Aehr Test Systems, Inc. (AEHR) Earnings Call Transcript

Good day, everyone, and welcome to the Aehr Test Systems Fiscal 2027 First Quarter Financial Results Conference Call. [Operator Instructions] It is now my pleasure to hand the floor over to your host, Todd Kehrli of PondelWilkinson. Sir, the floor is yours.

Thank you, operator. Good afternoon, everyone, and welcome to Aehr Test Systems First Quarter Fiscal 2027 Financial Results Conference Call. Joining me on today's call are Gayn Erickson, Aehr Test's President and Chief Executive Officer; and Chris Siu, Chief Financial Officer. This afternoon, following the market close, Aehr Test issued a press release announcing its first quarter fiscal 2027 results. The release is available on the company's website at aehr.com. Today's call is being webcast live, and a replay will be available on the Investor Relations page of the company's website. Before we begin, I'd like to remind everyone that management will make forward-looking statements today that are based on current information and estimates. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. Factors that could cause such differences are discussed in the company's most recent periodic and current reports filed with the SEC. Forward-looking statements, including guidance provided during today's call, are valid only as of today's date, and Aehr undertakes no obligation to update them. Now I'd like to turn the conference call over to Gayn Erickson, President and Chief Executive Officer. Gayn?

Thanks, Todd. Good afternoon, everyone, and thank you for joining us. I'll begin with a brief overview of our first quarter highlights and provide an update on the key customer programs and markets driving our business with a focus on the strong demand we're seeing in the AI and data center infrastructure markets. Chris will then review our financial results and outlook before we open the call for questions. We delivered an outstanding start to fiscal 2027 with record quarterly revenue, strong bookings and significant progress across several major AI semiconductor customer programs. First quarter revenue was a record $33.0 million, increasing 200% year-over-year and 75% sequentially. Non-GAAP net income was $9.4 million, up 163% sequentially, reflecting the operating leverage in our business as revenue scales. These results demonstrate expanding AI production demand and our ability to meet customer capacity requirements. Bookings totaled $46.7 million, representing a book-to-bill of 1.4. Our effective backlog, including bookings received after quarter end, reached $109.3 million as of November 1. Based on our strong first quarter performance, substantial backlog and visibility in the customer production requirements, we're raising our fiscal 2027 revenue outlook to $150 million compared with our previous guidance range of $130 million to $150 million. This represents 200% revenue growth over fiscal 2026 and reflects our growing confidence in the production ramps and customer programs supporting our business. We expect non-GAAP net income of at least 20% of revenue for the full fiscal year. Chris will provide additional details on our financial outlook. Demand continues to accelerate across both wafer level and package level burn-in, driven by increasing semiconductor complexity, power requirements and deployment in mission-critical applications. As devices become more advanced, the need for comprehensive test and burn-in is becoming essential to ensure reliability and performance, which is driving growing adoption of our solutions across multiple markets. For Aehr, this is translating into expanding production demand from existing customers and new opportunities to qualify our solutions on additional devices with both those customers and new customers. Starting with our wafer level burn-in business, demand for our FOX wafer-level burn-in solutions is accelerating. Our lead AI processor production customer continues to expand capacity. In August, we announced a $22 million follow-on order for multiple systems consisting of fully automated FOX-XP systems with integrated WaferPak auto liners and full sets of proprietary WaferPak full wafer contactors. We are executing against this customer's capacity expansion plans and are encouraged by its forecast for additional capacity in both the short and long term. We've also made significant progress with a major supplier of AI accelerators, CPUs and network processors that successfully completed a benchmark evaluation last quarter. This customer has decided to purchase a fully configured XP wafer-level burn-in test cell for installation at one of its key outsourced semiconductor assembly and test or OSAT partners in Taiwan, where the system will be evaluated in a high-volume production environment using the same device that was successfully tested in last quarter's benchmark. Installation is planned for early calendar 2027 with a decision regarding high-volume production anticipated within several months following installation and validation. We believe this customer represents one of the largest potential burn-in system opportunities Aehr has ever pursued with significant potential across multiple product lines and across multiple manufacturing locations. This engagement represents an important step toward broader adoption of wafer-level burn-in for advanced AI processors as well as deployment of our wafer-level burn-in solutions across multiple products and product lines for a single customer. As these advanced processes are integrated into expensive multi-die packages that include other processors, high-bandwidth memory and other components such as electrical and optical I/O chips, identifying early life failures before final assembly can provide significant cost and reliability benefits. There's also a growing trend that some devices that customers are working on may require production burn-in screening at the wafer level as infant mortality failures of certain devices may simply not be able to be screened effectively at the package level. In silicon photonics, we received additional production orders from multiple customers for fully automated FOX-XP systems used to burn in photonic integrated circuits for high-speed optical interconnects and data center applications. We believe broader adoption of optical interconnects, including emerging co-packaged optics architectures will create additional demand for wafer-level reliability screening. In silicon carbide, additional WaferPak orders and