Applied Optoelectronics Inc ((AAOI)) has held its Q2 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Applied Optoelectronics Inc. presented a mixed outlook, characterized by robust year-over-year revenue growth and notable advancements in the datacenter and CATV segments. However, these positive developments were tempered by higher-than-expected losses per share and increased operating expenses.
Strong Year-over-Year Growth
Total revenue for Q2 2025 reached $103 million, more than doubling compared to the previous year and showing a 3% sequential increase. The datacenter product revenue was a significant contributor, increasing by 30% year-over-year.
Significant CATV Segment Growth
The CATV segment experienced remarkable growth, with revenue increasing more than eightfold year-over-year to $56 million. This surge was primarily driven by strong demand for 1.8 gigahertz amplifiers.
Expansion in High-Speed Transceivers
Applied Optoelectronics completed its first volume shipment of 400G datacenter transceivers to a major hyperscale customer. The company is witnessing increasing demand from other hyperscalers, indicating a promising future for this segment.
Strategic Investments in Production Capacity
The company is making strategic investments to expand production capacity for 800G and higher transceivers in the U.S. and Taiwan. They expect to produce over 200,000 transceivers per month by mid-2026, positioning themselves well for future demand.
EPS Below Expectations
Despite the revenue growth, the non-GAAP loss per share of $0.16 fell below the guidance range of a loss of $0.09 to $0.03. This was primarily due to elevated operating expenses.
Increased Operating Expenses
Operating expenses rose as a result of strategic investments in R&D and SG&A. R&D expenses alone increased by $2.6 million compared to Q1, impacting the overall financial performance.
Sequential Revenue Decrease in CATV
The CATV segment saw a 13% sequential revenue decrease, attributed to retooling production to Motorola-style amplifier products after a seasonally strong Q1.
Forward-Looking Guidance
Looking ahead, Applied Optoelectronics anticipates third-quarter revenue between $115 million and $127 million, with a stable gross margin forecasted at 29.5% to 31%. The company remains optimistic about its growth trajectory, supported by strong demand in its key segments.
In summary, the earnings call for Applied Optoelectronics Inc. highlighted a mixed sentiment, with strong revenue growth and strategic advancements in key segments being overshadowed by higher losses and operating expenses. The company remains focused on expanding its production capacity and meeting the growing demand in the datacenter and CATV markets.