Aehr Test Systems (AEHR) on Q2 2023 Results - Earnings Call Transcript

Operator: Good evening, and welcome to the Aehr Test Systems' Fiscal 2023 Second Quarter Financial Results Conference Call. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. I would now like to turn the conference over to Jim Byers of MKR Investor Relations. Please go ahead. Jim Byers: Thank you, operator. Good afternoon, and welcome to Aehr Test Systems' second quarter fiscal 2023 financial results conference call. With me on today's call are Aehr Test Systems' President and Chief Executive Officer, Gayn Erickson; and Chief Financial Officer, Ken Spink. Before I turn the call over to Gayn and Ken, I'd like to cover a few quick items. This afternoon right after market closed, Aehr Test issued a press release announcing its second quarter fiscal 2023 results. That release is available on the company's website at aehr.com. This call is being broadcast live over the Internet for all interested parties and the webcast will be archived on the Investor Relations page of the company's website. I'd like to remind everyone that on today's call, Management will be making forward-looking statements today that are based on current information and estimates and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. These factors that may cause results to differ materially from those in the forward-looking statements are discussed in the company's most recent periodic and current reports filed with the SEC. These forward-looking statements, including guidance provided during today's call, are only valid as of this date and Aehr Test Systems undertakes no obligation to update the forward-looking statements. And now with that, I'd like to turn the conference call over to Gayn Erickson, President and Chief Executive Officer. Gayn? Gayn Erickson: Thanks, Jim. Good afternoon, everyone, and welcome to our second quarter of fiscal 2023 earnings conference call. Thanks for joining us today. Let's start with a quick summary of the highlights of the quarter and the momentum we're seeing in the semiconductor wafer level test and burn-in market and then, Ken will go over the financials in detail. After that, we'll open up the lines to take your questions. We had a very solid second quarter reflecting strong sequential and year-over-year growth in our revenue and net income, both ahead of consensus estimates. Revenue for the quarter was $14.8 million, an increase of 39% sequentially and 54% year-over-year, and we generated non-GAAP net income of $4.5 million, slightly over 30% net profit. Our momentum in silicon carbide wafer level test and burn-in continues to grow and we see this momentum continuing for the next several years as companies are adding significant capacity in silicon carbide semiconductors to address the incredible forecasted demand, particularly for the electric vehicle and electric vehicle charger markets. Forecasts from William Blair estimate that the silicon carbide market for devices and electric vehicles alone such as traction inverters and onboard chargers is expected to grow from a 119,000 6-inch equivalent silicon carbide wafers for electric vehicles in 2021 to more than 4.1 million 6-inch equivalent wafers in 2030. This represents a compound annual growth rate of 48.4%. This equates to almost 35 times larger in 2030 than in 2021. In addition, 6-inch equivalent silicon carbide wafers for other markets such as solar, industrial and other electrification infrastructure are expected to grow to another 3 million wafers by 2030. This expands our silicon carbide test and burn-in market even more. We are excited to have added two new customers for silicon carbide test and burn-in during the quarter. The first is a major silicon carbide semiconductor supplier that purchased our FOX-NP dual wafer test and burn-in system used for engineering and device qualification during the quarter, and after the quarter closed, has since placed their first orders for two of our FOX-XP multi-wafer systems for volume production test and burn-in of their silicon carbide wafers, including the order we just announced today. This company is one of the world's largest suppliers of silicon carbide devices and serve several significant markets, including the electric vehicle industry, as well as other industrial applications. We now have two of the top four silicon carbide market participants as customers. They have indicated to us that they plan to order a significant number of FOX-XP systems for volume production of their silicon carbide devices at facilities around the world to meet the rapidly expanding forecasted market demand for silicon carbide devices for electric vehicles and other industrial markets. This new customer selected our FOX-XP multi-wafer test and burn-in system configured with our new fully Integrated and Automated WaferPak Aligner for high volume hands-free operation. They have told us how important automation is to them across their wafer fabrication and assembly and test and that in addition to the cost effectiveness and scalability of our system, our fully integrated FOX-XP with automated WaferPak alignment handling is key to meeting their automation needs that are critical to their scalability, as well as the quality and reliability goals of the customers and markets they serve. The FOX-XP multi-wafer level test and burn-in system can be configured with up to nine or 18 wafers depending on the customers’ specific test requirements. It provides the test electronics and the device contactor technology that enables contact to 100% devices on a single wafer and the handling and alignment equipment to provide a total turnkey single vendor solution to meet the needed critical test and stress requirements. Our Automated WaferPak Aligner adds a number of very valuable features to the wafer-level test and burn-in process. This new FOX WaferPak Aligner is available in both standalone and integrated versions. In the standalone version, customers can align their WaferPaks offline from the FOX-XP systems using our new FOX WaferPak cards that can be docked to the Aligner. The Aligner will automatically load the WaferPaks with wafers or exchange tested wafers with untested wafers and can be used to support up to five or more fully-loaded XP systems for an extremely low-cost application with long test and burn-in times. The integrated version of our new Aligner docks directly to a FOX-XP chamber that can test and burn-in up to 18 wafers at a time. This can be preferable to customers for lower test and burn-in times or in the case where the customer wants near hands-free operation. The new Aligner can work with all types of wafer sizes, including the high volume runners of 150 millimeter and 200 millimeter used for silicon carbide and can also test 100 millimeter silicon carbide or other wafers. It can also test 200 millimeter and 300 millimeter wafers typical of silicon photonics devices, memories and logic devices. We see automation more typically desired in 300 millimeter fabs such as silicon photonics and memory devices where automation is much more typical. The Automated Aligner also allows for unattended change or reverse from one product type to the next and the ability to run multiple different product type wafers in parallel. Adding automation through our new Aligner gives our wafer-level test and burn-in offering even greater value, as well as opens up several large incremental markets to Aehr such as high volume processors and chipsets with integrated photonics transceivers, flash and ultimately DRAM memories and also higher mix devices requiring extremely high reliability and 100% burn-in such as automotive microcontrollers and sensors. The new second customer added this quarter is a multi-billion dollar annual revenue global manufacturer of semiconductors that serves multiple markets, including supplying devices to the automotive industry. This new customer has already has experience in power semiconductors and quickly understood the value proposition of being able to test and burn-in 100% of their devices at wafer level. In a fairly short period of time, they selected our FOX-NP dual wafer test and burn-in system for qualification of their silicon carbide devices for multiple