increased utilization of installed FOX systems point to improving demand. We have direct evidence from EV automotive suppliers that companies using our wafer-level burn-in systems are being seen as preferred vendors for their quality and reliability screening. Increasingly, we see that companies performing reliability screening through wafer-level burn-in see it as a real differentiator in their markets. We also continue to pursue gallium nitride and other power semiconductor applications where reliability screening has proven to be critical to their end markets as well. GaN has much broader application space than silicon carbide does today and has proven to be much harder to screen for early life failures. We feel we are the market leader in this area and have added 2 additional production customers in the last 6 months. In memory, we remain engaged with major manufacturers on next-generation wafer level burn-in. NAND flash opportunities are progressing more slowly than expected because of limited incremental manufacturing capacity and also the timing of new high-bandwidth flash architecture volumes. Separately, emerging high-bandwidth memory architecture for DRAM with more complex logic in the base die may create wafer-level burn-in opportunities before integration into advanced memory packages. These engagements continue and Aer continues to feel these are long-term opportunities for us. Now let me turn to package level. Our Sonoma high-power package level burn-in business is also expanding. We are shipping and installing more than a dozen systems per month to support our lead hyperscale customers' production ramp for its first AI processor using Sonoma. Our expanded manufacturing capacities are supporting this delivery pace. The same customer's second AI processor has successfully completed qualification on Sonoma. As announced in October, we received follow-on orders for additional systems, burn-in modules and software enhancements to support initial production sampling and an anticipated production ramp in calendar 2027. Importantly, the customer forecasts that this second processor will ultimately reach higher production volumes than its first processor currently in production on Sonoma. This processor requires greater power and more sophisticated thermal management, including multiple independently controlled thermal zones within a single package. We're also advancing evaluations of our Sonoma high-power systems with additional AI processor suppliers and hyperscale customers for both engineering qualification and potential high-volume production applications. These engagements include bringing up processors here at Aehr as well as at customers' facilities here and in the U.S. and in Asia. These processors include data center-focused processors for training and inference as well as very high-volume edge-based processors for mission-critical real-time inference applications. We continue to see package level applications driving our business in addition to the growth in wafer level. On our consumable business, complementing our system sales, our proprietary WaferPak contactors and Sonoma burn-in modules support customers' ongoing production requirements and new device introductions. We currently expect these products to represent about 35% of our fiscal '27 revenue. As our installed base expands across AI processors, silicon photonics, silicon carbide, gallium nitride applications, we see further opportunities for these engineering qualification and production-driven purchases. I also want to highlight an important change in the profile of our business that may not be fully apparent from the individual customer programs we've discussed. Historically, Aehr had only a handful of customers with the potential to generate significant production orders. Today, we see that potential across more than a dozen customers, spanning AI processors, silicon photonics, silicon carbide, gallium nitride and other applications. This represents meaningful diversification, not only across customers and end markets, but also across both our FOX wafer-level burn-in and Sonoma package level burn-in platforms. Individual customer orders and production ramps can still vary significantly from quarter-to-quarter, but we now have a much broader range of customer and production opportunities contributing to our growth outlook. We believe this breadth reduces our dependence on the timing of any single customer program and positions Aehr for more diversified, sustainable long-term growth. Importantly, this expanding customer base, combined with the increased number of devices being qualified production and growing installed base of our systems is creating multiple opportunities for additional revenue growth beyond our fiscal year. To support expanding demand, we've increased our manufacturing capabilities, including in Southeast Asia. These investments are supporting our current customer production ramps and providing capacity for additional growth. We continue to work closely with suppliers to meet customer delivery requirements. We're also planning further manufacturing expansion and targeted investments in engineering, customer support and sales to support growth beyond fiscal 2027. Our priorities remain delivering on existing production commitments and advancing additional customer programs through qualification and validation. Before turning the call over to Chris, I'd like to welcome Vijay Rao to our Board of Directors. Vijay brings 30 years of technology industry experience and deep expertise in hyperscale data center infrastructure, including AI accelerators, high-performance memory and optical networking. His understanding of semiconductor reliability requirements will be valuable as we expand our presence in AI and data center applications. To close, our record revenue, strong quarterly bookings, record effective backlog and expanding customer opportunities have strengthened our confidence in the year ahead. With existing customers increasing production, additional AI processor programs advancing toward commercialization and a significantly broader pipeline of opportunities across both our wafer level and package level burn-in platforms, we believe Aehr is exceptionally well positioned for continued growth in fiscal 2027 and beyond. Our focus remains on executing against existing production commitments, expanding our installed base and converting additional qualification programs into long-term production business. With that, I'll turn it over to Chris.

