祥茂光電 (AAOI) 2023 Q2 法說會逐字稿

Good afternoon. I will be your conference operator. At this time, I would like to welcome everyone to Applied Optoelectronics' Second Quarter 2023 Earnings Conference Call. (Operator Instructions) Please note, this event is being recorded.

下午好。我將擔任您的會議操作員。現在，我歡迎大家參加應用光電2023年第二季度收益電話會議。 （操作員說明）請注意，正在記錄此事件。

I will now turn the call over to Lindsay Savarese, Investor Relations for AOI. Ms. Savarese, you may begin.

我現在將把電話轉給 AOI 投資者關係部的 Lindsay Savarese。薩瓦雷斯女士，您可以開始了。

Thank you. I'm Lindsay Savarese, Investor Relations for Applied Optoelectronics. I am pleased to welcome you to AOI's Second Quarter 2023 Financial Results Conference Call.

謝謝。我是應用光電公司投資者關係部的林賽·薩瓦雷塞 (Lindsay Savarese)。我很高興歡迎您參加 AOI 2023 年第二季度財務業績電話會議。

After the market close today, AOI issued a press release announcing its second quarter 2023 financial results and provided its outlook for the third quarter of 2023. The release is also available on the company's website at ao-inc.com.

今天收盤後，AOI 發布新聞稿，公佈 2023 年第二季度財務業績，並提供 2023 年第三季度展望。該新聞稿還可在該公司網站 ao-inc.com 上獲取。

This call is being recorded and webcast live. A link to the recording can be found on the Investor Relations section of the AOI website and will be archived for 1 year.

此次通話正在錄音並進行網絡直播。錄音的鏈接可以在 AOI 網站的投資者關係部分找到，並將存檔 1 年。

Joining us on today's call is Dr. Thompson Lin, AOI's Founder, Chairman and CEO; and Dr. Stefan Murry, AOI's Chief Financial Officer and Chief Strategy Officer. Thompson will give an overview of AOI's Q2 results, and Stefan will provide financial details and the outlook for the third quarter of 2023. A question-and-answer session will follow our prepared remarks.

參加今天電話會議的還有 AOI 創始人、董事長兼首席執行官 Thompson Lin 博士；以及 AOI 首席財務官兼首席戰略官 Stefan Murry 博士。 Thompson 將概述 AOI 第二季度業績，Stefan 將提供財務詳細信息和 2023 年第三季度的前景。在我們準備好的發言之後將舉行問答環節。

Before we begin, I would like to remind you to review AOI's safe harbor statement. On today's call, management will make forward-looking statements. These forward-looking statements involve risks and uncertainties as well as assumptions and current expectations, which could cause the company's actual results, levels of activity, performance or achievements of the company or its industry to differ materially from those expressed or implied in such forward-looking statements.

在我們開始之前，我想提醒您查看 AOI 的安全港聲明。在今天的電話會議上，管理層將發表前瞻性聲明。這些前瞻性陳述涉及風險和不確定性以及假設和當前預期，可能導致公司的實際結果、活動水平、公司或其行業的業績或成就與此類前瞻性陳述中明示或暗示的結果存在重大差異。尋找陳述。

In some cases, you can identify forward-looking statements by terminology such as believe, forecast, anticipate, estimate, intend, predict, expect, plan, may, should, could, would, will, potential or things or by the negative of those terms or other similar expressions that convey uncertainty of future events or outcomes. The company has based these forward-looking statements on its current expectations, assumptions, estimates and projections.

在某些情況下，您可以通過相信、預測、預期、估計、打算、預測、預期、計劃、可能、應該、能夠、將、將、潛力或事物等術語或這些術語的否定來識別前瞻性陳述傳達未來事件或結果的不確定性的術語或其他類似表達。該公司根據其當前的預期、假設、估計和預測做出這些前瞻性陳述。

While the company believes these expectations, assumptions, estimates and projections are reasonable such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond the company's control, including important factors such as risks related to the company's ability to complete the transaction described on this call on the proposed terms and schedule or at all.

雖然公司認為這些預期、假設、估計和預測是合理的，但此類前瞻性陳述僅是預測，涉及已知和未知的風險和不確定性，其中許多風險和不確定性超出了公司的控制範圍，包括與公司業務相關的風險等重要因素。有能力按照提議的條款和時間表或根本完成本次電話會議中描述的交易。

The risk that certain closing conditions may not be timely satisfied or waived, the failure or delay to receive the required regulatory or other government approvals relating to the transaction and the occurrence of any event, change or other circumstance that could give rise to the termination of the transaction.

