Aehr Test Systems Reports Significant Revenue Growth, Net Income Decline in Q1 2025

Aehr Test Systems reported significant changes in its financial performance for the first fiscal quarter of 2025, which ended on August 30, 2024. The company achieved net revenues of $555.97 million, a substantial increase from $50.49 million in the same period of the previous year. This growth was primarily driven by a notable increase in sales, particularly in the United States, which accounted for $523.79 million of total revenues. However, revenues from Asia and Europe saw declines, with Asia dropping to $12.58 million from $19.23 million in 2023.

Despite the revenue surge, net income for the quarter was $660,000, a significant decrease from $4.67 million reported in the prior year. The decline in profitability was attributed to increased selling, general, and administrative expenses, which rose to $4.6 million from $3.4 million, largely due to acquisition-related costs and expenses from the newly acquired Incal Technology, Inc. Additionally, research and development expenses remained relatively stable at $2.4 million, compared to $2.5 million in the previous year.

The company completed the acquisition of Incal Technology on July 31, 2024, for a total consideration of $21.9 million, which included cash and restricted stock. The acquisition is expected to enhance Aehr's product offerings and market position, although the revenue contribution from Incal was minimal at $200,000 for the quarter.

Gross profit for the quarter was reported at $7.1 million, down from $10 million in the same period last year, but the gross margin improved to 54.0% from 48.4%. This increase in gross margin was attributed to a shift towards higher-margin contactor sales, despite lower manufacturing efficiencies due to reduced system shipments.

Cash, cash equivalents, and restricted cash totaled $40.8 million as of August 30, 2024, down from $51.1 million a year earlier. The decrease in cash flows from operating activities to $2.38 million, down from $3.90 million, was linked to lower net income and reduced cash from deferred revenue and accounts receivable collections.

Overall, Aehr Test Systems is navigating a complex market environment, with strategic acquisitions and shifts in product demand impacting its financial results. The company continues to focus on enhancing its operational capacity and addressing market trends in semiconductor testing.