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What changed in AEHR TEST SYSTEMS's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of AEHR TEST SYSTEMS's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+219 added−167 removedSource: 10-K (2025-07-28) vs 10-K (2024-07-30)

Top changes in AEHR TEST SYSTEMS's 2025 10-K

219 paragraphs added · 167 removed · 141 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

50 edited+13 added−6 removed71 unchanged
Biggest changeThe FOX-XP platform has been extended for burn-in and test of small multi-die modules by using DiePak Carriers. The DiePak Carrier with its multi-module sockets and high wattage dissipation capabilities has a capacity of hundreds of die or modules, much higher than the capacity of a traditional burn-in system with traditional single-device sockets and heat sinks.
Biggest changeThe DiePak Carrier with its multi-module sockets and high wattage dissipation capabilities has a capacity of hundreds of die or modules, much higher than the capacity of a traditional burn-in system with traditional single-device sockets and heat sinks. 6 Table of Contents The FOX-NP is a low-cost entry-level system to provide a configuration and price point for companies to initiate a new product introduction and production qualification, enabling an easier transition to the FOX-XP system for high volume production test.
The Company has applications engineering and field service personnel located near and sometimes co-located at our customers and includes resources at the corporate headquarters in Fremont, California, at customer locations in Texas, at the Company’s subsidiaries in Germany and the Philippines, at its branch office in Taiwan, and also through third-party agreements in China.
The Company has applications engineering and field service personnel located near and sometimes co-located at our customers and includes resources at the corporate headquarters in Fremont, California, at customer locations in Texas, at the Company’s subsidiaries in Germany, Japan and the Philippines, at its branch office in Taiwan, and also through third-party agreements in China.
MARKETING, SALES AND CUSTOMER SUPPORT The Company has sales and service operations in the United States, Germany, the Philippines and Taiwan, dedicated sales and service resources in China and South Korea, and has established a network of distributors and sales representatives in certain key parts of the world.
MARKETING, SALES AND CUSTOMER SUPPORT The Company has sales and service operations in the United States, Germany, Japan, the Philippines and Taiwan, dedicated sales and service resources in China and South Korea, and has established a network of distributors and sales representatives in certain key parts of the world.
Selected financial information, including net revenues and property and equipment, net for each of the last three fiscal years, by geographic area is included in Part II, Item 8, Note 12, “Revenue” and Note 15, “Segment Information” and certain risks related to such operations are discussed in Part I, Item 1A, Risk Factors, under the heading “We sell our products and services worldwide, and our business is subject to risks inherent in conducting business activities in geographic regions outside of the United States.” 10 Table of Contents AVAILABLE INFORMATION The Company’s common stock trades on the NASDAQ Capital Market under the symbol “AEHR.” The Company’s annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to these reports that are filed with the United States Securities and Exchange Commission, or SEC, pursuant to Section 13(a) or 15(d) of the Exchange Act, are available free of charge through the Company’s website at www.aehr.com as soon as reasonably practicable after we electronically file them with, or furnish them to the SEC.
Selected financial information, including net revenues and property and equipment, net for each of the last three fiscal years, by geographic area is included in Part II, Item 8, Note 11, “Revenue” and Note 16, “Segment Information” and certain risks related to such operations are discussed in Part I, Item 1A, Risk Factors, under the heading “We sell our products and services worldwide, and our business is subject to risks inherent in conducting business activities in geographic regions outside of the United States.” AVAILABLE INFORMATION The Company’s common stock trades on the NASDAQ Capital Market under the symbol “AEHR.” The Company’s annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to these reports that are filed with the United States Securities and Exchange Commission, or SEC, pursuant to Section 13(a) or 15(d) of the Exchange Act, are available free of charge through the Company’s website at www.aehr.com as soon as reasonably practicable after we electronically file them with, or furnish them to the SEC.
See “Revenue Recognition” in Item 7 under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for a further discussion of the Company’s relationship with distributors, and its effects on revenue recognition. 7 Table of Contents The Company’s customer service and support program includes system installation, system repair, applications engineering support, spare parts inventories, customer training and documentation.
See “Revenue Recognition” in Item 7 under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for a further discussion of the Company’s relationship with distributors, and its effects on revenue recognition. The Company’s customer service and support program includes system installation, system repair, applications engineering support, spare parts inventories, customer training and documentation.
Social The Company reviews hiring and turnover quarterly and performs annual salary reviews, using independent third-party data, to ensure competitive compensation practices. The Company conducts annual employee surveys to evaluate employee satisfaction. Glassdoor shows the Company at a 4.2 out of 5 rating as a great place to work.
Social The Company reviews hiring and turnover quarterly and performs annual salary reviews, using independent third-party data, to ensure competitive compensation practices. The Company conducts annual employee surveys to evaluate employee satisfaction. Glassdoor shows the Company at a 4.3 out of 5 rating as a great place to work.
The FOX-XP and FOX-NP systems are full wafer contact and singulated die/module test and burn-in systems that can test, burn-in, and stabilize a wide range of devices such as leading-edge silicon carbide-based and gallium nitride power semiconductors, 2D and 3D sensors used in mobile phones, tablets, and other computing devices, memory semiconductors, processors, microcontrollers, systems-on-a-chip, and photonics and integrated optical devices used in artificial intelligence.
The FOX-XP and FOX-NP systems are full wafer contact and singulated die/module test and burn-in systems that can test, burn-in, and stabilize a wide range of devices such as leading-edge silicon carbide-based and gallium nitride power semiconductors, 2D and 3D sensors used in mobile phones, tablets, and other computing devices, memory semiconductors, processors, microcontrollers, systems-on-a-chip, and photonics and integrated optical devices used in AI.
The Company regularly evaluates its ability to attract and retain its employees. The Company has had relatively low turnover rates within its workforce, with 51% of its regular full-time workforce being with the Company for 5 years or more.
The Company regularly evaluates its ability to attract and retain its employees. The Company has had relatively low turnover rates within its workforce, with 54% of its regular full-time workforce being with the Company for 5 years or more.
There can be no assurance that the Company will be able to compete successfully in the future. 8 Table of Contents PROPRIETARY RIGHTS The Company relies primarily on the technical and creative ability of its personnel, its proprietary software, and trade secrets and copyright protection, rather than on patents, to maintain its competitive position.
There can be no assurance that the Company will be able to compete successfully in the future. PROPRIETARY RIGHTS The Company relies primarily on the technical and creative ability of its personnel, its proprietary software, and trade secrets and copyright protection, rather than on patents, to maintain its competitive position.
Supporting a wide range of wafer sizes (e.g. 100/200/300mm) allows a broad range of customers to implement fully automated wafer level test and burn-in factories. 6 Table of Contents Similar to the WaferPak Aligner for WaferPak Contactors, the Company offers the DiePak Loader for DiePak Carriers.
Supporting a wide range of wafer sizes (e.g. 100/200/300mm) allows a broad range of customers to implement fully automated wafer level test and burn-in factories. Similar to the WaferPak Aligner for WaferPak Contactors, the Company offers the DiePak Loader for DiePak Carriers.
Using our optional chambers, our systems can produce temperatures as low as -55 degrees Celsius (-67 degrees Fahrenheit). A single BIB can hold up to several hundred integrated circuits (“ICs”), and a production chamber holds up to 72 BIBs, resulting in thousands of memory or logic devices being tested in a single system.
Using our optional chambers, our systems can produce temperatures as low as -55 degrees Celsius (-67 degrees Fahrenheit). A single BIB can hold up to several hundred ICs, and a production chamber holds up to 72 BIBs, resulting in thousands of memory or logic devices being tested in a single system.
In addition, the Company from time to time employs a few contractors, temporary, and part-time employees, particularly to perform customer support and manufacturing. The Company’s employees are dispersed across principal offices in the United States, Germany, Taiwan, and the Philippines.
In addition, the Company, from time to time, may employ a few contractors, temporary, and part-time employees, particularly to perform customer support and manufacturing. The Company’s employees are dispersed across principal offices in the United States, Germany, Taiwan, and the Philippines.
Semiconductor companies are continuously innovating and releasing new AI chips to meet this demand. The production of AI processor wafers has seen substantial growth, with companies shipping millions of devices. As the AI processor market grows, the Company sees the need for burn-in becoming increasingly important.
Semiconductor companies are continuously innovating and releasing new AI chips to meet this demand. The production of AI processor wafers has seen substantial growth, with companies shipping millions of devices. As the AI processor market grows, the Company expects the need for burn-in to become increasingly important.
CUSTOMERS The Company markets and sells its products throughout the world to semiconductor manufacturers, semiconductor contract assemblers, electronics manufacturers and burn-in and test service companies. Revenues from the Company’s five largest customers accounted for approximately 93%, 97%, and 98% of its net revenues in fiscal 2024, 2023, and 2022, respectively.
CUSTOMERS The Company markets and sells its products throughout the world to semiconductor manufacturers, semiconductor contract assemblers, electronics manufacturers and burn-in and test service companies. Revenues from the Company’s five largest customers accounted for approximately 77%, 93%, and 97% of its net revenues in fiscal 2025, 2024, and 2023, respectively.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) Environmental The Company focuses on clean technology such as the electrical vehicle (“EV”) and power semiconductors market. EV and power semiconductor revenues accounted for 92%, 85%, and 82% of total revenues in fiscal 2024, 2023, and 2022, respectively.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) Environmental The Company focuses on clean technology such as the electrical vehicle (“EV”) and power semiconductors market. EV and power semiconductor revenues accounted for 41%, 92%, and 85% of total revenues in fiscal 2025, 2024, and 2023, respectively.
AI Processors distinct architecture of die-to-die interdependency and increased memory size and use create a unique opportunity for the Company to apply enabling wafer level test and burn-in technology for its customers and potential future customers.
AI processors’ distinct architecture of die-to-die interdependency and increased memory size and use create a unique opportunity for the Company to apply enabling wafer level test and burn-in technology and package part burn-in for its customers and potential future customers.
Building upon the expertise gained in the development of its existing products, the Company has developed the FOX family of systems for performing test and burn-in of entire processed wafers, and burn-in of devices in singulated die and module form, including the FOX-NP and FOX-CP systems released during fiscal 2019, and the Automated WaferPak Aligner released during fiscal 2023.
Building upon the expertise gained in the development of its existing products, the Company has developed the FOX family of systems for performing test and burn-in of entire processed wafers, and burn-in of devices in singulated die and module form, including the FOX-NP and FOX-CP systems released during fiscal 2019, and the Automated WaferPak Aligner released during fiscal 2023 and the acquisition of the Sonoma, Tahoe and Echo platforms in fiscal 2025.
Automotive Semiconductors In addition, the rapid growth and increasing demand for reliability in automotive sensor technologies is a key market driver for the Company. These technologies include ADAS (Advanced Driver Assistance Systems) capabilities such as collision avoidance systems using laser, LIDAR (Light Detection and Ranging), and RADAR (Radio Detection and Ranging) or other sensing technologies.
Automotive Semiconductors In addition, the rapid growth and increasing demand for reliability in automotive sensor technologies is a key market driver for the Company. These technologies include Advanced Driver Assistance Systems (“ADAS”) capabilities such as collision avoidance systems using laser, Light Detection and Ranging (“LIDAR”), and Radio Detection and Ranging (“RADAR”) or other sensing technologies.
The applications include electric vehicles, electric vehicle charging infrastructure, solar and wind power, computing, data and telecommunications infrastructure, and solid-state memory storage. The trend is driving additional test requirements, incremental capacity needs, and new opportunities for Aehr Test products and solutions.
The applications include artificial intelligent (“AI”) compute data centers, electric vehicles, electric vehicle charging infrastructure, solar and wind power, data and telecommunications infrastructure, and solid-state memory storage. The trend is driving additional test requirements, incremental capacity needs, and new opportunities for Aehr Test products and solutions.
Pin electronics at each burn-in board (BIB), position are designed to provide accurate signals to the ICs being tested and detect whether a device is failing the test. Devices being tested are placed on BIBs and loaded into environmental chambers which typically operate at temperatures from 25 degrees Celsius (77 degrees Fahrenheit) up to 150 degrees Celsius (302 degrees Fahrenheit).
