systems expected to ship in late August and an estimated six-month qualification process. To support expected demand, Cohu is expanding internal manufacturing in Malaysia and working with suppliers to increase capacity. The company expects to increase output for HPC handlers by about 50% over the six months following the second quarter and to more than double output by around mid-2027. Müller said the company could potentially triple output by the end of 2027 if market demand supports that expansion. Cohu also received a $26 million order early in the third quarter from a single customer for Eclipse systems, with much of that order expected to ship in the fourth quarter. The company said Eclipse lead times remain about 13 to 14 weeks to the first system shipment after receipt of an order, although larger orders are shipped across multiple weeks. In inspection and metrology, Cohu shipped additional final inspection systems for HBM3, HBM4 and HBM4E devices to a U.S.-based integrated device manufacturer, with a strong forecast for the second half of 2026. The company also qualified its Neon platform at a Taiwan-based outsourced semiconductor assembly and test provider and introduced a shortwave infrared vision sensor designed to detect inner cracks in complex silicon devices. The company said its software analytics business recorded its first $1 million revenue quarter, while orders increased 140% year over year. Cohu is expanding a predictive-maintenance deployment with a high-performance computing chipmaker that Müller said is expected to become its largest software deployment with a single customer. Cohu also continued work on an on-site AI appliance that runs AI models and autonomous agents inside a customer’s network, addressing semiconductor manufacturers’ data sovereignty requirements. Interface solutions accounted for about 19% of consolidated second-quarter revenue. Cohu booked $500,000 of interface solutions for optical engine testing and is pursuing additional opportunities tied to co-packaged optical devices. The company plans to ship a handler-based qualification unit for optical-engine test by the end of 2026. On a non-GAAP basis, second-quarter gross margin was 45.5%, above guidance due primarily to favorable product mix. Operating expenses were $52.7 million, net interest income after interest expense and foreign-currency losses was approximately $1.7 million, and non-GAAP earnings per share were $0.26. Adjusted EBITDA margin was 12%. Cash and investments increased approximately $9 million during the quarter to $498 million, while cash from operations was $10 million. Total debt was $304 million, including $288 million related to the company’s fourth-quarter 2025 convertible debt offering. Cohu did not repurchase shares during the quarter. For the third quarter, Cohu forecast revenue of approximately $170 million, plus or minus $7 million, representing growth of 14% sequentially and 35% year over year. The company expects third-quarter gross margin of approximately 45% and operating expenses of about $54 million. Cohu also raised its full-year 2026 revenue outlook to approximately 35% growth from the prior year, implying annual revenue of roughly $610 million to $615 million, according to management’s discussion. Jones said fourth-quarter revenue would need to be approximately flat with the third quarter to reach that range. The company said rising demand has contributed to longer lead times and higher costs for certain semiconductors and specialty components, particularly memory. Cohu has made advance purchases where possible and has begun discussions with customers about passing along some higher costs. Management said its guidance incorporates current supply-chain risks and constraints. Cohu, Inc is a global provider of semiconductor test and inspection solutions, offering a broad portfolio of products designed to support chip manufacturers, outsourced semiconductor assembly and test (OSAT) providers, and electronics original equipment manufacturers (OEMs). The company's product lineup includes automatic test handlers, wafer probers, test sockets, thermal subassembly systems and burn-in boards, all engineered to optimize throughput, accuracy and reliability in semiconductor production and final test. Founded in 1947 and headquartered in Poway, California, Cohu has grown through both organic development and targeted acquisitions to become a recognized leader in test handling and interconnect technologies. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Cohu Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

