Good day. Thank you for standing by. Welcome to today's conference call to discuss Cohu's first quarter financial results and second quarter outlook. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star one one on your telephone. You'll hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I'd now like to hand the conference over to your host today, Jeff Jones, CFO. Please go ahead. Good noon. Welcome to our conference call to discuss Cohu's first quarter 2023 results and second 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 statement section of the slide presentation and 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, May 4th, 2023. 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. I'd like to turn the call over to Luis Müller, Cohu's President and CEO. Luis. Good afternoon. Thanks for joining us. I'll first discuss some of our thoughts on growing Cohu's business, aligning investments to key global trends. Jeff will review first quarter financial results and second quarter guidance before we open up for questions at the end. We are pleased with first quarter profitability that reflects our focus on continuing improvements in operational performance and a recurring business that delivered $334 million revenue over the last 12 months. Cohu's recurring business provides stable revenue through industry cycles, allowing the company to deliver profitable results and cash flow to invest in new technologies and products to generate growth during market upturns. First quarter non-GAAP gross margin of 48.2% increased 210 basis points year-over-year, and it's better than our target financial model at this revenue level. Cohu's recurring business contributed 43% of first quarter revenue at approximately 53% gross margin. Recurring revenue grew at a 3-year CAGR of 6.4% through Q1 2023. Service is a key component of Cohu's recurring, creating a sticky business as demonstrated by our greater than 87% annual renewal rate on service contracts. Also part of recurring, Cohu's test interface business has landed a series of new opportunities in the first quarter, helping expand our contactor penetration across automotive and industrial semiconductor customers. We manufactured approximately 81% of our contactors in Asia in the first quarter as we continue to transfer new designs into our Philippines factory and work to establish the local supply chain. With this, we've closed on a target to produce approximately 80% of contactors in Asia. Going forward, we're planning for long-term growth of the interface business. In support of those plans, we broke ground in January on the construction of a new 92,000 square foot facility in the Philippines adjacent to our current factory. The plan is to start production at this new site early next year and be fully operational by mid-2024. We also continue working to expand the local supply chain to increase flexibility and quickly ramp production in support of customers' needs. Part of recurring, our software business is developing additional analytic capabilities for predictive maintenance. We see a trend across many semiconductor customers to implement factory automation, and our DI-Core software is key to enabling higher productivity of Cohu's large installed base of handlers. Switching over to Cohu's systems business, it contributed 57% of first quarter revenue at approximately 45% gross margin, which is a 250 basis points improvement year-over-year as we continue to focus on selling differentiated products and work to offset cost pressures from inflation and supply chain constraints. Estimated test cell utilization was 77% at the end of Q1, down 2 points quarter-over-quarter. Commonly on this utilization across market segments. Automotive and industrial was sequentially down a couple of points in Q1, but remained the strongest segments. Mobility increased 1 point, computing was up 2 points sequentially, and consumer remained flat. First quarter systems revenue was notably stronger in automotive and industrial end markets that remain more resilient through this industry cycle. Cohu continues to benefit from automotive market direction to electric drivetrains, along with a technology shift to more autonomous vehicles. We are aligning our tester, handler, and interface product investments to gain greater participation of our customers' future capital expenditures in these markets. In the first quarter, we received a multi-unit $5 million order for silicon carbide device test automation and inspection. Cohu offers automation, test interface, and vision inspection for these high-power devices, ensuring known good die traceability from wafer to device and tape, supporting later integration and power modules. We are discussing applicability of this product, the NY32W, with our cGator interface at other customers manufacturing wide bandgap power dies. Mobility revenue grew a few percentage points sequentially as we continue to make inroads into new applications, and also benefited from 2 months revenue from the recently acquired MCT business. Core to our strategy is the development of products that support test and inspection at wafer and die level that we expect to accelerate in the coming years and align to the expansion of AI and high-performance computing, as well as increasing MEMS sensor technology. Moving on, Cohu is committed to responsible business practices, and we recently published our 2022 sustainability report, which you can read in detail in our website at www.cohu.com. We made progress on use of electricity derived from renewable sources that increased to 26% last year, increase