Alpha and Omega Semiconductor NASDAQ: AOSL reported fiscal 2026 fourth-quarter revenue above the midpoint of its guidance, as growth in advanced computing and communications helped offset softer demand in traditional PCs and gaming applications.
Revenue for the June quarter totaled $170.4 million, up 4% sequentially but down 3.5% from a year earlier. The company posted a non-GAAP gross margin of 23.7%, up from 21.7% in the prior quarter, while non-GAAP earnings per share were a loss of $0.13, improving from a loss of $0.28 in the March quarter. A year earlier, the company reported non-GAAP earnings of $0.02 per share.
CEO Stephen Chang said advanced computing, including artificial intelligence and server applications, remained the company’s strongest business area. He said demand in those markets and in communications offset weakness in traditional PCs, where higher memory costs have pressured demand, as well as lower gaming revenue in the consumer segment.
Advanced Computing Gains Share
Computing revenue represented 49.8% of total quarterly revenue. The segment rose 5.6% sequentially but declined 8.6% year over year. Within computing, advanced computing revenue increased 35% from the prior quarter and reached a record 31% of segment revenue.
Chang attributed the advanced-computing growth to AI, server, workstation and cloud applications. The company’s medium-voltage MOSFET products are seeing expanding demand across AI and cloud infrastructure, according to Chang, with engagement from power-supply providers, module makers, original design manufacturers, cloud service providers and hyperscale customers.
For the September quarter, the company expects advanced computing revenue to rise more than 40% sequentially. Its AI and server business alone is projected to increase more than 60% sequentially and account for the majority of advanced computing revenue. Advanced computing is expected to exceed 40% of computing segment revenue and approach 20% of total company revenue.
That growth is expected to offset continued weakness in traditional PCs, producing roughly flat sequential results for the overall computing segment. Chang said customers are dealing with memory and CPU shortages, making the September quarter an adjustment period for the PC business. The company was not expecting another correction in the December quarter, though Chang said visibility remains unclear because of the memory market.
Chang also said AI-related products carry stronger pricing and margins because they are high-performance, performance-critical products with less competition. The company is expanding medium-voltage manufacturing capacity and increasing research and development investment for next-generation AI infrastructure.
Segment Trends Were Mixed
The consumer segment accounted for 12.3% of revenue and rose 8% sequentially, though it was down 21.3% from the prior-year period. Broad-based quarterly growth in gaming, wearables and home appliances exceeded the company’s expectations for a relatively flat quarter. However, the year-over-year decline reflected lower gaming revenue as the current console cycle approaches maturity.
For the September quarter, Alpha and Omega expects consumer revenue to decline about 25% sequentially, primarily due to lower sales in home appliances, wearables and gaming.
Communications revenue accounted for 19.3% of total revenue, rising 22.3% year over year and declining 2.3% sequentially. Seasonally lower battery protection circuit module shipments ahead of smartphone model transitions were largely offset by growth in DC/DC modules and networking applications.
The company expects communications revenue to increase approximately 10% sequentially in the September quarter as new products ramp with a Tier 1 U.S. smartphone customer. Chang said the company is prioritizing premium smartphone platforms, where battery-protection solutions supporting higher charging currents can increase content per device. He noted that lower-end smartphone markets remain more challenging amid elevated memory pricing and supply constraints.
Power supply and industrial revenue, which represented 17.6% of total revenue, increased 5.2% sequentially and 1.4% year over year. Growth in e-mobility and DC fans tied to AI server demand was partly offset by declines in quick chargers and AC/DC power supplies. The company expects the segment to increase nearly 30% sequentially in the September quarter, supported by demand for power tools, DC fans for AI server racks, quick chargers and AC/DC power supplies.
Margins, Spending and Balance Sheet
CFO Yifan Liang said the 200-basis-point sequential improvement in June-quarter non-GAAP gross margin was driven primarily by product mix, with utilization and operating factors providing a smaller contribution. The company expects non-GAAP gross margin of 24.5%, plus or minus 1 percentage point, in the September quarter, reflecting further mix improvement as well as an allowance for weather-related manufacturing disruption.
Non-GAAP operating expenses were $45.3 million in the June quarter, up from $44.3 million in the March quarter, mainly because of higher R&D spending. The company expects non-GAAP operating expenses of $46.5 million, plus or minus $1 million, for the September quarter. Liang said additional hiring and investment are focused on AI and total-solution opportunities in PCs and smartphones, with some modest expense growth still possible after September. Chang said most of the planned step-up in R&D investment is expected to occur during calendar 2026, followed by more normal organic growth next year.
Operating cash flow was negative $10 million, compared with negative $8.3 million in the prior quarter. The company ended the June quarter with $180.8 million in cash, down from $190.3 million at the end of the March quarter. During the quarter, it received the final $15 million installment payment related to, and completed, the $150 million sale of its joint-venture equity.
September Outlook Includes Flooding Impact
For the September quarter, Alpha and Omega forecast revenue of approximately $176 million, plus or minus $10 million. It projected GAAP gross margin of 23.8%, plus or minus 1 percentage point, and non-GAAP gross margin of 24.5%, plus or minus 1 percentage point. Capital expenditures are expected to range from $15 million to $17 million.
The outlook incorporates an estimated impact of a few million dollars in revenue and some margin pressure from Typhoon Dolphin and flooding in Shanghai that affected portions of the company’s packaging operations. Chang said the company expects a slight impact during the September quarter and is working to restore capacity, minimize customer disruption and recover delayed business in subsequent quarters.
About Alpha and Omega Semiconductor (NASDAQ:AOSL)
Alpha and Omega Semiconductor Limited NASDAQ: AOSL is a designer and supplier of power semiconductor components used in power management applications across a range of electronic systems. The company offers a broad portfolio of discrete and integrated power devices, including power MOSFETs, rectifiers, voltage regulators, and power management ICs. These products are optimized for high efficiency, compact form factors and thermal performance, catering to the growing demands of energy-sensitive applications in computing, consumer electronics, communications and industrial markets.
Since its founding in 2000, Alpha and Omega Semiconductor has leveraged in-house design expertise and strategic partnerships with manufacturing facilities to deliver scalable, high-volume production.
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