Pin electronics at each burn-in board (“BIB”) or Burn-in module (“BIM”) position are designed to provide accurate signals to the ICs being tested and detect whether a device is failing the test. 7 Table of Contents Devices being tested are placed on BIBs and loaded into environmental chambers which typically operate at temperatures from 25 degrees Celsius (77 degrees Fahrenheit) up to 150 degrees Celsius (302 degrees Fahrenheit).
Subjecting the AI processors under stress to eliminate potential failures before they are deployed is crucial as they are often used in critical applications where failure can have significant consequences. Therefore, as the AI chip market continues to expand, the importance of robust and efficient burn-in processes cannot be overstated.
Subjecting the AI processors under stress to eliminate potential failures before they are deployed is crucial as they are often used in critical applications where failure can have significant consequences. Therefore, as the AI chip market continues to expand, the requirement for robust and efficient burn-in processes increases.
HUMAN CAPITAL RESOURCES As of May 31, 2024, the Company, including its foreign subsidiaries and one branch office, employed 115 persons collectively, on a regular full-time basis, of whom 28 were engaged in research, development and related engineering, 39 were engaged in manufacturing, 33 were engaged in marketing, sales and customer support and 15 were engaged in general administration, finance and IT functions.
HUMAN CAPITAL RESOURCES As of May 30, 2025, the Company, including its foreign subsidiaries and one branch office, employed 136 persons collectively, on a regular full-time basis, of whom 38 were engaged in research, development and related engineering, 50 were engaged in manufacturing, 33 were engaged in marketing, sales and customer support and 15 were engaged in general administration, finance and IT functions.
Net revenues of packaged part product lines, systems and services for fiscal 2024, 2023, and 2022 were $1.6 million, $1.4 million, and $1.9 million, respectively, and accounted for approximately 2%, 2%, and 4% of the Company’s net revenues in fiscal 2024, 2023, and 2022, respectively.
Net revenues of packaged part product lines, systems and services for fiscal 2025, 2024, and 2023 were $19.8 million, $1.6 million, and $1.4 million, respectively, and accounted for approximately 34%, 2%, and 2% of the Company’s net revenues in fiscal 2025, 2024, and 2023, respectively.
The Company improved its facilities by replacing existing air conditioners and heat exchanger with higher efficiency units that draw less power and produce less wasted energy. Our headquarters facility upgrades include moving to high efficiency lighting, modernizing our electrical power and cooling infrastructure, and adding Electric Vehicle charging stations for employees, vendors, and customers.
The Company improved its facilities by replacing existing air conditioners and heat exchanger with higher efficiency units that draw less power and produce less wasted energy. Our headquarters facility upgrades include moving to high efficiency lighting, modernizing our electrical power and cooling infrastructure.
Net revenues of full wafer contact product lines, systems, WaferPak Contactors, DiePak Carriers and services for fiscal 2024, 2023, and 2022 were $64.6 million, $63.5 million, and $48.9 million, respectively, and accounted for approximately 98%, 98%, and 96% of the Company’s net revenues in fiscal 2024, 2023, and 2022, respectively.
Net revenues of full wafer contact product lines, systems, WaferPak Contactors, DiePak Carriers and services for fiscal 2025, 2024, and 2023 were $39.2 million, $64.6 million, and $63.5 million, respectively, and accounted for approximately 66%, 98%, and 98% of the Company’s net revenues in fiscal 2025, 2024, and 2023, respectively.
Such claims could include assertions that the Company’s products infringe, or may infringe, the proprietary rights of third parties, requests for indemnification against such infringement or suggest the Company may be interested in acquiring a license from such third parties.
However, the Company may, from time to time, receive communications from third parties asserting intellectual property claims against the Company. Such claims could include assertions that the Company’s products infringe, or may infringe, the proprietary rights of third parties, requests for indemnification against such infringement or suggest the Company may be interested in acquiring a license from such third parties.
In addition, our service and support organization has employees located worldwide, at or near customer facilities, to provide timely customer response. As of May 31, 2024 regular full-time employees were located in the following geographic areas: 83 in United States, 25 in the Philippines, five in Taiwan and two in Germany.
In addition, our service and support organization has employees located worldwide, at or near customer facilities, to provide timely customer response. As of May 30, 2025 regular full-time employees were located in the following geographic areas: 102 in United States, 26 in the Philippines, six in Taiwan, and two in Germany.
The Company believes that maintaining a close relationship with customers and providing them with ongoing engineering support improves customer satisfaction and will provide the Company with a competitive advantage in selling its products to the Company’s customers. BACKLOG At May 31, 2024, the Company’s backlog was $7.3 million compared with $24.5 million at May 31, 2023.
The Company believes that maintaining a close relationship with customers and providing them with ongoing engineering support improves customer satisfaction and will provide the Company with a competitive advantage in selling its products to the Company’s customers. 8 Table of Contents BACKLOG At May 30, 2025, the Company’s backlog was $15.2 million compared with $7.3 million at May 31, 2024.
The FOX DiePak Carrier allows testing, burn-in, and stabilization of singulated bare die and modules up to 1,024 devices in parallel per DiePak on the FOX-NP and FOX-XP systems up to nine DiePaks at a time.
The FOX DiePak Carrier allows testing, burn-in, and stabilization of singulated bare die and modules up to 1,024 devices in parallel per DiePak on the FOX-NP and FOX-XP systems up to nine DiePaks at a time. The introduction of the High Power FOX-XP in connection with the acquisition of Incal Technology, Inc.
The Company’s ability to compete successfully is dependent in part upon its ability to protect its proprietary technology and information. Although the Company attempts to protect its proprietary technology through patents, copyrights, trade secrets and other measures, there can be no assurance that these measures will be adequate or that competitors will not be able to develop similar technology independently.
Although the Company attempts to protect its proprietary technology through patents, copyrights, trade secrets and other measures, there can be no assurance that these measures will be adequate or that competitors will not be able to develop similar technology independently.
The latest generation Automated WaferPak Aligner supports industry standard Automated Material Handling System (AMHS), Automated Guided Vehicle (AGV), Overhead Hoist Transfer (OHT) and SEMI Equipment Communication Standard (SECS) and Generic Equipment Mode (GEM) Semi E84 factory integration enabling “Lights-out” fully automated wafer handling.
The latest generation Automated WaferPak Aligner supports industry standard Automated Material Handling System (“AMHS”), Automated Guided Vehicle (“AGV”), Overhead Hoist Transfer (“OHT”) and SEMI Equipment Communication Standard (“SECS”) and Generic Equipment Mode (“GEM”) Semi E84 factory integration enabling “Lights-out” fully automated wafer handling.
During fiscal 2024, two customers accounted for approximately 67% and 17% of the Company’s net revenues. During fiscal 2023, two customers accounted for approximately 79% and 10% of the Company’s net revenues. During fiscal 2022, one customer accounted for approximately 82% of the Company’s net revenues.
During fiscal 2025, two customers accounted for approximately 39% and 15% of the Company’s net revenues. During fiscal 2024, two customers accounted for approximately 67% and 17% of the Company’s net revenues. During fiscal 2023, two customers accounted for approximately 79% and 10% of the Company’s net revenues.
Implementing this approach along with our proprietary full wafer contactors and device interface carriers provides our customers with the ability to configure a system for engineering characterization and reliability qualification and high-volume production applications. 5 Table of Contents Full Wafer Contact Systems Aehr’s FOX-XP test and burn-in platform allows for reliability screening tests to be completed on an entire wafer full of devices, testing all of them at once or multiple touchdowns, while also testing and monitoring every device for failures during the burn-in process to provide critical information on those devices.
Full Wafer Contact Systems Aehr’s FOX-XP test and burn-in platform allows for reliability screening tests to be completed on an entire wafer full of devices, testing all of them at once or multiple touchdowns, while also testing and monitoring every device for failures during the burn-in process to provide critical information on those devices.
One of the market opportunities for wafer level burn-in is semiconductors used in Hard Disk drives for data storage. The NAND Flash market implements 100% test and burn-in of devices to be used in mission critical applications such as enterprise storage.
The NAND Flash semiconductor memory market implements 100% test and burn-in of devices to be used in mission critical applications such as enterprise storage.
MARKETS The Company’s semiconductor test and reliability qualification solutions address multiple test and burn-in markets including Silicon Carbide (SiC) and Gallium Nitride (GaN) devices for power semiconductors, electric vehicles, electric vehicle charging infrastructure, solar and wind power, silicon photonics for data center infrastructure and worldwide 5G infrastructure, 2D/3D sensors for consumer electronics and automotive applications, the data storage and memory and artificial intelligence markets.
MARKETS The Company’s semiconductor test and reliability qualification solutions address multiple test and burn-in markets including Artificial Intelligence devices for Large Language Modules (“LLMs”) and Inference, Silicon Carbide (“SiC”) and Gallium Nitride (“GaN”) devices for power semiconductors, electric vehicles, electric vehicle charging infrastructure, solar and wind power, silicon photonics for data center infrastructure and worldwide 5G infrastructure, 2D/3D sensors for consumer electronics and automotive applications, and the data storage and memory markets. 4 Table of Contents Artificial Intelligence The Artificial Intelligence and Inference processor market is experiencing a significant surge, driven by the increasing demand for machine learning and AI applications.
RESEARCH AND PRODUCT DEVELOPMENT The Company historically has devoted a significant portion of its financial resources to research and development programs and expects to continue to allocate significant resources to these efforts. The Company’s research and development expenses were $8.7 million, $7.1 million, $5.8 million during fiscal 2024, 2023, and 2022, respectively.
RESEARCH AND PRODUCT DEVELOPMENT The Company historically has devoted a significant portion of its financial resources to research and development programs and expects to continue to allocate significant resources to these efforts.
The FOX-CP system is a low-cost single-wafer compact test solution for logic, memory and photonic devices and the newest addition to the FOX-P product family. The FOX WaferPak Contactor contains a unique full wafer contactor capable of testing wafers up to 300mm that enables IC manufacturers to perform test, burn-in, and stabilization of full wafers on the FOX-P systems.
The FOX WaferPak Contactor contains a unique full wafer contactor capable of testing wafers up to 300mm that enables integrated circuits (“ICs”), manufacturers to perform test, burn-in, and stabilization of full wafers on the FOX-P systems.
The SEC maintains an Internet site, www.sec.gov, that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. In addition, information regarding the Company’s code of conduct and ethics and the charters of its Audit, Compensation and Nominating and Governance Committees, are available free of charge on the Company’s website listed above.
In addition, information regarding the Company’s code of conduct and ethics and the charters of its Audit, Compensation and Nominating and Governance Committees, are available free of charge on the Company’s website listed above. 11 Table of Contents
The Company’s proprietary software is copyrighted and licensed to the Company’s customers. As of May 31, 2024, the Company held more than 110 active patents in the United States, Singapore, China, Japan, Korea, and other countries, with expiration date ranges from 2024 to 2041, and had several additional United States patent applications and foreign patent applications pending.
As of May 30, 2025, the Company held 131 active patents in the United States, Singapore, China, Japan, Korea, and other countries, with expiration date ranges from 2025 to 2045, and had several additional United States patent applications and foreign patent applications pending. 9 Table of Contents The Company’s ability to compete successfully is dependent in part upon its ability to protect its proprietary technology and information.
All employees and Board members sign a Code of Conduct and Ethics Policy, and Insider Trading Policy upon hire. All employees are provided with the employee handbook which addresses Sexual Harassment, Confidentiality, and Electronic Use Policy among others. Each of the Company’s directors and officers completes a Director and Officer Questionnaire to identify conflicts of interest or areas of concern.
This includes seeking out individuals with a variety of perspectives informed by personal and professional experiences. All employees and Board members sign a Code of Conduct and Ethics Policy, and Insider Trading Policy upon hire. All employees are provided with the employee handbook which addresses Sexual Harassment, Confidentiality, and Electronic Use Policy among others.
The Company promotes employee engagement through corporate events or activities on a regular basis. The Company provides health care coverage for all RFT employees, life insurance, continuing education assistance, and reimbursement of U.S. employee health club membership. The Company ensures compliance with International Organization for Standardization (“ISO”) certification and maintains safety training.
The Company provides health care coverage for all RFT employees, life insurance, continuing education assistance, and reimbursement of U.S. employee health club membership.
