目录
Executive Summary
I. Opening Remarks
II. Management Commentary
Second-Quarter Performance Overview
Data Center Business and Capacity Expansion
CPO and Internally Manufactured Lasers
Tariff Impact
III. Second-Quarter Financial Results
Revenue Mix
CATV Business
Customer Concentration
Gross Margin and Expenses
Balance Sheet and Capital Expenditures
IV. Third-Quarter and Full-Year Outlook
V. Q&A
U.S. Manufacturing and Potential Import Restrictions
800G Capacity Ramp
Fourth-Quarter 800G and 1.6T Revenue
Competitive Impact of New Laser Supply
Indium Phosphide Substrates and Raw Materials
Expanding the 1.6T Customer Base
Capacity Delays and Supply-Chain Challenges
Gross-Margin Outlook
CPO Business Progress
VI. Management Summary
本内容基于公开资料和研报数据整理，不构成任何投资建议，不代表任何个人观点，仅供学习参考，请理性阅读
AOI delivered record revenue for a fifth consecutive quarter and returned to non-GAAP profitability. However, demand for AI optical modules continues to significantly exceed capacity, and the pace of the 800G and 1.6T ramp depends on production expansion and the supply of critical components, including DSPs and TIAs.
Executive Summary
AOI reported record Q2 revenue of $191.9 million, up 86% year over year and 27% sequentially. Non-GAAP gross margin was 29.8%, and non-GAAP diluted EPS was $0.06, above the high end of prior guidance and marking a return to non-GAAP profitability.
Data center was the primary growth engine, with revenue rising 140.4% year over year to $107.7 million. 400G revenue reached $48.4 million, more than 4x the prior-year level; 800G revenue reached $12.8 million, more than 10x year over year, and is expected to increase by nearly 5x sequentially in Q3.
The company expects Q3 revenue of $255 million–$290 million and full-year revenue of approximately $1.1 billion. Management emphasized that near-term revenue is constrained almost entirely by capacity and critical-component availability, rather than insufficient market demand.
Monthly 800G and 1.6T capacity has increased from nearly 100,000 units at the end of Q1 to nearly 200,000 units. It is expected to exceed 650,000 units by year-end 2026 and 930,000 units by year-end 2027, with more than half produced in Texas. Customer forecasts indicate demand will continue to exceed AOI’s capacity through mid-2027.
AOI expects to complete final qualification with a major hyperscale customer for its 1.6T product within several weeks and begin shipments late in Q3. With a backlog exceeding $200 million, the company expects approximately $70 million–$80 million of 1.6T revenue in Q4; Q1 2027 revenue could double or more from Q4.
Q3 100G revenue is expected to decline by approximately $20 million–$25 million because a customer cannot obtain sufficient switches. Management believes the issue is related to memory supply shortages and may resolve in late 2026 or 2027. Without this disruption, Q3 revenue growth could have exceeded 50%.
CATV revenue reached a record $80.6 million, up 43.8% year over year, and is expected to reach $100 million–$110 million in Q3. AOI maintained its long-term expectation for annual CATV revenue above $325 million. Amplifiers remain the primary revenue contributor, while QuantumLink software has begun generating revenue.
Key risks include shortages of DSPs, TIAs, and other critical components; the pace of capacity expansion and customer qualification; elevated capital expenditure, equity financing, and customer concentration; and near-term product-mix pressure on gross margin. The company’s long-term target remains a return to an approximately 40% non-GAAP gross margin.
I. Opening Remarks
Operator:
Welcome to Applied Optoelectronics’ (AOI) second-quarter 2026 earnings conference call. Joining us today are AOI founder, Chairman, and CEO Dr. Thompson Lin, and CFO and Chief Strategy Officer Dr. Stefan Murry. Thompson will review Q2 performance, Stefan will discuss the financial details and Q3 outlook, and the call will then open for questions.
Investor Relations:
AOI has released its financial results for the second quarter of 2026 and provided an outlook for the third quarter of 2026.
Management will make forward-looking statements during this call. These statements involve risks, uncertainties, assumptions, and current expectations, and actual results, operations, performance, or achievements may differ materially. The forward-looking statements include management’s views regarding product entry into new markets, customer response to innovative products, and the outlook for Q3 and full-year 2026.
The company believes the relevant expectations, assumptions, estimates, and projections have a reasonable basis, but they remain predictions and are subject to known and unknown risks, many of which are beyond the company’s control. Except as required by law, AOI undertakes no obligation to update these forward-looking statements after this call. Additional business risks are detailed in the company’s annual and quarterly reports filed with the U.S. Securities and Exchange Commission, including the risk-factor sections of those filings.
Unless otherwise stated, the financial results and metrics discussed on this call are presented on a non-GAAP basis. Non-GAAP measures should not be considered in isolation or as substitutes for GAAP results. Reconciliations between GAAP and non-GAAP measures, together with the reasons for using non-GAAP measures, are included in the company’s earnings release.
I will now turn the call over to AOI founder, Chairman, and CEO Thompson Lin.
II. Management Commentary
Second-Quarter Performance Overview
CEO:
Thank you for joining us. We are pleased to report a solid second quarter, with results meeting or exceeding expectations, driven primarily by strong demand across our data center and CATV businesses.
AOI posted record revenue for a fifth consecutive quarter and achieved an important milestone by returning to non-GAAP profitability. Demand supporting next-generation AI infrastructure remains exceptionally strong, such that near-term revenue is constrained almost entirely by production capacity and the availability of critical components.
