Aehr Test Systems (AEHR) Q4 2023 Earnings Call Transcript

Aehr Test Systems (NASDAQ:AEHR) Q4 2023 Earnings Conference Call July 13, 2023 5:00 PM ET

Company Participants

Jim Byers - MKR Investor Relations

Gayn Erickson - President and Chief Executive Officer

Chris Siu - Chief Financial Officer

Ken Spink - Vice President of Finance and Chief Financial Officer

Conference Call Participants

Christian Schwab - Craig-Hallum

Jed Dorsheimer - William Blair

Larry Chlebina - Chlebina Capital

Tom Diffely - D.A. Davidson

Operator

Good day and welcome to the Aehr Test Systems Fiscal 2023 Fourth Quarter and Full Year Financial Results Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Jim Byers, MKR Investor Relations. Please go ahead.

Jim Byers

Thank you, Operator. Good afternoon and welcome to Aehr Test Systems Fiscal 2023 Fourth Quarter and Full Year Financial Results Conference Call. With me on today's call are Aehr Test Systems' President and Chief Executive Officer, Gayn Erickson and Chief Financial Officer, Chris Siu.

Before I turn the call over to Gayn and Chris, I'd like to cover a few items. This afternoon right after market close, Aehr Test issued a press release announcing its fiscal 2023 fourth quarter and full year results. That release is available on the company's website at aehr.com. This call is also being broadcast live over the Internet for all interested parties and the webcast will be archived in the Investor Relations page of the Aehr website.

I'd like to remind everyone that on today's call, management will be making forward-looking statements today that are based on current information and estimates, and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements.

These factors that may cause results to differ materially from those in the forward-looking statements are discussed in the company's most recent periodic and current reports filed with the SEC.

These forward-looking statements, including guidance provided during today's call are only valid as of this date and Aehr Test Systems undertakes no obligation to update the forward-looking statements.

And now, with that said, I'd like to turn the call over to Gayn Erickson, President and CEO.

Gayn Erickson

Thanks, Jim. Good afternoon, everyone, and welcome to our fiscal 2023 fourth quarter and full year earnings conference call. Thanks for joining us today.

Let's start with a quick summary of the highlights of the quarter and fiscal year we just completed in May and the continued momentum we're experiencing in the semiconductor wafer level test and burn-in markets, then our new CFO, Chris Siu, let's make sure I get that right, Chris Siu, sorry. That's awful. Who is sitting here with myself and Ken Spink, who is retiring soon will go over the financials in more detail. After that, we'll open up the lines to take your questions.

We are pleased to report record financial performance for both the quarter as well as the entire fiscal 2023 year ended May 31st. For fiscal '23, our total revenue grew 28% to a record $65 million, bookings reached a record $78.3 million and our GAAP profit of 14.6 million and non-GAAP profit of $17.3 million were also records, growing 54% and 62% year-over-year respectively.

This record performance was significantly driven by bookings and revenue shipments of our wafer level test and burn-in systems and contactors for silicon carbide semiconductors used in electric vehicles and electric vehicle charging infrastructure and silicon photonics devices used in data and telecommunications infrastructure as well as an up and coming new application for chip-to-chip optical I/O that I'll provide more detail on later in this call.

We saw fiscal 2023 as a breakout year for our unique wafer level test and burn-in products. These products provide complete solutions for semiconductor manufacturers for high volume test, burn-in and stabilization of semiconductors such as those used in electric vehicles, electric vehicle charging infrastructure, photovoltaic or solar power conversion and data and telecommunications infrastructure.

We also see on the horizon a significant new market opportunity for test and burn-in of semiconductors such as silicon photonics devices used in optical input/output or optical I/O and co-packaged optics for data farms, computing and artificial intelligence markets. So let me start with the increasing momentum we're seeing for wafer level test and burn-in for silicon carbide devices.

During the fiscal fourth quarter, we received the first purchase order from another new silicon carbide semiconductor company for our production FOX-XP multi-wafer solution that will be used for volume production wafer level test and burn-in of silicon carbide devices for electric vehicles, trucks and train traction inverter modules.

The train traction inverter application represents an exciting new market driver for our FOX production test solutions due to the extreme reliability and length of service requirements of this application leading to prolonged test times. This new customer is a multinational industrial conglomerate and manufacturer of semiconductors including power semiconductors.

They're forecasting to grow their silicon carbide business significantly to meet the market demand, which we forecast will in turn drive incremental capacity of our FOX systems and our proprietary WaferPak full wafer contactors. William Blair forecast total demand for silicon carbide wafer is just for electric vehicles, which include EV, inverters onboard and offboard chargers to grow from 220,000 wafers in 2022 to over 4.5 million six inch equivalent wafers in 2030, a greater than 45% compound annual growth rate and over 20 times larger in 2030 than in 2022.

In addition, William Blair expects demand for industrial applications, trains, energy conversion and RF amplifiers of silicon carbide to drive another 2.8 million wafers in 2030. This expands our silicon carbide test and burn-in market even more.

