{"success":true,"data":{"pressRelease":{"id":"112129","rtpr_id":"nGNX8dLtRW","ticker":"AAOI","exchange":"NASDAQ","all_tickers":["AAOI"],"title":"Applied Optoelectronics Reports Second Quarter 2026 Results","author":"Globe Newswire","published_at":"2026-08-06T20:10:01.015Z","article_body":"SUGAR LAND, Texas, Aug. 06, 2026 (GLOBE NEWSWIRE) -- Applied Optoelectronics,\nInc. (NASDAQ: AAOI) (“AOI”), a leading provider of advanced optical and\nHFC networking products that power AI, today announced financial results for\nits second quarter ended June 30, 2026.\n\n“Q2 was a pivotal quarter for AOI. We delivered record revenue for our fifth\nconsecutive quarter and achieved an important milestone as we returned to\nnon-GAAP profitability in the quarter. Further, we saw a strong volume ramp of\nour 800G products, which more than doubled sequentially,” said Dr. Thompson\nLin, AOI’s Founder, President and Chief Executive Officer. “Strong demand\nfor high-speed optics alongside high-volume adoption of our 1.8 GHz CATV\nproducts generated powerful results during the quarter. We continue to see\nrobust customer engagement around our 800G transceivers and 1.6 Tb products,\nand we forecast that demand will continue to outpace our production capacity\nthrough mid-2027. We continue to believe the fundamental drivers of long-term\ndemand for our business remain robust and we are uniquely positioned as a key\nsupplier to the AI, cloud infrastructure, and CATV markets.”\n\n“We’re pleased to deliver second quarter results that were in line with or\nbetter than our expectations,” said Dr. Stefan Murry, AOI’s Chief\nFinancial Officer and Chief Strategy Officer. “During Q2, we continued to\nmake solid progress on our production capacity ramp, particularly for our 800G\nand 1.6Tb products. We have a total manufacturing capacity approaching 200,000\nunits per month and continue to expect by the end of this year that we will be\ncapable of producing around 650,000 pieces of 800G and 1.6 Tb products per\nmonth. We’re working hard to expand our capacity, and we continue to\nanticipate steady sequential revenue growth this year.”\n\nSecond Quarter 2026 Financial Summary\n* GAAP revenue was $191.9 million, compared with $103.0 million in the second\nquarter of 2025 and $151.1 million in the first quarter of 2026.\n\n\n* GAAP gross margin was 27.7%, compared with 30.3% in the second quarter of\n2025 and 29.1% in the first quarter of 2026. Non-GAAP gross margin was 29.8%,\ncompared with 30.4% in the second quarter of 2025 and 29.2% in the first\nquarter of 2026.\n\n\n* GAAP net loss was $22.8 million, or $0.28 per basic share, compared with net\nloss of $9.1 million, or $0.16 per basic share in the second quarter of 2025,\nand a net loss of $14.3 million, or $0.19 per basic share in the first quarter\nof 2026.\n\n\n* Non-GAAP net income was $5.5 million, or $0.06 per diluted share, compared\nwith non-GAAP net loss of $8.8 million, or $0.16 per basic share in the second\nquarter of 2025, and a non-GAAP net loss of $4.9 million, or $0.07 per basic\nshare in the first quarter of 2026.\nA reconciliation between all GAAP and non-GAAP information referenced above is\ncontained in the tables below. Please also refer to “Non-GAAP Financial\nMeasures” below for a description of these non-GAAP financial measures.\n\nThird Quarter 2026 Business Outlook ((+))\n\nFor third quarter of 2026, the company currently expects:\n* Revenue in the range of $255 million to $290 million.\n* Non-GAAP gross margin in the range of 29% to 30.5%.\n* Non-GAAP net income in the range of $10.1 million to $24.0 million, and\nnon-GAAP income per share in the range of $0.11 to $0.26 using approximately\n92.8 million shares.\n((+)) Please refer to the note below on forward-looking statements and the\nrisks involved with such statements as well as the note on non-GAAP financial\nmeasures.\n\nConference Call Information\n\nThe company will host a conference call and webcast for analysts and investors\ntoday, August 6, 2026 to discuss its second quarter 2026 financial results and\noutlook for its third quarter 2026 at 4:30 p.m. Eastern time / 3:30 p.m.\nCentral time. This call will be open to the public, and investors may access\nthe call by dialing 844-890-1794 (domestic) or 412-717-9586 (international). A\nlive audio webcast of the conference call along with supplemental financial\ninformation will also be accessible on the company's website at\ninvestors.ao-inc.com\n(https://www.globenewswire.com/Tracker?data=L2HxFk9UQwxfw0vz9pmVLCVW4c3RFYdBb1-iKP88KBwT4uOOjgnsvhgz2SEfBfIQ0OVUFgXat7X5xMYWhAFA1RvAeCvILqexheL4GYYq2wZYKlVm0fOYD_jyBc4nEIcXfMdL0cQlTn_t63j0P0OVKBu_fnqd6tYQVHxOd70keDRddylyAUN3jRPOTPz6_eKt3ZVsWD56eOIjVwv7_Fg2aKjcE9VoPdJyueEiqQkkVEWjAeA59G_gtPYjPV1wfgtoKjOYjkNQ0Sh6-fxf942KFFrkzFzrl89ge-AWLK6wXwLGedRRBr8WHNfG4Mm95CCCeHyW2nGsiU8q9E-YoTtTv66WYS92luBNIFKZdsRn6V1nXxve7XvjNwJCuexeEyyc).\nFollowing the webcast, an archived version will be available on the website\nfor one year. A telephonic replay of the call will be available one hour after\nthe call and will run for five business days and may be accessed by dialing\n855-669-9658 (domestic) or 412-317-0088 (international) and entering passcode\n6704856.