markets, including electric vehicles. We anticipate that this customer will move to high volume production using our FOX-XP systems after their customer qualifications. Adding two new customers now provides more optimism about our ability to gain significant market share of the test and burn-in market for silicon carbide devices. These customers expand our penetration beyond our initial lead silicon carbide wafer level burn-in customer. Regarding that lead customer, they continue to ramp their capacity and use of our FOX-XP multi-wafer test and burn-in systems and WaferPaks which is being driven by increased demand for silicon carbide, particularly for, but not limited to electric vehicles. We expect significant orders from them for the necessary WaferPak for wafer contactors to match their previously purchased FOX-XP systems and they continue to forecast orders for significant numbers of new FOX-XP systems and WaferPak contactors over the next several years to meet growing demand. In addition to the customers that have now placed initial orders with Aehr for silicon carbide wafer level test and burn-in systems, our ongoing benchmarks and evaluations with multiple prospects made great progress during the quarter. These include significant market leaders in silicon carbide, as well as several smaller existing and up and coming suppliers. We expect several of these companies to place their initial orders with us before the end of this fiscal year ending May 31, 2023. We also continue to see very positive responses from our discussions with a number of new potential customers in silicon carbide this quarter, and have also begun detailed discussions with gallium nitride semiconductor suppliers from around the world. Silicon carbide devices and modules have key advantages for traction inverters in onboard and offboard charges for electric vehicles, as well as other high power industrial applications, while gallium nitride is generally believed to be superior for lower power applications, particularly under a 1000 watts. Both device types are forecasted to grow significantly over the next several years and into the future. Both silicon carbide and gallium nitride semiconductors address the high voltage power semiconductor markets that are significant opportunities for our FOX wafer-level test and burn-in systems and WaferPak for wafer contactors. As we look to further penetrate these markets, we continue to add new capabilities to our wafer-level test and burn-in systems. These include the new bipolar voltage channel module and very high voltage channel module options that enable silicon carbide and gallium nitride semiconductor manufacturers more flexibility to address a wider variety of stress and burn-in conditions for their engineering qualification and production needs. These advanced capabilities enable manufacturers to ship product with higher reliability and parametric stability necessitated -- easy to say -- necessitated by applications such as electric vehicle traction inverters, onboard chargers and several other industrial and power conversion markets. With these new features, test and burn-in at wafer-level ensures even better control of yield loss and improved product reliability. Many questions have come up on what does the addition of these two new silicon carbide customers mean. Both have a history in the automotive space and one is currently a leading supplier of silicon carbide devices to this market. We announced our lead customer about three years ago, right before the pandemic started. Silicon carbide's massive ramp did not really start until the latter half of the pandemic as electric vehicles, chargers and worldwide electrification of infrastructure really began to take off. Our lead customer did not place an order for their second system until the middle of 2021. If you aggregate the orders we've announced from them and the WaferPak contactors to support their orders, their choice of Aehr has meant roughly $75 million of business for Aehr already. And they've publicly said they have plans to expand. So, we are enjoying their success. The new customers can be equally significant. For the major supplier silicon carbide customer, we first tested their wafers on our machines at Aehr and then they purchased a FOX-NP for engineering qualifications three months ago and have since tested their wafers at their facility. Since then, they have already purchased two of our multi-wafer FOX-XPs for production test and burn-in of their devices, including the order announced today, and they have told us they'll need a significant number of additional systems. This happened in a fraction of the time that it took to get to this point with our initial customer. As Aehr has now validated our wafer-level solution with multiple customers and their end customers, that our solution is very effective at screening out defects to automotive qualities. We believe this new customer can be as large as our lead customer. So, while we only announce purchase orders as they come in, the fact that this customer is depending on Aehr for its production volumes going forward should give investors confidence that Aehr is right in the middle of this electric vehicles tsunami. The second new customer this last quarter is a very large player in discrete and power semiconductors today and is already qualified for automotive. Interestingly, this company has yet to announce their silicon carbide MOSFETs that they're already characterizing on our FOX wafer level burn-in systems. We believe that most customers of our FOX wafer level test and burn-in systems have the potential to be a significant revenue source for Aehr and this customer is no different. We've said in the past that we haven't seen any real competition in terms of cost effectiveness, footprint and manufacturing capacity compared to our proprietary FOX wafer level test and burn-in systems and WaferPak for wafer contactors. We continue to engage with both current suppliers of silicon carbide devices, as well as other new entrants into this market. The industry data suggests CAGRs of close to 50% over the rest of this decade, as the electric vehicle and charging infrastructure markets develop. Solar and wind will also be part of this growing market. So, naturally you'd expect lots of new entrants, some will succeed wildly, some may make niche inroads. We want all of them to come to Aehr for their test requirements. Our use case is compelling. Since their customers such as the automotive companies require zero failures, not one in 10,000 or one in 100,000, but no failures. So test and screening out early defects becomes very, very important to our customers and prospects. And from the level of interest we're seeing, we believe our message is getting through. We set out to be seen as the industry standard for wafer level test and burn-in, a critical piece of the production process for several semiconductors and their target applications, including silicon carbide and silicon photonics. With the momentum we're seeing, we feel we have a very good chance to be recognized as that industry standard and to gain significant market share worldwide. Now let me move on to silicon photonics. We're also seeing a strong recovery of our silicon photonics wafer level test and burn-in business after the weakness we saw during the pandemic. Halfway through this fiscal year, we've already shipped over $5 million in systems upgrades in WaferPaks to silicon photonics customers and that's over 300% of last year's fiscal year's first half revenue for silicon photonics. This jump in revenue is also spread across multiple customers and much of it is for new product designs and qualifications that we feel will lead to production volumes. We have systems installed at over half a dozen customers testing silicon photonics devices used in 5G infrastructure, data and telecommunications transceivers and a few yet to be introduced applications that we're very excited about. With multiple market leaders announcing plans to integrate photonics transceivers into their microprocessors, graphics processors and chipsets, we believe silicon photonics will become a significant market for wafer level test and burn-in over the next several years. Looking ahead, we