With the addition of this latest new customer, we've significantly expanded our customer base by adding a total of four new silicon carbide customers this year. Each of these new customers is already ramping or plans to ramp our products into high volume production using our multi-wafer test and burn-in systems.

We continue to be excited about the incredible growth in production ramp of our lead silicon carbide customer that's using our wafer level test and burn-in systems and WaferPaks to meet capacity increases from their current customers, in addition to many new design wins. In early June, we announced another $13.7 million in follow-on orders for WaferPaks from them.

That includes both current design capacity increases and several new designs that are expected to ramp to volume production after their customer qualification is completed. During the quarter, we also announced an order for production quantities of WaferPak full wafer contactors from our second major silicon carbide customer that will be used with previously ordered FOX-XP systems for test and burn-in of wafers in their production facility.

We believe this customer who serves several significant markets that include the electric vehicle industry as well as other industrial applications will purchase a large number of our FOX-XP systems to meet their publicly announced significant increase in plant capacity and revenue growth over the next several years and through the end of the decade and longer.

Now, let me move to our benchmarks and engagements with prospective new customers, which continue to make great progress. We continue to work closely with one of the largest silicon carbide players in the world on a large wafer level benchmark and qualification for automotive and other markets.

While candidly this has taken much longer than we thought it would. We're excited that this qualification continues to make good progress and we remain confident that it will result in them moving to our FOX wafer level systems and WaferPaks for their volume production. They have told us that their plan is to move all new production capacity to wafer level burn-in and away from packaged part burn-in.

This is because they're not only mostly moving to multi-chip modules and known good die sales, but also for the lower cost of test associated with wafer level burn-in over packaged burn-in as well as the significant improvements in yield they achieve with wafer level burn-in.

For those listening in that are new to our story, we provide our customers with a unique low cost way to do extended burn-in stress testing that removes the early extrinsic failures of devices like silicon carbide semiconductors before they're put into packages. This saves in cost of overall manufacturing as you're not only avoiding throwing away the cost of the package, but in scenarios where multiple of these devices are put into a single package which is referred to as multi-chip modules.

This also saves significant costs as the other devices in the same module are not thrown away when one of the devices failed during burn-in. The savings and yield is much more than the actual cost of wafer level burn-in. Multiple companies have announced silicon carbide hybrid modules used for EV traction inverters that have up to 48-die in a single module.

Imagine the implication of the greater than 1% failure rate experienced in burn-in on a module with 48-die. The extrinsic failure rate of high power silicon carbide MOSFETs could cause 25% to 50% yield loss of these modules. For all intents and purposes, this is unmanageable without wafer level burn-in.

So wafer level burn-in actually enables these kinds of high-density multi-chip modules. In addition to our momentum in silicon carbide, we also have multiple potential new customers inquiring about our systems with the new 2000 volt high-voltage option that we introduced last year to test and burn-in devices such as silicon carbide and gallium nitride semiconductors for power conversion applications.

Gallium nitride is another wide-bandgap compound semiconductor being applied for efficient high speed power conversion and amplifier applications. These new potential customer inquiries include several gallium nitride semiconductor devices ranging from RF or radiofrequency to power conversion.

We're currently working with a large multinational semiconductor supplier to move forward with a full wafer level burn-in evaluation of gallium nitride devices. This evaluation includes our new high voltage option for doing the critical high temperature reverse bias stress test needed for gallium nitride MOSFETs and amplifiers.

The gallium nitride market appears to be a potentially significant growth driver for our systems and WaferPak full wafer contactors particularly for automotive and photovoltaic applications where burn-in appears to be critical for meeting the initial quality and reliability needs of those markets.

Now moving to silicon photonics semiconductor burn-in and stabilization and the new significant market opportunity we see on the horizon. As a reminder for those not familiar with silicon photonics, this is what the industry calls the devices where both electrical semiconductor integrated circuits are combined with photonics or light-based transmitters and receivers.

We continue to be very enthusiastic about this market, especially as it looks to expand beyond just being used for fiber optic transceivers to becoming an embedded market that integrates the optical data transmission technology into other devices like chipsets and processors themselves.

We see the potential to integrate the photonics integrated circuit devices into multi-chip modules as another major market opportunity for Aehr. There are several names for this application, ranging from co-packaged optics, heterogeneous integration and optical I/O that use silicon photonics integrated circuits for use in optical chip-to-chip communication.

This market is in addition to the current photonics transceiver market used in data and telecommunications where we currently have six customers that have adopted our FOX-XP and NP systems for production use of their silicon photonics wafer and die/module level burn-in.

Multiple companies such as Intel, nVidia, AMD, TSMC and Global Foundries have made public announcements regarding their product roadmaps for co-packaged photonics integrated circuits with microprocessors, graphics processors, chipsets for computing and also artificial intelligence applications.

Our FOX wafer level test and burn-in solution with our proprietary WaferPak full wafer contactors are a great fit for the silicon photonics semiconductor market as we can test and burn-in the devices while still in die or wafer form before they're integrated into the multi-chip modules for the same reason as discussed before due to module yield improvement.

