Cohu Inc. (NASDAQ: COHU) reported first‑quarter 2026 revenue of $125.1 million, up 2.4% from $122.2 million in the prior quarter and 29.5% from $96.8 million in Q1 2025. The company posted a GAAP loss of $12.1 million, or $0.26 per share, while non‑GAAP income was $0.6 million, or $0.01 per share. Test‑cell utilization reached 78% at the end of March, reflecting strong demand for AI‑exposed and high‑performance computing (HPC) test equipment.
The revenue beat was driven by a 57% year‑over‑year increase in orders across multiple product lines, with a $750 million opportunity pipeline in the computing segment—$650 million in test handlers and $100 million from high‑bandwidth memory inspection—highlighting the company’s expanding AI and HPC footprint. Gross margin expanded to 46.5%, above guidance, as higher‑margin AI contracts offset lower‑margin legacy product sales.
The GAAP loss was largely a result of a one‑time restructuring charge and inventory adjustments related to the discontinuation of legacy products. Non‑GAAP EPS of $0.01 fell short of the consensus estimate of $0.03, a miss of $0.02, while revenue exceeded the consensus estimate of $122.07 million by $3.03 million.
Management guided second‑quarter 2026 sales to $144 million plus or minus $7 million, a sequential increase of 15% and a year‑over‑year rise of 34%. "For Q2 revenue to increase 15% sequentially and 34% year‑over‑year to approximately $144 million, plus or minus $7 million," said CFO Jeffrey Jones. The company also raised its full‑year 2026 revenue outlook to 20%–25% growth, reflecting confidence in sustained AI and HPC demand. "We're increasing our full year 2026 revenue outlook for growth over last year of 20% to 25%," Jones added.
Market reaction was mixed: the EPS miss prompted initial concern, but the revenue beat and robust guidance, especially the $80 million–$100 million outlook for high‑performance computing revenue, outweighed the short‑term disappointment. "We started fiscal 2026 with strong momentum, driven by accelerating AI and high‑performance computing demand and improving market conditions driving an estimated test cell utilization of 78% at the end of March," CEO Luis Müller noted.
Strategically, Cohu is accelerating its AI and HPC portfolio, investing in the Eclipse platform and expanding software analytics. The company’s recurring revenue mix remains strong at 60%, and operating leverage is improving as manufacturing consolidation in Asia reduces cost intensity. While near‑term gross margins are expected to compress to around 44% in Q2 due to ramp costs, the company’s focus on high‑margin AI contracts and a growing pipeline positions it for long‑term growth.
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