Thank you, Gayn, and good afternoon, everyone. Our first quarter results reflect strong execution against expanding customer demand with record first quarter revenue, bookings that exceeded revenue and significant operating leverage as we continue to scale our business. Importantly, we increased quarter end backlog to approximately $101 million despite substantial shipments during the quarter, and our effective backlog reached $109.3 million, providing substantial visibility into our fiscal 2027 outlook. I'll begin with a brief update on our manufacturing capacity followed by a review of bookings and backlog, first quarter financial results, cash flow and balance sheet and our updated fiscal 2027 outlook. During the first quarter, we continued expanding our manufacturing and customer support capabilities to meet growing demand. In addition to expanding our Fremont operations, we began shipping Sonoma systems from an existing contract manufacturer in Southeast Asia. This operation adds capacity for more than 20 additional Sonoma systems per month, giving us greater flexibility to support growing customer production requirements. During the quarter, we shipped multiple Sonoma systems from this facility to the Taiwan-based OSAT supporting our lead hyperscale customer and the ramp proceeded smoothly. This asset-light manufacturing approach allowed us to increase production capacity and responsiveness without a comparable increase in infrastructure or capital spending. We are also expanding our local support capabilities in Taiwan. Following the signing of a new lease in Hsinchu, we added customer service resources and planned selective hiring in sales and customer support as wafer level and package level burn-in programs move toward higher production volumes. Turning to bookings and backlog. First quarter bookings totaled $46.7 million, an increase of more than 300% from $11.4 million in the prior year quarter. The increase was driven primarily by orders for FOX wafer-level burn-in systems, WaferPak contactors and auto aligners supporting AI processor and silicon photonics applications. Quarter end backlog was $100.9 million, up from $80.6 million at the end of fiscal 2026. Importantly, we increased backlog to above $100 million despite recognizing $33 million in revenue during the quarter, reflecting strong new order activity. Including $8.4 million in additional bookings received after quarter end, effective backlog reached $109.3 million as of November 1. This substantial backlog, combined with our expanded manufacturing capacity and visibility into existing production programs, provides a strong foundation for our updated fiscal 2027 revenue outlook. First quarter revenue was a record $33 million, increasing 200% from $11 million in the prior year quarter and 75% sequentially. The result exceeded consensus expectations and reflected strong execution across both package level and wafer level burning programs. Revenue included Sonoma system shipments to our lead hyperscale customer in Taiwan, multiple FOX-P system shipments, including a FOX-XP system and WaferPak auto aligners to our lead AI processor customer and FOX-NP system shipments to customers in the power semiconductor market. Revenue from contactors and related products, including WaferPaks for wafer level burn-in and burn-in modules and burn-in boards for package level burn-in totaled $13.5 million or 41% of total revenue. This compares with $2.6 million or 24% of revenue in the prior year quarter, representing more than fivefold growth. This is an important component of our business model as our installed base expands and customers increase production volumes or introduce new devices, we expect