COHU INC 10-K

Item 9A. Controls and Procedures. Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures - Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based on this evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were effective as of December 27, 2025, the end of the period covered by this annual report. Changes in Internal Control over Financial Reporting - There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended December 27, 2025, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Management ’ s Annual Report on Internal Control Over Financial Reporting - Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Based on our evaluation under the framework in Internal Control - Integrated Framework , our management concluded that our internal control over financial reporting was effective as of December 27, 2025. Ernst & Young LLP, the independent registered public accounting firm that audited the consolidated financial statements included in this Annual Report on Form 10-K, has also audited the effectiveness of our internal control over financial reporting as of December 27, 2025, as stated in their report which is included herein. 43 Table of Contents Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of Cohu, Inc. Opinion on Internal Control Over Financial Reporting We have audited Cohu, Inc.’s internal control over financial reporting as of December 27, 2025, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Cohu, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 27, 2025, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB) and in accordance with auditing standards generally accepted in the United States of America, the consolidated balance sheets of the Company as of December 27, 2025 and December 28, 2024, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the three years in the period ended December 27, 2025, and the related notes and the financial statement schedule listed in the Index at Item 15(a) and our report dated February 17, 2026 expressed an unqualified opinion thereon. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Ernst & Young LLP San Diego, California February 17, 2026 44 Table of Contents Item 9B. Other Information. Rule 10b5-1 Trading Plans Our directors and executive officers may purchase or sell shares of our common stock in the market from time to time, including pursuant to equity trading plans adopted in accordance with Rule 10b5-1 under the Exchange Act and in compliance with guidelines specified by our insider trading policy. In accordance with Rule 10b5-1 and our insider trading policy, directors, officers and certain employees who, at such time, are not in possession of material non-public information are permitted to enter into written plans that pre-establish amounts, prices and dates (or formula for determining the amounts, prices and dates) of future purchases or sales of our stock, including shares acquired pursuant to our equity incentive plans. Under a Rule 10b5-1 trading plan, a broker executes trades pursuant to parameters established by the director or executive officer when entering into the plan, without further direction from them. The use of these trading plans permits asset diversification as well as personal financial and tax planning. Our directors and executive officers may also buy or sell additional shares outside of a Rule 10b5-1 plan when they are not in possession of material nonpublic information, subject to compliance with SEC rules, the terms of our insider trading policy and certain minimum holding requirements. During the fourth quarter of fiscal 2025, the following Section 16 directors and officers adopted or terminated a “Rule 10b5-1 trading arrangement” (as defined in Item 408 of Regulation S-K of the Exchange Act): Plan Number of Name and Title Plan Action Adoption Date Expiration Date Shares to be Sold under Plan Chris G. Bohrson, Sr. VP & Chief Customer Officer Adoption 11/21/2025 2/19/2027 13,000 Transactions by Section 16 directors and officers will be disclosed publicly through Form 144 and Form 4 filings with the SEC to the extent required by law. No non-Rule 10b5-1 trading arrangements (as defined in Item 408of Regulation S-K of the Exchange Act) were adopted or terminated by any Section 16 director or officer during the fourth quarter of fiscal 2025 Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections. Not applicable. 45 Table of Contents PART III Item 10. Directors, Executive Officers and Corporate Governance. The information under the heading “Information About Our Executive Officers” in Part I, Item 1 of this Form 10-K is incorporated by reference in this section. The other information required by this item is hereby incorporated by reference to Cohu’s definitive proxy statement, which will be filed with the SEC within 120 days after the close of fiscal 2025. Code of Business Conduct and Code of Ethics Cohu has adopted a code of business conduct and ethics for directors, officers and employees. The code is available on the Investor Relations section of our website at www.cohu.com. We intend to make all required disclosures concerning any amendments to, or waivers from, our code of ethics on our website, within four business days of such amendment or waiver. Corporate Governance Guidelines and Certain Committee Charters Cohu has adopted Corporate Governance Guidelines as well as charters for its Audit, Compensation and Nominating and Governance Committees. These documents are available on the Investor Relations section of our website at www.cohu.com. Insider Trading Policy We have adopted an Insider Trading Policy governing transactions in our securities by our directors, officers and employees that we believe is reasonably designed to promote compliance with insider trading laws, rules and regulations and Nasdaq listing standards. A copy of the Insider Trading Policy is filed as Exhibit 19 to this Annual Report on Form 10-K. The information on our website is not incorporated by reference in or considered to be a part of this Annual Report on Form 10-K. Item 11. Executive Compensation. Information regarding Executive Compensation is hereby incorporated by reference to Cohu’s definitive proxy statement, which will be filed with the SEC within 120 days after the close of fiscal 2025. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. Information regarding Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters is hereby incorporated by reference to Cohu’s definitive proxy statement, which will be filed with the SEC within 120 days after the close of fiscal 2025. Item 13. Certain Relationships and Related Transactions, and Director Independence. Information regarding Certain Relationships and Related Transactions, and Director Independence is hereby incorporated by reference to Cohu’s definitive proxy statement, which will be filed with the SEC within 120 days after the close of fiscal 2025. Item 14. Principal Accounting Fees and Services. Information regarding the Principal Accounting Fees and Services is hereby incorporated by reference to Cohu’s definitive proxy statement, which will be filed with the SEC within 120 days after the close of fiscal 2025. 46 Table of Contents PART IV Item 15. Exhibits, Financial Statement Schedules. (a) The following documents are filed as part of, or incorporated by reference into, this Annual Report on Form 10-K. (1) Financial Statements The following consolidated financial statements of Cohu, Inc., including the report thereon of Ernst & Young LLP, are included in this Annual Report on Form 10-K beginning on page 48 : Form 10-K Description Page Number Consolidated Balance Sheets at December 27, 2025, and December 28, 2024 48 Consolidated Statements of Operations for each of the three years in the period ended December 27, 2025 49 Consolidated Statements of Comprehensive Income (Loss) for each of the three years in the period ended December 27, 2025 50 Consolidated Statements of Stockholders’ Equity for each of the three years in the period ended December 27, 2025 51 Consolidated Statements of Cash Flows for each of the three years in the period ended December 27, 2025 52 Notes to Consolidated Financial Statements 53 Report of Independent Registered Public Accounting Firm (PCAOB ID: 42 ) 90 (2) Financial Statement Schedule Schedule II – Valuation and Qualifying Accounts 97 All other financial statement schedules have been omitted because the required information is not applicable or not present in amounts sufficient to require submission of the schedule, or because the information required is included in the consolidated financial statements or the notes thereto. (3) Exhibits The exhibits listed under Item 15(b) hereof are filed with, or incorporated by reference into, this Annual Report on Form 10-K. 47 Table of Contents COHU, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except par value) December 27, December 28, 2025 2024 ASSETS Current assets: Cash and cash equivalents $ 227,053 $ 206,407 Short-term investments 256,928 55,685 Accounts receivable, net 108,754 91,619 Inventories 129,006 141,861 Prepaid expenses and other current assets 24,356 19,293 Taxes receivable 3,893 19,442 Total current assets 749,990 534,307 Property, plant and equipment, net 76,987 74,786 Goodwill 283,027 234,639 Intangible assets, net 79,272 110,717 Other assets 24,435 31,058 Operating lease right of use assets 29,271 13,908 $ 1,242,982 $ 999,415 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Short-term borrowings $ 9,807 $ 633 Current installments of long-term debt 1,244 1,115 Accounts payable 40,708 30,554 Customer advances 2,802 2,764 Accrued compensation and benefits 22,463 20,023 Accrued warranty 4,179 2,971 Deferred profit 8,626 3,589 Income taxes payable 2,789 2,394 Other accrued liabilities 16,460 21,141 Total current liabilities 109,078 85,184 Other accrued liabilities 6,730 6,821 Noncurrent income tax liabilities 3,975 5,691 Accrued retirement benefits 5,472 8,481 Deferred income taxes 15,469 19,402 Long-term debt 285,026 7,052 Long-term lease liabilities 31,693 9,893 Stockholders’ equity: Preferred stock, $ 1 par value; 1,000 shares authorized, none issued - - Common stock, $ 1 par value; 90,000 shares authorized, 49,875 shares issued and outstanding in 2025 and 49,601 shares in 2024 49,875 49,601 Paid-in capital 681,509 697,489 Treasury stock, at cost; 3,030 shares in 2025 and 2,891 shares in 2024 ( 87,842 ) ( 87,784 ) Retained earnings 174,467 248,740 Accumulated other comprehensive loss ( 32,470 ) ( 51,155 ) Total stockholders’ equity 785,539 856,891 $ 1,242,982 $ 999,415 The accompanying notes are an integral part of these statements. 48 Table of Contents COHU, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) Years ended December 27, December 28, December 30, 2025 2024 2023 Net sales $ 452,956 $ 401,779 $ 636,322 Cost and expenses: Cost of sales (1) 259,337 221,485 333,454 Research and development 92,213 84,797 88,571 Selling, general and administrative 123,566 128,037 132,249 Amortization of purchased intangible assets 37,466 39,087 36,355 Restructuring charges (Note 4) 10,143 41 2,421 522,725 473,447 593,050 Income (loss) from operations ( 69,769 ) ( 71,668 ) 43,272 Other (expense) income: Interest expense ( 2,054 ) ( 618 ) ( 3,382 ) Interest income 8,040 9,976 11,504 Foreign transaction loss ( 783 ) ( 2,395 ) ( 5,209 ) Pension curtailment gain 2,159 - - Loss on extinguishment of debt - ( 241 ) ( 369 ) Income (loss) before taxes ( 62,407 ) ( 64,946 ) 45,816 Income tax provision 11,866 4,872 17,660 Net income (loss) $ ( 74,273 ) $ ( 69,818 ) $ 28,156 Income (loss) per share: Basic: $ ( 1.59 ) $ ( 1.49 ) $ 0.59 Diluted: $ ( 1.59 ) $ ( 1.49 ) $ 0.59 Weighted average shares used in computing income (loss) per share: Basic 46,723 46,908 47,486 Diluted 46,723 46,908 48,025 (1) Excludes amortization of purchased intangibles of $28,086, $30,008, and $28,418 for the years ended December 27, 2025, December 28, 2024, and December 30, 2023, respectively. The accompanying notes are an integral part of these statements. 49 Table of Contents COHU, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (in thousands) Years ended December 27, December 28, December 30, 2025 2024 2023 Net income (loss) $ ( 74,273 ) $ ( 69,818 ) $ 28,156 Other comprehensive income (loss), net of tax Foreign currency translation adjustments 19,436 ( 16,839 ) 6,815 Adjustments related to postretirement benefits ( 887 ) 518 ( 2,375 ) Change in unrealized gain/loss on investments 136 ( 55 ) 793 Other comprehensive income (loss), net of tax 18,685 ( 16,376 ) 5,233 Comprehensive income (loss) $ ( 55,588 ) $ ( 86,194 ) $ 33,389 The accompanying notes are an integral part of these statements. 50 Table of Contents COHU, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS ’ EQUITY (in thousands, except par value and per share amounts) Accumulated Common other stock Paid-in Retained comprehensive Treasury $1 par value capital earnings loss Stock Total Balance at December 31, 2022 $ 49,276 $ 687,218 $ 290,402 $ ( 40,012 ) $ ( 58,043 ) $ 928,841 Common stock repurchases - - - - ( 23,641 ) ( 23,641 ) Net income - - 28,156 - - 28,156 Changes in cumulative translation adjustment - - - 6,815 - 6,815 Adjustments related to postretirement benefits, net of tax - - - ( 2,375 ) - ( 2,375 ) Changes in unrealized gains and losses on investments, net of tax - - - 793 - 793 Shares issued under ESPP 147 3,785 - - - 3,932 Shares issued for restricted stock units vested 6 ( 20,174 ) - - 20,168 - Repurchase and retirement of stock - ( 1,920 ) - - ( 7,668 ) ( 9,588 ) Share-based compensation expense - 17,237 - - - 17,237 Balance at December 30, 2023 49,429 686,146 318,558 ( 34,779 ) ( 69,184 ) 950,170 Common stock repurchases - - - - ( 27,123 ) ( 27,123 ) Net loss - - ( 69,818 ) - - ( 69,818 ) Changes in cumulative translation adjustment - - - ( 16,839 ) - ( 16,839 ) Adjustments related to postretirement benefits, net of tax - - - 518 - 518 Changes in unrealized gains and losses on investments, net of tax - - - ( 55 ) - ( 55 ) Shares issued under ESPP 172 3,814 - - - 3,986 Shares issued for restricted stock units vested - ( 13,154 ) - - 13,154 - Repurchase and retirement of stock - ( 57 ) - - ( 4,631 ) ( 4,688 ) Share-based compensation expense - 20,740 - - - 20,740 Balance at December 28, 2024 49,601 697,489 248,740 ( 51,155 ) ( 87,784 ) 856,891 Common stock repurchases - - - - ( 8,586 ) ( 8,586 ) Net loss - - ( 74,273 ) - - ( 74,273 ) Changes in cumulative translation adjustment - - - 19,436 - 19,436 Adjustments related to postretirement benefits, net of tax - - - ( 887 ) - ( 887 ) Changes in unrealized gains and losses on investments, net of tax - - - 136 - 136 Shares issued under ESPP 274 3,469 - - - 3,743 Shares issued for restricted stock units vested - ( 12,948 ) - - 12,948 - Repurchase and retirement of stock - 1,852 - - ( 4,420 ) ( 2,568 ) Share-based compensation expense - 23,042 - - - 23,042 Purchase of capped calls - ( 31,395 ) - - - ( 31,395 ) Balance at December 27, 2025 $ 49,875 $ 681,509 $ 174,467 $ ( 32,470 ) $ ( 87,842 ) $ 785,539 The accompanying notes are an integral part of these statements. 51 Table of Contents COHU, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Years ended December 27, December 28, December 30, 2025 2024 2023 Cash flows from operating activities: Net income (loss) $ ( 74,273 ) $ ( 69,818 ) $ 28,156 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Net accretion on investments ( 1,457 ) ( 1,254 ) ( 1,364 ) Loss on extinguishment of debt - 241 369 Pension curtailment gain ( 2,159 ) - - Depreciation and amortization 50,685 52,487 49,744 Share-based compensation expense 23,042 20,740 17,237 Inventory related charges 8,211 4,977 5,619 Amortization of debt discounts and issuance costs 422 8 146 Accrued retiree benefits ( 1,817 ) ( 1,589 ) ( 540 ) Deferred income taxes ( 1,802 ) ( 3,722 ) ( 4,774 ) Impairment charge related to equity investment - 903 - Change in fair value of contingent consideration liability ( 1,700 ) - - Changes in other assets 426 ( 3,831 ) ( 13,286 ) Amortization of cloud-based software implementation costs 2,836 2,836 2,800 (Gain) loss from sale of property, plant and equipment 141 176 ( 4 ) Changes in other accrued liabilities ( 175 ) ( 1,309 ) ( 702 ) Operating lease right-of-use assets 7,148 5,812 7,656 Changes in current assets and liabilities: Customer advances ( 208 ) ( 1,835 ) ( 2,309 ) Accounts receivable, net ( 14,466 ) 34,850 61,899 Inventories 4,280 6,374 12,839 Accrued compensation, warranty and other liabilities 8,614 ( 15,449 ) ( 14,897 ) Accounts payable 10,296 ( 3,560 ) ( 21,356 ) Deferred profit 3,707 26 ( 4,447 ) Other current assets 15,353 ( 16,148 ) 10,920 Income taxes payable 1,450 ( 2,234 ) ( 24,782 ) Current and long-term operating lease liabilities ( 6,862 ) ( 5,903 ) ( 7,454 ) Net cash provided by operating activities 31,692 2,778 101,470 Cash flows from investing activities: Purchases of property, plant and equipment ( 20,958 ) ( 10,634 ) ( 16,053 ) Net cash received from sale of assets 504 107 216 Purchases of short-term investments ( 263,417 ) ( 78,573 ) ( 97,290 ) Payment for purchase of Tignis, net of cash received ( 34,763 ) - - Sales and maturities of short-term investments 63,762 114,228 152,649 Settlement of net investment hedge ( 2,145 ) ( 3,212 ) - Payment for purchase of MCT, net of cash received - - ( 26,331 ) Payment for purchase of EQT, net of cash received - - ( 43,401 ) Net cash provided by (used in) investing activities ( 257,017 ) 21,916 ( 30,210 ) Cash flows from financing activities: Proceeds from revolving line of credit, revolving credit facility and convertible notes 296,295 - - Payment of debt issuance costs ( 9,435 ) - - Purchase of capped calls related to convertible notes ( 31,395 ) - - Repayments of long-term debt ( 1,733 ) ( 31,324 ) ( 38,788 ) Payments on finance lease liabilities ( 7 ) ( 24 ) ( 52 ) Acquisition of treasury stock ( 8,586 ) ( 26,986 ) ( 23,641 ) Net issuance (repurchases) of stock, including awards settled in cash 1,187 ( 701 ) ( 5,656 ) Net cash provided by (used in) financing activities 246,326 ( 59,035 ) ( 68,137 ) Effect of exchange rate changes on cash and cash equivalents ( 355 ) ( 4,776 ) 60 Net increase (decrease) in cash and cash equivalents 20,646 ( 39,117 ) 3,183 Cash and cash equivalents at beginning of year 206,407 245,524 242,341 Cash and cash equivalents at end of year $ 227,053 $ 206,407 $ 245,524 Supplemental disclosure of cash flow information: Cash paid for income taxes, net of refunds $ ( 2,829 ) $ 24,926 $ 44,276 Cash paid for interest $ 536 $ 803 $ 3,424 Property, plant and equipment purchases included in accounts payable $ 307 $ 454 $ 124 Inventory capitalized as capital assets $ 1,241 $ 1,765 $ 1,215 The accompanying notes are an integral part of these statements. 