continue to be very encouraged by discussions with current and prospect customers and the continued momentum opportunities we are seeing. Europe has a large number of potential customers for power semiconductors, including both silicon carbide and gallium nitride, and the U.S. East Coast has a number of companies that are already in or getting into silicon carbide, as well as companies that are making investments in silicon photonics. And we're also seeing -- starting to see companies in Asia getting into the power semiconductor game. The lifting of COVID-related travel restrictions in Taiwan and Japan is really helping with our new customer engagements in those regions. With the significant increase in market demand we're seeing for our products and in our sales activities, we have been investing in building up our sales and support teams across the globe. During the quarter, we expanded our senior sales leadership with the addition of several proven executives that will manage our sales activities in Asia, Europe and the East Coast of the United States. These are experienced semiconductor capital equipment sales veterans with significant expertise in test and direct relationships with our target customers. We're very happy with these additions and have already seen a positive impact from their efforts. In conclusion, we continue to believe that we will receive production orders from additional silicon carbide companies beyond our current customers and begin shipping systems to meet their production capacity by the end of our current fiscal year that ends May 31, 2023. We expect a strong second half of this fiscal year and are maintaining our guidance for revenues of at least $60 million to $70 million for our current fiscal year that ends May 31, representing growth of at least 18% to 38% year-over-year and also represents revenue growth of between 35% and 75% in the second half of the fiscal year, compared to the first half of this year. Additionally, we continue to expect bookings to grow faster than revenues in fiscal 2023 as the ramp in demand for silicon carbide and electric vehicles increases and we build momentum going into fiscal 2024. With that, let me turn it over to Ken before we open up the line for questions. Ken Spink: Thank you, Gayn, and good afternoon, everyone. As Gayn noted, we had another solid quarter in Q2 with strong sequential and year-over-year growth in our revenue and net income. We also saw improvement in gross margin and beat analyst estimates in both the top and bottom lines. Looking at our financial results in more detail, net sales in the second quarter were $14.8 million, up 39% sequentially from $10.7 million in the first quarter and up 54% from $9.6 million in the second quarter last year. The sequential increase in net sales from Q1 includes an increase in WaferPak/DiePak revenues of $6.1 million. For the second quarter, these consumable revenues accounted for 45% or $6.6 million of our total revenue, compared to only 5% of revenue in the preceding first quarter. The increase in revenues is primarily due to shipments of WaferPaks for our lead silicon carbide customer in Q2 related to prior quarters' system shipments. As noted previously, customers often buy systems and then WaferPaks later after they have completed their WaferPak designs. Gross profit in the second quarter was $7.9 million or 53% of sales, up from gross profit of $4.5 million or 42% of sales in the preceding first quarter and up from gross profit of $4.5 million or 47% of sales in the second quarter of the previous year. Several factors contributed to the improvement in gross margin. The change in product mix had a favorable impact on gross margin. Consumables revenues which deliver higher gross margins accounted for 45% of total revenues compared to only 5% of revenues in the prior quarter, resulting in a 4.7 percentage point improvement in gross margin from Q1. We also saw an improvement in unabsorbed overhead cost to cost of goods sold due to higher revenue levels in the second quarter, accounting for a 3.2 percentage point improvement in gross margin over the prior quarter. With our use of contract manufacturers, we have the ability to keep our costs relatively fixed while revenues grow, which contributes to gross margin. Gross margin also benefited from lower freight, duties and tariffs and lower warranty costs providing a 3.5 percentage point improvement in gross margin. We are definitely seeing an improvement from the challenging supply chain environment we saw over the last year -- fiscal year. Freight costs have come down substantially. As noted in prior calls, due to the shortage in ocean freight capacity with shipments into the U.S., we were required to ship by air. This is no longer the case and we are saving over $50,000 per chamber consolidating chambers on ocean shipments. We continue to minimize our use of suppliers in China and use these suppliers only when their total cost including tariffs is lower than other suppliers. Warranty costs also improved which is actually reversing some warranty reserves as both our quality continues to improve, as well as our costs associated with repair has lowered significantly using our repair center in the Philippines. Non-GAAP net income for the second quarter was $4.5 million or $0.16 per diluted share. This compares to non-GAAP net income of $1.3 million or $0.05 per diluted share in the preceding first quarter, and non-GAAP net income of $1.4 million or $0.05 per diluted share in the second quarter of fiscal 2022. Non-GAAP net income excludes the impact of stock-based compensation. Operating expenses in the second quarter were $4.4 million, an increase of $403,000 or 10% from $4 million in the preceding first quarter and up $624,000 or 16% from $3.8 million in the second quarter of the previous year. The increase from the preceding first quarter is primarily due to an increase in SG&A of $350,000 related to cost of growing the business, including increases in headcount and corresponding recruiting fees, increases in company-wide salaries and increases in outside commissions, travel, entertainment and trade shows related to our significant increase in selling activities. We've invested in human capital with key additions to our sales and marketing staff to expand our customer engagement and marketing reach, customer support and manufacturing staff to support revenue growth and engineering staff for our development programs. The increase from the second quarter last year include increases in SG&A of $386,000 related to the cost of growing the business, and R&D of $238,000 related to increased spending on development programs. During the quarter, we announced two new enhancements for our FOX-P family of wafer level test and burn-in systems. These include the bipolar voltage channel module and very high voltage channel module options, which enable new advanced test and burn-in capabilities for silicon carbide and gallium nitride power semiconductors on Aehr's FOX-P wafer level test and burn-in systems. Our R&D program initiatives also include a new automated WaferPak Aligner which can be configured in either a standalone configuration or integrated with our FOX-XP systems. We have taken orders for both configurations, including the recent announcement of an order from our new silicon carbide customer for a FOX-XP system, which includes the integrated configuration which provides hands-free operation of wafer handling and auto loading. We continue to invest in R&D to enhance our existing market leading products and to introduce new products to maintain our competitive advantages and expand our applications and addressable markets. These R&D programs include enhancements in all our key markets, including silicon carbide and gallium nitride power semiconductors, silicon photonics and other photonics semiconductors, mobile 2D and 3D sensing devices, and memory and data storage semiconductors. Turning to the balance sheet for the second quarter. We finished the quarter with a strong balance sheet. Our cash, cash equivalents and short-term investments were $36.6 million at November 30, up $437,000 from $36.1 million at the end of the preceding first quarter, and up $1.6 million from $35 million at the