10-Q · April 8, 2026
Aehr reported quarterly revenue of $10,313,000 and a GAAP net loss of $3,203,000 (diluted loss per share $0.10) for the three months ended February 27, 2026. Revenue declined sharply year-over-year from $18,307,000…
Earnings analysis · 10-K
AEHR earnings analysis
Filed July 27, 2026 · Our reading of the company's report
The latest report
FY2026 results remained under pressure from weak EV power-semiconductor demand: revenue declined 15.2% to $50.001M, gross margin contracted to 35.3%, and diluted EPS was negative $0.23. The strategic offset is a broader…
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FY2026 results remained under pressure from weak EV power-semiconductor demand: revenue declined 15.2% to $50.001M, gross margin contracted to 35.3%, and diluted EPS was negative $0.23. The strategic offset is a broader wafer- and package-level reliability platform aimed at silicon photonics and high-power AI/HPC devices, with systems revenue increasing to $28.669M and U.S./Europe growth partly diversifying Asia exposure. A $97.4M gross ATM raise lifted cash to $116.5M, but it also diluted shareholders; the filing offers no numeric FY2027 forecast, only management's expectation of a return to profitability.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
Reported figures
- Earnings per share
- $-0.23
What stood out
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Broadened AI and reliability-test roadmap
Aehr positions FOX wafer-level and singulated-die burn-in, plus acquired Incal package-level systems, for reliability demand in generative AI, silicon photonics and power semiconductors. Sonoma targets AI accelerators, GPUs and HPC processors requiring burn-in at power levels of 1,600W or more, while FOX DiePak supports up to 1,024 devices per carrier and up to nine carriers simultaneously.
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Systems mix improved despite EV weakness
System revenue rose 30.4% to $28.669M in FY2026 from $21.978M in FY2025, led by a $10.4M increase in wafer-level burn-in systems sold primarily to silicon-photonics customers. This partly offset the $19.9M decline in wafer-level contactor revenue amid weak EV-related demand.
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Revenue diversified away from Asia
The geographic mix shifted substantially toward U.S. and European silicon-photonics demand: U.S. revenue increased 16.8% to $20.643M and Europe/Middle East rose 55.6% to $6.535M. Asia revenue fell 38.5% to $22.823M, reducing its share of revenue to 45.6% from 62.9%.
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ATM financing rebuilt liquidity
Liquidity strengthened materially after ATM equity issuance: cash, cash equivalents and restricted cash increased to $116.5M from $26.5M, with $97.4M of gross proceeds from common-stock offerings. The company states existing cash and anticipated operating funds should cover operating needs, capex and obligations for the next 12 months.
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Incal added package-level burn-in capability
The company expanded its addressable package-level burn-in portfolio through the July 2024 Incal acquisition, valued at $22.2M, including $10.6M cash and $9.4M of restricted common stock. Incal contributed $18.6M revenue and $3.8M net income from acquisition through FY2025.
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Operating cash burn narrowed
FY2026 operating cash outflow improved to $3.310M from $7.400M in FY2025, aided by higher customer deposits and lower inventory/vendor cash outflows. Customer deposits increased to $4.554M from $1.802M, although capex of $2.066M resulted in calculated free cash flow of negative $5.376M.
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Three-year financial deterioration
Three-year trend remains a sharp downturn before anticipated recovery: revenue declined from $66.218M in FY2024 to $58.968M in FY2025 and $50.001M in FY2026; gross margin fell from 49.1% to 40.6% to 35.3%; and diluted EPS moved from $1.12 to negative $0.13 and negative $0.23.
What to watch
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High customer concentration and order volatility
Customer concentration remains high: the five largest customers represented approximately 70% of FY2026 revenue, and the top three represented 26%, 14% and 11%. Although concentration improved from 77% in FY2025 and 93% in FY2024, a single customer delay, cancellation or vendor change can materially affect quarterly results.
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Tariffs pressure demand, costs and margins
Trade-policy uncertainty became a specifically expanded exposure: management says tariff announcements since the second half of FY2025 hurt customer demand and orders, while FY2026 gross margin fell 5.3 points to 35.3%, partly due to higher tariffs on imported parts. International deliveries remained 59% of FY2026 sales, versus 70% in FY2025.
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Elevated inventory faces write-down risk
Inventory remained elevated at $41.354M at FY2026 year-end, nearly unchanged from $41.997M despite revenue declining 15.2% to $50.001M. The auditor identified excess/obsolete inventory valuation as a critical audit matter because lower-than-forecast demand could significantly reduce carrying value and results.
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Fixed-cost leverage amplified the loss
The company is relying on a FY2027 profitability recovery despite FY2026 operating loss widening to $14.149M from $5.677M and operating margin declining to negative 28.3% from negative 9.6%. R&D increased 20.7% to $12.633M and SG&A increased 4.8% to $19.161M while revenue declined.
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Liquidity raise materially diluted holders
The balance-sheet improvement came with significant dilution: FY2026 common shares outstanding increased to 32.480M from 29.877M, following approximately $97.1M of net proceeds from public offerings. The company has no stock-repurchase plan and did not repurchase shares in the open market.
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New AI implementation and governance exposure
The company added a standalone AI-use risk, citing potential flawed algorithms, biased data, IP loss, privacy, cybersecurity and evolving regulation. It has deployed Claude for engineering and Copilot for other staff while still formalizing AI-use policies, guidance and employee training.
Management's outlook
The 10-K provides no numeric FY2027 revenue or EPS outlook. MD&A states that management expects a return to profitability in FY2027, supported by substantial backlog and near-term demand visibility; annual quantitative outlook was provided separately in the Q4 earnings materials.
Earlier filings 1
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.