52 Table of Contents COHU, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Summary of Significant Accounting Policies Basis of Presentation – Cohu, Inc. (“Cohu”, “we”, “our”, “us” and the “Company”), through our wholly owned subsidiaries, is a provider of semiconductor test equipment and services. Our consolidated financial statements include the accounts of Cohu and our wholly owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. We evaluate the need to consolidate affiliates based on standards set forth in ASC Topic 810, Consolidation (“ASC 810”). The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates. Our fiscal years are based on a 52- or 53-week period ending on the last Saturday in December. Our fiscal years ended on December 27, 2025 and December 28, 2024, each consisted of 52 weeks. Our fiscal year ended on December 30, 2023 consisted of 53 weeks. Income (Loss) Per Share – Basic income (loss) per common share is computed by dividing net income by the weighted-average number of common shares outstanding during the reporting period. Diluted income per share includes the dilutive effect of common shares potentially issuable upon the exercise of stock options, vesting of outstanding restricted stock and performance stock units and issuance of stock under our employee stock purchase plan using the treasury stock method. In loss periods, potentially dilutive securities are excluded from the per share computations due to their anti-dilutive effect. For purposes of computing diluted income per share, certain restricted and performance stock units and stock options with exercise prices that exceed the average fair market value of our common stock for the period are excluded. The dilutive effect of the Notes is calculated under the if-converted method. Shares issuable upon conversion of the Notes are excluded from diluted net loss per common share in any quarter when the weighted average fair market value of our common stock is below the conversion price. For the year to date diluted net loss per common share calculation, the number of incremental common shares is determined by averaging the number of incremental common shares included in each calculation of quarterly diluted net loss per common share. For the years ended December 27, 2025, December 28, 2024 and December 30, 2023, approximately 474,000 , 248,000 , and 193,000 shares, respectively, of potentially issuable shares of our common stock were excluded from the computation. The following table reconciles the denominators used in computing basic and diluted income per share: (in thousands) 2025 2024 2023 Weighted average common shares outstanding 46,723 46,908 47,486 Effect of dilutive stock options and restricted stock units - - 539 46,723 46,908 48,025 Cash, Cash Equivalents and Short-term Investments – Highly liquid investments with insignificant interest rate risk and original maturities of three months or less are classified as cash and cash equivalents. Investments with maturities greater than three months are classified as short-term investments. All of our short-term investments in debt securities are classified as available-for-sale and are reported at fair value, with any unrealized gains and losses, net of tax, recorded in the statement of comprehensive income (loss). We manage our cash equivalents and short-term investments as a single portfolio of highly marketable securities. We have the ability and intent, if necessary, to liquidate any of our investments in order to meet the liquidity needs of our current operations during the next 12 months. Accordingly, investments with contractual maturities greater than one year have been classified as current assets in the accompanying consolidated balance sheets. Fair Value of Financial Instruments – The carrying amounts of our financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, approximate fair value due to the short maturities of these financial instruments. Concentration of Credit Risk – Financial instruments that potentially subject us to significant credit risk consist principally of cash equivalents, short-term investments and trade accounts receivable. We invest in a variety of financial instruments and, by policy, limit the amount of credit exposure with any one issuer. 53 Table of Contents COHU, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Our trade accounts receivable are presented net of an allowance for credit losses, which is determined in accordance with the guidance provided by ASC Topic 326, Financial Instruments-Credit Losses (“ASC 326”). Our customers include semiconductor manufacturers and semiconductor test subcontractors throughout many areas of the world. While we believe that our allowance for credit losses is adequate and represents our best estimate at December 27, 2025, we will continue to monitor customer liquidity and other economic conditions, which may result in changes to our estimates regarding expected credit losses. Inventories – Inventories are stated at the lower of cost, determined on a first-in, first-out basis, or net realizable value. Cost includes labor, material and overhead costs. Determining the net realizable value of inventories involves numerous estimates and judgments including projecting average selling prices and sales volumes for future periods. As a result of these analyses, we record a charge to cost of sales in advance of the period when the inventory is sold, which occurs when estimated market values are below our costs. Charges to cost of sales for excess and obsolete inventories totaled $ 7.5 million, $ 5.4 million and $ 4.5 million in fiscal 2025, 2024 and 2023, respectively. Inventories by category were as follows (in thousands) : December 27, December 28, 2025 2024 Raw materials and purchased parts $ 84,797 $ 94,970 Work in process 23,388 25,833 Finished goods 20,821 21,058 Total inventories $ 129,006 $ 141,861 Property, Plant and Equipment – Depreciation and amortization of property, plant and equipment, both owned and under financing lease, is calculated principally on the straight‑line method based on estimated useful lives of thirty to forty years for buildings, five to fifteen years for building improvements, three to ten years for machinery, equipment and software and the lease life for financing leases. Land is not depreciated. Property, plant and equipment, at cost, consisted of the following (in thousands) : December 27, December 28, 2025 2024 Land and land improvements $ 12,364 $ 6,941 Buildings and building improvements 49,469 47,733 Machinery and equipment 103,273 104,767 165,106 159,441 Less accumulated depreciation and amortization ( 88,119 ) ( 84,655 ) Property, plant and equipment, net $ 76,987 $ 74,786 Depreciation expense was $ 13.2 million in fiscal 2025, $ 13.4 million in fiscal 2024 and $ 13.4 million in fiscal 2023. Cloud Computing Implementation Costs – We have capitalized certain costs associated with the implementation of our cloud-based Enterprise Resource Planning (“ERP”) system in accordance with ASC Topic 350, Intangibles — Goodwill and Other (“ASC 350”). Capitalized costs include only external direct costs of materials and services consumed in developing the system and interest costs incurred, when material, while developing the system. Total unamortized capitalized cloud computing implementation costs totaled $ 7.0 million and $ 9.3 million at December 27, 2025 and December 28, 2024, respectively. These amounts are recorded within other current assets and other assets in our consolidated balance sheets. Implementation costs are amortized using the straight-line method over seven years and we recorded amortization expense totaling $ 2.8 million in each of the years ended December 27, 2025, December 28, 2024 and December 30, 2023. Segment Information – We apply the provisions of ASC Topic 280, Segment Reporting (“ASC 280”), which sets forth a management approach to segment reporting and establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products, major customers and the geographies in which the entity holds material assets and reports revenue. An operating segment is defined as a component that engages in business activities whose operating results are reviewed by the CODM and for which discrete financial information is available. We have determined that our three identified operating segments are: TH, ST and IS. Our TH, ST and IS operating segments qualify for aggregation under ASC 280 due to similarities in their customers, their economic characteristics, and the nature of products and services provided. As a result, we report in one segment, Semiconductor Test & Inspection. 54 Table of Contents COHU, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Goodwill, Intangible Assets and Other Long-Lived Assets – We evaluate goodwill for impairment annually and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Goodwill impairment testing is performed at the reporting unit level by comparing the estimated fair value of the reporting unit to its carrying value, including goodwill. If the carrying value exceeds fair value, an impairment charge is recognized for the amount by which the carrying value exceeds the fair value, limited to the carrying amount of goodwill. We estimate the fair values of our reporting units using a weighting of the income and market approaches. Under the income approach, we use a discounted cash flow methodology, which requires significant judgment and estimates related to, among other things, forecasted revenues, gross profit margins, operating income margins, working capital cash flows, perpetual growth rates, and long‑term discount rates. The market approach utilizes the guideline public company method, under which valuation multiples derived from comparable publicly traded companies with similar operating and investment characteristics are applied to the reporting unit’s operating performance metrics. The indicated values derived from the income and market approaches are equally weighted to determine the estimated fair value of each reporting unit. Forecasts of future cash flows are based on management’s best estimates of future net sales and operating expenses, taking into account customer forecasts, industry trade organization data, and general economic and market conditions. Fair value measurements are inherently subjective and sensitive to changes in assumptions. Adverse changes in forecasted results, discount rates, long‑term growth assumptions, macroeconomic conditions, customer demand, competitive dynamics, or other factors could result in a reduction in the estimated fair value of one or more reporting units. We performed our annual goodwill impairment test as of October 1, 2025, and determined that the estimated fair values of our reporting units exceeded their respective carrying values. For fiscal 2025, our IS reporting unit had limited headroom, meaning fair value only narrowly exceeded carrying value; as a result, even modest adverse changes in valuation assumptions, operating results, or market conditions could result in a future goodwill impairment charge. By comparison, our TH and ST reporting units each had substantially greater headroom at the assessment date, indicating a significantly larger cushion between fair value and carrying value. Goodwill associated with the IS reporting unit represented 39% of the total goodwill allocated across our reporting units as of the assessment date. Based on our analysis, including all relevant qualitative and quantitative factors, we concluded that no impairment exists as of the assessment date. Additionally, goodwill is required to be evaluated for impairment between annual testing dates if indicators of impairment arise. As of December 27, 2025, we determined that no such triggering events had occurred. If circumstances change and an interim impairment assessment is required, it could result in a non‑cash impairment charge, which could be material and would adversely affect our results of operations and financial condition. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recoverable. Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which an asset is used, or any other significant adverse change that would indicate that the carrying amount of an asset or group of assets may not be recoverable. For long-lived assets, impairment losses are only recorded if the asset’s carrying amount is not recoverable through its undiscounted future cash flows. We measure the impairment loss based on the difference between the carrying amount and estimated fair value. As of December 27, 2025, no events or conditions occurred suggesting an impairment in our long-lived assets. 55 Table of Contents COHU, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Product Warranty – Product warranty costs are accrued in the period sales are recognized. Our products are generally sold with standard warranty periods, which differ by product, ranging from 12 to 36 months. Parts and labor are typically covered under the terms of the warranty agreement. Our warranty expense accruals are based on historical and estimated costs by product and configuration. From time to time we offer customers extended warranties beyond the standard warranty period. In those situations, the revenue relating to the extended warranty is deferred at its estimated fair value and recognized on a straight-line basis over the contract period. Costs associated with our extended warranty contracts are expensed as incurred. Income Taxes – We assess our income tax positions and record tax benefits for all years subject to examination based upon management’s evaluation of the facts, circumstances and information available at the reporting dates. For those tax positions where it is more likely than not that a tax benefit will be sustained, we have recorded the largest amount of tax benefit with a greater than 50 percent likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where it is not more likely than not that a tax benefit will be sustained, no tax benefit has been recognized in the financial statements. Where applicable, associated interest and penalties have also been recognized and recorded, net of federal and state tax benefits, in income tax expense. We recognized deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established for those jurisdictions when necessary to reduce deferred tax assets to the amounts that are more likely than not to be realized in the future. Contingencies and Litigation – We assess the probability of adverse judgments in connection with current and threatened litigation. We would accrue the cost of an adverse judgment if, in our estimation, the adverse outcome is probable, and we can reasonably estimate the ultimate cost. Leases – We determine if a contract contains a lease at inception. Operating leases are included in operating lease right of use (“ROU”) assets, current other accrued liabilities, and long-term lease liabilities on our consolidated balance sheets. Finance leases are included in property, plant and equipment, other current accrued liabilities, and long-term lease liabilities on our consolidated balance sheets. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at January 1, 2019, the adoption date of Accounting Standard Update (“ASU”) 2016-02 , Leases (Topic 842) , or the commencement date for leases entered into after the adoption date. As most of our leases do not provide an implicit rate, we use our incremental borrowing rates for the remaining lease terms based on the information available at the adoption date or commencement date in determining the present value of future payments. The operating lease ROU asset also includes any lease payments made, lease incentives, favorable and unfavorable lease terms recognized in business acquisitions and excludes initial direct costs incurred and variable lease payments. Variable lease payments include estimated payments that are subject to reconciliations throughout the lease term, increases or decreases in the contractual rent payments, as a result of changes in indices or interest rates and tax payments that are based on prevailing rates. Our lease terms may include renewal options to extend the lease when it is reasonably certain that we will exercise those options. In addition, we include purchase option amounts in our calculations when it is reasonably certain that we will exercise those options. Rent expense for minimum payments under operating leases is recognized on a straight-line basis over the term. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet but recognized in our consolidated statements of operations on a straight-line basis over the lease term. We account for lease and non-lease components as a single lease component and include both in our calculation of the ROU assets and lease liabilities. We sublease certain leased assets to third parties, mainly as a result of unused space in our facilities. None of our subleases contain extension options. Variable lease payments in our subleases include tax payments that are based on prevailing rates. We account for lease and non-lease components as a single lease component. 56 Table of Contents COHU, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Revenue Recognition – Our net sales are derived from the sale of products and services and are adjusted for estimated returns and allowances, which historically have been insignificant. We recognize revenue when the obligations under the terms of a contract with our customers are satisfied; generally, this occurs with the transfer of control of our systems and non-system products or the completion of services. In circumstances where control is not transferred until destination or acceptance, we defer revenue recognition until such events occur. Revenue for established products that have previously satisfied a customer’s acceptance requirements is generally recognized upon shipment. In cases where a prior history of customer acceptance cannot be demonstrated and in the case of new products, revenue and cost of sales are deferred until customer acceptance has been received. Our post-shipment obligations typically include standard warranties. Service revenue is recognized over time as we transfer control to our customer for the related contract or upon completion of the services if they are short-term in nature. Spares, contactor and kit revenue is generally recognized upon shipment. Certain of our equipment sales have multiple performance obligations that may occur at different points in time or over different periods of time. For arrangements containing multiple performance obligations, the revenue relating to the undelivered performance obligation is deferred using the relative standalone selling price method utilizing estimated sales prices until satisfaction of the deferred performance obligation. Unsatisfied performance obligations primarily represent contracts for products with future delivery dates. At December 27, 2025 and December 28, 2024, we had $ 5.1 million and $ 5.6 million of revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) for contracts with original expected durations of over one year, respectively. As allowed under ASC 606, we have opted not to disclose unsatisfied performance obligations for contracts with original expected durations of less than one year. We generally sell our equipment with a product warranty. The product warranty provides assurance to customers that delivered products are as specified in the contract (an “assurance-type warranty”). Therefore, we account for such product warranties under ASC Topic 460, Guarantees (“ASC 460”), and not as a separate performance obligation. The transaction price reflects our expectations about the consideration we will be entitled to receive from the customer and may include fixed or variable amounts. Fixed consideration primarily includes sales to customers in which the amount of consideration is known as of the end of the reporting period. Variable consideration includes sales in which the amount of consideration that we will receive is unknown as of the end of a reporting period. Such consideration primarily includes sales made to certain customers with cumulative tier volume discounts offered. Variable consideration arrangements are rare; however, when they occur, we estimate variable consideration as the expected value to which we expect to be entitled. Included in the transaction price estimate are amounts in which it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Variable consideration that does not meet revenue recognition criteria is deferred. For contracts that are less than one year in duration we have elected to use the practical expedient available in ASC 606 to expense cost to obtain contracts as they are incurred because they would be amortized over less than one year. Accounts receivable represent our unconditional right to receive consideration from our customers. Payment terms do not exceed one year from the invoice date and therefore do not include a significant financing component. To date, there have been no material impairment losses on accounts receivable. There were no material contract assets recorded on the consolidated balance sheet in any of the periods presented. On shipments where sales are not recognized, gross profit is recorded as deferred profit in our consolidated balance sheet representing the difference between the receivable recorded and the inventory shipped. In certain instances where customer payments are received prior to product shipment, the customer’s payments are recorded as customer advances. At December 27, 2025, we had deferred revenue totaling approximately $ 15.3 million, current deferred profit of $ 8.6 million and deferred profit expected to be recognized after one year included in noncurrent other accrued liabilities of $ 3.7 million. At December 28, 2024, we had deferred revenue totaling approximately $ 8.6 million, current deferred profit of $ 3.6 million and deferred profit expected to be recognized after one year included in noncurrent other accrued liabilities of $ 4.3 million. 