Aehr Test Systems reported a mixed fiscal third quarter, with a per-share loss that exceeded analyst expectations despite revenue falling short. The semiconductor testing equipment manufacturer posted a net loss of $1.5 million, translating to a loss of $0.05 per share, better than the anticipated loss of $0.07. However, revenue totaled $10.3 million, marking a 44% decline compared to the same quarter last year and slightly below the $10.8 million consensus estimate. The divergence between earnings and revenue led investors to focus on the company’s substantial increase in new orders, signaling robust future potential.
Bookings surged to $37.2 million for the quarter, a significant rise from the prior quarter’s $6.2 million, resulting in a remarkable book-to-bill ratio of over 3.5x. This dynamic illustrates Aehr’s strong demand and capacity for future revenue generation. Ending the quarter, the effective backlog reached a record $50.9 million after including $12.2 million in new orders received during the first five weeks of the fourth quarter. Management now expects fiscal 2026 revenues to reach the upper end of the $45 million to $50 million guidance range.
CEO Gayn Erickson emphasized Aehr’s position as a pioneer in the industry, noting that the company is the first to successfully demonstrate and ship a wafer-level burn-in solution for AI processors. This milestone includes a $14 million follow-on production order from a primary AI accelerator client for the FOX-XP systems, which are designed to test nine 300mm wafers simultaneously. This contract underscores the company’s strategic focus on high-demand sectors.
Aehr’s advancements are further supported by growth opportunities in silicon photonics. The company recently received an initial order from a silicon photonics customer for multiple FOX-XP systems, targeting the hyperscale data center optical interconnect market. These systems are scheduled for delivery in fiscal Q4, which concludes on May 29, 2026. In addition, Aehr’s primary silicon photonics client has ordered a new high-power FOX-XP WaferPak system along with an upgrade to its existing configuration, reinforcing the demand for innovative testing solutions.
In the power semiconductor segment, Aehr secured an order from a newly acquired silicon carbide customer based in Taiwan. This client aims to penetrate the Greater China electric vehicle market, signaling a growing interest in Aehr’s offerings within the expanding electric vehicle sector. Although Erickson noted a recent uptick in demand from silicon carbide manufacturers, he tempered expectations for immediate revenue generation from this vertical.
Looking ahead, Aehr is also exploring possibilities in the memory sector, which represents a long-term growth avenue. The company is in discussions with a major supplier regarding specifications for next-generation high-bandwidth flash memory. A potential development partnership could be established in the coming months, initiating a 12 to 18-month development timeline that may lead to accelerated orders by fiscal 2028.
In response to the quarter’s results, analysts reacted positively. Lake Street Capital raised its price target for Aehr to $56 from $50, describing the surge in bookings as the “headline story.” William Blair analyst Jed Dorsheimer reaffirmed an Outperform rating, indicating that more customer announcements are expected. The heightened investor confidence is reflected in Aehr’s stock performance, which has risen over 35% this April and more than 140% year-to-date, according to Dow Jones Market Data.
Aehr concluded the third quarter with $37.1 million in cash reserves and has activated its full $40 million at-the-market equity facility, positioning the company for future growth. As the demand for semiconductor testing solutions continues to escalate, particularly in AI and silicon photonics, Aehr is poised to capitalize on emerging trends and strengthen its market position.
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