Revenue growth accelerated to 86.4% YoY in 2026Q2, but gross margin contracted to 27.7% and operating margin remained deeply negative at -12.9%, indicating that the 800G ramp has not yet delivered operating leverage.
Applied Optoelectronics, Inc. (AAOI) annual income statement — 15-year revenue, gross profit & net income history
| 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 |
|---|
| Sales/Revenue | 595.97M | 455.71M | 249.37M | 217.65M | 222.82M | 211.56M | 234.62M | 190.87M | 267.46M | 382.33M | 260.71M | 189.9M | 130.45M | 78.42M | 63.42M | 47.84M |
| Revenue Growth % | 61.85% | 82.75% | 14.57% | -2.32% | 5.32% | -9.83% | 22.92% | -28.64% | -30.04% | 46.65% | 37.29% | 45.58% | 66.34% | 23.66% | 32.57% | - |
| Cost of Goods Sold | 423.64M | 318.8M | 187.56M | 158.72M | 189.19M | 173.85M | 184.08M | 144.67M | 179.69M | 216.05M | 173.76M | 129.45M | 86.2M | 55.4M | 44.49M | 34.47M |
| COGS % of Revenue | - | 69.96% | 75.22% | 72.93% | 84.91% | 82.17% | 78.46% | 75.79% | 67.18% | 56.51% | 66.65% | 68.17% | 66.08% | 70.64% | 70.15% | 72.05% |
| Gross Profit | 172.33M | 136.91M | 61.8M | 58.92M | 33.63M | 37.72M | 50.54M | 46.2M | 87.77M | 166.28M | 86.95M | 60.45M | 44.25M | 23.03M | 18.93M | 13.37M |
| Gross Margin % | 28.92% | 30.04% | 24.78% | 27.07% | 15.09% | 17.83% | 21.54% | 24.21% | 32.82% | 43.49% | 33.35% | 31.83% | 33.92% | 29.36% | 29.85% | 27.95% |
| Gross Profit Growth % | - | 121.54% | 4.89% | 75.22% | -10.84% | -25.38% | 9.39% | -47.36% | -47.21% | 91.23% | 43.84% | 36.63% | 92.14% | 21.65% | 41.56% | - |
| Operating Expenses | 239.74M | 191.51M | 132.71M | 100.27M | 92.63M | 94.48M | 99.38M | 94.95M | 98.54M | 79.33M | 63.93M | 47M | 39.11M | 23.34M | 18.75M | 17.11M |
| OpEx % of Revenue | - | 42.03% | 53.22% | 46.07% | 41.57% | 44.66% | 42.36% | 49.74% | 36.84% | 20.75% | 24.52% | 24.75% | 29.98% | 29.75% | 29.56% | 35.76% |
| Selling, General & Admin | 132.13M | 106.01M | 77.75M | 64.3M | 56.38M | 53.26M | 55.99M | 51.55M | 48.64M | 43.96M | 32.15M | 26.15M | 23.14M | 14.82M | 11.15M | 10.65M |
| SG&A % of Revenue | - | 23.26% | 31.18% | 29.54% | 25.3% | 25.17% | 23.86% | 27.01% | 18.18% | 11.5% | 12.33% | 13.77% | 17.74% | 18.9% | 17.58% | 22.27% |
| Research & Development | 107.61M | 85.51M | 54.95M | 35.98M | 36.24M | 41.22M | 43.39M | 43.4M | 49.9M | 35.37M | 31.78M | 20.85M | 15.97M | 8.51M | 7.6M | 6.45M |
| R&D % of Revenue | - | 18.76% | 22.04% | 16.53% | 16.27% | 19.48% | 18.49% | 22.74% | 18.66% | 9.25% | 12.19% | 10.98% | 12.24% | 10.85% | 11.99% | 13.48% |
| Other Operating Expenses | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Operating Income | -67.41M | -54.6M | -70.91M | -41.35M | -59M | -56.77M | -48.84M | -48.75M | -10.77M | 86.95M | 23.02M | 13.45M | 5.14M | -307K | 179K | -3.73M |
| Operating Margin % | -11.31% | -11.98% | -28.44% | -19% | -26.48% | -26.83% | -20.82% | -25.54% | -4.03% | 22.74% | 8.83% | 7.08% | 3.94% | -0.39% | 0.28% | -7.81% |
| Operating Income Growth % | - | 23% | -71.49% | 29.91% | -3.93% | -16.22% | -0.19% | -352.7% | -112.38% | 277.72% | 71.17% | 161.76% | 1773.62% | -271.51% | 104.79% | - |
| EBITDA | -38.44M | -26.91M | -50.26M | -20.92M | -35.8M | -31.39M | -24.11M | -24.73M | 18.93M | 107.33M | 37.21M | 22.87M | 11.31M | 3.1M | 3.12M | -622K |
