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% in the previous 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 in the prior 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 $19.2 million, down 14.9% year-over-year and down 18.3% sequentially, accounting for 11.8% of total revenue [13][14] - Communication segment revenue was $33.1 million, flat year-over-year and up 1.1% sequentially, representing 20.4% of total revenue [15] - Power supply and industrial segment revenue was $27.1 million, 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 company is seeing increased BOM content in new platforms, particularly in AI and high-performance applications [9][57] - The smartphone market remains uneven, with strong performance from Tier 1 US customers but mixed results from China [15] 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 clear differentiation and strong customer engagement [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 anticipated beginning in the June quarter [17] - The company is optimistic about the impact of its total solution strategy and expects to see tangible results in 2026 [9][17] - There is confidence 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, with $16 million remaining in the repurchase program [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 Summary Question: AI opportunities and GPU track - Management noted that while AI opportunities are less than originally expected, they are expanding into 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 balance sheet - The company is investing in CapEx to prepare for growth in 2026 and is building up capacity [30] Question: Gross margin expectations - 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: Advanced compute product investment - The company is targeting AI applications and medium voltage power conversion, with expectations for significant growth in these areas [48][52]

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 ...

Core Insights - Alpha and Omega Semiconductor Limited reported a record quarterly revenue of $182.5 million for fiscal Q1 2026, reflecting a 3.4% sequential increase and a slight 0.3% year-over-year growth [2][22] - The company is transitioning to an 800-volt DC power architecture, which is expected to enhance efficiency and open new design opportunities in high-performance computing and data centers [5][20] - The computing segment showed strong performance with a 27.1% year-over-year increase, contributing 53.2% of total revenue, although a decline of nearly 20% is anticipated for December due to seasonal factors [7][10] Financial Performance - Non-GAAP gross margin for the quarter was 24.1%, down from 25.5% a year ago, primarily due to higher operational costs [22][23] - Non-GAAP EPS was reported at $0.13, compared to $0.21 in the same quarter last year [23] - Operating cash flow improved to $10.2 million, up from negative $2.8 million in the prior quarter [23] Segment Analysis - The computing segment revenue increased significantly, driven by demand from PCs and AI platforms, while the consumer segment saw a decline of 25.8% year-over-year [11][12] - The communication segment experienced a 21.4% sequential growth but a 7.8% year-over-year decline, attributed to weaker demand from Chinese smartphone customers [12][13] - Power supply and industrial segment revenue accounted for 15.3% of total revenue, down 12.4% year-over-year, but growth is expected in December driven by power tools [14][15] Strategic Initiatives - The company is focusing on expanding its market presence in high-performance computing and AI, leveraging its investments in technology and engineering talent [6][19] - A significant portion of the capital from the recent joint venture equity sale, approximately $94 million, is being allocated to strategic investments in technology and talent [6][40] - The shift to 800-volt architecture is seen as a critical opportunity for Alpha and Omega to enhance its product offerings and capture new market segments [5][20] Future Outlook - Revenue guidance for December is projected to be around $160 million, with expectations of a decline in several segments due to seasonal trends [26] - The company anticipates steady growth through 2026, with a stronger upturn expected in 2027 as new programs transition into volume production [20][50] - Investments in R&D are planned to support growth in AI and other high-performance applications, indicating a commitment to innovation and market leadership [19][49]

