AAOI Filings — Applied Optoelectronics, Inc. - FilingSpy
AAOI
Applied Optoelectronics, Inc.
A maker of fiber-optic networking components, Applied Optoelectronics builds the laser chips, transceivers, and light engines that carry data through internet data centers and cable TV networks. Founded in 1997 by Dr. Thompson Lin in a University of Houston lab, the company now makes its chips in Sugar Land, Texas, and sells cable operators its Quantum Bandwidth gear for next-generation DOCSIS 4.0 networks.
Data center revenue more than doubled to $107.7M, overtaking CATV as the primary growth engine for the first time in the recovery.
Data center overtook CATV as the primary growth driver. Total revenue rose 86.4% to $191.9M, led by a 140.4% increase in data center sales to $107.7M, while contracted 2.5 points to 27.7% as production ramp costs outpaced revenue gains. The company raised over $1 billion in equity, leaving it with $499.7M in cash to fund an aggressive capacity buildout.
Key takeaways
Data center rose 140.4% to $107.7M, surpassing CATV revenue for the first time since the recovery began, driven by 800G transceiver shipments to hyperscale customers.
CATV rose 43.8% to $80.6M, sustaining the North American MSO network upgrade cycle but growing at a slower rate than the data center .
contracted to 27.7% from 30.3% a year earlier, as higher direct material, labor, and manufacturing costs from the production ramp outpaced growth.
Section summaries
Management's Discussion and Analysis
Revenue surged 86% YoY to $192M in Q2 2026, driven by data center and CATV growth, but net loss widened to $23M on higher costs.
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Total Q2 rose 86.4% to $191.9M, led by a 140.4% jump in data center revenue to $107.7M and a 43.8% increase in CATV revenue to $80.6M.
Operating expenses rose 65.3% to $77.9M, with R&D up 69.2% on new data center product development and G&A up 71.7% on expanded corporate infrastructure, widening the net loss to $22.8M from $9.1M.
The company raised $1.03 billion in net proceeds from at-the-market equity offerings during the quarter, ending with $499.7M in cash and equivalents to fund $335.1M in for capacity expansion.
Management expects to improve through product mix and cost optimization, while 2026 remain elevated to support 800G and 1.6T transceiver and Quantum Bandwidth production.
What changed
Q1 2026 flagged data center against the $81.4M base to confirm whether 800G sales would exceed 400G as management expected for later 2026: data center revenue rose to $107.7M, a 32.3% sequential increase, confirming the 800G ramp is underway.
Q1 2026 flagged CATV against $66.8M to see if the 3.6% growth holds or declines toward pre-upgrade levels: CATV revenue rose 20.7% sequentially to $80.6M, showing the MSO upgrade cycle still has momentum.
The 20% Taiwan tariff flagged in prior quarters as a risk to cost of goods sold and margin is now flowing through production, with management citing higher direct material and labor costs as a factor in the contraction to 27.7%.
The $5.7M IEEPA tariff refund claims submitted in April 2026 were noted in Q1 with no receivable recognized; the current filing does not report a change in that status.
What to watch
Q3 2026 data center against $107.7M to confirm the 800G ramp sustains and whether 1.6T products begin contributing.
Q3 2026 against 27.7% to see if management's expected improvement from product mix and cost optimization materializes.
Pace of cash consumption as Q2 turned positive at $11.6M after five quarters of negative operating cash flow, against $335.1M in quarterly .
Outcome of the $5.7M IEEPA tariff refund claims and whether a receivable is recognized in a future period.
contracted to 27.7% from 30.3% a year ago as higher direct material, labor, and manufacturing costs from the production ramp outpaced gains.
grew 65.3% to $77.9M, with R&D up 69.2% to support new data center products and G&A up 71.7% for expanded corporate infrastructure.
Net loss widened to $22.8M from $9.1M, pressured by a $6.5M decline in other income due to negative foreign exchange impacts and a $1.3M income tax expense.
Cash and equivalents swelled to $508.8M after $1.03B in net proceeds from at-the-market equity offerings, funding $335.1M in for capacity expansion.
Management expects to improve through product mix and cost optimization, while 2026 remains elevated to support 800G/1.6T transceiver and Quantum Bandwidth production.
Quantitative and Qualitative Disclosures About Market Risk
For quantitative and qualitative disclosures about market risk affecting the Company, see Item 7A – Quantitative and Qualitative Disclosures about Market Risk in our Annual Report for the fiscal year ended December 31, 2025. We do not believe the Company’s exposure to market ris…
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For quantitative and qualitative disclosures about market risk affecting the Company, see Item 7A – Quantitative and Qualitative Disclosures about Market Risk in our Annual Report for the fiscal year ended December 31, 2025. We do not believe the Company’s exposure to market risk has changed materially since December 31, 2025.
We are affected by changes in currency exchange and interest rates. Our risk management programs are designed to reduce, but may not entirely eliminate, the impacts of these risks. We performed an evaluation of these risks to our financial positions as of December 31, 2025, and updated that analysis as of June 30, 2026, to determine whether material changes in market risks pertaining to currency and interest rates have occurred as a result of the changes in international trade policies, including tariffs and export controls. No material revisions were noted since disclosing "Quantitative and Qualitative Disclosures About Market Risk" within MD&A, in our 2025 Form 10-K.
Information with respect to legal proceedings can be found in Note 18 to the Condensed Consolidated Financial Statements contained in Part 1, Item 1 of this report.
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Information with respect to legal proceedings can be found in Note 18 to the Condensed Consolidated Financial Statements contained in Part 1, Item 1 of this report.
Investing in our common stock involves a high degree of risk. See Part I, Item 1A, "Risk Factors", of our Annual Report on Form 10-K for the year ended December 31, 2025 for a detailed discussion of the risk factors affecting our Company. As of June 30, 2026, there have been no…
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Investing in our common stock involves a high degree of risk. See Part I, Item 1A, "Risk Factors", of our Annual Report on Form 10-K for the year ended December 31, 2025 for a detailed discussion of the risk factors affecting our Company. As of June 30, 2026, there have been no material changes to those risk factors.