Episode Details

Cohu, Inc. (COHU) Q2 2026 — Cohu reported Q2 2026 (the 13 weeks to June 27) after the close on July 30. Revenue was $149.0M, +38% y/y and +19% sequentially, against roughly $144M expected. Non-GAAP gross margin was 45.5% (GAAP 45.4%) versus a ~44% guide. GAAP operating income was +$0.292M — the first positive operating quarter since 2023, against -$17.2M a year ago. GAAP net loss was $0.159M, or $(0.00) a share; non-GAAP net income was $14.1M, or $0.26 a share, against $0.14 expected. Adjusted EBITDA was $18.4M (12.3% of sales) versus 3.6% a year ago. Management guided Q3 to $170M +/- $7M, raised the FY26 high-performance-computing revenue outlook to $100M-$110M, and lifted the AI-compute opportunity pipeline to roughly $850M. The stock closed at $46.45, already +18.1% on the day before the print, and traded near $54.90 after hours. The quarter was genuinely good and we say so plainly — but the number that moved the stock was the guide, and almost nobody has done the arithmetic on it. Ninety days ago, on the April call, management told analysts to model the September quarter at about $144M-$145M with December weaker still. They just guided it to $170M — a ~17% raise to their own near-term view in one quarter. Follow that into the annual model: H1 revenue of $274.1M plus the $170M guide is $444.1M with one quarter to go, against a published FY26 consensus of $558.7M. That consensus implies a December quarter of roughly $114M — a 33% sequential collapse, below every quarter of 2026 including Q1. It is a stale model built on April's guidance. Two other things sit between the headline and a shareholder: all $0.26 of non-GAAP EPS is $14.8M of add-backs, $6.6M of which is stock comp (charge it back and the quarter earned about $0.14); and the widely-quoted '$498M of cash' is really about $202M of net cash once you count $296M of debt, almost all of it $287.5M of 1.50% convertible notes struck at ~$27.18 — which the stock now trades at twice. THE CALL: HOLD (3/5, A REAL INFLECTION, PRICED FOR THE BULL CASE IN FULL) — base-case value ~$40.0 vs ~$46.45 today. KEY METRICS: - Revenue $149.0M, +38% y/y and +19% q/q, versus roughly $144M expected - Non-GAAP gross margin 45.5% (GAAP 45.4%) against a ~44% guide, while ramping the Eclipse handler - GAAP operating income +$0.292M — the first positive operating quarter since 2023 (Q2 2025: -$17.2M; Q1 2026: -$11.2M) - Non-GAAP operating income $15.1M (10.1% of sales); Adjusted EBITDA $18.4M (12.3%) vs 3.6% a year ago - GAAP net loss $0.159M, $(0.00)/sh; non-GAAP net income $14.1M, $0.26/sh vs $0.14 expected - The $14.8M GAAP-to-non-GAAP bridge: $7.28M intangible amortisation (was $10.1M a year ago), $6.59M stock comp, $0.63M restructuring (was $7.8M in H1 2025), $0.28M other - Share counts: GAAP diluted 47.3M vs non-GAAP diluted 53.4M — 12.9% of latent dilution from the convertible notes already in the EPS denominator - Balance sheet at 6/27/26: cash and investments $498.2M, total debt $296.2M, net cash ~$202M (~$4.27/sh); inventories $140.3M (~157 days), receivables $122.7M (~75 days) - $287.5M of 1.50% convertible senior notes due 2031, issued 9/29/25 at a ~$27.18 conversion price, plus $28.4M of capped calls; no shares repurchased in Q2 2026 - Q3 2026 guidance $170M +/- $7M (+14% q/q, +35% y/y) versus the ~$144-145M management guided for that quarter in April - FY26 high-performance computing revenue raised to $100M-$110M (from $80M-$100M); AI compute opportunity pipeline raised to ~$850M (from ~$750M) - Test cell utilisation ~80% at the end of June, up from 78% at the end of Q1 — automotive and industrial, not just AI - Recurring revenue was ~60% of sales in Q1 2026, at roughly a 50% gross margin versus ~40% on systems - Street FY26 consensus of $558.7M implies a Q4 of about $114M against H1 $274.1M plus the $170M guide — a 33% sequential collapse nobody believes What to watch: What would turn us bullish: one number. The CFO said in February that at roughly $160M of quarterly revenue gross