Financial Data and Key Metrics Changes - Total revenue for Q1 2026 was $182.5 million, reflecting a slight year-over-year increase of 0.3% and a sequential increase of 3.4% [4][19] - Non-GAAP gross margin was 24.1%, down from 25.5% a year ago and 24.4% in the previous quarter [19] - Non-GAAP EPS was $0.13, compared to $0.21 a year ago and $0.02 in the prior quarter [19] - Operating cash flow was $10.2 million, a significant improvement from negative $2.8 million in the prior quarter [20] Business Line Data and Key Metrics Changes - Computing segment revenue increased by 27.1% year-over-year and 4.6% sequentially, accounting for 53.2% of total revenue [8] - Power IC revenue reached a record high of $72.7 million, up 37.3% year-over-year and 5.9% sequentially [4][19] - Consumer segment revenue decreased by 25.8% year-over-year and 11.6% sequentially, representing 12.9% of total revenue [10] - Communications segment revenue increased by 21.4% sequentially but declined by 7.8% year-over-year [12] - Power supply and industrial segment revenue was down 12.4% year-over-year and 5.6% sequentially, accounting for 15.3% of total revenue [13] Market Data and Key Metrics Changes - Demand for PCs remained strong due to tariff-related orders and seasonal back-to-school demand, but is expected to decline nearly 20% sequentially in the December quarter [9][10] - The consumer segment is experiencing a normalization of demand, particularly in gaming and home appliances, with wearables showing growth [11] - Communications segment demand from US customers remains strong, while demand from China has weakened [12] Company Strategy and Development Direction - The company is transitioning to support 800-volt DC power architecture, enhancing its role in next-generation AI data centers [5][6] - Investments are being made to strengthen technology leadership and expand into higher performance and higher margin applications [6][18] - The focus is on expanding served markets and increasing BOM content across various applications, including smartphones and AI platforms [7][8] Management's Comments on Operating Environment and Future Outlook - Management views the current market corrections as temporary, with underlying growth trends still intact [26] - The company expects steady growth through 2026, with a stronger upturn anticipated in 2027 as new programs transition to volume production [18][36] - Management is confident in the long-term trajectory, emphasizing the importance of power management in the ongoing global transformation [16][17] Other Important Information - The company received approximately $94 million from the sale of a portion of its equity interest in a joint venture, which will be used for strategic investments [6][22] - Capital expenditures for the quarter were $9.8 million, with expectations for the December quarter to range from $14 million to $16 million [22] Q&A Session Summary Question: Can you provide more color on the sequential decline in demand? - Management noted that the decline is partly due to seasonality and a correction period following tariff-related demand, but underlying growth trends remain [25][26] Question: What are the expectations for gross margin trends? - Management expects gross margins to fluctuate with revenue and product mix, anticipating a lower gross margin in the December quarter [27][28] Question: What dynamics are being observed around ASPs? - ASP erosion has been in line with historical trends, and the company aims to reset ASPs through new product introductions [29][30] Question: How will the proceeds from the JV sale be utilized? - Proceeds will be invested in areas where the company has demonstrated strength, such as smartphones, PCs, and AI applications [32][33] Question: What are the expectations for AI-related revenues? - AI-related revenues are expected to ramp up later than initially forecasted, with ongoing engagement in various opportunities [34][35] Question: What segments are expected to perform better next year? - Key focus areas include PCs, AI applications, and smartphones, with expectations for growth in these segments [38][39]

Financial Data and Key Metrics Changes - Total revenue for Q4 2025 was $176.5 million, representing a 9.4% year-over-year increase and a 7.2% sequential increase [6][16] - Non-GAAP gross margin was 24.4%, up from 22.5% in the previous quarter but down from 26.4% a year ago [17] - Non-GAAP EPS was $0.20, compared to a loss of $0.10 in the previous quarter and $0.09 a year ago [18] - Operating cash flow was negative $2.8 million, down from $7.4 million in the prior quarter [19] Business Line Data and Key Metrics Changes - Computing segment revenue increased by 29.7% year-over-year and 17.9% sequentially, accounting for 52.6% of total revenue [8] - Consumer segment revenue decreased by 5.8% year-over-year but increased by 23.9% sequentially, representing 15.1% of total revenue [10] - Communication segment revenue was down 1.7% year-over-year and 