0001628280-26-031360
SEC filingRevenue declined slightly, gross margin contracted due to higher material costs, and operating loss widened amid increased R&D spending.
For the three months ended March 31, 2026, total revenue was $163.8 million, a decrease of $0.8 million or 0.5% compared to $164.6 million in the same quarter last year. The decline was primarily driven by a $7.7 million decrease in Power IC sales and a $2.8 million reduction in license and development services (the SiC technology license agreement having been completed in the prior year), partially offset by an $8.2 million increase in Power Discrete sales and a $1.4 million rise in packaging and testing services. The net increase in Power Discrete and Power IC product sales was attributed to a 4.1% increase in average selling price, partially offset by a 3.6% decrease in unit shipment due to a shift in product mix.
Gross profit decreased 1.8% to $34.5 million, and gross margin contracted 30 basis points to 21.1% from 21.4% in the prior-year quarter. The margin decline was primarily due to higher material costs and lower unit shipments.
Operating expenses increased to $48.6 million from $45.8 million, driven by an 11.3% rise in research and development expenses to $26.1 million, reflecting higher employee compensation, prototyping costs, and consulting fees, partially offset by lower depreciation and share-based compensation. Selling, general and administrative expenses were relatively flat at $22.5 million. As a result, operating loss widened to $14.1 million from $10.7 million in the prior-year quarter.
Net loss before income taxes and equity method investment was $12.6 million, compared to $10.4 million in the prior year. After income tax expense of $1.0 million and equity method investment loss of $0.2 million, net loss was $13.8 million, compared to $10.8 million in the prior-year quarter.
Revenue by end market showed mixed trends. Computing revenue increased to $80.4 million (49.1% of total revenue) from $78.8 million (47.9%) in the prior-year quarter, driven by notebook demand. Consumer revenue declined to $19.4 million (11.8%) from $21.5 million (13.0%), reflecting weakness in home appliances and gaming. Communication revenue grew to $33.7 million (20.6%) from $28.4 million (17.2%), supported by battery products. Power Supply and Industrial revenue decreased to $28.5 million (17.4%) from $32.8 million (19.9%), primarily due to lower power tools and quick charger demand.
Management did not provide specific forward guidance in the MD&A section. However, the company noted ongoing product diversification efforts, including development of new silicon and packaging platforms to expand serviceable available market. The company also highlighted the completion of the sale of a 20.3% equity interest in the JV Company for $150 million, with remaining installment of approximately $15.6 million expected to close in the near future. Management believes this provides additional capital for continued investment in technology, R&D, and complementary asset acquisitions. The company continues to monitor the potential impact of the Bermuda Corporate Income Tax Act and the One Big Beautiful Bill Act, though the latter was deemed immaterial for the current quarter.
For the nine months ended March 31, 2026, Alpha and Omega Semiconductor reported a net loss of $29.2 million, while cash used in operations was $6.3 million. The divergence is primarily due to non-cash charges: depreciation and amortization of $42.8 million, share-based compensation of $20.5 million, and deferred income tax benefits of $8.7 million. However, working capital changes consumed cash: accounts receivable increased $3.6 million, inventories rose $9.4 million, accounts payable declined $15.3 million, and accrued liabilities fell $11.3 million. These outflows more than offset the non-cash add-backs, resulting in negative operating cash flow.
Capital expenditure intensity increased sharply to $36.9 million (versus $22.8 million in the prior period), representing 5.9x operating cash flow (negative). The company generated $88.2 million from investing activities, largely due to $133.5 million in proceeds from sale of equity interest in a joint venture. Financing activities used $44.6 million, including $18.2 million for share repurchases and $22.4 million for debt repayments. No free cash flow is explicitly stated, but with negative CFO and elevated capex, free cash flow was deeply negative. The company ended the period with $190.7 million in cash, cash equivalents, and restricted cash, up $37.2 million from the beginning of the period, supported by the JV sale proceeds.