Cohu (COHU) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue was $95.3 million, with 67% from recurring sources and strong performance in mobile, automotive, and industrial segments despite a 36.8% year-over-year decline due to weak demand.

• Gross margin was 47.1% non-GAAP and 46.8% GAAP, benefiting from new product revenue and lower manufacturing costs.

• GAAP net loss for Q3 2024 was $18.1 million ($0.39 per share); non-GAAP net loss was $3.8 million ($0.08 per share).

• Significant design wins in automotive, memory, and silicon carbide markets, including major test cell orders and entry into HBM and SiC segments.

• Cash and investments increased to $269.2 million, supporting share repurchases and ongoing investments.

Financial highlights

• Q3 2024 revenue: $95.3 million, down from $150.8 million in Q3 2023; non-GAAP gross margin: 47.1%; GAAP gross margin: 46.8%.

• Adjusted EBITDA was 2.3% in Q3 2024; non-GAAP EPS was a $0.08 loss; GAAP net loss was $18.1 million.

• Operating expenses were $45.2 million, $1.6 million below guidance, mainly from lower labor costs.

• Cash flow from operations was $17.4 million in Q3 2024; free cash flow was $15.1 million.

• Share repurchases in Q3 2024 totaled 315,000 shares for $8.1 million.

Outlook and guidance

• Q4 2024 revenue guidance is $95 million, plus or minus $7 million, with gross margin expected to decrease to about 44%.

• Q4 operating expenses projected to rise to ~$46 million due to higher labor costs and FX impact.

• Q4 non-GAAP tax provision expected at $3.1 million, reflecting tax on foreign profits and no U.S. tax benefit.

• Book-to-bill ratio forecasted over one for Q4; Q1 2025 revenue expected to be about 10% higher than Q4.

• Management remains optimistic about long-term prospects due to increasing semiconductor content and complexity.