5.2% sequentially, making up 15.2% of total revenue [11] - Power supply and industrial segment revenue was up 7.3% year-over-year but down 9.8% sequentially, accounting for 16.8% of total revenue [12] Market Data and Key Metrics Changes - Strong demand in computing was driven by tariff-related pull-ins for PCs and growth in AI and graphics applications [5][6] - The consumer segment saw growth in wearables and gaming, while the communication segment faced challenges due to a decline in smartphone demand in China [10][11] - The power supply and industrial segment experienced weaker demand from power tools and e-mobility [12] Company Strategy and Development Direction - The company aims to transition from a component supplier to a total solutions provider, leveraging customer relationships to expand market share [7][14] - The strategic sale of 20.3% of its joint venture in Chongqing, China, for $150 million is expected to provide additional capital for technology investments and acquisitions [7][21] - The company is focused on execution, innovation, and delivering sustainable value amid a fluid geopolitical and macroeconomic environment [14] Management's Comments on Operating Environment and Future Outlook - Management noted uncertainties regarding the macro economy and geopolitics but expressed confidence in the company's ability to execute and grow [7][14] - The company anticipates a digestion period in the computing segment as initial demand for AI programs is absorbed, with expectations for low single-digit sequential growth in the next quarter [9] - Despite challenges, management remains optimistic about growth opportunities in AI, graphics, and other segments [14] Other Important Information - The company recorded an impairment charge of $76.8 million related to the equity investment in the Chongqing joint venture [22] - CapEx for the quarter was $14.3 million, with expectations for $11 million to $13 million in the next quarter [20][21] Q&A Session Summary Question: Can you provide more color on the computing segment and the digestion mentioned? - Management indicated that the digestion is related to initial shipments of a new AI program and that additional programs are in design to support future growth [25][27] Question: How much did AI contribute to growth this quarter? - AI and graphics together account for approximately 25% of the computing segment [30][31] Question: What are the expectations for gross margins moving forward? - Management expects gross margins to remain flat in the next quarter, reflecting a similar product mix and production level [32][36] Question: How will the $150 million cash inflow be prioritized? - The company plans to invest in business growth, technology, and potential M&A opportunities, with shareholder returns also being evaluated [39][41] Question: How does the company view internal capacity versus third-party foundries? - Management stated that they will continue to evaluate both internal production and third-party sourcing based on needs, emphasizing flexibility [45][47] Question: How are customers reacting to demand and tariffs? - Demand varies by market, with the computing segment seeing more caution due to tariffs, while AI and graphics remain strong [52][53]

Financial Data and Key Metrics Changes - Revenue for fiscal Q3 was $164.6 million, representing a 9.7% year-over-year increase but a 4.9% sequential decline [6][19] - Non-GAAP gross margin was 22.5%, down from 24.2% in the previous quarter and 25.2% a year ago [19] - Non-GAAP EPS was a loss of $0.10, compared to a loss of $0.09 in the prior quarter and a loss of $0.04 a year ago [20] - Operating cash flow was $7.4 million, down from $14.1 million in the prior quarter and $28.2 million a year ago [21] Business Line Data and Key Metrics Changes - Computing segment revenue increased nearly 15% year-over-year and 3.6% sequentially, accounting for 47.9% of total revenue [8][11] - Consumer segment revenue decreased 9% year-over-year and 4.9% sequentially, representing 13% of total revenue [11][12] - Communications segment revenue was up 5.8% year-over-year but down 14.4% sequentially, making up 17.2% of total revenue [12][13] - Power Supply and Industrial segment revenue increased 32.4% year-over-year but declined 6.2% sequentially, accounting for 19.9% of total revenue [14][15] Market Data and Key Metrics Changes - The Computing segment saw robust demand for graphics and AI accelerated cards, driven by a key customer scaling their next-generation platform [9] - The Consumer segment is expected to see over 25% sequential growth in June, driven by gaming and home appliances [12] - Communications segment growth is anticipated to be flattish sequentially, with growth from U.S. and Korean