Applied Optoelectronics

Full year 2025 revenue hit 476 million dollars, up 83 percent from the year before. Management is guiding to roughly 1 billion dollars in 2026, which would be another 120 percent jump. The fourth quarter alone brought in 134 million dollars, with gross margins climbing to 31 percent.

Microsoft is now their largest customer, and Amazon signed a performance-based deal that could be worth up to 4 billion dollars over time. Recent orders for 800G transceivers totaled 124 million dollars in just a few weeks. The 2026 guide includes a 12 percent adjusted operating margin, a huge swing from last year's loss.

The company posted a 13.6 million dollar net loss for 2025 and net margins are still negative at around 8 percent. Cash burn has been heavy as they expand factories, and the balance sheet only carries about 40 million dollars of net cash. If the build out costs more than expected, they may need to raise money on tough terms.

Their top ten customers make up 97 percent of revenue, with Digicomm and Microsoft alone accounting for over 80 percent. Back in 2017 they fumbled a similar transition and lost Meta as a customer. If even one big buyer slows orders or hits a delay, the impact would land hard.