57 Table of Contents COHU, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Disaggregated net sales are as follows: (in thousands) 2025 2024 2023 Systems-Semiconductor Test & Inspection $ 180,627 $ 139,133 $ 326,448 Non-systems-Semiconductor Test & Inspection 272,329 262,646 309,874 Net sales $ 452,956 $ 401,779 $ 636,322 Advertising Costs – Advertising costs are expensed as incurred and were not material for all periods presented. Restructuring Costs – We record restructuring activities including costs for one-time termination benefits in accordance with ASC Topic 420, Exit or Disposal Cost Obligations (“ASC 420”) . The timing of recognition for severance costs accounted for under ASC 420 depends on whether employees are required to render service until they are terminated in order to receive the termination benefits. If employees are required to render service until they are terminated in order to receive the termination benefits, a liability is recognized ratably over the future service period. Otherwise, a liability is recognized when management has committed to a restructuring plan and has communicated those actions to employees. Employee termination benefits covered by existing benefit arrangements are recorded in accordance with ASC Topic 712, Nonretirement Postemployment Benefits. These costs are recognized when management has committed to a restructuring plan and the severance costs are probable and estimable. Debt Issuance Costs – We defer costs related to the issuance of debt. Debt issuance costs directly related to our Term Loan Credit Facility and Convertible Notes are presented within noncurrent liabilities as a reduction of long-term debt in our consolidated balance sheets. The amortization of such costs is recognized as interest expense using the effective interest method over the term of the respective debt issue. Amortization related to deferred debt issuance costs and original discount costs was $ 0.4 million and $ 0.1 million for the years ended December 27, 2025, and December 30, 2023, respectively. Amortization related to deferred debt issuance costs and original discount costs was not material for the year ended December 28, 2024. Share-based Compensation – Compensation expense for restricted stock unit (RSU) awards is calculated based on the market price of our common stock on the grant date. As Cohu doesn’t currently pay dividends, no reduction for expected dividends is applied. Compensation expense for performance stock units (PSUs) with market-based goals is determined using a Monte Carlo simulation model as of the grant date. Foreign Remeasurement and Currency Translation – Assets and liabilities of our wholly owned foreign subsidiaries that use the U.S. Dollar as their functional currency are re-measured using exchange rates in effect at the end of the period, except for nonmonetary assets, such as inventories and property, plant and equipment, which are re-measured using historical exchange rates. Revenues and costs are re-measured using average exchange rates for the period, except for costs related to those balance sheet items that are re-measured using historical exchange rates. Gains and losses on foreign currency transactions are recognized as incurred. During the years ended December 27, 2025, December 28, 2024 and December 30, 2023, in our consolidated statement of operations we recognized foreign exchange losses, net of hedging activity, of $ 0.8 million, $ 2.4 million and $ 5.2 million, respectively. Certain of our foreign subsidiaries have designated the local currency as their functional currency and, as a result, their assets and liabilities are translated at the rate of exchange at the balance sheet date, while revenue and expenses are translated using the average exchange rate for the period. Cumulative translation adjustments resulting from the translation of the financial statements are included as a separate component of stockholders’ equity. Foreign Exchange Derivative Contracts – We operate and sell our products in various global markets. As a result, we are exposed to changes in foreign currency exchange rates. To minimize foreign exchange volatility, we enter into foreign currency forward contracts with a financial institution to hedge against future movements in foreign exchange rates. We do not use derivative financial instruments for speculative or trading purposes. The accounting for changes in the fair value of our derivatives depends on the intended use of the derivative and whether we have elected to designate a derivative as a hedging relationship and apply hedge accounting. All derivative instruments are recognized at fair value on our consolidated balance sheets and all changes in fair value are recognized in net earnings or in the statement of consolidated stockholders’ equity through accumulated other comprehensive loss (“AOCL”). 58 Table of Contents COHU, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For contracts that qualify for hedge accounting treatment, the hedge contracts must be effective at reducing the risk associated with the exposure being hedged and must be designated as a hedge at the inception of the contract. Hedge effectiveness is assessed periodically. For accounting purposes, certain of our foreign currency forward contracts are not designated as hedging instruments and, accordingly, we record the fair value of these contracts as of the end of our reporting period in our consolidated balance sheets with changes in fair value recorded within foreign transaction gain (loss) in our consolidated statements of operations for both realized and unrealized gains and losses. Additional information related to our foreign exchange derivative contracts is included in Note 8, “Derivative Financial Instruments”. Accumulated Other Comprehensive Loss – Our accumulated other comprehensive loss totaled approximately $ 32.5 million at December 27, 2025, and $ 51.2 million at December 28, 2024, and was attributed to, net of income taxes where applicable, foreign currency adjustments resulting from the translation of certain accounts into U.S. Dollars, changes in unrealized gains and losses on investments and adjustments to accumulated postretirement benefit obligations. The U.S. Dollar weakened relative to certain foreign currencies in countries where we have operations as of December 27, 2025 and consequently, our accumulated other comprehensive loss attributed to foreign currency translation adjustments decreased by $ 19.4 million during the year ended December 27, 2025. The U.S. Dollar strengthened relative to certain foreign currencies in countries where we have operations as of December 28, 2024 and consequently, our accumulated other comprehensive loss attributed to foreign currency translation adjustments increased by $ 16.8 million during the year ended December 28, 2024. Reclassification adjustments from accumulated other comprehensive loss during fiscal 2025 and 2024 were not significant. Additional information related to accumulated other comprehensive loss, on an after-tax basis is included in Note 15, “Accumulated Other Comprehensive Loss”. Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements – In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. This ASU is effective for fiscal years beginning after December 15, 2024. The Company adopted the new accounting pronouncement in the current period on a prospective basis. The adoption of ASU 2023-09 did not have a material impact on the consolidated financial statements or results of operations, however, it impacted our income tax disclosures in Note 10, “Income Taxes”. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting ( “ ASC 848 ” ) . ASC 848 provides temporary optional expedients and exceptions to certain U.S. GAAP contract modification requirements for contracts affected by reference rate reform as entities transition away from the London Interbank Offered Rate (“LIBOR”) to alternative reference rates. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 to defer the sunset date of ASC 848 from December 31, 2022 to December 31, 2024, after which entities will no longer be permitted to apply the optional expedients in ASC 848. Effective June 16, 2023, we adopted ASC 848. Our Term Loan B Credit and Guaranty Agreement dated as of October 1, 2018, as amended, is our only contract where interest expense is based on LIBOR. The ICE Benchmark Administration Limited, LIBOR’s administrator, has ceased publishing certain LIBOR settings and stopped publishing the Overnight, 1-month, 3-month, 6-month, and 12-month USD LIBOR U.S. dollar settings in fiscal 2023. As a result, we commenced the transition of our LIBOR-based contract to SOFR. The optional expedients under ASC 848 have allowed and will allow us to account for contract modifications as continuations of the existing contract without further reassessments or remeasurements that would otherwise be required under the applicable U.S. GAAP. On February 9, 2024 we made a cash payment of $ 29.3 million to repay the remaining outstanding principal of our Term Loan Credit Facility. 59 Table of Contents COHU, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Recently Issued Accounting Pronouncements – In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. We are currently evaluating the impact of adopting ASU 2024-03. All other newly issued accounting pronouncements not yet effective have been deemed either immaterial or not applicable. 2. Goodwill and Purchased Intangible Assets Changes in the carrying value of our goodwill during the years ended December 27, 2025, and December 28, 2024, were as follows ( in thousands ): Total Goodwill Balance December 30, 2023 $ 241,658 Impact of currency exchange ( 7,019 ) Balance December 28, 2024 234,639 Additions 33,688 Impact of currency exchange 14,700 Balance December 27, 2025 $ 283,027 Purchased intangible assets, subject to amortization, are as follows (in thousands) : December 27, 2025 December 28, 2024 Remaining Gross Carrying Accumulated Useful Life Gross Carrying Accumulated Amount Amortization (years) Amount Amortization Developed technology $ 241,038 $ 199,776 3.5 $ 228,789 $ 163,453 Customer relationships 75,677 44,210 5.3 72,570 35,229 Trade names 22,366 15,845 4.6 20,926 12,930 Backlog - - - 100 100 Covenant not-to-compete 225 203 1.0 223 179 $ 339,306 $ 260,034 $ 322,608 $ 211,891 Changes in the carrying values of purchased intangible assets presented above are a result of the impact of fluctuations in currency exchange rates. We evaluate goodwill for impairment annually and when an event occurs or circumstances change that indicate that the carrying value may not be recoverable. We completed our required annual goodwill impairment testing as of October 1, 2025 and concluded there were no impairments of goodwill within our reporting units at that time. Other events and changes in circumstances may also require goodwill to be tested for impairment between annual measurement dates. Amortization expense related to purchased intangible assets was approximately $ 37.5 million in fiscal 2025, $ 39.1 million in fiscal 2024 and $ 36.4 million in fiscal 2023. As of December 27, 2025, we expect amortization expense in future periods to be as follows: fiscal 2026 - $ 26.9 million; fiscal 2027 - $ 18.7 million; fiscal 2028 - $ 12.3 million; fiscal 2029 - $ 8.2 million fiscal 2030 - $ 6.2 million; and thereafter $ 7.0 million. 60 Table of Contents COHU, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 3. Borrowings and Credit Agreements The following table is a summary of our borrowings as of December 27, 2025 and December 28, 2024: Fiscal year ended (in thousands) December 27, 2025 December 28, 2024 Convertible notes $ 287,500 $ - Bank term loans-Kita 1,530 1,694 Construction loan-Cohu GmbH 6,252 - Revolving credit facility 9,360 6,473 Lines of credit 447 633 Total debt 305,089 8,800 Less: financing fees and discount ( 9,012 ) - Less: current portion ( 11,051 ) ( 1,748 ) Total long-term debt $ 285,026 $ 7,052 The debt principal payments, excluding financing lease obligations, for the next five years and thereafter are as follows (in thousands) : 2026 $ 11,051 2027 1,249 2028 1,319 2029 1,125 2030 629 Thereafter 289,716 Total $ 305,089 Convertible Senior Notes Due 2031 On September 29, 2025, we issued $ 287.5 million aggregate principal amount of 1.50 % convertible senior notes due 2031. The Notes include the full exercise by the initial purchasers on September 25, 2025 of their option to purchase up to an additional $ 27.5 million principal amount of the Notes. The Notes are senior unsecured obligations and bear interest at a coupon rate of 1.50 % per annum, with interest payable semiannually in arrears on January 15 and July 15 of each year, beginning on January 15, 2026. The Notes will mature on January 15, 2031, unless earlier converted, redeemed or repurchased in accordance with their terms. Prior to the close of business on the business day immediately preceding October 15, 2030, noteholders will have the right to convert their Notes only upon the occurrence of certain events. On or after October 15, 2030, noteholders may convert all or any portion of their Notes at any time at their election until the close of business on the second scheduled trading day immediately preceding the maturity date. Upon conversion, we will satisfy the conversion obligations by paying cash up to the aggregate principal amount of the Notes to be converted and paying and/or delivering cash, shares of common stock or a combination of cash and shares of common stock, at our election, in respect of the remainder, if any, of the conversion obligation in excess of the aggregate principal amount of the Notes being converted. The initial conversion rate for the Notes is 36.7975 shares of common stock per $1,000 principal amount of Notes (equivalent to an initial conversion price of approximately $ 27.18 per share of common stock), which represents an approximately 32.5 % conversion premium over the last reported sale price of $ 20.51 per share of our common stock on The Nasdaq Stock Market on September 24, 2025 (the “Reference Price”). The conversion rate (and accordingly the conversion price) is subject to adjustment upon the occurrence of certain events. In addition, upon certain corporate events or upon a notice of redemption (as described below), we will, under certain circumstances, increase the conversion rate for noteholders who convert Notes in connection with such a corporate event or convert their Notes called (or deemed called) for redemption during the related redemption period, as the case may be. 61 Table of Contents COHU, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The Notes will not be redeemable before January 22, 2029. The Notes will be redeemable, in whole or in part, for cash at our option at any time, and from time to time, on or after January 22, 2029 and prior to the 51st scheduled trading day immediately preceding the maturity date, if (i) the Notes are “freely tradable” (as defined in the indenture governing the Notes), and certain accrued and unpaid additional interest, if any, has been paid in full, as of the first interest payment date occurring on or before the date we send such notice and (ii) the last reported sale price per share of our common stock has been at least 130 % of the conversion price for a specified period of time. The redemption price will be equal to the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. If a “fundamental change” (as defined in the indenture governing the Notes) occurs, then, subject to certain conditions, noteholders may require us to repurchase their Notes for cash. The repurchase price will be equal to the principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the applicable repurchase date. Our net proceeds from the offering were approximately $ 278.9 million, after deducting the initial purchasers’ discounts and commissions but before estimated offering expenses. We used approximately $ 31.4 million of the net proceeds to enter into the capped call transactions that are described in Note 9, “Equity”. We intend to use the remaining net proceeds for general corporate purposes. The Notes are recorded as liabilities in accordance with ASC 470. Issuance costs will be amortized to interest expense over the term of the Notes using the effective interest method. Upon issuance, we evaluated the conversion feature for potential separation as an embedded derivative under ASC 815 and determined that the conversion feature did not meet the criteria for derivative accounting. The effective interest rate for the Notes is 2.2 % after considering the effect of the accretion of the related debt discount over the term of the Notes. For the year ended December 27, 2025, total interest expense related to the Notes was $ 1.5 million with coupon interest expense of $ 1.1 million and amortization of debt discount of $ 0.4 million. As of December 27, 2025, the remaining unamortized debt discount of the Notes was $ 9.0 million. At December 27, 2025, the outstanding Notes balance, net of discount, was $ 278.5 million. As of December 27, 2025, the fair value of the Notes was $ 321.9 million. The measurement of the fair value of Notes is based on the last traded price of the Notes as of December 27, 2025 and is considered a Level 2 fair value measurement. Credit Agreement On October 1, 2018, we entered into a Credit Agreement providing for a $ 350.0 million Term Loan Credit Facility and borrowed the full amount to finance a portion of the Xcerra acquisition. Loans under the Term Loan Credit Facility were amortized in equal quarterly installments of 0.25 % of the original principal amount, with the balance payable at maturity. All outstanding principal and interest in respect of the Term Loan Credit Facility would have been due on or before October 1, 2025. The loans under the Term Loan Credit Facility bore interest, at Cohu’s option, at a floating annual rate equal to LIBOR plus a margin of 3.00 %. On June 16, 2023, in connection with the discontinuation of LIBOR , we entered into an amendment to our Term Loan Credit Facility, which provided for the transition of the benchmark interest rate from LIBOR to SOFR. Effective with the interest period beginning July 1, 2023, LIBOR was replaced with Adjusted Term SOFR, a floating annual rate equal to SOFR plus a margin of 3.0 %. On February 9, 2024, we made a cash payment of $ 29.3 million to repay the remaining outstanding amounts owed under our Term Loan Credit Facility. We accounted for the transaction as a debt extinguishment, and in the first quarter of fiscal 2024 we recognized a loss of $ 0.2 million due to the recognition of the remaining debt discount and deferred financing costs. Kita Term Loans We have a series of term loans with Japanese financial institutions primarily related to the expansion of our facility in Osaka, Japan. The loans are collateralized by the facility and land, carry interest rates ranging from 0.05 % to 0.96 %, and expire at various dates through 2034. At December 27, 2025, the outstanding loan balance was $ 1.5 million, and $ 0.2 million of the outstanding balance is presented as current installments of long-term debt in our consolidated balance sheets. At December 28, 2024, the outstanding loan balance was $ 1.7 million, and $ 0.2 million of the outstanding balance is presented as current installments of long-term debt in our consolidated balance sheets. The fair value of the debt approximates the carrying value at December 27, 2025. 