Cohu 2025 Q3 Earnings 77.3% Net Loss Reduction Amid AI Expansion

Cohu (COHU) reported fiscal 2025 Q3 earnings on Nov 1, 2025, with revenue surpassing Wall Street expectations and a significant narrowing of net losses. The company’s stock gained 16.5% month-to-date despite a quarterly net loss of $4.1 million, reflecting optimism around its AI-focused product suite and strategic cost-cutting measures.

Revenue

Cohu’s total revenue surged 32.4% year-over-year to $126.25 million, driven by robust demand for AI and mobile computing applications. Systems revenue contributed $56.24 million, while non-systems revenue accounted for $70 million, reflecting a balanced growth trajectory across core segments.

Earnings/Net Income

The company narrowed its net loss to $-4.10 million in Q3 2025, a 77.3% improvement from $-18.06 million in Q3 2024. Earnings per share (EPS) improved from -$0.39 to -$0.09, underscoring effective operational restructuring and cost controls. <img src="https://cdn.ainvest.com/aigc/hxcmp/images/compress-aime_generated_1762035435362.jpg.png" style="max-width:100%;">

Post-Earnings Price Action Review

Cohu’s stock price declined 1.12% on the latest trading day but gained 4.11% over the past week and 16.50% month-to-date. Analysts attribute the volatility to mixed sentiment around short-term profitability versus long-term AI-driven growth potential.

CEO Commentary

CEO Luis Müller highlighted “recurring revenue continued to grow for the third consecutive quarter, driven by strength in interface solutions and test handler spares,” while noting “systems revenue improved sequentially for the fourth quarter in a row though it remains below normalized levels.” He emphasized strategic shifts toward AI-centric products, including the Neon HBM inspection system and Eclipse test handler, which are central to next-gen computing.

Guidance

Cohu guided Q4 2025 revenue to $122 million (±$7 million), reflecting a 3.5% sequential decline due to seasonal slowdowns. Management projected recurring revenue to account for 60% of Q4 sales, with gross margin targeting 45%. Operating expenses are expected to stabilize at $50 million, aligning with restructuring goals.

Additional News

Cohu announced a $287.5 million convertible notes offering in early Q4 at a 1.5% interest rate, with a 5-year term and 32.5% conversion premium. The company also appointed Matthew Hutton as Vice President of Strategy to lead M&A and partnership initiatives. Recent product wins include the first Diamondx order for automotive testing and repeat Neon HBM system orders, raising 2025 revenue forecasts for these tools to $10–$11 million.

Cohu’s global restructuring program is expected to yield $2 million in quarterly cost savings by 2025, with CFO Jeffrey Jones noting improved gross margins from recurring revenue (mid-50s) and disciplined operating expense management.