Applied Optoelectronic Posts Record Revenue Growth Amid Rising Capital Expenditures and Share Dilution
Applied Optoelectronics (AAOI) reported $191.9 million in Q2 2026 revenue, marking an 86% year-over-year increase and its fifth consecutive record quarter. The company guided for approximately 130% annual growth at the midpoint of its third-quarter forecast. Despite strong demand for high-speed transceivers used in AI infrastructure, AAOI's capital expenditures surged to $575 million during Q2 alone, driven by a significant expansion of production capacity. Free cash flow turned sharply negative at -$563.7 million—the worst since 2024—due largely to these investments. The company also nearly doubled its weighted average diluted shares outstanding from 42.3 million in late 2024 to 81.6 million by June 2026, primarily through two at-the-market equity programs totaling over $538 million raised so far. CFO Stefan Murry and SVP Joshua Yeh sold company stock during a period when the share price dropped about 35% from its late-June peak despite rising analyst price targets averaging around $163 by mid-September.
Tickers: $AAOI
Topics: capital investments executive stock sales free cash flow revenue share dilution