Aehr Test System Reports Record Q1 Revenue and Raises FY2027 Outlook

Aehr Test System (NASDAQ: AEHR ) reported first-quarter financial results on Monday. The transcript from the company's first-quarter earnings call has been provided below. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

View the webcast at Summary Aehr Test System reported record first-quarter fiscal 2027 revenue of $33 million, a 200% increase year-over-year, driven by strong AI semiconductor demand. The company raised its fiscal 2027 revenue guidance to $150 million, reflecting a 200% growth over fiscal 2026, with a non-GAAP net income expectation of at least 20% of revenue. Bookings for the quarter totaled $46.7 million, with a book-to-bill ratio of 1.4, and an effective backlog of $109.3 million as of November 1st. Demand is accelerating for both wafer-level and package-level burn-in solutions, particularly for AI processors, silicon photonics, and silicon carbide applications.

The company is expanding manufacturing capabilities, including in Southeast Asia, to support growing customer production requirements and future growth beyond fiscal 2027. Operational highlights include significant progress with a major AI accelerator customer and additional orders from silicon photonics and silicon carbide markets. Management highlighted the diversification of its customer base across more than a dozen clients, reducing dependence on any single customer. Aehr Test System remains debt-free with strong liquidity, supporting ongoing investments in growth and capacity expansion.

Full Transcript OPERATOR Good day everyone and welcome to the Aehr Test System fiscal 2027 first quarter financial results conference call. At this time, all participants are placed on a listen-only mode and we will open the floor for your questions and comments after the presentation. It is now my pleasure to hand the floor over to your host, Todd Curley of Pondel Wilkinson. Sir, the floor is yours.

Todd Curley (Investor Relations) Thank you, operator. Good afternoon everyone and welcome to Aehr Test System first quarter fiscal 2027 financial results conference call. Joining me on today's call are Gayn Erickson, Aehr Test System President and Chief Executive Officer, and Chris Hsu, Chief Financial Officer. This afternoon, following the market close, Aehr Test System issued a press release announcing its first quarter fiscal 2027 results.

The release is available on the company's website at aehr.com. Today's call is being webcast live and a replay will be available on the Investor Relations page of the company's website. Before we begin, I'd like to remind everyone that management will make forward-looking statements today that are based on current information and estimates. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by the forward-looking statements.

Factors that could cause such differences are discussed in the company's most recent periodic and current reports filed with the SEC. Forward-looking statements, including guidance provided during today's call, are valid only as of today's date and Aehr undertakes no obligation to update them. Now I'd like to turn the conference call over to Gayn Erickson, President and Chief Executive Officer. Gayn.

Gayn Erickson (President and Chief Executive Officer) Thanks, Todd. Good afternoon everyone and thank you for joining us. I'll begin with a brief overview of our first quarter highlights and provide an update on the key customer programs and markets driving our business with a focus on the strong demand we're seeing in the AI and data center infrastructure markets. Chris will then review our financial results and outlook before we open the call for questions.

We delivered an outstanding start to fiscal 2027 with record quarterly revenue, strong bookings, and significant progress across several major AI semiconductor customer programs. First quarter revenue was a record $33.0 million, increasing 200% year over year and 75% sequentially. Non-GAAP net income was $9.4 million, up 163% sequentially, reflecting the operating leverage in our business as revenue scales. These results demonstrate expanding AI production demand and our ability to meet customer capacity.

Bookings totaled $46.7 million, representing a book-to-bill of 1.4. Our effective backlog, including bookings received after quarter end, reached $109.3 million as of November 1st. Based on our strong first quarter performance, substantial backlog, and visibility into customer production requirements, we're raising our fiscal 2027 revenue outlook to $150 million, compared with our previous guidance range of $130 million to $150 million. This represents 200% revenue growth over fiscal 2026 and reflects our growing confidence in the production ramps and customer programs supporting our business.

We expect non-GAAP net income of at least 20% of revenue for the full fiscal year. Chris will provide additional details on our financial outlook. Demand continues to accelerate across both wafer-level and package-level burn-in, driven by increasing semiconductor complexity, power requirements, and deployment in mission-critical applications. As devices become more advanced, the need for comprehensive test and burn-in is becoming essential to ensure reliability and performance, which is driving growing adoption of our solutions across multiple markets.

