Cohu Inc's Q4 2024 Earnings: Navigating Challenges and Opportunities

Cohu Inc (COHU), a global leader in semiconductor manufacturing equipment and services, reported its fourth-quarter 2024 earnings on February 13, 2025. The company's financial results highlighted both challenges and opportunities in the dynamic semiconductor industry. Let's dive into the key takeaways and analyze the company's strategic moves.



Cohu's full-year 2024 revenue of $401.8 million demonstrated resilience despite market downturns, while the company achieved a full-year non-GAAP gross margin of 45%. This highlights the value of Cohu's differentiated products and optimized manufacturing cost structure. However, the fourth-quarter gross margin was impacted by a $2.1 million inventory reserve charge, leading to a non-GAAP EPS loss of $0.15.

Cohu faces challenges in the Automotive and Industrial segments, which continue to experience inventory corrections and market downturns. Additionally, operating expenses for Q1 2025 are forecasted to increase, partly due to the acquisition of Tignis, an AI process control company. This acquisition is expected to contribute to Cohu's growth in the software segment, with an anticipated annual growth rate of 50% over the next three years.



Cohu's CEO, Luis Müller, stated, "We are expanding our analytics offering with Tignis, creating the opportunity to potentially grow software revenue at an annual rate of 50% or more over the next three years as the industry seeks solutions to optimize yield and productivity." This strategic move aligns with Cohu's long-term goal of diversifying its revenue streams and leveraging its expertise in the semiconductor industry to offer new value-added services.

In conclusion, Cohu Inc's Q4 2024 earnings call highlighted both challenges and opportunities in the dynamic semiconductor industry. While the company faces headwinds in the Automotive and Industrial segments, its strategic focus on expanding its software platform and entering new markets like high-bandwidth memory (HBM) and silicon carbide power semiconductors positions it for future growth. Investors should monitor Cohu's progress in these areas as the company navigates the challenges and opportunities in the semiconductor industry.