Also because the burn-in conditions of the photonic integrated circuits are very different than the other chips in the multi-chip module that they're integrated with, burn-in in the photonics integrated circuit in the module would also pose real thermal and power challenges to the silicon photonics part and also the devices that are integrated into the same module.

During the fourth quarter, we received our first order from a current major silicon photonics customer for a new volume production at FOX-XP system configuration that enables cost effective production test of full wafers of next generation photonic integrated circuits up to 3500 watts of power per wafer.

This system can test new high power density devices that can be used in new optical I/O or heterogeneous integrated packages. This customer is one of the world's largest semiconductor manufacturers and we expect to receive orders for additional production systems as they have increased production of these devices.

These next generation silicon photonics based integrated circuits can require up to two to four times as much power for full wafer test burn-in and stabilization of the silicon photonics devices. Our new FOX production system configuration, which can be used to test and burn-in these new optical I/O devices up to 3500 watts per wafer expands the market opportunities of the FOX-XP system even further.

Its ability to test, burn-in and stabilize up to nine 300 millimeter wafers in parallel with up to 3.5 kilowatts of power per wafer is beyond the wafer parallelism and power capacity of any system on the market. This testability is unprecedented in the industry as there are no other competitors that can even test one wafer at a time at these power levels.

And our FOX-XP with our proprietary WaferPak contactors enables the test of up to nine of these wafers at a time in a single system. The applications that have been announced by these major semiconductor players for optical chip-to-chip communication include high performance microprocessors, graphics processors and processor to peripheral device chipsets.

These known devices have been predicted to dramatically improve the communication bandwidth between semiconductor devices beyond the bottleneck of traditional electrical interfaces used today. This is an exciting opportunity and we believe these devices will ramp to high volume production over the next several years.

We believe silicon photonics can become a significant market for wafer level test and burn-in and could become as large or larger than the silicon carbide market for our products later in this decade. Now, let me spend a minute or two on our R&D initiatives. This past year we introduced several significant test system enhancements that extend the market leadership of our FOX products for full wafer test and burn-in and opened new markets for our products.

These include added voltage ranges, increased parallelism per wafer, new burn-in and stress conditions and a new fully automated FOX WaferPak Aligner configured to fully integrate with our FOX-XP multi-wafer systems to enable hands free operation. Our new Bipolar Voltage Channel Module or BVCM for the FOX-P platform of products, which includes our FOX-XP, NP and CP extends our test and burn-in capability to provide a wide range of positive and negative voltage programmability applied to the gate for positive high temperature gate bias or negative HTGB testing.

The BVCM can supply gate bias voltage to more than 3000 die per wafer while being able to monitor individual die performance and detect individual die failures. Enabling these tests is particularly essential in threshold voltage and gate oxide stabilization and screening.

Our new Very High Voltage Channel Module or VHVCM, which is an option released this fiscal year, enables high temperature reverse bias testing of silicon carbide and gallium nitride devices on wafers of up to 2000 volts using our proprietary WaferPak contactors.

Our WaferPaks and the FOX-XP and NP systems include patented anti-arcing capabilities that are necessary to avoid the high voltage electrical arcing between devices running at these voltages or between the devices and the streets on the wafer that have distances as small as less than 200 microns apart from each other.

The amazing part of this is we can manage anti-arcing across the entire wafer, whereas semiconductor functional automated test equipment or ATE tester today are only able to keep devices from arcing in very small areas such as only one or a few devices at a time.

This allows an unprecedented low cost of test and burn-in for high voltage wafers such as silicon carbide devices used for electric vehicles, trucks and trains with voltage specifications up to 1700 volts and above.

We're excited that we received customer final acceptance of this new high voltage solution and WaferPaks in our fiscal fourth quarter. During the fiscal year, we completed a multi-year development of our new fully automated FOX WaferPak Aligner. Our new WaferPak Aligner allows hands free operation of WaferPak handling and alignment and is available either as a standalone configuration with movement between the Aligner and portable carts or in a full integration configuration integrated with the FOX-XP system.

The WaferPak Auto Aligner automatically takes wafers from cassettes or FOUPs ranging from 100 to 300 millimeter wafers and automatically aligns and loads wafers into our proprietary WaferPak cartridges which provide contact with 100% of the die on the wafer. WaferPaks can be brought to and from the Auto Aligner in WaferPak carts in what we refer to as the standalone configuration.

This allows one Auto Aligner to work with multiple FOX-XP systems, which each can have up to 18 WaferPaks with 18 wafers in them tested at the same time. This is great for very long test and burn-in times such as 24 to 48 hours or more.

Alternatively, the Auto Aligner can be configured to dock directly to the front of a FOX-XP system such that all material handling and WaferPak movement is done 100% hands free up to and including fully lights out operation. As capacity and volume forecasts grow, eliminating all manual interfaces for automated handling can become critical to our customers.