| EBITDA Margin % | -6.45% | -5.9% | -20.15% | -9.61% | -16.07% | -14.84% | -10.28% | -12.96% | 7.08% | 28.07% | 14.27% | 12.04% | 8.67% | 3.95% | 4.92% | -1.3% |
| EBITDA Growth % | -52.43% | 46.47% | -140.22% | 41.55% | -14.02% | -30.22% | 2.52% | -230.66% | -82.36% | 188.46% | 62.67% | 102.29% | 264.74% | -0.67% | 601.77% | - |
| D&A (Non-Cash Add-back) | 24.8M | 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 |
| EBIT | -60.07M | -43.21M | -179.91M | -46.61M | -60.08M | -48.54M | -45.59M | -45.98M | -8.67M | 86.95M | 23.02M | 13.45M | 5.14M | -281K | 436K | -3.99M |
| Net Interest Income | 2.73M | -1.71M | -5.95M | -8.82M | -6.19M | -5.55M | -5.38M | -4.48M | -824K | -637K | -1.47M | -690K | 43K | -1.02M | -1.35M | -1.32M |
| Interest Income | 5.82M | 1.79M | 874K | 609K | 126K | 70K | 255K | 925K | 282K | 221K | 247K | 328K | 369K | 104K | 26K | 15K |
| Interest Expense | 3.08M | 3.5M | 6.83M | 9.43M | 6.32M | 5.62M | 5.63M | 5.41M | 1.11M | 858K | 1.72M | 1.02M | 326K | 1.13M | 1.38M | 1.34M |
| Other Income/Expense | 4.25M | 7.9M | -115.82M | -14.69M | -7.4M | 2.61M | -2.38M | -2.64M | 990K | -2.42M | -2.02M | -2.28M | -656K | -1.1M | -1.12M | -1.59M |
| Pretax Income | -63.16M | -46.7M | -186.73M | -56.04M | -66.4M | -54.16M | -51.22M | -51.39M | -9.78M | 84.53M | 21M | 11.17M | 4.48M | -1.41M | -945K | -5.33M |
| Pretax Margin % | -10.6% | -10.25% | -74.88% | -25.75% | -29.8% | -25.6% | -21.83% | -26.92% | -3.66% | 22.11% | 8.06% | 5.88% | 3.44% | -1.79% | -1.49% | -11.14% |
| Income Tax | -6.14M | -8.48M | 2K | 9K | 1K | 2K | 7.23M | 14.66M | -7.63M | 10.57M | -10.23M | 375K | 199K | 0 | 0 | 0 |
| Effective Tax Rate % | 9.72% | 18.15% | -0% | -0.02% | -0% | -0% | -14.11% | -28.53% | 78.05% | 12.51% | -48.71% | 3.36% | 4.44% | 0% | 0% | 0% |
| Net Income | -57.02M | -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 |
| Net Margin % | -9.57% | -8.39% | -74.88% | -25.75% | -29.8% | -25.6% | -24.91% | -34.6% | -0.8% | 19.34% | 11.98% | 5.68% | 3.28% | -1.79% | -1.49% | -11.14% |
| Net Income Growth % | 63.38% | 79.53% | -233.17% | 15.59% | -22.59% | 7.34% | 11.5% | -2977.77% | -102.9% | 136.76% | 189.39% | 152% | 404.62% | -48.78% | 82.26% | - |
| Net Income (Continuing) | -57.02M | -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 |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | -0.70 | -0.64 | -4.50 | -1.75 | -2.38 | -2.01 | -2.67 | -3.31 | -0.11 | 3.67 | 1.76 | 0.65 | 0.28 | -0.14 | -0.11 | -0.60 |
| EPS Growth % | 76.82% | 85.78% | -157.14% | 26.47% | -18.41% | 24.72% | 19.34% | -2909.09% | -103% | 108.52% | 170.77% | 132.14% | 300% | -27.27% | 81.67% | - |
| EPS (Basic) | - | -0.64 | -4.50 | -1.75 | -2.38 | -2.01 | -2.67 | -3.31 | -0.11 | 3.87 | 1.82 | 0.69 | 0.30 | -0.14 | -0.11 | -0.60 |
| Diluted Shares Outstanding | 81.57M | 60.18M | 41.54M | 31.94M | 27.85M | 26.91M | 21.87M | 19.98M | 19.65M | 20.14M | 17.71M | 16.53M | 15.19M | 9.96M | 8.95M | 8.95M |
| Basic Shares Outstanding | 81.57M | 60.18M | 41.54M | 31.94M | 27.85M | 26.91M | 21.87M | 19.98M | 19.65M | 19.1M | 17.2M | 15.63M | 14.31M | 9.96M | 8.95M | 8.95M |
| Dividend Payout Ratio | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
Quick answers to the most common questions about buying AAOI stock.
For fiscal year 2025, Applied Optoelectronics, Inc. (AAOI) reported total revenue of $455.7M. This represents a 852.6% increase compared to $47.8M in 2011.
