Applied Optoelectronics (0HGV.L) Q2 2024 Earnings Report

Applied Optoelectronics reported QQ2 2024 results ended 2024-06-30 with modest top-line growth but pronounced profitability and cash-flow headwinds. Revenue rose approximately 3.98% year over year to 43.27 million USD, aided by a mid-single-digit sequential improvement (QoQ revenue up ~6.39% as per provided QoQ data). However, the quarter delivered a substantial operating loss of 26.24 million USD and a net loss of 26.12 million USD, driven by elevated operating expenses (R&D 13.08M, SG&A 16.82M, and selling expenses of 5.91M) that overwhelmed the 9.46 million USD gross profit and an EBITDA of -19.36 million USD. Net debt stood at roughly 98.6 million USD, with a total debt load of 109.25 million USD against total assets of 348.04 million and stockholders’ equity of 186.49 million USD. Balance-sheet liquidity remained challenged: current ratio 1.64, quick ratio 0.97, and a cash balance of ~16.12 million USD at period end, implying limited cushion for ongoing losses without operating improvements or external funding. The results highlight a classic cycle for a capital-intensive optics semiconductor player: revenue although growing modestly, is not translating into near-term profitability due to high fixed and semi-fixed costs, inventory and receivable intensity, and a negative cash conversion cycle pressure. Management commentary (where available) would be critical to understanding their path to improved margins, potential program wins, and capital allocation priorities. In the near term, investors should monitor the company’s ability to reduce operating expenses, optimize working capital, and de-lever the balance sheet while sustaining revenue momentum from its fiber-optic networking product portfolio.