Applied Optoelectronics (AAOI) Q3 2025 earnings summary

Executive summary

• Achieved Q3 2025 revenue of $118.6 million, up 82% year-over-year and 15% sequentially, driven by record CATV demand and steady datacenter growth, with CATV revenue more than tripling year-over-year to $70.6 million.

• Progressed toward 800G product qualification, expecting meaningful shipments in Q4 2025, and expanded U.S. and Taiwan production capacity targeting 100,000 units/month of 800G transceivers by year-end.

• Positioned as a leading U.S.-based supplier of high-speed optical modules, with a diversified and expanding customer base, including marquee global clients.

Financial highlights

• Q3 2025 revenue: $118.6 million (guidance: $115M–$127M); CATV: $70.6 million (up 26% sequentially, +237% YoY); datacenter: $43.9 million (+7% YoY, -2% sequentially); telecom: $3.7 million (+34% YoY).

• Q3 2025 GAAP gross margin: 28% (up from 24% YoY); non-GAAP gross margin: 31% (up from 25% YoY).

• Q3 2025 GAAP net loss: $17.9 million ($0.28/share); non-GAAP net loss: $5.4 million ($0.09/share); adjusted EBITDA: $2.0 million.

• Cash and equivalents at quarter-end: $150.7 million, up from $87.2 million in Q2 and $79.1 million at year-end 2024.

• Year-to-date capital investments totaled $124.9 million, mainly for manufacturing expansion.

Outlook and guidance

• Q4 2025 revenue expected between $125 million and $140 million; non-GAAP gross margin guidance: 29%–31%; non-GAAP net loss: $9 million to $2.8 million; non-GAAP EPS: loss of $0.13–$0.04.

• CATV revenue to moderate to $50–$55 million in Q4; data center revenue to increase significantly, with meaningful 800G shipments expected.

• 1.6T revenue anticipated in late 2026; revenue from a major supply agreement with Microsoft expected to increase in 2025.