additional demand for our proprietary contactors, WaferPaks, beams and bits. These repeat purchases complement system sales and provide opportunities for ongoing production-driven revenue, although the percentage of total revenue will vary quarter-to-quarter based on product mix and shipment timing. Non-GAAP gross margin was 48.5% compared with 37.5% in the prior year quarter, an improvement of 11 percentage points. The improvement primarily reflected higher sales volumes and a more favorable product mix. The prior year quarter included a higher proportion of lower-margin third-party probers and an automated aligner upgrade sold as part of our complete solutions. Non-GAAP operating expenses were $7.8 million compared with $5.7 million in the prior year quarter. The increase primarily reflected additional research and development investments, including engineering headcounts and materials supporting AI-related programs. These investments are focused on specific opportunities, including wafer level burn-in validation for a major AI processor customer, next-generation package level burn-in programs and memory-related development. While non-GAAP operating expenses increased approximately 36% year-over-year, revenue increased 200%, demonstrating significant operating leverage as we scale. We recorded an income tax benefit of $0.3 million, resulting in an effective tax rate of negative 3.7%. The benefit primarily reflected discrete tax items, including disqualifying dispositions from stock options and excess tax benefits from divesting of restricted stock units. Non-GAAP net income was $9.4 million or $0.28 per diluted share compared with $0.2 million or $0.01 per diluted share in the prior year quarter. Sequentially, non-GAAP net income increased 163%. Non-GAAP net income excludes stock-based compensation and acquisition-related adjustments. Turning to cash flow and our balance sheet. Cash used in operating activities was $3.1 million during the first quarter. We ended the quarter with $105.1 million in cash, cash equivalents and restricted cash compared with $116.5 million at the end of fiscal 2026. Operating cash flow reflected working capital investments, including purchases of long lead item -- long lead time components to support anticipated AI-related production demand and customer delivery schedules. These investments are intended to ensure we have the materials needed as production volumes increase. Importantly, we remain debt-free and our strong liquidity position provides flexibility to fund these investments while supporting continued growth. Turning to our fiscal 2027 outlook. Based on our strong first quarter performance, substantial backlog, expanded manufacturing capacity and increased visibility into customer production requirements, we are raising our full year revenue outlook to $150 million compared with our previous guidance range of $130 million to $150 million. This outlook represents 200% year-over-year revenue growth or triple fiscal 2026 revenue. We continue to expect non-GAAP net income of at least 20% of revenue for the full fiscal year. Our increased outlook reflects current backlog, anticipated demand from existing production ramps and delivery schedules. With expanded manufacturing capacity, a strong balance sheet and a substantial backlog, we believe we're well positioned to execute against our full year outlook while investing in growth opportunities beyond fiscal 2027. Before we open the call for questions, I would like to mention that Aehr plans to meet with investors at the NYC CEO Summit on December 15. We look forward to seeing some of you there. That concludes our prepared remarks. Operator, we're now ready to take questions.

