Alpha and Omega Semiconductor Limited (AOSL) reported fiscal Q2 2025 revenue of $173.2 million, up 4.8% year over year but down 4.8% sequentially. Non-GAAP gross margin was 24.2%, modestly below the prior quarter’s 25.5% and markedly below the mid- to high-20s target levels historically achieved, with non-GAAP EPS of $0.09. GAAP gross margin was not disclosed in the transcript extract, but GAAP operating income remained negative at approximately $5.9 million, underscoring ongoing sensitivity to ASP erosion, mix, and seasonality. The company reiterated that calendar 2024 revenue grew 4.1% year over year as inventory digested and that 2025 would continue to experience seasonal softness in the March quarter before margin and revenue recoveries take hold.
Management framed 2025 as a transition year toward becoming a total solutions provider, leveraging high-performance silicon, packaging, and intelligent ICs to deepen BOM content with premier customers across computing, communications, AI, graphics, and wearables. AOSL highlighted a two-pronged AI opportunity: (1) AI acceleration cards and graphics cards with expanded power stages and multi-phase controllers, and (2) AI data-center solutions on servers with mid-year launch potential. The company signaled modest near-term growth in AI-related content and expects the March quarter to show a low-teens sequential decline in revenue for the Power Supply and Industrial segment and a small decline in Computing amid seasonality. Importantly, AOSL maintains a strong balance sheet with about $182.6 million in cash and an implicit net cash position (net debt around -$123 million), supporting ongoing R&D investment and capital expenditures while funding strategic growth initiatives.
Looking ahead, management provided March-quarter guidance of approximately $158 million in revenue with GAAP gross margin around 21.5% (non-GAAP about 22.5%), and non-GAAP operating expenses near $39.5 million. They view ASP erosion in 2025 as mid-to-high single digits on a product basis, with ongoing new product introductions intended to counteract pricing pressure and to restore gross margins toward historical levels once the AI/content ramp materializes. The strategic roadmap emphasizes expanding BOM content through AI, graphics, and smartphone charging, along with opportunities in e-mobility and server infra, while monitoring macro risk factors such as tariff dynamics and content licensing wind-downs. Investors should monitor AI program progression, realized content in data-center deployments, ASP trajectory, utilization uplift at internal and external foundries, and the pace of margin recovery as major drivers of value over the next 12–24 months.