APPLIED OPTOELECTRONICS, INC. Q4 FY2024 earnings call

• Q4 revenue of $100 million was in line with guidance range of $94 million to $104 million. Non-GAAP gross margin was 28.9% in line with guidance range of 27.5% to 29.5%. Non-GAAP loss per share of $0.02 was in line with guidance range of loss of $0.04 to earnings of $0.04 per share.
• Datacenter 400G products saw 40% year-over-year and 70% sequential growth driven by increased adoption by datacenter customers and new customers.
• CATV segment received a substantial order for Quantum Bandwidth networking products from a top North American cable operator, with products beginning to ship. Next-gen Quantum Bandwidth amplifiers already deployed by a major North American MSO.
• Retrofitted facility in Sugar Land, Texas to accommodate new automated production equipment for 400G and 800G transceiver products. Signed agreement to lease additional building in Taiwan to increase production of data center and CATV products.

Total revenue for the quarter was $100 million. Datacenter products contributed $44.2 million, which is 44% of total revenue and was essentially flat year-over-year but up 8% sequentially. 400G products in the datacenter segment increased 40% year-over-year and 70% sequentially. The CATV segment had revenue of $52.2 million, which is 52% of total revenue, increased more than 4x year-over-year and more than doubled sequentially. The remaining 4% of revenue came from FTTH, telecom, and other segments.

• Q1 2025 revenue expected to be between $94 million and $104 million.
• Non-GAAP gross margin expected in the range of 29% to 30.5%.
• Non-GAAP net income expected to be in the range of a loss of $3.6 million to breakeven, with non-GAAP earnings per share between a loss of $0.07 per share and breakeven using a weighted average basic share count of approximately 49.6 million shares.

Q: Tim Savageaux with Northland Capital Markets asked about capacity investments, specifically focusing on datacenter versus cable and estimating capacity targets.

A: Stefan Murry said most CapEx is for datacenter, designed for 800-gig and 1.6-terabit production. Thompson Lin mentioned plan to have over 120,000 to 140,000 per month of capacity for single-mode transceivers by end of year or early next year.

Q: Michael Genovese with Rosenblatt Securities asked about Quantum Bandwidth order and datacenter demand.

A: Stefan Murry said Quantum Bandwidth order was for 1.8-gigahertz amplifier products, same as previous. Datacenter demand for 400-gig up, 100-gig gradually declining, 800-gig and 1.6-terabit to ramp later.

Q: Jeff Koche with B. Riley Securities asked about 400-gig demand and CapEx.

A: Stefan Murry said can't comment on customer-specific products or forward guidance by product line. Thompson Lin mentioned strong demand for 400G single-mode transceivers and plans for capacity in Houston.

Q: Dave Kang with Raymond James asked about cable TV customer and 800-gig lead time.

A: Stefan Murry said cable TV customer sells to large MSOs, 800-gig lead time typically around 8-10 weeks.

Q: Michael Genovese asked if they qualified 800G products and shipped revenue.

A: Thompson Lin said they are almost there, shipped a few hundred thousand units for final qualification with three or four customers for single-mode transceiver.