62 Table of Contents COHU, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The term loans are denominated in Japanese Yen and, as a result, amounts disclosed herein will fluctuate because of changes in currency exchange rates. Construction Loans In July 2019 and June 2020, one of our wholly owned subsidiaries located in Germany entered into a series of Loan Facilities with a German financial institution providing it with total borrowings of up to € 10.1 million. The Loan Facilities were utilized to finance the expansion of our facility in Kolbermoor, Germany and are secured by the land and the existing building on the site. The Loan Facilities bear interest at agreed upon rates based on the facility amounts as discussed below. The first facility totaling € 3.4 million has been fully drawn and is payable over 10 years at a fixed annual interest rate of 0.8 %. Principal and interest payments are due each quarter over the duration of the facility ending in September 2029. The second facility totaling € 5.2 million has been fully drawn and is payable over 15 years at an annual interest rate of 1.05 %, which is fixed until April 2027. Principal and interest payments are due each month over the duration of the facility ending in January 2034. The third facility totaling € 0.9 million has been fully drawn and is payable over 10 years at an annual interest rate of 1.2 %. Principal and interest payments are due each month over the duration of the facility ending in May 2030. At December 27, 2025, total outstanding borrowings under the Loan Facilities was $ 6.3 million with $ 1.1 million of the total outstanding balance being presented as current installments of long-term debt in our consolidated balance sheets. At December 28, 2024, total outstanding borrowings under the Loan Facilities was $ 6.5 million with $ 0.9 million of the total outstanding balance being presented as current installments of long-term debt in our consolidated balance sheets. The loans are denominated in Euros and, as a result, amounts disclosed herein will fluctuate because of changes in currency exchange rates. The fair value of the debt approximates the carrying value at December 27, 2025. Revolving Credit Facility On December 30, 2024, our wholly owned subsidiary in Malaysia entered into a revolving credit facility with a Malaysian financial institution that provides up to MYR 40 million, of which MYR 37.9 million was subsequently drawn. The revolving credit facility was utilized to finance the purchase of our leased facility in Melaka, Malaysia. Interest is due monthly and is calculated based on the lender’s Effective Cost of Funds plus a spread of 0.5 %. The revolving credit facility is secured by the land and building. At December 27, 2025, $ 9.4 million was outstanding under the revolving credit facility and the rate of interest was 4.04 %. As this revolving credit facility agreement renews monthly, it has been included in short-term borrowings in our consolidated balance sheets. The revolving credit is denominated in Malaysian Ringgits and, as a result, amounts disclosed herein will fluctuate because of changes in currency exchange rates. Lines of Credit As a result of our acquisition of Kita, we assumed a series of revolving credit facilities with various financial institutions in Japan. The credit facilities renew monthly and provide Kita with access to working capital totaling up to 660 million Japanese Yen of which 70 million Japanese Yen is drawn. At December 27, 2025, total borrowings outstanding under the revolving lines of credit were $ 0.4 million. As these credit facility agreements renew monthly, they have been included in short-term borrowings in our consolidated balance sheets. The revolving lines of credit are denominated in Japanese Yen and, as a result, amounts disclosed herein will fluctuate because of changes in currency exchange rates. Our wholly owned subsidiary in Switzerland has one available line of credit which provides borrowings of up to a total of 2.0 million Swiss Francs, a portion of which is reserved for tax guarantees. At December 27, 2025, and December 28, 2024, no amounts were outstanding under this line of credit. 63 Table of Contents COHU, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 4. Restructuring Charges 2025 Strategic Restructuring On February 19, 2025, we approved and began executing a strategic restructuring program designed to reposition our organization and improve our cost structure (the “2025 Restructuring Program”). As part of this program, we consolidated certain of our operations in La Chaux-de-Fonds, Switzerland, and Kolbermoor, Germany, into lower‑cost locations, and we also implemented headcount reductions in those areas and in the U.S. and across Asia. Relating to the operations consolidation actions, we notified certain impacted employees of the corresponding reduction in force program at those locations which required negotiation with the microtechnology and Swiss watch trade union and the German labor organization which represent certain of the employees at their respective locations. During the second quarter of fiscal 2025, headcount reductions we implemented in Switzerland as part of the 2025 Restructuring Program resulted in a change to our defined benefit pension plan, resulting in a curtailment of future benefits for affected employees. In accordance with ASC Topic 715, Compensation-Retirement Benefits (“ASC 715”), during the fiscal year ended December 27, 2025, we recognized pension curtailment gains totaling $ 2.2 million. These gains reflect the reduction in the projected benefit obligation due to the termination of future service accruals for impacted plan participants and are included in the consolidated statements of operations. The 2025 Restructuring Program, as implemented over time, will reduce headcount and enable us to optimize the facilities of our operations, as well as transition certain manufacturing to other lower cost regions. The 2025 Restructuring Program is being implemented as part of a comprehensive review of our operations with the goal of reducing costs during the extended downturn in the semiconductor test and inspection equipment industry. In the fourth quarter of 2025, management identified additional restructuring actions under Cohu’s previously communicated 2025 Restructuring Program to further optimize our cost structure and operational footprint. These additional actions were announced and commenced on January 13, 2026, and include the further consolidation of certain operations within our IS and ST business segments in the U.S. and Asia, as well as workforce reductions across select functions. Consistent with our ongoing benefit arrangements, management determined that these actions represent a continuation of an ongoing plan which requires recognition of a liability for postemployment benefits when the obligation is probable and reasonably estimable. Because the related termination benefits were probable and reasonably estimable, as of December 27, 2025, Cohu recorded an accrual totaling $ 1.4 million. Approximately $ 0.5 million of additional costs are expected to be recorded during fiscal 2026. As a result of the activities described above, we recognized total pretax charges of $ 10.1 million during the fiscal year ended December 27, 2025, that are within the scope of ASC 420. Charges related to the 2025 Restructuring Program for the fiscal year ended December 27, 2025, were as follows: (in thousands) 2025 Employee severance costs $ 8,300 Inventory related charges (adjustments) 122 Other restructuring costs 153 Total $ 8,575 Costs associated with restructuring activities are presented in our consolidated statements of operations as restructuring charges. Other restructuring costs include crating, freight, travel and manufacturing transition costs. 64 COHU, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The following table summarizes the activity within the restructuring related accounts for the 2025 Restructuring Program during the fiscal year ended December 27, 2025 (in thousands) : Employee Severance Other Exit Costs Total Balance, December 28, 2024 $ - $ - $ - Costs accrued 8,300 153 8,453 Amounts paid or charged ( 6,570 ) ( 129 ) ( 6,699 ) Impact of currency exchange 402 - 402 Balance, December 27, 2025 $ 2,132 $ 24 $ 2,156 Poway Volume Manufacturing Transition During the fourth quarter of fiscal 2024, we made the decision to transition all remaining volume manufacturing out of Poway, CA, and consolidate it into our factories in Asia. When fully implemented, these changes will allow us to better utilize our corporate infrastructure, drive improvements in inventory management, optimize our warehousing and better support our long-term goals. Total pretax charges related to the Poway volume manufacturing transition for the fiscal year ended December 27, 2025, were $ 1.7 million. Total pretax charges related to the Poway volume manufacturing transition for the fiscal year ended December 28, 2024, were not material. Charges related to the Poway volume manufacturing transition for the fiscal year ended December 27, 2025, were as follows: (in thousands) 2025 Employee severance costs $ 1,053 Inventory related charges (adjustments) 623 Other restructuring costs 637 Total $ 2,313 Costs associated with restructuring activities are presented in our consolidated statements of operations as restructuring charges. Other restructuring costs include freight, logistics, training and travel expenses to facilitate moving inventory and manufacturing equipment from Poway to Asia. The following table summarizes the activity within the restructuring related accounts for the Poway volume manufacturing transition during the fiscal year ended December 27, 2025 (in thousands) : Employee Severance Other Exit Costs Total Balance, December 28, 2024 $ - $ - $ - Costs accrued 1,053 637 1,690 Amounts paid or charged ( 1,053 ) ( 637 ) ( 1,690 ) Balance, December 27, 2025 $ - $ - $ - MCT Integration Program During fiscal 2023, we began a strategic restructuring and integration program (“MCT Integration Program”) in connection with the acquisition of MCT Worldwide, LLC (“MCT”). As part of the MCT Integration Program, we consolidated MCT’s Penang, Malaysia manufacturing operations into Cohu’s Melaka, Malaysia manufacturing operations by the end of fiscal 2023. Relating to the facility consolidation actions, we notified certain impacted employees of a reduction in force program and the facility consolidation and reduction in force programs are being implemented as part of a comprehensive review of our operations and are intended to reduce our operating cost structure and capitalize on acquisition synergies. As a result of the activities described above, we recognized total pretax charges of $ 2.4 million during the fiscal year ended December 30, 2023, that are within the scope of ASC 420. Total pretax charges during the fiscal year ended December 27, 2025 and December 28, 2024 were not material. 65 COHU, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Charges related to the MCT Integration Program for the year ended December 30, 2023, were as follows: (in thousands) 2023 Employee severance costs $ 2,159 Other restructuring costs 262 Total $ 2,421 Costs associated with restructuring activities are presented in our consolidated statements of operations as restructuring charges. Other restructuring costs include facility closure and manufacturing software integration costs. The following table summarizes the activity within the restructuring related accounts for the MCT Integration Program during the year ended December 30, 2023 (in thousands) : Employee Severance Other Exit Costs Total Balance, December 31, 2022 $ - $ - $ - Costs accrued 2,159 262 2,421 Amounts paid or charged ( 2,091 ) ( 262 ) ( 2,353 ) Balance, December 30, 2023 $ 68 $ - $ 68 Xcerra Integration Program Subsequent to the acquisition of Xcerra, during the fourth quarter of 2018, we began a strategic restructuring program designed to reposition our organization and improve our cost structure as part of our targeted integration plan regarding the recently acquired Xcerra (“Xcerra Integration Program”). As part of the Xcerra Integration Program we consolidated our global handler and contactor manufacturing operations and closed our manufacturing operations in Penang, Malaysia and Fontana, California in 2019. In 2019, we began the Xcerra Integration Program of our German operations and entered a social plan with the German labor organization representing certain of the employees of our wholly owned subsidiary, Multitest elektronische Systeme GmbH. During the fourth quarter of 2020 we implemented a voluntary program and termination agreements with certain employees of our wholly owned subsidiary, Cohu GmbH. These programs collectively reduced headcount, enabled us to consolidate the facilities of our multiple operations located near Kolbermoor and Rosenheim, Germany, as well as transitioned certain manufacturing to other lower cost regions. The facility consolidations and reduction in force programs were implemented as part of a comprehensive review of our operations and are intended to streamline and reduce our operating cost structure and capitalize on acquisition synergies. As of December 31, 2022, restructuring activities associated with the Xcerra Integration Program were materially complete. Certain end of life inventory adjustments have continued during the fiscal years 2023 and 2024. As a result of the activities described above, we recognized total pretax credits of $( 0.5 ) million and $( 0.1 ) million for the fiscal years ended December 28, 2024 and December 30, 2023, respectively, that are within the scope of ASC 420. Total pretax charges during the fiscal year ended December 27, 2025 were not material. All costs of the Xcerra Integration Program were incurred by our Semiconductor Test & Inspection segment. Charges related to the Xcerra Integration Program for the fiscal years ended December 27, 2025, December 28, 2024 and December 30, 2023, were as follows (in thousands): (in thousands) 2025 2024 2023 Employee severance costs $ - $ - $ - Inventory related charges (adjustments) - ( 465 ) ( 62 ) Other restructuring costs - - - Total $ - $ ( 465 ) $ ( 62 ) During the fiscal year ended December 28, 2024 and December 30, 2023 our restructuring activities included the reversal of certain inventory related charges related to the decision to end manufacturing of certain of Xcerra’s semiconductor test handler products taken in prior periods. Costs associated with inventory charges are classified within cost of sales. 66 Table of Contents COHU, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS At December 27, 2025, our total accrual for restructuring related items for the 2025 Restructuring Program, Poway volume manufacturing transition, MCT and Xcerra integration programs is reflected within current liabilities in our consolidated balance sheets as these amounts are expected to be paid out in fiscal 2026. The estimated costs associated with the employee severance and facility consolidation actions are not material and will be paid predominantly in cash. 5. Financial Instruments Measured at Fair Value Our cash, cash equivalents, and short-term investments consisted primarily of cash and other investment grade securities. We do not hold investment securities for trading purposes. All short-term investments in debt securities are classified as available-for-sale and recorded at fair value. Investment securities are exposed to market risk due to changes in interest rates and credit risk and we monitor credit risk and attempt to mitigate exposure by making high-quality investments and through investment diversification. We assess whether unrealized loss positions on available-for-sale debt securities are due to credit-related factors. The credit-related portion of unrealized losses, and any subsequent improvements, are recorded in earnings through an allowance account. Unrealized gains and losses that are not due to credit-related factors are included in accumulated other comprehensive loss. Factors that could indicate an impairment exists include, but are not limited to earnings performance, changes in credit rating or adverse changes in the regulatory or economic environment of the asset. Gross realized gains and losses on sales of short-term investments are included in interest income. Realized gains and losses for the periods presented were not significant. Investments that we have classified as short-term, by security type, are as follows (in thousands) : At December 27, 2025 Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses (1) Value Corporate debt securities (2) $ 150,314 $ 60 $ 13 $ 150,361 Bank certificates of deposit 58,130 26 - 58,156 U.S. treasury securities 37,584 68 - 37,652 Asset-backed securities 10,038 18 - 10,056 Foreign government security 703 - - 703 $ 256,769 $ 172 $ 13 $ 256,928 At December 28, 2024 Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses (1) Value Corporate debt securities (2) $ 32,040 $ 37 $ 25 $ 32,052 U.S. treasury securities 11,964 12 15 11,961 Bank certificates of deposit 6,971 4 3 6,972 Asset-backed securities 3,647 6 - 3,653 Foreign government security 714 - - 714 Municipal securities 330 3 - 333 $ 55,666 $ 62 $ 43 $ 55,685 (1) As of December 27, 2025, the cost and fair value of investments with loss positions were both approximately $ 58.3 million. As of December 28, 2024, the cost and fair value of investments with loss positions was approximately $ 20.5 million and $ 20.4 million, respectively. We evaluated the nature of these investments, credit worthiness of the issuer and the duration of these impairments to determine if a credit-related decline in fair value had occurred and concluded that these losses were temporary and we have the ability and intent to hold these investments to maturity. (2) Corporate debt securities include investments in financial and other corporate institutions. No single issuer represents a significant portion of the total corporate debt securities portfolio. 