Financial Data and Key Metrics Changes - The company reported a record revenue of $1.13 billion for the second quarter, representing a 36% increase year-over-year and a 16% increase from the prior quarter [5][9] - Non-GAAP EPS reached a new record of $3.36 per share, exceeding guidance despite foreign exchange headwinds [5][11] - Gross margin improved to 12.4%, a 10 basis point increase from Q1, while operating margin reached 10.9%, up 30 basis points from both Q1 and the previous year [11][12] Business Line Data and Key Metrics Changes - Optical Communications revenue grew 29% year-over-year and 11% sequentially, totaling $833 million [9][10] - Telecom revenue surged to a record $554 million, up 59% from last year and 17% from Q1, with DCI revenue increasing 42% year-over-year [9][10] - Non-Optical Communications revenue was $300 million, a 61% increase from a year ago and 30% from Q1, driven by high-performance computing products [10][11] Market Data and Key Metrics Changes - The company experienced strong demand in telecom, particularly in DCI modules, which saw a 42% year-over-year growth [6][10] - Datacom revenue showed a sequential increase of 2%, with a year-over-year decline narrowing to 7% as demand strengthens [6][10] - Automotive revenue grew 12% year-over-year but slightly declined sequentially, while industrial laser revenue increased by 10% year-over-year [6][11] Company Strategy and Development Direction - The company is focused on strategic capacity expansion, with the construction of Building 10, a 2 million sq ft facility, on track for completion by the end of 2026 [7][8] - The company is converting office space into manufacturing space at its Pinehurst campus to support anticipated growth [7][8] - The management is pursuing new opportunities across all business areas, with a strong emphasis on execution and capacity expansion [7][8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining growth trends across all major business areas, with the exception of automotive [7][13] - The company anticipates revenue growth in telecom, datacom, and HPC, while expecting a modest decline in automotive revenue [13] - Management highlighted the importance of operational execution and strategic capacity expansion to meet increasing demand [8][13] Other Important Information - The company ended the quarter with cash and short-term investments of $961 million, with capital expenditures of $52 million reflecting ongoing construction and capacity enhancements [12] - The company repurchased over 12,000 shares at an average price of $387 per share during the quarter [12] Q&A Session Summary Question: HPC customer ramp and production lines - Management indicated they are a little over halfway to fully ramped volume, expecting revenue from the HPC program to exceed $150 million when fully ramped [15][16] Question: Co-packaged optics and optical circuit switches - Management is working on co-packaged optics programs with three different customers and is excited about the potential of optical circuit switches [19][22] Question: Datacom transceivers supply constraints - Management confirmed they have been supply-constrained in Datacom but are making progress with a second source for lasers to alleviate constraints [26][27] Question: Telecom revenue mix - Management noted that the growth in telecom was primarily driven by DCI, with satellite communications also contributing [30] Question: New customer opportunities in telecom - Management is pursuing both new and existing customers, focusing on transceivers for hyperscalers and merchant vendors [42][43] Question: Hyperscale business ramp and margins - Management expressed confidence in growing the business further, with multiple programs ramping and a strong performance expected [51][52] Question: Currency impact on EPS - Management indicated a similar impact from foreign exchange headwinds in the upcoming quarter, with expectations to offset through operating leverage [53][56] Question: Capacity additions and timelines - Management confirmed that the Pinehurst capacity addition is happening now, with significant demand from legacy customers [89][91]

Financial Data and Key Metrics Changes - Revenue for the second quarter reached a record $1.13 billion, representing a 36% increase year-over-year and a 16% increase from the prior quarter [4][9] - Non-GAAP EPS was $3.36, exceeding guidance despite a $3 million foreign exchange revaluation loss [9][11] - Gross margin improved to 12.4%, and operating margin reached 10.9%, reflecting strong top-line growth [11][12] Business Line Data and Key Metrics Changes - Optical Communications revenue grew 29% year-over-year and 11% sequentially, totaling $833 million [9][10] - Telecom revenue surged 59% year-over-year and 17% from Q1, reaching $554 million, with DCI revenue increasing 42% year-over-year [4][10] - Non-Optical Communications revenue was $300 million, up 61% year-over-year and 30% sequentially, driven by high-performance computing products [10][11] Market Data and Key Metrics Changes - Datacom revenue was $278 million, showing a 2% sequential increase, while the year-over-year decline narrowed to 7% [10] - Automotive revenue grew 12% year-over-year but slightly declined sequentially as anticipated [5][11] - Industrial Laser revenue increased 10% year-over-year and 4% sequentially, contributing $41 million [11] Company Strategy and Development Direction - The company is focused on strategic capacity expansion, with the construction of Building 10, a 2 million sq ft facility, on track for completion by the end of 2026 [6][8] - The company is pursuing new opportunities across all business areas, particularly in telecom and high-performance computing [5][6] - The company aims to maintain execution excellence while scaling operations to meet increasing demand [6][8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining growth trends across all major business areas, with expectations for continued strong performance in Q3 [8][13] - The company anticipates revenue growth in telecom, datacom, and HPC, while expecting a modest decline in automotive revenue [13] - Management highlighted the importance of executing well to capture growth opportunities and maintain competitive advantages [17][52] Other Important Information - The company ended the quarter with cash and short-term investments of $961 million, with capital expenditures of $52 million reflecting ongoing construction and capacity enhancements [12] - The company repurchased over 12,000 shares at an average price of $387 per share during the quarter [12] Q&A Session Summary Question: HPC customer ramp and production lines - Management indicated they are a little more than halfway to fully ramping the HPC program, expecting revenue to exceed $150 million when fully ramped [16][17] Question: Co-packaged optics and optical circuit switches - Management confirmed they are working on co-packaged optics with three different customers and are excited about the potential of optical circuit switches [19][22] Question: Datacom transceivers supply constraints - Management acknowledged supply constraints in Datacom but noted progress with a second source for lasers, which should alleviate some issues [27] Question: Telecom revenue growth drivers - Management stated that the growth in telecom was primarily driven by DCI, with optimism about both satellite communications and core telecom systems [30][31] Question: New customer opportunities in telecom - Management is pursuing both existing and new customers, emphasizing their role as a pure contract manufacturer without competing products [43][44] Question: Capacity additions and timelines - Management confirmed that the Pinehurst campus is being repurposed to add 120,000 sq ft of manufacturing space, with strong demand from legacy customers [91][92]

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]

Q4 FY25 Performance - Revenue reached $480.7 million[9,10,11,13], a 16% increase QoQ[8] and a 67% increase YoY[8] - Non-GAAP gross margin was 37.8%[10], compared to 35.2% in Q3 FY25[10] and 27.8% in Q4 FY24[10] - Non-GAAP operating income was $72.3 million[10], resulting in a 15.0% operating margin[10] - Non-GAAP diluted EPS was $0.88[10], compared to $0.57 in Q3 FY25[10] and $(0.13) in Q4 FY24[10] Segment Performance - Cloud & Networking revenue was $424.1 million[11] - Industrial Tech revenue was $56.6 million[11] Key Growth Drivers - Strong cloud demand, particularly from hyperscale customers, drove revenue growth[8] - Cloud module shipments exceeded the 50% QoQ growth target[8] - EML business approximately doubled compared to Q4 FY24[8] Q1 FY26 Guidance (Non-GAAP) - Revenue is projected to be between $510 million and $540 million[13] - Operating margin is expected to be between 16.0% and 17.5%[13] - Diluted EPS is projected to be between $0.95 and $1.10[13]