Cohu expects 30%-40% 2027 revenue growth as it targets 3x Eclipse shipments

• CEO Luis Müller said the quarter showed “solid third quarter progress as high-performance computing adoption accelerated and recurring revenue growth strengthened,” highlighting revenue of $173 million and noting “book-to-bill was solidly above 1.”

• President, CEO & Director Luis Müller said Cohu is “raising our fiscal year 2026 high-performance computing revenue outlook to approximately $120 million,” and added that, to support demand, Cohu is scaling with “the goal of delivering approximately 3x as many Eclipse handlers in 2027 as in 2026.”

• President, CEO & Director Müller described the HPC funnel expanding to “approximately $1 billion,” including “$230 million in qualified annual revenue potential” and “another $440 million in active qualification,” and said 7 programs reaching qualification milestones between late November and Q1 “represent approximately $340 million of annual systems revenue based on current customer planning.”

• President, CEO & Director Müller said Neon inspection shipped “final inspection systems for HBM3 and HBM4,” that the IDM customer “has designated Cohu as a strategic supplier,” and that Neon backlog was “booked deep into the first quarter of 2027,” alongside progress toward an advanced package inspection qualification.

• CFO & Executive Officer Jeffrey Jones said, “Q3 2026 revenue was $173 million, above the midpoint of guidance,” and added: “Gross margin was 45.7%, above guidance,” “Non-GAAP EPS for the third quarter was $0.43,” and “Cash and investments increased by approximately $10 million during Q3 to $508 million.”

Outlook

• CFO Jones guided, “we're expecting Q4 revenue of approximately $178 million, plus or minus $7 million,” with “Q4 gross margin… approximately 44%,” and said Cohu is “raising our full year 2026 revenue growth outlook to approximately 38% over 2025.”

• President, CEO & Director Müller provided a 2027 view: “For 2027, we expect revenue growth of approximately 30% to 40%,” and said the high end “will depend on the timing of customer qualifications and production ramps provided market conditions remain strong.”

• CFO Jones added a preliminary 2027 framework: “At that revenue range, we expect gross margin of 46% to 48%,” “quarterly operating expenses… in the $54 million to $56 million range,” and “approximately 50% of incremental revenue falling to operating income.”

Financial results

• CFO Jones reported Q3 non-GAAP operating expenses of $53.5 million, net interest income of “approximately $1.5 million,” a tax provision of $3.7 million, and adjusted EBITDA margin of 16.6%.

• CFO Jones said Q3 recurring revenue “represented 48% of total revenue,” and noted customer concentration: “One compute customer accounted for more than 10% of total sales during the quarter.”

• CFO Jones said Q3 cash from operations was “approximately $6 million,” total debt was $310 million, and capital expenditures were “approximately $3 million,” while continuing to target 2026 capex of “approximately 2% of revenue.”

Q&A

• David Duley, Steelhead Securities LLC: asked about hyperscale interface wins leading to SLT and the shape of Eclipse shipments next year; President, CEO & Director Müller replied, “it's a little too soon to be talking about SLT,” and described Eclipse as “a ramping through the year,” adding, “we're looking at putting enough capacity in place to ship 3x more Eclipse systems next year than we're shipping this year in 2026.”

• Quinn Fredrickson, Baird: asked how much of 2027’s 30% to 40% growth is HPC vs. core recovery and about utilization; CFO Jones said the earlier $200 million to $250 million HPC sizing was “probably at the higher end of that range,” and added, “we got about 82% test cell utilization,” with “84% utilization in the compute sector… 83%… industrial… about 80%… automotive,” while noting, “We don't really forecast utilization.”

• Robert Mertens, TD Cowen: asked if the $1 billion pipeline and FY2026 HPC outlook raise was clarity vs. new engagements and about supply chain tightness; President, CEO & Director Müller said, “Largely, we're gaining more clarity on the customer forecast for 2027,” and added, “We see some tightness on specialty components… Don't see it as a… constraint to business today.”

• Craig Ellis, B. Riley Securities: asked what’s driving pipeline growth, engagement-to-revenue cycle time, and mobile seasonality; President, CEO & Director Müller said visibility improved as customers “describing more of their capacity needs in 2027,” described qualification-to-production as “approximately 9 to 12 months,” and said mobile is “the smallest of our business segments,” with no “dramatic change” expected.