The added automation capability of our new Aligner gives our wafer level test and burn-in offering even greater value and opened several significant incremental markets to Aehr such as high volume processors and chipsets with integrated photonics transceivers, flash and ultimately DRAM memories and higher-mix devices requiring extremely high reliability and 100% burn-in such as automotive microcontrollers and sensors.

We have received positive feedback on our new Aligner from multiple current and prospective customers across several markets and believe it will be an important addition to our product portfolio going forward.

We have now installed both the standalone and integrated configurations of our new WaferPak Aligner at multiple customers with the standalone aligner accepted and released into production just this week and the FOX-XP with the integrated aligner is expected to receive production acceptance yet this current fiscal quarter.

We see a mix of customers that will purchase our WaferPak Auto Aligners in standalone and integrated configurations. Most customers feel very passionate that one way is absolutely better than the other way and basically we just agree with them. We offer both to our customers.

Each of these new product enhancements broadens our total available market and extends our cost competitiveness and application space for our FOX products. We continue to invest in R&D to enhance our existing market leading products and to introduce new products to maintain our competitive advantages and to expand our applications in addressable markets.

Our customers use our products to test, burn-in and stabilize semiconductors used for applications where safety, security, quality and reliability are absolutely critical, including electric vehicles, electric vehicle chargers, photovoltaic solar, power conversion, industrial and data and telecommunication applications.

Our FOX multi-wafer test and burn-in systems proprietary WaferPak full wafer contactors and newly introduced fully automated WaferPak Aligner puts us in an excellent position to continue to gain significant market share of these new market opportunities.

Our customers require semiconductors to be tested and burned in and stabilized prior to integration in the customer systems and in particular multi-chip modules, heterogeneous, integrated packages or co-packaged optics and we believe this is the very beginning of a wave of applications using our FOX products.

The market forecast for wafer level burn-in products is significant. William Blair estimates the total available market for wafer level burn-in products for SILICON CARBIDE alone to be over $400 million by 2027. We believe Aehr has the potential to capture a significant portion of that market based on the level of silicon carbide engagements we have with the customers across the globe.

To meet this demand, we have begun to significantly ramp up the production capacity of our systems and WaferPak full wafer contactors, increasing our production capacity to 3X or by over 200% during this past fiscal year and we plan to double this production capacity by the end of this new fiscal year.

We also have the supply chain and infrastructure to increase capacity significantly as the market demand warrants. To conclude, we're very encouraged by the continued positive momentum and expanding growth opportunities we see with our current and prospective customers.

We start fiscal 2024 with an effective backlog of almost $40 million and a strong forecast from our current and prospective customers. Our engagements with numerous potential new customers gives us confidence in our growth expectations over the next several years, including projections for record revenue and profit again for this fiscal year that ends next May, particularly as the positive momentum in demand for silicon carbide and electric vehicle continues to accelerate.

We're very pleased to report a significant forecasted growth in our fiscal 2024 financials. For the fiscal year ending May 31st 2024, Aehr expects total revenue to be at least $100 million, representing a growth of over 50% year-over-year and a GAAP net income of at least $28 million, representing earnings growth greater than 90% year-over-year.

Before I turn the call over to Chris, I'd like to take a moment to welcome him to Aehr. Chris is a semiconductor industry veteran who has served in senior financial positions with several much larger public companies in the semiconductor and semiconductor equipment space, including most recently at Ultra Clean Technologies. We're excited to have him join the company and look forward to working together.

I also want to thank again Ken Spink for his leadership and many contributions during his 15 years at Aehr. This includes helping us identify and select Chris as our new CFO and also staying on to help complete our fiscal year and annual 10-K filing and work with Chris and I to ensure a smooth transition.

On behalf of the board and the entire Aehr team, we wish Ken and his family the best in his retirement.

With that, let me turn the call over to Chris before we open up the lines for questions.

Chris Siu

Thank you, Gayn. Good afternoon, everyone. I'd like to begin by saying that I'm thrilled to have joined Aehr test and we're very excited about the opportunities ahead of us. On today's call, I'll summarize our results for the fiscal year 2023 and Q4 as well as provide our guidance for fiscal 2024.

As Gayn noted, we reported record financial performance for both the fourth quarter and the fiscal year 2023. On a year-over-year basis, revenue increased by 28% to a record $65 million. GAAP gross margin increased by 390 basis points to 50.4%. Our full year non-GAAP net income increased by 62% to a record $17.3 million.

We generated a record $10 million in operating cash flow in fiscal 2023 up more than 500% from the prior year. In the fiscal year, demand for our products was very strong with record annual bookings of $78.3 million up 30% from our total bookings of $60.2 million for the prior fiscal year.

Bookings in the fourth quarter was $15.2 million. Backlog as of yearend was $24.5 million, up 121% from a year ago. With more than $15 million bookings received in the first six weeks of the first quarter of fiscal 2024, we now have an effective backlog of nearly $40 million.

