Applied Optoelectronics Inc (0HGV.L) reported QQ3 2024 revenue of $65.15 million, up 50.57% QoQ from Q2 2024 and 4.16% year over year. The quarter delivered a meaningful sequential revenue uptick, likely reflecting seasonal demand in fiber-optic networking products and continued customer activity in data-center solutions. Yet, profitability remained negative, with gross profit of $15.92 million and a gross margin of 24.43%, while operating income and net income printed at negative levels: operating loss of $16.55 million and net loss of $17.76 million, corresponding to an operating margin of -25.40% and net margin of -27.25%. EBITDA was -$10.82 million, underscoring ongoing cost discipline challenges in a subdued margin environment.
From a cash-flow perspective, operating cash flow was negative at -$14.44 million, contributing to a free cash flow of -$20.50 million for the quarter. The company supplemented liquidity through financing activities, which generated +$49.37 million largely via common stock issuance, lifting the cash balance at period end to $41.37 million. The balance sheet remains asset-rich but debt-laden: total assets of $409.97 million, total debt of $111.38 million, and net debt of $77.26 million. Retained earnings sit at a sizable negative $332.16 million, while total stockholders’ equity stands at $212.09 million, implying meaningful accumulated losses but a tangible equity base to support ongoing operations and potential dilution if further funding is required.
Overall, the QQ3 2024 results show revenue resilience on a QoQ basis but a continuation of profitability and cash-flow headwinds. Investors should weigh the near-term liquidity flexibility provided by equity financing against the ongoing need to scale revenue meaningfully and achieve margin expansion to convert cash burn into positive free cash flow.