Applied Optoelectronics (NasdaqGM:AAOI) Q4 2025 Earnings call February 26, 2026 04:30 PM ET Company ParticipantsLindsay Savarese - Investor Relations ContactStefan Murry - CFO and Chief Strategy OfficerThompson Lin - Founder, Chairman, and CEOConference Call ParticipantsGeorge Notter - Managing Director and Equity Research AnalystMichael Genovese - Managing Director and Senior Research AnalystRyan Koontz - Managing Director and Senior Equity Research AnalystSimon Leopold - Managing Director and Senior Equit ...

Applied Optoelectronics (NasdaqGM:AAOI) Q4 2025 Earnings call February 26, 2026 04:30 PM ET Company ParticipantsLindsay Savarese - Investor Relations ContactStephen Murray - CFO and Chief Strategy OfficerThompson Lin - Founder, Chairman, and CEOConference Call ParticipantsGeorge Notter - Managing Director and Equity Research AnalystMichael Genovese - Managing Director and Senior Research AnalystRyan Koontz - Managing Director and Senior Equity Research AnalystSimon Leopold - Managing Director and Senior Equ ...

Financial Data and Key Metrics Changes - Total revenue for 2025 increased by 83% year-over-year to a record $456 million, driven by strong demand in both CATV and data center businesses [8][15] - Q4 revenue was $134.3 million, up 34% year-over-year and 13% sequentially, aligning with guidance [25][30] - Non-GAAP gross margin for Q4 was 31.4%, exceeding the guidance range of 29%-31% [12][29] - Non-GAAP loss per share for Q4 was $0.01, narrower than the guidance range of a loss of $0.13 to a loss of $0.04 [12][32] Business Line Data and Key Metrics Changes - Data center revenue for 2025 was $196 million, a 32% increase compared to 2024, with Q4 data center revenue at $74.9 million, up 69% year-over-year [8][26] - CATV revenue nearly tripled to $245 million in 2025, with Q4 CATV revenue at $54 million, up 3% year-over-year but down 24% sequentially [8][13] - Telecom segment revenue for Q4 was $5.1 million, up 45% year-over-year and 37% sequentially [28] Market Data and Key Metrics Changes - 56% of Q4 revenue came from data center products, 40% from CATV products, and 4% from FTTH, telecom, and other segments [25] - Sales of 400G products increased by 141% year-over-year, while 100G products saw a 54% increase [12][26] Company Strategy and Development Direction - The company is focused on scaling next-generation data center products, expanding production capacity, diversifying revenue, and improving operational execution [14][15] - Investments in manufacturing capacity are expected to support anticipated demand, particularly in the Texas facility [14][20] - The company aims to achieve a non-GAAP gross margin of around 40% by late 2026, driven by a shift towards higher-margin products [30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand for 800G and 1.6T products, particularly as AI-driven data center investments accelerate [15][22] - The company anticipates generating over $1 billion in revenue for 2026, limited by production capacity rather than market demand [38] - Management noted that the demand for 800G modules is projected to exceed production capacity through mid-2027 [10][17] Other Important Information - The company plans to triple its laser manufacturing capacity in Texas to accommodate future growth [36] - Direct tariffs had a $1.2 million impact on the income statement, with less than 10% of component value sourced from China [24] Q&A Session Summary Question: What was the value of 800G revenue in the quarter? - The 800G revenue was below $4 million due to delays related to firmware optimization [41][42] Question: What is the timeline for achieving the target gross margin of 40%? - The company expects to achieve a gross margin of 35%-38% by Q2, with a target of 40% by late Q3 or Q4 of next year [44][46] Question: How does the company view the cable TV market amidst operator outlooks? - The company believes significant spending is directed towards amplifiers and outside plant parts of the network, where it operates [54][56] Question: What is the current status of laser production and capacity expansion? - The company plans to triple indium phosphide production capacity by mid-next year, with equipment already on order [90]