in recycling, maintain our stellar safety and ethics record, and continue progress on employee gender and ethnic diversity, along with details about Scope 1 and 2 greenhouse gas emissions. Discussing our view for the balance of this year. We expect demand for the second half of 2023 to remain challenged by a weak economic outlook that continues to put pressure on a semiconductor market recovery. Despite these macroeconomic headwinds, we remain well positioned to deliver strong profitability and cash flows that allow for investments in new technologies and products. We're focused on aligning our resources to major trends in industrial automation, autonomous vehicles, increased processing, and sensing power. The focus now is on growing the business and ensuring our product roadmaps are aligned to these secular growth market opportunities. Let me now turn this presentation over to Jeff for further details on first quarter results and second quarter 2023 guidance. Jeff? Thanks, Luis. Before I walk through the Q1 results and Q2 guidance, please note that my comments that follow all refer to non-GAAP figures. Information about the non-GAAP financial measures, including the GAAP to non-GAAP reconciliations and other disclosures, are included in the accompanying earnings release and investor presentation, which are located on the investor page of our website. Now turning to the Q1 financial results. Cohu delivered strong profitability on revenue of $179.4 million, which is in line with the midpoint of our guidance range. During the first quarter, two customers in the automotive market each accounted for more than 10% of sales. Q1 gross margin was strong at 48.2%, about 70 basis points higher than guidance, driven by Cohu's resilient recurring business and differentiated products. Headwinds from cost increases for IC components used on our tester products had a minor impact on our Q1 gross margin of approximately 29 basis points. We expect similar minor impacts to gross margin in future quarters as we work through the remaining inventory purchased in prior quarters at higher than normal costs. Operating expenses for Q1 were in line with guidance at $52.3 million. First quarter non-GAAP operating income was 19.1% of revenue, and Adjusted EBITDA was 21.1%. The non-GAAP effective tax rate for Q1 was approximately 23% and higher than guidance due to projected concentration of annual pre-tax income in higher tax rate jurisdictions. Non-GAAP EPS for the first quarter was $0.56. In summary, Q1 gross margin and Adjusted EBITDA were strong, exceeding the midterm financial targets at this level of revenue. Moving to the balance sheet. Cash and investments ended Q1 at $324 million. Debt repayment totaled $35.3 million. We ended Q1 with a net cash position of approximately $280 million. Cohu shares repurchased in Q1 totaled $3.5 million. The MCT acquisition for $27 million in cash closed on January 30th. CapEx in Q1 was $5.1 million, with approximately $2 million related to construction of the new Philippines facility mentioned by Luis to support long-term growth prospects in our interface business. The Philippines building will drive another $7 million of CapEx through the remainder of 2023. Total CapEx for 2023, including the new building, is expected to remain at approximately $20 million. Cash flow from operations in Q1 was $17 million. Overall, Cohu's balance sheet maintains a strong position to support debt reduction, the share repurchase program, and investment opportunities to expand our served markets and technology portfolio in line with our growth strategy. Moving to our Q2 outlook. We're guiding Q2 revenue to be between $161 million and $173 million. Q2 gross margin is forecasted to be approximately 47%, better than the financial target model at this level of revenue. With a 3-year compound annual growth rate of 6.4%, Cohu's high margin and stable recurring business adds resilience to profitability and provides consistent cash flows through the industry cycles. Operating expenses for Q2 are projected to be approximately $52 million, essentially flat quarter-over-quarter. We're projecting Q2 interest expense to be approximately $1 million and offset by interest income of approximately $2 million. We expect Q2 Adjusted EBITDA at the midpoint of guidance to be approximately 18%. The Q2 forecasted non-GAAP tax rate is approximately 24% at the midpoint of guidance. The diluted share count for Q2 is expected to be approximately 48.2 million shares. That concludes our prepared remarks, and now we'll open the call to questions. As a reminder, if you'd like to ask a question at this time, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Craig Ellis with B. Riley Securities. Craig Ellis. I was wondering if you could provide any additional color on the back half of the year, and specifically as we're looking toward the September quarter, do you see sales coming down on seasonality or growing on a lower base? Thank you. Hi. You know, it's a good question, I don't think anything has changed in our view since what we described about a quarter ago. You know, there's really no change for the second half of the year. It's still the same perspective we talked about three months ago. Okay. Thank you for that. Our next question comes from the line of David Duley with Steelhead Securities. Hello. Thanks for taking my question. I was wondering if you could elaborate a little bit more on this Silicon carbide opportunity that you talked or win that you talked about. I think you talked about a win on the previous conference call as well. Is this a new customer