Moving to our Q4 results. We delivered record quarterly revenue of $22.3 million up 10% from $20.3 million year-over-year. Demand for our FOX-P systems drove the record revenue in the fourth quarter. We encourage to see that install base of our systems continues to grow as our product solutions are validated and recognized by our existing and new customers.

WaferPak and DiePak consumables revenue accounted for 38% of our total revenue in the fourth quarter compared to 45% of revenue in the prior year quarter. As we've noted before, customers typically purchase our FOX systems and WaferPaks at separate times and also staggered delivery.

GAAP gross margin for the fourth quarter came in at 51.5% compared to 51.6% last year. Margins can be influenced by fluctuations in product mix as well as material and transportation costs.

Operating expenses in the fourth quarter were $5.8 million up 26% from $4.6 million year-over-year primarily driven by increased headcount related expenses to support sales initiatives and R&D programs.

As we noted on the Q3 call, the company increased its worldwide sales and marketing efforts with the addition of three senior sales executives who have already begun making a positive impact. We continue to invest in R&D to enhance our existing market leading products and to introduce new products to maintain our competitive advantages and expand our applications and addressable markets.

The increase in R&D is primarily due to costs associated with development programs for new automated WaferPak Aligner and our very high voltage channel module and bipolar voltage channel module, which enable new advanced test and burn-in capabilities for silicon carbide and gallium nitride power semiconductors on Aehr's FOX-P wafer level test and burn-in systems.

The first order for our Automated Aligner was shipped during Q4 of fiscal 2023 and was just accepted this week. Non-GAAP net income, which excludes the impact of stock-based compensation was $6.8 million or $0.23 per diluted share for the fourth quarter. This compares to non-GAAP net income of $6.5 million or $0.23 per diluted share in the fourth quarter of fiscal 2022.

Turning to the balance sheet, we finished the year with a strong cash position. Our cash, cash equivalents and short-term investments were $47.9 million at year-end up 52% from $31.5 million year-over-year. We generated $5.8 million in operating cash flow during the quarter, up more than 800% year-over-year.

We have zero debt and continue to invest our excess cash in short-term investments to take advantage of higher interest rates. Interest income earned in the fourth quarter was nearly $0.5 million compared to just $22,000 in the fourth quarter last year.

During the third quarter, we announced an ATM offering of up to $25 million in shares of the company's common stock on the open market. As we reported on our last call, during the third quarter, we received gross proceeds of $7.3 million on the sale of 209,000 shares at an average price of $34.78 per share.

We did not sell any shares under the ATM in our fourth quarter, but we expect to sell shares in fiscal 2024 to receive the remaining $17.7 million available under the ATM. Now turning to our outlook for the current fiscal 2024 that ends on May 31st, 2024.

We expect full year total revenue to be at least $100 million representing growth of over 50% year-over-year and GAAP net income of at least $28 million representing earnings growth of greater than 90% year-over-year.

Lastly, looking at the Investor Relations calendar, Aehr Test will be meeting with investors virtually at the Needham Virtual Semiconductor and Semi-Cap One-on-One conference on Tuesday, August 22^nd, and then the following week, we will be meeting with investors in-person on Tuesday, August 29th at the Jefferies Semiconductor IT Hardware, Communication, Software and Infrastructure Summit taking place in Chicago. We hope to see some of you at this conferences.

This concludes our prepared remarks and we are now ready to take your questions. Operator, please go ahead.

Question-and-Answer Session

Operator

Thank you. We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Christian Schwab with Craig-Hallum. Please go ahead.

Christian Schwab

Hey, guys. Thanks for taking my questions. I just have a few. So, Ken, when would you expect to file your 10-K?

Ken Spink

We're filing our 10-K at the end of August. I think August 28th is our proposed filing date right now.

Christian Schwab

Could you be willing to share if there was more than one 10% customer and exactly if there was only one exactly how much revenue came from just the one customer?

Ken Spink

Absolutely. We did actually have two customers over 10%, one at 79% of revenues and the other at 10% of revenues.

Christian Schwab

Excellent. And, Ken, when you guys are talking about your greater than 100 million expectation for revenue next fiscal year, how many 10% customers, you know, are you assuming in that guidance?

Ken Spink

Let me try and fill that one. Maybe almost better. I don't have it in front of me because I don't want to get too specific on it, but I think we expect several, maybe three or four. So there will be, you know, we're obviously very heavily focused on our lead silicon carbide customer this last year and we expect while they will continue to be a great customer and certainly a 10% customer for years to come that there'll be less of a focus in terms of concentration with them.

Christian Schwab

Excellent. And in that three to four, I assume that will be, you know, we've talked about before, obviously, our lead customer. We've gotten orders from our second major silicon customer. Should we assume that the third large silicon customer -- should we expect business from that customer in the next fiscal year as well then?

Ken Spink

Yes.

Christian Schwab

Excellent, excellent. And then as we think about mix for the quarter, Ken, I know we have 40 million in backlog as you stated you know do we expect mix you know as we think about the shape of the quarters for next year, should we assume roughly 40% in the first half and 60% in the second half again or would that makes me something different?

