Cohu, Inc.

What they do

Cohu sells test automation handlers and thermal systems, semiconductor automated test equipment (ATE), inspection and metrology tools, interface products (test contactors and probe cards), and software analytics to semiconductor manufacturers and test subcontractors. Its installed base exceeds 25,000 systems across more than 280 high-volume manufacturing facilities, 108 customers and 31 countries. A large share of revenue is recurring, from interface products, services, spares, upgrades, configuration tooling and software, which is tied to the installed base and device test volumes rather than customer capital budgets.

Revenue drivers

• Test Automation — Handlers and systems that move and temperature-control devices during test, including active thermal management (ATC) for high-power processors; sold as capital equipment driven by customer capex.
• Interface Solutions — Test contactors and power probe cards consumed per device design and replaced frequently; the company identifies this as a key contributor to recurring revenue.
• Semiconductor ATE and Inspection/Metrology — Instrumentation platforms for RF, digital, mixed-signal and power management test, plus optical and infrared inspection of packaged and wafer-level devices.
• Services, spares, upgrades and software analytics — Recurring revenue supporting the installed base; management describes it as more stable and less cyclical than capital equipment revenue.

Recent performance

Second quarter 2026 net sales were $149.0 million, up 19.1% sequentially from $125.1 million in Q1 2026 and up 38% year-over-year from $107.7 million in Q2 2025. Q2 2026 GAAP net loss was $0.2 million ($0.00 per share) versus a $16.9 million loss in Q2 2025; non-GAAP net income was $14.1 million ($0.26 per share). First-half 2026 net sales were $274.1 million with a GAAP loss of $12.2 million ($0.26 per share) and non-GAAP income of $14.6 million ($0.29 per share). Gross margin was 45.4% GAAP and 45.5% non-GAAP, and estimated test cell utilization rose to about 80% at the end of June. Cash and investments were $498.2 million at quarter end, and no shares were repurchased in Q2 2026.

Strategy

Cohu is directing R&D toward high-bandwidth memory inspection, high-performance processor test for AI applications (CPUs, embedded-NPUs, GPUs, ASICs and xPUs), mixed-signal, silicon carbide and gallium nitride wide-bandgap test, and AI-driven software analytics. In fiscal 2025 it initiated a global restructuring program to improve profitability while maintaining product development investment. Management is expanding its addressable market with new test, inspection, automation and software products, and cites the Eclipse test handler with T-Core active thermal control as a driver of AI compute momentum. It expects to fund operations while preserving flexibility for growth opportunities.

Risks

• Rapid technology change and product transitions — Cohu spent $92.2 million on R&D in fiscal 2025 and has previously made material investments in new product platforms that did not generate expected sales or return.
• End-market cyclicality and mix — Capital equipment revenue depends on customer capex and budgets, and weakness in automotive and consumer markets has been only partly offset by AI and industrial demand.
• Customer inventory and capacity caution — Management states customers continue to manage inventory closely and remain cautious with capacity investments, which can delay equipment orders.
• Inventory write-off exposure — The custom nature of inventory parts and the introduction of new products increase the risk that established inventory becomes obsolete.

Outlook

Cohu expects third quarter 2026 sales of approximately $170 million, plus or minus $7 million. Management raised its fiscal 2026 high-performance computing revenue estimate to $100 million to $110 million, citing accelerating AI compute customer momentum. It reports that AI datacenter demand remains comparatively strong while automotive, industrial and consumer markets continue to recover unevenly, and says it will manage costs while supporting expected growth.