Cohu (COHU) Q3 2025 earnings summary

Executive summary

• Q3 2025 revenue reached $126.2 million, up both sequentially and year-over-year, with approximately 55% from recurring revenue streams and growth driven by mobile, AI-based computing, and interface solutions.

• Recurring revenue grew for the third consecutive quarter, and systems revenue improved for the fourth straight quarter.

• Strategic investments and new business wins included AI data centers, automotive ADAS, edge-AI computing, NEON HBM inspection tools, Eclipse handler for AI processors, and DiamondX for analog power ICs.

• Convertible notes offering closed post-quarter, raising $287.5 million to support growth, strategic initiatives, and innovation.

• Acquisition of Tignis, an AI process control software provider, was completed in January 2025, expanding analytics offerings.

Financial highlights

• Q3 2025 revenue was $126.2 million, up 32.4% year-over-year, exceeding guidance.

• Gross margin for Q3 2025 was 43.8% GAAP and 44.1% non-GAAP; adjusted EBITDA margin was 9.2%.

• Q3 2025 net loss was $4.1 million GAAP ($0.09 per share); non-GAAP net loss was $2.8 million ($0.06 per share); non-GAAP EPS improved to $0.02.

• Cash and investments at quarter-end were $198.2 million, down due to operational support, Tignis acquisition, and increased accounts receivable.

• Debt at quarter-end was $17.8 million, with $287.5 million in convertible notes issued post-quarter.

Outlook and guidance

• Q4 2025 revenue expected to be about $122 million, plus or minus $7 million, reflecting seasonal moderation and systems slowdown.

• Recurring revenue forecasted to increase for the fourth straight quarter, representing about 60% of Q4 revenue.

• Q4 gross margin projected at 45%; operating expenses expected at $50 million; adjusted EBITDA near 7%.

• Restructuring plan targets $2 million in quarterly cost savings and operating expenses of $49 million at $130 million revenue run-rate by early 2026.

• Liquidity expected to be sufficient for at least the next 12 months, with flexibility for strategic acquisitions or increased capital expenditures.