Customers Receive Power Solutions from Alpha and Omega Semiconductor, Yet Shareholders Remain Unsatisfied
In a recent financial report, Alpha and Omega Semiconductor Limited (NASDAQ: AOSL) has revealed increased revenue but substantial net losses for the fiscal year ended June 30, 2025.
The company's fourth quarter revenue reached $176.5 million, an increase of 9.4% year-over-year and 7.2% quarter-over-quarter. The full fiscal year revenue stood at $696.2 million, a 6.1% increase year-over-year. However, the net loss widened sharply to $77.1 million in Q4 and $97.0 million for the full fiscal year.
Despite the losses, the company demonstrated operational strengths. The CEO highlighted record AI and graphics revenue growth, and momentum in wearables and PCs driven partly by tariff-related purchasing pull-ins. The non-GAAP earnings per share beat expectations with a positive $0.02 versus a predicted loss, and gross margins remained stable though slightly down from the previous year (~24.4% non-GAAP gross margin in Q4). Cash and cash equivalents stood at $153.1 million at quarter-end.
Looking ahead, Alpha and Omega Semiconductor projects continued revenue growth in the upcoming quarter (September 2025) with anticipated revenue of about $183 million (+/- $10 million) supported by seasonal strength in communications and steady demand in PCs and wearables. Expected GAAP gross margin is around 23.8% (+/-1%) with non-GAAP about 24.4% (+/-1%).
Here's a summary of the key metrics:
| Metric | Q4 FY 2025 | FY 2025 | Outlook Q1 FY 2026 | |-----------------------------|---------------------|--------------------|-----------------------------| | Revenue | $176.5 million (+9.4% YoY) | $696.2 million (+6.1% YoY) | $173-$193 million | | Net Income (Loss) | -$77.1 million | -$97.0 million | Not specified (positive signs) | | EPS (Non-GAAP) | $0.02 | N/A | Not specified | | Gross Margin (Non-GAAP) | 24.4% | N/A | ~24.4% ±1% | | Cash & Cash Equivalents | $153.1 million | N/A | N/A |
While the recent widening losses have pressured the stock (down ~29% YTD), improving revenue trends, strong segment performance in AI, graphics and wearables, and a positive near-term outlook indicate potential for financial recovery and growth in these high-performance applications for power semiconductors.
The company operates with $27 million in debt, resulting in net cash holdings of about $9 per share based on a share tally of 30 million shares. The sale of a 20.3% equity interest in the Chongqing JV in China, received a $150 million cash payment, roughly doubling the cash position to $303 million.
Over the past decade, the company's revenues more than doubled to a high of $777 million, but have been stagnant at around $700 million since then. The business has been uneconomical for quite a long period of time, driving the long-term mixed performance of the business. The company's revenue base is primarily tied to computing markets, accounting for 50% of sales, with power supply, communications, and consumer markets each making up between 15% and 20% of sales.
Shares of Alpha and Omega Semiconductor Limited have shown significant volatility over the past decade, with a $10 stock in 2020 reaching highs around $60 in 2022, but subsequently plunging to $20 in 2024 and currently trading at $25. The company's gross margins of 23% last year were not sufficient to cover overall corporate costs.
Alpha and Omega Semiconductor Limited designs, develops, and supplies a range of discrete power devices for various customer applications. The company reported a $28 million GAAP loss in the same year, and the sales multiple is just 0.7 times, in relation to a near $700 million revenue business. The operating assets of the business are valued at around $16 per share, for a market valuation of just below a half-billion.
[1] Alpha and Omega Semiconductor Limited Press Release, August 2025 [2] Alpha and Omega Semiconductor Limited Investor Relations, Q4 2025 Earnings Call Transcript [3] Seeking Alpha Analysis, Q4 2025 Earnings Call Transcript [4] Yahoo Finance, Alpha and Omega Semiconductor Limited Q4 2025 Earnings Report [5] MarketWatch, Alpha and Omega Semiconductor Limited Q4 2025 Earnings Report
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