\n\nForward-Looking Information\n\nThis press release contains forward-looking statements within the meaning of\nthe Private Securities Litigation Reform Act of 1995. In some cases, you can\nidentify forward-looking statements by terminology such as \"believe,\" \"may,\"\n\"estimate,\" \"continue,\" \"anticipate,\" \"intend,\" \"should,\" \"could,\" \"would,\"\n\"target,\" \"seek,\" \"aim,\" \"predicts,\" \"think,\" \"objectives,\" \"optimistic,\"\n\"new,\" \"goal,\" “priorities,” \"strategy,\" \"potential,\" \"is likely,\" \"will,\"\n\"expect,\" “momentum,” \"plan\" \"project,\" \"permit,\" “positions” or by\nother similar expressions that convey uncertainty of future events or\noutcomes. These statements include management’s beliefs and expectations\nrelated to our outlook for the third quarter of 2026, the remainder of the\nyear, and the first half of 2027. Such forward-looking statements reflect the\nviews of management at the time such statements are made. These\nforward-looking statements involve risks and uncertainties, as well as\nassumptions and current expectations, which could cause the company's actual\nresults to differ materially from those anticipated in such forward-looking\nstatements. These risks and uncertainties include but are not limited to:\nreduction in the size or quantity of customer orders; change in demand for the\ncompany's products due to industry conditions; changes in manufacturing\noperations; volatility in manufacturing costs; delays in shipments of\nproducts; disruptions in the supply chain; change in the rate of design wins\nor the rate of customer acceptance of new products; the company's reliance on\na small number of customers for a substantial portion of its revenues;\npotential pricing pressure; a decline in demand for our customers' products or\ntheir rate of deployment of their products; general conditions in the internet\ndatacenter, cable television (CATV) broadband, telecom, or fiber-to-the-home\n(FTTH) markets; changes in the world economy (particularly in the United\nStates and China); changes in the regulation and taxation of international\ntrade, including the imposition of tariffs; changes in currency exchange\nrates; the negative effects of seasonality; and other risks and uncertainties\ndescribed more fully in the company's documents filed with or furnished to the\nSecurities and Exchange Commission, including our Annual Report on Form 10-K\nfor the year ended December 31, 2025 and our Quarterly report on Form 10-Q for\nthe quarter ended June 30, 2026. More information about these and other risks\nthat may impact the company's business are set forth in the \"Risk Factors\"\nsection of the company's quarterly and annual reports on file with the\nSecurities and Exchange Commission. You should not rely on forward-looking\nstatements as predictions of future events. All forward-looking statements in\nthis press release are based upon information available to us as of the date\nhereof, and qualified in their entirety by this cautionary statement. Except\nas required by law, we assume no obligation to update forward-looking\nstatements for any reason after the date of this press release to conform\nthese statements to actual results or to changes in the company's\nexpectations.\n\nNon-GAAP Financial Measures\n\nWe provide non-GAAP gross margin, non-GAAP net income (loss), and non-GAAP\nearnings (loss) per share, and non-GAAP Adjusted EBITDA to eliminate the\nimpact of items that we do not consider indicative of our overall operating\nperformance. To arrive at our non-GAAP gross margin, we exclude stock-based\ncompensation and related expenses, expenses associated with discontinued\nproducts, and non-recurring (income) expenses, if any, from our GAAP gross\nmargin. To arrive at our non-GAAP net income (loss), we exclude all\namortization of intangible assets, stock-based compensation expense,\nnon-recurring expenses, unrealized foreign exchange loss (gain), losses from\nthe disposal of idle assets, if any, and non-GAAP tax benefit (expenses) from\nour GAAP net income (loss). Included in our non-recurring expenses in Q2 2026\nand Q2 2025 are employee severance expenses (if any) and legal expenses\nassociated with litigation and certain legal and advisory expenses associated\nwith purchase termination or patent protection. In computing our non-GAAP\nincome tax benefit (expense), we have applied an estimate of our annual\neffective income tax rate and applied it to our net income before income\ntaxes. Our non-GAAP Adjusted EBITDA is calculated by excluding depreciation\nexpense, non-GAAP tax benefit (expense), and interest (income) expense, as\nwell as the items excluded from non-GAAP net income (loss), from our GAAP net\nincome (loss). Our non-GAAP diluted net earnings (loss) per share is\ncalculated by dividing our non-GAAP net gain (loss) by the fully diluted share\ncount (for periods in which non-GAAP net income is positive) or basic share\ncount (for periods in which our non-GAAP net income is negative).\n\nWe believe that our non-GAAP measures are useful to investors in evaluating\nour operating performance for the following reasons:\n* We believe that elimination of items such as amortization of intangible\nassets, stock-based compensation expense, non-recurring revenue and expenses,\nlosses from the disposal of idle assets, unrealized foreign exchange gain or\nloss, and depreciation on certain equipment undergoing reconfiguration is\nappropriate because treatment of these items may vary for reasons unrelated to\nour overall operating performance;\n* We believe that elimination of expenses associated with discontinued\nproducts, including depreciation and inventory obsolescence is appropriate\nbecause these expenses are not indicative of our ongoing operations;\n* We believe that estimating non-GAAP income taxes allows comparison with\nprior periods and provides additional information regarding the generation of\npotential future deferred tax assets;\n* We believe that non-GAAP measures provide better comparability with our past\nfinancial performance, period-to-period results and with our peer companies,\nmany of which also use similar non-GAAP financial measures; and\n* We anticipate that investors and securities analysts will utilize non-GAAP\nmeasures as a supplement to GAAP measures to evaluate our overall operating\nperformance.