Executive Summary

SemiLEDs delivered a step-change quarter: revenue jumped to $10.9M and GAAP EPS turned positive to $0.05, versus $1.3M revenue and $(0.08) EPS in Q1; however gross margin compressed to 9% from 21% sequentially .
Management’s forward-looking language highlights “revenue expectations for the third quarter ending May 31, 2025” and references “expedited timing of the recognition of revenue relating to the buy-sell purchase orders,” indicating timing-driven volatility and cost impacts around these transactions .
Balance sheet swung sharply: inventories rose to $13.5M and accrued expenses/other current liabilities to $15.1M; cash improved to $2.4M; stockholders’ equity increased to $3.6M (also enabling Nasdaq equity compliance) .
No quantified guidance was provided in the Q2 release; near-term catalysts include subsequent Q3 revenue acceleration ($17.7M) and product news around the “world’s smallest PPG sensor head,” which broaden the narrative but reinforce execution/margin visibility as key debates .

What Went Well and What Went Wrong

What Went Well
- Revenue inflected to $10.9M with a return to profitability: GAAP net income of $0.388M ($0.05 diluted EPS) versus a $(0.547)M loss in Q1 .
- Operating margin improved to 1% from negative 52% in Q1, reflecting scale leverage despite lower gross margin .
- Liquidity and equity improved: cash rose to $2.4M (from $1.2M) and stockholders’ equity to $3.6M (from $1.6M), supporting Nasdaq equity compliance .
What Went Wrong
- Gross margin fell to 9% from 21% sequentially, indicating mix and/or cost pressure amid the revenue surge .
- Working capital stress signals: inventories ballooned to $13.5M and accrued expenses/other current liabilities surged to $15.1M in Q2 .
- Visibility remains limited: the press release did not include quantified guidance ranges; forward-looking language referenced revenue expectations and buy-sell PO timing but no numbers, constraining estimate comparisons .

Financial Results

Metric	Q2 2024 (YoY)	Q4 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$0.886	$1.324	$1.261	$10.872
Gross Margin %	13%	12%	21%	9%
Operating Margin %	-94%	-62%	-52%	1%
Net Income (Loss) ($USD Millions)	$(0.559)	$(0.560)	$(0.547)	$0.388
Diluted EPS ($)	$(0.11)	$(0.08)	$(0.08)	$0.05
Cash & Equivalents ($USD Millions)	$1.613	$1.671	$1.248	$2.384

KPIs and Balance Sheet Drivers

KPI	Q2 2024 (YoY)	Q4 2024	Q1 2025	Q2 2025
Inventories ($USD Millions)	$3.751	$3.574	$3.722	$13.531
Accounts Payable ($USD Millions)	$0.179	$0.137	$0.340	$0.445
Accrued Exp. & Other Current Liabilities ($USD Millions)	$2.562	$2.936	$2.799	$15.063
Total Current Liabilities ($USD Millions)	$6.636	$7.022	$7.111	$17.974
Stockholders’ Equity ($USD Millions)	$3.044	$2.249	$1.580	$3.595
Basic & Diluted Shares (Millions)	4.905	7.203	7.212	7.222

Segment/Geographic breakdown: Not disclosed in the press release or 8-K exhibit for Q2 2025 .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	Q3 2025	N/A	No quantified guidance; forward-looking references “revenue expectations for the third quarter ending May 31, 2025” (no figures)	N/A
Other metrics (margins, OpEx, tax, segments)	Q3 2025	N/A	Not provided	N/A

Note: SemiLEDs provided quantified revenue guidance in the Q2 2024 press release (“~$1.0M +/-10%” for Q3 2024), but no quantified guidance was provided in the Q2 2025 materials .

Earnings Call Themes & Trends

Note: No Q2 2025 earnings call transcript is available in the filing/press document catalog (the catalog only contains transcripts from 2013–2014) .