In the case of silicon photonics, the laser devices are bonded directly to a silicon-based device that has all the logic multiplexing and de-multiplexing, and other high-speed communication subsystems, all integrated into a silicon-based integrated circuit. 4 Table of Contents Data Storage and Memory The Company also sees new developments in the data storage and memory markets as new opportunities for its systems where these end markets and customers require devices to have extremely high levels of quality and long-term reliability.
In the case of silicon photonics, the laser devices are bonded directly to a silicon-based device that has all the logic multiplexing and de-multiplexing, and other high-speed communication subsystems, all integrated into a silicon-based integrated circuit.
These processes work to ensure the reliability and longevity of AI chips, thereby helping to contribute to the overall growth and success of the AI industry. Mobile 2D and 3D Sensors Sensors used in mobile devices such as smartphones, tablets, wearables such as watches and fitness bands, and audio devices have become pervasive.
These processes work to ensure the reliability and longevity of AI chips, thereby helping to contribute to the overall growth and success of the AI industry.
The first set of tests is typically performed by semiconductor device manufacturers before the processed semiconductor wafer is cut into individual die, in order to avoid the cost of packaging defective die. This “wafer probe” testing can be performed on one or many die at a time, including testing the entire wafer at once.
Semiconductor manufacturers rely on testing and reliability screening to identify and eliminate defects that occur during the manufacturing process. Testing and reliability screenings involve multiple steps. The first set of tests is typically performed by semiconductor device manufacturers before the processed semiconductor wafer is cut into individual die, in order to avoid the cost of packaging defective die.
The Company also provides a 401(k) plan, and a non-contributory Employee Stock Ownership plan, for U.S. employees. 9 Table of Contents The Company provides recurring training in compliance with State of California regulations including sexual harassment, prevention of violence in the workplace, and Diversity, Equality, and Inclusion (“DEI”) training.
The Company also provides a 401(k) plan for U.S. employees, which includes an employer discretionary matching contribution to eligible compensation. The Company provides recurring training in compliance with State of California regulations including sexual harassment, prevention of violence in the workplace, and safety training. The Company promotes employee engagement through corporate events or activities on a regular basis.
The Company also maintains Audit, Compensation and Nominating and Governance Committees to provide corporate oversight.
Each of the Company’s directors and officers completes a Director and Officer Questionnaire to identify conflicts of interest or areas of concern. The Company also maintains Audit, Compensation and Nominating and Governance Committees to provide corporate oversight.
As of May 31, 2024, there were no pending claims against the Company regarding infringement of any patents or other intellectual property rights of others. However, the Company may, from time to time, receive communications from third parties asserting intellectual property claims against the Company.
For a description of the infringement proceedings in China seeking to protect two of the Company’s patents, see Note 9, “Commitments and Contingencies” in the Notes to Consolidated Financial Statements. As of May 30, 2025, there were no pending claims against the Company regarding infringement of any patents or other intellectual property rights of others.
As the Company pursues future Board recruitment efforts, the Nominating Committee will continue to seek candidates who can contribute to the diversity of views and perspectives of the Board. This includes seeking out individuals of diverse ethnicities, a balance in terms of gender, and individuals with diverse perspectives informed by other personal and professional experiences.
The Company ensures compliance with International Organization for Standardization (“ISO”) certification and maintains safety training. 10 Table of Contents Governance As the Company pursues future Board recruitment efforts, the Nominating Committee will continue to seek candidates who can contribute a wide range of views and perspectives to the Board.
The Company sees NAND Flash market as an opportunity for our fully automated systems and WaferPaks with long term potential to also move into DRAM wafer level test and burn-in. Artificial intelligence The artificial intelligence (AI) processor market is experiencing a significant surge, driven by the increasing demand for machine learning and AI applications.
The Company sees NAND Flash market as an opportunity for our fully automated systems and WaferPaks with long term potential to also move into Dynamic Random Access Memory (“DRAM”) wafer level test and burn-in. 5 Table of Contents Mobile 2D and 3D Sensors Sensors used in mobile devices such as smartphones, tablets, wearables such as watches and fitness bands, and audio devices have become pervasive.
The Company conducts ongoing research and development to design new products and to support and enhance existing product lines.
For information regarding our research and development expenses during the last three fiscal years, see Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Annual Report on Form 10-K. The Company conducts ongoing research and development to design new products and to support and enhance existing product lines.
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Semiconductor manufacturers rely on testing and reliability screening to identify and eliminate defects that occur during the manufacturing process. 3 Table of Contents Testing and reliability screening involve multiple steps.
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The FOX-CP system is a low-cost single-wafer compact test solution for logic, memory and photonic devices and the newest addition to the FOX-P product family.
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The FOX-NP is a low-cost entry-level system to provide a configuration and price point for companies to initiate a new product introduction and production qualification, enabling an easier transition to the FOX-XP system for high volume production test.
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(“Incal”), our new line of high-power packaged part reliability/burn-in test solutions enables Aehr the unique ability to deliver wafer level test and burn-in and package part burn-in for AI accelerators, GPUs, and high-performance computing (“HPC”) processors.
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The Advanced Burn-in and Test System, or ABTS, was introduced in fiscal 2008. Several updates to the ABTS system have been made since its introduction, including the ABTS-P system released in 2012.
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The combination positions us well within the rapidly growing AI market as a turn-key provider of reliability and testing that span from engineering to high volume production. In combination with Incal’s Sonoma, Tahoe and Echo package part burn-in systems, we provide a full range of solutions for semiconductor devices.
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The ABTS family of products is based on a hardware and software architecture that is intended to address not only today’s devices, but also future devices for many years to come. The ABTS system can test and burn-in both high-power logic and low-power ICs.
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This “wafer probe” testing can be performed on one or many die at a time, including testing the entire wafer at once.
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It can be configured to provide individual device temperature control for devices up to 70W or more and with up to 320 I/O channels. The ABTS system is nearing the end of its lifecycle and limited shipments are expected in the future.
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Data Storage and Memory The Company also sees new developments in the data storage and memory markets as new opportunities for its systems where these end markets and customers require devices to have extremely high levels of quality and long-term reliability. One of the market opportunities for wafer level burn-in is semiconductors used in hard disk drives for data storage.
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Governance The Company’s Board satisfies the diversity objectives of Nasdaq Rule 5605(1)(2) for Smaller Reporting Companies with two directors who identify as female, representing 33% of the total six Board members. The Board members also include individuals with Native American origin and multi-ethnicity.
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Implementing this approach along with our proprietary full wafer contactors and device interface carriers provides our customers with the ability to configure a system for engineering characterization and reliability qualification and high-volume production applications.
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The FOX-XP platform has been extended for burn-in and test of small multi-die modules by using DiePak Carriers.
Added
For high-power applications, devices under test are placed on BIMs which are loaded into our power burn-in systems. Pin electronics and power supplies are dedicated to each individual device under test (DUT) and all resources are near the DUT to optimize signal integrity and accuracy. The temperature is controlled locally at DUT level and thermal control is liquid cooled.
Added
In connection with the acquisition of Incal, our product portfolio further expanded to include packaged parts burn-in solutions for the full range of power and complexity of integrated circuits. Incal’s product lines feature the Sonoma series for ultra-high-power burn-in testing, the Tahoe series for medium-power reliability burn-in, and the Echo series for low-power and high parallelism testing.
Added
The Sonoma line, with its ultra-high-power capabilities, is specifically designed to address the reliability and burn-in needs of the burgeoning demand for AI accelerators, GPUs, HPC processors, and devices that can reach levels of power as high as 2000 watts. The Sonoma is available in its standard configuration, which supports up to 88 devices with independent test resources per chamber.
Added
The Tahoe and Echo lines for medium-power and low-power burn-in solutions, respectively, target logic, SoC, and mixed-signal devices employed in mobile communications, mobility, medical, military, aerospace, and data center applications. These systems are installed globally at independent test and burn-in labs, as well as semiconductor manufacturers for high volume production.
Added
The Company’s proprietary software is copyrighted and licensed to the Company’s customers.
Added
The SEC maintains an Internet site, www.sec.gov, that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIt is possible that the businesses we have acquired may perform worse than expected or prove to be more difficult to integrate and manage than anticipated. 14 Table of Contents Operational and Other Risks Supply chain issues, including a shortage of critical components or contract manufacturing capacity, could result in a delay in fulfillment of customer orders, or an increase in costs, resulting in an adverse impact on our business and operating results.
Biggest changeSupply chain issues, including a shortage of critical components or contract manufacturing capacity, could result in a delay in fulfillment of customer orders, or an increase in costs, resulting in an adverse impact on our business and operating results. Our sales growth depends on our ability to obtain timely deliveries of parts from our suppliers and contract manufacturers.
We provide sales and service globally with resources in North America, Taiwan, Germany, South Korea, and a service organization in the Philippines, as well as direct support through third party agreements in China. We expect that sales of products for delivery outside of the United States will continue to represent a substantial portion of our future sales.
We provide sales and service globally with resources in North America, Taiwan, Germany, Japan, South Korea, and a service organization in the Philippines, as well as direct support through third party agreements in China. We expect that sales of products for delivery outside of the United States will continue to represent a substantial portion of our future sales.
Such an outcome could cause customers, suppliers or investors to view us as less stable, or could cause us to fail to meet financial analysts’ revenue or earnings estimates, any of which could have an adverse impact on our stock price. 13 Table of Contents In addition, our management is constantly striving to balance the requirements and demands of our customers with the availability of resources, the need to manage our operating model and other factors.
Such an outcome could cause customers, suppliers or investors to view us as less stable, or could cause us to fail to meet financial analysts’ revenue or earnings estimates, any of which could have an adverse impact on our stock price. 14 Table of Contents In addition, our management is constantly striving to balance the requirements and demands of our customers with the availability of resources, the need to manage our operating model and other factors.
Global economic uncertainty and financial market volatility caused by political instability, changes in international trade relationships and conflicts, such as the conflict between Russia and Ukraine and the political climate in China and Taiwan, the Israel-Hamas war, and escalating tensions in the Red Sea in connection with the attacks to disrupt shipments may result in limited access to these markets for sales and material purchases.
Global economic uncertainty and financial market volatility caused by political instability, changes in international trade relationships and conflicts, such as the conflict between Russia and Ukraine and the political climate in China and Taiwan, the Israel-Hamas war, the Israel-Iran conflict and the tensions in the Red Sea in connection with the attacks to disrupt shipments may result in limited access to these markets for sales and material purchases.
A delay or reduction in shipments near the end of a particular quarter, due, for example, to unanticipated shipment rescheduling, cancellations or deferrals by customers, customer credit issues, unexpected manufacturing difficulties experienced by us or delays in deliveries by suppliers, could cause net sales in a particular quarter to fall significantly. 11 Table of Contents The semiconductor equipment industry is intensely competitive.
A delay or reduction in shipments near the end of a particular quarter, due, for example, to unanticipated shipment rescheduling, cancellations or deferrals by customers, customer credit issues, unexpected manufacturing difficulties experienced by us or delays in deliveries by suppliers, could cause net sales in a particular quarter to fall significantly. 12 Table of Contents The semiconductor equipment industry is intensely competitive.
In each of the markets we serve, we face competition from established competitors and potential new entrants, many of which have greater financial, engineering, manufacturing and marketing resources than us. Our FOX wafer-level and singulated die/module test and burn in systems face competition from larger systems manufacturers that have significant technological know-how and manufacturing capability.
In each of the markets we serve, we face competition from established competitors and potential new entrants, many of which have greater financial, engineering, manufacturing and marketing resources than us. Our FOX wafer-level and singulated die/module test and burn in systems and packaged part burn-in systems face competition from larger systems manufacturers that have significant technological know-how and manufacturing capability.
Any such decisions may impact our ability to recognize revenue, including the fiscal period during which such revenue may be recognized, with respect to such products, which could have a material adverse effect on our business, results of operations or stock price. Over the past year, the Company has increased inventory levels significantly.
Any such decisions may impact our ability to recognize revenue, including the fiscal period during which such revenue may be recognized, with respect to such products, which could have a material adverse effect on our business, results of operations or stock price. Over the past few years, the Company has increased inventory levels significantly.
Our industry is subject to rapid technological change and our ability to remain competitive depends on our ability to introduce new products in a timely manner. The semiconductor equipment industry is subject to rapid technological change and new product introductions and enhancements.
