Applied Optoelectronics (AAOI) Q1 2026 earnings summary

Executive summary

• Achieved record Q1 2026 revenue of $151.1 million, up 51% year-over-year, driven by strong demand in data center and CATV segments, with first volume shipments of 800G and 1.6T transceivers.

• Net loss widened to $14.3 million due to higher operating expenses and increased investment in R&D and infrastructure.

• Non-GAAP gross margin was 29.2%, with GAAP gross margin at 29.1%, both down year-over-year due to higher manufacturing costs.

• Cash, equivalents, and investments rose to $449.4 million, supported by a $382.4 million ATM equity offering.

• Expanded manufacturing capacity and Houston-area footprint, with major ramp in Q3 and new facilities coming online through 2027.

Financial highlights

• Q1 revenue: $151.1 million, up 51% year-over-year and 13% sequentially.

• Data center revenue: $81.4 million, up 154% year-over-year; CATV revenue: $66.8 million, up 4% year-over-year.

• Non-GAAP gross margin: 29.2%; GAAP gross margin: 29.1%.

• Net loss: $14.3 million (GAAP), or $(0.19) per share; non-GAAP net loss: $4.9 million, or $(0.07) per share.

• Operating expenses increased to $56.9 million, mainly due to higher R&D and G&A costs.

Outlook and guidance

• Q2 2026 revenue expected between $180 million and $198 million.

• Q2 non-GAAP gross margin projected at 29%-30% and non-GAAP net income guidance ranges from a loss of $2.5 million to income of $2.8 million.

• 2026 revenue expected to exceed $1.1 billion, with non-GAAP operating profit over $140 million.

• Major production ramp and revenue acceleration anticipated in Q3 and Q4 as new capacity comes online.

• CapEx for 2026 projected to be materially higher than 2025, supporting manufacturing expansion in the U.S. and Taiwan.