Revenue growth accelerated to 51.4% in 2026Q1, yet gross margins remain constrained at 29.1%, indicating limited pricing power despite the hyperscale demand environment.
| 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 | 507M | 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 % | 64.32% | 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 | 356.71M | 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 | 150.29M | 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 % | 29.64% | 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 | 208.94M | 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 | 115.59M | 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 | 93.35M | 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 | -58.66M | -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 % | -11.57% | -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 | -36.68M | -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 % | -7.24% | -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 % | 0.37% | 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) | 21.97M | 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 | -48.41M | -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 | -996K | -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 | 2.85M | 1.79M | 874K | 609K | 126K | 70K | 255K | 925K | 282K | 221K | 247K | 328K | 369K | 104K | 26K | 15K |
| Interest Expense | 1.25M | 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 | 7.89M | 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 | -50.76M | -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 % | -10.01% | -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 | -9.53M | -8.48M | 2K | 9K | 1K | 2K | 7.23M | 14.66M | -7.63M | 10.57M | -10.23M | 375K | 199K | 0 | 0 | 0 |
| Effective Tax Rate % | 18.76% | 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 | -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 |
| Net Margin % | -8.55% | -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 % | 74.91% | 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) | -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 |
| 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) | -0.57 | -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 % | 82.93% | 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 | 75.98M | 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 | 75.98M | 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 | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
High customer concentration risk
According to the latest quarterly financial data, AAOI achieved a significant 51.4% year-over-year revenue growth in 2026Q1, signaling that the company is successfully capturing the initial demand wave from the ongoing transition to 400G and 800G data center architectures across its primary hyperscale customer base.
The acceleration in top-line performance suggests that the company's vertical integration strategy is finally gaining traction within the high-volume data center segment. Investors should monitor whether this growth trajectory remains sustainable as the company navigates the cyclical procurement patterns of its largest technology partners.
As reported in recent income statements, AAOI's gross margin has remained stubbornly tethered near the 30% level, with 2026Q1 figures showing a 29.1% margin, indicating that despite substantial revenue expansion, the company has yet to achieve the pricing power necessary to drive meaningful margin expansion.
The inability to push gross margins significantly higher suggests that the company remains vulnerable to competitive pricing pressures in the transceiver market. This structural limitation implies that profitability improvements will likely depend more on operational efficiency gains than on premium product pricing.
Based on the provided financial data, AAOI continues to struggle with operating leverage, as evidenced by a negative 8.6% operating margin in 2026Q1, which demonstrates that the company's high fixed-cost structure is currently outpacing the benefits of its recent, rapid revenue growth.
The persistence of negative operating income despite strong top-line gains suggests that the company's manufacturing footprint requires higher utilization rates to reach break-even. Further investigation is warranted to determine if current R&D and SG&A spending levels are temporary investments or permanent structural burdens.
While revenue growth is accelerating, the company's inability to generate positive net income, with a 2026Q1 net margin of -9.4%, suggests that the current business model may be fundamentally misaligned with the capital intensity required to maintain its competitive position in the semiconductor industry.
Short-term observers may focus on the recurring net losses as a sign that the company is subsidizing growth at the expense of shareholder value. This trend warrants caution, as it implies that the company's long-term viability may remain dependent on external capital or continued cash burn.
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.