Our industry is subject to rapid technological change, and our ability to remain competitive and enter new markets depends on our ability to introduce new products in a timely manner. The semiconductor equipment industry is subject to rapid technological change and new product introductions and enhancements.
Any failure to control the use, disposal or storage of or adequately restrict the discharge of, hazardous or toxic substances could subject us to significant liabilities. The failure to successfully implement enterprise resource planning and other information systems changes could adversely impact our business and operating results.
Any failure to control the use, disposal or storage of or adequately restrict the discharge of, hazardous or toxic substances could subject us to significant liabilities. 18 Table of Contents The failure to successfully implement enterprise resource planning and other information systems changes could adversely impact our business and operating results.
The semiconductor manufacturing industry is highly concentrated, with a relatively small number of large semiconductor manufacturers and contract test and assembly companies accounting for a substantial portion of the purchases of semiconductor equipment. Sales to our five largest customers accounted for approximately 93%, 97%, and 98%, of our net sales in fiscal 2024, 2023, and 2022, respectively.
The semiconductor manufacturing industry is highly concentrated, with a relatively small number of large semiconductor manufacturers and contract test and assembly companies accounting for a substantial portion of the purchases of semiconductor equipment. Sales to our five largest customers accounted for approximately 77%, 93%, and 97% of our net sales in fiscal 2025, 2024, and 2023, respectively.
Our ability to remain competitive depends in part upon our ability to develop new products and to introduce them at competitive prices and on a timely and cost-effective basis.
Our ability to remain competitive and expand into new markets depends in part upon our ability to develop new products and to introduce them at competitive prices and on a timely and cost-effective basis.
As is common with new complex products incorporating leading-edge technologies, we may encounter reliability, design and manufacturing issues as we begin volume production and initial installations of FOX systems at customer sites. The failure of the FOX system to achieve increased market acceptance would have a material adverse effect on our future operating results, long-term prospects and our stock price.
As is common with new complex products incorporating leading-edge technologies, we may encounter reliability, design and manufacturing issues as we begin volume production and initial installations of FOX and Sonoma systems at customer sites. The failure of the FOX or Sonoma system to achieve increased market acceptance would have a material adverse effect on our future operating results.
Approximately 95%, 86%, and 90% of our net sales in fiscal 2024, 2023, and 2022, respectively, were attributable to sales to customers for delivery outside of the United States.
Approximately 70%, 95%, and 86% of our net sales in fiscal 2025, 2024, and 2023, respectively, were attributable to sales to customers for delivery outside of the United States.
We rely on increasing market acceptance for our FOX system, and we may not be successful in attracting new customers or maintaining our existing customers. A principal element of our business strategy is to increase our presence in the test equipment market through system sales in our FOX wafer-level and singulated die/module test and burn-in product family.
We rely on increasing market acceptance for our FOX and Sonoma systems, and we may not be successful in attracting new customers or maintaining our existing customers. A principal element of our business strategy is to increase our presence in the test equipment market through system sales in our FOX wafer-level burn-in product family and Sonoma packaged parts burn-in solutions.
In addition, in recent years the stock market in general, and the market for small capitalization and high technology stocks in particular, have experienced extreme price fluctuations which have often been unrelated to the operating performance of the affected companies.
In addition, in recent years the stock market in general, and the market for small capitalization and high technology stocks in particular, have experienced extreme price fluctuations which have often been unrelated to the operating performance of the affected companies. Such fluctuations could adversely affect the market price of our common stock.
Risks Related to Ownership of our Common Stock Our stock price is volatile. Historically, our common stock has experienced substantial price volatility. For example, during the two-year period ended May 31, 2024, the price of our common stock has ranged from $6.71 to $54.10.
Risks Related to Ownership of our Common Stock Our stock price is volatile. Historically, our common stock has experienced substantial price volatility. For example, during the two-year period ended May 30, 2025, the price of our common stock has ranged from $6.27 to $54.10.
While we believe we have complied with all applicable environmental laws, our failure to do so could adversely affect our business as a result of having to pay substantial amounts in damages or fees.
We cannot assure that we have complied with all applicable environmental laws, and our failure to do so could adversely affect our business as a result of having to pay substantial amounts in damages or fees.
We may not be able to successfully integrate and manage the acquired business. Our success depends on our ability to continually enhance and broaden our product offerings in response to customer-anticipated process changes, strategic opportunities for growth, and industry technology trends. We may choose to acquire new and complementary businesses, products, technologies and/or services instead of developing them ourselves.
Our success depends on our ability to continually enhance and broaden our product offerings in response to customer-anticipated process changes, strategic opportunities for growth, and industry technology trends. We may choose to acquire new and complementary businesses, products, technologies and/or services instead of developing them ourselves.
This cyclicality may have a material adverse impact on our business performance and financial condition. 16 Table of Contents We may be subject to litigation relating to intellectual property infringement which would be time-consuming, expensive and a distraction from our business.
This cyclicality may have a material adverse impact on our business performance and financial condition. We have been and may in the future be subject to litigation relating to intellectual property infringement which would be time-consuming, expensive and a distraction from our business.
In addition, we are subject to other risks associated with doing business internationally, including longer receivable collection periods and greater difficulty in accounts receivable collection, the burden of complying with a variety of foreign laws, difficulty in staffing and managing global operations, risks of civil disturbance or other events which may limit or disrupt markets, international exchange restrictions, changing political conditions and monetary policies of foreign governments.
In addition, we are subject to other risks associated with doing business internationally, including longer receivable collection periods and greater difficulty in accounts receivable collection, the burden of complying with a variety of foreign laws, difficulty in staffing and managing global operations, risks of civil disturbance or other events which may limit or disrupt markets, international exchange restrictions, changing political conditions and monetary policies of foreign governments. 16 Table of Contents Our net sales for fiscal 2025 were primarily denominated in U.S.
These costs could be substantial and could have an adverse impact upon our business, financial condition and operating results. In addition, our reputation with our customers could be damaged as a result of such product defects, which could reduce demand for our products and negatively impact our business.
These costs could be substantial and could have an adverse impact upon our business, financial condition and operating results. In addition, our reputation with our customers could be damaged as a result of such product defects, which could reduce demand for our products and negatively impact our business. We may not be able to successfully integrate and manage acquired businesses.
If we fail to maintain effective internal control over financial reporting in the future, the accuracy and timing of our financial reporting may be adversely affected. We are required to comply with Section 404 of the Sarbanes-Oxley Act of 2002.
Changes in management could disrupt our operations and adversely affect our operating results. 19 Table of Contents If we fail to maintain effective internal control over financial reporting in the future, the accuracy and timing of our financial reporting may be adversely affected. We are required to comply with Section 404 of the Sarbanes-Oxley Act of 2002.
During fiscal 2024, two customers accounted for approximately 67% and 17% of the Company’s net sales. During fiscal 2023, two customers accounted for approximately 79% and 10% of our net sales. During fiscal 2022, one customer accounted for approximately 82% of our net sales.
During fiscal 2025, two customers accounted for approximately 39% and 15% of the Company’s net sales. During fiscal 2024, two customers accounted for approximately 67% and 17% of the Company’s net sales. During fiscal 2023, two customers accounted for approximately 79% and 10% of our net sales.
In addition, there can be no assurance that any of the patents issued to us will not be challenged, invalidated or circumvented or that the rights granted thereunder will provide competitive advantages to us. There are no pending claims against us regarding infringement of any patents or other intellectual property rights of others.
In addition, there can be no assurance that any of the patents issued to us will not be challenged, invalidated or circumvented or that the rights granted thereunder will provide competitive advantages to us.
Competition for such personnel in the semiconductor equipment industry is intense, and there can be no assurance that we will be successful in attracting, retaining or motivating such personnel. Changes in management could disrupt our operations and adversely affect our operating results.
Competition for such personnel in the semiconductor equipment industry is intense, and there can be no assurance that we will be successful in attracting, retaining or motivating such personnel.
Our sales growth depends on our ability to obtain timely deliveries of parts from our suppliers and contract manufacturers. A market shortage of semiconductor and other component supply could affect lead times, the cost of supply, and our ability to meet customer demand for our products.
A market shortage of semiconductor and other component supply could affect lead times, the cost of supply, and our ability to meet customer demand for our products.
We have experienced, from time to time, significant delays in the introduction of, and technical and manufacturing difficulties with, certain of our products and may experience delays and technical and manufacturing difficulties in future introductions or volume production of our new products.
Because of the complexity of our products, significant delays can occur between a product’s introduction and the commencement of the volume production of such product. We have experienced, from time to time, significant delays and technical and manufacturing difficulties with certain product introductions and may experience similar challenges in the future.
Initial purchases are expected to be limited to systems used for these qualifications and for engineering studies. Market acceptance of the FOX system also may be affected by a reluctance of IC manufacturers to rely on relatively small suppliers such as us.
Market acceptance of the FOX and Sonoma systems also may be affected by the reluctance of IC manufacturers to rely on relatively small suppliers such as us.
The process of qualifying subcontractors and suppliers could be lengthy, and no assurance can be given that any additional sources would be available to us on a timely basis. Any delay, interruption or termination of a supplier relationship could adversely affect our ability to deliver products, which would harm our operating results.
The process of qualifying subcontractors and suppliers could be lengthy, and no assurance can be given that any additional sources would be available to us on a timely basis.
Any delay in meeting customer specifications could have a material adverse effect on our operating results. A substantial portion of net sales typically are realized near the end of each quarter.
For non-standard products where we have not effectively demonstrated the ability to meet specifications in the customer environment, we defer revenue until we have met such customer specifications. Any delay in meeting customer specifications could have a material adverse effect on our operating results. A substantial portion of net sales typically are realized near the end of each quarter.
Market acceptance of the FOX system is subject to a number of risks. Before a customer incorporates the FOX system into a production line, lengthy qualification and correlation tests must be performed. We anticipate that potential customers may be reluctant to change their procedures in order to transfer burn-in and test functions to the FOX system.
Market acceptance of the FOX and Sonoma systems is subject to a number of risks. Before a customer incorporates the FOX or Sonoma system into a production line, lengthy qualification and correlation tests must be performed.
Our net sales for fiscal 2024 were primarily denominated in U.S. Dollars. However, because a substantial portion of our net sales is from sales of products for delivery outside the United States, an increase in the value of the U.S.
Dollars. However, because a substantial portion of our net sales is from sales of products for delivery outside the United States, an increase in the value of the U.S. Dollar relative to foreign currencies would increase the cost of our products compared to products sold by local companies in such markets.
From time to time, cancellations and rescheduling of customer orders have occurred, and delays by our suppliers in providing components or subassemblies to us have caused delays in our shipments of our own products. For example, in the second and third quarters of 2024, we experienced significant delays in expected customer orders and an increased frequency of customers rescheduling.
From time to time, cancellations and rescheduling of customer orders have occurred, and delays by our suppliers in providing components or subassemblies to us have caused delays in our shipments of our own products. For example, in the second half of fiscal 2025, global tariff announcements created uncertainty in the global economy that impacted customer demand and orders.
The failure to obtain timely delivery of supplies, or a significant increase in costs, could result in a material impact in our business and results from operations. We purchase materials from suppliers worldwide, which subjects the Company to increased risk. We purchase components, sub-assemblies, and chambers from suppliers outside the United States.
The failure to obtain timely delivery of supplies, or a significant increase in costs, could result in a material impact in our business and results from operations. We sell our products and services worldwide, and our business is subject to risks inherent in conducting business activities in geographic regions outside of the United States.
Dollar exchange rate during the lengthy period from the date a purchase order is received until payment is made. This exchange rate risk is partially offset to the extent our foreign operations incur expenses in the local currency. To date, we have not invested in any instruments designed to hedge currency risks.
This exchange rate risk is partially offset to the extent our foreign operations incur expenses in the local currency. To date, we have not invested in any instruments designed to hedge currency risks. Our operating results could be adversely affected by fluctuations in the value of the U.S. Dollar relative to other currencies.
Changes in trade relations, currency fluctuations, or protectionist policies could have a material adverse effect on our business, financial condition or results of operations. We sell our products and services worldwide, and our business is subject to risks inherent in conducting business activities in geographic regions outside of the United States.
Changes in trade relations, tariff structures, currency fluctuations, or protectionist policies could have a material adverse effect on our business, financial condition or results of operations.
