Aehr Test Systems (AEHR) on Q1 2023 Results - Earnings Call Transcript
Operator: Hello. And welcome to the Aehr Test Systems Fiscal 2023 First Quarter Financial Results Conference Call. All participants will be in listen-only mode. After todayâs 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 Todd Kehrli of MKR Investor Relations. Please go ahead.
Todd Kehrli: Thank you, Operator. Good afternoon. And welcome to Aehr Test Systems first quarter fiscal 2023 financial results conference call. With me on todayâs call are Aehr Testâs President and Chief Executive Officer, Gayn Erickson; and Chief Financial Officer, Ken Spink. Before I turn the call over to you Gayn and Ken, Iâd like to cover a few quick items. This afternoon Aehr Test issued a press release announcing its first quarter financial results. That release is available on the companyâs 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 companyâs website. Iâd like to remind everyone that on todayâs call management will be making forward-looking statements 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 forward-looking statements which may cause the results to differ materially from those in the forward-looking statements are discussed in the companyâs most recent periodic and current reports filed with the SEC. These forward-looking statements, including the guidance provided today are only valid as of this date and Aehr Test undertakes no obligation to update the forward-looking statements. Now Iâd like to turn the call over to Gayn Erickson, President and Chief Executive Officer of Aehr Test. Gayn?
Gayn Erickson: Thanks, Todd. Good afternoon, everyone. Thank you too for joining us on the first quarter conference call. Letâs start with a quick summary of the highlights of the quarter and momentum weâre experiencing in semiconductor wafer level test and burn-in market and then Ken will go over the financials in detail. After that weâll open up the lines to take your questions. Weâre off to a good start this year finishing the quarter with revenue and net income ahead of consensus estimates and strong bookings of $19.1 million. Revenue for the quarter was $10.7 million, which is up at 9% year-over-year and weâve generated non-GAAP net income of $1.3 million. As weâve noted before and discussed last quarter, over the last couple of years, our first quarter tends to be our seasonally softest quarter, as it was again this year and we expect each consecutive quarter to ramp higher throughout the year. So let me get right to it and talk about how weâre doing it getting into more accounts focused on silicon carbide for electric vehicles and other markets since thatâs where a lot of the questions are coming in at. Weâre currently engaged or in discussions with almost all the existing and future silicon carbide suppliers now, regarding our unique low cost multi-wafer level test and burn-in solution that enables contact to and test of 100% of devices on every wave. This allows our customers to burn-in every device at a lower cost than they could in any other form, due to our ability to contact thousands of devices on each of 18 wafers at a time with our FOX-XP multi-wafer test and burn-in system and proprietary FOX Full Wafer Contact WaferPaks. All of these major silicon carbide companies expect that electric vehicle traction inverters will move to multi-chip modules as this is where the electric vehicle manufacturers are driving the industry. As such, theyâve told us they must move to wafer-level test and burn-in to remove the inherent failures before they put these devices into multi-die modules to meet the cost, yield and reliability goals of those modules. Aehrâs technology provides a total turnkey single vendor solution to meet this customerâs critical test and stress requirements at a cost and test floor footprint significantly lower than any other alternative on the market. Our lead customer for silicon carbide wafer level burn-in continues to ramp up use of our FOX-XP multi-wafer systems and WaferPaks, placing yet another significant order with us during the quarter. Similar to past orders, they purchased the systems without the necessary WaferPaks for wafer contactors and as such, we expect significant orders from them for WaferPaks to match these systems. This need for additional capacity is being driven by increased demand for silicon carbide customers for electric vehicles. This semi -- this customer recently announced that they expect their growth rate to accelerate faster than previously forecasted and they continue to forecast orders for a significant number of FOX systems and WaferPaks contactors with us over the next several years. Beyond this lead customer, our previously announced benchmarks and evaluations with two additional major silicon carbide semiconductor suppliers continuing to move forward with great progress this quarter. Following the end of the quarter, we announced an initial purchase order from one of these suppliers for our FOX-NP multi-wafer test and burn-in system, multiple WaferPak contactors and a FOX WaferPak Aligner to be used for qualification of our wafer level burn-in solution for silicon carbide devices for electric vehicles and other markets. This new customer is one of the worldâs largest suppliers of silicon carbide devices serving several significant markets including the electric vehicle industry. We now have two of the top four silicon carbide market participants as customers. Weâve already shipped the system to this new customerâs facility and we believe weâll achieve their specific performance and functionality evaluation criteria on their test floor during the next three months to six months. This new customer indicated to us that Aehr Test is the only provider that has a product that is scalable to high volume production to meet the production capacity they need to address the increasing demand for silicon carbide devices. They have provided us with forecasts for our FOX-XP systems for volume production of their silicon carbide devices at multiple facilities around the world and we expect that they will purchase FOX-XP production systems to be shipped before the end of our fiscal year ending May 31, 2023. The benchmark with the other potential customer which candidly has been slow and steady over the last year has also progressed significantly since last quarterâs conference call. We completed a significant milestone using a new capability we publicly announced today and Iâll discuss later where we tested a significant number of wafers for a correlation of an automotive device and we believe that we will successfully complete their production correlation over the next few months, allowing them to also move forward with our FOX solution. With both of these major silicon carbide suppliers, Iâm sorry, let me try, we expect both of these major silicon carbide suppliers to implement our FOX platform solution into their volume product -- manufacturing production flow as they look to capitalize on the fast growing demand for silicon carbide devices and electric vehicles. FOX demand is building for wafer-level burn-in in silicon carbide devices and specifically for traction inverters and onboard and off board chargers for electric vehicles. During the last few months, multiple additional silicon carbide suppliers have asked us to provide technical feasibility, quotations and schedules for production test and burn-in of their wafers. While some of these companies want to do on wafer validation of our solutions before they place orders for systems from us, others are planning to move directly to purchasing our FOX systems and our WaferPaks to accelerate their time to market. An example of this is just a few days ago, we received orders for WaferPaks on two designs from a brand new customer for silicon carbide MOSFETs targeted electric vehicles. This multibillion dollar semiconductor company that is already making silicon carbide MOSFET wafers that we have in-house by