Financial Performance - In 2025, the company's revenue was $455.7 million, with a gross margin of 30.0%[22] - The company reported a net loss of $38.2 million in 2025, with accumulated deficits of $493.1 million[22] - The company achieved a compound annual growth rate (CAGR) of 5.7% in annual revenue from 2016 to 2025[212] - The company experienced a net loss of $38.2 million in 2025, with an accumulated deficit of $491.0 million at the end of the year[212] Revenue Sources - The CATV market contributed 53.8% of total revenue in 2025, while the internet data center market accounted for 42.9%[22] - Revenue from the CATV market constituted 53.8% of total revenue in 2025, while the internet data center market contributed 42.9%[212] - The telecom market accounted for 3.0% of total revenue in 2025, a decrease from 4.4% in 2024[213] - The FTTH market contributed only 0.3% of total revenue in 2025, compared to 0.9% in 2024[213] Customer Concentration - Key customer Digicomm represented 53.1% of revenue in 2025, up from 11.3% in 2023[23] - Microsoft was the primary customer in the internet data center market, accounting for 28.8% of revenue in 2025[23] - The top ten customers represented 96.6%, 95%, and 92.7% of revenue for the years ended 2025, 2024, and 2023, respectively, with Digicomm and Microsoft accounting for 53.1% and 28.8% of revenue in 2025[94] Market Trends - The internet data center market is the fastest-growing segment, driven by the demand for higher-capacity optical networking technology[18] - The telecom market is seeing increased demand for optical components due to the deployment of advanced 5G networks[27] - The ongoing deployment of high-speed fiber-optic networks, including 5G, supports growth in the telecom market[211] - The company benefits from trends in higher bandwidth demand across its target markets, including CATV, telecom, and internet data centers[211] Research and Development - The company has a total of 425 employees in the R&D department, including 14 with Ph.D. degrees, and continues to recruit talented engineers[39] - The company engages in an active research and development program to develop new products and enhance existing products, anticipating various releases over the next several years[38] - The company has developed solutions for 25 Gbps and 50 Gbps PON networks, anticipating future adoption by customers[27] - The company has developed proprietary miniaturized optical packaging and electronic control circuitry to create a hybrid WDM-PON solution, addressing historical impediments in fiber-optic deployment[32] Manufacturing and Operations - The company has three manufacturing sites located in Sugar Land, Texas, Ningbo, China, and Taipei, Taiwan, with a focus on vertically integrated manufacturing processes[44] - The company maintains manufacturing and R&D facilities in the U.S., China, and Taiwan, with a total square footage of approximately 2,088,850[198] - In fiscal 2025, 57.5% of the company's revenue, amounting to $262.1 million, was attributable to products manufactured at its plant in China[162] - As of December 31, 2025, 42.8% of the company's property, plant, and equipment was located in China[162] Competitive Landscape - The optical networking market is highly competitive, with major competitors including Coherent Corporation, Intel Corporation, and Lumentum Holdings, among others[56] - The company anticipates increased competition in its product areas, with larger competitors having greater financial and marketing resources[57] Sustainability and Compliance - The company aims to obtain at least 20% of its energy from renewable sources and reduce hazardous waste generation by at least 10% over five years starting in 2024[77] - The company is committed to sustainability initiatives, including improving technology efficiency and exploring alternative energy sources[72] - The company’s operations and products are subject to various environmental regulations, and compliance costs have not been material to its financial position[67] Risks and Challenges - The company faces risks related to the availability, cost, and performance of specialized equipment, which could impact project costs and timelines[87] - If AI adoption slows or does not meet expectations, the company may incur overcapacity and lower utilization rates, negatively affecting margins and free cash flow[88] - The company relies on a limited number of key customers, making it vulnerable to significant reductions in orders from these customers[94] - Changes in government policies and regulatory frameworks could increase project costs and impact the ability to complete or operate facilities as planned[91] - The company may face challenges in recruiting and retaining skilled labor, which is critical for the success of its manufacturing and automation initiatives[87] Intellectual Property - The company owns a total of 199 U.S. issued patents, 140 patents issued in China and Taiwan, and 10 patents issued in Europe, with patents expiring between 2026 and 2046[42] - The company has applied for patents and trademarks to protect its intellectual property, but there is no guarantee of approval or enforcement[171] - The company has taken legal actions to protect its intellectual property, which may lead to significant litigation costs and divert management's attention[174] Financial Position - The company has approximately $163.8 million in consolidated indebtedness as of December 31, 2025[141] - The company reported U.S. accumulated net operating loss carryforwards of approximately $253.0 million, federal and state R&D credits of $14.9 million, and business interest expense carryforwards of $24.9 million as of December 31, 2025[126] - The company has significant foreign currency exposure, particularly to the U.S. dollar, Chinese Renminbi (RMB), and New Taiwan dollar (NT dollar)[127] Cybersecurity - The company has established comprehensive cybersecurity risk management policies and practices to protect customer data and mitigate threats[188] - The board of directors oversees cybersecurity risk management, receiving regular reports on incident prevention and response[194] - The company conducts annual cybersecurity risk assessments to prioritize initiatives for enhancing security controls[190]