Applied Optoelectronics, Inc. (AAOI) reported a net loss of $38.2M for the fiscal year ending 2025.
Applied Optoelectronics, Inc. (AAOI) reported an operating income of $-54.6M, resulting in an operating profit margin of -12.0%. This margin reflects the operational efficiency of the business before interest and taxes.
Applied Optoelectronics, Inc. (AAOI) generated $136.9M in gross profit for the year, representing a gross profit margin of 30.0%. This demonstrates the company's core pricing power and production efficiency.
Key Metrics
Top Statement Risk
GAAP profitability remains elusive
Metrics are mathematically derived from official filings.
Revenue Surge on 800G Ramp
AAOI's revenue jumped 86.4% year-over-year to $191.9M in 2026Q2, driven by the 800G product ramp that more than doubled sequentially, according to the latest earnings report.
The sequential acceleration from 51.4% growth in 2026Q1 to 86.4% in 2026Q2 indicates that the hyperscale refresh cycle is gaining momentum. The 800G ramp appears to be the primary driver, as CEO commentary suggests it more than doubled sequentially. This suggests that the company is successfully transitioning to next-generation products, but the sustainability of this growth depends on continued customer adoption and capacity expansion.
Gross Margin Expansion Still Elusive
Despite record revenue, gross margin contracted to 27.7% in 2026Q2 from 29.1% in the prior quarter, as reported in the income statement, indicating pricing pressure or mix shift.
The gross margin has remained in a narrow band between 27% and 31% over the past year, suggesting that the company's vertical integration has not yet translated into structural margin improvement. The slight decline in 2026Q2 may reflect higher costs associated with the 800G ramp or continued pricing pressure in legacy products. Investors should monitor whether the 800G mix can drive gross margins above the 30% threshold, which appears necessary for sustainable profitability.
Operating Leverage Not Yet Realized
Operating income improved to -$24.7M in 2026Q2 from -$13.0M in 2026Q1, but operating margin remained deeply negative at -12.9%, as per the income statement, despite revenue growth.
The company's high fixed-cost base should provide operating leverage, but the data shows that operating losses have widened in absolute terms even as revenue grows. This suggests that SG&A and R&D expenses are scaling with revenue, preventing the expected drop-through. The negative operating margin of -12.9% indicates that the company is still investing heavily in R&D and sales infrastructure to support the 800G ramp, which may be necessary but delays profitability.
Non-GAAP Profitability Masks GAAP Losses
AAOI reported a non-GAAP EPS beat of $0.06 versus estimates, but GAAP net loss widened to -$22.8M in 2026Q2, according to the income statement, highlighting the gap.
The difference between non-GAAP and GAAP results appears to be driven by stock-based compensation and other adjustments, as SBC was $4.9M in 2026Q2. The GAAP net margin of -11.9% indicates that the company is still far from GAAP profitability, and the reliance on non-GAAP metrics may obscure the true cost structure. Investors should monitor the sustainability of the non-GAAP adjustments, as they could pressure cash flow if they persist.
R&D and SG&A Outpace Revenue Growth
R&D and SG&A expenses grew to $34.9M and $43.1M respectively in 2026Q2, up from $25.7M and $31.3M in 2026Q1, as per the income statement, outpacing revenue growth.
The combined operating expenses of $78.0M in 2026Q2 represent 40.6% of revenue, which is a significant drag on profitability. The increase in R&D spending is likely tied to the 800G and future 1.6T development, but the SG&A growth suggests that the company is investing in sales and marketing to capture the hyperscale demand. This expense discipline appears to be a trade-off between near-term profitability and long-term market share, but investors should monitor whether these costs can be leveraged as revenue scales.
2024Q4: A Turning Point in Revenue Trajectory
Revenue inflection occurred in 2024Q4, with a 65.9% YoY jump to $100.3M, following a period of sub-5% growth, as reported in the income statement, marking the start of the AI-driven cycle.
The 2024Q4 quarter saw a dramatic acceleration from the prior quarters, where revenue was growing at only 4% YoY. This inflection appears to be driven by the initial ramp of 400G and early 800G products, which set the stage for the subsequent 82.8% YoY surge in 2026Q2. The lasting impact is that AAOI has repositioned itself as a key supplier in the AI data center buildout, but the challenge remains converting this revenue growth into sustainable profitability.
GAAP Losses Undermine Growth Story
Despite record revenue and non-GAAP profitability, GAAP operating margin remains at -12.0%, as per the income statement, suggesting that the company's growth is not yet translating into real earnings.
Short-sellers would likely focus on the persistent GAAP losses, which have not improved despite the revenue surge. The negative operating margin indicates that the company's cost structure is not yet aligned with its revenue scale, and the reliance on non-GAAP adjustments may be masking underlying inefficiencies. Additionally, the high customer concentration and the cyclical nature of the hyperscale capex cycle pose risks to the sustainability of this growth. If the 800G ramp fails to deliver the expected margin expansion, the stock could be vulnerable to a re-rating.