end of the second quarter of fiscal 2022. Also, we are now investing excess cash in short-term investments to take advantage of the recent increases in interest rates. Working capital at November 30 was $54.8 million. This represents an increase of $5.4 million from Q1 and $15.3 million from Q2 of the prior year. Inventories at the end of the second quarter were $18 million, an increase of $739,000 from the preceding quarter and up $4.9 million from the second quarter last year. We are increasing inventory to support our expected growth in the second half of fiscal 2023, and we continue to purchase inventory to ensure adequate supply to meet current customer and future customer market demand. Our highly differentiated FOX family of systems allows us to purchase material that is leveraged across many customers and markets, which provides us confidence in our ability to meet the significant market opportunity. Bookings in the second quarter were $10.8 million. Backlog as of November 30 was $15.5 million, compared to $19.5 million at the end of the preceding first quarter, and $36.1 million at the end of the second quarter last year. Effective backlog, which includes backlog as of November 30 and all orders since the end of the second quarter, including the order we announced today, is $23.5 million. Now turning to our outlook for 2023 fiscal year which ends on May 31, 2023, we are confident in the company's growth trajectory and our unique capabilities and product offerings to meet customer demands. As such, we are reiterating our previously provided guidance for full year total revenue of at least $60 million to $70 million, representing growth of at least 18% to 38% year-over-year with strong profit margins similar to last year. We continue to expect bookings to grow faster than revenues in fiscal 2023 as the ramp in demand for silicon carbide and electric vehicles increases, and we've built momentum going into fiscal 2024. Lastly, looking at the Investor Relations calendar, next week we'll be meeting with investors virtually at the 25th Annual Needham Growth Conference on Thursday, January 12. We hope to see some of you virtually at the conference. This concludes our prepared remarks. We are now ready to take your questions. Operator, please go ahead. Operator: Thank you. We will now begin the question-and-answer session. The first question comes from Christian Schwab with Craig-Hallum Capital Group. Please go ahead. Christian Schwab: Hey, congrats guys on continued strong business and new customer momentum. Gayn, it sounds like you're updating the number of customers that you expect to be shipping to by the end of the fiscal year. Can you just clarify how many customers in total you would anticipate selling to by the end of the fiscal year? Gayn Erickson: Additional from where we're at right now? Christian Schwab: Right. Gayn Erickson: Yes, I mean, we don't intend to try to be too vague, but getting yourself too accurate can also get you in trouble, but there's a couple of few customers that have not bought production systems from us yet, that we believe could be taking -- giving us orders and requesting deliveries even as soon as before the end of the year and we have capacity to be able to do that. So, we have enough inventory and prebuild against market forecast as well as specific customer forecast to allow us to actually ship systems before the end of May. Christian Schwab: That's great. I know you've highlighted this before, but could you just quickly remind us what your capacity is on a yearly or quarterly type of level whichever way you would like to break it down? Gayn Erickson: Okay, that's good point. It's actually, as you’ve seen, it’s a combination of capacity and sort of our current reality. And I mean that as terms of just right now, what are we doing and what are we. Right now, we're probably shipping somewhere in the 50 blades or wafers of capacity a month. So, if you think of a FOX-XP with 18 blades in it, two in a little of those or something, that's about what we're currently doing. We have more capacity than that, but that's actually our build plan. That's equal to or a little bit higher than what our current customer requests and demands are. We have the material and pipeline to be able to ship upwards of maybe five systems or 100 wafers of capacity a month by this summer and could actually ship another perhaps even 2x that or 10 systems a month in a year. That is not what we're currently believing our forecast is, candidly, but it's feasible to be that. And so, it's an interesting scenario. We're actually using our capacity in our short lead times and our supply chain as one of our believed to be competitive advantages. We have companies in our space that have 52-week lead times, that's not Aehr Test. So, we've deliberately taken the position that we are putting capacity and infrastructure and material in place to be able to go say yes to as many customers as we possibly can and that's why we have this capacity available to us. Now, one more thing we have said in the past, we did extend our lease here and finalized that just over the last month or so. We've got plans that were in the works right now to do some facility upgrades and all, that's actually going to help us with some infrastructure in terms of electrical and water to be able to do more in parallel. That would be needed we think to be able to hit those high-end numbers by the end of next year. So, those are some investments we'll be making over the next year-and-a-half or so. We'll gradually do it without being disruptive. But I think we've told the Street that might be a $3 million to $5 million investment or so and then depreciate that over the rest of the lease. Christian Schwab: Okay. It's fabulous. And then on the new wafer handling technology, which really seems to be a game changer for some of your new customers. Does that come with an ASP that's any materially different than the prior generation product? Gayn Erickson: No, it's pretty similar. We had said before that our automated handlers are in about 800,000 range type of thing, whereas the manual liners are significantly cheaper than that. So, if you use that kind of number, that's probably fair. And again, you could buy one that could feed five XP chambers. If you had 10 chambers on the floor, you might need two of them and use WaferPaks and WaferPak cards moving around and there are some companies that prefer that model, that's similar to how Packaged Part Burn-in has operated for years, or you could take an Aligner and bolt it onto the front of each of those 10 XP systems. You'd think, wow, that's a lot more expensive. Turns out it's still pretty negligible if you look at it over, say, 18 wafers, and for some companies that's a big deal. If people that know me, I am super passionate about this new Aligner. We've stayed steady on the course. We've been heads down working on this thing completely through the entire COVID pandemic and just really happy at where it's at right now. And our plans are to be shipping that here over the next, by the end of the fiscal year to multiple customers. Christian Schwab: Great. And then my last question and congrats on the product success during the COVID period and the recent uptick in silicon photonics, I know it's relatively modest revenue, but materially better than it has been in the most recent time frame. But as you look at that in a multiyear time frame, could those customers be the same size as we've kind of mentioned as your lead silicon carbide customer at 75 million or is it materially greater or modestly less? Could you give us any color there? Gayn Erickson: Yes. So we've been kind of holding our cards to our chest for several years on this thing and just recently have started to talk about it. So with the announcements by some major suppliers, the two largest microprocessor suppliers in the world, the main graphics processors companies in the world, even some of the large fabs like TSMC and GlobalFoundries have created these consortiums to talk about heterogeneous integration, which is a fancy word for multiple chips in one package that include a fiber optic transceiver port on it. And what they're saying is servers first are going to start having