Operational cash flow remains deeply negative with a -95.0% FCF margin in 2026Q1, reflecting the significant cash-intensive nature of maintaining its $491.0 million net PPE base.
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 | Dec'11 |
|---|
| Cash from Operations | -208.87M | -174.43M | -69.53M | -7.93M | -14.02M | -11.64M | -44.01M | -1.75M | 14.03M | 84.28M | 57.1M | -15.21M | 7.24M | -6.55M | -358K | -4.13M |
| Operating CF Margin % | - | -38.28% | -27.88% | -3.64% | -6.29% | -5.5% | -18.76% | -0.92% | 5.25% | 22.04% | 21.9% | -8.01% | 5.55% | -8.35% | -0.56% | -8.62% |
| Operating CF Growth % | -3376.7% | -150.88% | -776.86% | 43.45% | -20.42% | 73.54% | -2409.07% | -112.5% | -83.36% | 47.6% | 475.39% | -310.05% | 210.53% | -1730.17% | 91.32% | - |
| Net Income | -43.34M | -38.23M | -186.73M | -56.05M | -66.4M | -54.16M | -58.45M | -66.05M | -2.15M | 73.95M | 31.23M | 10.79M | 4.28M | -1.41M | -945K | -5.33M |
| Depreciation & Amortization | 2.73M | 27.7M | 20.65M | 20.43M | 23.2M | 25.37M | 24.73M | 24.01M | 29.7M | 20.38M | 14.19M | 9.42M | 6.17M | 3.41M | 2.94M | 3.11M |
| Stock-Based Compensation | -18.47M | 0 | 14.79M | 11.88M | 9.6M | 12.12M | 13.05M | 11.8M | 11.12M | 7.79M | 3.83M | 2.12M | 2.06M | 1.07M | 161K | 563K |
| Deferred Taxes | 1.05M | -7.58M | 0 | 0 | 0 | 0 | 7.35M | 14.57M | -8.96M | -114K | -11.43M | 0 | 0 | 0 | 0 | 0 |
| Other Non-Cash Items | -65.07M | 19.62M | 117.64M | 9.75M | 7.67M | -931K | 3.73M | 7.43M | 6.67M | 2.37M | 2.9M | 5.37M | 2.24M | 855K | 894K | 1.66M |
| Working Capital Changes | -124M | -175.94M | -35.88M | 6.06M | 11.9M | 5.96M | -34.41M | 6.47M | -22.35M | -20.1M | 16.38M | -42.92M | -6.22M | -10.12M | -3.41M | -4.13M |
| Change in Receivables | -127.74M | -127.6M | -68.51M | 13.21M | -4.99M | -14.61M | -8.81M | -4.36M | 29.32M | -10.08M | -11.15M | -6.55M | -10.68M | -7.42M | -2.19M | -4.5M |
| Change in Inventory | -82.09M | -100.72M | -29.41M | 6.79M | 1.15M | 15.79M | -23.67M | 1.56M | -28.4M | -21.88M | 10.21M | -37.5M | -16.11M | -7.52M | -538K | -1.58M |
| Change in Payables | 23.3M | 38.96M | 72.08M | -14.95M | 12.97M | 7.07M | -3.35M | 3.15M | -13.71M | 7.25M | 9.11M | -1.26M | 18.95M | 8.08M | -961K | 1.53M |
| Cash from Investing | -242.39M | -210.6M | -50.7M | -14.76M | -3.83M | -10.55M | -19.35M | -32.12M | -76.51M | -70.16M | -41.54M | -61.62M | -45.39M | -17.74M | -3.29M | -1.57M |
| Capital Expenditures | -29.94M | -179.53M | -43.41M | -9.08M | -3.21M | -7.98M | -15.79M | -28.79M | -71.85M | -66.97M | -49.44M | -57.08M | -41.13M | -9.6M | -3.18M | -1.79M |
| CapEx % of Revenue | 5.91% | 39.39% | 17.41% | 4.17% | 1.44% | 3.77% | 6.73% | 15.08% | 26.86% | 17.52% | 18.96% | 30.06% | 31.53% | 12.24% | 5.01% | 3.74% |
| Acquisitions | 0 | 5K | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Investments | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Investing | -212.45M | -31.08M | -7.29M | -5.68M | -624K | -2.56M | -3.55M | -3.33M | -4.7M | -3.2M | 155K | -4.37M | -4.01M | -166K | -112K | 219K |
| Cash from Financing | 847.19M | 527.94M | 142.18M | 40.58M | 10.75M | 14.09M | 47.44M | 42.6M | 34.8M | 18.24M | 4.64M | 73.11M | 47.25M | 35.37M | 12.75M | 2.84M |
| Debt Issued (Net) | 19.45M | 19.48M | 3.01M | -27.47M | 9.97M | -357K | 9.3M | 43.48M | 38.82M | 5.93M | -26.44M | 38.43M | 938K | 3.5M | 2.71M | 115K |
| Equity Issued (Net) | 447.25M | 518.91M | 146.29M | 68.98M | 1.24M | 15.4M | 39.2M | 14K | 0 | 21.57M | 27.24M | 38.65M | 45.68M | 31.45M | 10.23M | 2.86M |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Share Repurchases | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Financing | 380.5M | -10.45M | -7.13M | -934K | -454K | -953K | -1.07M | -897K | -4.02M | -9.26M | 859K | 458K | 631K | 418K | -188K | -139K |
| Net Change in Cash | 382.57M | 136.9M | 24.04M | 19.51M | -5.55M | -8.98M | -16.91M | 9.02M | -25.94M | 31.98M | 22.15M | -4.1M | 10.17M | 11.28M | 8.96M | -2.72M |