Gayn Erickson

You should see his eyebrows raised right now. But let me feel that one maybe for Chris and I, because, you know, Ken's going to be riding off in the sunset here and won't have to live with it like this. I actually do think that's probably fair. We think that the second half is going to be stronger than the first half.

Maybe a little less dramatic as it has been in the last couple of years, but that may be a fair way of thinking about it. Now, for everybody on the call, we don't give quarterly guidance. So I need to be careful because I'm guessing your next question is going to be about next quarter. So please don't.

Christian Schwab

All right. I'll save that. I'll save that for offline. And then my last question is, were there any shipments in Q4? It sounded like there was one, but a dollar amount of shipments in in Q4 '24 that weren't recognized in revenue that should be recognized?

Gayn Erickson

We did. We had teed that up pretty hard, right before at the last call because we were anticipating shipping the Aligners as well as an Aligner tied to an FOX-XP system. And so we did get the revenue for the couple of NPs that we had with the high voltage option, but the integrated FOX-XP and Aligner pushed into this quarter as we expected.

And in fact I think we shipped it right literally right after I think it was on June 2nd or something like that. So it didn't ship yet, but it was right there. We had customer acceptance during the quarter, but we would expect to see revenue for this quarter upon its acceptance. The first Aligners were actually shipped during last quarter for the standalone Aligners. And they, like you said, we just got acceptance on the first one of those this week. So we're pretty happy about that.

Christian Schwab

Great. And then just if I could slip one last question in. The difference between you said at least 100 million, what should we be looking for monitoring throughout the course of the year to say that revenue goes 100 million, 105 million? What would it take for revenue to be 120 million or 130 million? Is there one or two things you could point us to that you're thinking about or is it just too early to think about that?

Gayn Erickson

Yeah, I mean, it's too early. A lot of this is just still uncertainty and timing of customer ramps themselves. That's one of the challenges with this thing, I mean, an ASP of a system with a set of WaferPaks at $4 million plus or minus a couple of days is a big number, right, on a quarter and on a year.

But for us to be able to look out there and try and understand what it was, I think, we're confident that's why we use at least $100 million. But, you know, as things firm up and we get a little bit more visibility and we believe that we will, you know, it gets a lot stronger. We'll let you guys know.

But we're starting off with a great backlog. We have great forecasts of current and prospective, which we believe are likely to be customer wins this year. And as those things firm up, I mean, it's boding well and we think that it's -- we're just right at the start where a lot of these companies are starting to kick in the silicon carbide plans.

This last year was kind of a big number for us in terms of just sort of the initial progress got us to test our wheels to be able to ramp up our production and things like that. But we're just going to be continuing to ramp as we go into the end of into this year and certainly into the next year.

Christian Schwab

Fantastic. No other questions. Thanks.

Gayn Erickson

Thanks, Christian.

Ken Spink

Thanks, Christian.

Operator

The next question comes from Jed Dorsheimer with William Blair. Please go ahead.

Jed Dorsheimer

Hi. Thanks for taking my question. Congratulations on the quarter. Ken, I hope you have some good travel plans and, Chris, welcome. It's been a while since the AeA days at meeting with you at Trident. So welcome to Aehr.

Chris Siu

Thank you.

Jed Dorsheimer

And then I'd be remiss, Gayn, thanks for the technology primer. So I appreciate that. I guess just want to dig into basically what Christian was kind of coming to and maybe just take a different, a slightly different angle, which is around the sausage making for this -- for your -- your full year guide. And specifically if we look at this past year and your largest customer being 52 million based on the 79% and their targets of growing 300% over the next few years. I would assume that creates a solid base for your -- for your business. So as you look at already having 8 million to 10 million booked on that, number two, you're really talking about a 30 million incremental number to hit that minimum threshold and you've already got three customers. So could you just walk us through sort of how when Vernon brings the spreadsheet of the customers, how you're thinking about the puts and takes for that level of confidence in terms of that guide? And then I have a few follow-ups.

Gayn Erickson

Sure, Jed. As I hear you talk through that, I felt like you were going to end it with why we're such sandbaggers but anyhow.

Jed Dorsheimer

I would never say that again.

Gayn Erickson

So we actually -- we -- if you were to look at Vernon, Vernon, by the way is our VP of Sales and his team, if you were to look at their funnel, it's pretty impressive.

There are a very large number of companies that are expressing interest and leaning forward with us for our wafer level test and burn-in products across several markets. It's going to be a very busy year for us. The forecast does include a good number.

I'm not sure we want to start putting numbers on it of new customers both for bookings as well as turns, but customers that are expect to book and ship within the year. We still have a wide range of forecasts from people. It's interesting even with current customers candidly their ability to forecast is all over the map. And so I think we've taken a conservative stance here.

But it provides us with confidence to be able to hit that number. And we don't need any miracles to happen, if you will. I don't want to get into talking about how much upside there is to it. I will say that we have considerable upside in terms of capacity and the ability to serve the market.