chipsets that are in communication with processors and disk drives and data storage through fiber optic ports directly. That is a huge deal, okay? Because the fiber optic transceiver itself will still require the stabilization in the burn-in that we have now been doing for years. It's really what all the hub up has been about and why there are so many companies and so much investment that's been in there. Now having said that, I think there's going to be probably fewer big players than there can be even in silicon carbide, but there'll be lots of smaller players certainly over the next, say, three years or something along those lines. But any one of those big players could be larger than our biggest silicon carbide customer. So the total available market for the silicon photonics when you start talking about it being embedded in servers and chipsets and processors and GPUs, I think is bigger than the silicon carbide business. And so as we start to look at the second half of the decade, when that will really kick in, in particular, that's a huge opportunity, and we are all in on that. So a number of investments that we're already making some we haven't told you about are directed directly at that space. Christian Schwab: That’s fantastic. No other questions. Thanks guys. Gayn Erickson: Thanks, Christian, Operator: The next question comes from Jed Dorsheimer with William Blair. Please go ahead. Jed Dorsheimer: Yeah. Thanks. First off, congratulations on a spectacular quarter. So nice work. Gayn Erickson: Thanks, Jed. Jed Dorsheimer: I guess my first question on the -- your first new silicon carbide customer, the one that's purchased two XPs with the automated handler. Is the automated handler going to be shipping at the same time as the shipment of these two tools? So will you have both available to ship with that automated handler at the March time frame? Gayn Erickson: That's a pretty good specific question. Let me leave it a bit -- so yeah, -- well, I'm going to just go out and say, the customers actually requested that we shipped the XP system with the first one, shift the second one integrated with the aligner and then upgrade the first one with the aligner. That's what we are doing. And so there's a little bit of timing, but they're all about the same time frame. So there's like a -- but it's sort of a risk reduction thing for everybody on doing that. Jed Dorsheimer: Got it. And from a rev rec perspective, is -- or do you expect that these will fall into this fiscal year's revenue recognition or is it… Gayn Erickson: Another good question. Yes, no, that's the advanced question, Jed. Folks, we did not see, Jed, with these questions, okay? So -- no, Jed, that's dead on. So as you understand, we seldom if ever get into rev rec things. But our policy, which is extremely conservative for a hardware company, is that if we have a new product going to a new customer until that customer says, I've accepted it, we do not score revenue, even if they pay us for it entirely. So the interesting thing here and embedded in our kind of weird range of forecast for the $60 million to $70 million includes the timing of when one or both of those systems would get rev rec. So -- but it could very well happen that we don't get revenue recognition for those systems until Q1 when they're finally accepted even though we ship them in Q4. Jed Dorsheimer: Got it. That's helpful. Thank you. And I guess, I was wondering if you could just outline if the material quality of silicon carbide milliohm (ph) resistance, it's coming down in the material, it enables for a multiple shrinks. Every time you would have a shrink or your customer would have a shrink in terms of chip design, that will trigger new consumables from a WaferPak . Gayn Erickson: That's right. Yeah, WaferPak -- full wafer contactors are unique to the wafer design, which is unique to the device design. So the very nature of the word that shrink means that it's going to -- the X by Y square area would get smaller. And as such, the pads would change and it would require to add new WaferPak. This is very similar to what the test business is referred to as a probe card. And so the probe cards become the consumables. And even if they don't need more capacity, if they simply change all their wafer patterns, they would buy only probe cards or WaferPaks in our case. Jed Dorsheimer: Got it. So when you look at and you talk about capacity needs simply for silicon carbide from a wafer start perspective, there's a third that presumably if this industry gets on a similar to a -- I hesitate to say it more as well, but a shrink scale, you would have a 30% recurring revenue stream associated with that, not to mention sort of the movement over of additional machines for different diameters. Gayn Erickson: Yeah. So let me put better numbers around that. So in a typical purchase upfront for our tool, we've talked about these ASPs in the like $2 million, $2.5 million or so for a tool and then a set of WaferPaks might be $1.5 million or somewhere in there. So there's sort of this two-third, one-third rule. So if you use the one-third rule and call that 30%, I'm with you, okay? So upfront, they would buy 67% tester and 33% what consumable or WaferPaks. But in some point in time, they would then -- those WaferPaks would be no longer valuable or useful because they no longer sell those wafers. They would then buy all new WaferPaks from us. So the one thing that's still going on with us is trying to get our arms around what is that cycle going to be. On one hand, automotive devices tend to last longer. So they might be the ones that might last multiple years, whereas something like a consumer device or memory might only have a 1.5- or two year life, meaning every other year, all of the probe cards are replaced on a fab, okay? In our case, though, with silicon carbide, there's multiple things that are going on. Everyone is talking about Gen 2, Gen 3, Gen 4 shrinks. They're talking about a planar versus trench. They're talking about going from 150 millimeter to 200 millimeter, each of those create dynamic transitions that would actually accelerate the obsolescence of the previous generation device. So we've been using maybe every four years right now, and they're still yet to see it. But there's no doubt that when you look out four, five years, a significant amount of our revenue is going to be coming from WaferPaks of the installed base. And we're already seeing that with our silicon photonics customers, for example. So -- and as our installed base grows, that number would grow as an absolute value as well. Jed Dorsheimer: Got it. That's helpful. Last question for me, I'll jump back in the queue. The -- did I hear you correctly when you talked about your second new customer, did they have not announced products in silicon carbide? I was wondering if you could just help clarify that. Gayn Erickson: Yeah. I'm choosing my words very specifically. They have not introduced silicon carbide MOSFETs, and I looked at their website again last night just to double check. They still have not -- they still have said it. So they have figured out a program to come stealthily at this, they have multiple devices I know because we have their wafers. And so I -- we're being pretty elusive. I realize someone -- I think someone asked to why you guys can't never mention about customers? I'm telling you that customers do not want to be mentioned. It's the biggest secret around. And we’re always trying to be very careful. I don't even mention the name of the customer outside of the context anymore because they will get bad at me if I mention them, right. So it's a difficult thing, I realize. We've said we have two of the big guys. I will be bold and I mean, I think because of them being a 10-K -- 10% customer in our 10Ks, I think people understood that on Semiconductor was one of our biggest customers. Everybody is trying to guess who the next big guy was -- is. And we're -- I'm not sure exactly how that's all going to play out. Right now, burden is very clear. I'm just going to win them all, and then we can say we have all of them. So -- but in the meantime, I apologize that you guys don't have better insight as to who they are. Jed Dorsheimer: No apologies is job