[Operator Instructions] Your first question is coming from Christian Schwab from Craig-Hallum Capital Group.

Congrats guys on a great quarter and outlook. Gayn, I want to come back to your commentary regarding the new wafer level benchmark and your commentary saying that you'll have an idea whether they put in high-volume orders. It sounds like sometime in the first half of calendar '27. But in particular, your commentary about the largest opportunity ever pursued by the company. I'm just wondering if you can give some relative color about the range of revenue potential that you're referring to there.

Okay. So beyond just the sheer numbers and size, it's the tone that's coming in from them and other customers particularly related to their new devices that are coming out. And I mean like coming up in '27 and '28, thinking like kind of near term, even '27, where the new processors, there's sort of a whole new generation of different types of flavors of processors that are going out there. And I'll talk generically, my intention is trying not to be too specific about anyone. So anything I say, I could point to 2 or more customers that are saying the same thing. But there are things where there are processors that are coming out that are described as a single processor, or like a single chip, if you will. But embedded in that chip might be 4 AI accelerator chips. There could be 12 stacks of high-bandwidth memory, another 4 or 8 optical or electrical I/O interconnect chips. That's in the near term. There's devices that are out there that have been being talked about publicly that have 12, 16 compute chips inside. The other thing is there's a shift going on with respect to just the sheer number of CPUs versus the accelerators and combinational CPU accelerator infrastructure devices that are very interesting. And so the complexity is going up, and it turns out as you mix even the same devices in the package, the burning challenges are very high because all of the devices run at different thermal levels and power levels based upon the physics of the process, and so once you attack put them together into the same substrate with the same heat sink, it becomes difficult or actually impossible to get the device to the optimum screening temperature because the one next to it is hotter or colder. And so we're able to isolate the die at the wafer level and maintain every single device at the exact same burn-in condition in terms of temperature and voltage and current that is not even feasible to do on package level burn-in systems, not ours, not anybody's. So that whole tone of like, hey, this is really important to us. And then instead of referring to one device under test that might be on Sonoma, it might be 4 devices or 8 devices that are -- so the actual quantity is higher. So we put some numbers together just to help people understand. If you look at one of our systems, our system is a 9 wafer for the AI configuration, let's say. For every 1 million units shipped in a calendar year, that system would need to test -- you would need somewhere between 5 and 10 of our systems per million units per year. And that assumes pure linearity, meaning it ships the same amount the first day of the year as last year. So -- and keep in mind, that's times 9. So it's 45 to 90 wafers of capacity. And if you multiply that times our ASPs that can range, including the consumables, $6 million, $7-plus million, it's $35 million to $70 million for each million units. If you look at the accelerator markets that we have been seeing, accelerator markets in 2027 alone are somewhere around 25 million units or so total. This is between the GPUs of NVIDIA and AMD and the TPUs and other ASICs from everybody. And the CPUs are double that. So the numbers are staggering and sobering for us. So why we keep pounding the drum and talking about all the infrastructure that we're putting in place to be able to ship tens of these systems per month, for example, is because of these numbers. Now are we going to win them all? Someday maybe, but that's not what we're aiming for. But you pick up 1, 2, 3 high runners, and these are big numbers, you get a customer who's saying, I would like to be -- consider this for all my devices or most of my devices or every device you could do it. And all of a sudden, it becomes the biggest deal you've ever looked at before. So that's where those numbers come from.

And just a quick follow-up on the silicon carbide with the improving demand for vendor customer stats, et cetera. Can you remind us what your revenue to silicon carbide was in fiscal year '26 and a level of expectations that is reasonable to assume in fiscal year '27?

We always just overly simplified as saying of the $50 million we did in FY '26, it was less than 10% or thereabouts. It's in silicon carbide. If I blurred GaN and silicon carbide, sometimes I do that with power semis, but it was -- the silicon carbide was that. That by contrast to silicon carbide was 90% of our revenue a couple of years earlier. So it was only about $10 million. And I think we already announced a $7 million order. I think we've already got orders maybe bigger than that already. So silicon carbide is going to grow this year. We've had some recent meetings with customers that are hopeful and optimistic. As I do say, I'm sort of in the -- we put the investments in place. We have the infrastructure. We know how to build these things in high volume, both the systems and the WaferPaks. So I'll just announce them when they come in. But it does appear that everybody's utilization is about full, and there's people talking about continuing up the ramp of silicon carbide, mostly again for the traction inverters for EVs, some of the charging infrastructure of EVs and solar. And on the horizon more is all the data center stuff. It doesn't feel like yet that's really high volumes for -- in the immediate near term, but that's coming as well.

Your next question is coming from Jed Dorsheimer from William Blair.

