Applied Optoelectronics Reports 138% Revenue Growth to $102.9 Million in Q2 2025

Applied Optoelectronics, Inc. (AOI) reported significant financial growth in its latest quarterly filing, with net revenue reaching $102.9 million for the three months ended June 30, 2025, a 138% increase from $43.3 million in the same period last year. For the first half of 2025, revenue totaled $202.8 million, up 142% from $83.9 million in the first half of 2024. The company attributed this growth primarily to increased demand for its products across key markets, particularly in cable television (CATV) and data centers, which saw revenue increases of 863% and 30% respectively in the second quarter.

Despite the revenue surge, AOI reported a net loss of $9.1 million for the second quarter, an improvement from a loss of $26.1 million in the same quarter of 2024. The loss for the first half of 2025 was $18.3 million, down from $49.3 million in the prior year. The company’s gross profit also improved significantly, reaching $31.2 million in the second quarter, compared to $9.6 million a year earlier, reflecting a gross margin of 30.3%, up from 22.1%. This improvement was driven by higher sales of high-margin products and ongoing cost reduction efforts.

Operationally, AOI has expanded its customer base, with its top ten customers accounting for 98% of revenue in the latest quarter, up from 94% a year prior. The company has also seen a notable increase in accounts receivable, which rose to $211.5 million, largely due to increased sales volume. Additionally, inventory levels increased to $138.9 million, reflecting the company's efforts to meet growing demand. The company’s employee headcount has also grown, supporting its expanded operations and product development initiatives.

Strategically, AOI has entered into a supply agreement with Microsoft to design and manufacture data center products, which is expected to contribute to revenue growth through 2025. The company has also issued a warrant to an Amazon affiliate, allowing for the purchase of shares contingent on future product purchases, further solidifying its partnerships in the tech sector. Looking ahead, AOI anticipates continued demand for its products, particularly in the context of increasing bandwidth needs driven by advancements in artificial intelligence and network infrastructure upgrades.

In terms of liquidity, AOI reported cash, cash equivalents, and restricted cash totaling $87.2 million as of June 30, 2025, with $31.2 million in unused borrowing capacity. The company has also successfully raised capital through at-the-market offerings, generating approximately $196 million in net proceeds from recent equity sales. AOI's management remains optimistic about future growth, although they acknowledge potential risks related to market conditions and geopolitical factors that could impact operations and financial performance.