Fiscal first quarter of 2027
Filed Nov 5, 2026Revenue was $177.8 million, up 4.3% from the prior quarter and down 2.6% from the same quarter last year, while GAAP gross margin improved to 24.5%.
Sequential revenue and gross-margin improvement reduced losses, supported by AI and Server growth, but revenue declined from the same quarter last year and the company remained loss-making on both GAAP and non-GAAP bases.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Revenue, three months ended September 30, 2026GAAP | $177.8M | increase of 4.3% | decrease of 2.6% |
| Cost of goods sold, three months ended September 30, 2026GAAP | 134,258 | – | – |
| Gross profit, three months ended September 30, 2026GAAP | $43.50M | – | – |
| Gross margin, three months ended September 30, 2026GAAP | 24.5% | – | – |
| Non-GAAP gross profit, three months ended September 30, 2026non-GAAP | $44.83M | – | – |
| Non-GAAP gross margin, three months ended September 30, 2026non-GAAP | 25.2% | – | – |
| Research and development expense, three months ended September 30, 2026GAAP | 28,436 | – | – |
| Selling, general and administrative expense, three months ended September 30, 2026GAAP | 24,070 | – | – |
| Total operating expenses, three months ended September 30, 2026GAAP | $52.5M | – | – |
| Non-GAAP operating expenses, three months ended September 30, 2026non-GAAP | $45.9M | – | – |
| Operating loss, three months ended September 30, 2026GAAP | $9M | – | – |
| Non-GAAP operating income (loss), three months ended September 30, 2026non-GAAP | −$1M | – | – |
| Non-GAAP operating margin, three months ended September 30, 2026non-GAAP | (0.6)% | – | – |
| Other income (loss), net, three months ended September 30, 2026GAAP | (548) | – | – |
| Interest income, three months ended September 30, 2026GAAP | 899 | – | – |
| Interest expenses, three months ended September 30, 2026GAAP | (101) | – | – |
| Income tax expense, three months ended September 30, 2026GAAP | 1,536 | – | – |
| Equity method investment income (loss), three months ended September 30, 2026GAAP | 4,150 | – | – |
| Net loss, three months ended September 30, 2026GAAP | −$6.1M | – | – |
| Non-GAAP net income (loss), three months ended September 30, 2026non-GAAP | −$2.1M | – | – |
| Non-GAAP net margin, three months ended September 30, 2026non-GAAP | (1.2)% | – | – |
| Diluted net loss per share, three months ended September 30, 2026GAAP | $ (0.20) | – | – |
| Non-GAAP diluted net income (loss) per share, three months ended September 30, 2026non-GAAP | $ (0.07) | – | – |
| EBITDAS, three months ended September 30, 2026non-GAAP | $12,175 | – | – |
| Weighted average number of common shares used to compute GAAP diluted net loss per share, three months ended September 30, 2026GAAP | 30,286 | – | – |
| Weighted average number of common shares used to compute Non-GAAP diluted net income per share, three months ended September 30, 2026non-GAAP | 30,286 | – | – |
| Net cash provided by operating activities, three months ended September 30, 2026GAAP | $5.6M | – | – |
| Net cash provided by (used in) investing activities, three months ended September 30, 2026GAAP | (9,955) | – | – |
| Net cash used in financing activities, three months ended September 30, 2026GAAP | (1,459) | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| AI and ServerIncreasing demand for AI infrastructure. | over 20% of total company revenue | more than 65% sequentially | 250% year-over-year |
Fiscal Q2 Ending December 31, 2026 outlook
- Revenueapproximately $180 million, plus or minus $10 million
- Gross marginGAAP gross margin to be 25.1%, plus or minus 1%. We anticipate non-GAAP gross margin to be 25.7%, plus or minus 1%.
- Operating expensesGAAP operating expenses to be in the range of $52.0 million, plus or minus $1.0 million. Non-GAAP operating expenses are expected to be in the range of $46.0 million, plus or minus $1.0 million.
- NoteInterest income is expected to be $0.4 million higher than interest expense.
- NoteIncome tax expense to be in the range of $1.1 million to $1.3 million.
- NoteEstimated share-based compensation expense: 0.6%.
- NoteEstimated stock-based compensation expense: (6.0).
What drove it
- AI and Server revenue grew more than 65% sequentially and 250% year-over-year, reaching over 20% of total company revenue.
- Increasing demand for AI infrastructure drove AI and Server growth.
- Communications and Power Supply and Industrial performed strongly, including premium smartphone battery protection, Power Tools, and DC Fans.
- An improving business mix contributed to higher gross margins.
Concerns
- Revenue decreased 2.6% from the same quarter last year.
- GAAP net loss was $ (6.1) million and non-GAAP net loss was $ (2.1) million.
- Traditional PCs and consumer electronics remained weak.
- GAAP operating expenses increased to $52.5 million from $47.4 million in the same quarter last year.
- The company cited risks including semiconductor-industry conditions and seasonality, PC-market declines, distributor ordering patterns, tariff and trade policies, China operations, product performance, factory utilization, and its lack of control over the joint venture in China.
What to watch
- Fiscal Q2 revenue guidance of approximately $180 million, plus or minus $10 million.
- Fiscal Q2 GAAP gross-margin guidance of 25.1%, plus or minus 1%, and non-GAAP gross-margin guidance of 25.7%, plus or minus 1%.
