Cohu Inc. Reports Challenging Year in 2024 Annual Financial Results

Cohu Inc., a prominent player in the semiconductor test and inspection equipment industry, faced significant challenges in its fiscal year 2024. Established in 1947, Cohu provides a suite of products that includes automated test equipment, handlers, and inspection solutions. The company's performance is heavily influenced by the cyclical nature of the semiconductor sector, which has seen fluctuating demand due to macroeconomic conditions.

In 2024, Cohu's net sales plummeted by 36.9%, dropping from $636.3 million in 2023 to $401.8 million. This decline can be attributed to global economic pressures, including increased costs of capital and reduced capital expenditures by semiconductor manufacturers.

Cohu made significant strides in its growth strategy through acquisitions, culminating in the purchase of MCT in January 2023, followed by EQT in October 2023. These acquisitions aim to enhance Cohu’s offerings in automated solutions and semiconductor test contactors, respectively.

Cohu operates its business under a unified segment: Semiconductor Test & Inspection, reflecting the similarities in customer base and economic characteristics. The segmented revenue performance in 2024 showed no variations compared to 2023, with total revenue for this segment remaining consistent at $636.3 million.

The company's revenue was heavily impacted across different geographic regions. The most significant declines were observed in the Philippines and Malaysia, with revenues dropping by 44.55% and 46.49% respectively. The detailed revenue distribution by geography is as follows:

Cohu's gross margin fell to 44.9% in 2024 from 47.6% in 2023, largely due to decreased business volume. Research and development expenses were 21.1% of net sales, amounting to $84.8 million, a decrease from the prior year. Conversely, selling, general, and administrative expenses saw an increase, reaching 31.9% of net sales.

The company recorded a net loss of $69.8 million in 2024, a stark contrast to a net income of $28.2 million in 2023. The impact of lower revenues and higher operational costs led to an operating loss of $71.66 million.

Cohu’s liquidity position faced challenges as cash provided by operating activities decreased significantly in 2024. As of December 28, 2024, the company held $206.4 million in cash and cash equivalents, with 60% residing in foreign subsidiaries. The company also maintained a $350 million Term Loan Credit Facility and various credit arrangements.

Despite the turbulent financial year, Cohu continued its commitment to shareholder return through its share repurchase program, which allows for up to $140 million in buybacks. As of the end of 2024, $31.4 million remained available for repurchase.

Cohu's management remains focused on navigating through the current market challenges while strategically positioning the company for future growth. The company’s recent entry into the Silicon Carbide burn-in test market and the enhancement of its data analytics and AI/ML platform indicate a commitment to innovation and adaptation in a rapidly changing industry landscape.

As the semiconductor market stabilizes, Cohu aims to leverage its recent acquisitions and product developments to regain traction and improve its financial performance in the coming years.

The fiscal year 2024 has proven to be a tumultuous period for Cohu Inc., with significant revenue declines and net losses. However, strategic acquisitions, a focus on innovation, and a commitment to managing costs may provide pathways for recovery as the semiconductor landscape evolves. Investors and stakeholders will be keenly watching Cohu’s strategic responses and market performance in the upcoming quarters.