Congratulations. Great quarter. Nice to see this breakout. Gayn, maybe just I think -- and I could be wrong here, but I think previously, you had mentioned the linearity of revenues or maybe it was Chris, in terms of weighted to front half. I'm just wondering whether or not that holds true in the context of raising the full year guide to the $150-plus million. How do you expect that linearity through the year?

Well, we -- kind of a couple of months in, a month in or so into the quarter, customers started coming back and saying, "Hey, I know I scheduled them into your second quarter. Can you pull them in?" In fact, that's kind of everybody right now ship as quickly as you can. So we were able to smooth some things out a little bit by bringing in Q1 -- but I mean, if you just do the math, if you say you're $150 million and we did 33, you've got 120-ish, something like that left the math. It feels like it's kind of -- each quarter of that 3 will grow a little bit and see it sort of smooth them out. But it feels -- this quarter will be a little bit more than last, and we think the following quarter higher than that. And then the fourth quarter, maybe the highest of the year, we'll see. But a lot of this, too, is interesting, and I don't -- we just raised our guidance. I don't want to get ahead of ourselves, but there are real potentials both in terms of potential demand and our ability to ship as we head into the second half. So I mean, we're feeling really good about the year and candidly, heading into the following year as well.

I just want to add for the second quarter will still be a very strong quarter for us, especially we have commitment to deliver our systems to our hyperscale customers. It's all in backlog. Q2, we ship it all. So if not all of them, most of it. So we still have a very strong quarter in the second quarter.

And Chris, you bring up a good point. I mean a book-to-bill of 1.4 is great, but you typically -- particularly because you've been more of a turns business. As you kind of operate at these new levels and maybe gain your perspective on this, are you seeing any areas of your supply chain that are giving you any pause or in terms of operating at, say, at this level or you're talking about numbers that are much, much larger around this benchmark customer if they go. How are you thinking about shoring up the resilience of your supply chain? And then I have one more.

So we've already been doing that. I mean we were talking up a storm a year ago about adding capacity, and it seemed a little odd that we were adding all this capacity if we're only doing $50 million for the year. And the answer was we could anticipate what they were saying and we were putting the infrastructure in place. So doing $33 million in the first quarter, 3x what it was the year before same quarter. We're already doing really well against it. Now candidly, having said that, we think we put infrastructure in place to be able to do above $150 million, and I'm pressing on the team to be able to put a lot more than that in place for the following year or maybe even pull in. So there are ways that we are working with our subcons. We do final assembly here of our wafer level systems. We can do final assembly of the package level systems at one of our subcons entirely now. Those are all shipping directly to our hyperscaler. We'll continue to do the final assembly of wafer level here for the foreseeable future, but the subcons are doing more and more of the subassemblies. So today, we have x hours to do a completion of a whole wafer-level burn-in system here. By the end of the year, I think we're down to 1/3 or so of that, which would allow us to do 3x the capacity, if you will, kind of number. So we're continuing to move on all of those fronts. And we're also spending money. We're putting money down with suppliers and making sure we're buying long lead items and additional aligners and things like that to have some buffer so that we can also ship very quickly.

Last question for me. That's helpful. Just around the benchmark customer and the wafer level burn-in, it does seem like escalation to purchase one of your systems and move it over to Asia. When do you -- do you have any expectation in terms of what that qualification process would look like that moves towards a PO? Is that something -- how should we be thinking about that?