67 Table of Contents COHU, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Effective maturities of short-term investments at December 27, 2025, were as follows: Amortized Estimated (in thousands) Cost Fair Value Due in 1 year or less $ 200,379 $ 200,436 Due after 1 year through 5 years 56,390 56,492 $ 256,769 $ 256,928 Accounting standards pertaining to fair value measurements establish a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. When available, we use quoted market prices to determine the fair value of our investments, and they are included in Level 1. When quoted market prices are unobservable, we use quotes from independent pricing vendors based on recent trading activity and other relevant information. The following table summarizes, by major security type, our financial instruments that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in thousands) : Fair value measurements at December 27, 2025 using: Total estimated Level 1 Level 2 Level 3 fair value Cash $ 142,091 $ - $ - $ 142,091 Corporate debt securities - 183,611 - 183,611 Bank certificates of deposit - 58,156 - 58,156 Money market funds - 51,712 - 51,712 U.S. treasury securities - 37,652 - 37,652 Asset-backed securities - 10,056 - 10,056 Foreign government security - 703 - 703 $ 142,091 $ 341,890 $ - $ 483,981 Fair value measurements at December 28, 2024 using: Total estimated Level 1 Level 2 Level 3 fair value Cash $ 136,965 $ - $ - $ 136,965 Money market funds - 69,442 - 69,442 Corporate debt securities - 32,052 - 32,052 U.S. treasury securities - 11,961 - 11,961 Bank certificates of deposit - 6,972 - 6,972 Asset-backed securities - 3,653 - 3,653 Municipal securities - 333 - 333 Foreign government security - 714 - 714 $ 136,965 $ 125,127 $ - $ 262,092 68 Table of Contents COHU, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 6. Employee Benefit Plans Defined Contribution Retirement Plans – Cohu maintains a defined contribution 401(k) retirement savings plan covering all salaried and hourly U.S. employees. Participation is voluntary and participants’ contributions are based on their eligible compensation. Participants in the Cohu plan receive matching contributions of 50 % up to 8 % of salary contributed, subject to various statutory limits. In fiscal 2025, 2024 and 2023, we made matching contributions to the plan of $ 2.2 million, $ 2.3 million and $ 2.5 million, respectively. Defined Benefit Retirement Plans – Some of our employees located in Europe and Asia participate in defined benefit retirement plans. Our largest defined benefit retirement plan is the Ismeca Europe Semiconductor BVG Pension Plan which covers our employees in Switzerland (“the Swiss Plan”) and the following discussion relates solely to the Swiss Plan, all other plans are not material to our financial statements. Net periodic benefit cost of the Swiss Plan was as follows: (in thousands) 2025 2024 2023 Service cost $ 603 $ 643 $ 551 Interest cost 244 357 510 Expected return on assets ( 236 ) ( 283 ) ( 331 ) Curtailment ( 2,159 ) - - Settlements ( 1,813 ) ( 277 ) ( 177 ) Net periodic costs $ ( 3,361 ) $ 440 $ 553 The following table sets forth the projected benefit obligation, the fair value of plan assets, the funded status and the liability we have recorded in our consolidated balance sheets related to the Swiss Plan: (in thousands) 2025 2024 Change in projected benefit obligation: Benefit obligation at beginning of year $ ( 21,511 ) $ ( 24,884 ) Service cost ( 603 ) ( 643 ) Interest cost ( 244 ) ( 357 ) Actuarial gain (loss) 2,705 79 Participant contributions ( 698 ) ( 988 ) Benefits paid 271 599 Plan change ( 18 ) 203 Settlements 8,296 2,820 Plan Curtailment 1,496 - Foreign currency exchange adjustment ( 956 ) 1,660 Benefit obligation at end of year ( 11,262 ) ( 21,511 ) Change in plan assets: Fair value of plan assets at beginning of year 17,458 19,700 Return on assets, net of actuarial gain/loss ( 203 ) 732 Employer contributions 639 783 Participant contributions 698 988 Benefits paid ( 271 ) ( 599 ) Settlements ( 8,296 ) ( 2,820 ) Foreign currency exchange adjustment 2,084 ( 1,326 ) Fair value of plan assets at end of year 12,109 17,458 Net asset (liability) at end of year $ 847 $ ( 4,053 ) At December 27, 2025, and December 28, 2024, the Swiss Plan’s net liability is included in noncurrent accrued retirement benefits. Amounts recognized in accumulated other comprehensive income (loss) net of tax related to the Swiss Plan consisted of an unrecognized net actuarial gains totaling $ 3.9 million and $ 4.0 million at December 27, 2025, and December 28, 2024, respectively. The actuarial gains of $ 2.7 million and $ 0.1 million for the years ended December 27, 2025, and December 28, 2024, respectively, were due to assumption changes as well as plan experience. 69 Table of Contents COHU, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Weighted-average actuarial assumptions used to determine the projected benefit obligation under the Swiss Plan are as follows: 2025 2024 Discount rate 1.3 % 1.1 % Compensation increase 2.2 % 1.0 % Weighted-average assumptions used to determine net periodic benefit cost of the Swiss Plan are as follows: 2025 2024 2023 Discount rate 1.3 % 1.1 % 1.5 % Rate of return on assets 1.3 % 1.3 % 1.5 % Compensation increase 2.2 % 1.0 % 2.0 % During 2026 employer and employee contributions to the Swiss Plan are expected to total $ 0.4 million. Estimated benefit payments are expected to be as follows: 2026 - $ 0.9 million; 2027 - $ 1.0 million; 2028 - $ 0.6 million; 2029 - $ 0.5 million; 2030 - $ 0.5 million; and $ 3.6 million thereafter through 2035. As is customary with Swiss pension plans, the assets of the plan are invested in a collective fund with multiple employers. We have no investment authority over the assets of the plan that are held and invested by a Swiss insurance company. Investment holdings are made with respect to Swiss laws and target allocations for plan assets are 45 % debt securities and cash, 24 % real estate investments, 13 % alternative investments and 18 % equity securities. The valuation of the collective fund assets as a whole is a Level 3 measurement; however, the individual investments of the fund are generally Level 1 (equity securities), Level 2 (fixed income) and Level 3 (real estate and alternative) investments. We determine the fair value of the plan assets based on information provided by the collective fund, through review of the collective fund’s annual financial statements. See Note 5, “Financial Instruments Measured at Fair Value” for additional information on the three-tier fair value hierarchy. During the second quarter of fiscal 2025, we implemented headcount reductions in Switzerland as part of the 2025 Restructuring Program which resulted in a curtailment of future benefits for affected employees. In accordance with ASC 715, during the fiscal year ended December 27, 2025, we recognized pension curtailment gains totaling $ 2.2 million. These gains reflect the reduction in the projected benefit obligation due to the termination of future service accruals for impacted plan participants and are included in the consolidated statements of operations. We maintain other defined benefit plans for employees located outside the U.S. for which the majority of the obligations and net periodic benefit cost were determined to be immaterial for all periods presented. Retiree Medical Benefits – We provide post-retirement health benefits to certain executives and directors under a noncontributory plan. The net periodic benefit cost was $ 0.1 million in fiscal 2025, 2024 and 2023. We fund benefits as costs are incurred and as a result there are no plan assets. The weighted average discount rate used in determining the accumulated post-retirement benefit obligation was 5.1 % in fiscal 2025, 5.4 % in fiscal 2024 and 4.7 % in fiscal 2023. The annual rates of increase of the cost of health benefits were assumed to be 10.7 % in fiscal 2026 for post-65 participants. This rate was then assumed to decrease 0.69 % per year for participants that have reached the age of 65 to 4.5 % in fiscal 2035 and remain level thereafter. Contributions to the post-retirement health benefit plan are expected to total $ 0.1 million in fiscal 2026. Estimated benefit payments are expected to be as follows: fiscal 2026 - $ 0.1 million; fiscal 2027 - $ 0.1 million; fiscal 2028 - $ 0.1 million; fiscal 2029 - $ 0.1 million; fiscal 2030 - $ 0.1 million and $ 0.7 million thereafter through fiscal 2035. 70 COHU, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The following table sets forth the post-retirement benefit obligation, funded status and the liability we have recorded in our consolidated balance sheets: (in thousands) 2025 2024 Accumulated benefit obligation at beginning of year $ ( 1,592 ) $ ( 1,651 ) Interest cost ( 82 ) ( 75 ) Actuarial (gain) loss ( 211 ) 25 Benefits paid 118 109 Accumulated benefit obligation at end of year ( 1,767 ) ( 1,592 ) Plan assets at end of year - - Funded status $ ( 1,767 ) $ ( 1,592 ) Deferred Compensation – The Cohu, Inc. Deferred Compensation Plan allows certain of our officers to defer a portion of their current compensation. We have purchased life insurance policies on the participants with Cohu as the named beneficiary. Participant contributions, distributions and investment earnings and losses are accumulated in a separate account for each participant. At December 27, 2025, the payroll liability to participants, included in accrued compensation and benefits in the consolidated balance sheet, was approximately $ 0.4 million and the cash surrender value of the related life insurance policies included in other current assets was approximately $ 1.5 million. At December 28, 2024, the liability totaled $ 0.6 million and the corresponding assets were $ 1.4 million. Employee Stock Benefit Plans – Our 2005 Equity Incentive Plan (“2005 Plan”) and our 1997 Employee Stock Purchase Plan are broad-based, long-term retention programs intended to attract, motivate, and retain talented employees as well as align stockholder and employee interests. Awards that may be granted under the 2005 Plan include, but are not limited to, non-qualified and incentive stock options, restricted stock units, and performance stock units. We settle employee stock option exercises, employee stock purchase plan purchases, and the vesting of restricted stock units, and performance stock units with newly issued common shares or treasury shares. At December 27, 2025, there were 1,841,531 shares available for future equity grants under the 2005 Plan and 353,581 shares available for purchase under the ESPP. Employee Stock Purchase Plan The ESPP provides for the issuance of a maximum of 3,750,000 shares of our common stock. Under the ESPP, eligible employees may purchase shares of common stock through payroll deductions. The price paid for the common stock is equal to 85 % of the fair market value of our common stock on specified dates. During the last three years we issued shares under the ESPP as follows: 2025 - 274,735 ; 2024 - 171,353 and 2023 - 146,829 . Stock Options Under the 2005 Plan stock options may be granted to employees, consultants and outside directors to purchase a fixed number of shares of our common stock at prices not less than 100 % of the fair market value at the date of grant. Options generally vest and become exercisable after one year or in four annual increments beginning one year after the grant date and expire ten years from the grant date. We have historically issued new shares of Cohu common stock upon share option exercise. During fiscal 2025, 2024 and 2023 no stock options were granted. At December 27, 2025 and December 28, 2024, we had no stock options outstanding. Restricted Stock Units Under our equity incentive plans, restricted stock units (“RSUs”) may be granted to employees, consultants and outside directors. Restricted stock units vest over a one-year , two-year , three-year or a four-year period from the date of grant. Prior to vesting, restricted stock units do not have dividend equivalent rights, do not have voting rights and the shares underlying the restricted stock units are not considered issued and outstanding. New shares of our common stock or treasury shares will be issued on the date the restricted stock units vest net of the statutory tax withholding requirements to be paid by us on behalf of our employees. As a result, the actual number of shares issued will be fewer than the actual number of RSUs outstanding at December 27, 2025. 71 Table of Contents COHU, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Restricted stock unit activity under our share-based compensation plans was as follows: 2025 2024 2023 Wt. Avg. Wt. Avg. Wt. Avg. (in thousands, except per share data) Units Fair Value Units Fair Value Units Fair Value Outstanding, beginning of year 885 $ 32.34 884 $ 30.52 969 $ 24.55 Granted 905 $ 18.50 411 $ 31.76 365 $ 36.66 Released ( 374 ) $ 32.99 ( 366 ) $ 27.33 ( 428 ) $ 22.33 Cancelled ( 76 ) $ 28.01 ( 44 ) $ 31.92 ( 22 ) $ 28.62 Outstanding, end of year 1,340 $ 23.10 885 $ 32.34 884 $ 30.52 Equity-Based Performance Stock Units We grant performance stock units (“PSUs”) to certain senior executives as a part of our long-term equity compensation program. The number of shares of common stock that will ultimately be issued to settle PSUs granted ranges from 0 % to 200 % of the number granted and is determined based on certain performance criteria over a three-year measurement period. The performance criteria for the majority of PSUs are based on a combination of our annualized Total Shareholder Return (“TSR”) for the performance period and the relative performance of our TSR compared with the annualized TSR of certain peer companies for the performance period. PSUs granted vest 100 % on the third anniversary of their grant, assuming achievement of the applicable performance criteria. We estimated the fair value of the PSUs using a Monte Carlo simulation model on the date of grant. Compensation expense is recognized over the requisite service period. New shares of our common stock or treasury shares will be issued on the date the PSUs vest net of the minimum statutory tax withholding requirements to be paid by us on behalf of our employees. PSU activity under our share-based compensation plans was as follows: 2025 2024 2023 Wt. Avg. Wt. Avg. Wt. Avg. (in thousands, except per share data) Units Fair Value Units Fair Value Units Fair Value Outstanding, beginning of year 539 $ 39.64 408 $ 45.65 403 $ 28.64 Granted 397 $ 13.84 203 $ 33.78 270 $ 39.97 Released ( 70 ) $ 33.38 ( 63 ) $ 57.39 ( 258 ) $ 13.18 Cancelled ( 119 ) $ 35.94 ( 9 ) $ 57.39 ( 7 ) $ 42.52 Outstanding, end of year 747 $ 27.05 539 $ 39.64 408 $ 45.65 Share-based Compensation – We estimate the fair value of our employee stock purchase plan using the Black-Scholes valuation model. The assumptions for the Black-Scholes model include the risk-free rate of interest, expected dividend yield, expected volatility, and the expected life of the award. The estimated fair value of PSUs is determined on the grant date using the Monte Carlo simulation valuation model. The Monte Carlo simulation model incorporates assumptions for the risk-free interest rate, Cohu and the selected peer group price volatility, the correlation between Cohu and the selected index, and dividend yields. Share-based compensation expense related to restricted stock unit awards is calculated based on the market price of our common stock on the date of grant, reduced by the present value of dividends expected to be paid on our common stock prior to vesting of the restricted stock unit. Cohu’s Board of Directors authorized suspending our quarterly cash dividend indefinitely, as of May 5, 2020. All awards granted in fiscal 2025, 2024 and 2023 exclude the assumption of dividend payments. 72 COHU, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The following weighted average assumptions were used to value share-based awards granted: Employee Stock Purchase Plan 2025 2024 2023 Expected volatility 41.6 % 35.5 % 36.3 % Risk-free interest rate 4.5 % 5.3 % 4.5 % Expected term (years) 0.5 0.5 0.5 Weighted-average grant date fair value per share $ 6.19 $ 7.49 $ 8.54 Reported share-based compensation is classified in the consolidated financial statements as follows: (in thousands) 2025 2024 2023 Cost of sales $ 1,396 $ 1,049 $ 845 Research and development 5,456 3,566 3,394 Selling, general and administrative 16,190 16,125 12,998 Share-based compensation 23,042 20,740 17,237 Income tax benefit 137 ( 211 ) ( 1,770 ) Total share-based compensation, net of tax $ 23,179 $ 20,529 $ 15,467 We account for forfeitures of plan-based awards as they occur. At December 27, 2025, we had approximately $ 25.1 million of pre-tax unrecognized compensation cost related to unvested restricted stock units and performance stock units which is expected to be recognized over a weighted-average period of approximately 1.7 years. 7. Business Acquisitions Tignis, Inc. On January 7, 2025, we completed the acquisition of Tignis, Inc. (“Tignis”), a provider of artificial intelligence (“AI”) process control and analytics-based monitoring software. This strategic acquisition is intended to enable us to expand our analytics offerings to the semiconductor process control market. Tignis’ PAICe Monitor and PAICe Maker solutions leverage the insights of physical phenomena with cutting-edge AI, machine learning, and data science to deliver advanced predictive and prescriptive automation solutions for semiconductor manufacturing. Tignis is also expected to deepen Cohu’s expertise in data science while adding advanced analytics to our DI-Core software. The acquisition of Tignis is a debt free transaction and was subject to a working capital adjustment which we finalized in the third quarter of fiscal 2025. We made a cash payment totaling approximately $ 34.8 million, net of cash received, for Tignis which was paid out of cash on hand. In addition to the initial consideration paid, the Tignis shareholders had the right to receive an additional $ 5.0 million of consideration which was based on Tignis achieving certain sales and expense targets through December 2025. The contingent consideration payable was classified as Level 3 in the fair value hierarchy. See Note 5 “Financial Instruments Measured at Fair Value” for additional information on the three-tier fair value hierarchy. Contingent consideration was recorded in our consolidated balance sheets in other accrued liabilities. Adjustments to the fair value of contingent consideration was reflected in selling, general, and administrative expense in our consolidated statements of operations. The initial fair value of the contingent consideration recognized at acquisition date was $ 1.7 million. In the first quarter of fiscal 2025, we updated the fair value of contingent consideration to zero based on management’s current estimates at that date which differed from those used as of January 7, 2025. The sales and expense targets were not met in fiscal 2025 and no additional payment is owed to Tignis shareholders. Including cash paid, the impact of our working capital adjustment and the fair value of the contingent consideration, the purchase price for Tignis is $ 36.6 million. During the twelve months ending December 27, 2025, we incurred acquisition-related costs totaling approximately $ 0.4 million, which were expensed as selling, general and administrative costs. 