| Free Cash Flow | -238.88M | -353.58M | -112.93M | -17.6M | -18.26M | -22.3M | -63.57M | -33.87M | -63.22M | 13.95M | 7.12M | -72.77M | -37.23M | -16.27M | -3.75M | -6.08M |
| FCF Margin % | -47.12% | -77.59% | -45.29% | -8.08% | -8.19% | -10.54% | -27.1% | -17.75% | -23.64% | 3.65% | 2.73% | -38.32% | -28.54% | -20.75% | -5.91% | -12.71% |
| FCF Growth % | -51.12% | -213.09% | -541.8% | 3.63% | 18.14% | 64.92% | -87.69% | 46.42% | -553.31% | 96.01% | 109.78% | -95.48% | -128.74% | -334.58% | 38.42% | - |
| FCF per Share | -3.14 | -5.87 | -2.72 | -0.55 | -0.66 | -0.83 | -2.91 | -1.70 | -3.22 | 0.69 | 0.40 | -4.40 | -2.45 | -1.63 | -0.42 | -0.68 |
| FCF Conversion (FCF/Net Income) | 5.51x | 4.56x | 0.37x | 0.14x | 0.21x | 0.21x | 0.75x | 0.03x | -6.54x | 1.14x | 1.83x | -1.41x | 1.69x | 4.66x | 0.38x | 0.77x |
| Interest Paid | 0 | 0 | 0 | 8.1M | 0 | 4.9M | 0 | 0 | 848K | 872K | 0 | 1.07M | 329K | 1.13M | 0 | 1.39M |
| Taxes Paid | 0 | 0 | 0 | 9K | 0 | 1K | 0 | 0 | 8.47M | 5.83M | 0 | 650K | 148K | 1K | 0 | 1K |
High customer concentration risk
As reported in recent financial statements, AAOI's operating cash flow consistently trails net income, with the 2026Q1 OCF/NI ratio reaching 5.98, highlighting a significant divergence that suggests the company's reported losses do not fully capture the cash-intensive nature of its current operational expansion.
The wide gap between net income and operating cash flow indicates that the company is consuming cash at a rate far exceeding its accounting losses. This suggests that accruals and working capital requirements are placing a heavy burden on liquidity, which warrants further investigation into the quality of earnings.
Based on the provided quarterly data, AAOI's free cash flow remains deeply negative, culminating in a -95.0% FCF margin in 2026Q1, which underscores the company's ongoing struggle to self-fund its operations despite the recent surge in top-line revenue growth.
The consistent inability to generate positive free cash flow suggests that the company is currently in a high-intensity investment phase that may not be yielding immediate cash returns. Investors should monitor whether this cash burn is a temporary byproduct of scaling or a structural feature of the business model.
According to historical filings, AAOI's capital expenditure as a percentage of revenue reached 38.5% in 2026Q1, reflecting a high level of capital intensity that appears necessary to maintain its vertically integrated manufacturing capabilities in a competitive semiconductor environment.
The elevated CapEx levels suggest that the company is aggressively investing in its fabrication facilities to meet hyperscale demand. This heavy capital commitment may limit the company's financial flexibility if the expected revenue growth from new product cycles fails to materialize as anticipated.
As evidenced by the quarterly cash flow data, working capital changes have been a significant drag on cash, with a $62.1 million outflow in 2025Q2, indicating that the company's cash conversion cycle is highly sensitive to the procurement and payment patterns of its major customers.
The erratic nature of these working capital swings suggests that the company may be carrying significant inventory or facing delayed collections from its concentrated customer base. This volatility appears to be a primary driver of the company's current cash burn, necessitating close monitoring of accounts receivable and inventory turnover.
Quick answers to the most common questions about buying AAOI stock.
Applied Optoelectronics, Inc. (AAOI) generated $-174.4M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Applied Optoelectronics, Inc. (AAOI) reported negative free cash flow of $353.6M in 2025, indicating capital requirements exceeded cash from operations.
Applied Optoelectronics, Inc. (AAOI) spent $179.5M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.