smartphone customers offset by slower sales from China [13] Company Strategy and Development Direction - The company aims to transform from a component supplier to a total solutions provider, leveraging customer relationships to expand market share [7][8] - The focus remains on executing the strategy and delivering sustained value for stakeholders despite near-term uncertainties [17][18] Management's Comments on Operating Environment and Future Outlook - Management highlighted a dynamic landscape with macroeconomic, geopolitical, and trade-related uncertainties impacting visibility for the second half of 2025 [7][17] - The company expects low to mid-single-digit sequential revenue growth in June, driven by strength in Computing and Consumer segments [17][24] Other Important Information - The company completed the quarter with a cash balance of $169.4 million, down from $182.6 million at the end of the previous quarter [22] - CapEx for the quarter was $8.1 million, with expectations for June ranging from $12 million to $14 million [23][24] Q&A Session Summary Question: Can you quantify the magnitude of the pull-ins on the PC side and discuss graphics card success? - Management noted increased demand due to tariff situations, with an estimated $6 million of revenue increase attributed to notebook shipments [28] Question: What is the tariff impact on the company? - Direct exposure to tariffs is minimal due to limited U.S. shipments, but indirect impacts on overall demand remain uncertain [32] Question: How is the margin guidance for June despite the fall-off in licensing revenue? - Margin guidance is based on a better product mix and higher factory utilization [35] Question: Can you provide an update on the China JV and wafer requirements? - The China JV accounts for about 20% of total supply, with minimal tariff impact [38] Question: What are the cash flow dynamics expected throughout the year? - Cash flow is expected to remain stable, targeting 6% to 8% of revenue, with CapEx projected around $40 million to $50 million for the year [42][45] Question: What is the pricing environment and competitive landscape? - ASP erosion is tracking historical trends, with increased competition from all players [48]

Financial Data and Key Metrics Changes - Revenue for fiscal Q3 was $164.6 million, representing a 9.7% year-over-year increase but a 4.9% sequential decline [6][21] - Non-GAAP gross margin was 22.5%, down from 24.2% in the previous quarter and 25.2% a year ago [21] - Non-GAAP EPS was a loss of $0.10, compared to a loss of $0.09 in the prior quarter and a loss of $0.04 a year ago [22] Business Segment Data and Key Metrics Changes - Computing segment revenue increased nearly 15% year-over-year and 3.6% sequentially, accounting for 47.9% of total revenue [10][12] - Consumer segment revenue decreased 9% year-over-year and 4.9% sequentially, representing 13% of total revenue [13] - Communications segment revenue was up 5.8% year-over-year but down 14.4% sequentially, making up 17.2% of total revenue [15] - Power Supply and Industrial segment revenue increased 32.4% year-over-year but declined 6.2% sequentially, accounting for 19.9% of total revenue [16] Market Data and Key Metrics Changes - The company noted robust demand for graphics and AI accelerated cards, particularly driven by a key customer scaling their next-generation platform [11] - The U.S. and Korea are expected to see growth in smartphone customers, while sales from China are anticipated to slow [15] Company Strategy and Development Direction - The company aims to transform from a component supplier to a total solutions provider, leveraging customer relationships to expand market share and increase bond content [9][19] - The focus remains on executing the strategy and delivering sustained value for stakeholders despite near-term uncertainties [19] Management's Comments on Operating Environment and Future Outlook - Management highlighted a dynamic landscape with macroeconomic, geopolitical, and trade-related uncertainties impacting visibility for the second half of 2025 [9] - The company expects low to mid-single-digit sequential revenue growth for June, driven by strength in Computing and Consumer segments [19] Other Important Information - Operating cash flow for the quarter was $7.4 million, down from $14.1 million in the prior quarter [23] - The company completed the quarter with a cash balance of $169.4 million, down from $182.6 million at the end of the last quarter [24] Q&A Session Summary Question: Can you quantify the magnitude of the pull-ins on the PC side and discuss graphics card success? - Management noted increased demand due to customers taking advantage of tariff situations, with an estimated $6 million of revenue