73 Table of Contents COHU, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The acquisition of Tignis has been accounted for in conformity with ASC Topic 805, Business Combinations (“ASC 805”). The acquired assets and liabilities of Tignis were recorded at their respective fair values including an amount for goodwill representing the difference between the consideration paid and the fair value of the identifiable net assets. The purchase price allocation was finalized during the third quarter of fiscal 2025. The table below summarizes the assets acquired and liabilities assumed as of January 7, 2025 ( in thousands ): Current assets, including cash received $ 293 Property, plant and equipment 19 Other assets 56 Intangible assets 2,900 Goodwill 33,688 Total assets acquired 36,956 Liabilities assumed ( 349 ) Net assets acquired $ 36,607 The allocation of the intangible assets subject to amortization is as follows ( in thousands ): Estimated Fair Value Weighted Average Useful Life (years) Developed technology $ 2,300 3.0 Customer relationships 500 6.0 Trademarks and trade names 100 4.0 Total intangible assets $ 2,900 Acquired intangible assets reported above are being amortized using the straight-line method over their estimated useful lives which approximates the pattern of how the economic benefit is expected to be used. While high customer retention rates are common in the semiconductor capital equipment industry, amounts allocated to customer relationships are being amortized on an accelerated basis over their estimated useful lives due to the early-stage nature of Tignis’ business and historical customer turnover. The value assigned to developed technology was determined by using the relief from royalty method under the income approach, which included assumptions related to revenue growth rates, royalty rates, and discount rates. Developed technology, which comprises products that have reached technological feasibility, includes the products in Tignis’ product line. The revenue estimates used to value the developed technology were based on estimates of relevant market sizes and growth factors, expected trends in technology and the nature and expected timing of new product introductions by Tignis and competitors. The estimated after-tax cash flows were based on a hypothetical royalty rate applied to the revenues for the developed technology. The discount rate utilized to discount the net cash flows of the developed technology to present value was based on the risk associated with the respective cash flows taking into consideration the perceived risk of the technology relative to the other acquired assets, the weighted average cost of capital, the internal rate of return, and the weighted average return on assets. The value assigned to customer relationships was determined by using the multi-period excess earnings method under the income approach. The estimated cash flow was based on revenues from the existing customers net of operating expenses and net of contributory asset charges. The discount rate utilized to discount the net cash flows of the customer relationships to present value was based on the respective cash flows taking into consideration the perceived risks. The earnout agreement was measured at fair value in accordance with the guidance provided by ASC Topic 820, Fair Value Measurement (“ASC 820”). ASC 820 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at their fair values, we consider the principal or most advantageous market in which we would transact and consider assumptions that market participants would use when pricing the assets or liabilities, such as inherent risk, transfer restrictions, and risk of nonperformance. Tignis’ results of operations have been included starting January 7, 2025. The impact of Tignis on our consolidated statements of operations and comprehensive income (loss) was not material. 74 Table of Contents COHU, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MCT On January 30, 2023, we completed the acquisition of all the outstanding membership units of MCT, pursuant to a membership unit purchase agreement dated January 30, 2023, by and among MCT, Arise Acquisition Co., LLC, The Seaport Group LLC Profit Sharing Plan, and Delta Design, Inc., a wholly owned subsidiary of Cohu (“the MCT Acquisition”). MCT is a U.S. based company with a principal manufacturing site in Penang, Malaysia. MCT provides automated solutions for the semiconductor industry and designs, manufactures, markets, services and distributes strip test handlers, film frame handlers and laser mark handlers. On January 30, 2023, we made a cash payment totaling $ 28.0 million for MCT of which $ 0.6 million was used to pay the former MCT CFO and CEO and expensed as restructuring severance expense. Taking into consideration the amount expensed as severance and the working capital adjustment receivable resulted in a final net purchase price of approximately $ 26.8 million. The MCT Acquisition was a cash free debt free transaction and was subject to a working capital adjustment for the difference between the actual and estimated net working capital. The MCT Acquisition was accounted for in conformity with ASC 805. The acquired assets and liabilities of MCT were recorded at their respective fair values including an amount for goodwill representing the difference between the consideration paid and the fair value of the identifiable net assets. The purchase price allocation was finalized during the fourth quarter of 2023. The table below summarizes the assets acquired and liabilities assumed as of January 30, 2023 ( in thousands ): Current assets, including cash received $ 9,505 Property, plant and equipment 197 Other assets 356 Intangible assets 12,000 Goodwill 8,755 Total assets acquired 30,813 Liabilities assumed ( 4,024 ) Net assets acquired $ 26,789 The allocation of the intangible assets subject to amortization is as follows ( in thousands ): Estimated Fair Value Weighted Average Useful Life (years) Developed technology $ 7,500 7.0 Customer relationships 4,000 10.0 Product backlog 500 0.5 Total intangible assets $ 12,000 Acquired intangible assets reported above are being amortized using the straight-line method over their estimated useful lives which approximates the pattern of how the economic benefit is expected to be used. This includes amounts allocated to customer relationships because of anticipated high customer retention rates that are common in the semiconductor capital equipment industry. The value assigned to developed technology was determined by using the relief from royalty method under the income approach, which included assumptions related to revenue growth rates, royalty rates, and discount rates. Developed technology, which comprises products that have reached technological feasibility, includes the products in MCT’s product line. The revenue estimates used to value the developed technology were based on estimates of relevant market sizes and growth factors, expected trends in technology and the nature and expected timing of new product introductions by MCT and competitors. The estimated after-tax cash flows were based on a hypothetical royalty rate applied to the revenues for the developed technology. The discount rate utilized to discount the net cash flows of the developed technology to present value was based on the risk associated with the respective cash flows taking into consideration the perceived risk of the technology relative to the other acquired assets, the weighted average cost of capital, the internal rate of return, and the weighted average return on assets. 75 COHU, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The value assigned to customer relationships was determined by using the multi-period excess earnings method under the income approach. The estimated cash flows were based on revenues from the existing customers net of operating expenses and net of contributory asset charges. The discount rate utilized to discount the net cash flows of the customer relationships to present value was based on the respective cash flows taking into consideration the perceived risks. The value assigned to backlog acquired was estimated based upon the contractual nature of the backlog as of January 30, 2023, using the multi-period excess earnings method under the income approach to discount back to present value the cash flows attributable to the backlog at a discount rate commensurate with the expected risks of the backlog cash flows. MCT’s results of operations have been included starting January 30, 2023. The impact of MCT on our consolidated statements of operations and comprehensive income (loss) was not material. In connection with the MCT Acquisition, during the fiscal year ended December 28, 2024 and December 30, 2023, we incurred acquisition-related costs, which were expensed as selling, general and administrative costs totaling $ 0.1 million and $ 0.5 million, respectively. No acquisition-related costs were incurred for MCT in fiscal 2025. EQT On October 2, 2023, we completed the acquisition of Equiptest Engineering Pte. Ltd. (“EQT”), a provider of semiconductor test contactors and other consumables. (“the EQT Acquisition”). EQT is a Singapore based company with a principal manufacturing site located there. EQT provides test interface products including high performance thermal, MEMS, Infrared, Coaxial and Kelvin Contactors that expands our interface products in mid- to high-power contactors. The EQT Acquisition was a cash free debt free transaction and was subject to a working capital adjustment for the difference between the actual and estimated net working capital. We made a cash payment of SGD 66.0 million ($ 48.3 million) on October 2, 2023, and set up a retention sum liability for potential adjustments to working capital and future tax or insurance claims in the amount of SGD 2.2 million ($ 1.6 million) resulting in an initial purchase price of SGD 68.3 million ($ 49.9 million). The working capital adjustment was finalized in January 2024 and an additional cash payment was made to EQT owners of SGD 0.8 million (approximately $ 0.6 million) resulting in an adjusted purchase price of SGD 68.8 million ($ 50.3 million). The retention liability for remaining tax, insurance and other claims as of December 27, 2025, and December 28, 2024, was SGD 1.3 million ($ 1.0 million) and SGD 1.1 million ($ 0.8 million), respectively and is accrued in long term other liabilities on our consolidated balance sheet. The retention liability for net working capital, remaining tax, insurance and other claims as of December 30, 2023, was SGD 2.2 million ($ 1.6 million) and $ 0.3 million and $ 1.3 million is accrued in short term and long term other liabilities, respectively, on our consolidated balance sheet. The EQT Acquisition has been accounted for in conformity with ASC 805. The acquired assets and liabilities of EQT were recorded at their respective fair values including an amount for goodwill representing the difference between the consideration paid and the fair value of the identifiable net assets. The table below summarizes the assets acquired and liabilities assumed as of October 2, 2023 ( in thousands ): Current assets, including cash received $ 10,135 Property, plant and equipment 538 Intangible assets 34,500 Goodwill 15,377 Total assets acquired 60,550 Liabilities assumed ( 10,203 ) Net assets acquired $ 50,347 76 Table of Contents COHU, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The allocation of intangible assets subject to amortization is as follows ( in thousands ): Estimated Fair Value Weighted Average Useful Life (years) Developed technology $ 20,600 8.0 Customer relationships 12,900 10.0 Product backlog 100 1.0 Trademarks and trade name 900 5.0 Total intangible assets $ 34,500 Acquired intangible assets reported above are being amortized using the straight-line method over their estimated useful lives which approximates the pattern of how the economic benefit is expected to be used. This includes amounts allocated to customer relationships because of anticipated high customer retention rates that are common in the semiconductor capital equipment industry. The value assigned to developed technology was determined by using the relief from royalty method under the income approach, which included assumptions related to revenue growth rates, royalty rates, and discount rates. Developed technology, which comprises products that have reached technological feasibility, includes the products in EQT’s product line. The revenue estimates used to value the developed technology were based on estimates of relevant market sizes and growth factors, expected trends in technology and the nature and expected timing of new product introductions by EQT and competitors. The estimated after-tax cash flows were based on a hypothetical royalty rate applied to the revenues for the developed technology. The discount rate utilized to discount the net cash flows of the developed technology to present value was based on the risk associated with the respective cash flows taking into consideration the perceived risk of the technology relative to the other acquired assets, the weighted average cost of capital, the internal rate of return, and the weighted average return on assets. The value assigned to customer relationships was determined by using the multi-period excess earnings method under the income approach. The estimated cash flows were based on revenues from the existing customers net of operating expenses and net of contributory asset charges. The discount rate utilized to discount the net cash flows of the customer relationships to present value was based on the respective cash flows taking into consideration the perceived risks. The value assigned to backlog acquired was estimated based upon the contractual nature of the backlog as of October 2, 2023, using the multi-period excess earnings method under the income approach to discount back to present value the cash flows attributable to the backlog at a discount rate commensurate with the expected risks of the backlog cash flows. The value assigned to trademarks and trade names acquired was determined by using the using the relief from royalty method under the income approach, which included assumptions related to revenue growth rates, royalty rates, and discount rates. EQT’s results of operations have been included starting October 2, 2023. The impact of EQT on Cohu’s consolidated statements of operations and comprehensive income (loss) were not material. In connection with the acquisition of EQT, during the twelve-month periods ended December 28, 2024 and December 30, 2023 we incurred acquisition-related costs, which were expensed as selling, general and administrative costs totaling $ 0.1 million and $ 1.1 million, respectively. No acquisition-related costs were incurred for EQT in fiscal 2025. 77 Table of Contents COHU, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 8. Derivative Financial Instruments Economic (Non-Designated) Hedges We enter into foreign currency forward contracts to manage our foreign exchange exposure related to intercompany transactions and other balance sheet items that are subject to revaluation. For accounting purposes, our foreign currency forward contracts that are not designated as hedging instruments are recorded at fair value as of the end of our reporting period in our consolidated balance sheets with changes in fair value recorded within foreign transaction gain (loss) in our consolidated statements of operations for both realized and unrealized gains and losses. The gain or loss recorded on these instruments is substantially offset by the remeasurement adjustment on the foreign currency denominated asset or liability. The location and amount of gains (losses) related to non-designated derivative instruments in the consolidated statements of operations were as follows (in thousands) : Derivatives Not Designated Location of Gain (Loss) Fiscal Year as Hedging Instruments Recognized on Derivatives 2025 2024 2023 Foreign exchange forward contracts Foreign transaction gain (loss) $ 4,471 $ ( 7,542 ) $ ( 2,127 ) Net Investment Hedges In the third quarter of fiscal 2024, we initiated a program to hedge foreign currency risk associated with our net investment positions in certain foreign subsidiaries. These exposures are managed through the use of foreign currency forward contracts, which are designated as net investment hedges. The location and amount of gains (losses) from net investment hedges recorded in the foreign currency translation component of AOCL were as follows (in thousands) : Derivatives Designated Location of Gain (Loss) Fiscal Year as Hedging Instruments Recognized on Derivatives 2025 2024 2023 Foreign exchange forward contracts AOCL $ ( 8,501 ) $ 964 N/A Gains (losses) recognized in foreign transaction loss, in the consolidated statements of operations for the portion of the net investment hedges excluded from the assessment of hedge effectiveness was $ 1.5 million and $ 0.7 million for fiscal 2025 and 2024, respectively. Since our net investment hedge program started in fiscal 2024 there were no amounts recorded in fiscal 2023 or fiscal 2022. Cash flows associated with settlements of our non-designated foreign currency forward contracts are reported in net cash provided by operating activities and our net investment hedges are included in investing activities in our consolidated statements of cash flows. Fair Value The fair value of our foreign currency forward contracts was determined based on current foreign currency exchange rates and forward points. All our foreign currency forward contracts outstanding on December 27, 2025 will mature during the first quarter of fiscal 2026. The following table provides information about our foreign currency forward contracts outstanding as of December 27, 2025 (in thousands) : Currency Contract Position Contract Amount (Local Currency) Contract Amount (U.S. Dollars) Euro Buy 40,292 47,500 Swiss Franc Buy 10,858 13,800 South Korean Won Buy 3,571,944 2,480 Japanese Yen Buy 541,841 3,470 Euro Sell 35,100 41,353 Swiss Franc Sell 9,900 12,535 Our foreign currency contracts are classified within Level 2 of the fair value hierarchy as they are valued using pricing models that utilize observable market inputs. The fair value of our foreign currency contracts as of December 27, 2025, and December 28, 2024, was immaterial. 78 Table of Contents COHU, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 9. Equity Capped Call Transactions In connection with the Notes offering described in Note 3, “Borrowings and Credit Agreements”, on September 24, 2025, we entered into privately negotiated capped call transactions (the “Base Capped Call Transactions”) with an affiliate of one or more of the initial purchasers of the Notes and certain other financial institutions (the “Option Counterparties”). In addition, on September 25, 2025, in connection with the initial purchasers’ exercise in full of their option to purchase additional Notes, we entered into additional capped call transactions (the “Additional Capped Call Transactions,” and, together with the Base Capped Call Transactions, the “Capped Call Transactions”) with each of the Option Counterparties. The Capped Call Transactions are separate from the Notes and do not change the holders' rights under the Notes. Holders of the Notes do not have any rights with respect to the Capped Call Transactions. The Capped Call Transactions are generally expected to reduce the potential dilution to our common stock upon any conversion of the Notes and/or offset any potential cash payments we are required to make in excess of the principal amount of converted Notes, with such reduction and/or offset subject to a cap. The Capped Call Transactions are for an aggregate of 10.58 million shares of our common stock, subject to certain anti-dilution adjustments. Each capped call option has an initial strike price of approximately $ 27.18 per share, which corresponds to the initial conversion price of the Notes, and an initial cap price of approximately $ 41.02 per share, representing a premium of approximately 100% above the Reference Price. The strike and cap prices are subject to certain adjustments. The Capped Call Transactions are intended to offset some or all of the potential dilution to our common stock caused by any conversion of the Notes up to the cap price. The capped call options can be settled in either net shares or cash at our option in components commencing October 15, 2030, and ending January 15, 2031, which could be extended under certain circumstances. The capped call options are subject to either adjustment or termination upon the occurrence of specified extraordinary events affecting us, including a merger, tender offer, nationalization, insolvency or delisting. In addition, certain events may result in a termination of the capped call options, including changes in law and hedging disruptions. The Capped Call Transactions are recorded at their aggregate cost of $ 31.4 million as a reduction to paid-in capital stock in the shareholders’ equity section of our consolidated balance sheet. Share Repurchase Program On October 28, 2021, we announced that our Board of Directors authorized a $ 70 million share repurchase program. This share repurchase program was effective as of November 2, 2021, and has no expiration date. On October 25, 2022, our Board of Directors authorized an additional $ 70 million under the share repurchase program. The timing of share repurchases and the number of shares of common stock to be repurchased will depend upon prevailing market conditions and other factors. Repurchases under this program will be made using our existing cash resources and may be commenced or suspended from time to time at our discretion without prior notice. Repurchases may be made in the open market, through 10b5-1 programs, or in privately negotiated transactions at prevailing market rates in accordance with federal securities laws. For the year ended December 27, 2025, we repurchased 432,288 shares of our common stock for $ 8.6 million to be held as treasury stock. For the year ended December 28, 2024, we repurchased 915,504 shares of our common stock for $ 27.0 million. For the year ended December 30, 2023, we repurchased 700,270 shares of our common stock for $ 23.6 million. As of December 27, 2025, $ 22.8 million remained available for us to repurchase shares of our common stock under our share repurchase program. 