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ALPHA & OMEGA SEMICONDUCTOR Ltd (AOSL)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 FY2025 revenue was $164.6M (+9.7% y/y, -4.9% q/q) with GAAP gross margin at 21.4% and non-GAAP gross margin at 22.5%; non-GAAP EPS was -$0.10, at the high end of guidance driven by Computing strength and tablet demand .
  • Against S&P Global consensus, revenue beat by ~$7.4M and primary EPS beat by ~$0.07; EBITDA came in below consensus, reflecting lower licensing/engineering revenue in the quarter. Bold beats: revenue and EPS; miss: EBITDA (Values retrieved from S&P Global)*.
  • June quarter (Q4 FY2025) guidance: revenue ~$170M ± $10M; GAAP GM ~22.9% (non-GAAP ~24.0%); GAAP OpEx ~$47.1M (non-GAAP ~$40.2M), with margin rebound driven by product mix and higher utilization .
  • Segment mix: Computing 47.9% of revenue (+14.8% y/y, +3.6% q/q), Communications 17.2% (+5.8% y/y, -14.4% q/q), Power Supply & Industrial 19.9% (+32.4% y/y, -6.2% q/q), Consumer 13.0% (-9.0% y/y, -4.9% q/q) .
  • Stock reaction catalysts: continued AI/graphics card momentum (record expected in Q4), BOM content gains with multiphase controllers/power stages, and tariff-related PC pull-ins; watch for margin trajectory, licensing wind-down, and smartphone demand mix .

What Went Well and What Went Wrong

What Went Well

  • “Our fiscal Q3 results were at the high-end of our guidance, supported by strength in Computing and better-than-expected demand in tablets.” — CEO Stephen Chang .
  • Computing segment grew nearly 15% y/y and 3.6% q/q, aided by tablet strength and notebook pull-ins amid tariff uncertainty; graphics/AI accelerator demand remained robust with a key customer scaling next-gen platform .
  • Design win secured in a data center application with notable BOM content increase; volume production began in March quarter and continues into June, underpinning total solutions strategy (controller + multiple power stages) .

What Went Wrong

  • Gross margin compression: GAAP GM fell to 21.4% (from 23.1% q/q; 23.7% y/y) and non-GAAP GM to 22.5% (from 24.2% q/q; 25.2% y/y), mainly from the wind-down of licensing/engineering revenue .
  • Communications saw a seasonal 14.4% q/q decline (Tier-1 U.S. smartphone) and China expected slower sales into June; visibility in H2 2025 remains limited due to macro/trade uncertainties .
  • Non-GAAP operating swung to a loss (-$2.7M vs +$3.0M q/q) and non-GAAP EPS to -$0.10 vs +$0.09 q/q; operating cash flow fell to $7.4M with customer deposit repayments of $9.6M .

Financial Results

Key Financials vs Prior Year and Prior Quarter

MetricQ3 2024Q2 2025 (Dec 31, 2024)Q3 2025 (Mar 31, 2025)
Revenue ($M)$150.1 $173.2 $164.6
GAAP Gross Margin (%)23.7% 23.1% 21.4%
Non-GAAP Gross Margin (%)25.2% 24.2% 22.5%
GAAP Operating Income (Loss) ($M)($10.5) ($5.9) ($10.7)
Non-GAAP Operating Income (Loss) ($M)($1.1) $3.0 ($2.7)
GAAP Net Income (Loss) ($M)($11.2) ($6.6) ($10.8)
GAAP Diluted EPS ($)($0.39) ($0.23) ($0.37)
Non-GAAP Diluted EPS ($)($0.04) $0.09 ($0.10)
Cash & Equivalents ($M)—$182.6 $169.4
Operating Cash Flow ($M)—$14.1 $7.4

Trend Table (Last 3 Quarters)

MetricQ1 2025 (Sep 30, 2024)Q2 2025 (Dec 31, 2024)Q3 2025 (Mar 31, 2025)
Revenue ($M)$181.9 $173.2 $164.6
Non-GAAP Gross Margin (%)25.5% 24.2% 22.5%
Non-GAAP Diluted EPS ($)$0.21 $0.09 ($0.10)

Consensus vs Actuals (S&P Global)

MetricQ3 2025 ConsensusQ3 2025 Actual
Revenue ($M)$157.2*$164.6
EPS (Primary, $)($0.17)*($0.10)
EBITDA ($M)$9.0*$7.6*

Values retrieved from S&P Global*.

Segment Mix and Growth

SegmentMix (% of Revenue)YoY GrowthQoQ GrowthNotes
Computing47.9% +14.8% +3.6% Tablet demand nearly doubled y/y; notebook pull-ins on tariffs; graphics/AI cards strength .
Consumer13.0% -9.0% -4.9% Seasonality in gaming/home appliances; wearables pullback after record Q3 CY2024 .
Communications17.2% +5.8% -14.4% Tier-1 U.S. seasonal decline; mix shift to higher-end China phones increases charging current/BOM content .
Power Supply & Industrial19.9% +32.4% -6.2% Quick chargers seasonally down; e-mobility and AC-DC grew q/q; server rack DC fan opportunity .

