Record Quarterly Revenue and Strong Top-Line Growth
Q1 revenue of $151.1M, a record fourth consecutive quarter, up 51% year-over-year and up 13% sequentially; revenue was in line with guidance ($150M–$165M).
Applied Optoelectronics
· AAOI
May 7th, 2026
Summary
- Earnings Call Date:
- 2026-05-07
- Change Since:
- -6.72%
- Next Earnings Date:
- 2026-07-30
Earnings Call Sentiment
PositiveThe call presents a constructive and growth-oriented outlook driven by record revenue, significant YoY data center expansion (154% YoY), early volume shipments/orders for next-generation 800G and 1.6T products, large capacity expansion plans, and a materially stronger cash position. Management upgraded 2026 revenue to >$1.1B and expects >$140M non-GAAP operating income, reflecting confidence in demand. Offsetting factors include ongoing non-GAAP and GAAP losses in Q1, lower near-term gross margins (29.2%), high customer concentration, capacity constraints that limit the near-term ability to meet demand, heavy CapEx and inventory build, and operational/qualification timing risks tied to long equipment lead times. Overall, the positive operational momentum, bookings, and upgraded guidance outweigh the execution and timing risks described on the call.
Company Guidance
The company guided to 2026 revenue of more than $1.1 billion and non‑GAAP operating income above $140 million, with Q2 revenue expected between $180 million and $198 million, non‑GAAP gross margin of 29%–30%, non‑GAAP net income of a loss of $2.5 million to income of $2.8 million (EPS -$0.03 to $0.03 on ~80.7M shares). Management expects rapid capacity‑driven growth: exiting Q1 they had ~100k units/month of 800G/1.6T capacity, expect to approach ~150k/month this quarter, to be capable of >650k pieces/month of 800G/1.6T by year‑end (≈30% U.S. output) and >930k/month by end‑2027 (>50% U.S.); mid‑2027 monthly data‑center revenue is forecast at roughly $90M (100G/400G) + $217M (800G) + $164M (1.6T) = ~$471M. They also expect ELSFP (CPO) production to ramp toward ~400k pieces/month by 2027, plan ~350% expansion in laser fabrication capacity by 2027, and flagged continued sizable quarterly CapEx above the Q1 spend of $68.7M; Q1 actuals to benchmark included $151.1M revenue, 29.2% non‑GAAP gross margin, non‑GAAP loss per share $0.07, cash + short‑term investments $449.4M, total debt (ex‑convertible) $77M, and $206.2M inventory.
Data Center Business Acceleration
Data center revenue of $81.4M, up 154% year-over-year and up 9% sequentially; 100G sales +36% YoY and 400G sales increased tenfold YoY. 800G revenue was $4.6M in Q1 (5.6% of data center revenue). First volume shipment of 800G single-mode transceivers completed and first volume order for 1.6T transceivers received.
CATV Momentum and Sequential Strength
CATV revenue of $66.8M, up 4% year-over-year and up 24% sequentially, at the high end of expectations ($61M–$67M); company expects Q2 CATV revenue of $75M–$80M and now forecasts over $325M annually in CATV.
Upgraded 2026 Revenue and Profitability Outlook
Company now expects 2026 revenue to exceed $1.1B and to generate more than $140M in non-GAAP operating income for the year (upgrade from prior guidance of ~$1.0B).
Large Capacity Expansion Plan and Production Ramp
Manufacturing footprint expanded in Texas to ~900k sq ft (multiple buildings); exiting Q1 800G/1.6T capacity ~100k units/month and expecting to approach ~150k/month this quarter; target >650k/month of 800G/1.6T by end of 2026 and >930k/month by end of 2027.
In-house Laser and CPO (ELSFP) Strategy
Company emphasizes in-house laser manufacturing advantage, plans to expand laser fabrication capacity ~350% by 2027 and anticipates ramping ELSFP production to ~400k pieces/month by 2027; positioning to be a top global laser producer by end of next year.
Healthy Liquidity Position
Total cash, cash equivalents, short-term investments and restricted cash of $449.4M at quarter end, up from $216M at end of 2025 (~108% increase), providing resources for CapEx and growth.
Order and Customer Wins
Received multiple volume orders from long-term hyperscale customers (including first 1.6T volume order and two new 800G orders); company expects one hyperscale customer to return as a 10%+ customer.
Operator
Good afternoon. I will be your conference operator. At this time, I would like to welcome everyone to Applied Optoelectronics, Inc. First Quarter 2026 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. Please note that this call is being recorded. I will now turn the call over to Lindsay Savarese, Investor Relations for Applied Optoelectronics, Inc.
Ms. Savarese, you may begin.
Lindsay Savarese
Thank you. I am Lindsay Savarese, Investor Relations for Applied Optoelectronics, Inc. I am pleased to welcome you to Applied Optoelectronics, Inc.’s first quarter 2026 Financial Results Conference Call. After the market closed today, Applied Optoelectronics, Inc. issued a press release announcing its first quarter 2026 financial results and provided its outlook for 2026. The release is also available on the company's website at aoinc.com. This call is being recorded and webcast live. A link to the recording can be found on the Investor Relations section of the Applied Optoelectronics, Inc.
website and will be archived for one year. Joining us on today's call is Dr. Thompson Lin, Applied Optoelectronics, Inc.’s founder, chairman, and CEO, and Dr. Stefan Murry, Applied Optoelectronics, Inc.’s chief financial officer and chief strategy officer. Thompson will give an overview of Applied Optoelectronics, Inc.’s Q1 results, and Stefan will provide financial details and the outlook for 2026. A question and answer session will follow our prepared remarks. Before we begin, I would like to remi...
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