- Fiscal Q2 GAAP operating-expense guidance of $52.0 million, plus or minus $1.0 million, and non-GAAP operating-expense guidance of $46.0 million, plus or minus $1.0 million.
- Whether AI and Server demand continues to offset weakness in traditional PCs and consumer electronics.
- The effect of continued investments in technology, manufacturing capacity, and targeted R&D on design wins, growth, and profitability.
Balance sheet and cash flow
- Cash and cash equivalents were $175.2 million at September 30, 2026, compared with $180.8 million at June 30, 2026.
- Restricted cash was 437 at September 30, 2026, compared with 654 at June 30, 2026.
- Short-term debt was 2,879 at September 30, 2026, compared with 3,094 at June 30, 2026.
- Long-term debt was — at September 30, 2026, compared with 537 at June 30, 2026.
- Inventories were 196,265 at September 30, 2026, compared with 201,384 at June 30, 2026.
- Accounts receivable, net were 53,250 at September 30, 2026, compared with 42,798 at June 30, 2026.
- Total assets were $960,776 at September 30, 2026, compared with $963,555 at June 30, 2026.
- Total liabilities were 160,436 at September 30, 2026, compared with 165,654 at June 30, 2026.
- Total shareholders' equity was 800,340 at September 30, 2026, compared with 797,901 at June 30, 2026.
- Net increase (decrease) in cash, cash equivalents and restricted cash was (5,773) for the three months ended September 30, 2026, compared with 70,432 for the three months ended September 30, 2025.
- Cash, cash equivalents and restricted cash at end of period was $175,652 for the three months ended September 30, 2026, compared with $223,930 for the three months ended September 30, 2025.
Analysis
AOS reported fiscal first-quarter revenue of $177.8 million, an increase of 4.3% from the prior quarter but a decrease of 2.6% from the same quarter last year. The sequential recovery was led by AI and Server, where revenue grew more than 65% sequentially and 250% year-over-year and reached over 20% of total company revenue. Management also cited strong performance in Communications and Power Supply and Industrial, including premium smartphone battery protection, Power Tools, and DC Fans, while traditional PCs and consumer electronics remained weak.
Profitability improved sequentially on gross-margin performance. GAAP gross margin was 24.5%, compared with 23.1% in the prior quarter and 23.5% in the same quarter last year. Non-GAAP gross margin was 25.2%, compared with 23.7% and 24.1%, respectively. Management attributed the improvement to business mix, and the results included $302 of typhoon-related loss and $581 of impairment of long-lived assets in the non-GAAP reconciliation.
Operating costs increased from the year-ago quarter. GAAP operating expenses were $52.5 million, versus $47.4 million, while non-GAAP operating expenses were $45.9 million, versus $41.4 million. GAAP operating loss narrowed sequentially to $9.0 million from $11.0 million, but widened from $4.6 million in the same quarter last year. Non-GAAP operating loss narrowed sequentially to $1.0 million from $4.8 million of operating loss, compared with $2.5 million of operating income a year earlier. GAAP net loss was $ (6.1) million and non-GAAP net loss was $ (2.1) million.
Cash generation turned positive sequentially, with $5.6 million of consolidated cash flows provided by operating activities compared with $10.0 million of cash flows used in operating activities in the prior quarter. The company closed the quarter with $175.2 million of cash and cash equivalents, while short-term debt was 2,879 and long-term debt was —. For fiscal Q2 ending December 31, 2026, AOS expects revenue of approximately $180 million, plus or minus $10 million, alongside GAAP gross margin of 25.1%, plus or minus 1%, and non-GAAP gross margin of 25.7%, plus or minus 1%.
The guide calls for GAAP operating expenses of $52.0 million, plus or minus $1.0 million, and non-GAAP operating expenses of $46.0 million, plus or minus $1.0 million. Management continues to invest in technology, manufacturing capacity, and targeted R&D to support new design wins and broader participation across global customers. The key reported tension is whether AI infrastructure and the cited industrial and communications applications can sustain mix and margin gains while traditional PC and consumer-electronics weakness persists.
Management, verbatim
Our September quarter results demonstrate the accelerating momentum in AI and Server, where revenue grew more than 65% sequentially and 250% year-over-year, reaching over 20% of total company revenue.
Stephen Chang, Chief Executive Officer
Despite continued weakness in traditional PCs and consumer electronics, our improving business mix contributed to higher gross margins and underscores the tangible progress we are making in transforming AOS into a higher-performance power semiconductor company.
Stephen Chang, Chief Executive Officer
These investments, combined with our total solutions strategy, position AOS to capture a larger share of emerging opportunities and drive more sustainable growth and profitability into 2027 and beyond.
Stephen Chang, Chief Executive Officer
Not in the filing
stated, not guessed- Prior-quarter free cash flow was not reported.
- Free cash flow was not reported.
- Capital-return activity, including share repurchases and dividends, was not reported.
- Formal reportable segment revenue was not reported.
- Revenue figures for Communications, Power Supply and Industrial, traditional PCs, and consumer electronics were not reported.
- Fiscal Q2 operating income or loss guidance was not reported.
- Fiscal Q2 net income or loss guidance was not reported.
- Fiscal Q2 EPS guidance was not reported.
- Fiscal Q2 tax-rate guidance was not reported.
- Previous-quarter outlook was not provided.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.