Dollar relative to foreign currencies would increase the cost of our products compared to products sold by local companies in such markets. In addition, since the price is determined at the time a purchase order is accepted, we are exposed to the risks of fluctuations in the U.S.
In addition, since the price is determined at the time a purchase order is accepted, we are exposed to the risks of fluctuations in the U.S. Dollar exchange rate during the lengthy period from the date a purchase order is received until payment is made.
Because new product development commitments must be made well in advance of sales, new product decisions must anticipate both future demand and the technology that will be available to satisfy that demand. Furthermore, introductions of new and complex products typically involve a period in which design, engineering and reliability issues are identified and addressed by our suppliers and by us.
Because new product development commitments must be made well in advance of sales, new product decisions must anticipate both future demand and future technology advancements, which are inherently uncertain.
Our suppliers manufacture components, tooling, and provide engineering services. During this process, our suppliers are allowed access to our intellectual property.
Any delay, interruption or termination of a supplier relationship could adversely affect our ability to deliver products, which would harm our operating results. 17 Table of Contents Our suppliers manufacture components, tooling, and provide engineering services. During this process, our suppliers are allowed access to our intellectual property.
Increases in tariffs, additional taxes, or trade barriers may result in an increase in our manufacturing costs. A decrease in the value of the U.S. Dollar relative to foreign currencies would increase the cost of our materials.
Fluctuations in tariff and trade policies, particularly those that may change without significant notice, create instability in our supply chain and limit our ability to plan for future cost structures. A decrease in the value of the U.S. Dollar relative to foreign currencies would increase the cost of our materials.
Our operating results could be adversely affected by fluctuations in the value of the U.S. Dollar relative to other currencies. 15 Table of Contents Global unrest may impact our ability to sell our products or obtain critical materials.
Global unrest may impact our ability to sell our products or obtain critical materials.
There can be no assurance that we will not be materially adversely affected by future cancellations or rescheduling by our customers or other delays in our shipments. For non-standard products where we have not effectively demonstrated the ability to meet specifications in the customer environment, we defer revenue until we have met such customer specifications.
There can be no assurance that we will not be materially adversely affected by future cancellations or rescheduling by our customers or other delays in our shipments. In addition, a significant portion of our business is driven by demand for silicon carbide semiconductor devices, which are increasingly used in electric vehicles and related applications.
Removed
There can be no assurance that we will be successful in selecting, developing, manufacturing and marketing new products that satisfy market demand.
Added
If the growth of the electric vehicle market, or demand for silicon carbide semiconductor devices specifically, does not recover in the near future or experiences a prolonged slowdown, it could materially adversely affect our sales volumes, revenue growth, and overall operating results.
Removed
Any such failure would materially and adversely affect our business, financial condition and results of operations. 12 Table of Contents Because of the complexity of our products, significant delays can occur between a product’s introduction and the commencement of the volume production of such product.
Added
We anticipate that potential customers may be reluctant to change their procedures in order to transfer burn-in and test functions to the FOX or Sonoma system. Initial purchases are expected to be limited to systems used for these qualifications and for engineering studies.
Removed
Such fluctuations could adversely affect the market price of our common stock. 17 Table of Contents Increased scrutiny and changing expectations from stakeholders with respect to the Company’s ESG practices may result in additional costs or risks. Companies across many industries are facing increasing scrutiny related to their ESG practices.
Added
We invest significant resources in research and development; however, there is no assurance that these efforts will result in commercially viable products or technologies that satisfy future customer needs.
Removed
Investor advocacy groups, certain institutional investors, investment funds and other influential investors are also increasingly focused on ESG practices and in recent years have placed increasing importance on the non-financial impacts of their investments.
Added
Failure to innovate, delays in product development, or unsuccessful product launches could hinder our ability to enter new markets, negatively impacting our competitive position, revenue growth, and overall financial performance. 13 Table of Contents Furthermore, introductions of new and complex products typically involve a period in which design, engineering and reliability issues are identified and addressed by our suppliers and by us.
Removed
If our ESG practices do not meet investor or other industry stakeholder expectations, which continue to evolve, we may incur additional costs and our brand, ability to attract and retain qualified employees and business may be harmed.
Added
It is possible that the businesses we have acquired may perform worse than expected or prove to be more difficult to integrate and manage than anticipated. 15 Table of Contents We are exposed to risks related to the use of artificial intelligence by us and our competitors. We are increasingly incorporating AI capabilities into the development of our technologies.
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AI technology is complex and rapidly evolving, and may subject us to significant competitive, legal, regulatory and other risks. The implementation of AI can be costly and there is no guarantee that our use of AI will enhance our technologies, benefit our business operations or produce products and services that are preferred by our customers.
Added
Our competitors may be more successful in their AI strategy and develop superior products and services with the aid of AI. Additionally, AI algorithms or training methodologies may be flawed, and datasets may contain irrelevant, insufficient or biased information, which can cause errors in outputs. This may give rise to legal liability, damage our reputation and materially harm our business.
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We may not be able to control the development, maintenance or behavior of third-party AI solutions or how their providers obtain or otherwise process data, and these AI solutions may be used inappropriately or irresponsibly.
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There is no guarantee that any contractual or other protections we seek to implement will be sufficient to protect us from risks presented by these solutions.
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Additionally, the use of AI in the development of our products and services, and our customers’ use of AI in relation to our products and services could also cause loss of intellectual property (“IP”), as well as subject us to risks, including third-party claims, related to IP infringement or misappropriation, data privacy and cybersecurity.
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Additionally, concerns over the use of AI for purposes contrary to public interests could impair public acceptance of AI and affect demand for our products and services. Furthermore, the United States and other countries may adopt laws and regulations related to AI.
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Such new laws and regulations may be interpreted in ways that conflict with or otherwise impact our approach to AI and use of AI solutions, could cause us to incur greater compliance costs and may limit the use of AI in the development of our products and services.
Added
Any failure or perceived failure by us to comply with such regulatory requirements could subject us to legal liabilities, damage our reputation, or otherwise have a material and adverse impact on our business.
Added
Operational and Other Risks We purchase materials from suppliers worldwide, which subjects the Company to increased risk; t ariff uncertainty, trade restrictions, and global supply chain risks could adversely affect our business. We purchase components, sub-assemblies, and chambers from suppliers outside the United States.
Added
Increases in tariffs, uncertainty surrounding current and future tariff regulations, additional taxes, rising inflation in the supply chain or new trade barriers may result in an increase in our manufacturing costs.
Added
Geopolitical tensions and changes in government trade policies could adversely affect our operations in China and our business, results of operations and financial condition.
Added
Heightened geopolitical tensions between the United States and China could create barriers to selling our products and services to customers in China as there is currently significant uncertainty about the future relationship between the United States and China with respect to trade policies, treaties, tariffs and taxes.
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These barriers include increased tariffs and other trade barriers, regulatory restrictions, or limitations on technology transfer.
Added
These tariffs, and the related geopolitical uncertainty between the United States and China, may cause decreased demand for our products or increase cost of components used in our products, which could have a material adverse effect on our business, results of operations and financial condition.
Added
Additionally, any such developments, including changes in trade policies, export and import restrictions, or diplomatic relations under the current or future administrations, could impact economic activity and lead to a general contraction of customer demand and could adversely affect our ability to compete in the Chinese market, impairing our growth prospects in China.
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For a description of the infringement proceedings in China seeking to protect two of our patents, see Note 9, “Commitments and Contingencies” in the Notes to Consolidated Financial Statements. There are no pending claims against us regarding infringement of any patents or other intellectual property rights of others.
Added
We are exposed to risks associated with shareholder class action lawsuits, which are expensive and could divert management attention. On December 3, 2024, a shareholder class action lawsuit, captioned Lucid Alternative Fund, LP v.
Added
Aehr Test Systems, Inc. was filed in the United States District Court for the Northern District of California, alleging that we and certain of our executives made false and misleading statements regarding our earnings guidance and other financial projections for 2024.
Added
Additionally, two shareholder derivative complaints were filed, alleging breaches of fiduciary duties and other misconduct by certain directors and officers of the Company. On May 16, 2025, the court-appointed lead plaintiff voluntarily dismissed the class action lawsuit, and on June 9, 2025, the court dismissed the derivative action without prejudice.
Added
While these lawsuits have been resolved without adverse judgments, there is no assurance that we will not face similar litigation in the future. Defending against shareholder class actions or derivative lawsuits can be costly, disruptive, and time-consuming, and may divert the attention of our management and Board of Directors.
Added
Such proceedings, regardless of their outcome, could also harm our reputation, impact investor confidence, and result in increased scrutiny of our public disclosures, internal controls, and corporate governance practices.
Added
If we are subject to future litigation and do not prevail, we could be required to pay substantial damages or incur other significant costs, which could materially adversely affect our financial condition, results of operations, and cash flows.
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Compliance with federal securities laws, rules and regulations, as well as NASDAQ requirements, has become increasingly complex, and the significant attention and expense we must devote to those areas may have an adverse impact on our business.
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Federal securities laws, rules and regulations, as well as NASDAQ rules and regulations, require companies to maintain extensive corporate governance measures, impose comprehensive reporting and disclosure requirements, set strict independence and financial expertise standards for audit and other committee members and impose civil and criminal penalties for companies and their chief executive officers, chief financial officers and directors for securities law violations.
Added
It is anticipated that the rules and regulations applicable to public companies have increased and will continue to increase substantially the legal and financial compliance costs incurred by us and make some activities more time-consuming and costly.
Added
If these requirements divert the attention of our management and personnel from other business concerns, they could have an adverse effect on our business.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur Security Awareness Program includes training that reinforces our information technology risk and security management policies, standards and practices, as well as the expectation that employees comply with these policies. The Security Awareness Program engages personnel through training on how to identify potential cybersecurity risks and protect the Company’s resources and information.
Biggest changeThe Security Awareness Program engages personnel through training on how to identify potential cybersecurity risks and protect the Company’s resources and information. This training is mandatory for all employees on a periodic basis, and it is supplemented by Company-wide testing initiatives.
We face risks from cybersecurity threats that, if realized, are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition.
While we have not, as of the date of this Report, experienced any material cybersecurity incidents that materially affected us, including our operations, business strategy, results of operations, or financial condition, we face risks from cybersecurity threats that, if realized, are reasonably likely to materially affect our business, financial condition, results of operations.
This training is mandatory for all employees on a periodic basis, and it is supplemented by Company-wide testing initiatives. Our processes also address cybersecurity threat risks associated with our use of third-party service providers, including our suppliers or who have access to our systems. In addition, cybersecurity considerations affect the selection and oversight of our third-party service providers.
Our processes also address cybersecurity threat risks associated with our use of third-party service providers, including our suppliers or who have access to our systems. In addition, cybersecurity considerations affect the selection and oversight of our third-party service providers.
Following these risk assessments, we re-design, implement, and maintain reasonable safeguards to minimize identified risks; reasonably address any identified gaps in existing safeguards; and regularly monitor the effectiveness of our safeguards.
Following these risk assessments, we re-design, implement, and maintain reasonable safeguards to minimize identified risks; reasonably address any identified gaps in existing safeguards; and regularly monitor the effectiveness of our safeguards. 20 Table of Contents Our Security Awareness Program includes training that reinforces our information technology risk and security management policies, standards and practices, as well as the expectation that employees comply with these policies.
CSF is a set of voluntary guidelines that help organizations assess and improve their cybersecurity posture by implementing processes for identifying and mitigating risk, and detecting, responding to and recovering from cyberattacks. 18 Table of Contents We conduct periodic risk assessments to identify cybersecurity threats, as well as assessments in the event of a material change in our business practices that may affect information systems that are vulnerable to such cybersecurity threats.
CSF is a set of voluntary guidelines that help organizations assess and improve their cybersecurity posture by implementing processes for identifying and mitigating risk, and detecting, responding to and recovering from cyberattacks.
Removed
We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected us, including our operations, business strategy, results of operations, or financial condition.
Added
We conduct periodic risk assessments to identify cybersecurity threats, as well as assessments in the event of a material change in our business practices that may affect information systems that are vulnerable to such cybersecurity threats.
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He consults with experts in enterprise security and risk management to ensure our intellectual property and devices are protected. While we have not experienced a material information security (cybersecurity) incident, we maintain an information security (cybersecurity) risk insurance policy as a matter of good practice.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe Company periodically evaluates its global operations and facilities to bring its capacity in line with demand and to provide cost-effective services for its customers. In prior years, through this process, the Company has moved from certain facilities that exceeded the capacity required to satisfy its needs.