We continue to expect steady sequential revenue growth throughout 2026 while maintaining non-GAAP profitability. Q2 revenue was $191.9 million and non-GAAP gross margin was 29.8%, both within guidance, while non-GAAP EPS of $0.06 exceeded expectations.
Customer engagement with our 800G and 1.6T products remained strong during the quarter. 800G production ramped rapidly in Q2, with shipment volume more than doubling sequentially. Based on customer forecasts, demand is expected to exceed our production capacity through mid-2027. We are working to expand capacity to address this demand.
We continue to expect full-year 2026 revenue of approximately $1.1 billion. I will now turn the call over to Stefan for details on Q2 performance and our Q3 outlook.
Data Center Business and Capacity Expansion
CFO:
As Thompson noted, our Q2 results met or exceeded expectations. AOI delivered record revenue for a fifth consecutive quarter and returned to non-GAAP profitability. Strong demand across both data center and CATV validates our dual-growth-engine strategy and diversified revenue mix.
Demand supporting next-generation AI infrastructure remains exceptionally strong, leaving near-term revenue constrained almost entirely by production capacity and critical-component availability. As incremental capacity comes online, we continue to expect steady sequential revenue growth throughout 2026 while remaining non-GAAP profitable.
Q2 revenue was $191.9 million, within guidance of $180 million–$198 million. Non-GAAP gross margin was 29.8%, within guidance of 29%–30%. Non-GAAP EPS was $0.06, above the guidance range of -$0.03 to $0.03.
During Q2, we continued to advance three priorities:
Expand capacity prudently and scale production of next-generation data center products, including 400G and 800G.
Further diversify our revenue base.
Strengthen operational execution, improve gross margin, and establish the foundation for long-term profitability.
These initiatives are translating into visible business momentum. As AI-driven data center investment accelerates, customer engagement with our 800G and 1.6T products remains strong.
800G ramped rapidly in Q2 as planned, generating $12.8 million of revenue, or 11.9% of data center revenue. This represented growth of more than 10x year over year and more than 2x sequentially. For Q3, we expect 800G revenue to increase by nearly 5x sequentially. Growth should remain strong in Q4, although the pace will be constrained by capacity and component supply.
The 400G business also remained strong, generating $48.4 million of revenue in Q2, or 45% of data center revenue, up more than 4x year over year and 27.4% sequentially.
In Q1, the company announced its first volume order for 1.6T optical modules from another major hyperscale customer with which it has a longstanding relationship, along with two volume orders for 800G single-mode optical modules from the same customer. Shipments against the 800G orders began in Q2. We expect the first 1.6T product to complete all qualification requirements with this customer within the next several weeks, with shipments beginning later this quarter.
As these orders ship, we expect this customer to again account for more than 10% of revenue in Q3.
Based on customer forecasts, demand for 800G and 1.6T modules is expected to exceed the company’s capacity through mid-2027. We are expanding capacity and securing the necessary supply of critical components. The ramp in 800G and 1.6T capacity continued to make solid progress during Q2.
Once the expansion is complete, we continue to believe AOI will have the largest U.S. manufacturing capacity for AI data center optical modules. The company’s U.S. manufacturing base is located in Sugar Land, near Houston. Through property purchases and leases, AOI has expanded its manufacturing footprint across Greater Houston to more than 1.6 million square feet, with the facilities currently at various stages of construction.
During the quarter, the company continued building a new 210,000-square-foot facility located only several hundred yards from its headquarters. Initial production is expected to begin by the end of Q3. The facility will be dedicated entirely to manufacturing 800G and 1.6T optical modules.
The facility will not directly add indium phosphide wafer capacity. However, we plan to relocate existing optical-module production from the headquarters facility to the new building, freeing space at headquarters to expand indium phosphide capacity.
Other facilities in Pearland and Houston will also support additional 800G and 1.6T capacity. Construction has begun on the Pearland project, which has received strong local support. The area offers an ample labor pool, robust infrastructure, and room to scale operations further. We continue to expect these facilities to begin operating in early 2027.
Total monthly capacity for the company’s 800G and 1.6T products is now approaching 200,000 units, compared with nearly 100,000 units at the end of Q1. We expect monthly 800G and 1.6T capacity to exceed 650,000 units by year-end 2026 and 930,000 units by year-end 2027, with more than half produced in Texas.
These investments reflect a measured expansion of our manufacturing footprint aligned with customer demand and the progress of 800G and 1.6T qualifications. Both products can be manufactured on the same production lines using the same processes. Although 1.6T requires different final testing, our automated 800G lines were designed from inception with an architecture capable of supporting future higher-speed products as customer demand emerges and evolves.
These automated lines can scale efficiently from 800G to 1.6T with limited incremental investment. This structural flexibility can both shorten time to market for AI customer products and expand long-term gross-margin potential.
We continue to expect 800G to drive the near-term data center ramp, followed by 1.6T. The 1.6T product is expected to begin contributing revenue later in 2026, with a larger-scale ramp beginning in 2027.
CPO and Internally Manufactured Lasers
During OFC, the company also discussed plans to expand capacity for external laser source form-factor pluggable modules, or ELSFPs. These products are used in co-packaged optics, or CPO, and incorporate the ultra-narrow-linewidth, high-power laser previously introduced by the company.
Current module production is highly limited, but the company expects to begin increasing output later in 2026 and continue expanding through 2027, ultimately reaching monthly capacity of approximately 400,000 units in 2028.
AOI’s internal laser capabilities remain a strategic advantage. The company has manufactured its own lasers for many years, allowing it to avoid some of the supply shortages affecting other industry participants. As AOI continues expanding its Texas manufacturing footprint, internal laser capacity enables the company to support both near-term customer demand and long-term growth.