or is it more business with a current customer? Hi, Dave. It is more with the current that we have described a quarter ago. A quarter ago, we talked about the design win, the qualification. It might have been also the acceptance of the first couple of tools. Now, now it's more of the description of an initial volume ramp on the business. Okay. I think you mentioned it's, you know, inspection and handling and, you're basically trying to you know, figure out which are the known good die. Is this an opportunity where you could expand your footprint of equipment to this customer with other solutions? Would the opportunity here be to take this solution that you sold to the initial customer to other customers? It's more of the latter, Dave. What we're selling here is a piece of equipment and does the electrical test. I mean, I'm sorry. It does the automation for the electrical test. It provides the interface as well, the contactor for very high voltage and current test. It does then the die inspection and sorting through so that you have known good dies on the output side. The, you know, we're pretty much providing all we can provide for the, for the, for these types of applications. The opportunity forward is taking the same to other customers in the market that do silicon carbide and looking to improve the quality of their known good dies before doing the stacking into modules. Okay. Switching topics, you mentioned how you're expanding capacity for test contactors in the Philippines. Could you just elaborate a little bit more on where you've seen recent wins in that business? I think initially you had a lot of automotive wins. I'm just curious if you've picked up customers in other markets or has it continued to be in that initial market? You know, what's your success rate as far as attach rate goes at this point? Yeah, couple of things going on. First of all, the automotive market continues to grow. You know, our automotive revenue is up year-over-year. I don't have it handy here, specifically automotive for contactors, but our automotive business at large is up like 43% year-over-year in Q1. With that, we're obviously manufacturing more and more contactors in automotive where we get the greatest exposure. Additionally, we have, we actually have won a series of probe head opportunities in the first quarter, design wins for probe heads. Two of those are in automotive, and a third one is, it's actually not. It's in the, it's more in the communications segment of the market. We're basically now at a point that we need more manufacturing capacity. We need more space, we need more tools, we need more suppliers. We're, you know, pushing, pushing to increase the output out of our Philippines operation, pushing to increase the output and capability of our suppliers in the region. That's what we need to go after now so we can enable further wins and business ramps. Could you just remind us, I don't see the number in these slides. How big was the contactor business in calendar 2022? You've talked about how it's had a CAGR of about 6%. Even though this is a super difficult year, do you think this, that business grows for you in 2023? Hey, Dave. Last year that business was about $130 million for Cohu. Yes, we do anticipate that it grows this year. The target is ultimately to be 20% of the revenue target of $1 billion, so up to $200 million. We anticipate that that business will still grow sort of, you know, high single-digit growth rate over Just as a follow-on, I'm sorry. Does the capacity you're putting in place in the Philippines now, the new building and everything, does it cover, does it get you to this $200 million annual run rate? Yeah. Between the internal capacity and the supply chain, that we're trying to develop in the region, yes, it does. Thank you. Mm-hmm. Our next question comes from the line of Christian Schwab with Craig-Hallum. Hey, guys. This This is Tyler on behalf of Christian. Thanks for letting us ask a couple questions. First, I guess, maybe at gross margins, you know, above model right now. I guess as we look into the back half of the year, I was wondering you know, recurring revenue, by definition, should kind of, you know, remain at these strong levels. If the second half is the same view as before, we should see some directional improvement, although maybe modest. Should we expect then gross margins should, you know, trend down a little bit from the 47% we got in Q2? How should I think about them in the back half? Yeah. Hey, Tyler, it's Jeff. I think the Street's got us, you know, in a pretty good spot for not only the revenue piece of it in the back half, but also gross margin. Somewhere in the high, you know, 46% to low 47%. I'd call it maybe an average of 47%. We're pretty comfortable in that range. All right. That's perfect. I guess second question, you know, talked about automotive and industrial strength continuing, but in the quarter, if I heard you right, you know, your tester utilization in auto and industrial was down a little bit while the rest of the markets were up a little bit. Any, any color or comment there? Is that just, you know, quarter to quarter fluctuations or anything to call out? It was not, Tyler, it was not specific to automotive or industrial. We said the tester utilization was down to 77%. We said auto and industrial combined was down 2 points. As you can see, even in our revenue profile, right, Q1 revenue profile in industrial is down 3 points relative to Q4 last year. Automotive is about the same. It's up 1 point. You know, I think it's normal fluctuation at this moment. What we're liking