Biggest changeIn prior years, through this process, the Company has moved from certain facilities that exceeded the capacity required to satisfy its needs. The Company believes that its existing facilities in Fremont, California are adequate to meet its current and reasonably foreseeable requirements.
The lease, which began February 1, 1992 and expires on January 31, 2025, contains an automatic twelve months renewal, at rates to be determined, if no notice is given prior to six months from expiration. On November 18, 2020, the Company established a wholly owned subsidiary, Aehr Test Systems Philippines Inc., which has been in full operation since March 2021.
The lease, which began February 1, 1992 and contains an automatic twelve months renewal, at rates to be determined, if no notice is given prior to six months from expiration. On November 18, 2020, the Company established a wholly owned subsidiary, Aehr Test Systems Philippines Inc., which has been in full operation since March 2021.
Item 2. Properties The Company’s principal administrative and production facilities are located in Fremont, California, in a 51,289 square foot building. The Company’s lease was renewed in December 2022 and expires in September 2030 with an option to extend the lease for another five years. The Company leases a 492 square foot sales and support office in Utting, Germany.
Item 2. Properties The Company’s principal administrative and production facilities are located in Fremont, California, in a 51,289 square foot building. The Company’s lease was renewed in December 2022 and expires in September 2030 with an option to extend the lease for another five years.
The Company believes that its existing facilities in Fremont, California are adequate to meet its current and reasonably foreseeable requirements. The Company regularly evaluates its expected future facilities requirements and believes that alternate facilities would be available if needed. 19 Table of Contents Item 3. Legal Proceedings None. Item 4.
The Company regularly evaluates its expected future facilities requirements and believes that alternate facilities would be available if needed.
Removed
Mine Safety Disclosures Not Applicable 20 Table of Contents PART II
Added
In April 2025, it became reasonably certain that the Company would exercise the five-year lease extension option due to the remodeling of the Fremont office. The Company leases a 492 square foot sales and support office in Utting, Germany.
Added
Following the acquisition of Incal, the Company inherited Incal’s office in Fremont, California, which it subsequently vacated in May 2025 after relocating employees to its principal facilities in Fremont, to consolidate the Company’s California operations. The Company periodically evaluates its global operations and facilities to bring its capacity in line with demand and to provide cost-effective services for its customers.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 20 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 21 Item 6. [Reserved] 21 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 22 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 27 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 21 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 22 Item 6. [Reserved] 22 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 23 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 29 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeHigh Low Fiscal 2024: First quarter ended August 31, 2023 $ 54.10 $ 33.72 Second quarter ended November 30, 2023 53.06 21.57 Third quarter ended February 29, 2024 30.50 14.54 Fourth quarter ended May 31, 2024 18.63 10.19 Fiscal 2023: First quarter ended August 31, 2022 $ 19.43 $ 6.71 Second quarter ended November 30, 2022 27.00 13.00 Third quarter ended February 28, 2023 37.57 17.05 Fourth quarter ended May 31, 2023 40.69 23.11 At July 16, 2024, the Company had 97 holders of record of its common stock.
Biggest changeHigh Low Fiscal 2025: First quarter ended August 30, 2024 $ 21.44 $ 9.83 Second quarter ended November 29, 2024 17.41 10.64 Third quarter ended February 28, 2025 18.76 9.30 Fourth quarter ended May 30, 2025 10.45 6.27 Fiscal 2024: First quarter ended August 31, 2023 $ 54.10 $ 33.72 Second quarter ended November 30, 2023 53.06 21.57 Third quarter ended February 29, 2024 30.50 14.54 Fourth quarter ended May 31, 2024 18.63 10.19 At July 15, 2025, the Company had 131 holders of record of its common stock.
The Company did not repurchase any of its common stock in the open market during the fiscal year ended May 31, 2024 because the Company does not have a stock repurchase plan.
The Company did not repurchase any of its common stock in the open market during the fiscal year ended May 30, 2025 because the Company does not have a stock repurchase plan. On July 31, 2024, we issued an aggregate of 552,355 shares of our common stock in connection with the acquisition of Incal.
Added
The stock was issued for an aggregate fair value of $9.4 million. The foregoing transaction did not involve any underwriters, any underwriting discounts or commissions, or any public offerings.
Added
The issuance was made to accredited investors in a privately negotiated transaction not involving any public offerings or solicitations in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, and/or Rule 506 of Regulation D promulgated thereunder.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeOur first fiscal quarter in fiscal 2025 will end on August 30 and our fiscal year 2025 will end on May 30, 2025. 23 Table of Contents Discussion of Results of Operations Revenues Revenue by Category Year Ended May 31, (Dollars in thousands) 2024 2023 2022 FY 2024 vs FY 2023 FY 2023 vs FY 2022 Products $ 61,729 $ 60,717 $ 47,871 $ 1,012 1.7 % $ 12,846 26.8 % Services 4,489 4,244 2,958 245 5.8 % 1,286 43.5 % Total revenues $ 66,218 $ 64,961 $ 50,829 $ 1,257 1.9 % $ 14,132 27.8 % Products as a percentage of total revenues 93.2 % 93.5 % 94.2 % Services as a percentage of total revenues 6.8 % 6.5 % 5.8 % Revenue increased by $1.3 million in fiscal year 2024 over fiscal year 2023, primarily driven by higher sales in our contactors.
Biggest changeDiscussion of Results of Operations Revenues Year Ended May 30, May 31, May 31, (Dollars in thousands) 2025 2024 2023 FY 2025 vs FY 2024 FY 2024 vs FY 2023 Revenue $ 58,968 $ 66,218 $ 64,961 $ (7,250 ) (10.9 %) $ 1,257 1.9 % Revenue decreased by $7.3 million in fiscal year 2025 over fiscal year 2024 driven by a decrease in shipments of our systems and contactors primarily due to the continued softness in the power semiconductor demand for electric vehicles.
For fiscal year 2024, total revenues increased compared to the same period in the prior year due to an increase in international revenues as a result of more shipments to our customers in Asia and Europe, partially offset by the decline in revenue from a customer in the United states.
For fiscal year 2024, total revenues increased compared to the same period in the prior year due to an increase in international revenues as a result of more shipments to our customers in Europe and Asia, partially offset by the decline in revenue from a customer in the United States.
A significant income tax benefit in fiscal year 2024 was recognized primarily due to release of a valuation allowance of $21.9 million, as management determined that there was sufficient positive evidence to conclude that it is more likely than not that the deferred tax assets will be realized, which was partially offset by income tax expense of $1.2 million in fiscal year 2024.
A significant income tax benefit in fiscal year 2024 was recognized primarily due to the release of a valuation allowance of $21.9 million, as management determined that there was sufficient positive evidence to conclude that it is more likely than not that the deferred tax assets will be realized, which was partially offset by income tax expense of $1.2 million in fiscal year 2024.
Selling, general and administrative expenses increased by $1.5 million in fiscal year 2024 over fiscal year 2023, primarily due to higher employment-related cost of $1.3 million because of an increase in headcount, and an increase in audit and legal service fees of $0.3 million.
Selling, general and administrative expenses increased by $1.5 million in fiscal year 2024 over fiscal year 2023, primarily due to higher employment-related cost because of an increase in headcount, and an increase in audit and legal service fees.
Our revenue consists primarily of sales of FOX-P systems, WaferPak Aligners and DiePak Loaders, WaferPak Contactors, DiePak Carriers, test fixtures, upgrades and spare parts, service contracts revenues, and non-recurring engineering charges.
Our revenue consists primarily of sales of FOX-P systems, WaferPak Aligners and DiePak Loaders, WaferPak Contactors, DiePak Carriers, packaged parts burn-in systems, test fixtures, upgrades and spare parts, service contracts revenues, and non-recurring engineering charges.
In order to reverse the valuation allowance, management considered both positive and negative evidence and determined that there was sufficient positive evidence to conclude that it is more likely than not that the deferred tax assets will be realized.
In order to reverse the valuation allowance, management considers both positive and negative evidence and determines that there is sufficient positive evidence to conclude that it is more likely than not that the deferred tax assets will be realized.
Contractual Obligations As of May 31, 2024, the Company’s unconditional purchase obligations, which have a remaining term in excess of 12 months, are not material.
Contractual Obligations As of May 30, 2025, the Company’s unconditional purchase obligations, which have a remaining term in excess of 12 months, are not material.
For the fiscal years 2023 and 2022, net proceeds from the sale of our common stock under our “At-the-Market” offering program were $6.8 million and $24.0 million, respectively, compared to no such sales during fiscal year 2024.
For the fiscal years 2023, net proceeds from the sale of our common stock under our “At-the-Market” offering program were $6.8 million, compared to no such sales during fiscal years 2025 and 2024.
Increasing quality, reliability, safety, and security needs of semiconductors used across multiple applications, including electric vehicles, electric vehicle charging infrastructure, solar and wind power, computing, data and telecommunications infrastructure, and solid-state memory and storage, are driving additional test requirements, incremental capacity needs, and new opportunities for Aehr Test products and solutions.
Decarbonization, generative AI and digitalization is driving increased quality, reliability, safety, and security needs of semiconductors used across multiple applications, including electric vehicles, electric vehicle charging infrastructure, solar and wind power, computing, data and telecommunications infrastructure, and solid-state memory and storage. This trend is driving additional test requirements, incremental capacity needs, and new opportunities for Aehr Test products and solutions.
Research and Development Year Ended May 31, (Dollars in thousands) 2024 2023 2022 FY 2024 vs FY 2023 FY 2023 vs FY 2022 Research and development $ 8,719 $ 7,134 $ 5,818 $ 1,585 22.2 % $ 1,316 22.6 % As a percentage of total revenues 13.2 % 11.0 % 11.4 % Research and development expenses consist primarily of compensation and benefits for product development personnel, outside development service costs, travel expenses, facilities cost allocations, and stock-based compensation charges.
Research and Development Year Ended May 30, May 31, May 31, (Dollars in thousands) 2025 2024 2023 FY 2025 vs FY 2024 FY 2024 vs FY 2023 Research and development $ 10,463 $ 8,719 $ 7,134 $ 1,744 20.0 % $ 1,585 22.2 % As a percentage of total revenues 17.7 % 13.2 % 11.0 % Research and development expenses consist primarily of compensation and benefits for product development personnel, outside development service costs, travel expenses, facilities cost allocations, and stock-based compensation charges.
Capital expenditure was primarily for acquisition of testing equipment and manufacturing equipment. 26 Table of Contents Net Cash Flows Provided by Financing Activities Net cash provided by financing activities decreased to $0.1 million for fiscal year 2024, compared to $7.3 million and $25.8 million for fiscal years 2023 and 2022, respectively.
Capital expenditure was primarily for acquisition of testing equipment and manufacturing equipment. Net Cash Flows Provided by Financing Activities Net cash provided by financing activities was $0.6 million for fiscal year 2025, compared to $0.1 million and $7.3 million for fiscal years 2024 and 2023, respectively.
In determining whether the realization of these deferred tax assets would be impaired, we made judgments with respect to whether we were likely to generate sufficient future taxable income to realize these assets.
In determining whether the realization of these deferred tax assets is impaired, we make judgments with respect to whether we are likely to generate sufficient future taxable income to realize these assets.
Our estimates are derived from historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Those results form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Those results form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
In the past, we assessed the likelihood that we would be able to recover our deferred tax assets. If recovery was not more likely than not, we increased our provision for taxes by recording a valuation allowance to reduce our deferred tax assets to the amount that was more likely than not to be recoverable.
We assess the likelihood that we are able to recover our deferred tax assets. If recovery is not more likely than not, we increase our provision for taxes by recording a valuation allowance to reduce our deferred tax assets to the amount that is more likely than not to be recoverable.
Net Cash Flows Provided by (Used in) Investing Activities Net cash provided by investing activities was $17.3 million for fiscal year 2024, compared to net cash used in investing activities of $18.7 million for fiscal year 2023.
Net Cash Flows Provided by (Used in) Investing Activities Net cash used in investing activities was $16.1 million for the fiscal year 2025 compared to net cash provided by investing activities of $17.3 million for the fiscal year 2024.
