ALPHA & OMEGA SEMICONDUCTOR Ltd Q2 FY2025 earnings call

Stephen Chang began by stating fiscal Q2 revenue and EPS were in line with guidance. Calendar 2024 revenue increased 4.1% YOY, with computing and communications segments growing over 25%. AOS is shifting from component supplier to total solutions provider. Details on each segment's performance were provided, including outlooks for the March quarter. Yifan Liang discussed financial results, cash flow, balance sheet, and March quarter guidance.

Fiscal Q2 revenue was $173.2 million. Segment performances: Computing: December quarter revenue up 6% year-over-year, down 0.5% sequentially, represented 43.9% of total revenue. Consumer: December revenue down 3.9% year-over-year, down 28.8% sequentially, represented 13% of total revenue. Communication: December revenue up 14.5% year-over-year, down 6.4% sequentially, represented 19.2% of total revenue. Power Supply and Industrial: Accounted for 20.2% of total revenue, flat year-over-year, up 9.6% sequentially.

March quarter revenue expected to be approximately $158 million plus or minus $10 million. GAAP gross margin to be 21.5% plus or minus 1%, non-GAAP gross margin to be 22.5% plus or minus 1%. GAAP operating expenses to be $46.5 million plus or minus $1 million, non-GAAP operating expenses expected to be $39.5 million plus or minus $1 million.

Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially. Tariff uncertainties could impact demand. Subdued market environment may pressure pricing and wind down of licensing and engineering revenue could further impact gross margin.

Q: Can you provide more detail on AI accelerator market revenue being below expectations?

A: It's the transition from customers moving from old programs to new ones, with new models starting to ship and expected to grow.

Q: Talk about thermal issues reported?

A: Not going to comment on the specific article, but continue to be a contender in data center design.

Q: Magnitude of pull-ins due to tariff issues?

A: Not a huge amount, but led to slight pull-ins due to anticipation of tariffs.

Q: Quantify gross margin impact from ASP erosion and mix changes?

A: ASP erosion in mid-to-high single digit range in 2025, expect mid single digit ASP erosion going forward.

Q: Transition in gaming and impact?

A: Gaming platform cycles last 6-8 years, currently in year 5, shifting focus to other growing areas like AI and smartphones.