more is to see computing being up 2 points, mobility up 1 point. You know, it's not an indicative of a market upturn on those segments. It's more of an indicative of stability, right? Hopefully here, a bit of an improvement as we get into the second half. All right. That's perfect clarification. I appreciate that. That's all for us. Thanks, guys. Mm-hmm. Our next question comes from Krish Sankar with Cowen. Hi, this is Robert Mertens on for Krish. Thanks for taking my questions. Maybe just come back to automotive exposure that you have. Can you give just a little bit more color between the handler side and test products, how those are playing out in the market? Then also maybe if you just had a gauge on who some of the main competitors are, or any sort of market share dynamics that are at play within that business. Sure. We don't have exact numbers to break it down for you by product. I can tell you we do have, as and you can see from the data set here, the highest exposure, market exposure we have in our, in our presentation for the Q1 results is in automotive. We have 22% of market exposure into automotive. If you go down by products, I'm just gonna tell you qualitatively, our handlers are mostly our handlers and our contactors are exposed to automotive. We actually have a significant leadership position in both handlers and contactors. On the tester side, you know, it hovers now to between 25%-30% of our tester revenue is in automotive. Obviously, we have the desire to add a lot more to our tester business in automotive and, in industrial, and we're working on it. At this moment, you know, we're further behind a Teradyne and Advantest in ATE automotive market. Great. Thank you. That's helpful. Just real quick, how are the current lead times, how they've progressed throughout the quarter? I think last quarter you had mentioned maybe handlers were around 24 weeks, testers maybe 12, half that. Is that sort of the same or has the lead time been brought in this quarter? No, lead times are generally the same. Handlers are maybe a couple weeks shorter, you know, 2 weeks shorter than shorter lead times than we were a quarter ago. We're talking, you know, in the order of about 22 weeks for handlers. Testers, contactors, all about the same. Well, we got a little faster in contactors as well, that improved. Sort of the band narrowed down closer to a 6 weeks lead time. No dramatic change quarter-on-quarter on the lead time. Great. Thank you. That's all I had. Our next question comes from the line of Quinn Bolton with Needham. Hey, guys. This is Trevor on for Quinn. Thanks for letting me ask some questions. To start, when looking at the backlog for the second half, has there been any shifts or cancellations of that backlog within the quarter? Can you speak about your visibility into the second half? Thanks. To answer the first part of that, no cancellations, shifts in the backlog. You know, typically our visibility out 6 months and further is not clear, and it's the same situation now. Good, good visibility obviously into Q2 and decent to Q3, but beyond that it's still foggy. It's no different than it was, you know, 1 quarter ago through July, and now maybe current through September. Same kind of view. We have a pretty decent, you know, backlog into Q3 already and orders booking now for Q3 shipments. Like Jeff said, anything beyond that, it obviously much less of a backlog so far into fourth quarter of the year. That's gonna become more of a reality as we approach the end of this quarter, beginning of next quarter. All right, thank you. I believe you stated that mobility and PC was up in the quarter. Do you expect this trend to continue into the second half? Any insight on these inventory levels would be helpful. Yeah, it's a fantastic question. I don't think necessarily a big improvement in mobility over the next quarter. I would expect mobility to have more traction, more market traction towards the end of the year. Computing, yes, I do think computing is gonna be more of on a positive trend, particularly cloud on the second half of this year. Awesome. Good to hear. One more if I may. Are you having more conversations recently with silicon carbide customers than you may have expected 2 quarters ago when you first mentioned this opportunity? Are you able to quantify as a percent of revenue what silicon carbide could be in 2023? Yes to the first question and, you know, certainly yes on the second as well. When we talk about silicon carbide revenue, we think this is going to be, you know, something on the order of 2%, 3% of our total revenue on an annual basis. Awesome. Thanks, guys. As a reminder, to ask a question, please press star one one. Our next question comes from Brian Chin with Stifel. Hi there. Thanks for letting us ask a question. Maybe Luis, just to provide a little bit more contouring, and I know there's been some questions here about sort of sustainability or visibility into the second half. I know the pattern typically, you know, in a steady state year might be something like, you know, higher revenues towards, you know, the mid part of the year, Q2, Q3, and then, you know, usually seasonally softer sort of at the beginning and end of the year, something like that. In terms of as you try to read, you know, your order book and sort of, other indications on the end markets, particularly for Q4, what's sort of the main ingredient here? Is it sustainability of auto and industrial? I know you had earlier, you know, last call talked about moderation, at parts of this year and that. Is it, you know, maybe looking to see if there'll