Financial Data and Key Metrics Changes - Total revenue for Q2 2026 was $162.3 million, down 6.3% year-over-year and down 11.1% sequentially [4][18] - Non-GAAP gross margin was 22.2%, compared to 24.1% last quarter and 24.2% a year ago [18] - Non-GAAP EPS was a loss of $0.16 per share, compared to a profit of $0.13 last quarter and $0.09 a year ago [20] - Operating cash flow was negative $8.1 million, down from positive $10.2 million in the prior quarter [20][21] Business Line Data and Key Metrics Changes - Computing segment revenue was $80.5 million, representing 49.6% of total revenue, down 17.1% sequentially but up 5.9% year-over-year [10][12] - Consumer segment revenue was down 14.9% year-over-year and down 18.3% sequentially, accounting for 11.8% of total revenue [13][14] - Communication segment revenue was flat year-over-year and increased 1.1% sequentially, representing 20.4% of total revenue [15] - Power supply and industrial segment revenue was down 22.5% year-over-year and down 3% sequentially, accounting for 16.7% of total revenue [16] Market Data and Key Metrics Changes - Demand for PCs is expected to be constrained due to memory shortages, but data center investments are providing an offset [11][57] - The smartphone market is seeing uneven demand from China, while the U.S. market remains strong [15] - The company is experiencing growth in high-performance, medium-voltage solutions for AI data centers [10][9] Company Strategy and Development Direction - The company is transitioning from a component supplier to a provider of application-specific total solutions, focusing on higher performance markets [6][7] - Increased R&D investments are being made in areas with strong customer engagement and clear differentiation [7][40] - The company is monetizing a portion of its equity interests in a joint venture to support strategic investments [8] Management's Comments on Operating Environment and Future Outlook - Management expects the March quarter to be a near-term low point for revenue and margin, with growth returning in the June quarter [17] - The company anticipates modest growth in 2026, with stronger growth expected in 2027 and beyond as new platforms ramp up [17][57] - Management is confident in the ability to penetrate further into the PC and smartphone markets despite memory supply challenges [57] Other Important Information - The company repurchased approximately $13.9 million of shares during the December quarter [5] - CapEx for the quarter was $15 million, with expectations for the March quarter to range from $15 million to $18 million [21] Q&A Session Questions and Answers Question: AI opportunities and GPU track - The AI opportunity is expanding beyond initial expectations, with the company addressing medium-voltage MOSFETs for power conversions [25] Question: Operating expenses normalization - Operating expenses are expected to increase by about $4 million in the March quarter, primarily due to R&D investments [27] Question: Capacity and gross margin - The company is investing in CapEx to prepare for growth in 2026, which may help improve gross margins [30] Question: Gross margin guidance - March quarter guidance reflects lower utilization due to seasonal factors, with expectations for margins to rebound in the June quarter [36] Question: R&D investment specifics - Increased R&D will focus on areas with competitive leverage, including AI applications and smartphone battery protection [40] Question: Revenue return on investment - AI-related revenue could potentially increase to 50% of the computing segment, depending on market penetration [52]

Alpha and Omega Semiconductor (NasdaqGS:AOSL) Q2 2026 Earnings call February 05, 2026 05:00 PM ET Speaker2Good afternoon. Thank you for attending today's Alpha and Omega Semiconductor Fiscal Second Quarter 2026 earnings call. My name is Victoria, and I'll be your moderator today. All lines will be muted during the presentation portion of the call, with an opportunity for questions and answers at the end. If you would like to ask a question, please press * followed by 1 on your telephone keypad. I would now ...