Aehr Test Systems (NASDAQ:AEHR) executives said the company made “significant progress” across both wafer-level and package-part burn-in markets during its fiscal 2026 second-quarter earnings call, even as quarterly revenue came in below expectations. Management pointed to expanding customer engagement tied to AI and data center infrastructure demand and reinstated guidance for the second half of fiscal 2026 based on improved visibility and customer forecasts.
Second-quarter results, bookings, and backlog
Chief Financial Officer Chris Siu reported second-quarter revenue of $9.9 million, down 27% from $13.5 million in the prior-year period. The decline was attributed primarily to lower wafer pack shipments, partially offset by stronger Sonoma system demand from a hyperscaler customer.
Non-GAAP gross margin was 29.8%, down from 45.3% a year ago, reflecting lower overall volume and an unfavorable mix versus the prior year quarter, which included a higher proportion of wafer pack revenue. Non-GAAP operating expenses were $5.7 million, down from $5.9 million, with lower personnel-related costs partially offset by higher R&D spending tied to AI benchmark initiatives and memory-related programs.
On profitability, Aehr posted a non-GAAP net loss of $1.3 million, or $(0.04) per diluted share, compared with non-GAAP net income of $0.7 million, or $0.02 per diluted share, in the year-ago quarter. The company recorded an income tax benefit of $1.2 million, resulting in an effective tax rate of 27.3%.
Bookings were $6.2 million in the second quarter, versus $11.4 million in the first quarter, and backlog at quarter end was $11.8 million. Siu added that during the first six weeks of the fiscal third quarter, Aehr received an additional $6.5 million in bookings, bringing “effective backlog” to $18.3 million. He said the increase was driven primarily by an order from a “premier Silicon Valley test lab” for a newly introduced high-power configured Sonoma system.
Reinstated outlook and booking expectations
Chief Executive Officer Gayn Erickson said that while second-quarter revenue was “softer than anticipated,” the company believes customer forecasts support a stronger booking profile in the back half of the year. For the second half of fiscal 2026 (Nov. 29, 2025 through May 29, 2026), Aehr expects:
- Revenue: $25 million to $30 million
- Non-GAAP net loss per diluted share: $(0.09) to $(0.05)
While the company did not issue formal bookings guidance, management said it believes second-half bookings will be “much higher than revenue,” in a range of $60 million to $80 million based on customer forecasts. In the Q&A, Erickson indicated that the bulk of the expected bookings is tied to AI processors, spanning both wafer-level and package-part burn-in, with silicon photonics also contributing and silicon carbide representing the smallest portion.
Wafer-level burn-in: AI, memory, silicon photonics, GaN, SiC, and HDD
Erickson outlined multiple wafer-level burn-in engagements in production installations and evaluations across AI processors, flash memory, silicon photonics, gallium nitride (GaN), and hard disk drives. He said Aehr’s lead AI wafer-level burn-in customer continues next-generation processor development and is discussing additional capacity, including a planned transition to Aehr’s automated wafer pack aligner for 300mm wafers.
Aehr also expanded its partnership with ISE Labs to deliver wafer-level test and burn-in services for high-performance computing and AI, offering customers both wafer-level and package-part options for production volumes.
Regarding a benchmark program with a “top-tier AI processor supplier,” Erickson said Aehr completed development of fine-pitch, high-current wafer packs and is working through startup procedures (including power-up sequencing, thermal profiling, test vectors, timing, and differential clocks). He said Aehr expects to complete data collection during the current quarter, noting that the overall benchmark “typically” takes about six months. Aehr also has two additional AI processor companies planning wafer-level benchmark evaluations.
In flash memory, Erickson said the company completed a wafer-level benchmark with a global NAND flash leader before the holidays, and the customer is now validating correlation with internal processing. Aehr proposed a next-generation solution for high-bandwidth flash (HBF) targeted at AI workloads, built on the Fox XP platform and auto-aligner technology, but noted development would take “over a year following customer commitment.”
In silicon photonics, management said its lead customer has “firmed up” a production ramp expected to begin early next fiscal year, later than previously expected. Aehr also finalized a forecast with another major silicon photonics customer and expects to book an initial turnkey Fox system soon, with delivery planned for May.
In GaN, Erickson said unanticipated high-voltage fault conditions required wafer pack and protection circuit redesigns, delaying roughly $2 million in wafer pack shipments from the prior quarter into the current one. He said shipments have resumed. For silicon carbide (SiC), Erickson reiterated that near-term demand has been weaker and the company has pushed expected system capacity orders into next fiscal year, though it expects wafer pack needs from a lead customer that has transitioned from 150mm to 200mm wafers.
Package-part burn-in: Sonoma traction and higher-power systems
In package-part burn-in, management emphasized accelerating demand for its Sonoma ultra-high-power systems for AI devices. Erickson said that during the fiscal third quarter to date, the company has received more than $5.5 million in Sonoma orders from multiple customers, including initial orders from a “premier Silicon Valley test lab” for a newly introduced higher-power Sonoma configuration that can also support full automation. He said these orders already exceed total Sonoma orders for the entire second quarter.
Erickson also described “key new device wins” for Sonoma supporting high-temperature operating life (HTOL) qualifications for AI devices, which he said are expected to drive additional capacity at test houses. He added that Aehr’s lead production Sonoma customer for AI processors continues to ramp and has provided a “substantial forecast” for AI ASIC production capacity, with requested Sonoma system and BIM shipments beginning in Aehr’s fiscal first quarter of 2027 (starting May 30, 2026). Management said that forecast could contribute to strong bookings in fiscal 2026 and meaningful revenue growth in fiscal 2027.
During the quarter, Aehr completed development of a next-generation, fully automated higher-power Sonoma system supporting up to 2,000 watts per device. Erickson said the system enables continuous flow operation, improved throughput, and compatibility with installed Sonoma systems, and can be paired with an Aehr-developed automated handler as a turnkey solution.
Cash position and ATM activity
Siu said Aehr used $1.2 million in operating cash during the quarter and ended the period with $31.0 million in cash, cash equivalents, and restricted cash, up from $24.7 million at the end of the first quarter. The increase was largely attributed to proceeds from the company’s at-the-market (ATM) equity program.
During the second quarter, Aehr raised $10 million in gross proceeds through the sale of about 384,000 shares. Siu said $30 million remained available under the ATM at quarter end and that the company intends to use the program selectively based on market conditions and shareholder value.
About Aehr Test Systems (NASDAQ:AEHR)
Aehr Test Systems develops, manufactures and sells semiconductor test and burn-in equipment used by device manufacturers to ensure quality and reliability of integrated circuits. Its products are designed for wafer-level reliability assessment, functional test and stress screening of memory devices, system-on-chips, optical components and power semiconductors. By focusing on wafer-level burn-in and testing processes, the company helps reduce cost and improve yield for high-volume semiconductor production.
The company’s product portfolio includes FOX series wafer probe test and burn-in systems as well as ABTS burn-in ovens.
