Aehr Test Systems AEHR reported non-GAAP earnings of 11 cents per share for the fourth quarter of fiscal 2026, surpassing the Zacks Consensus Estimate by 1200%. The company had posted a loss of 1 cent per share in the year-ago quarter.
Revenues increased 33.7% year over year to $18.84 million and beat the consensus mark by 0.72%. Higher artificial intelligence (AI) and data-center demand, improved manufacturing utilization and favorable product mix supported profitability. Quarterly bookings reached a record $60.7 million.
AEHR's AI & Data Center Mix Strengthens
AI processors and silicon photonics burn-in generated more than 80% of fiscal fourth-quarter revenues, up from 56% in the prior-year period. Demand was particularly strong for FOX systems, serial AutoAligners and proprietary WaferPak contactors.
Three customers each accounted for more than 10% of quarterly revenues. Two served the AI market, while the third focused on optical transceivers used in data centers. Contactor revenues totaled $5.8 million, representing 31% of the company’s top line compared with 30% a year earlier.
Aehr Test Systems Price, Consensus and EPS Surprise
Aehr Test Systems price-consensus-eps-surprise-chart | Aehr Test Systems Quote
AEHR's Margin Expansion Lifts Profitability
Non-GAAP gross margin expanded to 45% from 35% in the year-ago quarter. The 1,000-basis-point improvement reflected higher revenues, better manufacturing capacity utilization and a more favorable product mix.
Non-GAAP operating expenses increased to $7.5 million from $5.4 million. The rise primarily reflected higher employment costs tied to research and development hiring, along with increased commissions associated with strong AI and data center bookings and legal expenses associated with patent litigation in China.
AEHR Posts Record Bookings & Backlog
Quarterly bookings surged more than 500% year over year to $60.7 million from $11.1 million. Growth was driven by orders for Sonoma package-level systems, FOX wafer-level systems, WaferPaks and burn-in module boards supporting AI and silicon photonics applications.
Backlog at fiscal year-end reached $80.6 million, up from $15.2 million a year earlier. AEHR received another $20 million in bookings shortly after year-end, lifting effective backlog to approximately $100.6 million and providing substantial visibility into fiscal 2027 revenues.
AEHR Expands Across Key Semiconductor Markets
The lead AI wafer-level burn-in customer doubled its system base during fiscal 2026 and shifted all production burn-in screening from system-level to wafer-level testing. Management expects further capacity requirements as the customer receives increased wafer allocations from its foundry.
AEHR completed benchmark testing with a major supplier of AI accelerators, CPUs and network processors. Results exceeded the customer’s expectations, prompting discussions about pilot production validation for a current high-volume processor and an evaluation of a second device. Revenues from this opportunity are largely excluded from the fiscal 2027 outlook.
AEHR Sees Momentum in Photonics & Power
Silicon photonics demand strengthened as data-center architectures increasingly adopted optical input-output and high-speed interconnect technologies. AEHR’s lead customer placed follow-on orders, while another networking customer provided forecasts for additional systems as it expands capacity for hyperscale deployments.
Power semiconductor activity also improved. The company received approximately $8 million in recent silicon carbide WaferPak orders and completed more than a dozen gallium nitride designs. AEHR sold its first FOX system for a silicon MOSFET wafer-level burn-in application.
AEHR Scales Capacity for Customer Ramps
The company began shipping Sonoma systems from a contract manufacturer in Southeast Asia, adding capacity for more than 20 systems per month. AEHR is expanding its Taiwan operations to support customer engagement and potential production ramps.
Management highlighted that existing manufacturing capacity can support revenues above the top end of its current guidance. The company expects a significant concentration of Sonoma shipments in the second quarter of fiscal 2027, making that period a particularly strong contributor to the annual revenue profile.
AEHR's Balance Sheet Supports Expansion
As of May 29, 2026, cash, cash equivalents and restricted cash totaled $116.5 million compared with $37.1 million as of Feb. 27, 2026.
The company raised approximately $100 million during fiscal 2026, primarily through its at-the-market equity program.
Operating activities used $3.3 million in cash in the reported quarter, while capital expenditures totaled $2.1 million.
AEHR Issues Strong Fiscal 2027 Outlook
For fiscal 2027, AEHR expects revenues between $130 million and $150 million, implying growth of approximately 160% to 200% from fiscal 2026 revenues of $50 million. Management expects AI-related applications to contribute roughly 70% of revenues, with silicon photonics representing about 15% to 20%.
Non-GAAP pretax net income is projected to be 18% to 22% of revenues.
AEHR’s Zacks Rank & Stocks to Consider
Currently, Aehr Test Systems carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Computer and Technology sector include ASE Technology ASX, Bandwidth BAND and Fortinet FTNT, each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of ASE Technology have gained 150.7% in the year-to-date period. ASX is set to report its second-quarter 2026 results on July 30.
Shares of Bandwidth have surged 390.4% in the year-to-date period. BAND is slated to report its second-quarter 2026 results on July 29.
Fortinet shares have gained 110.1% in the year-to-date period. FTNT is set to report its second-quarter 2026 results on July 29.
Radical New Technology Could Hand Investors Huge Gains
Quantum Computing is the next technological revolution, and it could be even more advanced than AI.
While some believed the technology was years away, it is already present and moving fast. Large hyperscalers, such as Microsoft, Google, Amazon, Oracle, and even Meta and Tesla, are scrambling to integrate quantum computing into their infrastructure.
Senior Stock Strategist Kevin Cook reveals 7 carefully selected stocks poised to dominate the quantum computing landscape in his report, Beyond AI: The Quantum Leap in Computing Power .
Kevin was among the early experts who recognized NVIDIA's enormous potential back in 2016. Now, he has keyed in on what could be "the next big thing" in quantum computing supremacy. Today, you have a rare chance to position your portfolio at the forefront of this opportunity.
See Top Quantum Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Aehr Test Systems (AEHR): Free Stock Analysis Report
Fortinet, Inc. (FTNT): Free Stock Analysis Report
ASE Technology Holding Co., Ltd. (ASX): Free Stock Analysis Report
Bandwidth Inc. (BAND): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).