the way, they have not even gone public with their silicon carbide MOSFET introduction plans. The silicon carbide market for electric vehicles and its supporting infrastructure requirements are growing at a tremendous rate. With Canaccord Genuity estimated that wafer capacity will increase from 125,000 6-inch wafers in 2021 to over 4 million 6-inch equivalent wafers in 2030 just to meet the EV market alone. Add in the other applications for silicon carbide including solar power conversion, industrial and other electrification infrastructure and the market size doubles. This past month Vernon Rogers, our EVP of Sales and Marketing and I met face-to-face with multiple potential customers at their facilities in both the U.S. and Europe, and are very encouraged about our prospects for winning this capacity with these prospective customers. We also had very productive meetings around our participation in two important industry conferences in Europe. Vernon attended this yearâs International Conference on Silicon Carbide and Related Materials known as ICSCRM in Davos, Switzerland, considered to be the most important technical conference series on silicon carbide and related materials. He and I also attended the EU Power Semiconductor Executive Summit in Munich, where I gave a presentation on Aehr and the impact of wafer-level burn-in on reliability and stability of silicon carbide devices to a large audience of power semiconductor industry leaders, as well as automotive and other users of silicon carbide power semiconductors from around the globe. From our many discussions and introductions at these events, two themes were very important. Number one, itâs clear thereâs a continued momentum in silicon carbide. In fact, there seems to be an acceleration of the expected adoption rate, as well as an increase in the expected growth in electric vehicles. Several silicon carbide and electric vehicle companies are now saying electric vehicles are more likely to account for 50% of all vehicles made in 2030 as opposed to the 30% number weâve been stated. In fact, VW Group, the first or second largest automotive supplier in the world depend on the year along with Toyota said in a presentation that they expect electric vehicles to comprise 50% of all their vehicles sold by 2030. I guess I should say in 2030. Number -- the number two theme is thereâs an increasing consensus that not only do you need to do 100% burn-in silicon carbide devices that go into the automotive space and other mission critical applications. But that burning of the die must be done at wafer-level before theyâre put into the modules for the traction inverters, in particular for electric vehicles. In my presentation at the EU Summit, I noted that in addition to the obvious cost advantage of removing device failures before theyâre put into a module with many other devices, companies also wants to stabilize the inherent early life drift of threshold voltage is observed in silicon carbide MOSFETs and then select devices with matching threshold voltages to put into multi-chip modules. Higher than acceptable infant mortality rates of silicon carbide MOSFETs require 100% production stress and burn-in testing to achieve automotive and industrial quality levels. And value and requirement for doing stabilization of the devices goes beyond just infant mortality to include critical parametric -- parameters such as the threshold voltage. With the transition from discrete silicon carbide components to multiple silicon carbide die modules or integrated power modules, the gate threshold voltage stability is critical to the module reliability, driven by the prerequisite to have matching and stable gate voltage threshold die-to-die. Aehrâs technologies and capabilities enable guest -- gate threshold stability and reliability at the wafer level. Module manufacturers are requesting and in fact requiring devices with matching threshold voltage or total on resistance between the drain and source in the MOSFET. The major silicon carbide companies expect that most EV traction inverters will move to modules and have told us they must move to wafer-level stress and burn-in to remove the inherent failures before they put the devices into multi-die modules to meet their cost yield and reliability goals. Aehrâs unique low cost multi-wafer level test and burn-in solution provides a test electronics and the device contactor technology that enables contact to 100% of 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. We believe weâll have multiple more customer wins in silicon carbide for our solutions this fiscal year. In addition to our progress with silicon carbide applications, weâre seeing an increase in our wafer-level burn-in business for silicon photonics devices used in data communications. We shipped multiple FOX-NP systems this quarter to support the characterization and product qualification of new photonics based devices. Weâve also received multiple orders for upgrades to existing systems that enable a higher number of devices and higher power wafer -- per wafer, as well as multiple new designs for WaferPaks from several companies. We expect these will be first ordered for engineering a new product introduction and then they turn to volume production with higher quantity orders. As Iâve noted before, we expect to see a nice recovery in the silicon photonics market segment sometime over this into next year as weâre being told by our customers. Weâre expecting customers to resume buying in the current fiscal year 2023 and fiscal 2024, and several customers addressing the silicon photonics market at forecast additional FOX systems and WaferPak or DiePak contactor capacity needs during that time. So let me spend a minute on our R&D investments. On our last earnings call, I mentioned several tests of some enhancements we plan to introduce that will extend the capabilities of our FOR-P wafer-level test and burn-in platform. Today we formally announced two new advanced test and burn-in capabilities 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 include our FOX Bipolar Voltage Channel Module or BVCM, which provides customers a wide range of bipolar voltage programmability from positive 40 volts to negative 30 volts applied to the gate for positive High Temperature Gate Bias or Negative HTGB. This solution in combination with our proprietary WaferPak for wafer contactors delivers a unique capability, benefiting power silicon carbide diodes and MOSFETs and both E-mode, D-mode gallium nitride power MOSFET manufacturers. Enabling these tests is essential in threshold voltage and gate oxide stabilization and screening in the new BVCM extends our current capability even farther. The other enhancement is our Very High Voltage Channel Module or VHVCM that enables customers to perform High Temperature Reverse Bias testing on wafers of up to 2,000 volts on MOSFETs and diodes and measure individual device leakage current. Aehrâs proprietary WaferPak Contactor implements arcing mitigation technology to alleviate high voltage arcing on the wafer, especially with fine pitch die-to-die geometries. The modularity of the FOX-P system offers customers the ability to configure solutions to provide advanced test capabilities for their power electronic device wafers. These advanced capabilities are designed to enable manufacturers to ship product with higher reliability and parametric stability necessitated by an EVs traction inverters and onboard chargers. Feedback from current and potential new customers has been very positive and weâve already taken orders for both systems and WaferPak for those -- for these new options that we discussed with customers under non-disclosure agreements. This includes the new major silicon carbide customer announced last month and the brand new customer I just mentioned, who ordered multiple WaferPaks for a plan FOX-P system purchased from us for their silicon carbide products. We expect these new enhancements to