Cohu, Inc. Q2 2026 Earnings Call Summary

Moby Intelligence

Fri, July 31, 2026 at 5:50 AM GMT+3 3 min read

COHU +3.32%

Cohu, Inc. Q2 2026 Earnings Call Summary - Moby

Strategic Execution and Market Dynamics

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Delivered 38% year-over-year sales growth driven by robust adoption of advanced thermal test handlers for AI processors and HBM inspection.
Semiconductor test utilization improved sequentially to 80% at the end of Q2, signaling a historical turning point for capital expenditure among core IDM customers.
Computing led system orders with a 150% year-over-year increase, primarily fueled by the Eclipse handler's growth in high-performance computing (HPC).
Industrial segment orders rose 87% year-over-year as utilization in that sector reached the low 80s, while automotive remains the primary laggard in the current recovery cycle.
Strategic focus on software analytics achieved a milestone $1 million revenue quarter, utilizing an 'on-site AI appliance' to meet strict customer data sovereignty requirements.
High-performance computing customer pipeline expanded to an estimated $850 million annually, encompassing 19 identified customers across various qualification stages.
Recurring revenue reached 53% of total sales, supported by consumables, device application kits, and a growing subscription software model.

Operational Outlook and Scaling Strategy

Raised fiscal 2026 revenue growth outlook to approximately 35% year-over-year, implying a full-year range of $610 million to $615 million.
Increasing HPC revenue estimates to between $100 million and $110 million for fiscal 2026, with Q4 capacity already largely committed.
Executing a manufacturing expansion in Malaysia to increase HPC handler output by 50% by year-end 2026 and double output by mid-2027., with plans to potentially triple output by late 2027.
Anticipating Q3 revenue of approximately $170 million, driven equally by HPC ramps and a continued recovery in core industrial business segments.
Projecting gross margins to remain in the mid-40% range for the full year, despite headwinds from higher input costs for memory and specialty components.

Risk Factors and Structural Developments

Supply chain constraints and longer lead times for semiconductors and memory have resulted in higher input costs, prompting proactive advanced purchases.
Operating expenses are expected to remain elevated in the low-$50 million range to support rapid R&D and production scaling for HPC opportunities.
Automotive segment remains a headwind, with management not expecting utilization to reach the 80% threshold until late Q1 or Q2 of 2027.
Capital expenditures are targeted at 2% of revenue for 2026, primarily focused on the Malaysia facility expansion and thermal head production in the Philippines.

Q&A Session Summary

Timeline and conversion of the $850 million HPC pipeline

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Management clarified the $850 million represents annual customer spend potential, not a multi-year total.
Qualification for near-term customers is expected to conclude between late Q3 2026 and mid-Q1 2027.
One major customer is currently transitioning from qualification on legacy devices to production configurations for next-generation intercepts.

Capacity expansion levers and supply chain management

Internal manufacturing output for HPC handlers is planned to double by the middle of 2027., with a path to triple output if market demand persists.
The primary bottleneck is exercising the supply chain for specialty components rather than internal floor space.
Lead times for the Eclipse handler are currently maintained at 13 to 14 weeks, though large volume orders are shipped incrementally over several weeks.

Competitive landscape in high-performance thermal management

Cohu identifies a single primary competitor, Han Precision, which has historically dominated the OSAT market.
Management believes their thermal technology is a key differentiator as power dissipation becomes the primary challenge for hyperscalers and fabless GPU designers.
The Eclipse system's ability to straddle both CPU and GPU applications without changing base capital equipment is a core value proposition.

Impact of rising input costs on margins

Higher costs are currently concentrated in integrated circuits and memory components.
Management has initiated discussions with customers regarding potential price pass-throughs to offset these increased costs.
Q3 guidance already accounts for known risks and current component cost structures.