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SEC filingQ1 revenue grew 20.1% to $213.5M with gross margin expanding to 59.5%, signaling scale benefits from higher volumes, though operating loss of $17.1M persisted amid elevated costs.
Revenue increased 20.1% year-over-year to $213.5 million in Q1 FY2026 from $177.7 million, driven by higher shipment volumes amid varying product mix and pricing dynamics. As noted in management discussion, revenues vary period-to-period due to shipment timing, product mix, and pricing decisions, which contributed to this rebound and enabled gross margin expansion.
Gross profit rose 29.9% to $127.0 million, lifting the gross margin to 59.5% from the prior year's level. This improvement occurred as indirect and overhead expenses decreased as a percentage of revenues, leveraging the topline growth to absorb fixed costs more effectively. Such margin leverage underscores operational scale benefits from increased activity, even as average selling prices fluctuate with product mix shifts.
Operating income showed marked improvement, with the loss narrowing 46.8% to -$17.1 million from -$32.1 million, translating to an operating margin of -8.0%. While topline and gross profit gains provided tailwinds, this reflects ongoing cost pressures inherent in the semiconductor cycle. Net income was -$15.9 million, with diluted EPS at -$0.48, a 48.9% improvement from -$0.94, aligning with the operating trajectory.
Cash flow dynamics shifted, with net cash from operating activities at $4.9 million versus $48.1 million prior year, primarily due to working capital outflows tied to inventory and receivables fluctuations. Inventory levels vary with supply availability and demand forecasting variances, impacting cash conversion. Capital expenditures rose to $9.8 million from $4.9 million, yielding negative free cash flow of -$4.9 million. Management's focus on preserving investment capital guided liquidity deployment, bolstered by net purchases, sales, and maturities of marketable securities plus government incentives.