Aehr Test Systems Reports 27% Revenue Decline in Q2 Fiscal 2026

Aehr Test Systems reported a significant decline in financial performance for the second quarter of fiscal 2026, with revenues of $9.9 million, down 27% from $13.5 million in the same period last year. For the six months ending November 28, 2025, total revenues were $20.9 million, a decrease of 22% compared to $26.6 million in the prior year. The decline was primarily attributed to reduced shipments of contactors, driven by ongoing softness in demand for electric vehicles, which saw a revenue drop of $5.1 million. However, this was partially offset by a $1.6 million increase in package-level burn-in systems revenue, reflecting heightened demand from AI-related applications.

The company's gross profit also fell sharply, decreasing to $2.5 million for the three months ended November 28, 2025, compared to $5.4 million in the prior year, resulting in a gross margin of 25.7%, down from 40.1%. For the six-month period, gross profit was $6.3 million, down from $12.5 million, with gross margin declining to 30% from 47%. The decrease in gross margin was attributed to lower overhead absorption due to reduced manufacturing production, a shift in product mix, and increased costs related to assembly, warranties, and freight.

In terms of operational developments, Aehr Test Systems has expanded its product offerings, particularly following its acquisition of Incal Technology, which has enhanced its portfolio with packaged parts burn-in solutions. The company has introduced several innovative products, including the FOX-P family of test and burn-in systems, which cater to a growing market for advanced semiconductor testing. The company’s employee headcount has also increased, contributing to higher research and development expenses, which rose to $3.0 million for the quarter, up 31% year-over-year, driven by increased staffing and project-related costs.

Geographically, revenue from Asia accounted for 77.1% of total revenues in the latest quarter, although it decreased by 22% year-over-year. The United States saw a more pronounced decline, with revenues dropping 44% to $1.9 million, while Europe and the Middle East experienced a notable increase, albeit from a smaller base. The company’s cash and cash equivalents stood at $30.8 million as of November 28, 2025, compared to $24.5 million at the end of the previous fiscal period, reflecting a net increase in cash flow from financing activities, primarily from a public offering.

Looking ahead, Aehr Test Systems anticipates continued challenges in the semiconductor market, particularly in the electric vehicle sector. However, the company remains optimistic about the growth potential in AI-related applications and is focused on leveraging its expanded product portfolio to capture market share. The management has indicated that they will continue to monitor market conditions closely and adjust their strategies accordingly to navigate the evolving landscape.