\nA reconciliation of our GAAP net income (loss), GAAP total gross profit, GAAP\nearnings (loss), and GAAP earnings (loss) per share for Q2 2026 to our\nnon-GAAP net income (loss), non-GAAP total gross profit, Adjusted EBITDA, and\nearnings (loss) per share, respectively, is provided below, together with\ncorresponding reconciliations for Q2 2025.\n\nNon-GAAP measures should not be considered as an alternative to gross profit,\nnet income (loss), earnings (loss) per share, or any other measure of\nfinancial performance calculated and presented in accordance with GAAP. Our\nnon-GAAP measures may not be comparable to similarly titled measures of other\norganizations because other organizations may not calculate such other\nnon-GAAP measures in the same manner. We have not reconciled the non-GAAP\nmeasures included in our guidance to the appropriate GAAP financial measures\nbecause the GAAP measures are not readily determinable on a forward-looking\nbasis. GAAP measures that impact our non-GAAP financial measures may include\nstock-based compensation expense, non-recurring expenses, amortization of\nintangible assets, unrealized exchange loss (gain), asset impairment charges,\nloss (gain) from disposal of idle assets, and changes in the fair value of our\nconvertible notes. These GAAP measures cannot be reasonably predicted and may\ndirectly impact our non-GAAP gross margin, our non-GAAP net income and our\nnon-GAAP fully-diluted earnings per share, although changes with respect to\ncertain of these measures may offset other changes. In addition, certain of\nthese measures are out of our control. Accordingly, a reconciliation of the\nnon-GAAP financial measure guidance to the corresponding GAAP measures is not\navailable without unreasonable effort.\n\nAbout Applied Optoelectronics\n\nApplied Optoelectronics, Inc. (AOI) is a leading developer and manufacturer of\nadvanced optical and HFC networking products that are the building blocks for\nAI datacenters, CATV and broadband fiber access networks around the world. AOI\nsupplies this critical infrastructure to tier-one customers across cloud\ncomputing, CATV broadband, telecom, and FTTH markets. The company has R&D\nfacilities in Atlanta, GA, and engineering and manufacturing facilities at its\ncorporate headquarters in Sugar Land, TX, as well as in Taipei, Taiwan and\nNingbo, China. For additional information, visit www.ao-inc.com.\n\nInvestor Relations Contacts:\n\nThe Blueshirt Group, Investor Relations\nLindsay Savarese\n+1-212-331-8417\nir@ao-inc.com\n\n Applied Optoelectronics, Inc. \n Preliminary Condensed Consolidated Balance Sheets \n (In thousands) \n (Unaudited) \n June 30, 2026 December 31, 2025 \n ASSETS \n CURRENT ASSETS \n Cash, Cash Equivalents and Restricted Cash $ 508,758 $ 216,035 \n Accounts Receivable, Net 314,009 244,404 \n Inventories 278,791 183,105 \n Prepaid Expenses and Other Current Assets 88,316 32,183 \n Total Current Assets 1,189,874 675,727 \n \n Property, Plant And Equipment, Net 697,086 376,050 \n Land Use Rights, Net 4,917 4,825 \n Operating Right of Use Asset 75,168 49,697 \n Intangible Assets, Net 3,633 3,623 \n Other Assets 330,514 58,501 \n TOTAL ASSETS $ 2,301,192 $ 1,168,423 \n \n LIABILITIES AND STOCKHOLDERS' EQUITY \n CURRENT LIABILITIES \n Accounts Payable $ 286,088 $ 143,932 \n Bank Acceptance Payable 33,940 33,363 \n Accrued Expenses 46,939 42,491 \n Current Lease Liability-Operating 4,223 3,522 \n Current Portion of Notes Payable and Long Term Debt 57,258 33,975 \n Total Current Liabilities 428,448 257,283 \n Convertible Senior Notes 129,142 129,829 \n Other Long-Term Liabilities 75,577 47,393 \n TOTAL LIABILITIES 633,167 434,505 \n \n STOCKHOLDERS' EQUITY \n Common Stock 84 75 \n Additional Paid-in Capital 2,192,682 1,224,538 \n Cumulative Translation Adjustment 2,399 (617 ) \n Retained Earnings (527,140 ) (490,078 ) \n TOTAL STOCKHOLDERS' EQUITY 1,668,025 733,918 \n \n TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,301,192 $ 1,168,423 \n \n\n\n\n Applied Optoelectronics, Inc. \n Preliminary Condensed Consolidated Statements of Operations \n (In thousands) \n (Unaudited) \n Three Months Ended June 30, Six Months Ended June 30, \n Revenue 2026 2025 2026 2025 \n CATV $ 80,578 $ 56,019 $ 147,419 $ 120,520 \n Datacenter 107,662 44,791 189,066 76,841 \n Telecom 3,411 1,940 5,971 4,876 \n Other 271 202 610 574 \n Total Revenue 191,922 102,952 343,066 202,811 \n \n Total Cost of Goods Sold 138,715 71,790 245,943 141,105 \n \n Total Gross Profit 53,207 31,162 97,123 61,706 \n \n Operating Expenses: \n Research and Development 34,871 20,612 60,527 38,422 \n Sales and Marketing 11,490 8,135 17,837 13,492 \n General and Administrative 31,573 18,391 56,477 34,706 \n Total Operating Expenses 77,934 47,138 134,841 86,620 \n \n Operating Loss (24,727 ) (15,976 ) (37,718 ) (24,914 ) \n \n Other Income (Expense): \n Interest Income 3,248 286 4,985 511 \n Interest Expense (927 ) (818 ) (1,790 ) (1,752 ) \n Other Income (Expense), net 914 7,410 (201 ) 7,885 \n Total Other Income (Expense): 3,235 6,878 2,994 6,644 \n \n Net loss before Income Taxes (21,492 ) (9,098 ) (34,724 ) (18,270 ) \n Income Tax Expense (1,289 ) - (2,338 ) - \n Net loss $ (22,781 ) $ (9,098 ) $ (37,062 ) $ (18,270 ) \n Net loss per share attributable to common stockholders \n basic $ (0.28 ) $ (0.16 ) $ (0.47 ) $ (0.34 ) \n diluted $ (0.28 ) $ (0.16 ) $ (0.47 ) $ (0.34 ) \n \n Weighted-average shares used to compute net loss per share attributable to common stockholders \n basic 81,568 56,772 78,789 53,426 \n diluted 81,568 56,772 78,789 53,426 \n \n\n\n\n Applied Optoelectronics, Inc. \n Reconciliation of Statements of Operations under GAAP and Non-GAAP \n (In thousands) \n (Unaudited) \n Three Months Ended June 30, Six Months Ended June 30, \n 2026 2025 2026 2025 \n GAAP total gross profit ((a)) $ 53,207 $ 31,162 $ 97,123 $ 61,706 \n Share-based compensation expense 170 94 326 177 \n Non-recurring expense 282 41 298 41 \n Expenses associated with discontinued products 3,594 - 3,594 - \n Non-GAAP total gross profit ((a)) $ 57,253 $ 31,297 $ 101,341 $ 61,924 \n \n GAAP net loss $ (22,781 ) $ (9,098 ) $ (37,062 ) $ (18,270 ) \n Share-based compensation expense 4,863 3,164 9,254 5,726 \n Expenses associated with discontinued products 3,594 - 3,594 - \n Non-cash expenses associated with discontinued products 1,102 1,073 2,017 2,118 \n Amortization of intangible assets 123 110 244 218 \n Non-recurring (income) expense 4,744 862 5,021 1,255 \n Unrealized exchange loss (gain) (432 ) (5,278 ) 745 (5,061 ) \n Tax (benefit) expense related to the above 14,262 337 16,722 4,325 \n Non-GAAP net Gain (loss) $ 5,475 $ (8,830 ) $ 535 $ (9,689 ) \n \n GAAP net loss $ (22,781 ) $ (9,098 ) $ (37,062 ) $ (18,270 ) \n Share-based compensation expense 4,863 3,164 9,254 5,726 \n Expenses associated with discontinued products 3,594 - 3,594 - \n Non-cash expenses associated with discontinued products 1,102 1,073 2,017 2,118 \n Amortization of intangible assets 123 110 244 218 \n Non-recurring expense (income) 4,744 862 5,021 1,255 \n Unrealized exchange loss (gain) (432 ) (5,278 ) 745 (5,061 ) \n Depreciation expense 9,276 5,217 17,467 9,790 \n Interest (income) expense, net (2,321 ) 532 (3,195 ) 1,241 \n Income tax expenses (credit) 1,289 - 2,338 - \n Adjusted EBITDA $ (543 ) $ (3,418 ) $ 423 $ (2,983 ) \n \n GAAP diluted net loss per share $ (0.28 ) $ (0.16 ) $ (0.47 ) $ (0.34 ) \n Share-based compensation expense 0.06 0.06 0.11 0.11 \n Expenses associated with discontinued products 0.04 - 0.04 - \n Non-cash expenses associated with discontinued products 0.01 0.02 0.02 0.04 \n Non-recurring (income) expense 0.05 0.01 0.06 0.02 \n Unrealized exchange loss (gain) - (0.10 ) 0.01 (0.09 ) \n Non-GAAP tax benefit 0.18 0.01 0.24 0.08 \n Non-GAAP diluted net earnings (loss) per share $ 0.06 $ (0.16 ) $ 0.01 $ (0.18 ) \n \n Shares used to compute diluted loss per share 81,568 56,772 78,789 53,426 \n Shares used to compute diluted earnings per share 88,152 62,037 85,373 58,690 \n \n (a) Provided for the purpose of calculating gross profit as a percentage of revenue (gross margin). \n\n\n\n(https://www.globenewswire.com/NewsRoom/AttachmentNg/9101d51d-df7d-4036-a344-db6bda4f45c0)\n\n\n\nGlobeNewswire, Inc. 2026","article_body_html":"","raw_payload":{"data":{"id":"nGNX8dLtRW","title":"Applied Optoelectronics Reports Second Quarter 2026 Results","author":"Globe Newswire","ticker":"AAOI","created":"2026-08-06T20:10:01.015Z","tickers":["AAOI"],"exchange":"NASDAQ","article_body":"SUGAR LAND, Texas, Aug. 06, 2026 (GLOBE NEWSWIRE) -- Applied Optoelectronics,\nInc. (NASDAQ: AAOI) (“AOI”), a leading provider of advanced optical and\nHFC networking products that power AI, today announced financial results for\nits second quarter ended June 30, 2026.\n\n“Q2 was a pivotal quarter for AOI. We delivered record revenue for our fifth\nconsecutive quarter and achieved an important milestone as we returned to\nnon-GAAP profitability in the quarter. Further, we saw a strong volume ramp of\nour 800G products, which more than doubled sequentially,” said Dr. Thompson\nLin, AOI’s Founder, President and Chief Executive Officer. “Strong demand\nfor high-speed optics alongside high-volume adoption of our 1.8 GHz CATV\nproducts generated powerful results during the quarter. We continue to see\nrobust customer engagement around our 800G transceivers and 1.6 Tb products,\nand we forecast that demand will continue to outpace our production capacity\nthrough mid-2027. We continue to believe the fundamental drivers of long-term\ndemand for our business remain robust and we are uniquely positioned as a key\nsupplier to the AI, cloud infrastructure, and CATV markets.”\n\n“We’re pleased to deliver second quarter results that were in line with or\nbetter than our expectations,” said Dr. Stefan Murry, AOI’s Chief\nFinancial Officer and Chief Strategy Officer. “During Q2, we continued to\nmake solid progress on our production capacity ramp, particularly for our 800G\nand 1.6Tb products. We have a total manufacturing capacity approaching 200,000\nunits per month and continue to expect by the end of this year that we will be\ncapable of producing around 650,000 pieces of 800G and 1.6 Tb products per\nmonth. We’re working hard to expand our capacity, and we continue to\nanticipate steady sequential revenue growth this year.”\n\nSecond Quarter 2026 Financial Summary\n* GAAP revenue was $191.9 million, compared with $103.0 million in the second\nquarter of 2025 and $151.1 million in the first quarter of 2026.\n\n\n* GAAP gross margin was 27.7%, compared with 30.3% in the second quarter of\n2025 and 29.1% in the first quarter of 2026. Non-GAAP gross margin was 29.8%,\ncompared with 30.4% in the second quarter of 2025 and 29.2% in the first\nquarter of 2026.