For Aehr Test System, this is translating into expanding production demand from existing customers and new opportunities to qualify our solutions on additional devices with both those customers and new customers. Starting with our wafer-level burn-in business, demand for our FOX wafer-level burn-in solutions is accelerating. Our lead AI processor production customer continues to expand capacity. In August we announced a $22 million follow-on order for multiple systems consisting of fully automated FOX-XP systems with integrated WaferPak Auto Aligners and full sets of proprietary WaferPak full—wafer contactors.

We are executing against this customer's capacity expansion plans and are encouraged by its forecast for additional capacity in both the short and long term. We've also made significant progress with a major supplier of AI accelerators, CPUs, and network processors that successfully completed a benchmark evaluation last quarter.

This customer has decided to purchase a fully configured XP wafer-level burn-in test cell for installation at one of its key outsourced semiconductor assembly and test, or OSAT, partners in Taiwan, where the system will be evaluated in a high-volume production environment using the same device that was successfully tested in last quarter's benchmark. Installation is planned for early calendar 2027, with a decision regarding high-volume production anticipated within several months following installation and validation.

We believe this customer represents one of the largest potential burn-in system opportunities Aehr Test System has ever pursued, with significant potential across multiple product lines and across multiple manufacturing locations. This engagement represents an important step toward broader adoption of wafer-level burn-in for advanced AI processors, as well as deployment of our wafer-level solutions across multiple products and product lines for a single customer.

As these advanced processors are integrated into expensive multi-die packages that include other processors, high-bandwidth memory, and other components such as electrical and optical I/O chips, identifying early life failures before final assembly can provide significant cost and reliability benefits. There's also a growing trend that some devices that customers are working on may require production burn-in screening at the wafer level, as infant mortality failures of certain devices may simply not be able to be screened effectively at the package level.

In silicon photonics, we received additional production orders from multiple customers for fully automated FOX-XP systems used to burn in photonic integrated circuits for high-speed optical interconnects and data center applications. We believe broader adoption of optical interconnects, including emerging co-packaged optics architectures, will create additional demand for wafer-level reliability screening. In silicon carbide, additional WaferPak orders and increased utilization of installed FOX systems point to improving demand.

We have direct evidence from EV automotive suppliers that companies using our wafer-level burn-in systems are being seen as preferred vendors for their quality and reliability screening. Increasingly we see that companies performing reliability screening through wafer-level burn-in see it as a real differentiator in their markets. We also continue to pursue gallium nitride and other power semiconductor applications where reliability screening has proven to be critical to their end markets as well. GaN has a much broader application space than silicon carbide does today and has proven to be much harder to screen for early life failures.

We feel we are the market leader in this area and have added two additional production customers in the last six months. In memory, we remain engaged with major manufacturers on next-generation wafer-level burn-in. NAND flash opportunities are progressing more slowly than expected because of limited incremental manufacturing capacity and also the timing of new high-bandwidth flash architecture volumes. Separately, emerging high-bandwidth memory architecture for DRAM, with more complex logic in the base die, may create wafer-level burn-in opportunities before integration into advanced memory packages.

These engagements continue and Aehr Test System continues to feel these are long-term opportunities for us. Now let me turn to package level. Our Sonoma high-power package-level burn-in business is also expanding. We are shipping and installing more than a dozen systems per month to support our lead hyperscale customer's production ramp for its first AI processor using Sonoma.

Our expanded manufacturing capacities are supporting this delivery pace. The same customer's second AI processor has successfully completed qualification on Sonoma. As announced in October, we received follow-on orders for additional systems, burn-in modules, and software enhancements to support initial production sampling and an anticipated production ramp in calendar 2027. Importantly, the customer forecasts that this second processor will ultimately reach higher production volumes than its first processor currently in production on Sonoma.

This processor requires greater power and more sophisticated thermal management, including multiple independently controlled thermal zones within a single package. We're also advancing evaluations of our Sonoma high-power systems with additional AI processor suppliers and hyperscale customers for both engineering qualification and potential high-volume production applications. These engagements include bringing up processors here at Aehr Test System as well as at customers' facilities here in the U.S. and in Asia.

These processors include data center—focused processors for training and inference, as well as very high-volume edge-based processors for mission-critical real-time inference applications. We continue to see package-level applications driving our business in addition to the growth in wafer level. On our consumable business, complementing our system sales, our proprietary WaferPak contactors and Sonoma burn-in modules support customers' ongoing production requirements and new device introductions. We currently expect these products to represent about 35% of our fiscal 2027 revenue.