The old adage, what if you invite everybody and they all show up? And so we're looking at it that way. We want to make sure that if the customer select us that we will be able to ship them in shortly times and high volumes with the level of confidence that they would want.

And so hopefully that gives you a little bit more color. Again, it's not all about one, one or even two companies. As we go forward, we're going to see a lot of breadth. Many of those will just be starting. The classic they take their first system and there's a little digestion, which I think will bode well for us as we head into the following fiscal year as well.

Jed Dorsheimer

Gotcha. That's helpful. I guess just as a follow up on sort of number two through number four of the -- or number five, I guess, of the incremental customers. In terms of the discussions, so as you ship out these two systems or as you've shipped the two systems, you recognize the revenues. Are the conversations that such that if this tool hits this specification, we expect to come back with five tools or ten tools or 20 or three or what level of visibility. I know as you mentioned, there's a bit of movement amongst your customers, but what level of visibility are they providing you so that you're making your decision?

Gayn Erickson

Yeah, Jed, I mean, I don't mean to be vague or illusive, but it really depends on the customer. But I would say even within one thing in common with all of them is, there's still some pretty broad ranges.

It just they're trying to figure out the timing of their customer wins or their customer capacity needs. There's certainly an element of test times and what quality requirements will be needed for different customer levels. The higher the quality requirements, the larger the test times, which have a direct linear impact on us.

We've heard customers talk about, well, you know, different markets can get away with lower quality than others. That's very odd or interesting to me, but those are clearly things we keep to ourselves about who's saying those type of things.

But you know it -- we hope to make it get easier. I mean one of the challenges that we face is, we're very -- there's customers can be very lumpy and there's these variabilities. The nice thing is, we do expect to wake up here in the not too far distant future with a lot more customers.

And so while it may seem like we're better at planning, we're probably just averaging a bunch of random uncertainties if you will. Random is way overstated. We have pretty darn good visibility to what people are doing. The one of the things we look at the most candidly is what their actual plans are.

You go look at their buildings, you watch them being built. You look at their public statements about the capacity they're putting in place. We have a pretty good idea of what the average test times are amongst the OEMs around the world. And we do our back of the envelope numbers.

Sometimes those numbers are bigger than what the customers are saying. And candidly, that has happened in the past where we built when a customer said we're going to buy X, we were building 2X and they came back and said, I need 3X. So and we were able to actually quickly ramp to them. So I know you're looking for better color. I hope that gives you some, but it's not that clear to you I realize.

Jed Dorsheimer

No, no, listen, it's helpful. I know I'm going to be asked these questions. So I just wanted to get it from the horse's mouth. I guess just before I jump back in queue your high voltage product. Congratulations. That takes you into opens up a few doors for you.

Gayn Erickson

It does.

Jed Dorsheimer

I was wondering if you might just elaborate on that. I know you mentioned it for the silicon. You mentioned silicon photonics, but does that also change the calculus for trench in silicon carbide? And then how does that play for memory too?

Gayn Erickson

Yeah. Okay. Well, for memory, it doesn't apply for trench or gallium nitride. There are different burn-in processes that can be used to accelerate different failures and depending on what the customer failures may be seen, this gives them all the tools for them to be able to apply it.

And so candidly we're just there for them. A lot of people are trying to get away from high voltage. I mean, it's more expensive than the gate bias, even from us, even though we're a fraction of the other guys. But it's still cheaper to do the gate bias only. And so people are playing around with recipes and mixes of how much high voltage do they need, how much gate bias do they need and different things. And they're all trying to optimize.

And of course, we can't share anyone else's secrets. So we're just giving them the tools and being supportive. The nice thing is, you can buy a system from us that can do all of the above. In fact, you can buy a blade that can do all of the above and one blade. You can optimize it depending on test times.

Let's say your test time for high voltage is X, but your test time for gate is 10X. You can optimize the systems and you can reconfigure them in the field on. So it gives us a lot of, it gives customers a lot of flexibility and we kind of arm them with those tools and are supportive and we don't have to say no to anything that's key.

And then things like gallium nitride where the primary, if not maybe only the only real failure mode has to do with the high temp reverse bias, which is a high voltage gate breakdown. And so in that case they need the high voltage for it. And so that's a critical piece to it. And the fact that we can do it at much higher voltages than anyone else without arching across a whole wafer GaN devices also tend to be smaller, so they have a much higher quantity per wafer.

Even the competitors of ours that talk about having the ability to test a wafer, do it with lower quantity than we do. So we have an advantage there as well. And it seems to be coming out from our -- the customer inquiries. So it's nice to have these options. You mentioned memory.

Memory, if you mentioned to a memory guy, 2000 volts, it might, they'll get a eke sound out of ours. And so they're like don't get that near my device. So high voltage is really more to do with these compound semiconductor devices for power management than is for memory. Memory tends to be lower voltage.

And I'll tell you what, let me just cover that rather than let me say. So we have been having discussions with respect to some memory folks related to both the new Auto Aligner as well as our long-term roadmap. And I always allude to that sometime on these calls.