79 Table of Contents COHU, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 10. Income Taxes Total income tax expense (benefit) was allocated as follows: (in thousands) 2025 2024 2023 Income from operations $ 11,866 $ 4,872 $ 17,660 Other comprehensive income 64 396 ( 984 ) Total $ 11,930 $ 5,268 $ 16,676 Significant components of income tax expense (benefit) are as follows: (in thousands) 2025 2024 2023 Current: U.S. Federal $ ( 1,725 ) $ 717 $ 694 U.S. State 47 36 86 Foreign 15,346 7,841 21,654 Total current 13,668 8,594 22,434 Deferred: U.S. Federal ( 150 ) ( 13 ) 61 Foreign ( 1,652 ) ( 3,709 ) ( 4,835 ) Total deferred ( 1,802 ) ( 3,722 ) ( 4,774 ) $ 11,866 $ 4,872 $ 17,660 Income (loss) before income taxes consisted of the following: (in thousands) 2025 2024 2023 U.S. $ ( 95,310 ) $ ( 85,450 ) $ ( 37,799 ) Foreign 32,903 20,504 83,615 Total $ ( 62,407 ) $ ( 64,946 ) $ 45,816 Income tax payments, net of refunds, in fiscal 2025 were as follows: (in thousands) 2025 U.S. State $ 48 Non-U.S. China 169 Germany ( 8,436 ) Japan 1,093 Malaysia 2,474 Philippines 681 Singapore 763 Switzerland 275 Other 104 Total Non-U.S. ( 2,877 ) Total net income tax payments $ ( 2,829 ) 80 COHU, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Deferred tax effects Except for working capital requirements in certain foreign jurisdictions, we provide for substantially all taxes, including withholding and other residual taxes, related to unremitted earnings of our foreign subsidiaries. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting and tax purposes. Significant components of our deferred tax assets and liabilities were as follows: (in thousands) 2025 2024 Deferred tax assets: Inventory, receivable and warranty reserves $ 10,802 $ 11,034 Net operating loss carryforwards 63,339 39,572 Tax credit carryforwards 34,738 35,788 Capitalized R&D 27,117 35,348 Accrued employee benefits 2,783 3,742 Stock-based compensation 4,855 4,511 Lease liabilities 6,831 2,544 Uniform capitalization 243 2,553 Other 13,701 3,064 Gross deferred tax assets 164,409 138,156 Less valuation allowance ( 143,482 ) ( 114,517 ) Total deferred tax assets 20,927 23,639 Deferred tax liabilities: Intangible assets and other acquisition basis differences 18,330 25,848 Operating lease right-of-use assets 5,534 2,226 Unremitted earnings of foreign subsidiaries 6,583 4,898 Other 3,837 4,986 Total deferred tax liabilities 34,284 37,958 Net deferred tax liabilities $ ( 13,357 ) $ ( 14,319 ) The components of total net deferred tax assets (liabilities), net of valuation allowances, as shown in our consolidated balance sheets are as follows: (in thousands) 2025 2024 Other assets (long-term) $ 2,112 $ 5,083 Long-term deferred income tax liabilities ( 15,469 ) ( 19,402 ) Net deferred tax liabilities $ ( 13,357 ) $ ( 14,319 ) Companies are required to assess whether a valuation allowance should be recorded against their deferred tax assets (“DTAs”) based on the consideration of all available evidence, using a “more likely than not” realization standard. The four sources of taxable income that must be considered in determining whether DTAs will be realized are, (1) future reversals of existing taxable temporary differences (i.e. offset of gross deferred tax assets against gross deferred tax liabilities); (2) taxable income in prior carryback years, if carryback is permitted under the tax law; (3) tax planning strategies and (4) future taxable income exclusive of reversing temporary differences and carryforwards. 81 COHU, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS In assessing whether a valuation allowance is required, significant weight is to be given to evidence that can be objectively verified. We have evaluated our DTAs each reporting period, including an assessment of taxable income in prior carryback years, future reversals of existing taxable temporary differences, future taxable income exclusive of reversing temporary differences and carryforwards, and prudent and feasible tax planning strategies that we would be willing to undertake to prevent a deferred tax asset from otherwise expiring. The assessment regarding whether a valuation allowance is required or whether a change in judgement regarding the valuation allowance has occurred also considers all available positive and negative evidence, including but not limited to: • Nature, frequency, and severity of cumulative losses in recent years • Duration of statutory carryforward and carryback periods • Statutory limitations against utilization of tax attribute carryforwards against taxable income • Historical experience with tax attributes expiring unused • Near- and medium-term financial outlook The weight given to the positive and negative evidence is commensurate with the extent to which the evidence may be objectively verified. Accordingly, it is generally difficult to conclude a valuation allowance is not required when there is significant objective and verifiable negative evidence, such as cumulative losses in recent years. We use the actual results for the last two years and current year results as the primary measure of cumulative losses in recent years. The evaluation of deferred tax assets requires judgment in assessing the likely future tax consequences of events recognized in the financial statements or tax returns and future profitability. The recognition of deferred tax assets represents our best estimate of those future events. Changes in the current estimates, due to unanticipated events or otherwise, could have a material effect on our results of operations and financial condition. In certain tax jurisdictions, our analysis indicates that it has cumulative losses in recent years. This is considered significant negative evidence, which is objective and veritable and, therefore, difficult to overcome. However, the cumulative loss position is not solely determinative and, accordingly, we consider all other positive and negative evidence available in this analysis. Based on the evidence available, including a lack of sustainable earnings and history of expiring unused net operating losses and tax credits, we continue to maintain the judgement that a previously recorded valuation allowance against substantially all net deferred tax assets in the U.S. is required. In addition, due to the cumulative loss position in Switzerland and the worldwide consolidated cumulative loss, we recorded valuation allowances against the net deferred tax assets in Switzerland and Malaysia during fiscal 2025. If a change in judgement regarding these valuation allowances were to occur in the future, we will record a potentially material deferred tax benefit, which could result in a favorable impact on the effective tax rate in that period. Our valuation allowance on our DTAs at December 27, 2025, and December 28, 2024, was approximately $ 143.5 million and $ 114.5 million, respectively. The remaining gross DTAs for which a valuation allowance was not recorded are realizable primarily through future reversals of existing taxable temporary differences and to a lesser extent future taxable income in certain jurisdictions exclusive of reversing temporary differences and carryforwards. 82 COHU, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The reconciliation of income tax computed at the U.S. federal statutory tax rate to the provision for income taxes, applying ASU 2023-09 prospectively, is as follows: 2025 (in thousands) Amount Percent Tax provision at U.S. Federal statutory rate $ ( 13,105 ) 21.0 % State and local income taxes, net of federal income tax effect (1) 902 ( 1.4 )% Effects of cross-border tax laws Tax on Global Intangible Low-Taxed Income (GILTI) 2,543 ( 4.1 )% Tax on Subpart F Income 1,031 ( 1.7 )% Tax credits Reversal of previously recognized unborn foreign tax credits 4,853 ( 7.8 )% Research and development credits ( 2,002 ) 3.2 % Change in valuation allowance 12,918 ( 20.7 )% Nontaxable or nondeductible items Equity based employee compensation 1,886 ( 3.0 )% Other ( 232 ) 0.4 % Changes in unrecognized tax benefits ( 3,164 ) 5.1 % Foreign tax effects Germany Foreign rate differential 646 ( 1.0 )% Local income taxes 1,460 ( 2.3 )% Other ( 269 ) 0.4 % Philippines Local country tax holiday ( 756 ) 1.2 % Other 313 ( 0.5 )% Switzerland Withholding taxes 1,326 ( 2.1 )% Other 683 ( 1.1 )% Malaysia Changes in valuation allowance 3,490 ( 5.6 )% Other 34 ( 0.1 )% Other jurisdictions ( 255 ) 0.4 % Other FX of net investment hedge ( 745 ) 1.2 % Other 309 ( 0.5 )% Income tax expense $ 11,866 ( 19.0 )% (1) State and local taxes in CA and TX comprise the majority of this category. The reconciliation of income tax computed at the U.S. federal statutory tax rate to the provision for income taxes, applying ASC 740 prior to the adoption of ASU 2023-09, is as follows: (in thousands) 2024 2023 Tax provision at U.S. 21 % statutory rate $ ( 13,638 ) $ 9,470 State income taxes, net of federal tax benefit ( 2,126 ) ( 633 ) Accruals, adjustments and releases from statute expirations ( 2,372 ) 579 Federal R&D credits ( 1,103 ) ( 1,360 ) Stock-based compensation 502 ( 1,504 ) Excess executive compensation 715 1,375 Change in valuation allowance 14,844 10,654 GILTI, net of foreign tax credits 2,613 1,735 Foreign rate differential 146 2,093 Withholding and other foreign taxes, net of foreign tax credit 1,206 254 Other, net 4,085 ( 5,003 ) $ 4,872 $ 17,660 83 Table of Contents COHU, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS An accounting policy may be selected to either (i) treat taxes due on future U.S. inclusions in taxable income related to global intangible low-taxed income (“GILTI”) as a current-period expense when incurred or (ii) factor such amounts into a company’s measurement of its deferred taxes. We have elected to account for GILTI as a period cost. At December 27, 2025, we had federal, state and foreign net operating loss carryforwards of approximately $ 244.8 million, $ 132.3 million and $ 17.4 million, respectively, that expire in various tax years beginning in 2026 through 2044 or have no expiration date. We also have federal and state tax credit carryforwards at December 27, 2025, of approximately $ 6.1 million and $ 28.9 million, respectively, certain of which expire in various tax years beginning in 2026 through 2044 or have no expiration date. The federal and state loss and credit carryforwards are subject to annual limitations under Sections 382 and 383 of the Internal Revenue Code and applicable state tax laws. We analyzed and determined that there were no ownership changes during the three-year period ending December 27, 2025. We will continue to assess the realizability of these carryforwards in subsequent periods. Future changes in the ownership of Cohu could further limit the utilization of these carryforwards. We have certain tax holidays with respect to our operations in Malaysia and the Philippines. These holidays require compliance with certain conditions and expire at various dates through 2038. The impact of these holidays was an increase in net income of approximately $ 0.8 million or $ 0.02 per share in 2025, $ 1.0 million or $ 0.02 per share in 2024, and $ 3.8 million or $ 0.08 per share in fiscal 2023. A reconciliation of our gross unrecognized tax benefits, excluding accrued interest and penalties, is as follows: (in thousands) 2025 2024 2023 Balance at beginning of year $ 33,765 $ 35,900 $ 33,368 Additions for tax positions of current year 947 858 899 Additions/(Reductions) for tax positions of prior years ( 1,096 ) ( 788 ) 1,802 Reductions due to lapse of the statute of limitations ( 1,492 ) ( 2,089 ) ( 295 ) Reductions due to settlements ( 1,833 ) - - Foreign exchange rate impact 129 ( 116 ) 126 Balance at end of year $ 30,420 $ 33,765 $ 35,900 If the unrecognized tax benefits at December 27, 2025 are ultimately recognized, excluding the impact of U.S. tax benefits netted against deferred taxes that are subject to a valuation allowance, approximately $ 3.5 million ($ 5.2 million at December 28, 2024, and $ 7.5 million at December 30, 2023) would result in a reduction in our income tax expense and effective tax rate. We recognize interest and penalties related to unrecognized tax benefits in income tax expense. Cohu had approximately $ 0.5 million and $ 0.5 million accrued for the payment of interest and penalties at December 27, 2025 and December 28, 2024, respectively. Interest expense, net of accrued interest reversed, was $( 0.3 ) million in 2025, $( 0.2 ) million in 2024, and $( 0.1 ) million in 2023. Our U.S. federal income tax returns for years after fiscal 2022 remain open to examination, subject to the statute of limitations. Our U.S. state income tax returns for years after fiscal 2020 remain open to examination, subject to the statute of limitations. Net operating loss and credit carryforwards arising prior to these years are also open to examination if and when utilized. The statute of limitations for the assessment and collection of income taxes related to our foreign tax returns varies by country. In the foreign countries where we have significant operations these time periods generally range from four to ten years after the year for which the tax return is due or the tax is assessed. We conduct business globally and as a result, Cohu or one or more of its subsidiaries files income tax returns in the U.S. and various state and foreign jurisdictions. In the normal course of business, we are subject to examinations by taxing authorities throughout the world and are currently under examination in Germany, Maylasia, the Philippines and the state of California. We believe our financial statement accruals for income taxes are appropriate. 84 Table of Contents COHU, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Tax positions have been reflected in the consolidated financial statements in accordance ASC Topic 740, Income Taxes (“ASC 740”), Income Taxes. Such tax positions are, based solely on their technical merits, more likely than not to be sustained upon examination by taxing authorities and reflect the largest amount of benefit, determined on a cumulative probability basis, that is more likely than not to be realized upon settlement with the applicable taxing authority with full knowledge of all relevant information. We have both intent and ability to initiate a claim pursuant to the competent authority (e.g., Mutual Agreement Procedure) for reasonable and prudent situations such as, for example, when the resulting tax benefit exceeds the costs involved to obtain such tax benefit, and the success of prevailing upon pursuing the competent authority is more-likely-than-not achievable. 11. Segment and Geographic Information We applied the provisions of ASC 280, which sets forth a management approach to segment reporting and establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products, major customers and the geographies in which the entity holds material assets and reports revenue. An operating segment is defined as a component that engages in business activities whose operating results are reviewed by the CODM, which is our Chief Executive Officer, Luis A. Müller and for which discrete financial information is available. We have determined that our three identified operating segments are: TH, ST and IS. Our three operating segments qualify for aggregation under ASC 280 due to similarities in their customers, their economic characteristics, and the nature of products and services provided. As a result, we report in one segment, Semiconductor Test & Inspection, which derives revenue from the design and manufacture of equipment and components used in the testing of semiconductors. The CODM assesses performance of the Semiconductor Test & Inspection segment and decides how to allocate resources based on income (loss) before taxes. The table below summarizes selected financial information for our single reportable segment. (in thousands) 2025 2024 2023 Net sales $ 452,956 $ 401,779 $ 636,322 Cost and expenses: Cost of sales 257,941 220,436 332,609 Research and development 86,756 81,231 85,178 Selling 53,028 51,584 61,056 General & administrative 54,349 60,328 58,196 Amortization of purchased intangible assets 37,466 39,087 36,355 Stock-based compensation 23,042 20,740 17,237 Other segment items (1) 2,781 ( 6,681 ) ( 125 ) Income (loss) before taxes $ ( 62,407 ) $ ( 64,946 ) $ 45,816 (1) Other segment items include restructuring charges as well as miscellaneous non-operating items. During the last three years, the following customers comprised 10% or greater of our consolidated net sales: 2025 2024 2023 STMicroelectronics * * 12.0 % * Less than 10% of consolidated net sales. Net sales to customers, attributed to countries based on product shipment destination, were as follows: (in thousands) 2025 2024 2023 Philippines $ 68,936 $ 51,310 $ 92,529 Taiwan 64,667 22,562 27,901 China 60,654 59,491 92,408 Malaysia 57,263 54,016 100,949 United States 46,957 56,663 76,995 Singapore 26,176 40,827 53,518 Rest of the world 128,303 116,910 192,022 Total, net $ 452,956 $ 401,779 $ 636,322 85 Table of Contents COHU, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The measure of segment assets is reported on the consolidated balance sheets as total consolidated assets. Geographic location of our property, plant and equipment and other long-lived assets was as follows: (in thousands) 2025 2024 Property, plant and equipment: Philippines $ 21,021 $ 23,072 Germany 18,705 15,705 Malaysia 15,826 15,264 United States 13,902 13,601 Japan 5,778 6,051 Rest of the world 1,755 1,093 Total, net $ 76,987 $ 74,786 Goodwill and other intangible assets: Germany $ 132,356 $ 128,513 United States 109,815 92,251 Malaysia 60,913 61,252 Singapore 51,753 56,276 Rest of the world 7,462 7,064 Total, net $ 362,299 $ 345,356 12. Leases We lease certain of our facilities, equipment and vehicles under non-cancelable operating and finance leases. Leases with initial terms with 12 months or less are not recorded in the consolidated balance sheet, but we recognized those lease payments in the consolidated statements of operations on a straight-line basis over the lease term. Lease and non-lease components are included in the calculation of the right of use asset (“ROU”) asset and lease liabilities. Our leases have remaining lease terms ranging from 1 year to 32 years, some of which include one or more options to extend the lease for up to 25 years. Our lease term includes renewal terms when we are reasonably certain that we will exercise the renewal options. We sublease certain leased assets to third parties, mainly as a result of unused space in our facilities. Future minimum lease payments at December 27, 2025, are as follows: Operating Finance (in thousands) leases leases Total 2026 (1) $ 6,126 $ - $ 6,126 2027 (1) 5,201 - 5,201 2028 (1) 4,310 - 4,310 2029 (1) 4,646 - 4,646 2030 (1) 4,884 - 4,884 Thereafter (1) 22,399 - 22,399 Total lease payments 47,566 - 47,566 Less: Interest ( 12,773 ) - ( 12,773 ) Present value of lease liabilities $ 34,793 $ - $ 34,793 (1) In June 2025, we gained access to our new corporate headquarters located in San Diego, California enabling us to make certain preparations for our relocation on December 1, 2025. The new lease results in cash outflows totaling $ 34.9 million expected to be paid as follows: $ 2.5 million, $ 3.0 million, $ 2.6 million, $ 3.0 million and $ 20.8 million for 2026, 2027, 2028, 2029 and thereafter, respectively. 