drive incremental bookings in revenue for our FOX-NP systems for new product introduction and engineering qualification needs, as well as our FOX-XP multi-wafer systems to be used for high volume production with these new features. Weâre also quoting and will accept orders for our new fully automated FOX WaferPak Aligner, which is configured to fully integrate with our FOX-XP multi-wafer systems to enable hands free operation and includes full integration with our WaferPaks. As capacity and volume forecasts increase eliminating all manual interface for automated handling can become critical. We expect to see our new Aligner with this full automation capability to begin shipments by about the end of our fiscal year. All right, let me try and wrap this thing up. While the timing for volume production decisions, initial production orders, as well as follow on orders from customers is never certain. Thereâs no doubt as to the way the silicon carbide market is developing. As many of you know ON Semi, one of the top silicon carbide suppliers in the world announced in August it will increase its silicon carbide production capacity by 5 times and almost quadruple the number of its employees by the end of this year at its new silicon carbide facility in New Hampshire. And last month Wolfspeed, another top supplier announced a new manufacturing facility in North Carolina, a $1.3 billion factory with a ten-fold increase in wafer capacity. And ST, who last year was the largest silicon carbide supplier in the world just announced that it will build an integrated silicon carbide substrate manufacturing facility in Catania, Italy, right next to its existing device manufacturing facility, with production expected to start in 2023. The decisions being made today are in response to the explosive demand in silicon carbide. Weâre very encouraged by the continued positive momentum and expanding growth opportunities weâre seeing with current and prospective customers. As such, weâre confident with our previously provided forecasts for total annual revenue of at least $60 million to $70 million this fiscal year, which would represent a growth of at least 18% to 38% growth year-over-year and clearly emphasize our belief that revenue will grow substantially through the fiscal year to achieve these levels. This includes our belief that weâll receive production system orders from several silicon carbide customers beyond our initial lead customer and begin shipping systems to meet their production capacity by the end of our current fiscal year that ends May 31, 2023. We also continue to expect bookings to grow faster than revenues this year, particularly to address the ramp in demand for silicon carbide and electric vehicles. So last, I just want to quickly announce a couple of changes in our organization. Iâm very excited to announce today the appointment of Nick Spork as Vice President of our Contactor Business. In this role, Nick will be leading the effort to manage and grow our WaferPak Contactor and DiePak Carrier Consumables Business, which has become more and more strategic and has grown into a significantly larger part of our overall business. Over time, we expect Consumables to not only grow in total revenue for Aehr, but as a total percentage of our business approaching 50% of our business on an annual basis. Nick has an excellent background to lead this effort with broad experience in the semiconductor and electronics industries leading people, engineering teams and organizations in multiple areas covering product development, product design, manufacturing applications. Nick started out as a Product Test Engineering Manager at LSI Logic, which is now part of Broadcom. He then worked at FormFacto for 17 years in various roles, but mainly as VP of Design Engineering. After leaving FormFacto, he was VP of Design and Applications at Translarity, VP of Business Development for ISC, which is a Korean socket and probe card company, and most recently, he had his own company making various components for the probe card and test industry. Weâre extremely pleased to add someone of his caliber and experience to our executive team. At the same time, Iâd like to announce that Dave Hendrickson, our Chief Technology Officer will be retiring at the end of this fiscal year next May. Dave has served as a valuable member of our executive team for more than 20 years and contributed substantially to our product portfolio many of our business practices. Most recently he is led a focus component sourcing task force, where his combination of engineering operations and business skills has allowed Aehr to achieve our business growth in the face of a global semiconductor crisis. Heâs also been leading the effort to grow our Consumables business through strengthening and collaborating with our supply chain partners. Dave will continue as a part time employee through the end of the year as we transition our component sourcing leadership to our new Chief Technology Operating Officer, Adil Engineer, and our WaferPak and DiePak Technologies and Business VP, Nick Spork. And with that, let me turn it over to Ken before we open it up for questions.
Ken Spink: Thank you, Gayn. Good afternoon, everyone. Weâre off to a solid start to fiscal 2023 after a record Q4 and fiscal 2022. During our first quarter we recognized strong revenues, increased backlog and improved cash flow. As Gayn noted, revenue for the first quarter was up 89% year-over-year. Both our bottom -- our top and bottomline results came in ahead of analysts estimates for Q1. Bookings in the first quarter were $19.1 million and we ended the quarter with a healthy backlog of $19.5 million. Included in our bookings were announced orders of $16.8 million from our lead silicon carbide customer for additional systems, WaferPaks and a high volume production WaferPak Aligner. Looking at our financial results, net sales in the first quarter were $10.7 million, which is down 47% sequentially from our record sales of $20.3 million in the fourth quarter and up 89% from $5.6 million in the first quarter last year. The first quarter sales were consistent with our expectations and we are forecasting significant growth in the upcoming quarters. The sequential decrease in net sales from Q4 includes a decrease in WaferPak, DiePak revenues of $8.7 million. These consumable revenues accounted for only 5% of revenues in Q1 2023, compared to 45% of revenues in Q4 2022. Customers often buy systems and then WaferPaks later, after theyâve completed their WaferPak designs. While our lead customers ordered several systems recently, we have yet to receive all the WaferPak orders to match up with these systems. We expect to receive these WaferPak orders later this year. This change in product mix had a direct impact on our gross margin in Q1 2023, as our Consumables business delivers higher gross margins. Gross profit in the first quarter was $4.5 million or 42% of sales, down from gross profit of $10.5 million or 52% of sales in the preceding fourth quarter and up from gross profit of $2.3 million or 40% of sales in the first quarter of the previous year. Direct materials accounted for an increase in cost of sales of 3.5 percentage points from Q4 2022. Also contributing to the decrease in gross margin from the preceding fourth quarter was an increase in unabsorbed overhead cost a cost of sales related to lower revenue levels compared to Q4 accounting for a 3.3-percentage-point impact on gross margin. Lastly, an increase in other cost of goods sold including increased inventory reserves, freight, warranty and tariff costs accounted for a 2.7-percentage-point impact on gross margin from the prior fourth quarter. During this challenging supply chain environment, we have maintained the ability to meet customer commitments. As our FOX-P platform contains a high concentration of common parts across the platform, it allows flexibility among various customerâs configurations. Also the use of contract