Cohu : First Quarter Earnings Presentation

Q1'24 FINANCIAL RESULTS

May 2, 2024

© Cohu, Inc. All rights reserved.

Cautionary Statement Regarding Forward-Looking Statements

Forward-Looking Statements:

Certain statements contained in this presentation may be considered forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, including statements regarding the source and contribution of recurring revenue; impact of key business drivers for systems products; effect of annual renewal rate on service contracts on future business; consequence of systems installed base or employee tenure; completion of sustainability or social projects, initiatives or goals; mid-term target financial model; resiliency of our recurring business model; balance sheet strength to support inorganic growth and share purchase program; target capital expenditures; Q2'24 outlook and financial guidance, including market forecasts, gross margin, strength of recurring revenue, operating expense, outstanding share projections, tax treatment impacts and success of cost reduction measures; and any other statements that are predictive in nature and depend upon or refer to future events or conditions; and/or include words such as "may," "will," "should," "would," "expect," "anticipate," "plan," "likely," "believe," "estimate," "project," "intend;" and/or other similar expressions among others. Statements that are not historical facts are forward-looking statements. Forward-looking statements are based on current beliefs and assumptions that are subject to risks and uncertainties and are not guarantees of future performance. Any third-party industry analyst forecasts quoted are for reference only and Cohu does not adopt or affirm any such forecasts.

Actual results and future business conditions could differ materially from those contained in any forward-looking statement as a result of various factors, including, without limitation: new product investments and product enhancements which may not be commercially successful; the semiconductor industry is seasonal, cyclical, volatile and unpredictable; recent erosion in mobile, automotive and industrial market sales; our ability to manage and deliver high quality products and services; failure of sole source contract manufacturer or our ability to manage third-party raw material, component and/or service providers; ongoing inflationary pressures on material and operational costs coupled with rising interest rates; economic recession; the semiconductor industry is intensely competitive, subject to rapid technological changes, and experiences consolidation of key customers for semiconductor test equipment; a limited number of customers account for a substantial percentage of net sales; significant exports to foreign countries with economic and political instability and competition from a number of Asia-based manufacturers; our relationships with customers may deteriorate; loss of key personnel; risks of using artificial intelligence within Cohu's product developments and business; reliance on foreign locations and geopolitical instability in such locations critical to Cohu and its customers; natural disasters, war and climate-related changes, including related economic impacts; levels of debt; access to sufficient capital on reasonable or favorable terms; foreign operations and related currency fluctuations; required or desired accounting charges and the cost or effectiveness of accounting controls; instability of financial institutions where we maintain cash deposits and potential loss of uninsured cash deposits; significant goodwill and other intangibles as percentage of our total assets; increasingly restrictive trade and export regulations impacting our ability to sell products, specifically within China; risks associated with acquisitions, investments and divestitures such as integration and synergies; constraints related to corporate governance structures; share repurchases and related impacts; financial or operating results that are below forecast or credit rating changes impacting our stock price or financing ability; law/regulatory changes and including environmental or tax law changes; significant volatility in our stock price; the risk of cybersecurity breaches; enforcing or defending intellectual property claims or other litigation.

These and other risks and uncertainties are discussed more fully in Cohu's filings with the SEC, including our most recent Form 10-K and Form 10-Q, and the other filings made by Cohu with the SEC from time to time, which are available via the SEC's website at www.sec.gov. Except as required by applicable law, Cohu does not undertake any obligation to revise or update any forward-looking statement, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.

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BUSINESS UPDATE

Page 3

SUMMARY

Revenue

Non-GAAP Gross Margin(1)

Adj. EBITDA(1)

$179.4M	48.2%	48.5%
	$137.2M	46.0%
	$107.6M

21.1%

13.0%

2.6%

Q1'23 Q4'23 Q1'24

• High ARR(2) Service business
• μ-sense microphone tester selected by leading U.S. fabless customer
• ADAS customer selected RF interface for radar sensor test
• 1. See appendix for GAAP to non-GAAP reconciliation
  2. Annual Renewal Rate

Q1'23 Q4'23 Q1'24

• GM better than guidance:
• • Differentiated products
  • Resilient recurring business
  • Test interface mfg. in Asia

Q1'23 Q4'23 Q1'24

• Test cell utilization up 100 bps QoQ to 72%: mobile at 67%, auto & ind. 78%, computing 66%
• Published 2023 Sustainability report; joined SBTi with goal to set near-term emissions reduction targets

Page 4

DIVERSE REVENUE PROFILE

Recurring

Key Business Drivers

Systems

Key Business Drivers

• More stable recurring revenue
• EQT acquisition adds to test interface business
• Service business

