AAOI Q2 revenue of $191.9 million sets fifth consecutive quarterly record, 800G revenue up more than 10x year-over-year

Odaily News - qinbafrank posted on the X platform that AAOI's Q2 total revenue was $191.9 million, up 86.4% year-over-year and 27.0% quarter-over-quarter, marking the fifth consecutive quarterly record. Among this, data center revenue was $107.7 million, up 140.4% year-over-year and 32.3% quarter-over-quarter, accounting for 56% of total revenue; CATV revenue was $80.58 million, up 43.8% year-over-year and 20.6% quarter-over-quarter.

AAOI expects Q3 revenue of $255 million to $290 million, with a midpoint of $272.5 million, representing approximately 42% quarter-over-quarter growth; non-GAAP gross margin of 29% to 30.5%, and net income of $10.1 million to $24 million. Based on the company's projected quarterly non-GAAP expenses of $70 million to $80 million, Q3 non-GAAP operating profit is estimated to range from a loss of $6 million to a profit of $18.5 million.

AAOI's Q2 800G revenue was $12.8 million, accounting for 11.9% of data center revenue, up more than 10x year-over-year and more than doubling quarter-over-quarter; Q1 revenue was $4.6 million, with Q2 growing approximately 178% from Q1. The company expects Q3 800G revenue to grow nearly 5x quarter-over-quarter, potentially reaching approximately $60 million to $64 million. Q2 400G revenue was $48.4 million, accounting for 45% of data center revenue, up 27.4% quarter-over-quarter and more than 4x year-over-year.

On the earnings call, management projected that Q4 committed 1.6T revenue would be approximately $70 million to $80 million. Based on a combined 800G and 1.6T revenue estimate of approximately $330 million, the implied Q4 800G revenue is approximately $250 million to $260 million. The company's first 1.6T product is expected to complete final qualification within the next 2 to 3 weeks, with initial shipments beginning at the end of Q3; the company's existing orders exceed $200 million, with most initial orders expected to ship in Q4, and a small portion extending into Q1 2027. Management expects 1.6T revenue in Q1 2027 to reach double or more of Q4 levels, and stated that the company is close to becoming the fourth 1.6T qualified supplier for a major cloud service provider.

AAOI stated that the primary mass production window for its CPO-related products is after Q3 2027. Currently, there are only small quantities of ELSFP external laser source products, with plans to expand production in the second half of 2026 and continue increasing output in 2027. The company expects high-volume CPO-related products to launch in the latter part of Q3 2027, and is currently collaborating with at least five customers. Management noted that CPO laser chip area could reach 6x or more of existing products, and next-generation DWDM CPO requires higher wavelength precision; related laser manufacturing capacity may need to expand 8 to 10x, with 21 to 24 months required from equipment ordering to achieving high-volume production.

AAOI management stated that U.S. manufacturing is a key factor in customers choosing AAOI, with plans to have more than half of 800G and 1.6T production come from Texas by the end of 2027. The company's current short-term constraints include InP, DSPs, switches and their memory, automated assembly, final testing, high-speed product yields, and capacity ramp-up. Potential constraints include high-power InP lasers, epitaxy, wafer processing, and related equipment.