Financial Data and Key Metrics Changes - In Q1, revenues surged more than 58% year-over-year, reaching $533 million, the highest revenue in a single quarter in the company's history [6][17] - Non-GAAP gross margin improved to 39.4%, up 160 basis points sequentially and 660 basis points year-on-year [17] - Non-GAAP operating margin was 18.7%, up 370 basis points sequentially and 1,570 basis points year-on-year [17] - Cash and short-term investments increased by $245 million to $1.12 billion [19] Business Line Data and Key Metrics Changes - Components revenue was $379 million, up 18% sequentially and 64% year-over-year, driven by strong demand in data centers [10][19] - Systems revenue was $155 million, down 4% sequentially but up 47% year-over-year, with cloud transceiver revenue remaining flat [13][19] - The company initiated CW laser deliveries for 800-gig transceiver manufacturers, marking a significant milestone [11] Market Data and Key Metrics Changes - Over 60% of total revenue now comes from cloud and AI infrastructure, indicating a shift in market demand [7] - Strong growth in data center interconnect components, with shipments of narrow linewidth laser assemblies for DCI transmission growing over 70% year-over-year [12] Company Strategy and Development Direction - The company has reorganized to report financials as a single reportable segment, allowing for quicker responses to market changes [9] - Future growth is driven by cloud transceivers, optical circuit switches, and co-packaged optics, with expectations to surpass $600 million in quarterly revenue earlier than previously targeted [8][15] - The company aims to leverage its strong market position in optics for scaling AI compute and is entering a period of sustained expansion [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustained growth driven by the accelerating adoption of AI and optical technologies [15] - The demand-supply imbalance for EML products has increased, with demand outstripping supply by 25%-30% [77] - The company is focused on long-term agreements with key customers to ensure sustainable business growth [56] Other Important Information - The company expects to see significant increases in shipment volumes in the second half of calendar 2026 as adoption accelerates [12] - The guidance for Q2 anticipates net revenue in the range of $630-$670 million, with a midpoint representing a new all-time quarterly revenue record [20][21] Q&A Session Summary Question: Can you discuss the confidence in sustaining growth in transceivers? - Management highlighted improved execution and participation in early customer ramps, expecting to ship 1.6T transceivers by mid-next year, contributing to a layering effect in revenue [27][28] Question: What does the 40% increase in capacity for data comm chips mean for revenue? - The increase in capacity is expected to enhance output and shift the product mix towards higher-margin 200G EMLs, contributing positively to revenue [30][31] Question: How is the continuous wave laser output being targeted? - The CW laser is being positioned for internal transceivers, with expectations for full production by mid-2026 [37] Question: What is the competitive environment for narrow linewidth lasers? - The company holds a strong market share in narrow linewidth lasers, with challenges in ramping capacity but a solid competitive position [40][41] Question: How is the supply-demand balance for EML products changing? - The demand-supply mismatch has worsened, with a 25%-30% shortfall relative to customer demand, despite increased supply [77][78] Question: What are the key milestones for the OCS business? - The hardware is generally qualified, with ongoing work on software qualification expected to be completed by mid-2026 [92]