manufacturers provides ability to scale easily and quickly without increasing our fixed costs. We expect our gross margins to improve as we move through the remainder of the year, as we recognize more consumable revenue and our absorption of our manufacturing overhead improves as revenue increases throughout the year. Non-GAAP net income for the first quarter was $1.3 million or $0.05 per share. This compares to non-GAAP net income of $6.5 million or $0.23 per diluted share in the preceding fourth quarter and the non-GAAP net loss of $100 -- $414,000 or $0.02 per diluted share in the first quarter of fiscal 2022. Non-GAAP net income excludes the impact of stock-based compensation. In the first quarter of fiscal 2022, non-GAAP net income also excluded the impact of forgiveness of $1.7 million remember from the Paycheck Protection Program that we received in fiscal 2020. Operating expenses in the first quarter were $4 million, a decrease of $625,000 or 13% from $4.6 million in the preceding fourth quarter and up $749,000 or 23% from $3.3 million in the first quarter last year. The decreased from the preceding fourth quarter is primarily due to higher incentive payments and stock compensation in Q4 related to bonus objectives, resulting from our record revenue and bookings last fiscal year. The increase from prior Q1 is primarily due to increased headcount, higher incentive payments, stock compensation and an increase in shareholder relations costs. We continue to invest in R&D to exams against, excuse me, enhance our existing market leading products and to introduce new products to maintain our competitive advantages and expand our applications in addressable markets. These new products include the recently introduced new advanced testing capabilities on our FOX-P systems for silicon carbide and gallium nitride technologies and our fully automated and integrated aligner. Turning to the balance sheet for the first quarter, weâve finished the quarter with a strong balance sheet. Our cash and cash equivalents were $36.1 million at August 31st, up $4.7 million from $31.5 million at the end of the preceding quarter and up $29.6 million from $6.5 million at the end of the first quarter of fiscal 2022. The significant increase year-over-year includes the $24 million we raised in our ATM offering in Q2 22. Working capital at August 31st was $49.4 million. Inventories at the end of the first quarter were $17.2 million, an increase of $2.2 million from the preceding quarter end and $7.1 million from Q1 last year. As weâve noted before, we have been ordering long lead components for systems and WaferPaks to ensure adequate supply to meet customer lead times and to support our expected growth in fiscal 2023. Now turning to our outlook for the 2023 fiscal year, which ends on May 31, 2023, we are confident in the companyâs growth trajectory and our unique capabilities and product offerings to meet customer demands. As such, we are reiterating our previously provided guidance for flow your total revenue of at least $60 million to $70 million, representing growth of at least 18% to 38% year-over-year, with strong profit margin 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. The company continues to make investments to support its future growth. This includes investments in headcount and operations. The company plans to make improvements to its corporate facilities to allow for increased production. In addition, the company has invested in expanding its foreign operations, including its Philippine repair center. This repair center replaces resources close to our Asia customers and a lower cost region to support repairs, installations and upgrades. This also provides for lower freight costs and faster response times as the Asia market accounted for 90% of revenues in fiscal 2022. Lastly, looking at the Investor Relations calendar, our Annual Shareholders Meetings will be held at our corporate headquarters on Tuesday, October 18th. We will also be participating in several investor conferences in the next few months. On October 25th, we will be presenting at the LD Micro Main Conference taking place in Los Angeles. On November 17th, weâll be participating in Craig-Hallum Alpha Select Conference taking place in New York. And on December 13th, weâll be participating in the CEO Summit Conference, which is also taking place in New York. We hope to see some of you in person at these events. This concludes our prepared remarks. We are now ready to take your questions. Operator, please go ahead.
Operator: Thank you. The first question today comes from Christian Schwab with Craig-Hallum Capital Group. Please go ahead.
Christian Schwab: Good evening, guys. Congrats on a great start to the year. Gayn, can youâ¦
Gayn Erickson: Hi, Christian.
Christian Schwab: Could you give us a number, you talked about being engaged in discussions with almost all existing and future silicon carbide suppliers as you see it today? How many potential customers is there?
Gayn Erickson: Well, thatâs a good question. I actually donât have that in front of me. Iâm looking -- Iâm kind of mentally imagining the list that Vernon has and itâs a pretty long list. Iâm kind of guessing here, but a dozen or more it kind of range, Iâd say.
Christian Schwab: Okay. Great. And thenâ¦
Gayn Erickson: Yeah.
Christian Schwab: As the several new customers ramp throughout the course of this year, is this the type of ramp that you expect to accelerate strongly this year and be greater next year, and can it ramp to the level that your largest customer ramped, once they started making production type of orders on a kind of aâ¦
Gayn Erickson: Couple -- I mean, a couple of questions in there. I mean, the traditional model is people usually take like one system and they will, I call it, sit on it and work through some issues or just make sure it gets called into production, then theyâll order another one and you go through lead times and then start shipping it. I would say, thatâs not what the shape looks like with these customers. Itâs more of full systems, maybe multiple systems in a short period of time and some cases in multiple facilities and itâs kind of go, go, go. So, now, the other customer has -- our lead customer has been making some really significant investments. They to some extent led the industry in this wafer-level burn-in portion. Itâs certainly been felt in the industry, everybodyâs quite aware of it and they took a pretty long time to absorb the first one and then started ramping pretty hard. My guess is, is that, itâs softer during the first six months to 12 months and then it gets stronger thereafter. Weâll see it. It depends on the customer. Even -- itâs kind of interesting, I mean, even with test times, Iâve had been engaged with customers and theyâll tell me their test time is such and such over and over and over again. And then they go to place the order and then they told me the real test times and they are longer than they were. Why is that? Is it just theyâre trying to be coy or not tell you everything? So weâre right now when things happen is weâre definitely trying to ferret out long, lead and forecasts for multiple customers, as we just stated, to just make sure we have plenty of material on that is being purchased. But I think they will start a little slower and then gradually pick up. And as we had -- if you look at the amount of capacity that everybodyâs talking about to hit in 2025 calendar wise, most people are just really focused on second half 2023 and into 2024 is where just a lot of capacity is coming online and so it may be less to do with the timing of us as the timing of that silicon carbide ramp. And our goal is to get qualified before that ramp happens and have a ton of capacity and material on hand to be able to address it.
Christian Schwab: Thatâs a great question, Gayn. Can you remind us what you think your yearly manufacturing capacity is or could be, by the time you get to calendar 2025?