\n\n\n* GAAP net loss was $22.8 million, or $0.28 per basic share, compared with net\nloss of $9.1 million, or $0.16 per basic share in the second quarter of 2025,\nand a net loss of $14.3 million, or $0.19 per basic share in the first quarter\nof 2026.\n\n\n* Non-GAAP net income was $5.5 million, or $0.06 per diluted share, compared\nwith non-GAAP net loss of $8.8 million, or $0.16 per basic share in the second\nquarter of 2025, and a non-GAAP net loss of $4.9 million, or $0.07 per basic\nshare in the first quarter of 2026.\nA reconciliation between all GAAP and non-GAAP information referenced above is\ncontained in the tables below. Please also refer to “Non-GAAP Financial\nMeasures” below for a description of these non-GAAP financial measures.\n\nThird Quarter 2026 Business Outlook ((+))\n\nFor third quarter of 2026, the company currently expects:\n* Revenue in the range of $255 million to $290 million.\n* Non-GAAP gross margin in the range of 29% to 30.5%.\n* Non-GAAP net income in the range of $10.1 million to $24.0 million, and\nnon-GAAP income per share in the range of $0.11 to $0.26 using approximately\n92.8 million shares.\n((+)) Please refer to the note below on forward-looking statements and the\nrisks involved with such statements as well as the note on non-GAAP financial\nmeasures.\n\nConference Call Information\n\nThe company will host a conference call and webcast for analysts and investors\ntoday, August 6, 2026 to discuss its second quarter 2026 financial results and\noutlook for its third quarter 2026 at 4:30 p.m. Eastern time / 3:30 p.m.\nCentral time. This call will be open to the public, and investors may access\nthe call by dialing 844-890-1794 (domestic) or 412-717-9586 (international). A\nlive audio webcast of the conference call along with supplemental financial\ninformation will also be accessible on the company's website at\ninvestors.ao-inc.com\n(https://www.globenewswire.com/Tracker?data=L2HxFk9UQwxfw0vz9pmVLCVW4c3RFYdBb1-iKP88KBwT4uOOjgnsvhgz2SEfBfIQ0OVUFgXat7X5xMYWhAFA1RvAeCvILqexheL4GYYq2wZYKlVm0fOYD_jyBc4nEIcXfMdL0cQlTn_t63j0P0OVKBu_fnqd6tYQVHxOd70keDRddylyAUN3jRPOTPz6_eKt3ZVsWD56eOIjVwv7_Fg2aKjcE9VoPdJyueEiqQkkVEWjAeA59G_gtPYjPV1wfgtoKjOYjkNQ0Sh6-fxf942KFFrkzFzrl89ge-AWLK6wXwLGedRRBr8WHNfG4Mm95CCCeHyW2nGsiU8q9E-YoTtTv66WYS92luBNIFKZdsRn6V1nXxve7XvjNwJCuexeEyyc).\nFollowing the webcast, an archived version will be available on the website\nfor one year. A telephonic replay of the call will be available one hour after\nthe call and will run for five business days and may be accessed by dialing\n855-669-9658 (domestic) or 412-317-0088 (international) and entering passcode\n6704856.\n\nForward-Looking Information\n\nThis press release contains forward-looking statements within the meaning of\nthe Private Securities Litigation Reform Act of 1995. In some cases, you can\nidentify forward-looking statements by terminology such as \"believe,\" \"may,\"\n\"estimate,\" \"continue,\" \"anticipate,\" \"intend,\" \"should,\" \"could,\" \"would,\"\n\"target,\" \"seek,\" \"aim,\" \"predicts,\" \"think,\" \"objectives,\" \"optimistic,\"\n\"new,\" \"goal,\" “priorities,” \"strategy,\" \"potential,\" \"is likely,\" \"will,\"\n\"expect,\" “momentum,” \"plan\" \"project,\" \"permit,\" “positions” or by\nother similar expressions that convey uncertainty of future events or\noutcomes. These statements include management’s beliefs and expectations\nrelated to our outlook for the third quarter of 2026, the remainder of the\nyear, and the first half of 2027. Such forward-looking statements reflect the\nviews of management at the time such statements are made. These\nforward-looking statements involve risks and uncertainties, as well as\nassumptions and current expectations, which could cause the company's actual\nresults to differ materially from those anticipated in such forward-looking\nstatements. These risks and uncertainties include but are not limited to:\nreduction in the size or quantity of customer orders; change in demand for the\ncompany's products due to industry conditions; changes in manufacturing\noperations; volatility in manufacturing costs; delays in shipments of\nproducts; disruptions in the supply chain; change in the rate of design wins\nor the rate of customer acceptance of new products; the company's reliance on\na small number of customers for a substantial portion of its revenues;\npotential pricing pressure; a decline in demand for our customers' products or\ntheir rate of deployment of their products; general conditions in the internet\ndatacenter, cable television (CATV) broadband, telecom, or fiber-to-the-home\n(FTTH) markets; changes in the world economy (particularly in the United\nStates and China); changes in the regulation and taxation of international\ntrade, including the imposition of tariffs; changes in currency exchange\nrates; the negative effects of seasonality; and other risks and uncertainties\ndescribed more fully in the company's documents filed with or furnished to the\nSecurities and Exchange Commission, including our Annual Report on Form 10-K\nfor the year ended December 31, 2025 and our Quarterly report on Form 10-Q for\nthe quarter ended June 30, 2026. More information about these and other risks\nthat may impact the company's business are set forth in the \"Risk Factors\"\nsection of the company's quarterly and annual reports on file with the\nSecurities and Exchange Commission. You should not rely on forward-looking\nstatements as predictions of future events. All forward-looking statements in\nthis press release are based upon information available to us as of the date\nhereof, and qualified in their entirety by this cautionary statement. Except\nas required by law, we assume no obligation to update forward-looking\nstatements for any reason after the date of this press release to conform\nthese statements to actual results or to changes in the company's\nexpectations.