Cohu Inc. (NASDAQ: COHU) reported fourth‑quarter 2025 revenue of $122.2 million, a 30% year‑over‑year increase from $94.1 million in Q4 2024. The figure slightly exceeded the $122.1 million consensus estimate, but fell short of the higher $124.5 million estimate cited by some analysts, leaving the revenue outcome ambiguous depending on which benchmark is used.
The company posted a GAAP loss of $22.5 million, or $0.48 per share, and a non‑GAAP loss of $7.2 million, or $0.15 per share. The non‑GAAP loss represents a $0.21 per‑share miss against the consensus profit of $0.06, a swing of roughly 350% from the expected figure. The miss is largely attributable to one‑time restructuring and acquisition costs, as well as inventory write‑downs associated with discontinuing certain product lines.
Recurring revenue, which accounts for about 60% of total sales, grew 25% year‑over‑year to $73.3 million, driven by strong demand for services, interface solutions, and handler‑related spares. Systems revenue, the remaining 40%, remained flat, reflecting a mix shift toward higher‑margin recurring contracts and the ongoing rationalization of legacy product lines.
Gross margin for the quarter was 40.8%, below the guidance range and lower than the 45% target for Q1 2026. The compression was caused by one‑time inventory charges related to the discontinuation of certain product lines and the consolidation of offerings, which realigned engineering and support resources with customer demand. Management expects the margin to rebound as the inventory adjustments are fully absorbed.
Cohu is accelerating a strategic pivot toward high‑performance computing and AI applications. The company acquired Tignis in January 2025 and issued $287.5 million of convertible senior notes in September 2025, strengthening its cash position to $484 million. These moves support the company’s focus on AI‑related products, including HBM inspection metrology solutions, and position it to capture growth in the high‑bandwidth memory market.
Investors reacted negatively to the earnings miss, with the market citing the significant non‑GAAP EPS shortfall as the primary driver of the downturn. The miss underscored concerns about the company’s ability to translate revenue growth into profitability amid the strategic transition.
Management guided for flat revenue in Q1 2026 and projected a rebound in gross margin to approximately 45%. The guidance signals confidence in the AI and high‑performance computing strategy, while the flat revenue outlook reflects caution amid ongoing inventory adjustments and the need to consolidate product lines.
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