Gayn Erickson: Yeah. I mean, itâs broken up of maybe a few things. One is that seemingly what most people think is the obvious, which is if you come look at our facility, and you say, well, how many tools can you build on the floor here. But in reality thatâs some ways the easiest thing. The testers basically bolt-in to water and power and they test themselves. And we have a pretty good sized facility here with enough test based to build significantly. Ken alluded to that. Weâre actually going to be doing some investments probably couple few million dollars into the facility over the next couple of years, putting in additional power, water drops and some other enhancements to support our WaferPak business as well. But that would allow us to have maybe 10 plus drops, meaning we can be billing 10 systems at a time on two weeks spreads. I mean, thatâs a lot of capacity, more than the whole industry would take right now. We were building 20 systems a month for example. The next one is the subcontractors that are building all those subassemblies that come to us and then I have to go down the list of them. But basically, we have multiple chambers suppliers, multiple blade suppliers, multiple printed circuit board suppliers. And generally speaking, even as grandiose as we are excited, we donât really press that. And the key here is weâve been able to do this without really being impacted by everybodyâs whining about supply chain, outside of one thing and thatâs the last one and that is the semiconductor components. Semiconductor components we have a really, really good handle on. We know exactly how many that go in the system, weâre forecasting and weâre buying semiconductor components right now 12 month and 18 months out, and have been for 18 months. And because of the, quite frankly, massive leverage on semiconductor components to our revenue, weâre able to afford to buy a lot of semiconductors ahead of time. So weâre just not really being caught. Now having said that, we still have our onesie, twosie along the way and hiccups, and the guys are working their butts off to just make sure it looks like itâs easy. But for the most part, weâve just not been impacted and allow us to keep both our lead times down and our capacity up. But could we go ship $100 million, $200 million, $300 million worth of FOX-XP systems in a year, absolutely.
Christian Schwab: Great. And then just one last question, Iâll let others chime in. In your guidance of $60 million to $70 million, can you give us just kind of your rough expectation of what you think youâll be customer will be of that?
Gayn Erickson: Well, not as much as it was last year as a percentage. So thatâs a good sign. And some of the upside within that range and some of the upside beyond that range include them. And just not always having all the perfect visibility we have, obviously, we know a lot more about sharing, but theyâre going through all kinds of different manufacturing plans scenarios where theyâre going to be putting systems more facilities. And we donât -- even with our current installed base customer, we donât have perfect visibility. So partly we just buy enough material, because we can anticipate the amount of market share that weâre going to have. But we definitely have within that number several new customers and not just engineering, but product -- first production systems being installed. And the part of the front end of that, too, is how many will we get installed in time, will we have any kind of rev rec things with respect to being right on the edge with their acceptance, that creates some of the sort of uncertainty. Guys, if we didnât have to do quarters or years, you hear from CEOs all the time, my life would be a lot easier. The reality is, if I just look in the next year or I look out to next December and you look at what that ramp looks like, Iâm way more focused on that. But I get it, weâve got straight expectations to meet and we want to make our shareholders happy too. I just think exactly timing everything within a quarter. Sometimes itâs harder. And thatâs where you see that kind of wiggle room of the $60 million to -- at least $60 million to $70 million and we -- and then make statements like and we have capacity to do beyond that, okay.
Christian Schwab: Thatâs great. Well, just a quick follow up on that, is -- using your words, if you could just look out for December, after of next year, if we looked at your business in the calendar basis, next year that youâre excited about it, how big of a revenue range opportunity are you thinking about?
Gayn Erickson: Yeah. I am not going to go there, Christian. Sorry, we spent a lot of time making sure that Iâm -- thatâs the one thing we do discuss as a Board pretty hard to make sure. I apologize for that. But I will tell you, Iâm very confident and Iâll go ahead and itâs not a big stretch out there. We definitely believe that will grow next year over this year. Let me leave it at that.
Christian Schwab: Yeah. Great. All right. No other questions. Thanks, Gayn.
Gayn Erickson: Okay. Nice try though, Christian. All good.
Operator: The next question comes from Bradford Ferguson of Halter Ferguson Financial Group. Please go ahead.
Bradford Ferguson: Hello. Iâm curious, is your lead customer successfully making their own substrate. Wolfspeed has come out and said on a go-forward basis, as of some certain date, theyâre not going to be selling substrate or extra substrate to other suppliers of silicon carbide devices. I am curious if this is a risk for Aehr Test Systems?
Gayn Erickson: So obviously we have insight under non-disclosures and given the fact that I said Iâm talking to all of them major suppliers, you can imply Iâm talking to every one of the big guys, including the ones you mentioned and then some under non-disclosures. And that gives me in many ways way more visibility than others, but primarily related to the devices. There exactly what they know non-public related to their substrates. I donât have as much visibility and I wouldnât really share. Itâs my belief that all of the major suppliers are all having success and counting on success of developing their own substrate supply chain, and obviously, that includes the big guys. Wolfspeed, of course is, has been, was the major supplier of it, theyâre obviously expected to be very successful making devices out of that. ST, with their announcement of their new fab or their manufacturing facility is absolutely counting on ramping their own. And obviously, on Semiconductor is another one along those lines in the course, Infineon has got some more going on, too. Itâs my belief that all of them will be successful. I donât -- Iâm not hearing anyone that can genuinely say, thereâs certainly people that are saying itâs not as easy as it looks. Itâs take some time, but thereâs a lot of money being put in. I mean, Wolfspeed spent 30 years working on this stuff and they -- their competitors are spending more money to make pools in this year that maybe Wolfspeed spent in their whole career or so. I donât know if thatâs fair, but it feels like that. So, thereâs a lot of energy to go try and solve this problem and my belief is theyâll find, theyâll figure it out.
Bradford Ferguson: One name I havenât heard you mentioned is Infineon, are there any large silicon carbide makers who arenât doing wafer-level burn-in or doing that in math as the others intend to do?