security for us. We have to do some real research. So I like it. Thank you. Gayn Erickson: Thank you, Jed. Operator: The next question comes from Dylan Patel with SemiAnalysis. Please go ahead. Dylan Patel: Hey, Gayn. I wanted to ask the WaferPaks, the various burn-in equipment on both a silicon carbide side and photonics side, is that going to be in the wafer fab or can it be in the test fab? Because I was just trying to think about it from my perspective, and I think it could be in either. Gayn Erickson: Yeah. You know what, it absolutely can be an either. People -- the closest analogy is what's referred to as known good die, where people sell die sales, okay? In that case, the final test of the die often happens in what we would refer to in the test community is the back-end operation where packages are, okay, versus the front end where the wafers are. In this case, the wafer level burn-in process step feels like a known good die step. So it would be reasonable for somebody to put it in their back end. Having said that, I -- most of our equipment today, if not all of it, is in the front end. It naturally fits in the wafer fab right next to the fab. Our systems are rated for clean room specifications. They're intended to go into the clean rooms. And so we'll see both for sure. But I've heard both. I think we'll have systems both places. Dylan Patel: It's burn-in and then stimulation next, right or is there anything else in the middle? Gayn Erickson: No, there's test after burn-in on your wafer always. So our recommended process is take a raw wafer, no need to test it. We will test it and tell you which are the good and bad die, we will burn it in and we'll let you know which ones die during the process and exactly what time it did. And then you would correlate that with a functional final test of that singulated die because you can get tighter accuracies and some other things that you might want to do. But you would do a single insertion test with a test system like the likes of a Teradyne, there's a handful of little companies that are out there that test one, two, three, four devices at a time. And then on a wafer with a 1,000 devices, they might test 250 to 500 insertions of about one sec in a piece. And then they would singulated the good die -- singulate, separate the good die and oftentimes then that die, so they will pick and choose die with matching parametrics. One of the things that people -- I've spent more time on in the past is part of the process of silicon photonics today and silicon carbide. And I did this in a white paper in Munich in a presentation of it. There's also a bunch of technical white papers out there. Silicon carbide devices age and actually their parametric voltage threshold, the threshold at which the device turns on, changes in time over multiple hours and then stabilizes. If you put that into a module like you would do in, say, a module that goes into even from Tesla, but Lucid or Ford's or any of the automotive modules that are going on. You -- and you put, say, eight devices in there. The devices would all be turning on at different times, if you do not cherry pick them. So let's say, you cherry pick them and put them in, during the first 24 hours of use, the threshold voltage varies. So then the one that turns on the fastest will wear out the fastest and can become a reliability problem. So when people use our tools, they're not just being good from bad or weeding out what we call infant mortality or early life failures, we're actually stabilizing the threshold voltage, which takes a period of time such that they can cherry pick them and then sell them to the likes of the VWs of the world or Dan Foss or BorgWarner, who are going to be purchasing known good die from all of the suppliers with specified threshold voltages and RDS on voltages or RDS on impedances or resistances to catch all that. Dylan Patel: Thank you for the color. I'll have to reread it here. But one quick last question was about the China's reopening. I'm curious if you've been scheduling any travel there because there's a ton of companies like TankeBlue, so on and so forth that are all there that are investing a ton and -- yeah. Gayn Erickson: So we've had multiple conversations with several of the China suppliers. We have people in country, okay? So other than the restrictions on the local travel or intercountry travel, our team has been able to move around with customers throughout this entire period, and that includes both sales and support people. Most of the Chinese suppliers are behind relative to other folks. And in many cases, what we're doing today is, we're working with companies outside of China who are building silicon carbide devices to ship to those China automotive suppliers. So right now, that's where we see the primary opportunity from us. Over time, the Chinese industry may also pose a real opportunity for us. I'd say that the bulk of our energy has been in the U.S., Europe and Asia outside of China to-date. Dylan Patel: Good. Thank you. Gayn Erickson: Thank you. Operator: The next question comes from Bradford Ferguson with Halter (ph) Ferguson Financial. Please go ahead. Bradford Ferguson: Hi, Gayn. The way I understand is the FOX-XP system allows for 18 wafers to be burned out -- burn-in at the same time. In this system with all the WaferPaks costs of $4.5 million, what's the next closest competition look like? I've heard the commodity system is one way at a time 90,000? Gayn Erickson: Yeah. So $700 million to $1 million for the equivalent per wafer cost. So it would be -- there's an equivalent -- please go ahead. Bradford Ferguson: So essentially, you're like at 70% off potentially. Gayn Erickson: We are significantly lower than the other folks. There are people that have $1 million per wafer cost, and we might be $200,000 in kind of one of the -- in some of the silicon carbide cases, for example. And people usually go, well, why are you giving them away? Well, we don't feel we're giving them away. We're pretty open with our margins with our customers. They know what we're doing. I think we have a good relationship with them that allows us to continue to invest. And at the same time, our goal was not to just be cheaper than the other guy. In fact, to some extent, we were ignoring them. What we're trying to do is be as cheap as back-end production burn-in, which we have also been a supplier for 30 plus years, almost 40 years. And if you look at our cost to test, the cost of test of us at wafer level is the same as at package level, which people in our industry are shocked to see. And if you go up to 2,000 die per wafer like you would with an onboard charger, it's half the cost. And so they not only get the yield advantage, which is more than the cost of test, they also get it cheaper than they would any other way. And we've chosen to position this product that was its initial intent. We think we've successfully done it, and we're focusing now on being able to ship enough to everybody in the world if we need to. Bradford Ferguson: And tagging on to Jed Dorsheimer's last question, there's -- and there's also a second customer with no silicon carbide announced plans that is kicking the tires with Aehr. Gayn Erickson: Yes. Okay. So specifically, if you want to call it, the third customer that bought an NP system, they also -- they have not actually announced -- they haven't publicly announced that they're selling silicon carbide MOSFETs yet. We know they're talking to customers. So we don't really understand the strategy on that, but that's okay. They're a big player, they're serious, and they are very well qualified to be a big customer of ours. We also have benchmarks. We've talked about it before in our previous calls. We've had an ongoing benchmark with one of the other large suppliers for well over a year now. That's a very extensive automotive benchmark that has gone very well during the quarter, and we would hope to give you guys some updates on that over the next -- at our next call. Bradford Ferguson: Okay. And then I have a moonshot question, which is -- in medical testing, there's LabCorp and Quest Diagnostics where they would actually run the test for the customers. What does Aehr Test Systems think about running the