• Kevin Garrigan, Jefferies: asked capacity above 3x Eclipse and Diamondx’s power-management opportunity; President, CEO & Director Müller said Cohu could “ship over 2,000 systems next year” if fully utilizing handler capacity and stated Diamondx “is replacing an incumbent supplier.”

• Denis Pyatchanin, Needham: asked if the in-qualification growth is predominantly Eclipse and about Neon advanced packaging; President, CEO & Director Müller said, “It is exclusively Eclipse,” and said the Neon opportunity is “a new customer” for inspection within an existing Cohu computing customer.

• Daniela Talio, Stifel: asked about recurring revenue per upgrade and vendor strategy; President, CEO & Director Müller said HPC upgrade cycles include thermal head replacements and, “I would expect… an increase in recurring revenue,” while adding, “we are new into this market,” and described sourcing as “a mix,” with experience so far where “when we take a device family, we take the entirety of that device family.”

• Benjamin Taxdahl, Craig-Hallum: asked whether the pipeline can grow beyond $1 billion; President, CEO & Director Müller said final test is “about $1 billion of opportunity pipeline… and about $1.5 billion” SAM, and said Cohu is exploring “another vertical in the test space… deeper into 2027.”

• Denis Pyatchanin, Needham: asked about automotive/industrial bookings; President, CEO & Director Müller cited, “industrial system orders have increased 52%… Automotive has increased 23%,” and said “industrial will surpass automotive.”

Sentiment analysis

• Analyst tone was slightly positive and primarily focused on visibility and capacity execution (pipeline expansion, qualification timelines, utilization, supply-chain constraints), with recurring probing on “shape of Eclipse system shipments,” component tightness, and end-market recovery.

• Management tone was positive in prepared remarks and operationally confident on HPC conversion and scaling, using explicit commitments like President, CEO & Director Müller’s “we expect revenue growth of approximately 30% to 40%” and scaling plans to “deliver approximately 3x as many Eclipse handlers in 2027 as in 2026.”

• Versus the prior quarter, management language shifted toward more concrete 2027 production planning (need dates and ramp shape) and expanded market framing (Neon addressable markets and additional vertical exploration), while analysts stayed concentrated on conversion timing, capacity ceilings, and cyclicality outside compute.

Quarter-over-quarter comparison

• The HPC funnel expanded from “approximately $850 million annually” in Q2 to “approximately $1 billion” in Q3, alongside stronger specificity around qualified and in-qualification program value buckets (Q3 cited $230 million qualified annual revenue potential and $440 million active qualification).

• FY2026 HPC revenue outlook moved from “between $100 million and $110 million” in Q2 to “approximately $120 million” in Q3, with Q3 also emphasizing a production goal of “approximately 3x as many Eclipse handlers in 2027 as in 2026.”

• 2027 growth framing remained consistent at “approximately 30% to 40%,” but Q3 added more explicit profitability and model assumptions (gross margin of 46% to 48%, quarterly opex $54 million to $56 million, and ~50% incremental revenue to operating income).

• Core-cycle commentary evolved from Q2’s utilization improvement (“80% at the end of the second quarter”) to Q3’s “82%” and more granular segment utilization disclosures in Q&A.

Risks and concerns

• CFO Jones said, “the rapid increase in high-performance computing demand is creating longer lead times and higher input costs for certain semiconductors and specialty components,” and described mitigation as “proactive steps to secure critical components” and working with partners to “expand manufacturing capacity… and reduce these incremental costs over time.”

• President, CEO & Director Müller cautioned on timing uncertainty for late-year shipment visibility, telling David Duley that Cohu does not yet have “a good view on the fourth quarter at this point” for 2027 Eclipse shipment shape.

• Management emphasized execution risk tied to scaling suppliers alongside internal ramp: President, CEO & Director Müller said tripling output requires ensuring “our suppliers… ramp up their capacity or alternative suppliers have to come in and augment that.”

Final takeaway

Cohu’s management positioned Q3 around accelerating HPC adoption and conversion, raising FY2026 HPC revenue outlook to approximately $120 million, expanding the Eclipse opportunity pipeline to approximately $1 billion, and outlining manufacturing and supply-chain actions aimed at delivering approximately 3x as many Eclipse handlers in 2027 as in 2026. For Q4, management guided to approximately $178 million in revenue (±$7 million) and projected gross margin of approximately 44%, while reiterating an initial 2027 growth view of approximately 30% to 40% with a preliminary margin and operating model tied to scaling HPC systems, services, consumables, and software.

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