Gayn Erickson: Let me do it differently. Thereâs most of the vendors, most of the companies today have either little or zero wafer-level burn-in with the exception of our lead customer. I actually happen to know by quantity how many wafers a capacity and it is a very small fraction comparatively. Keep in mind, one of my systems can test 18 wafers at a time. Weâve publicly talked about our competitors. I choose really not to do it in this forum, because then they can read about it and itâs not because -- but the people that are out there test one way for at a time with a prober and it just doesnât scale. I mean, in the same footprint of, I actually use this analogy. I apologize if I did it on this group before. But our tester and the surrounding area that it takes to actually service it is about the size of like a small Prius car and it sits in a parking lot, like imagine that space, okay. Thatâs what our system is and in that stall Iâm looking at at our parking lot, in that room -- actually itâs smaller than that, but in that room, you can test 18 wafers. Thatâs about the same size as our competitors test one. If you go through the math and Iâve done this before, if you realize that the world needs 8 million wafers in 2030, that was a Canaccord number and I round down using like 8700 hours a year with inefficiencies, et cetera. You need 1000 wafers an hour, okay, to meet that demand. So if you start looking at like a 10-hour burn-in time, you have 10,000 wafers of capacity, thatâs a 10,000 car parking lot by my competitor. Now weâre 18 times smaller. Itâs -- weâre not zero footprint. But in the cost of it of a manufacturing floor of a wafer fab, thatâs enormous. And so if youâre a player playing in a market thatâs going to need 10,000 wafers of capacity of testers and you want to have 20% market share and you need 2000 wafers a capacity. Where are you going to put that? There is no test floor in the world that has 2000 wafers that -- it can support 2000 wafers -- wafer probers for silicon carbide. Thereâs no way. So weâre just -- obviously a very big opportunity.
Bradford Ferguson: Can I ask one more?
Gayn Erickson: Sure.
Bradford Ferguson: You mentioned a brand new player thatâs an experience chipmaker, are there chipmakers that are going to enter this market and sizes like the current announced plans of the top three players like our other people goingâ¦
Gayn Erickson: Yeah. I had -- weâre talking to now several. I had to go double check that, because weâve been talking to these guys for not very long by the way. I mean, I wouldnât say itâs been four months that we went from zero to first order in four months with these guys. I had to go double check to make sure they havenât publicly said anything when I wrote that, but they havenât. And we -- thereâs another customer weâve been working with that has never said anything public, either. But I did notice they showed up at one of the tradeshows recently, I still not going to talk any more about it. But we know they have massive plans, on the order of to some of the current top fours. Keep in mind, and this is always, Iâve done this math before, itâs always interesting, if you just go through the simple math of these forecasts and say there was 125,000 wafer starts to do silicon carbide last year and thereâs 4 million, I think, if you remember, like, 25 times. Another way of thinking about it is that, all of the silicon carbide that was built last year, right, is not even what 2% or 2, what is that like, Iâm sorry, go ahead 25 year, 4% of the overall market, you get that. So all of the suppliers today donât even dent the market in eight years. So they all have to grow substantially. People need to grow a lot to just sustain a small percentage market share. So theyâre going to need a lot more players. I mean, I sat in meetings where leaders like ST Microelectronics, who is the number one at a conference last May in San Diego, he stood up and said, listen, I just want to be very clear, we have no plans to build enough capacity to maintain a 50% market share like we did last year. They just donât. Theyâre not going to spend that much. So by definition, theyâre going to lose market share from being number one at 50%. But theyâre still planning to grow like a huge amount, but theyâre not going to go 25x. So the world actually needs a lot more players.
Bradford Ferguson: Hey. Thank you very much.
Gayn Erickson: Youâre welcome.
Operator: The next question comes from Gregory Ratliff with Nobis Partners. Please go ahead.
Gregory Ratliff: Yeah. Mr. Erickson, congratulations on the company and the good the opportunity . One thought I have is to carry on with that final question and if you were to look at the maybe the weaknesses in the structure of the company currently or the competitive threats down the road. Could you give us a bit of your thinking regarding what you need to do to continue to be a champion or to be a champion, but the tough competition they had? Thatâsâ¦
Gayn Erickson: Okay. So, Iâm not foolish to think that as the market is obviously large and growing, there wonât be people trying to figure out how to get into it. We are in a particular unique scenario where the way we do our testing is truly unique. Perhaps you could say, it could be in a negative connotation. If you look at every way for tester in the world, Iâve been in this industry for 35 years. I built them for most of that. The way you build an ATE system to test semiconductors is all the same. Every one of the companies, all 20 of them in the last 20 years have done it the same way. You build a tester box that sits on one of the three main wafer prober companies probers, it docks to one of 20 probe card suppliers and the three different industries, the tester, the prober and the probe card supplier have effectively have multiple people competing for the same capability and then people buy those tools, integrated themselves and put them on their floor. And that is a very successful business. Itâs -- combined itâs a big chunk of the $13 billion semiconductor automated test business last year. The problem with that is that those test times are all designed around seconds of test time. And so that test style might be an average somewhere between $1 million and $2 million to test the wafer. If you just look at the capital depreciation, testing one or two or four, eight devices at a time, itâs extremely expensive to do it, but the test times are so low, itâs okay. Now you take that exact same test time. And by the way, thatâs how you test silicon carbide at wafer level today. Functional test of a silicon carbide device takes about 2.5 seconds. And most of the testers that are in production today are between one and eight devices at a time. Itâs really cheap and easy to do that. When you go to burn them in, they now take 12 hours. Well, how are you going to do that with a tester that take in only test eight at the time, you just canât do that. We built a machine aimed at a completely different market, which is the idea that weâre going to take package part burn-in level costs and parallelism and implement that at wafer level and we made investments over the last decade to do that, quite frankly looking at macroeconomic trends of heterogeneous integration of semiconductors, of automotive devices going in this direction, of multi-die that modules going in this direction. Do not kid yourself, we did not think silicon carbide eight years ago was going to be this great hot market or that the world would actually be contemplating that weâre all going to be driving electric vehicles in 20 years, okay. But what we did do is anticipate the market trends that were headed in this direction, and quite frankly, weâre sitting out in front of this when the silicon carbide hit us sideways. And weâre just -- we just have -- we -- call it what it is, we call the shock that it was heading this direction and we were ready and prepared to take advantage of the wave and itâs it really exciting. It is not that easy to do what we do and we have an entire list of patents to defend it and we will defend that with any company that tries to build a test or like ours or any customer that tries to use a tester built by someone else that looks like ours. In the meantime, we have a long head start and weâre -- our goal is to get engaged with as many of these customers as we can. Also, weâre working directly with some of the automotive suppliers now, who now would look to qualify the tool and then they could qualify it backwards into multiple vendors. So that once weâre qualified, I donât think anyoneâs going to want to switch anyhow. I know Iâm pretty been specific about our strategy, but thatâs how itâs playing out right now. So, having said that, weâre also running like hell, weâre absolutely making sure that we do not limit anyone in capacity of testers. We have the shortest lead times of any tester company Iâve heard of. I mean, I took an order like two weeks ago and shipped at the end of the week. Iâll take an order. Iâm ready to talk about what my next orders are. But Iâm going to be announcing some orders that are going to ship within a quarter, okay. We have that ability and we can tell the customer we can meet their capacity demands that theyâre imagining out 12 months and six months and 18 months, right, 12 years, 18 years and two years, sorry. So the next thing is this, technically, there are some things and itâs not so much a weakness as it is people would like to do more testing or be able to do. So we took our power supplies that were going at about 30 volts and we increase them to 40 volts. Weâre not trying to make sure thereâs no technical reason you need to go away from us. So now we have the ability to give you a technical solution for engineering characterization of high voltage, high gates, all the different threshold voltages and stuff that you do for qualification and then move that into high volume production, either in the same configuration or in cost optimized configuration that we donât really get to on these calls, but we have some tricks up our sleeve to actually do characterization with higher cost performing systems and then go to a production volume one that hits a price point that is very novel. And so weâre trying to hit it on all of these, technically, commercially capacity to be able to address it and then we have IP patents to protect ourselves and then weâre just paranoid and running as fast as we can.