\n\nNon-GAAP Financial Measures\n\nWe provide non-GAAP gross margin, non-GAAP net income (loss), and non-GAAP\nearnings (loss) per share, and non-GAAP Adjusted EBITDA to eliminate the\nimpact of items that we do not consider indicative of our overall operating\nperformance. To arrive at our non-GAAP gross margin, we exclude stock-based\ncompensation and related expenses, expenses associated with discontinued\nproducts, and non-recurring (income) expenses, if any, from our GAAP gross\nmargin. To arrive at our non-GAAP net income (loss), we exclude all\namortization of intangible assets, stock-based compensation expense,\nnon-recurring expenses, unrealized foreign exchange loss (gain), losses from\nthe disposal of idle assets, if any, and non-GAAP tax benefit (expenses) from\nour GAAP net income (loss). Included in our non-recurring expenses in Q2 2026\nand Q2 2025 are employee severance expenses (if any) and legal expenses\nassociated with litigation and certain legal and advisory expenses associated\nwith purchase termination or patent protection. In computing our non-GAAP\nincome tax benefit (expense), we have applied an estimate of our annual\neffective income tax rate and applied it to our net income before income\ntaxes. Our non-GAAP Adjusted EBITDA is calculated by excluding depreciation\nexpense, non-GAAP tax benefit (expense), and interest (income) expense, as\nwell as the items excluded from non-GAAP net income (loss), from our GAAP net\nincome (loss). Our non-GAAP diluted net earnings (loss) per share is\ncalculated by dividing our non-GAAP net gain (loss) by the fully diluted share\ncount (for periods in which non-GAAP net income is positive) or basic share\ncount (for periods in which our non-GAAP net income is negative).\n\nWe believe that our non-GAAP measures are useful to investors in evaluating\nour operating performance for the following reasons:\n* We believe that elimination of items such as amortization of intangible\nassets, stock-based compensation expense, non-recurring revenue and expenses,\nlosses from the disposal of idle assets, unrealized foreign exchange gain or\nloss, and depreciation on certain equipment undergoing reconfiguration is\nappropriate because treatment of these items may vary for reasons unrelated to\nour overall operating performance;\n* We believe that elimination of expenses associated with discontinued\nproducts, including depreciation and inventory obsolescence is appropriate\nbecause these expenses are not indicative of our ongoing operations;\n* We believe that estimating non-GAAP income taxes allows comparison with\nprior periods and provides additional information regarding the generation of\npotential future deferred tax assets;\n* We believe that non-GAAP measures provide better comparability with our past\nfinancial performance, period-to-period results and with our peer companies,\nmany of which also use similar non-GAAP financial measures; and\n* We anticipate that investors and securities analysts will utilize non-GAAP\nmeasures as a supplement to GAAP measures to evaluate our overall operating\nperformance.\nA reconciliation of our GAAP net income (loss), GAAP total gross profit, GAAP\nearnings (loss), and GAAP earnings (loss) per share for Q2 2026 to our\nnon-GAAP net income (loss), non-GAAP total gross profit, Adjusted EBITDA, and\nearnings (loss) per share, respectively, is provided below, together with\ncorresponding reconciliations for Q2 2025.\n\nNon-GAAP measures should not be considered as an alternative to gross profit,\nnet income (loss), earnings (loss) per share, or any other measure of\nfinancial performance calculated and presented in accordance with GAAP. Our\nnon-GAAP measures may not be comparable to similarly titled measures of other\norganizations because other organizations may not calculate such other\nnon-GAAP measures in the same manner. We have not reconciled the non-GAAP\nmeasures included in our guidance to the appropriate GAAP financial measures\nbecause the GAAP measures are not readily determinable on a forward-looking\nbasis. GAAP measures that impact our non-GAAP financial measures may include\nstock-based compensation expense, non-recurring expenses, amortization of\nintangible assets, unrealized exchange loss (gain), asset impairment charges,\nloss (gain) from disposal of idle assets, and changes in the fair value of our\nconvertible notes. These GAAP measures cannot be reasonably predicted and may\ndirectly impact our non-GAAP gross margin, our non-GAAP net income and our\nnon-GAAP fully-diluted earnings per share, although changes with respect to\ncertain of these measures may offset other changes. In addition, certain of\nthese measures are out of our control. Accordingly, a reconciliation of the\nnon-GAAP financial measure guidance to the corresponding GAAP measures is not\navailable without unreasonable effort.\n\nAbout Applied Optoelectronics\n\nApplied Optoelectronics, Inc. (AOI) is a leading developer and manufacturer of\nadvanced optical and HFC networking products that are the building blocks for\nAI datacenters, CATV and broadband fiber access networks around the world. AOI\nsupplies this critical infrastructure to tier-one customers across cloud\ncomputing, CATV broadband, telecom, and FTTH markets. The company has R&D\nfacilities in Atlanta, GA, and engineering and manufacturing facilities at its\ncorporate headquarters in Sugar Land, TX, as well as in Taipei, Taiwan and\nNingbo, China. For additional information, visit www.ao-inc.com.