APPLIED OPTOELECTRONICS, INC. Q1 FY2026 earnings call

• Pleased with solid Q1 results in line with expectations, driven by strong demand in data center and CATV businesses. • Saw strong customer engagement around 800G and 1.6T products. • Completed 4th volume shipment of 800G single-mode transceiver to a large hyperscale customer. • Working to add capacity to meet forecast demand outpacing production capacity through mid-2027. • Made progress on expanding manufacturing capacity in Texas and Taiwan.

In Q1, data center product revenue was $81.4 million, up 154% year-over-year and 9% sequentially. CATV product revenue was $66.8 million, up 4% year-over-year and 24% sequentially. Telecom product revenue was $2.6 million, down 13% year-over-year and 50% sequentially. Revenue contribution: data center 54%, CATV 44%, others 2%.

• Now believes 2026 revenue will exceed $1.1 billion and generate over $140 million in long-term operating income. • Q2 revenue expected between $180 million and $198 million. • Non-GAAP gross margin expected in range of 29% to 30%. • Non-GAAP net income expected in range of a loss of $2.5 million to income of $2.8 million.

• Risk of material supply disruptions. • Equipment delivery and installation cycle time risks. • Uncertainty in recovery of tariffs as process is new. • Potential competitive impact from contract manufacturers entering transceiver production for hyperscale customers.

Q: Simon Leopold asked about risk profile for ramping capacity and clarification on $471 million monthly value.

A: Thompson and Stephan responded on risk from prior capacity expansions, equipment in-house development minimizing supply chain risk, and $471 million being revenue forecast considering qualification and delivery timing.

Q: George Nodder asked about ELSP customer engagements.

A: Thompson said working with several large customers on three-year long-term agreements including laser and ELSP.

Q: Michael Genovese asked about 800G qualification and second half revenue shape.

A: Thompson and Stephan responded on qualification progress and non-linear revenue growth in second half due to manufacturing and qualification processes.

Q: Tim Savageau asked about capacity vs forecast and competitive impact.

A: Thompson and Stephan responded on capacity timing and revenue realization, and uncertainty on competitive margin impact.