SUGAR LAND, Texas, Feb. 26, 2026 (GLOBE NEWSWIRE) -- Applied Optoelectronics, Inc. (NASDAQ: AAOI) (“AOI”), a leading provider of advanced optical and HFC networking products that power the internet, today announced financial results for its fourth quarter and full year ended December 31, 2025. “We are pleased to deliver record fourth quarter results that were in line with or better than our expectations, and which capped off the strongest year in our company’s history,” said Dr. Thompson Lin, AOI’s Founder, ...

"We generated significant revenue growth while expanding our gross margins this year," said Dr. Stefan Murry, AOI's Chief Financial Officer and Chief Strategy Officer. "We made tangible progress during the quarter on expanding our manufacturing capacity, which is a critical step as we prepare for higher-volume production of our next generation datacenter products. We believe we are well positioned for sustained growth and the capital investments underway are expected to fundamentally strengthen the company ...

1、行情催化 24日，Meta与AMD协议加强AI信心，海外科技股整体上涨，AMD+8.77%，Intel+5.71%，台积电+4.28%，AAOI +4.28%，高通+3.11%，苹果+2.24%。 开源电子|AI早餐会260225 1、行情催化 24日，Meta与AMD协议加强AI信心，海外科技股整体上涨，AMD+8.77%，Intel+5.71%，台积电+4.28%，AAOI +4.28%，高通+3.11%，苹果+2.24%。 2、行业速递 ①# 终端： 苹果将把部分 Mac Mini台式机的产从亚洲转移到美国休斯顿，Khan表示，Mac Mini的产将继 开源电子|AI早餐会260225 2、行业速递 ①# 终端： 苹果将把部分 Mac Mini台式机的产从亚洲转移到美国休斯顿，Khan表示，Mac Mini的产将继续在亚 洲进行，美国组装线将满本地需求。 ②# 算力： Meta与AMD签署多年期协议，预期将部署高达6GW的图形处理器（GPU），首批1GW的搭载MI450 GPU的AMDHelios机架级服务器将于2026年下半年出货。 ③# AI基座： 苹果公司表示，2026年将采购超1亿片台积电亚 ...

On February 10, 2026, 1492 Capital Management LLC disclosed a new position in Applied Optoelectronics (NASDAQ:AAOI). What happened According to a Securities and Exchange Commission (SEC) filing dated February 10, 2026, 1492 Capital Management LLC initiated a new position in Applied Optoelectronics, acquiring 215,987 shares. The estimated transaction value was $7.53 million based on the quarterly average share price. The stake’s quarter-end value also totaled $7.53 million, capturing both the purchase and ...

Investors with a lot of money to spend have taken a bullish stance on Applied Optoelectronics (NASDAQ:AAOI).And retail traders should know.We noticed this today when the trades showed up on publicly available options history that we track here at Benzinga.Whether these are institutions or just wealthy individuals, we don't know. But when something this big happens with AAOI, it often means somebody knows something is about to happen.So how do we know what these investors just did? Today, Benzinga's options ...

Since ChatGPT’s debut in late 2022, the ensuing rise of frontier generative-AI models has unleashed an arms race for compute. This has turbocharged demand for GPUs, as evidenced by AI darling Nvidia’s (Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seekin ...