Alpha And Omega Semiconductor Reports $177.8 Million Sales — AI Growth Narrows Quarterly Loss
AI and servers are now about 20% of revenue, but traditional PC weakness is expected to outweigh their growth within Computing.
Alpha and Omega Semiconductor, which designs and supplies chips that control electricity in electronic products, reported $177.8 million sales for the September quarter Thursday as a stronger AI business helped lift margins and narrow its loss from the June quarter. The unaudited results showed revenue rising 4.3% from the previous quarter but falling 2.6% from a year earlier.
AI Gains Meet A PC Retreat
AI and servers accounted for approximately 20% of sales, compared with 5.5% a year earlier, according to management's prepared earnings remarks. Alpha and Omega Semiconductor Chief Executive Officer Stephen Chang said in the earnings release that revenue in those applications “grew more than 65% sequentially and 250% year-over-year, reaching over 20% of total company revenue.”
The broader Advanced Computing business, which also includes graphics cards, delivered nearly 23% of company revenue. Its sales increased more than 50% from June and 80% from a year earlier, while traditional PC-related sales fell approximately 30% from June. Chang blamed higher memory costs and component shortages for weaker PC demand.
The combined Computing segment still declined: its $83.2 million revenue was down 2.0% from June and 14.3% from a year earlier. Consumer revenue fell to $16.1 million, down 22.9% from June and 31.4% year over year, with lower shipments for appliances, gaming and wearables.
Alpha and Omega's power chips serve products ranging from computers and servers to smartphones, appliances and power tools. Computing remains its largest market; the company sells primarily through distributors and operates a wafer plant in Hillsboro, Oregon, with packaging and testing in Shanghai.
Other businesses helped counter the declines. Communications sales reached $37.8 million, up 15.0% from June and 15.8% year over year, helped by battery-protection chips for a major U.S. smartphone customer. Power Supply and Industrial sales rose 29.2% from June and 38.8% year over year to $38.7 million; stronger power-tool demand and server-cooling fans contributed.
Better Margins, But Still A Loss
Gross margin—the portion of revenue left after product costs—reached 24.5%, versus 23.1% in June and 23.5% a year earlier. Adjusted gross margin reached 25.2%, compared with 23.7% and 24.1%, respectively. Management attributed the improvement to a better product mix.
Operating expenses increased to $52.5 million from $50.3 million in June and $47.4 million a year earlier. The operating loss narrowed to $9.0 million from $11.0 million in June, but exceeded the year-earlier $4.6 million loss.
The net loss was $6.1 million, versus $13.1 million in June and $2.1 million a year earlier. On an adjusted basis, the company lost $2.1 million, or $0.07 per share, compared with a $0.13 per-share loss in June and a $0.13 profit a year earlier.
AOSL shares soared about 19% to $22.03 in Friday trading, following Thursday's after-market announcement.
December Growth Beyond Computing
Management expects December-quarter revenue of approximately $180 million, plus or minus $10 million. Gross-margin forecasts are 25.1% under standard accounting and 25.7% adjusted, each plus or minus 1%.
Advanced Computing is expected to set another quarterly revenue record, but PC weakness is expected to more than offset that growth within Computing. Management expects Communications to grow about 15% from September and Power Supply and Industrial to grow under 10%, while Consumer stays roughly flat.
Operations generated $5.6 million cash, reversing June's $10.0 million outflow. Cash ended September at $175.2 million, versus $180.8 million in June. Capital spending was $9.2 million, with $12 million to $14 million expected in December.
The company's joint-venture stake fell from 18.9% to 15.1% after the majority shareholder injected approximately $344 million and the venture retired smaller shareholders' interests. Alpha and Omega recognized a $4.0 million gain, excluded from adjusted earnings.
The December outlook depends on growth outside traditional PCs: management does not expect a near-term PC recovery.
Sources
- 8-K Filing — ALPHA & OMEGA SEMICONDUCTOR Ltd (AOSL) — SEC EDGAR
- Exhibit exhibit991earningreleasese.htm — ALPHA & OMEGA SEMICONDUCTOR Ltd 8-K exhibit — SEC EDGAR
- Exhibit exhibit992earningreleasese.htm — ALPHA & OMEGA SEMICONDUCTOR Ltd 8-K exhibit — SEC EDGAR
- Alpha & Omega Q1 2027 Earnings Call Transcript — benzinga.com
- Alpha and Omega: Fiscal Q1 Earnings Snapshot | wusa9.com — Associated Press
- Alpha and Omega Semiconductor to Announce Fiscal First Quarter Financial Results on November 5, 2026 – Company Announcement - FT.com — Financial Times
- Alpha and Omega Semiconductor Reports Financial Results for the Fiscal First Quarter of 2027 Ended September 30, 2026 — businesswire.com
