EPS of $-0.10 decreased by 111.9% from previous year
Gross margin of 30.3%
Net income of -2.90M
""We believe using wafer level burn-in will result in savings in manufacturing costs, increases in revenues associated with the limited supply of these devices..." - Gayn Erickson" - Gayn Erickson
Aehr Test Systems (AEHR) Q4 2025 Financial Results Analysis - Transformative Year of Growth in AI and Semiconductor Testing
Executive Summary
In Q4 2025, Aehr Test Systems reported a revenue of $14.1 million, reflecting a 15% year-over-year decrease driven by delayed shipments due to tariff-related uncertainties. The gross profit margin dropped significantly from 51.5% a year ago to 34.7%, a consequence of changing product mix and elevated manufacturing costs related to the integration of acquired operations. Despite the challenges, management highlighted a transformative year with AI processor testing now generating over 35% of revenue, a notable departure from zero the previous year. Looking forward, Aehr expects robust growth as it continues to diversify its market focus, particularly in AI and other semiconductor applications. Chris Siu, CFO, anticipates an effective backlog of approximately $16.3 million, suggesting a positive trajectory for the upcoming quarters.
Key Performance Indicators
Revenue
14.09M
QoQ: -23.04% | YoY:-15.13%
Gross Profit
4.27M
30.32% margin
QoQ: -40.53% | YoY:-49.43%
Operating Income
-2.34M
QoQ: -109.12% | YoY:-192.09%
Net Income
-2.90M
QoQ: -350.86% | YoY:-112.15%
EPS
-0.10
QoQ: -350.00% | YoY:-111.85%
Revenue Trend
Margin Analysis
Key Insights
**Year-over-Year Change:** **-15%**
**Quarter-over-Quarter Change:** **-23%**
**Net Loss:** **$2.9 million**, compared to a net income of **$24.7 million** in Q4 2024, which included a **one-time tax benefit**.
**EPS:** Diluted EPS fell to **-$0.10** from **$0.84** in the previous year.
Financial Highlights
Revenue Performance: Aehr Test reported revenues of $14.1 million for Q4 2025, down from $16.6 million in Q4 2024.
- Year-over-Year Change:-15%
- Quarter-over-Quarter Change:-23%
Gross Profit Margin: Dropped to 34.7% compared to 51.5% the previous year, driven by the inclusion of InCal’s operations, product mix, and lower overall production volumes.
Profitability Metrics:
- Net Loss:$2.9 million, compared to a net income of $24.7 million in Q4 2024, which included a one-time tax benefit.
- EPS: Diluted EPS fell to -$0.10 from $0.84 in the previous year.
Cash Flow: The company ended Q4 with $26.5 million in cash and equivalents, down from $49.3 million in Q4 2024, impacted by operational cash outflows and capital expenditures, including the $11 million acquisition of InCal.
Balance Sheet Health: Aehr holds no debt, indicating a conservative capital structure, supporting further growth opportunities without leverage risks.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
14.09M
-15.13%
-23.04%
Gross Profit
4.27M
-49.43%
-40.53%
Operating Income
-2.34M
-192.09%
-109.12%
Net Income
-2.90M
-112.15%
-350.86%
EPS
-0.10
-111.85%
-350.00%
Key Financial Ratios
Net Income vs. Revenue
Expense Breakdown
Management Commentary
1. AI Diversification: CEO Gayn Erickson emphasized the shift in Aehr's revenue sources, stating, "...the burn-in of artificial intelligence processors represented 0% of our revenue last year but this year accounted for over 35% of our revenue."
2. Market Expansion: The management indicated excitement about their positioning in emerging semiconductor markets, remarking, "We believe using wafer level burn-in will result in savings in manufacturing costs, increases in revenues associated with the limited supply of these devices..."
3. Strategic Integration: CFO Chris Siu highlighted efficiencies from the InCal acquisition, projecting future cost savings: "With the integration of the two companies, we'll be able to create synergy and reduce our facility cost by over $800,000 per year going forward."
"We believe using wafer level burn-in will result in savings in manufacturing costs, increases in revenues associated with the limited supply of these devices..." - Gayn Erickson
— Gayn Erickson
"With the integration of the two companies, we'll be able to create synergy and reduce our facility cost by over $800,000 per year going forward." - Chris Siu
— Chris Siu
Forward Guidance
Management has adopted a cautious outlook for fiscal 2026 due to ongoing tariff uncertainties affecting delivery and supply chains. They have refrained from issuing specific guidance but acknowledge strong booking trends, with **$61.1 million** in annual bookings, a **24%** year-over-year increase. The anticipated order growth across all segments, except for potential delays in silicon carbide growth, reflects optimism about capturing significant market share in AI and GaN sectors. Investors should monitor ongoing developments in customer orders as they transition to high-volume testing solutions.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
AEHR Focus
30.32%
N/A
N/A
N/A
PLAB
37.00%
25.10%
3.02%
10.39%
LRCX
47.80%
29.40%
11.90%
33.95%
KLAC
62.00%
41.00%
24.80%
33.27%
KLIC
48.30%
1.48%
1.28%
50.22%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Overall, Aehr Test Systems presents a compelling investment case given its transformative growth trajectory in the AI sector, solid balance sheet, and significant market opportunity. While caution around short-term operational challenges persists, the long-term outlook remains positive as management's strategy revolves around expanding into high-growth areas and leveraging technological advancements to capture market share. Investors should watch for progress in execution against these initiatives, particularly how the company adapts to market needs and successfully integrates new acquisitions.
Key Investment Factors
Growth Potential
Aehr's ability to pivot into AI testing has opened substantial revenue potential that has grown from 0% to over 35% of total revenue in just one year. Continued investment in R&D and infrastructure further supports their transformation in the semiconductor space.
Profitability Risk
Risks include ongoing tariff uncertainties impacting shipment timing and customer order stability. Additionally, the integration of InCal's assets may continue to affect operational efficiencies in the near term until fully optimized.
Financial Position
With **$26.5 million** in cash and no debt, Aehr maintains a strong financial position that provides flexibility for future investments and supports growth strategies in promising semiconductor markets.
SWOT Analysis
Strengths
Leading position in wafer level testing innovation
Strong cash reserves and no debt
Successful integration of InCal providing expanded product offerings
Weaknesses
Significant drop in gross margins due to operational challenges
Dependence on delayed shipments affecting short-term revenue
Opportunities
Growing demand for AI semiconductor testing solutions
Expansion into GaN and silicon photonics markets presenting new revenue streams
Ability to capture significant market share through unique product offerings
Threats
Ongoing tariff and geopolitical uncertainties affecting supply chains and costs
Intense competition in semiconductor testing markets and emerging technologies