attributed to notebook increases [29] Question: What is the tariff impact on the company? - Direct exposure to tariffs is minimal due to limited U.S. shipments, but indirect impacts on overall demand remain uncertain [32] Question: How is the margin guidance for June despite the fall-off in licensing revenue? - Margin guidance is based on a better product mix and higher factory utilization, contributing to a sequential margin rebound [34][36] Question: Can you provide an update on cash flow dynamics and CapEx for the year? - Cash flow is expected to remain stable, targeting $40 million to $50 million for the year, with CapEx for June projected at $12 million to $14 million [45] Question: What is the pricing environment and competitive landscape? - ASP erosion is tracking historical trends, with increased competition prompting the company to roll out new products to reset ASP [49]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $164.6 million, representing a 9.7% increase year over year but a 4.9% decline sequentially [6][19] - Non-GAAP gross margin was 22.5%, down from 24.2% in the previous quarter and 25.2% a year ago [20] - Non-GAAP EPS was a loss of $0.10, compared to a loss of $0.09 in the prior quarter and a loss of $0.04 a year ago [21] - Operating cash flow was $7.4 million, down from $14.1 million in the prior quarter and $28.2 million a year ago [22] Business Segment Data and Key Metrics Changes - Computing segment revenue increased 14.8% year over year and 3.6% sequentially, accounting for 47.9% of total revenue [9][12] - Consumer segment revenue decreased 9% year over year and 4.9% sequentially, representing 13% of total revenue [12] - Communications segment revenue was up 5.8% year over year but down 14.4% sequentially, making up 17.2% of total revenue [14] - Power Supply and Industrial segment revenue increased 32.4% year over year but decreased 6.2% sequentially, accounting for 19.9% of total revenue [15] Market Data and Key Metrics Changes - The company noted robust demand for graphics and AI accelerated cards, particularly driven by a key customer scaling their next-generation platform [10] - The company anticipates continued growth in the Computing segment, with expectations of mid-single-digit sequential growth and over 15% year-over-year growth for June [12][17] - The company expects flattish sequential growth in the Communications segment, with growth from U.S. and Korean smartphone customers offset by slower sales from China [14] Company Strategy and Development Direction - The company aims to transform from a component supplier to a total solutions provider, leveraging customer relationships to expand market share and increase bond content [7][18] - The company is focusing on new market expansion, market share gains, and increased bond content to drive revenue growth in 2025 [18] Management's Comments on Operating Environment and Future Outlook - Management highlighted a dynamic landscape with macroeconomic, geopolitical, and trade-related uncertainties impacting visibility for the second half of 2025 [7] - The company is closely monitoring developments and collaborating with customers to minimize disruptions in the supply chain [17] - Management expects low to mid-single-digit sequential revenue growth for June, despite the discontinuation of licensing revenue [17] Other Important Information - The company completed the quarter with a cash balance of $169.4 million, down from $182.6 million at the end of the previous quarter [23] - CapEx for the quarter was $8.1 million, with expectations for June ranging from $12 million to $14 million [24] Q&A Session Summary Question: Can you quantify the magnitude of the pull-ins on the PC side and discuss graphics card success? - Management noted increased demand due to customers taking advantage of tariff situations, with an estimated $6 million of revenue increase attributed to notebook shipments [28] Question: What is the tariff impact on the company? - Management indicated minimal direct exposure to tariffs due to limited U.S. shipments, while indirect impacts on overall demand remain uncertain [32] Question: How is the margin guidance for June despite the fall-off in licensing revenue? - Management attributed the margin guidance to a better product mix and higher factory utilization [34] Question: What is the current utilization rate and capacity at the JV? - Internal utilization is around 80% to 90%, with additional external capacities available to support business growth [38] Question: Can you provide an update on the pricing environment and competitive landscape? - Management noted ASP erosion tracking historical trends, with increased competition prompting a focus on new product rollouts to reset ASP [46]