burn-in for the customer and/or like having an Aehr Test Systems certification where it's a best practices? This is a known good -- not only a known good die, but this has been best practices burn-in in Aehr certified wave? Gayn Erickson: There's multiple things to that. I like everything you're saying, okay? So first of all, we actually do -- we do customer wafers inside in one of our secure labs here. We have multiple labs that are secured with cameras and lockouts, et cetera, to ensure that there's no cross-politization of IP. And we've done that with multiple customers so that we can give them a risk-free demonstration of show there, their failures on their wafers with the equipment. That has proven 100% successful so far. So we do that. Second, we actually have -- we haven't announced our name yet, which is kind of an odd thing to. But we have a partnership with one of the largest subcons in the world who has our tools both in their front-end engineering as well as in production. Stay tuned for some announcements on that during the year. But we -- during this next half, but we already are working with them to qualify them to be able to do silicon photonics-based or silicon carbide-based burn-in in addition to the silicon photonics that they're doing today. And that would allow us to direct someone towards them if they wanted to do services, et cetera., different than us trying to actually be in the services business. We're still kind of focused on capital equipment engineering support services and the consumables themselves. Related to an endorsement by Aehr, there's something to that. We get to see a cross-section of all of the wafer -- many of the wafers around the world and see kind of the good and the bad and the whole thing, I have some very strong opinions about what burn-in time should be, what test conditions should be. And we -- what I will tell you is, we've started working with the -- what's referred to as OEMs, which is the end customers related to, can there be an industry standard for what those burn-in times should be in order to achieve a specific level of quality? And I would hope to try and drive that in the industry if nothing else for the good of the overall industry because there is a difference. And if people want to cut some corners or something along those lines, candidly, I'd prefer they don't do it on my machine. So that's it, thank you for the thoughts there, Brad. Bradford Ferguson: And those subcontractors are where the die maker, the wafer makers shipping out the whole wafer to Asia or whatever to get burned in and then it goes on from . Gayn Erickson: Yeah. I didn't mean to confuse that. We are working with companies that will use their own subcons and they will buy the tool and put it there and it's dedicated for them, okay? What I was referring to is, we've actually identified a generic subcon who would make themselves available for just services to anybody and their brother kind of thing. And so we've kind of kept that to ourselves candidly, deliberately. So I know that we mostly have investors on the call. Any customers or potential clients that are interested in potentially using the subcon, they can contact us and we'll be happy to make an arrangement in a proprietary way to enable that -- the ability to test your wafers at a secure subcon. Bradford Ferguson: Okay. Thank you. Gayn Erickson: No problem. Thank you. Operator: The next question comes from Tom Diffely with D.A. Davidson. Please go ahead. Thomas Diffely: Yeah. Good afternoon, Gayn and Ken. I guess a couple of follow-ups here. So Gayn, when you talk about -- and I can appreciate that you have capacity to do even a couple more clients by the end of the year. But when you look at the 15, 20, maybe more silicon carbide players that are ramping right now, do you have capacity to serve a majority of them? Gayn Erickson: I think so, yes because I don't think not all of them will be -- most of them will not be anywhere near as big as the first one. So it's -- we do actually look at the total capacity need. And to some extent, we only need to have enough for everybody and then the inefficiencies, right? Because guess what, people will over buy at some point because they're all thinking they'll have more market share. But you sure don't need to be 10 times the total market. So we are focusing on all of it, if you will, and who wins that were kind of -- doesn't really matter to us. Thomas Diffely: Yeah. Okay. Great. And I know, obviously, this is a very early stages of this market growth. But just curious if there's been any kind of a slowdown from any of the customers just based on China's EV market and some of the broader concerns in the marketplace? Gayn Erickson: We haven't seen it at all. And I obviously pay attention to it all the time. I think -- remember that’s -- okay, there's -- I'm going to simplify the categories of silicon carbide players. They're the multinational or multi-segment large players, big automotive guys, et cetera. I mean obviously, the folks like the STs and Infineon's and ON Semiconductors of the world and TIs or whoever, I'm trying to just make it generic, please don't quote me, they have a big product portfolio. And what they've seen, I mean, across the board, they're just slowing down. There's cancellations out there. There's just stuff where the -- this is the 17 cycle in semiconductors if people aren't paying attention, okay and there will be in 18, okay? As they contract, what they'll do is they'll figure out where the hot markets are and they redirect their energy, okay? I've always referred to as waves. It came back to my HP days, okay? We're in a hot way right now. Customers are pouring their energy towards silicon carbide right now, even though, obviously, there's other business units that aren't doing very well. And so for those companies that have multiple products and all they focus that are in silicon carbide, the pure players are pure and they're all in, right? I think some of the discussion that's been going on at Tesla stock or what's happening, Tesla is going to lose market share. Of course, they are. Guys, they have a dominant market share. There's no way they're going to ship that many to the rest of the world. That doesn't matter. There's way more opportunity in lower-cost EVs than they're in the high-end ones, but they all have traction inverters, they all have engines, they all need silicon carbide, if they want to go for efficiency mileage and charging times. And so we think there's going to be tons of players out there. And the more the merrier, the more -- the faster they're going to get market penetration of all the BBs. So we have not seen it. It has picked up right now. Vernon is so excited about having, we have these three new senior guys. I've had a chance to meet and be in front of customers with them, they're fantastic. And that's going to be a big deal to help us to get to more people. Thomas Diffely: All right. That sounds good. And final question, I was quite frankly shocked when you said earlier today that the silicon photonics customer could be bigger than your current silicon carbide customer. I was always under the assumption that after the initial set of orders, they're doing 100% burn-in and then it goes down to like a 5% sampling over time such that, that market itself would be a lot smaller. Gayn Erickson: All right, two things. First of all, silicon photonics as we -- it's different than when we talk about maybe photonics 2D, 3D sensing. And it is -- they're very different. Our 2D, 3D sensing in mobile those applications that people understand what 2D and 3D sensors are the things that recognize fingerprint or facial recognition or proximity sensors, et cetera, okay? Those actually have a reasonably high infant mortality rate, but they also sometimes have redundancy. It has proven so far that because of the life of those devices, they may only be on for 10 seconds lifetime because they're only on for a millisecond at a time -- times 100,000 or whatever the math is. They have -- the customers that are using it, we have multiple installed base applications, they're all doing sampling, okay? So they only sample 1% or 2% or some number. And as such, they don't do 100% for that