Cohu (COHU) came out with quarterly earnings of $0.26 per share, beating the Zacks Consensus Estimate of $0.14 per share. This compares to earnings of $0.02 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +85.71%. A quarter ago, it was expected that this maker of semiconductor test equipment would post earnings of $0.03 per share when it actually produced earnings of $0.01, delivering a surprise of -66.67%. Over the last four quarters, the company has surpassed consensus EPS estimates two times. Cohu, which belongs to the Zacks Electronics - Manufacturing Machinery industry, posted revenues of $149 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 3.47%. This compares to year-ago revenues of $107.68 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Cohu shares have added about 69.1% since the beginning of the year versus the S&P 500's gain of 6.9%. While Cohu has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Cohu was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.24 on $148.5 million in revenues for the coming quarter and $0.60 on $559.75 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Electronics - Manufacturing Machinery is currently in the top 7% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Kulicke and Soffa (KLIC), is yet to report results for the quarter ended June 2026. The results are expected to be released on August 5. This semiconductor equipment maker is expected to post quarterly earnings of $1.00 per share in its upcoming report, which represents a year-over-year change of +1328.6%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Kulicke and Soffa's revenues are expected to be $310 million, up 108.9% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Cohu, Inc. (COHU) : Free Stock Analysis Report Kulicke and Soffa Industries, Inc. (KLIC) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Second quarter net sales increased 38% year-over-year to $149.0 million Gross margin of 45.4%; non-GAAP gross margin of 45.5% Estimated test cell utilization increased sequentially to 80% at the end of June Raising annual AI-driven compute opportunity pipeline to approx. $850 million SAN DIEGO, July 30, 2026--(BUSINESS WIRE)--Cohu, Inc. (NASDAQ: COHU), a global supplier of equipment and services optimizing semiconductor manufacturing yield and productivity, today reported fiscal 2026 second quarter net sales of $149.0 million and GAAP loss of $0.2 million or $0.00 per share. Net sales for the first six months of 2026 were $274.1 million and GAAP loss was $12.2 million or $0.26 per share. Cohu also reported non-GAAP results, with second quarter 2026 income of $14.1 million or $0.26 per share and income of $14.6 million or $0.29 per share for the first six months of 2026. Total cash and investments at the end of second quarter 2026 were $498.2 million. Cohu did not repurchase any shares of its common stock during second quarter 2026. "Second quarter results reflected broad-based improvement across our end markets, with revenue increasing 38% year-over-year and estimated test cell utilization improving to approximately 80% at the end of June," said Cohu President and CEO Luis Müller. "Customer momentum in AI compute is accelerating, driven by the adoption of our Eclipse test handler with T-Core active thermal control for high-power processors used in data centers. Increased confidence in this market is leading us to raise our FY26 high-performance computing revenue estimate to $100 million to $110 million, further reinforcing Cohu’s differentiated position in test and inspection." Cohu expects third quarter 2026 sales to be in a range of $170 million +/- $7 million. Conference Call Information: The Company will host a live conference call and webcast with slides to discuss second quarter 2026 results at 1:30 p.m. Pacific Time/4:30 p.m. Eastern Time on July 30, 2026. Interested parties may listen live via webcast on Cohu’s investor relations website at https://edge.media-server.com/mmc/p/rpe9b6q7. To participate via telephone and join the call live, please register in advance at https://register-conf.media-server.com/register/BIdbf80ce0cc674b15b9c10aa7e230c332 to receive the dial-in number along with a unique PIN number that can be used to access the call. About Cohu: Cohu (NASDAQ: COHU) was founded in 1947 and is a global technology leader supplying test, automation, inspection & metrology products, software analytics solutions and services to the semiconductor industry. Additional information can be found at www.cohu.com. Use of Non-GAAP Financial Information: Included within this press release and accompanying materials are non-GAAP financial measures, including non-GAAP gross margin/profit, net income (loss) and net income (loss) adjusted earnings per share, operating income (loss), operating expense, effective tax rate, net cash per share and Adjusted EBITDA that supplement the Company’s Condensed Consolidated Statements of Operations prepared under generally accepted accounting principles (GAAP). These non-GAAP financial measures adjust the Company’s actual results prepared under GAAP to exclude charges and the related income tax effect for: share-based compensation, the amortization of purchased intangible assets, restructuring costs, manufacturing transition and severance costs, change in indemnification receivable, duplicate facility costs, acquisition and financing costs and associated professional fees, fair value adjustment to contingent consideration, pension curtailment