Again, investors in Aehr test are can be confident that we have oars in the water and are working towards long term goals of being in memory. Memory makes sense for wafer level burn-in. NAND is easier and closer. DRAM there's a path to wafer level burn-in. We have and can share our opinions with people about how to get there using some design for test methodologies that we can provide our opinions on to help the DRAM guys get there as well.

That's going to take longer and time, but personally, at some point out, you know, whether it's the end of the decade or what, I can see companies getting there and we want to be their partner.

Jed Dorsheimer

Thanks. That's helpful. I'll jump back in the queue. Thanks, guys.

Gayn Erickson

Okay.

Operator

[Operator Instructions] The next question comes from Larry Chlebina with Chlebina Capital. Please go ahead.

Gayn Erickson

Larry is clearly -- Larry, are you there?

Larry Chlebina

Yeah, I'm there. Gayn, you started to answer my question, my primary question, when you might have an evaluation tool to since you have a fully automated machine now, it seems like one of these memory guys might be interested in evaluating it for future fabs?

Gayn Erickson

I agree. If I were a memory guy, I would want to evaluate our tool as well. So that is something that is important to us. I often tell people, be careful, don't assume, we're going to be having revenue anytime immediately, but it is absolutely something that we are that we're working towards.

And for sure, our new WaferPak automated Aligner is a key piece of that. And we did get feedback from multiple memory companies on that configuration and its capability. I will share that with you. So I'm very for people that know me or have seen the picture of me smiling next to it before we shipped the first one. It's a passionate project for me and this team is very, very proud of that. So I'll leave it at that, Larry.

Larry Chlebina

All right. Good. Well, I'll leave it at that also. But, hey, great guide. I appreciate how you did that. I think it makes sense. And having seen the full automation, I completely agree with you. I think it's a fantastic offering. So, hey, great job. Take care of you guys.

Gayn Erickson

Thank you. Thank you, Larry.

Operator

[Operator Instructions]

Gayn Erickson

Last call, folks. All right, operator, then. Are there no other calls?

Operator

Yeah, we have one more. The next question comes from Tom Diffely with D.A. Davidson. Please go ahead.

Tom Diffely

Yeah, good afternoon. I appreciate the chance to ask a question. I was curious about the leverage in the model itself and maybe this is a question for Ken, but I think in the past you talked about roughly a $30 million breakeven and then a 45%, 50% drop through thereafter. A lot's gone on over the last year. So I'm curious if you can give us an update on that now?

Ken Spink

Yeah, I'd be happy to chat with you about it. Yeah, I think the number that you were talking about when I spoke previously was $36 million number and said [indiscernible] for every incremental dollar fell to the bottom line. And if you actually followed and compared to our revenue number that we came in at $65 million, it was within like $100,000 of that model.

So I was pretty excited. And thank you very much for asking. We're going to incur some significantly higher expenses in this upcoming year. And just from a model standpoint, you know, our gross margin standpoint, you could see us ranging from anywhere from a 49% to 52% margin plus very similar to what we've recognized in the past.

However, because and I think Chris could probably touch more on this is we're moving to a [indiscernible] holding company, a significant amount of cost associated with the G&A. We also have R&D initiatives that we are implementing also continuing during the year and we've added sales and marketing.

So there is a significant amount of overhead and OpEx manufacturing spending. So that $36 million number is really going to go up by several millions of dollars on them and.

Gayn Erickson

And then the same probably 50% dropping.

Chris Siu

Yeah. So let me add on that what Ken just said, Tom, is as you know our market cap exceeds $1 billion. So the SEC requires anything over 700 million public float to be to report their financial statements and as a large accelerator filer that includes SOX attestation. So that means there'll be more work from internal control perspective from our auditors. And what it means is we need to beef up our resources, meet that compliance requirement. So as a result, our OpEx would increase accordingly.

Gayn Erickson

There are downsides to a large market cap. One of them is, unless you're an auditor, then it's fantastic because they make so much more money, but okay.

Tom Diffely

Well, it seems like a pretty fair trade off. Appreciate your time.

Gayn Erickson

Thank you, Tom.

Ken Spink

Thank you, Tom.

Operator

[Operator Instructions]

Gayn Erickson

All right, folks. Let me go ahead and take that. Thank you, everybody, for joining the call. And we really appreciate you joining us for we're very proud of how the year went. And I can tell you, we're on the edge of our seat excited about heading into this new fiscal year, with a great backlog, great bunch of customers, a great bunch of potential customers and a great team.

And so we really appreciate you folks joining us. As always, we do try and make ourselves available. If you happen to be in the Silicon Valley Bay area to set up an appointment, come by and take a look. Our manufacturing floor is a buzzing and it is exciting to look at. It's another thing we're very proud of and so we appreciate everybody's I guess involvement and cheerleading that song as we head into this next fiscal year. And we will talk to you next quarter. Bye-bye.

Operator

The conference has now concluded. Thank you for attending today's presentation. You may all now disconnect.