Year Ended May 31, (In thousands) 2024 2023 2022 Operating activities $ 1,756 $ 10,011 $ 1,508 Investing activities 17,251 (18,656 ) (416 ) Financing activities 139 7,322 25,761 Effect of exchange rate changes on cash, cash equivalents and restricted cash (41 ) (37 ) 49 Net increase (decrease) in cash, cash equivalents and restricted cash $ 19,105 $ (1,360 ) $ 26,902 Net Cash Flows Provided by Operating Activities Cash flow from operating activities during fiscal year 2024 mostly consisted of net income, adjusted for certain non-cash items which primarily consisted of depreciation and amortization, share-based compensation expense and amortization of operating lease right-of-use assets.
Year Ended May 30, May 31, May 31, (In thousands) 2025 2024 2023 Operating activities $ (7,400 ) $ 1,756 $ 10,011 Investing activities (16,067 ) 17,251 (18,656 ) Financing activities 625 139 7,322 Effect of exchange rate changes on cash, cash equivalents and restricted cash 13 (41 ) (37 ) Net increase (decrease) in cash, cash equivalents and restricted cash $ (22,829 ) $ 19,105 $ (1,360 ) Net Cash Flows Provided by (Used in) Operating Activities Cash flow used in operating activities during fiscal year 2025 mostly consisted of net loss, adjusted for certain non-cash items which primarily consisted of depreciation and amortization, stock-based compensation expense and amortization of operating lease right-of-use assets.
Our contactors revenue increased by $15.7 million, and our services revenue increased by $0.3 million. The increase was partially offset by a decrease in systems revenue of $14.7 million. Revenue increased by $14.1 million in fiscal year 2023 over fiscal year 2022, primarily due to the increases in revenue of our wafer-level test products.
Revenue increased by $1.3 million in fiscal year 2024 over fiscal year 2023, primarily driven by higher sales in our contactors. Our contactors revenue increased by $15.7 million, and our services revenue increased by $0.3 million. The increase was partially offset by a decrease in systems revenue of $14.7 million.
The increase was primarily due to the maturity of our short-term investments of $18.0 million during fiscal year 2024, while there was a net purchase of short-term investments of $17.3 million during fiscal year 2023, compared to no purchase or sale of short-term investments during fiscal year 2022.
The increase was primarily due to the maturity of our short-term investments of $18.0 million during fiscal year 2024, while there was a net purchase of short-term investments of $17.3 million during fiscal year 2023. Capital expenditure in fiscal 2024, and 2023 was $0.7 million and $1.4 million, respectively.
Revenue Recognition The Company recognizes revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services by following a five-step process: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price, and (5) recognize revenue when or as the Company satisfies a performance obligation, as further described below.
We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements. 23 Table of Contents Revenue Recognition We recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services by following a five-step process: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price, and (5) recognize revenue when or as we satisfy a performance obligation, as further described below.
Provision for Income Taxes Year Ended May 31, (Dollars in thousands) 2024 2023 2022 FY 2024 vs FY 2023 FY 2023 vs FY 2022 Income tax expense (benefit) $ (20,698 ) $ 60 $ 91 $ (20,758 ) N.M $ (31 ) (34.1 %) N.M.-Not meaningful Income tax benefit was $20.7 million in fiscal year 2024, compared to income tax expense of $60 thousand in fiscal year 2023 and $91 thousand in fiscal year 2022.
Provision for Income Taxes Year Ended May 30, May 31, May 31, (Dollars in thousands) 2025 2024 2023 FY 2025 vs FY 2024 FY 2024 vs FY 2023 Income tax expense (benefit) $ (381 ) $ (20,698 ) $ 60 $ 20,317 (98.2%) $ (20,758 ) N.M. 27 Table of Contents N.M.-Not meaningful Income tax benefit was $0.4 million in fiscal year 2025, compared to income tax benefit of $20.7 million in fiscal year 2024.
The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to revenues, inventories, and income taxes, among others.
The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.
We believe that our existing cash resources and anticipated funds generated from operations will satisfy our cash requirements to fund our operating activities, capital expenditures and other obligations for the next twelve months.
Liquidity and Capital Resources Cash, cash equivalents, and restricted cash were $26.5 million as of May 30, 2025, compared to $49.3 million as of May 31, 2024. We believe that our existing cash resources and anticipated funds generated from operations will satisfy our cash requirements to fund our operating activities, capital expenditures and other obligations for the next twelve months.
Interest and other income, net, increased by $1.1 million in fiscal year 2024 over fiscal year 2023, primarily driven by higher interest income earned due to higher average cash and investment balances and higher yields from our investments in money market funds. 25 Table of Contents Interest and other income, net, decreased by $0.5 million in fiscal year 2023 over fiscal year 2022, primarily due to the one-time gain from forgiveness of Payroll Protection Program loan (“PPP Loan”) of $1.7 million in fiscal 2022.
Interest and other income, net, increased by $1.1 million in fiscal year 2024 over fiscal year 2023, primarily driven by higher interest income earned due to higher average cash and investment balances and higher yields from our investments in money market funds.
The proceeds from the issuance of common stock under employee stock plans in fiscal 2024, 2023 and 2022 were $1.8 million, $2.6 million and $3.6 million, respectively. Cash used in shares repurchased for tax withholdings on vesting of restricted stock units in fiscal 2024, 2023 and 2022 were $1.6 million, $2.0 million and $0.4 million, respectively.
In fiscal years 2025, 2024, and 2023, the proceeds from the issuance of common stock under employee stock plans were $1.4 million, $1.8 million, and $2.6 million, respectively.
Selling, General and Administrative Year Ended May 31, (Dollars in thousands) 2024 2023 2022 FY 2024 vs FY 2023 FY 2023 vs FY 2022 Selling, general and administrative $ 13,746 $ 12,237 $ 10,047 $ 1,509 12.3 % $ 2,190 21.8 % As a percentage of total revenues 20.8 % 18.8 % 19.8 % Selling, general and administrative expenses consist primarily of compensation and benefits for sales, marketing and general and administrative personnel, legal and accounting service costs, marketing communications costs, travel expenses, facilities cost allocations, and stock-based compensation charges.
Research and development expenses increased by $1.6 million in fiscal year 2024 over fiscal year 2023 primarily due to higher employment-related costs because of an increase in headcount, higher non-recurring engineering services charges, an increase in allocated facility cost and an increase in recruiting expenses. 26 Table of Contents Selling, General and Administrative Year Ended May 30, May 31, May 31, (Dollars in thousands) 2025 2024 2023 FY 2025 vs FY 2024 FY 2024 vs FY 2023 Selling, general and administrative $ 18,283 $ 13,746 $ 12,237 $ 4,537 33.0 % $ 1,509 12.3 % As a percentage of total revenues 31.0 % 20.8 % 18.8 % Selling, general and administrative expenses consist primarily of compensation and benefits for sales, marketing and general and administrative personnel, legal and accounting service costs, marketing communications costs, travel expenses, facilities cost allocations, and stock-based compensation charges.
The $8.5 million increase in cash flows from operating activities for fiscal year 2023, compared to fiscal year 2022, was driven primarily by higher net income after non-cash adjustments, improved cash flow from collection of accounts receivable and increase in accounts payable due to higher inventory purchases, partially offset by an increase in cash used in inventory production and a decrease in cash provided by deferred revenue due to timing of customer deposits and revenue recognition.
The $9.2 million decrease in cash flows from operating activities in fiscal year 2025, compared to fiscal year 2024, was driven primarily by lower adjusted net income, excluding non-cash items, in the current period compared to the prior period, a decrease in cash provided by the collection of accounts receivable due to lower revenue and slower collection, and an increase in unbilled receivables and prepayments, which were partially offset by the decrease in cash used in procuring inventory and payments to vendors, and an increase in deferred revenue due to timing of customer deposits and revenue recognition.
Beginning on June 1, 2024, we have changed our fiscal year to the 52- or 53-week period ending on the Friday nearest May 31.
During the years ended May 31, 2024 and May 31, 2023, the Company did not record any impairment of long-lived assets. Results of Operations Fiscal Year Beginning on June 1, 2024, we have changed our fiscal year to the 52- or 53-week period ending on the Friday nearest May 31. Our fiscal year 2025 ended on May 30, 2025.
Revenue by Geography Year Ended May 31, (Dollars in thousands) 2024 2023 2022 FY 2024 vs FY 2023 FY 2023 vs FY 2022 Asia $ 58,076 $ 55,609 $ 45,700 $ 2,467 4.4 % $ 9,909 21.7 % United States 3,532 9,289 5,110 (5,757 ) (62.0 %) 4,179 81.8 % Europe 4,610 63 19 4,547 N.M. 44 231.6 % Total revenues $ 66,218 $ 64,961 $ 50,829 $ 1,257 1.9 % $ 14,132 27.8 % Asia as a percentage of total revenues 87.7 % 85.6 % 89.9 % United States as a percentage of total revenues 5.3 % 14.3 % 10.1 % Europe as a percentage of total revenues 7.0 % 0.1 % 0.0 % N.M.-Not meaningful On a geographic basis, revenues represent products that were shipped to or services that were performed at our customer locations.
Total revenues $ 58,968 $ 66,218 $ 64,961 $ (7,250 ) (10.9 %) $ 1,257 1.9 % Asia as a percentage of total revenues 62.9 % 87.7 % 85.6 % United States as a percentage of total revenues 30.0 % 5.3 % 14.3 % Europe as a percentage of total revenues 7.1 % 7.0 % 0.1 % 25 N.M.-Not meaningful On a geographic basis, revenues represent products that were shipped to or services that were performed at our customer locations.
Standalone selling prices are based on multiple factors including, but not limited to, historical discounting trends for products and services and pricing practices in different geographies. Revenue for systems and spares is recognized at a point in time, which is generally upon shipment or delivery and evidenced by transfer of title and risk of loss to the customer.
Revenue for systems and spares is recognized at a point in time, which is generally upon shipment or delivery and evidenced by transfer of title and risk of loss to the customer. Revenue from services is recognized over time as the customer receives the benefit over the contractual period of generally one year or less.
In determining the transaction price, the Company evaluates whether the price is subject to refund or adjustment to determine the net consideration to which the Company expects to be entitled.
In determining the transaction price, we evaluate whether the price is subject to refund or adjustment to determine the net consideration to which we expect to be entitled. We generally do not grant return privileges, except for defective products during the warranty period.
Gross Margin Gross Profit by Category Year Ended May 31, (Dollars in thousands) 2024 2023 2022 FY 2024 vs FY 2023 FY 2023 vs FY 2022 Products $ 30,636 $ 30,958 $ 22,207 $ (322 ) (1.0 %) $ 8,751 39.4 % Services 1,907 1,788 1,458 119 6.7 % 330 22.6 % Gross profit $ 32,543 $ 32,746 $ 23,665 $ (203 ) (0.6 %) $ 9,081 38.4 % Gross Margin by Category Product 49.6 % 51.0 % 46.4 % Services 42.5 % 42.1 % 49.3 % Gross margin 49.1 % 50.4 % 46.6 % Gross profit decreased slightly for fiscal year 2024, compared to fiscal year 2023.
Gross Margin Gross Profit Year Ended May 30, May 31, May 31, (Dollars in thousands) 2025 2024 2023 FY 2025 vs FY 2024 FY 2024 vs FY 2023 Gross profit $ 23,933 $ 32,543 $ 32,746 $ (8,610 ) (26.5 %) $ (203 ) (0.6 %) Gross margin 40.6 % 49.1 % 50.4 % Gross profit decreased to $23.9 million for fiscal year 2025 from $32.5 million for fiscal year 2024.
The decrease in gross margin of 1.3% was primarily due to an increase in inventory reserves, as well as an increase in costs from design changes. 24 Table of Contents Gross profit increased to $32.7 million for fiscal year 2023 from $23.7 million for fiscal year 2022.
Gross margin decreased by 1.3% primarily due to an increase in inventory reserves, as well as an increase in costs from design changes.
In fiscal 2022, the Company also repaid the line of credit of $1.4 million. Off-Balance Sheet Financing We have not entered into any off-balance sheet financing arrangements and have not established any special purpose or variable interest entities.
