Cohu — Third Quarter 2026 Earnings Summary

Financial Performance:

• Third quarter 2026 net sales increased 37% year-over-year to $173.0 million (Q3 2025: $126.2 million); first nine months 2026 net sales were $447.1 million (9 months 2025: $330.7 million).
• GAAP net income for Q3 2026 was $12.1 million ($0.22 per share), compared to a net loss of $4.1 million ($0.09 per share) in Q3 2025; first nine months 2026 GAAP net loss was $0.1 million ($0.00 per share), compared to a loss of $51.8 million ($1.11 per share) in 2025.
• Non-GAAP net income for Q3 2026 was $23.3 million ($0.43 per share), compared to a loss of $2.8 million ($0.06 per share) in Q3 2025; first nine months 2026 non-GAAP net income was $37.9 million ($0.73 per share), compared to a loss of $2.9 million ($0.06 per share) in 2025.
• GAAP gross margin was 45.5% in Q3 2026; non-GAAP gross margin was 45.7%.
• Adjusted EBITDA for Q3 2026 was $28.771 million (16.6% of net sales), compared to $11.652 million (9.2% of net sales) in Q3 2025; first nine months 2026 Adjusted EBITDA was $54.124 million (12.1% of net sales), compared to $13.602 million (4.1% of net sales) in 2025.
• Total cash and investments at the end of Q3 2026 were $507.9 million.
• Short-term borrowings were $15.636 million and long-term debt was $285.212 million as of September 26, 2026.
• No shares were repurchased during the third quarter of 2026.

Guidance and Future Outlook:

• Fiscal year 2026 high-performance computing revenue outlook raised to approximately $120 million.
• Fourth quarter 2026 sales expected to be up 46% year-over-year, in the range of $178 million +/- $7 million.
• Annual AI-driven compute opportunity pipeline grew 18% sequentially to approximately $1.0 billion.
• Approximately several hundred Eclipse systems are forecasted for 2027.
• Company is focused on expanding manufacturing capacity and working with supply partners to support potential customer production ramps.

Business Segments and Product Lines:

• Bookings increased 126% year-over-year, with systems bookings up 318% and recurring bookings up 36%.
• Growing customer adoption of Eclipse thermal solutions for high-performance computing was a key driver for systems demand.
• Recurring revenue business, including services, consumables, and software, continues to provide a stable foundation.
• Estimated test cell utilization increased 200 basis points sequentially to 82%.

Market and Competitive Landscape:

• Customer demand is driven by increasing device complexity, higher power requirements, and greater test intensity in the semiconductor industry.
• The high-performance computing opportunity pipeline is maturing as more customer programs advance through qualification and into production.

Risks and Challenges:

• Forward-looking statements are subject to risks including rapid technology changes, industry cyclicality, supply chain disruptions, product defects, supplier concentration, inflation, interest rates, high customer concentration, geopolitical instability, trade barriers, and cybersecurity threats.
• Specific risks include AI-related risks, operational strain from rapid demand shifts, talent attraction and retention challenges, and risks related to M&A integration.

Management Commentary and Tone:

• CEO Luis Müller described third-quarter results as reflecting "broad-based improvement" with significant revenue and bookings growth.
• Management highlighted the strength of the recurring revenue business and the maturation of the high-performance computing pipeline.
• Tone is confident regarding the expansion of the opportunity pipeline and the ability to support production ramps through capacity expansion.

Other Key Points:

• Conference call and webcast scheduled for October 28, 2026, at 1:30 p.m. Pacific Time.
• Non-GAAP financial measures exclude share-based compensation, amortization of intangible assets, restructuring costs, manufacturing transition costs, duplicate facility costs, and acquisition/financing costs.
• The company operates in the semiconductor industry, supplying test, automation, inspection & metrology products, software analytics solutions, and services.