application, okay? That's one thing. We actually didn't spend any time until now talk about 2D, 3D sensing, which is still an ongoing business that we get annuities from, et cetera. Silicon photonics is actually the definition of where they are actually putting a photonics transceiver, fiber optic transceivers a way of thinking about it on to a piece of silicon bypassing the normal discrete modulators, demodulators and infrastructure that's required to create transition electricity to optical and back again. This has been the holy grail that people like IBM and Intel have been working on for over 20 years for several reasons. One is to continue to meet the shrinks of silicon and the process or improvements over time, electrical signals can only travel so fast, and we're very close where within people say a generation of it cannot go faster. About 240 gigabit is the upper high end range of an electrical signal on a conductive path. is 112 today. So we're like one generation or double from that's it. So the folks that have been writing the white papers have been saying, what we're going to need to do is we're going to have to switch to photonics transmission, which if you remember from your business class, photons are neither waves or particles. In the case that they're not a particle, they have no mass, therefore, there's no limitation to go to the speed of light and you can modulate it at much faster rates than you can in the electrical signals. So where electrical signals completely cannot go faster than 200 gig, photonics is just getting started. And so Intel, AMD, NVIDIA, IBM, TSMC, GlobalFoundries, these guys have all been making announcements recently to talk about their investments in what is referred to as silicon photonics to put that photonics transceiver on to chipsets, microprocessors, graphics processors, okay? When you do that, instead of the traditional market that I said two years ago, you would have heard me say on these calls, I do not believe silicon photonics is going to be bigger than silicon carbide. When I said that, I meant it related to transceivers. Now that there's been public announcements for leading suppliers of intent to put those transceivers into chipsets, the market is 100 times larger than silicon photonics and the test times are longer, okay. I'm sorry, yeah, longer – 100 times larger than the silicon photonics transceivers. And I believe -- and I've now stated, I believe it is ultimately larger than the silicon carbide market. It is way more devices. It is 100% burn-in and it is much longer test times. And so because of the stabilization of silicon photonics is very real, and it's been around for 20 years, this is not a 4 hour burn-in time or 6 or 12, nobody is going to be that low. And so with these long burn-in times, that's a big opportunity. And we're -- like you said, we're all over that. And then if you make an investment in us, you are making investment in that as well as some of the other markets we've talked about like memory. And one of the leading edges of that is the -- is our new automated aligner. Thomas Diffely: Well, that’s an exciting stuff. Look forward to the second and third phase of growth here. Thanks for your time today. Gayn Erickson: Thanks, Tom. Operator: The next question comes from Larry Chlebina with Chlebina Capital. Please go ahead. Larry Chlebina: Hey, guys. Great quarter. Ken, your beat on the gross margin, which drove the bottom line. Is that sustainable? I know the mix was a factor, but since the revenues are going to be going up, you feel confident you can beat 53%, maybe 55%? Your thoughts on that? Ken Spink: So Larry, I would think that the Q2 was an unusual quarter. We had some benefits that were onetime benefits like we talked about, we had some reversal costs that were previously accrued. We had the mix issue. We also had labor and overhead going to inventory with some of the growth in inventory that we had as well as the mix like we talked about in the . But I think mix would be pretty consistent in the second half though kind of more close. Yeah. Gayn Erickson: There is lots of items driving the margin. So in terms of 53% saying, are we going to get up to 55% that was what your question? I would not plan on that. In fact, I'd reiterate what I talked about in previously and said I think we forecasted for an overall gross margin for the fiscal year being about 50%, and I think that's what the plan should be. Larry Chlebina: All right. So the automated aligner, the automated XP, I know, ideally, you want a long burn-in to drive more equipment sales. But I think there could be a heck of a market out there for -- as you mentioned parametric testing of all sorts, whether it's threshold mortgages and silicon carbide and figure out how many cells are operable on a 3D NAND wafer? What is -- do you have a sense of what the maximum throughput is on a fully automated XP if that thing was constantly moving wafers and WaferPaks? What's... Gayn Erickson: Yeah. That's a good question. Maybe I'll come back. I'm not sure I want to get into all that with all of the introductions, Larry, and I'm not trying to skirt it or something. But there is an indexing time as we would refer to it, how long it takes to index a WaferPak. And if you had 18 wafers -- but if you -- yes, I mean if you're looking at 6 hours or 2 hours or 2.5 hour burn-in times, it's negligible in the background, okay? At some time, you would start to notice it. I mean if you had 1 win at test times or something like that, then that would -- you would start to eat into the overall throughput because of the indexing time. But your first comment is dead on though. This changes things. You would never do -- trying to do a 2 hour test time on a burn-in system is would never work because it takes 15 minutes or 30 minutes to ramp up the chamber and 30 minutes to ramp it down before you can pull the devices out, and it takes hours to exchange all the devices on what's called the burn-in boards. The whole processing of the historical package part burn-in has so much overhead associated with it that I'd tell you people resisted at all costs. Not to mention the cleanliness and the quality implications of package for burn-in of having to scratch the leads and have these in these processes where they could actually introduce a failure into, trying to get to zero PPM defects where the package for burn-in system is extremely difficult. Whereas in a clean wafer environment, where we can make a contact with that wafer 100,000 times with the same WaferPak and never have a different measurement result, you can't do that in a packaged part burn-in system. So there's opportunities that will expand by us taking this tool, making it look now as a high-volume production tool where you can walk up to it with or use overhead material handling and drop it down without even touching or we have systems that use robots that move boots (ph) onto our auto liners today. So you can actually be hands free. And using a interface front end into a wafer fabrication, you don't even need to touch the tool. Larry Chlebina: I think wafer level burn-in from the 1980s into the 21st century. I think i
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Aehr Test Systems Reports Q1 Beat, But Outlook Unchanged, Shares Plunge 14%

Aehr Test Systems (NASDAQ:AEHR) saw its stock price drop by over 14% intro-day today following the release of its Q1/24 results, despite beating expectations for the quarter. The company reported Q1 EPS of $0.18, surpassing the Street estimate of $0.16. They also achieved a 93% year-over-year revenue growth, reaching $20.6 million, compared to the Street estimate of $19.23 million.

CEO Gayn Erickson expressed satisfaction with the Q1 performance, calling it the strongest first quarter in the company's history, even though traditionally it has been their weakest season. Erickson stated that they are off to a strong start for the fiscal year and reaffirmed their expectation to achieve at least a 50% year-over-year revenue growth and over 90% profit growth for the full fiscal year.

Despite the beat, the company kept its previous full-year guidance unchanged, aiming for total revenue of at least $100 million (compared to a Street estimate of $102.93 million).