We do. We have, I'd say, almost all of the final details on what we call a statement of work between the 2 companies that make it very clear what is required and needed. And we were, I think, pushing on them too, to push on us to ensure that what's in there makes it qualified as a real production system, too. Units per hour, uptime, all of those normal things you'd see with production. I think for them, it was like, okay, you were able to do it here in Fremont, that's great. But will you be able to do it under the scrutiny of our OSATs and volume production? We already know what that looks like. I mean, whether -- maybe we haven't shared all of the details along the way, but we actually have FOX systems installed in Taiwan. They happen to be very captive. I can't really go into it, but customers that have bought it and really locked it up for their specific requirements. So we know what high volume looks like on these. But this will be the first for them to really see it. And a lot of people are still just sort of getting their arms around the concept that you can actually test 9 wafers with several thousand watts a piece at a time and do it in high-volume production hands-free environment. And when they see that, the lights sort of go on like, well, how many things I could do that with. So we have a good idea what it looks like. We have a gnat chart on the schedule. There's a lot of details that are working through that need to be done to make sure that they get the facility in place. And all that's part of the reason it will -- we will be able to ship it until the beginning of the year. It's actually their stuff. And we have some work to do. There are some things that we've shown them during the benchmark that were prototype, if you will, and validated, but we need to just show that in volume production configuration. It's -- there are some features that we can upgrade our installed base to, and they'll be seeing that for the first time in high-volume production. So I want to -- there's always a lot of work. I don't want anyone to think that this stuff is easy to do. But around January, February, March, they'll have seen the data. Should be able to be making some decisions around their capacity planning. We'll be working with them on their forecast and which devices they would want to go first on. And we're optimistic and hopeful, and we're going to try really hard. We met directly with them face-to-face. I have in the last 1 week. And we heard directly from their management that this is really important. They really want this to work. So that's usually a good sign.

Your next question is coming from Max Michaelis from Lake Street.

Just first question, you guys snuck it into the prepared remarks talking about consumables revenue mix. I think you said it was 35% for fiscal year '27 is the expectation. What was that in fiscal year '26? And I can't remember if you guys have shared sort of a long-term target. But if you have thought about that, I guess, as of recently, can you share what you expect that to be in the future?

Yes. '26, if I recall correctly, that's in the 20s. But for the long-term model, we always think about around the 30%. That's kind of what we discussed. But obviously, this year, Q1 was exceptional 41%, but for FY '27, we're looking at something like around 35%.

There are scenarios where it could be 50% and our business is strong. Why I say that is part of the, I guess, pros and cons of being in the consumable business proprietary to our things is that as you have an installed base of, say, 1,000 blades or 1,000 wafers of capacity, every 1 to 3 years, as new devices come out, they'll buy all new sets of WaferPaks. So for maybe 1,000 wafers of capacity out there, which would be 100-ish of our systems, let's say, 9. So you would get maybe 300 WaferPaks even though they didn't buy new systems that year. So over time, that number adds to the -- currently, about 1/3 of every sale is WaferPaks, 2/3 is systems. So when you think 30%, you're like, oh, that's just a good growth year, not a lot of rebuy. And that is somewhat true. So as we start to see that infrastructure -- in fact, that's the first indicator. The silicon carbide guys in the last 1.5 years have only been buying WaferPaks. And right now, they're leading with more forecast for more WaferPaks or more consumables. So maybe it could be 50%. And again, it could be 50% because you're having a bad year for systems, and it's all that. But I'm talking even in a good year, it could be 50%.

Yes, I can double check for you Max.

And then last question here. I mean, awesome guide, and you blew numbers out of the water this quarter took guidance up to the high end of the range from last quarter. So at $150 million. Looking out for the last 3 quarters, it's about $117 million to get there. You got about $109 million, $110 million in the backlog right now, really only calling for $7 million of orders. Help me out if I'm thinking about this wrong, but it feels like it's almost conservative that you guys are only going to get $7 million or $8 million of orders by the end of, I mean, whatever the lead time is. So help me out there. Is there anything capacity, supply chain that you guys are conservative about or help me out there?

I think we're trying to be conservative. Yes, that's fair. I mean that is not -- that's currently not us supply limited, meaning we can ship more than that. That is current customers orders and when they say they would like it shipped, I'd say, for the most part, across the board. And so they do schedule things, they anticipated. And so we could get additional orders and still ship it this year. And we just thought $150 is a pretty nice clean number for us to be conservative at this point.

Back to answer your question, WaferPak or contactless revenue was 29% last year. Consumables.

Your next question is coming from Kevin Garrigan from Jefferies.

Let me echo my congrats on the great results. Once this benchmark customer is kind of fully up and running with wafer level burn-in, I mean, do you expect that to accelerate adoption with other customers? Or are there any potential customers that are just waiting until they see additional customers adopt wafer level burn-in before they go online?