In fiscal 2025, 2024 and 2023, cash used in shares repurchased for tax withholdings on vesting of restricted stock units was $0.8 million, $1.6 million and $2.0 million, respectively. 28 Table of Contents Off-Balance Sheet Financing We have not entered into any off-balance sheet financing arrangements and have not established any special purpose or variable interest entities.
As a result, we released the entire valuation allowance in fiscal 2024 which contributed to the tax benefit of approximately $20.7 million for the year ended May 31, 2024. Results of Operations Fiscal Year Our fiscal year ended on May 31 for each of our fiscal years in 2024, 2023 and 2022.
In fiscal 2024, we released the entire valuation allowance which contributed to the tax benefit of approximately $20.7 million for the year ended May 31, 2024. 24 Table of Contents Business Combination Accounting for business combinations requires management to make significant estimates and assumptions to determine the fair values of assets acquired and liabilities assumed at the acquisition date.
Interest and Other Income, Net Year Ended May 31, (Dollars in thousands) 2024 2023 2022 FY 2024 vs FY 2023 FY 2023 vs FY 2022 Interest income $ 2,388 $ 1,245 $ 13 $ 1,143 91.8 % $ 1,232 N.M.
Interest and Other Income, Net Year Ended May 30, May 31, May 31, (Dollars in thousands) 2025 2024 2023 FY 2025 vs FY 2024 FY 2024 vs FY 2023 Interest income, net $ 1,401 $ 2,388 $ 1,245 (987 ) (41.3%) 1,143 91.8 % Other income (expense), net (15 ) (8 ) (3 ) (7 ) 87.5% (5 ) 166.7 % Interest and other income (expense), net $ 1,386 $ 2,380 $ 1,242 $ (994 ) (41.8%) $ 1,138 91.6 % Interest and other income, net, primarily consists of interest income, foreign currency transaction exchange gains and losses and other income (expense).
Revenue from services is recognized over time as the customer receives the benefit over the contractual period of generally one year or less. The Company has elected the practical expedient to not assess whether a contract has a significant financing component as the Company’s standard payment terms are less than one year.
We have elected the practical expedient to not assess whether a contract has a significant financing component as our standard payment terms are less than one year. We sell our products primarily through a direct sales force. In certain international markets, we sell our products through independent distributors.
The Company generally does not grant return privileges, except for defective products during the warranty period. 22 Table of Contents For contracts that contain multiple performance obligations, the Company allocates the transaction price to the performance obligations on a relative standalone selling price basis.
For contracts that contain multiple performance obligations, we allocate the transaction price to the performance obligations on a relative standalone selling price basis. Standalone selling prices are based on multiple factors including, but not limited to, historical discounting trends for products and services and pricing practices in different geographies.
Removed
We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements.
Added
Following the acquisition of Incal, our product portfolio further expanded to include packaged parts burn-in solutions for the full range of power and complexity of integrated circuits. Incal’s product lines feature the Sonoma series for ultra-high-power burn-in testing, the Tahoe series for medium-power reliability burn-in, and the Echo series for low-power and high parallelism testing.
Removed
The Company sells its products primarily through a direct sales force. In certain international markets, the Company sells its products through independent distributors.
Added
The Sonoma line, with its ultra-high-power capabilities, is specifically designed to address the reliability and burn-in needs of the burgeoning demand for AI accelerators, GPUs, HPC processors, and devices that can reach levels of power as high as 1600W. The Sonoma is available in its standard configuration, which hosts up to 22 slots per chamber.
Removed
Revenue of our wafer-level test products and services for fiscal 2023 were $63.5 million and increased by $14.6 million from fiscal year 2022 due to strong demand for our FOX-P systems.
Added
The Tahoe and Echo lines for medium-power and low-power burn-in solutions, respectively, target logic, SoC, and mixed-signal devices employed in mobile communications, mobility, medical, military, aerospace, and data center applications. These systems are frequently used by independent test and burn-in labs, as well as semiconductor manufacturers.
Removed
For fiscal year 2023, both international revenue and domestic revenue increased, compared to the same period in the prior year.
Added
On an ongoing basis, we evaluate our estimates, including those related to revenues, inventories, income taxes, the business combination with Incal, and the impairment of goodwill and long-lived assets, among others. Our estimates are derived from historical experience and on various other assumptions that are believed to be reasonable under the circumstances.
Removed
Gross margin decreased to 49.1% in fiscal year 2024 from 50.4% in fiscal year 2023.
Added
The assumptions and estimates are based, in part, on historical experience and information obtained from management of the acquired company and are inherently uncertain.
Removed
Gross margin increased to 50.4% in fiscal year 2023 from 46.6% in fiscal year 2022. The increase in gross margin of 3.8% was primarily the result of a decrease in inventory reserve provisions, an increase in manufacturing efficiencies as a result of higher sales volume, and a decrease in direct material costs.
Added
Critical estimates in valuing certain acquired intangible assets include, but are not limited to, future expected cash flows including revenue growth rate assumptions from product sales, customer orders and acquired technologies, estimated royalty rates used in valuing technology-related intangible assets, and discount rates.
Removed
Research and development expenses increased by $1.6 million in fiscal year 2024 over fiscal year 2023 primarily due to higher employment-related costs of $0.5 million because of an increase in headcount, higher non-recurring engineering services charges of $0.3 million, an increase in allocated facility cost of $0.3 million and an increase in recruiting expenses of $0.2 million.
Added
The discount rates used to discount expected future cash flows to present value are typically derived from a weighted-average cost of capital analysis and adjusted to reflect inherent risks. Unanticipated events and circumstances may occur that could affect either the accuracy or validity of such assumptions, estimates or actual results.
Removed
Research and development expenses increased by $1.3 million in fiscal year 2023 over fiscal year 2022, primarily due to increases in project expenses of $0.6 million and employment-related costs of $0.5 million related to research and development initiatives during fiscal 2023.
Added
Impairment of Goodwill We assess goodwill for impairment annually during our fourth fiscal quarter or whenever events or changes in circumstances indicate the carrying value may not be fully recoverable. The process of evaluating the potential impairment of goodwill requires significant judgment.
Removed
Selling, general and administrative expenses increased by $2.2 million in fiscal year 2023 over fiscal year 2022, primarily due to increased shareholder related costs of $0.5 million, recruiting and relocation expenses of $0.3 million, employment-related costs of $0.6 million because of an increase in headcount to support our growing business, audit and legal service fees of $0.3 million, and travel expenses of $0.2 million.
Added
We may first evaluate qualitative factors to assess if it is more likely than not that the fair value of a reporting unit is less than its carrying amount and to determine if an impairment test is necessary. We may choose to proceed directly to the quantitative impairment test, bypassing the initial qualitative assessment.
Removed
Gain from forgiveness of PPP loan - - 1,698 - - (1,698 ) (100.0%) Other income (expense), net (8 ) (3 ) 30 (5 ) 166.7 % (33 ) (110.0%) Interest and other income, net $ 2,380 $ 1,242 $ 1,741 $ 1,138 91.6 % $ (499 ) (28.7%) N.M.-Not meaningful Interest and other income, net, primarily consists of interest income, foreign currency transaction exchange gains and losses and other income (expense).
Added
The quantitative test compares the fair value of the reporting unit to its carrying value, including goodwill allocated to that reporting unit. A goodwill impairment loss would be the amount by which a reporting unit’s carrying value exceeds its fair value, however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit.
Removed
The decrease was partially offset by higher interest income for the fiscal year 2023, driven by higher cash deposits and higher interest rates.
Added
There were no impairments to goodwill during the fiscal year ended May 30, 2025. Impairment of Long-Lived Assets We monitor the carrying value of long-lived assets for potential impairment each quarter based on whether certain triggering events have occurred.
Removed
Liquidity and Capital Resources Cash, cash equivalents, and restricted cash were $49.3 million as of May 31, 2024, compared to $30.2 million as of May 31, 2023. Short term investments were $0 as of May 31, 2024, compared to $17.9 million as of May 31, 2023.
Added
These events include current period losses combined with a history of losses, or a projection of continuing losses, or a significant decrease in the market value of an asset. When a triggering event occurs, we perform an impairment calculation, comparing projected undiscounted cash flows, utilizing current cash flow information and expected growth rates, to the carrying value of the assets.
Removed
Capital expenditure in fiscal 2024, 2023 and 2022 was $0.7 million, $1.4 million and $0.4 million, respectively.
Added
If we identify impairment for long-lived assets to be held and used, we compare the assets’ current carrying value to the assets’ fair value. Fair value is determined based on market values or discounted future cash flows. We record impairment when the carrying value exceeds fair market value.
Added
During the year ended May 30, 2025, the Company recognized an impairment charge of $0.5 million related to the right-of-use asset and $0.1 million related to leasehold improvements in connection with the closure of the Incal office and the consolidation of facilities. The impairment charge is included in restructuring changes in the consolidated statement of operations.
Added
Each of our fiscal years in 2024 and 2023 ended on May 31.
Added
Our product revenue decreased by $8.9 million due to the decrease in our contactors revenue and FOX-P systems revenue, which was partially offset by the increase in package parts burn-in product revenue in connection with the Incal acquisition. The decline in product revenue was partially offset by an increase in services revenue of $1.7 million.
Added
Revenue by Geography Year Ended May 30, May 31, May 31, (Dollars in thousands) 2025 2024 2023 FY 2025 vs FY 2024 FY 2024 vs FY 2023 Asia $ 37,095 $ 58,076 $ 55,609 $ (20,981 ) (36.1 %) 2,467 4.4 % United States 17,673 3,532 9,289 14,141 400.4 % (5,757 ) (62.0 %) Europe 4,200 4,610 63 (410 ) (8.9 %) 4,547 N.M.
Added
For fiscal year 2025, revenue declined in Asia primarily due to continued softness in the power semiconductor demand for electric vehicles. This decline was partially offset by revenue growth in the United States, driven by much higher systems and contactors sales to customers that focus on the artificial intelligence market.
Added
Gross margin decreased by 8.5 percentage point primarily due to the amortization of certain acquired intangible assets, the acquisition related fair value adjustment to inventory, an inventory variance charge, lower system shipments leading to reduced manufacturing efficiencies, and a change in product mix. Gross profit decreased slightly for fiscal year 2024, compared to fiscal year 2023.
Added
Research and development expenses increased by $1.7 million in fiscal year 2025 over fiscal year 2024 primarily due to the severance benefits incurred following the death of an executive officer, higher employee costs and stock-based compensation expense resulting from growth in engineering headcount, and additional research and development expenses from the newly acquired Incal business.
Added
The increase was partially offset by lower non-recurring engineering service charges.
Added
Selling, general and administrative expenses increased by $4.5 million in fiscal year 2025 over fiscal year 2024, primarily driven by additional selling, general and administrative expenses from the newly acquired Incal business, higher legal and other professional service fees, and higher stock-based compensation expense.
Added
Restructuring Charges Year Ended May 30, May 31, May 31, (Dollars in thousands) 2025 2024 2023 FY 2025 vs FY 2024 FY 2024 vs FY 2023 Restructuring Charges $ 864 $ - $ - $ 864 N.M. $ - N.M.
Added
As a percentage of total revenues 1.5 % 0.0 % 0.0 % N.M.-Not meaningful Restructuring charges incurred during fiscal 2025 primarily relate to the closure of the Incal office. For further explanation of our restructuring charges, see Note 13, Restructuring Charges, in Notes to Consolidated Financial Statements.
Added
Interest and other income, net, decreased by $1.0 million in fiscal year 2025 over fiscal year 2024, primarily driven by lower interest income earned on a lower average cash balances as a result of $11.1 million spent on the acquisition of Incal and lower yields from our investments in money market funds.
Added
In fiscal 2025, the Company recognized an income tax benefit due to year-to-date operating losses in the United States. Income tax benefit was $20.7 million in fiscal year 2024, compared to income tax expense of $60 thousand in fiscal year 2023.
Added
The increase in net cash used was primarily due to the maturity of our short-term investments of $18.0 million during the fiscal year 2024, while there was no such maturity of investment during the fiscal year 2025.
Added
Additionally, the Company paid $11.1 million to acquire Incal, and increased its spending on property and equipment by $4.2 million, primarily related to office renovation during the fiscal year 2025. Net cash provided by investing activities was $17.3 million for fiscal year 2024, compared to net cash used in investing activities of $18.7 million for fiscal year 2023.

Other AEHR 10-K year-over-year comparisons