Applied Optoelectronics, Inc. (NASDAQ: AAOI) reported third-quarter 2025 revenue of $118.6 million, up 82% year-over-year, driven by record performance in its CATV segment. The company cited strong demand for its 1.8 GHz amplifier products and QuantumLink software, which helped offset lower datacenter revenue caused by shipping delays. GAAP gross margin reached 28%, while non-GAAP gross margin improved to 31%.
CEO Dr. Thompson Lin said the company is entering the final stages of 800G product qualification with several customers and expects meaningful shipments to begin in the fourth quarter. AOI plans to ramp 800G production capacity to about 100,000 units per month by year-end, with roughly 35% of manufacturing in its U.S. facility, which it expects will be the largest domestic production site for high-speed, AI-focused datacenter transceivers.
CFO Dr. Stefan Murry noted that robust CATV demand continues to offset variability in datacenter shipments and emphasized ongoing gross margin improvement. AOI projects fourth-quarter revenue between $125 million and $140 million and non-GAAP gross margin between 29% and 31%. The company anticipates narrowing its non-GAAP loss to between $0.13 and $0.04 per share.
• Q3 2025 revenue: $118.6 million, up from $65.2 million in Q3 2024
• Q3 non-GAAP gross margin: 31% (up 6 points year-over-year)
• Q3 non-GAAP net loss: $5.4 million ($0.09 per share)
• 800G product qualification in final stages with multiple customers
• Expected 800G capacity: 100,000 units/month by year-end (35% U.S. production)
• Q4 revenue guidance: $125–140 million with non-GAAP gross margin of 29–31%
“We continued to see strong demand in our CATV business, driven by the ramp of our 1.8 GHz amplifier products,” said Dr. Thompson Lin, Founder, President, and CEO of AOI. “We expect meaningful 800G shipments to begin in the fourth quarter.”
🌐 Analysis: AOI’s growth highlights the strength of its broadband access portfolio while it positions for entry into high-speed datacenter optics. The planned 100,000-unit monthly capacity for 800G transceivers—partly U.S.-based—aligns with increasing demand for AI infrastructure and the broader industry shift toward domestic photonics manufacturing. Competitors such as Coherent, Lumentum, and InnoLight are also scaling 800G and 1.6 Tbps platforms to meet hyperscaler demand.
Applied Optoelectronics recently expanded its manufacturing operations in Sugar Land, Texas, establishing what it says will be the largest U.S. production facility for high-speed, AI-focused datacenter transceivers. The expansion increases AOI’s domestic production capacity for 800G optical modules and complements its existing operations in Taiwan. The Texas site is designed to support advanced automated assembly and testing for datacenter optics, aligning with U.S. initiatives to strengthen semiconductor and photonics manufacturing supply chains. AOI expects the facility to contribute roughly 35% of its total 800G transceiver output by the end of 2025, positioning it as a key player in onshore optical component production for next-generation AI and cloud infrastructure.