Recurring
66%	Q1'22

Revenue	Mobile
	11%

$107.6M

	Automotive
	9%
	Industrial
	6%
Consumer	Computing
3%
3%
IoT & Opto
2%

• Weaker system demand across all markets
• Focus on customer design-wins and qualification of new products

Page 5

RESILIENT RECURRING BUSINESS MODEL

$304M	$138M	~ 24,700	~ 500
LTM(1) Recurring	LTM(1) Service	Systems Installed	Highly Skilled
Revenue	Revenue	Base	Field Engineers
2.7%	~ 93%	108	~ 11 year
3-year CAGR (2)	Annual Renewal Rate	Customers	AverageTenure
	on service contracts
Consumable products	Cloud-based, automated	Over 280 high-volume	Virtual-assist and
generate stable revenue	order management for	manufacturing facilities	on-site support
	~ 14,000 different spares	in 31 countries

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(1) Last Twelve Months (LTM) revenue, as of March 30, 2024

(2) Compound Annual Growth Rate (CAGR) from Q1'21 to Q1'24

2023 SUSTAINABILITY HIGHLIGHTS

Environmental		Product Safety &		Energy-Efficient		Business Ethics &		Employee Diversity(1),
		Materials Sourcing		Solutions		Employee Culture		Inclusion and Safety

• Renewable source energy usage increased to 32%
• $9.1M invested in a new energy-efficient mfg. facility
• Committed $1.2M for solar projects in Melaka & Laguna
• Rainwater harvesting system & deionized water recycling
• 838K non-hazardous waste &
  68% of hazardous waste recycled

• No product recalls
• No safety claims, legal proceedings or monetary losses
• Responsible mineral sourcing program
• Subsequent to invasion of Ukraine, ceased all business in Russia and Belarus

• Diamondx air-cooled architecture consumes~75% less power(2)
• DI-Coreimproves OEE(3)
• T-CoreATC(4) dynamically removes heat from devices
• Smart factory automation & AI deep learning solutions
• Enabling customer solutions for solar & wind power, vehicle electrification, & advanced healthcare

• Increased employee training hours investment by 11%YoY
• Returned 4.5% of profits to eligible non-exec. employees
• No bribery/corruption or anti- competitive behavior claims, legal proceedings, or monetary losses
• No direct monetary contributions to political campaigns, lobbying

Gender

• 29% female, 71% male
• 25% female board members

Race/Ethnicity

• 40% minority population
• 60% majority population

Excellent employee safety record - accident rate 67% belowindustry benchmark

Committed to engage with the Science Based Targets initiative ("SBTi") with the goal to develop near-termscience-based emissions reduction targets

	(1)	Cohu tracks race/ethnicity data only in the US; data as of year-end 2023
	(2)	Vs comparable liquid-cooled test system
Page 7	(3)	Overall equipment efficiency
	(4)	Active thermal control

Q1'24 FINANCIALS AND Q2'24 GUIDANCE

Page 8

Q1'24 NON-GAAP RESULTS

	Q4'23	Q1'24	Q1'24
	Actual	Guidance(2)	Actual
Revenue	$137.2M	$107M +/- $6M	$107.6M
Gross Margin(1)	48.5%	~ 45%	46.0%
Operating Expenses(1)	$49.8M	~ $51M	$50.2M
Non-GAAP EPS(1)	$0.23		$0.01
Adjusted EBITDA(1)	13.0%	~ 2%	2.6%

• Q1 revenue in-line with guidance; profitability better than forecast
• Resilient gross margin from differentiated products and strong recurring revenue
• Operating Expenses lower than guidance
• Q1 diluted shares outstanding of 47.6 million
• 1. Non-GAAP,see Appendix for Q4'23, Q1'24 GAAP to non-GAAP reconciliations and for notes regarding use of forward-lookingnon-GAAP figures

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(2) Guidance as provided on February 15, 2024 press release and earnings conference call

MID-TERM TARGET MODEL(3)

$1 billion

Revenue

$4.00

EPS(1)

	Q1'24	FY2023	Target
	Actuals	Actuals	Model(3)
Revenue	$107.6M	$636.3M	$1 billion
Gross Margin(1)	46.0%	47.9%	50%
Operating Expenses(1)	46.7%	31.7%	25%
Non-GAAP EPS(1)	$0.01	$1.62	$4.00
Adjusted EBITDA(1)	2.6%	17.9%	26%
Free Cash Flow(2)	($17.3M)	$85.4M	$180M

•

•

Resilient recurring revenue supports gross margin through the trough of the cycle

Q1'24 free cash flow reflects payment of variable compensation and payroll burden

	(1)	Non-GAAP, see Appendix for GAAP to non-GAAP reconciliations, and for notes regarding use of forward-lookingnon-GAAP figures.
Page 10	(2) Reflects cash from operating activities minus capital expenditures.
(3)	Mid-term(3-5 years) target model.