Product Mix (Q3 FY2025)

CategoryRevenue ($M)QoQYoY
DMOS$106.8 -5.4% +13.9%
Power IC$54.6 +1.6% +9.2%
License & Engineering$2.8 $5.4M → $2.8M (ended mid-February) $5.1M → $2.8M
Assembly Services & Other$0.4 $1.1M → $0.4M $1.2M → $0.4M

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($M)Q3 FY2025~$158 ± $10 Actual: $164.6 Achieved high end
GAAP Gross Margin (%)Q3 FY2025~21.5% ±1 Actual: 21.4% In line
Non-GAAP Gross Margin (%)Q3 FY2025~22.5% ±1 Actual: 22.5% Met
GAAP OpEx ($M)Q3 FY2025~$46.5 ± $1 Actual: $45.8 Slightly better
Non-GAAP OpEx ($M)Q3 FY2025~$39.5 ± $1 Actual: $39.7 Slight uptick
Revenue ($M)Q4 FY2025—~$170 ± $10 New
GAAP Gross Margin (%)Q4 FY2025—~22.9% ±1 New
Non-GAAP Gross Margin (%)Q4 FY2025—~24.0% ±1 New
GAAP OpEx ($M)Q4 FY2025—~$47.1 ± $1 New
Non-GAAP OpEx ($M)Q4 FY2025—~$40.2 ± $1 New
Interest Expense vs IncomeQ4 FY2025—~Equal New
Income Tax Expense ($M)Q4 FY2025—~$0.9–$1.1 New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 FY2025)Current Period (Q3 FY2025)Trend
AI/Graphics Cards BOM ContentNew platform ramp, expected BOM content increase; contender in data center design-ins; backlog improving .Robust demand; record graphics expected in June; data center design win with higher power stage count; shipments begun .Improving momentum
Supply Chain/TariffsExpect seasonal declines; watch pricing pressure; limited visibility; tariff uncertainty pulling in PC demand .Minimal direct U.S. tariff exposure; customers pulling in notebooks; monitoring compliance; visibility limited in H2 .Mixed risk; manageable direct exposure
Product Performance (Tablets/Notebooks)Seasonal strength in Q1 across PCs; slight Q2 growth in desktops/graphics, seasonal notebook/tablet decline .Tablets nearly doubled y/y; notebooks benefited from tariff-related pull-ins; computing slightly up q/q .Strength vs seasonality
Regional Smartphone TrendsMix shift to premium China phones; Tier-1 U.S. prepared for launches; low double-digit decline expected Q2→Q3 .Seasonal U.S. Tier-1 decline; flattish June guided with U.S./Korea up, China slower .Normalizing seasonality with mix tailwinds
R&D Execution/CapacityBuilding third-party foundry partnerships; mapping capacity for growth .Internal utilization ~80–90%; JV ~20% of supply; added foundry partners; capacity available for growth .Capacity in place
Data Center Power InnovationsPositioning Vcore and power stages for AI/data centers .Launch of 48V hot swap MOSFET for AI servers (AOTL66935) expanding AI server portfolio .Expanding offerings

Management Commentary

  • “Looking ahead, we remain focused on executing our strategy to become a total solutions provider, expanding market share and increasing BOM content across high-growth verticals.” — CEO Stephen Chang .
  • “For the June quarter margin guidance, we factored in better product mix… and higher utilization at our factories. Both factors contributed to the margin rebound.” — CFO Yifan Liang .
  • “In Q1, we broadened our penetration… secure a design win in one data center application with a notable increase in BOM content… multiphase controllers and multiple power stages per GPU.” — CEO Stephen Chang .

Q&A Highlights

  • PC pull-ins magnitude: demand uplift tied to tariff dynamics; beat midpoint by ~$6M with ~half from notebooks; continued pull-ins expected into June .
  • Tariff exposure: minimal direct U.S. shipments; monitoring multi-country compliance; working with customers to minimize disruptions .
  • Margin trajectory: improvement driven by product mix and higher factory utilization despite licensing wind-down .
  • Capacity/utilization: internal utilization ~80–90%; JV ~20% of supply; expanding third-party foundries to support expected growth .
  • AI accelerators/data center: shipping across performance tiers; record graphics expected in June; initial data center shipments started; low-voltage solutions directly powering GPUs (multiphase controllers + multiple power stages) .

Estimates Context

  • Q3 FY2025 vs consensus (S&P Global): revenue $164.6M vs $157.2M*, EPS (Primary) -$0.10 vs -$0.17*, EBITDA $7.6M* vs $9.0M*. Bold: revenue and EPS beat; EBITDA miss. Drivers: tablet outperformance, notebook pull-ins, strong graphics/AI cards; margin pressure from lower licensing/engineering . Values retrieved from S&P Global*.
  • Potential estimate revisions: upward for Q4 revenue/graphics contribution and non-GAAP GM approaching December levels; cautious on smartphones China and licensing wind-down impact on margin mix .

Key Takeaways for Investors

  • Computing resilience and AI/graphics momentum are near-term catalysts; record graphics revenue expected in Q4 with BOM content gains reinforcing the total solutions thesis .
  • Margin inflection expected in Q4 on mix and utilization despite licensing wind-down; watch non-GAAP GM path back toward ~24–25% .
  • Smartphone mix (higher charging currents, premium China) supports BOM content, but regional dynamics may temper sequential growth; June guided flattish for Communications .
  • Capacity headroom (internal 80–90% utilization, JV ~20% supply, added foundries) supports scaling with AI/data center opportunities .
  • Cash balance remains robust ($169.4M) with manageable deposit refunds; capex stepping up to $12–$14M in June to support growth (target ~6–8% of revenue annually) .
  • Note metric definitions: press release/8-K present “EBITDAS” ($15.2M) vs transcript “EBITDA” (~$11.2M), reflecting different add-back conventions; align comparisons accordingly .
  • Risk monitor: tariff/trade policy evolution (PC pull-ins durability), H2 visibility, pricing pressure; offset by product pipeline (e.g., 48V hot swap MOSFET for AI servers) and deeper customer integration .