adjustments and amortization of cloud-based software implementation costs (Adjusted EBITDA only). Reconciliations of GAAP to non-GAAP amounts for the periods presented herein are provided in schedules accompanying this release and should be considered together with the Condensed Consolidated Statements of Operations. With respect to any forward-looking non-GAAP figures, we are unable to provide without unreasonable efforts, at this time, a GAAP to non-GAAP reconciliation of any forward-looking figures due to their inherent uncertainty. These non-GAAP measures are not meant as a substitute for GAAP, but are included solely for informational and comparative purposes. The Company’s management believes that this information can assist investors in evaluating the Company’s operational trends, financial performance, and cash generating capacity. Management uses non-GAAP measures for a variety of reasons, including to make operational decisions, to determine executive compensation in part, to forecast future operational results, and for comparison to our annual operating plan. However, the non-GAAP financial measures should not be regarded as a replacement for (or superior to) corresponding, similarly captioned, GAAP measures. Forward Looking Statements: Certain statements contained in this release and accompanying materials may be considered forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, including statements regarding effects of growth in revenue in certain vertical markets; new market entries, product introductions or customer adoptions and corresponding performance metrics or financial impacts; product market projected growth and market sizes and related revenue opportunities; expectations related to our FY2026 outlook, including annual and/or quarterly projections; estimates regarding capital expenditures and other costs related to the ramp in the business; estimates related to tax expenses; and any other statements that are predictive in nature and depend upon or refer to future events or conditions; and/or include words such as "may," "will," "should," "would," "expect," "anticipate," "plan," "likely," "believe," "estimate," "project," "intend;" and/or other similar expressions among others. Statements that are not historical facts are forward-looking statements. Forward-looking statements are based on current beliefs and assumptions that are subject to risks and uncertainties and are not guarantees of future performance. Any third-party industry analyst forecasts quoted are for reference only and Cohu does not adopt or affirm any such forecasts. Actual results and future business conditions could differ materially from those contained in any forward-looking statement as a result of various factors, including, without limitation: rapid technology changes and product transition and investment risks; industry cyclicality, seasonality and volatility; outsourced manufacturing and supply chain disruptions or dependencies; product defects and quality issues; supplier concentration and part shortages; inflation and interest rate exposure; high customer concentration and rapid innovation cycles; semiconductor industry consolidation; operational strain from rapid shifts in demands; failure to meet innovation demands of customers and industries; talent attraction and retention challenges; AI related risks; international operations complexity; trade barriers and tariffs; geopolitical instability; natural disasters and health events; climate transition and physical risks; stakeholder ESG expectations; M&A and strategic transaction risks; acquisition integration risks; risks related to gaining access to capital; foreign currency exposure; restructuring and impairment charges; financial institution instability; goodwill and intangible asset impairment charges; stock price volatility; underperformance against stock price or financial metric targets; indebtedness and covenant limits; dilution from equity issuances or note conversions; share repurchase uncertainties; anti takeover provisions; export controls and trade regulation; tax law changes and audits; environmental regulatory compliance; changing U.S. and foreign policy landscape; cybersecurity breaches or threats; IP protection challenges; IP infringement claims; data privacy obligations; or litigation risk. These and other risks and uncertainties are discussed more fully in Cohu’s filings with the SEC, including our most recent Form 10-K and Form 10-Q, and the other filings made by Cohu with the SEC from time to time, which are available via the SEC’s website at www.sec.gov. Except as required by applicable law, Cohu does not undertake any obligation to revise or update any forward-looking statement, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise. For press releases and other information of interest to investors, please visit Cohu’s website at www.cohu.com. View source version on businesswire.com: https://www.businesswire.com/news/home/20260730977155/en/ Contacts Cohu, Inc.Matt Hutton - Investor Relations858-848-8106