09-05-2025
Applied Optoelectronics Inc (AAOI) Q1 2025 Earnings Call Highlights: Record CATV Revenue and ...
Release Date: May 08, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Applied Optoelectronics Inc (NASDAQ:AAOI) achieved the highest quarterly CATV revenue in its history during Q1 2025.
The company reported a significant year-over-year revenue increase, more than doubling compared to Q1 of the previous year.
Gross margin expanded by over 1,000 basis points year-over-year, indicating improved profitability.
The company is on track to expand production capacity for 800G and higher transceivers, with plans to produce over 200,000 pieces per month by mid-2026.
Positive feedback was received from customers regarding the company's plans for domestic production, enhancing supply chain security and customer confidence.
Sequential revenue decline in the data center segment due to seasonality and inventory digestion from a major customer.
Non-GAAP net loss for Q1 was $0.9 million, indicating ongoing financial challenges.
The company anticipates a modest pullback in CATV revenue in Q2 due to production retooling.
Supply constraints affected the ability to meet increased demand for certain 100G products, impacting revenue potential.
The company faces ongoing risks related to tariffs, which could impact future financial performance and operational costs.
Warning! GuruFocus has detected 6 Warning Signs with AAOI.
Q: Can you provide insight into the channel inventory for your cable TV products and the impact of tariffs on inventory levels? A: We have telemetry features and receive reports from MSOs and channel partners, giving us a good understanding of inventory levels. There is an intentional inventory build-up due to the evolving tariff situation, but we are comfortable with our knowledge of these levels. (Respondent: CFO)
Q: What is the expected trajectory for 800GB products in the second half of the year? A: By the end of the year, we expect to have a production capacity of about 100,000 pieces per month, primarily 800GB. There will be a ramp-up from near zero now to that level by year-end. (Respondent: CFO)
Q: Are you manufacturing anything in China that gets shipped to the US? A: We do certain manufacturing operations in China, but the ultimate country of origin for tariff purposes is not China. (Respondent: CFO)
Q: Can you elaborate on the retooling to Motorola-style amplifiers and its impact on cable TV revenue? A: We have sufficient inventory of GameMaker platform products and are shifting production to Motorola-style amplifiers, expecting final field trial and qualification soon. This will ensure significant inventory of both products stateside by the end of June. (Respondent: CFO)
Q: How do you view the long-term market for 800GB products given the emergence of 1.6 terabytes? A: The market for 800GB is enormous and will continue to grow. While 1.6 terabytes is emerging, it does not detract from the growth prospects for 800GB, especially with our recent deal with Amazon focusing on 800GB. (Respondent: CEO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