Gregory Ratliff: Thank you so much for that.
Gayn Erickson: Thank you, Greg. Itâs nice talking to you.
Gregory Ratliff: My pleasure, sir.
Operator: The next question comes from Matthew Winthrop with Equitable. Please go ahead.
Matthew Winthrop: Hi. Hi, there. Gayn, how are you?
Gayn Erickson: Iâm good, sir. In a particularly good mood these days.
Matthew Winthrop: You sound it. I wanted to just blow some smoke for a quick second. As you know, as a retail advisor, Iâve been following Aehr for four years or five years. I have lived through this downtime. And you were so brutally honest when things werenât great and I just wanted to thank you and commend the fact that you guys have kept your eye on the ball, and obviously, youâre starting to see some successes and thatâs a rare attribute in this environment that weâre in. So nice work, sir.
Gayn Erickson: All right. I really appreciate that. Real quickly, it does seem on the outset that youâre having shorter lead times, because of how well a customer wanted to see and when they got it and they messed around for a while. Am I interpreting that correct that the mass adoption or that your system really does work that well. But whatâs changed now, are they more in the workforce that suddenly sounds like the sales lead time is a little quicker unless Iâm misinterpreting that?
Gayn Erickson: Yeah. I think I got it. You broke up a little. So I apologize if I think I got the gist of it. So let me kind of repeat it back a little bit. So this idea that, it seems like things are going a little faster, maybe the sales cycles a little shorter, et cetera. Thereâs -- thatâs absolutely the case and I think thereâs a few things going on there. This really is one where COVID being over helps, okay. I mean, just things were so slow with current and new customers and people werenât traveling and itâs just hard to sell and itâs hard to communicate. You can only do so much over tune. So thatâs definitely one of them. Thereâs also this element that, if you -- three years ago, right, we were selling these systems, people know the lead customers of this platform were Apple and Intel and ST Microelectronics and some of these, because they were 10% customers for us, right? But theyâre still kind ofâ¦
Matthew Winthrop: Right.
Gayn Erickson: ⦠is it real, does it really make sense, itâs kind of niche, these are weird products, whatever it is, right? Itâs like, Iâm not sure. Then all of a sudden as people know that one of the big silicon carbide customers came along and bought this, and quite frankly, bought one system and sat on it for more than a year, of course, code was going on. So thereâs still sort of this, is it real, is it really going to work, does -- that whole thing. Then all sudden, they start ramping, then all of a sudden, from what it feels like and Iâve heard this directly, they -- companies that theyâre selling to are kind of coming back, because they really have done a good job of marketing themselves has being quality differentiated, selling the modules, selling the quality of the modules, and quite frankly, they did presentations, I talked about their wafer-level burn-in earlier and I think itâs come through. So then theyâre winning deals and those customers, their customers are turning around and talking to now their competitors and saying, oh, do you have wafer-level burn-in? Thereâs no doubt some of thatâs going on, okay. And weâre doing everything we can do to foster that environment, okay. Because all we have to do is get somebody say, I want to do wafer-level burn-in and right now, we win. Weâre done, because our value proposition, our solution, our lead times, our price points, theyâre a slam dunk. And so right now itâs like, weâre not taking advantage of this. Weâre not raising up. We did not raise our prices, guys, okay. Did not do it. We had some things where our cost went up. I mean, I did pay $50,000 to ship a chamber and last Christmas, it was crazy. But I didnât pass that on to my customer. Iâm not doing that game. And I -- we make good money. Weâre going to make a lot of it. Weâre going to provide a value to our customers and weâre going to be there for them. And I think that weâre in this -- in good position because of that.
Matthew Winthrop: Thatâs great. I have one follow up if I may. Iâll act like an analyst here. Last quarter what were you projecting for potential revenues for was a calendar of fiscal 2023, but now I think youâre release said $60 odd million, maybe more. Had that number just in the last quarter increased dramatically or was that?
Gayn Erickson: No. We provide -- we really only provide guidance annually and we only do it once a year, rather we have kind of fallen into the we reiterate or in some cases weâve uptick.
Matthew Winthrop: Okay.
Gayn Erickson: So we provided that guidance. And I get it, people said, what does that mean at least $60 million or $70 million? Is it $60 million and is it $70 million. What -- and we were not intentionally trying to be acute, but that still feels about right? I mean, we think weâre in good shape for that and it just really depends on some of the timing of these customers ramps. So sometimes I donât feed anyone questions, but Iâm going to feed you a question that is, were you able to ship everything your customers wanted last quarter? Yes. So why was it only 10 whatever? Thatâs all they wanted? I mean, thatâs the reality of it. And you think youâre going to grow? Why? Because the customers want more and I can build more. Itâs like -- itâs sort of like that we were actually ahead of the game on this. And so now weâre getting into why is it that there was it seems softer than Q4 and I know some of those reasons. So very private about customers ramps and their design wins and when they wanted WaferPaks and I got facility issues with people that are talking about bringing on new facilities and some of that stuff just hard to handicap and know what the answer is. And so -- and of course, I have to guess correctly with these guys. And some of this is, Iâm pretty confident in winning these customers, but itâll be -- itâll feel good when they give us the first POS, too, right? Soâ¦
Matthew Winthrop: Yeah.