\n\nInvestor Relations Contacts:\n\nThe Blueshirt Group, Investor Relations\nLindsay Savarese\n+1-212-331-8417\nir@ao-inc.com\n\n Applied Optoelectronics, Inc. \n Preliminary Condensed Consolidated Balance Sheets \n (In thousands) \n (Unaudited) \n June 30, 2026 December 31, 2025 \n ASSETS \n CURRENT ASSETS \n Cash, Cash Equivalents and Restricted Cash $ 508,758 $ 216,035 \n Accounts Receivable, Net 314,009 244,404 \n Inventories 278,791 183,105 \n Prepaid Expenses and Other Current Assets 88,316 32,183 \n Total Current Assets 1,189,874 675,727 \n \n Property, Plant And Equipment, Net 697,086 376,050 \n Land Use Rights, Net 4,917 4,825 \n Operating Right of Use Asset 75,168 49,697 \n Intangible Assets, Net 3,633 3,623 \n Other Assets 330,514 58,501 \n TOTAL ASSETS $ 2,301,192 $ 1,168,423 \n \n LIABILITIES AND STOCKHOLDERS' EQUITY \n CURRENT LIABILITIES \n Accounts Payable $ 286,088 $ 143,932 \n Bank Acceptance Payable 33,940 33,363 \n Accrued Expenses 46,939 42,491 \n Current Lease Liability-Operating 4,223 3,522 \n Current Portion of Notes Payable and Long Term Debt 57,258 33,975 \n Total Current Liabilities 428,448 257,283 \n Convertible Senior Notes 129,142 129,829 \n Other Long-Term Liabilities 75,577 47,393 \n TOTAL LIABILITIES 633,167 434,505 \n \n STOCKHOLDERS' EQUITY \n Common Stock 84 75 \n Additional Paid-in Capital 2,192,682 1,224,538 \n Cumulative Translation Adjustment 2,399 (617 ) \n Retained Earnings (527,140 ) (490,078 ) \n TOTAL STOCKHOLDERS' EQUITY 1,668,025 733,918 \n \n TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,301,192 $ 1,168,423 \n \n\n\n\n Applied Optoelectronics, Inc. \n Preliminary Condensed Consolidated Statements of Operations \n (In thousands) \n (Unaudited) \n Three Months Ended June 30, Six Months Ended June 30, \n Revenue 2026 2025 2026 2025 \n CATV $ 80,578 $ 56,019 $ 147,419 $ 120,520 \n Datacenter 107,662 44,791 189,066 76,841 \n Telecom 3,411 1,940 5,971 4,876 \n Other 271 202 610 574 \n Total Revenue 191,922 102,952 343,066 202,811 \n \n Total Cost of Goods Sold 138,715 71,790 245,943 141,105 \n \n Total Gross Profit 53,207 31,162 97,123 61,706 \n \n Operating Expenses: \n Research and Development 34,871 20,612 60,527 38,422 \n Sales and Marketing 11,490 8,135 17,837 13,492 \n General and Administrative 31,573 18,391 56,477 34,706 \n Total Operating Expenses 77,934 47,138 134,841 86,620 \n \n Operating Loss (24,727 ) (15,976 ) (37,718 ) (24,914 ) \n \n Other Income (Expense): \n Interest Income 3,248 286 4,985 511 \n Interest Expense (927 ) (818 ) (1,790 ) (1,752 ) \n Other Income (Expense), net 914 7,410 (201 ) 7,885 \n Total Other Income (Expense): 3,235 6,878 2,994 6,644 \n \n Net loss before Income Taxes (21,492 ) (9,098 ) (34,724 ) (18,270 ) \n Income Tax Expense (1,289 ) - (2,338 ) - \n Net loss $ (22,781 ) $ (9,098 ) $ (37,062 ) $ (18,270 ) \n Net loss per share attributable to common stockholders \n basic $ (0.28 ) $ (0.16 ) $ (0.47 ) $ (0.34 ) \n diluted $ (0.28 ) $ (0.16 ) $ (0.47 ) $ (0.34 ) \n \n Weighted-average shares used to compute net loss per share attributable to common stockholders \n basic 81,568 56,772 78,789 53,426 \n diluted 81,568 56,772 78,789 53,426 \n \n\n\n\n Applied Optoelectronics, Inc. \n Reconciliation of Statements of Operations under GAAP and Non-GAAP \n (In thousands) \n (Unaudited) \n Three Months Ended June 30, Six Months Ended June 30, \n 2026 2025 2026 2025 \n GAAP total gross profit ((a)) $ 53,207 $ 31,162 $ 97,123 $ 61,706 \n Share-based compensation expense 170 94 326 177 \n Non-recurring expense 282 41 298 41 \n Expenses associated with discontinued products 3,594 - 3,594 - \n Non-GAAP total gross profit ((a)) $ 57,253 $ 31,297 $ 101,341 $ 61,924 \n \n GAAP net loss $ (22,781 ) $ (9,098 ) $ (37,062 ) $ (18,270 ) \n Share-based compensation expense 4,863 3,164 9,254 5,726 \n Expenses associated with discontinued products 3,594 - 3,594 - \n Non-cash expenses associated with discontinued products 1,102 1,073 2,017 2,118 \n Amortization of intangible assets 123 110 244 218 \n Non-recurring (income) expense 4,744 862 5,021 1,255 \n Unrealized exchange loss (gain) (432 ) (5,278 ) 745 (5,061 ) \n Tax (benefit) expense related to the above 14,262 337 16,722 4,325 \n Non-GAAP net Gain (loss) $ 5,475 $ (8,830 ) $ 535 $ (9,689 ) \n \n GAAP net loss $ (22,781 ) $ (9,098 ) $ (37,062 ) $ (18,270 ) \n Share-based compensation expense 4,863 3,164 9,254 5,726 \n Expenses associated with discontinued products 3,594 - 3,594 - \n Non-cash expenses associated with discontinued products 1,102 1,073 2,017 2,118 \n Amortization of intangible assets 123 110 244 218 \n Non-recurring expense (income) 4,744 862 5,021 1,255 \n Unrealized exchange loss (gain) (432 ) (5,278 ) 745 (5,061 ) \n Depreciation expense 9,276 5,217 17,467 9,790 \n Interest (income) expense, net (2,321 ) 532 (3,195 ) 1,241 \n Income tax expenses (credit) 1,289 - 2,338 - \n Adjusted EBITDA $ (543 ) $ (3,418 ) $ 423 $ (2,983 ) \n \n GAAP diluted net loss per share $ (0.28 ) $ (0.16 ) $ (0.47 ) $ (0.34 ) \n Share-based compensation expense 0.06 0.06 0.11 0.11 \n Expenses associated with discontinued products 0.04 - 0.04 - \n Non-cash expenses associated with discontinued products 0.01 0.02 0.02 0.04 \n Non-recurring (income) expense 0.05 0.01 0.06 0.02 \n Unrealized exchange loss (gain) - (0.10 ) 0.01 (0.09 ) \n Non-GAAP tax benefit 0.18 0.01 0.24 0.08 \n Non-GAAP diluted net earnings (loss) per share $ 0.06 $ (0.16 ) $ 0.01 $ (0.18 ) \n \n Shares used to compute diluted loss per share 81,568 56,772 78,789 53,426 \n Shares used to compute diluted earnings per share 88,152 62,037 85,373 58,690 \n \n (a) Provided for the purpose of calculating gross profit as a percentage of revenue (gross margin). \n\n\n\n(https://www.globenewswire.com/NewsRoom/AttachmentNg/9101d51d-df7d-4036-a344-db6bda4f45c0)\n\n\n\nGlobeNewswire, Inc. 2026"},"type":"article","timestamp":"2026-08-06T20:10:01.078934327Z","server_sent_at_ms":1786047001078},"received_at":"2026-08-06T20:10:01.133Z","source_url":"https://www.globenewswire.com/news-release/2026/08/06/3340777/9986/en/applied-optoelectronics-reports-second-quarter-2026-results.html"},"analysis":{"id":"101129","press_release_id":"112129","analysis_json":{"industry":{"label":"Semiconductors & Semiconductor Equipment","sector":"Information Technology"},"redFlags":["GAAP net loss of $22.8 million contrasts with non-GAAP profitability due to $4.9M in stock-based comp and other adjustments","Inventory increased to $278.8 million from $183.1 million at year-end 2025, outpacing revenue growth"],"eventType":"earnings","narrative":"AAI reported Q2 revenue of $191.9 million, up 27% sequentially and 86% year-over-year, marking the fifth consecutive quarter of record sales driven by AI demand.\n\nThe company returned to non-GAAP profitability with $5.5 million in net income or $0.06 per share, led by a more than doubling of 800G product volumes.\n\nManagement forecasts Q3 revenue between $255 million and $290 million, expecting demand to exceed production capacity through mid-2027 as monthly manufacturing capacity approaches 200,000 units.","sentiment":"bullish","agentHooks":{"shouldPost":true,"suggestedAngle":"Record revenue and return to non-GAAP profitability highlight AOI as a pure-play beneficiary of the AI infrastructure build-out."},"keyFigures":{"revenue":"$191.9 million","guidance":"Q3 revenue $255 million to $290 million; Non-GAAP income per share $0.11 to $0.26","customDimensions":{"catv_revenue":"$80.6 million","non_gaap_eps":0.06,"gaap_net_loss":"$22.8 million","gaap_gross_margin":"27.7%","datacenter_revenue":"$107.7 million","non_gaap_net_income":"$5.5 million","non_gaap_gross_margin":"29.8%"}},"quotedText":"Q2 was a pivotal quarter for AOI. We delivered record revenue for our fifth consecutive quarter and achieved an important milestone as we returned to non-GAAP profitability in the quarter.","namedEntities":{"people":[{"name":"Dr. Thompson Lin","role":"Founder, President and CEO"},{"name":"Dr. Stefan Murry","role":"CFO and Chief Strategy Officer"}],"products":["800G products","1.6 Tb products","1.8 GHz CATV products"],"companies":[{"name":"Applied Optoelectronics, Inc.","ticker":"AAOI"},{"name":"The Blueshirt Group","relationship":"investor relations"}],"dollarAmounts":[{"amount":"$191.9 million","context":"Q2 2026 GAAP revenue"},{"amount":"$255 million to $290 million","context":"Q3 2026 revenue guidance"}]},"materialImpact":{"score":4,"reasoning":"Revenue surged 27% sequentially and 86% year-over-year to a record $191.9 million, with the company returning to non-GAAP profitability. Q3 guidance implies another ~30-50% sequential growth jump, signaling massive demand for AI optical products."},"tickerRelevance":{"others":[],"primary":"AAOI"},"globalImportance":30,"audienceRelevance":45,"eventTypeSecondary":["guidance_update"],"importanceComponents":{"tickerTier":"mid-cap","eventGravity":"high-growth earnings beat","sectorWeight":"IT-Hardware","retailInterest":"moderate"}},"event_type":"earnings","event_type_secondary":["guidance_update"],"sentiment":"bullish","material_impact_score":4,"narrative":"AAI reported Q2 revenue of $191.9 million, up 27% sequentially and 86% year-over-year, marking the fifth consecutive quarter of record sales driven by AI demand.\n\nThe company returned to non-GAAP profitability with $5.5 million in net income or $0.06 per share, led by a more than doubling of 800G product volumes.\n\nManagement forecasts Q3 revenue between $255 million and $290 million, expecting demand to exceed production capacity through mid-2027 as monthly manufacturing capacity approaches 200,000 units.","key_figures":{"revenue":"$191.9 million","guidance":"Q3 revenue $255 million to $290 million; Non-GAAP income per share $0.11 to $0.26","customDimensions":{"catv_revenue":"$80.6 million","non_gaap_eps":0.06,"gaap_net_loss":"$22.8 million","gaap_gross_margin":"27.7%","datacenter_revenue":"$107.7 million","non_gaap_net_income":"$5.5 million","non_gaap_gross_margin":"29.8%"}},"named_entities":{"people":[{"name":"Dr. Thompson Lin","role":"Founder, President and CEO"},{"name":"Dr. Stefan Murry","role":"CFO and Chief Strategy Officer"}],"products":["800G products","1.6 Tb products","1.8 GHz CATV products"],"companies":[{"name":"Applied Optoelectronics, Inc.","ticker":"AAOI"},{"name":"The Blueshirt Group","relationship":"investor relations"}],"dollarAmounts":[{"amount":"$191.9 million","context":"Q2 2026 GAAP revenue"},{"amount":"$255 million to $290 million","context":"Q3 2026 revenue guidance"}]},"model_name":"glm-4.7","prompt_hash":"sha256:727b4b9429a443af","schema_hash":"sha256:05005c02d9cffac9","created_at":"2026-08-07T06:16:43.863Z","global_importance":30,"audience_relevance":45,"importance_components":{"tickerTier":"mid-cap","eventGravity":"high-growth earnings beat","sectorWeight":"IT-Hardware","retailInterest":"moderate"}},"durationMs":130362,"modelName":"glm-4.7"}}