Alpha and Omega Semiconductor (AOSL) Q2 2026 earnings summary

Executive summary

• Fiscal Q2 2026 revenue was $162.3 million, down 6.3% year-over-year and 11.1% sequentially, slightly above guidance midpoint, reflecting seasonality, inventory digestion in AI, and strength in US smartphone and E-Mobility segments.

• Non-GAAP gross margin was 22.2%; non-GAAP EPS was a loss of $0.16 per share; GAAP net loss was $13.3 million, or $0.45 per share.

• Strategic transformation toward higher performance and application-specific solutions is driving increased BOM content and customer engagement, especially in AI, graphics, and premium smartphones.

• Share repurchases totaled $13.9 million in the quarter, with $16 million remaining under the program.

• Monetized 20% equity in Chongqing JV for $150 million, with most proceeds received and the remainder expected soon, supporting R&D and growth investments.

Financial highlights

• Non-GAAP gross margin was 22.2%, down from 24.1% last quarter and 24.2% a year ago; GAAP gross margin was 21.5%.

• Non-GAAP operating expenses were $41.3 million, flat sequentially; GAAP operating expenses increased to $48.4 million.

• Operating cash flow was negative $8.1 million, impacted by deposit repayments and tax on JV sale.

• Cash and cash equivalents at quarter end were $196.3 million.

• EBITDAS (excluding equity method investment loss) was $9.7 million, down from $19.4 million last quarter.

Outlook and guidance

• March quarter revenue expected at $160 million ± $10 million.

• Non-GAAP gross margin guidance is 21% ± 1%; non-GAAP operating expenses expected to rise to $45 million, mainly due to increased R&D.

• March quarter anticipated to be a near-term low for revenue and margin, with growth expected to resume in June quarter.

• Midterm target remains $1 billion revenue and 30% non-GAAP gross margin.

• Final installment of JV equity sale expected soon, providing additional capital for R&D and asset acquisitions.