Cohu, Inc. (NASDAQ:COHU) Q3 2023 Earnings Conference Call November 2, 2023 4:30 PM ET

Company Participants

Jeffrey Jones - Chief Financial Officer

Luis Müller - Chief Executive Officer

Conference Call Participants

Charles Shi - Needham & Company

Brian Chin - Stifel, Nicolaus & Company

Robert Mertens - TD Cowen

Christian Schwab - Craig-Hallum Capital Group LLC

Craig Ellis - B. Riley Securities

Operator

Good day, and thank you for standing by. Welcome to Cohu’s Third Quarter 2023 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker’s presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded.

I would now like to hand the conference over to your host today, Jeff Jones, Chief Financial Officer.

Jeffrey Jones

Good afternoon, and welcome to our conference call to discuss Cohu’s third quarter 2023 results and fourth quarter 2023 outlook. I’m joined today by our President and CEO, Luis Müller. If you need a copy of our earnings release, you may access it from our website at cohu.com, or by contacting Cohu Investor Relations. There’s also a slide presentation in conjunction with today’s call that may be accessed on Cohu’s website in the Investor Relations section. Replays of this call will be available via the same page after the call concludes.

Now to the safe harbor. During today’s call, we will make forward-looking statements reflecting management’s current expectations concerning Cohu’s future business. These statements are based on current information that we have assessed, but which, by its nature, is subject to rapid and even abrupt changes. We encourage you to review the forward-looking statements section of the slide presentation and the earnings release as well as Cohu’s filings with the SEC, including the most recently filed Form 10-K and Form 10-Q. Our comments speak only as of today, November 2, 2023, and Cohu assumes no obligation to update these statements for developments occurring after this call.

Finally, during this call, we will discuss certain non-GAAP financial measures. Please refer to our earnings release and slide presentation for reconciliations to the most comparable GAAP measures.

Now, I’d like to turn the call over to Luis Müller, Cohu’s President and CEO. Luis?

Luis Müller

Good afternoon. Third quarter gross margin and profitability were again strong driven by higher than forecasted margin on testers and Cohu’s resilient recurring business. Q3 non-GAAP gross margin of 47.1% continues to benefit from our focus on product differentiation, reducing cost, and the greater contribution of recurring that was 51% of Q3 total revenue.