be some pickup in businesses that have been pretty depressed, right, coming into the year, which includes mobility, consumer? Kind of how else would you maybe sort of characterize how you're thinking about second half? Brian, I would feel a lot more comfortable talking about fourth quarter a quarter from now, as you can appreciate, because we just based on our equipment lead time, right? We have very good visibility a quarter out, you know, fairly decent two quarters out, and then it drops off from there. You know, my best guess right now is at the end of the year would be running about flat to potentially up sequentially from Q3. Why do I say that? I think the automotive and industrial already moderated. Now the real question is, at what point computing and mobility starts recovering? As I mentioned, you know, a second ago, I think computing, particularly cloud, comes in first. Mobility becomes the real big question. Mobility is extremely depressed right now. It's sort of at the bottom of the barrel, but that is generally an indicative that a quarter or two from now it will be picking up some steam. Does that mean Q4? Does that mean Q1 next year? That's a little difficult to answer right now. I would appreciate one more quarter to have more clarity on the answer to that. I think this year we may not see your typical seasonal pattern. It may be one of those atypical years again in where, like I said, we usually see or you said, usually we see Q4 and Q1 as a seasonally low. On this cycle, we're probably gonna see one of those two quarters as a seasonally high, and then going up from there. Which one of them exactly, I don't know at the moment. Okay. No, it's interesting. I... Now, this could be wrong, you can correct me, but in the past, I've sometimes thought of ATE sometimes leading test handlers by, you know, say, a quarter or maybe a little bit more. Obviously one of your peers is seeing pretty strong auto industrial ATE business into their third quarter. Mm-hmm. Of this year, at least. Right. Do you think that relationship is playing a part in this a little bit? Yes. Yeah, I think it's. Yeah, absolutely, it is. That's, that's playing a part into all of that we're doing right now, you know, being able to run a business that's, you know, very healthily profitable and delivering the cash flows that we need to invest on new products. The question becomes is, some of these markets that are pretty depressed, when do they start turning up, right? I think we're gonna start to see movement on the second half of the year. The question is, what's the magnitude of it? We could very well exit the year accelerating, question mark, revenue or orders, right? Yeah. Okay. Maybe one last question, sort of maybe for both Jeff and you, Luis. Going back to sort of the statements on expanding capacity, strategic expansion capacity in the Philippines, I guess one, you made good gross margin improvements in that business. I think it's probably towards the mid-to-upper 40s at this point. How should that continue to trend as you start to... You know, that's next year at some point, but as you start to build that footprint and then eventually produce out of it, how should gross margins in that segment trend? Also, you know, going back to the comments you made about, you know, some wins that you're seeing in that business. Is that sort of early indications of the type of filling that you'll be able to do out of that facility, once it's ready? I guess I'll take the first part of it on the gross margin, and you're right that business is operating right around mid-40s, and we've modeled them to be in the high 40s. You know, adding another 200-300 basis points from where they currently are today, we think we can do that through, you know, obviously expanding the operation and increasing productivity and cost efficiencies. To the second part of your question, right? The what I mentioned earlier, I think it was Dave's question, is the design wins that we had in Q1 in that business, they were actually all probe heads. At this moment, probe heads are not something we're doing in the Philippines. We're transferring all of our contact or the bulk of our contactor manufacturing to the Philippines. In fact, we already did. We're over 80% manufacturing there now. These probe heads are essentially products that are designed and still manufactured in the U.S. or in Europe, depending if it's a power application or more of a high signal speed or RF application. We will need to find a path to get those to the Philippines as well, but that's not where we are. The design wins at the moment are U.S. European-based product manufacturing. Okay, great. Thank you. That concludes today's question and answer session. I'd like to turn the call back to Jeff Jones for closing remarks. Thank you, Liz. Before we sign off, I'd like to mention that we'll be attending a number of investor conferences in person during the second quarter. I'm gonna list them here. It's B. Riley Conference in Los Angeles on Thursday, May 25th. TD Cowen Conference in New York City on Wednesday, May 31st. Stifel Conference in Boston on Tuesday, June 6th. Baird Conference in New York City on Thursday, June 8th. The CEO Summit in San Francisco on Wednesday, July 12th. If you plan to attend one or more of these conferences, we'd like to meet with you. Please reach out to your respective analyst or conference contact to schedule a meeting. Again, thank you for joining today's call and look forward to speaking with you soon. This concludes today's conference call. Thank you for participating. You may now disconnect.