86 Table of Contents COHU, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Supplemental balance sheet information related to leases was as follows: December 28, December 28, (in thousands) Classification 2025 2024 Assets: Operating lease assets Operating lease right-of-use assets (1) $ 29,271 $ 13,908 Finance lease assets Property, plant and equipment, net (2) 68 9,676 Total lease assets $ 29,339 $ 23,584 Liabilities: Current: Operating Other accrued liabilities $ 3,100 $ 5,296 Finance Other accrued liabilities (2) - 8,418 Noncurrent: Operating Long-term lease liabilities (1) 31,693 9,890 Finance Long-term lease liabilities - 3 Total lease liabilities $ 34,793 $ 23,607 Weighted-average remaining lease term (years): Operating leases 9.0 5.2 Weighted-average discount rate: Operating leases 6.5 % 6.4 % Finance leases 0.0 % 2.8 % (1) In June 2025, we gained access to our new corporate headquarters located in San Diego, California enabling us to make certain preparations for our planned relocation on December 1, 2025, resulting in an increase to our operating lease asset and long term operating lease liability. (2) Finance lease assets are recorded net of accumulated amortization of $ 0.4 million in both fiscal 2025 and 2024. On December 30, 2024, we completed the purchase of our leased facility in Melaka, Malaysia resulting in a decrease to our finance lease asset and liability. The components of lease expense were as follows: December 27, December 28, December 30, (in thousands) 2025 2024 2023 Operating leases $ 7,698 $ 6,247 $ 6,691 Variable lease expense 2,669 2,542 2,389 Short-term operating leases 52 4 16 Finance leases: Amortization of leased assets 62 66 90 Interest on lease liabilities 1 269 1 Sublease income - ( 4 ) ( 29 ) Net lease cost $ 10,482 $ 9,124 $ 9,158 Supplemental cash flow information related to leases was as follows: December 27, December 28, December 30, (in thousands) 2025 2024 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 6,383 $ 6,448 $ 6,756 Operating cash flows from finance leases $ - $ 263 $ 1 Financing cash flows from finance leases $ 7 $ 24 $ 52 Leased assets exchanged for finance lease liabilities $ - $ 9,543 $ - Leased assets exchanged for operating lease liabilities $ 22,141 $ 2,987 $ 1,415 Financing lease assets acquired from MCT $ - $ - $ 19 Operating lease assets acquired from MCT $ - $ - $ 130 87 Table of Contents COHU, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 13. Commitments and Contingencies From time to time we are involved in various legal proceedings, examinations by various tax authorities and claims that have arisen in the ordinary course of our business. The outcome of any litigation is inherently uncertain. While there can be no assurance, we do not believe at the present time that the resolution of these matters will have a material adverse effect on our assets, financial position or results of operations. 14. Guarantees Accrued Warranty Changes in accrued warranty during the three-year period ended December 27, 2025, was as follows: (in thousands) 2025 2024 2023 Beginning balance $ 3,093 $ 5,017 $ 6,214 Warranty accruals 5,812 3,480 6,555 Warranty payments ( 4,503 ) ( 5,404 ) ( 7,862 ) Warranty liability transferred - - 110 Ending balance $ 4,402 $ 3,093 $ 5,017 Accrued warranty amounts expected to be incurred after one year are included in noncurrent other accrued liabilities in the consolidated balance sheet. These amounts totaled $ 0.2 million and $ 0.1 million at December 27, 2025 and December 28, 2024, respectively. 15. Accumulated Other Comprehensive Loss Components of other comprehensive loss, on an after-tax basis, were as follows: (in thousands) Before Tax amount Tax (Expense) Benefit Net of Tax Amount Year ended December 30, 2023 Foreign currency translation adjustments $ 6,256 $ 559 $ 6,815 Adjustments related to postretirement benefits ( 2,800 ) 425 ( 2,375 ) Change in unrealized gain/loss on investments 793 - 793 Other comprehensive income $ 4,249 $ 984 $ 5,233 Year ended December 28, 2024 Foreign currency translation adjustments $ ( 16,540 ) $ ( 299 ) $ ( 16,839 ) Adjustments related to postretirement benefits 615 ( 97 ) 518 Change in unrealized gain/loss on investments ( 55 ) - ( 55 ) Other comprehensive loss $ ( 15,980 ) $ ( 396 ) $ ( 16,376 ) Year ended December 27, 2025 Foreign currency translation adjustments $ 19,433 $ 3 $ 19,436 Adjustments related to postretirement benefits ( 820 ) ( 67 ) ( 887 ) Change in unrealized gain/loss on investments 136 - 136 Other comprehensive income $ 18,749 $ ( 64 ) $ 18,685 Components of accumulated other comprehensive loss, net of tax, at the end of each period are as follows: (in thousands) 2025 2024 Accumulated net currency translation adjustments (1) $ ( 36,896 ) $ ( 56,332 ) Accumulated net adjustments related to postretirement benefits 4,287 5,174 Accumulated net unrealized gain/loss on investments 139 3 Total accumulated other comprehensive loss $ ( 32,470 ) $ ( 51,155 ) (1) Includes $ 8.5 million loss and $ 1.0 million gain from the settlement of net investment hedges in fiscal 2025 and 2024, respectively. 88 Table of Contents COHU, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 16. Related Party Transactions At December 27, 2025, certain of our cash and short-term investments were held and managed by BlackRock, Inc. which owns 14.7 % of our outstanding common stock as reported in its Form 13-G/A filing made with the Securities and Exchange Commission on July 17, 2025. We previously had an ownership interest in Fraes-und Technologiezentrum GmbH Frasdorf (“FTZ”), a company based in Germany that provides milling services to our wholly owned subsidiaries. This investment was accounted for under the equity method and was not material to our consolidated balance sheet in fiscal 2023. In fiscal 2024, due to the current business conditions, we impaired the full value of our investment in FTZ and recorded a charge $ 0.9 million in SG&A. In fiscal 2025, we sold our ownership interest in FTZ and recorded a gain of $ 0.4 million in SG&A. During fiscal 2025, 2024 and 2023, purchases of products from FTZ were not material. 89 Table of Contents Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of Cohu, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Cohu, Inc. (the Company) as of December 27, 2025 and December 28, 2024, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the three years in the period ended December 27, 2025, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 27, 2025 and December 28, 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 27, 2025, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 27, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 17, 2026 expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. 90 Table of Contents Valuation of inventories Description of the Matter As of December 27, 2025, the Company’s consolidated inventories balance was $129.0 million. As described in Note 1 to the consolidated financial statements, the Company values its inventories at lower of cost, determined on a first-in, first-out basis, or net realizable value. Obsolete inventory or inventory in excess of management's estimated usage requirement is written down to its estimated net realizable value. Auditing management’s estimates for excess and obsolete inventory involved subjective auditor judgment because the estimates rely on a number of factors that are affected by market and economic conditions outside the Company’s control. In particular, the excess and obsolete inventory calculations are sensitive to the determination of expected future product demand. How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of internal controls over the Company’s excess and obsolete inventory valuation process, including management's assessment of the expected future product demand and data underlying the excess and obsolete inventory valuation. To test the valuation of inventories, our audit procedures included, among others, evaluating expected future product demand and testing the completeness and accuracy of the underlying data used by management in the analysis of excess and obsolete inventory. We evaluated adjustments to inventory reserves for specific product expectations, compared the balance of on-hand inventories to demand assumptions, and assessed the historical accuracy of management’s estimates by comparing prior period expected demand to actual consumption. /s/ Ernst & Young LLP We have served as the Company’s auditor since 1956. San Diego, California February 17, 2026 91 Table of Contents Index to Exhibits 15. (b) The following exhibits are filed as part of, or incorporated into, the 2025 Cohu, Inc. Annual Report on Form 10-K: Exhibit No. Description 3.1 Amended and Restated Certificate of Incorporation of Cohu, Inc. incorporated herein by reference to Exhibit 3.1 from the Cohu, Inc. Current Report on Form 8-K filed with the Securities and Exchange Commission on June 6, 2024 3.2 Certificate of Correction to Amended Restated Certificate of Incorporation of Cohu, Inc., filed on April 3, 2025, incorporated herein by reference to Exhibit 3.1 from the Cohu, Inc. Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 2, 2025 3.3 Amended and Restated Bylaws of Cohu, Inc. incorporated herein by reference to Exhibit 3.1 from the Cohu, Inc. Current Report on Form 8-K filed with the Securities and Exchange Commission on May 12, 2023 4.1 Description of Capital Stock incorporated herein by reference to Exhibit 4.1 from the Cohu, Inc. Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 17, 2023 4.2 Indenture, dated as of September 29, 2025, between Cohu, Inc. and U.S. Bank Trust Company, National Association, as Trustee (including Form of 1.5% Convertible Senior Notes due 2031 as Exhibit A) incorporated herein by reference to Exhibit 4.1 from the Cohu, Inc. Current Report on Form 8-K filed with the Securities and Exchange Commission on September 29, 2025 10.1 Credit and Guaranty Agreement dated as of October 1, 2018, by and among Cohu, Inc., Certain Subsidiaries of Cohu, Inc. and Deutsche Bank AG New York Branch, incorporated herein by reference to Exhibit 10.1 from the Cohu, Inc. Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 7, 2018 10.2 Pledge and Security Agreement dated as of October 1, 2018, by and among Cohu, Inc., Certain Subsidiaries of Cohu, Inc. and Deutsche Bank AG New York Branch, incorporated herein by reference to Exhibit 10.2 from the Cohu, Inc. Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 7, 2018 10.3* Cohu, Inc. 2005 Equity Incentive Plan, as amended May 10, 2023, incorporated herein by reference to Appendix B from the Cohu, Inc. Form DEF 14A filed with the Securities and Exchange Commission on March 28, 2023 10.4* Cohu, Inc. 1997 Employee Stock Purchase Plan, as amended May 10, 2023, incorporated herein by reference to Appendix C from the Cohu, Inc. Form DEF 14A filed with the Securities and Exchange Commission on March 28, 2023 10.5* Cohu, Inc. Deferred Compensation Plan (as amended and restated) incorporated herein by reference to Exhibit 10.1 from the Cohu, Inc. Current Report on Form 8-K filed with the Securities and Exchange Commission on December 29, 2008 10.6* Form of executive employee restricted stock unit agreement for use with restricted stock units granted pursuant to the Cohu, Inc. 2005 Equity Incentive Plan incorporated herein by reference to Exhibit 10.1 from the Cohu, Inc. Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 5, 2023 92 Table of Contents 10.7* Form of non-employee director restricted stock unit agreement for use with restricted stock units granted pursuant to the Cohu, Inc. 2005 Equity Incentive Plan incorporated herein by reference to Exhibit 10.2 from the Cohu, Inc. Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 4, 2015 10.8* Form of non-employee director restricted stock unit deferral election form for use with restricted stock units granted pursuant to the Cohu, Inc. 2005 Equity Incentive Plan incorporated herein by reference to Exhibit 10.3 from the Cohu, Inc. Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 4, 2015 10.9* Non-employee director fee deferral election form incorporated herein by reference to Exhibit 10.4 from the Cohu, Inc. Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 4, 2015 10.1* Form of deferred stock agreement for shares granted pursuant to the Cohu, Inc. 2005 Equity Incentive Plan incorporated herein by reference to Exhibit 10.5 from the Cohu, Inc. Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 4, 2015 10.11* Form of stock option agreement for use with stock options granted pursuant to the Cohu, Inc. 2005 Equity Incentive Plan incorporated herein by reference to Exhibit 10.6 from the Cohu, Inc. Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 4, 2015 10.12* Form of Indemnification Agreement, incorporated herein by reference to Exhibit 10.1 from the Cohu, Inc. Current Report on Form 8-K filed December 13, 2018 10.13* Cohu, Inc. Retiree Health Benefits Agreement (as amended) incorporated herein by reference to Exhibit 10.2 from the Cohu, Inc. Current Report on Form 8-K filed with the Securities and Exchange Commission on December 29, 2008 10.14 Lease agreement dated December 4, 2015 by and between CT Crosthwaite I, LLC and Cohu, Inc. incorporated herein by reference to Exhibit 10.14 from the Cohu, Inc. Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 23, 2016 10.15* Severance Agreement, dated September 8, 2020, between the Company and Christopher G. Bohrson incorporated herein by reference to Exhibit 10.1 from the Cohu, Inc. Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 4, 2020 10.16* Severance Agreement, dated September 8, 2020, between the Company and Jeffrey D. Jones incorporated herein by reference to Exhibit 10.2 from the Cohu, Inc. Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 4, 2020 10.17* Managing Director Services Agreement, dated November 13, 2024, between the Company’s subsidiary, Cohu GmbH, and Klaus Ilgenfritz 10.18* Severance Agreement, dated September 8, 2020, between the Company and Luis A. M ü ller incorporated herein by reference to Exhibit 10.4 from the Cohu, Inc. Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 4, 2020 10.19* Change in Control Agreement, dated September 8, 2020, between the Company and Christopher G. Bohrson incorporated herein by reference to Exhibit 10.5 from the Cohu, Inc. Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 4, 2020 93 Table of Contents 10.20* Change in Control Agreement, dated September 8, 2020, between the Company and Jeffrey D. Jones incorporated herein by reference to Exhibit 10.6 from the Cohu, Inc. Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 4, 2020 10.21* Addendum 1 to the Managing Director Services Agreement, dated November 13, 2024, between the Company’s subsidiary, Cohu GmbH, and Klaus Ilgenfritz 10.22* Change in Control Agreement, dated September 8, 2020, between the Company and Luis A. M ü ller incorporated herein by reference to Exhibit 10.8 from the Cohu, Inc. Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 4, 2020 10.23 First Amendment to Credit and Guaranty Agreement, dated as of June 16, 2023, between Cohu, Inc. and Deutsche Bank AG New York Branch, as administrative agent incorporated herein by reference to Exhibit 10.1 from the Cohu, Inc. Current Report on Form 8-K filed with the Securities and Exchange Commission on June 23, 2023 10.24 Settlement Agreement and Stipulation dated June 20, 2025 by and between Cohu, Inc. and Keith Palmer incorporated herein by reference to Exhibit 10.1 from the Cohu, Inc. Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 1, 2025 10.25 Form of Capped Call Confirmation incorporated herein by reference to Exhibit 10.1 from the Cohu, Inc. Current Report on Form 8-K filed with the Securities and Exchange Commission on September 29, 2025 19 Cohu, Inc. Insider Trading Policy 21 Subsidiaries of Cohu, Inc. 23 Consent of Independent Registered Public Accounting Firm 31.1 Certification pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002 for Luis A. Müller 31.2 Certification pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002 for Jeffrey D. Jones 32.1** Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Luis A. Müller 32.2** Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Jeffrey D. Jones 97 Cohu, Inc. Policy for Recovery of Erroneously Awarded Incentive Compensation incorporated herein by reference to Exhibit 97 from the Cohu, Inc. Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 20, 2025 101.INS Inline XBRL Instance Document (the Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) 101.SCH Inline XBRL Taxonomy Extension Schema Document 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) * Management contract or compensatory plan or arrangement ** This certification is not deemed “filed” for purposes of Section 18 of the Securities Exchange Act, or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that Cohu specifically incorporates it by reference. 94 Table of Contents Item 16. Form 10-K Summary. None. 95 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. COHU, INC. Date: February 17, 2026 By: /s/ Luis A. Müller Luis A. Müller President and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date /s/ James A. Donahue Chairperson of the Board, February 17, 2026 James A. Donahue Director /s/ Luis A. Müller President and Chief Executive Officer, Director February 17, 2026 Luis A. Müller (Principal Executive Officer) /s/ Jeffrey D. Jones Senior Vice President, Finance and CFO February 17, 2026 Jeffrey D. Jones (Principal Financial and Accounting Officer) /s/ William E. Bendush Director February 17, 2026 William E. Bendush /s/ Steven J. Bilodeau Director February 17, 2026 Steven J. Bilodeau /s/ Andrew M. Caggia Director February 17, 2026 Andrew M. Caggia /s/ Yon Y. Jorden Director February 17, 2026 Yon Y. Jorden /s/ Andreas W. Mattes Director February 17, 2026 Andreas W. Mattes /s/ Karen M. Rapp Director February 17, 2026 Karen M. Rapp /s/ Nina L. Richardson Director February 17, 2026 Nina L. Richardson 96 Table of Contents COHU, INC. SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS (in thousands) Additions (Reductions) Balance at Not Additions Balance Beginning Charged Charged Deductions/ at End Description of Year to Expense (1) to Expense Write-offs of Year Allowance for doubtful accounts: Year ended December 30, 2023 $ 199 $ 5 $ 140 $ 4 $ 340 Year ended December 28, 2024 $ 340 $ ( 14 ) $ 15 $ 151 $ 190 Year ended December 27, 2025 $ 190 $ 11 $ ( 69 ) $ 42 $ 90 Reserve for excess and obsolete inventories: Year ended December 30, 2023 $ 26,871 $ 648 $ 4,540 $ 11,641 $ 20,418 Year ended December 28, 2024 $ 20,418 $ 6,203 $ 5,442 $ 3,886 $ 28,177 Year ended December 27, 2025 $ 28,177 $ 210 $ 7,466 $ 7,229 $ 28,624 (1) Changes in reserve balances resulting from foreign currency impact and reclassifications from other reserves. 97