Gayn Erickson: ⦠itâs hard to guide that way. But, yeah, we did not change our guidance, if you will. I guess, we said, weâre very confident of that number. And as our backlog builds up and if the backlog and the customers asked for more than that, we will guide up at that time or as it makes sense, but again, weâre not trying to play that game.
Matthew Winthrop: Nice work.
Gayn Erickson: Okay.
Matthew Winthrop: Appreciate your efforts. Letâs make sure I get to see you when youâre in New York.
Gayn Erickson: Okay. Awesome. Itâd be good to go back. I love the travel personally, so.
Matthew Winthrop: I know youâve talked about Europe all the time. Thank you so much.
Gayn Erickson: Okay. Thank you.
Operator: The next question is from Larry Chlebina with Chlebina Capital. Please go ahead.
Larry Chlebina: Good afternoon, Gayn. Real quick question on this new version of your XP in terms of the higher voltages or the adjustable voltages.
Gayn Erickson: Yeah.
Larry Chlebina: The testing that you did in a past for a particular large silicon carbide customer, I think, it was in August of last year. Does that mean that this is the process that theyâre going to use these higher voltages one, I think, you just sent him someâ¦
Gayn Erickson: Yeah. Let me try and answer as clear as I...
Larry Chlebina: The following isâ¦
Gayn Erickson: Go ahead.
Larry Chlebina: ⦠is the higher voltage or is this adjustable voltage, the way you think most potential customers are going to go or they build likeâ¦
Gayn Erickson: I am glad you asked it that way. Thatâll be easier for me to answer.
Larry Chlebina: Yeah.
Gayn Erickson: Because itâs -- Iâm not trying to be coy here, okay. But let me try. Let me try and guess. So there are several ways, not 10, thereâs primarily two main ways that you can stress these MOSFET devices to weed out infant mortality, okay. A MOSFET is a transistor. A transistor, if you imagine a water valve, like on your sink is a great analogy. All you do is a transistor allows electrical current or water to flow through it, when you turn on the valve, or in this case, apply a voltage to the gate. Thatâs it. You apply a voltage, water flows through it, you turn off the gate, the water stops flowing through it. If the device works properly, when you turn it off, it doesnât drip. Recall that leakage. If you put a big power pressure behind it, it might leak a little and they actually specify how much it leaks. But if it leaks more than that, itâs bad, okay. Now, there are two main stresses you can do to verify that. One of them is, is a gate bias, a high voltage gate bias on the gate itself. Imagine the valve Iâm describing, I want you to put your hand on the valve and I want you to turn it over as hard as you can, try and break it on, okay. Sounds kind of odd, but thatâs exactly what we do. We basically overstressed the gate, and if the gate breaks, it snaps off. We actually call that a glass rod snap in-house. It --we love showing those to customers, particularly when they take 24 hours or 48 hours to show up, okay. That is a failure that shows up. It is the primary failure in silicon carbide MOSFETs that everybody talks about and you have to get rid of those. Those show up in cars and you have what we call a walk home event, which is you get out of your car and you walk home when it dies, okay. So those need to be weeded out and thatâs what we do primarily, okay, because the gap, the gate oxide has defects in it in the manufacturing process, that Iâll get into it, but theyâre not going away, that if you -- if those flows through all the way to your end customer, thatâs bad, okay. So we apply a high voltage gate bias onto the gate to overstress it to try and crack it off and thatâs a primary way of doing it. Another test is called the reverse bias, which is imagine putting really high pressure on that valve, water pressure, itâs called voltage in this case and it shouldnât leak through. Now the difference between that test, thatâs a good quality test or a reliability test. Meaning you want to do that during your process to validate the devices do not fail and youâll do that over, say, a 2000 hour, thatâs not necessarily a production test. The production test may only take a few seconds. But there are people that want to do qualification of that high voltage and thereâs some people that have done it in production and we have now provide them with a solution to do that, okay. Having said that, you canât do the same as the gate, you actually, if letâs say the device is rated for 1200 volts, you donât apply 1800 volts to the device, it will kill it, it will weaken it and it will not be shippable. So you can only put 1200 volts on it. So itâs not really a burn-in stress condition. Itâs a functional test validation and you might want to do it for a few seconds, but itâs not necessarily a production test. But what, if you want to put my system in production with that, you go for it, it costs a little bit more, Iâll be happy to do it and Iâll shop -- I will sell you FOX-XPs forever. Our opinion and weâve been fairly open about it is that you want to do characterization, you want to do that and you want to get that out of production as soon as you can and you should go to this gate bias testing and thatâs our story. And you -- we now have the tools to give you whatever you want to do. You can buy whatever you want, weâll be happy to sell it to you. It is more expensive to do reverse bias, but weâre cheaper than anybody else by a long way.
Larry Chlebina: So youâ¦
Gayn Erickson: Okay. Nowâ¦
Larry Chlebina: You think most of the systems will be like the original versions going forward?
Gayn Erickson: I do. I do. I do.
Larry Chlebina: Okay.
Gayn Erickson: I think over time, thatâs really where the cost is going and thatâs weâve been talking multiple. We -- by the way, the new BVCM, I know nobody cares about our language here. But the new bipolar voltage, it actually allows it to go a little higher voltage. We had some people that want to do that. Interestingly, as the devices mature, the voltage is actually going down. So weâre kind of feel like, but thereâs some people that ask for it, particularly in the gallium nitride and so weâre like, sure, no problem. We also have a negative voltage and thereâs some technical white papers out there that people are doing to do that as an accelerant and now we have, I think, the only solution out there to do that, even in packaged parts. So now we have the ability to do a negative voltage, which is something people may want to do too and weâll be happy to sell them those systems. It looks just like our current system. It just simply goes a larger voltage range, okay.
Larry Chlebina: Okay. Iâm glad you introduced the fully automated aligner, which gives you the fully automated XP. Do you have a name for the XP ful
Related Analysis
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).