Topic	Previous Mentions (Q-2: Q4 2024; Q-1: Q1 2025)	Current Period (Q2 2025)	Trend
Revenue trajectory/visibility	Q4’24: revenue $1.3M and margin compression; no guidance . Q1’25: revenue $1.3M; forward-looking note referenced Q2 revenue expectations/buy-sell PO timing (no figures) .	Revenue up to $10.9M; forward-looking references Q3 “revenue expectations” and expedited revenue recognition timing for buy-sell POs .	Up sharply; timing-driven volatility highlighted .
Gross margin/mix	Q4’24 gross margin 12% ; Q1’25 21% .	Gross margin 9% despite revenue surge .	Volatile; sequential compression .
Working capital	Q4’24 inventory $3.574M ; Q1’25 $3.722M .	Inventory spikes to $13.531M; accrued liabilities to $15.063M .	Build-up; significant liabilities increase .
Capital/Listing status	—	—	Company reports regaining Nasdaq equity compliance post-Q2 (equity $3.6M) .
Product initiatives	—	—	TSLC/SCIVAX unveil “world’s smallest PPG sensor head” during April; samples to begin in April .

Management Commentary

The Q2 press release emphasized the magnitude of the revenue and profit swing: “Revenue for the second quarter of fiscal 2025 increased to $10.9 million… GAAP net income… increased to $388 thousand, or $0.05 per diluted share…” .
Forward-looking language underscores timing dynamics: references to “revenue expectations for the third quarter ending May 31, 2025 [and] the expedited timing of the recognition of revenue relating to the buy-sell purchase orders” (and related estimated costs) frame near-term variability .
Balance sheet strength improved quarter-over-quarter: “cash and cash equivalents were $2.4 million at February 28, 2025, compared to $1.2 million at the end of the first quarter of fiscal 2025” .

Q&A Highlights

No Q2 2025 earnings call transcript was found in the document catalog; as such, no Q&A highlights or clarifications were available from a call. The only transcripts on record in the catalog are from 2013–2014 .

Estimates Context

S&P Global consensus appeared unavailable for LEDS in Q2 2025; we found no published EPS or revenue consensus figures to compare against the company’s actual results (Revenue $10.9M; EPS $0.05) .
Without published consensus, we cannot designate a beat/miss for Q2; subsequent Q3 actual revenue was $17.7M (also not assessable versus consensus) .

Values retrieved from S&P Global where applicable.*

Key Takeaways for Investors

Scale inflection but low margin: revenue surged to $10.9M with positive EPS, yet gross margin fell to 9%—investors should focus on mix/transaction economics and whether margins normalize as revenue scales .
Working-capital watch: inventories and accrued liabilities spiked materially in Q2; monitor cash conversion and liability unwinds in Q3/Q4 as the revenue ramp progresses .
Visibility remains limited: no quantified guidance and no call transcript reduce transparency; forward-looking language around buy-sell PO timing suggests continued quarterly volatility .
Balance sheet optics improving: equity rose to $3.6M, enabling Nasdaq equity compliance; liquidity improved to $2.4M—key for sustaining operations through ramp .
Product optionality: the PPG sensor head initiative (via TSLC/SCIVAX) adds an adjacent growth vector in health/wearables; watch for commercialization milestones and revenue contribution .
Post-quarter momentum: Q3 revenue increased further to $17.7M, but gross margin slipped to 5%; sustainability and margin trajectory are central to the medium-term thesis .

Appendix: Prior-Quarter Snapshots (for trend)

Q1 2025: Revenue $1.3M; GM 21%; Op margin -52%; Net loss $(0.547)M; EPS $(0.08); Cash $1.2M .
Q4 2024: Revenue $1.3M; GM 12%; Op margin -62%; Net loss $(0.560)M; EPS $(0.08); Cash $1.7M .

Citations:

Q2 2025 8-K/press release and financials
Q1 2025 press release/8-K
Q4 2024 press release/8-K
Q2 2024 8-K (for YoY)
Nasdaq compliance update
Product press releases (PPG sensor head)
Subsequent Q3 2025 press release

SemiLEDs Corp (LEDS)·Q2 2025 Earnings Summary