As our installed base expands across AI processors, silicon photonics, silicon carbide, gallium nitride applications, we see further opportunities for these engineering qualifications and production-driven purchases. I also want to highlight an important change in the profile of our business that may not be fully apparent from the individual customer programs we've discussed. Historically, Aehr Test System had only a handful of customers with the potential to generate significant production orders. Today we see that potential across more than a dozen customers spanning AI processors, silicon photonics, silicon carbide, gallium nitride, and other applications.

This represents meaningful diversification not only across customers and end markets, but also across both our FOX wafer-level burn-in and Sonoma package-level burn-in platforms. Individual customer orders and production ramps can still vary significantly from quarter to quarter, but we now have a much broader range of customer and production opportunities contributing to our growth outlook. We believe this breadth reduces our dependence on the timing of any single customer program and positions Aehr Test System for more diversified, sustainable long-term growth.

Importantly, this expanding customer base, combined with the increased number of devices being qualified for production and the growing installed base of our systems, is creating multiple opportunities for additional revenue growth beyond our fiscal year. To support expanding demand, we've increased our manufacturing capabilities, including in Southeast Asia. These investments are supporting our current customer production ramps and providing capacity for additional growth. We continue to work closely with suppliers to meet customer delivery requirements.

We're also planning further manufacturing expansion and targeted investments in engineering, customer support, and sales to support growth beyond fiscal 2027. Our priorities remain delivering on existing production commitments and advancing additional customer programs through qualification and validation. Before turning the call over to Chris, I'd like to welcome Vijay Rao to our Board of Directors. Vijay brings 30 years of technology industry experience and deep expertise in hyperscale data center infrastructure, including AI accelerators, high-performance memory, and optical networking.

His understanding of semiconductor reliability requirements will be valuable as we expand our presence in AI and data center applications. To close, our record revenue, strong quarterly bookings, record effective backlog, and expanding customer opportunities have strengthened our confidence in the year ahead. With existing customers increasing production, additional AI processor programs advancing toward commercialization, and a significantly broader pipeline of opportunities across both our wafer-level and package-level burn-in platforms, we believe Aehr Test System is exceptionally well positioned for continued growth in fiscal 2027 and beyond.

Our focus remains on executing against existing production commitments, expanding our installed base, and converting additional qualification programs into long-term production business. With that, I'll turn it over to Chris. Chris Siu (Chief Financial Officer) Thank you, Gayn, and good afternoon, everyone. Our first quarter results reflect strong execution against expanding customer demand, with record first quarter revenue, bookings that exceeded revenue, and significant operating leverage as we continue to scale our business.

Importantly, we increased quarter-end backlog to approximately 101 million despite substantial shipments during the quarter, and our effective backlog reached 109.3 million, providing substantial visibility into our fiscal 2027 outlook. I'll begin with a brief update on our manufacturing capacity, followed by a review of bookings and backlog, first quarter financial results, cash flow and balance sheet, and our updated fiscal 2027 outlook. During the first quarter, we continued expanding our manufacturing and customer support capabilities to meet growing demand.

In addition to expanding our Fremont operations, we began shipping Sonoma systems from an existing contract manufacturer in Southeast Asia. This operation adds capacity for more than 20 additional Sonoma systems per month, giving us greater flexibility to support growing customer production requirements. During the quarter, we shipped multiple Sonoma systems from this facility to the Taiwan-based OSAT supporting our lead hyperscale customer, and the ramp proceeded smoothly. This asset-light manufacturing approach allowed us to increase production capacity and responsiveness without a comparable increase in infrastructure or capital spending.

We are also expanding our local support capabilities in Taiwan following the signing of a new lease in Hsinchu. We added customer service resources and planned selective hiring in sales and customer support as wafer-level and package-level burn-in programs move toward higher production volumes. Turning to bookings and backlog, first quarter bookings totaled 46.7 million, an increase of more than 300% from 11.4 million in the prior-year quarter. The increase was driven primarily by orders for FOX wafer-level burn-in systems, WaferPak contactors, and auto aligners supporting AI processor and silicon photonics applications.

Quarter-end backlog was 100.9 million, up from 80.6 million at the end of fiscal 2026. Importantly, we increased backlog to above 100 million despite recognizing 33 million in revenue during the quarter, reflecting strong new order activity, including 8.4 million in additional bookings received after quarter end. Effective backlog reached 109.3 million as of November 1st. This substantial backlog, combined with our expanding manufacturing capacity and visibility into existing production programs, provides a strong foundation for our updated fiscal 2027 revenue outlook.

First quarter revenue was a record 33 million, increasing 200% from 11 million in the prior-year quarter and 75% sequentially.