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- **AI-Driven Growth**: Q1 revenue exceeded expectations, fueled by hyperscaler orders for Sonoma systems and wafer-level burn-in evaluations. Lead customer placed follow-on orders for AI processor production.
- **Wafer-Level Innovation**: FOX-XP systems are the only proven solution for wafer-level AI processor burn-in, with a leading OSAT showcasing 300mm wafer capabilities. HBF testing highlights potential for higher power requirements.
- **Financial Resilience**: Despite 16% YoY revenue decline, non-GAAP net income of $0.2 million reflects cost control and $24.7 million cash reserves. Facility renovation boosts manufacturing capacity by 5x+.
- **Market Expansion**: Engagements across AI, silicon photonics, HDD, and GaN markets suggest broad-based growth, with H2 2026 orders expected for wafer-level burn-in systems.
- **Risk Management**: Cautionary approach to guidance due to tariff uncertainty, but strong backlog ($15.5M) and Q2 bookings ($17.5M) signal momentum.

**【CEO Summary Section】**
- Q1 2026 revenue of $11 million exceeded analyst expectations, driven by AI processor production burn-in orders for the Sonoma system. Key customer placed multiple follow-on orders for shorter lead times due to higher-than-expected volumes.
- Sonoma system enhancements include 2,000W power per device, full automation, and a new device handler, generating strong customer interest across AI, silicon photonics, and HDD markets.
- Wafer-level burn-in for AI processors is gaining traction, with a leading OSAT showcasing Aehr's FOX-XP systems for 300mm wafers. Evaluation programs with top-tier AI suppliers are underway for high-volume production.
- Strategic partnership with a leading OSAT to provide wafer-level test and burn-in solutions for HPC and AI processors, with follow-on orders anticipated as volumes increase.
- Flash memory wafer-level burn-in benchmark testing shows positive results, with potential expansion into high-bandwidth flash (HBF) for AI workloads.
- Fiscal 2026 growth expected across AI, silicon carbide, GaN, and HDD markets, with cautious guidance due to tariff-related uncertainty.

**【CFO Financial Commentary】**
- Q1 2026 revenue: $11 million (down 16% YoY due to lower consumables revenue, which fell from $12.1M to $2.6M). Non-GAAP gross margin: 37.5% (down from 54.7% YoY due to lower sales volume and product mix).
- Operating expenses: $5.9 million (8% YoY increase due to R&D investments in AI and memory projects). One-time restructuring charge: $219,000 from Incal facility consolidation.
- Non-GAAP net income: $0.2 million ($0.01 per diluted share) vs. $2.2 million ($0.07 per share) YoY. Backlog: $15.5 million with $17.5 million in Q2 bookings.
- Cash position: $24.7 million (down from $26.5M due to $1.4M facility renovation payment). Total renovation spend: $6.3 million, enabling 5x+ manufacturing capacity for high-power systems.

**【Q&A Highlights】**
- **AI Growth & Timing**: CEO anticipates material orders for wafer-level burn-in in H2 2026, with lead customer needing additional capacity. Engagement with multiple hyperscalers and AI processor suppliers for both package and wafer-level solutions.
- **Customer Engagement**: Over 10 companies visited Aehr's HQ in Q1 to evaluate Sonoma enhancements, including fully automated handler. Lead customer for wafer-level burn-in plans to adopt FOX-XP for next-gen processors.
- **Wafer vs. Package Burn-In Transition**: Customers are moving from package-level (Sonoma) to wafer-level due to cost savings and yield improvements. Aehr's FOX-XP systems are the only proven solution for wafer-level AI processor burn-in.
- **HBF & Flash Memory**: Testing of new WaferPak for fine-pitch flash memory shows promise. HBF, developed by leading flash suppliers, requires higher power and parallelism, aligning with Aehr's expertise.
- **Silicon Carbide Outlook**: Strong demand for high-voltage FOX-XP systems (18-wafer configuration) in EV inverters, with follow-on orders expected in H2 2026.


Aehr Test Systems, Inc. (AEHR) Q1 2026 Earnings Call Transcript

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AEHR

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