某些成交條件可能無法及時滿足或豁免、未能或延遲獲得與交易相關的所需監管或其他政府批准以及發生可能導致交易終止的任何事件、變化或其他情況的風險交易。

Forward-looking statements also include statements regarding management's beliefs and expectations related to the expansion of the reach of our products into new markets and customer responses to our innovation, as well as statements regarding the company's outlook for the third quarter of 2023.

前瞻性陳述還包括有關管理層對將我們的產品範圍擴展到新市場的信念和期望以及客戶對我們的創新的反應的陳述，以及有關公司 2023 年第三季度前景的陳述。

Except as required by law, we assume no obligation to update forward-looking statements for any reason after the date of this earnings call to conform these statements to actual results or to changes in the company's expectations. More information about other risks that may impact the company's business are set forth in the Risk Factors section of the company's reports on file with the SEC, including the company's annual report on Form 10-K for the year ended December 31, 2022.

除法律要求外，我們沒有義務在本次財報電話會議之後以任何理由更新前瞻性陳述，以使這些陳述符合實際結果或公司預期的變化。有關可能影響公司業務的其他風險的更多信息，請參閱公司向 SEC 提交的報告的風險因素部分，包括公司截至 2022 年 12 月 31 日的 10-K 表格年度報告。

Also, all financial results and other financial measures discussed today are on a non-GAAP basis, unless specifically noted otherwise. Non-GAAP financial measures are not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. A reconciliation between our GAAP and non-GAAP measures as well as a discussion of why we present non-GAAP financial measures are included in our earnings press release that is available on our website.

此外，除非另有特別說明，今天討論的所有財務業績和其他財務指標均基於非公認會計原則。非公認會計原則財務指標不應被孤立考慮，也不能替代根據公認會計原則編制的結果。我們的 GAAP 和非 GAAP 指標之間的調節以及我們為何提出非 GAAP 財務指標的討論都包含在我們網站上的收益新聞稿中。

Before moving to the financial results, I'd like to announce that AOI management will be attending the H.C. Wainwright Global Investment Conference on September 11 and the Northland Institutional Investment Conference on September 19. I'd like to note the date of our third quarter earnings call is currently scheduled for November 9, 2023.

在公佈財務業績之前，我想宣布 AOI 管理層將出席 H.C. Wainwright 全球投資會議將於 9 月 11 日舉行，Northland 機構投資會議將於 9 月 19 日舉行。我想指出的是，我們第三季度財報電話會議的日期目前定於 2023 年 11 月 9 日。

Now I would like to turn the call over to Dr. Thompson Lin, Applied Optoelectronics' Founder, Chairman and CEO. Thompson?

現在我想把電話轉給應用光電創始人、董事長兼首席執行官林湯普博士。湯普森？

Thank you, Lindsay, and thank you for joining our call today. Our second quarter revenue was in line with our expectations, while our non-GAAP gross margin and non-GAAP loss per share were better than our expectations.

謝謝你，林賽，也感謝你今天加入我們的電話會議。我們第二季度的收入符合我們的預期，而我們的非 GAAP 毛利率和非 GAAP 每股虧損則好於我們的預期。

We are pleased by the continued progress we have made on improving our gross margin and are encouraged by increased demand we saw for our 100G and 400G products in our data center business during Q2.

我們對在提高毛利率方面取得的持續進展感到高興，並對第二季度數據中心業務中 100G 和 400G 產品的需求增加感到鼓舞。

(inaudible) revenue for our 100G product increased 30% sequentially, while revenue for our 400G product doubled sequentially and accounted for 11% of our total data center revenue in Q2. During the second quarter, we did revenue of $41.6 million, in line with our guidance range of $40.5 million to $47.5 million. We delivered non-GAAP gross margin of 24.8%, above our current range of 20.5% to 23.5%, mainly driven by a favorable product mix and our targeted cost reductions. Our non-GAAP loss per share was $0.21, above our guidance range of a loss of $0.23 to $0.31.

（聽不清）我們的 100G 產品收入環比增長了 30%，而我們的 400G 產品收入環比翻了一番，佔第二季度數據中心總收入的 11%。第二季度，我們的收入為 4160 萬美元，符合我們 4050 萬至 4750 萬美元的指導範圍。我們的非 GAAP 毛利率為 24.8%，高於目前 20.5% 至 23.5% 的範圍，這主要得益於有利的產品組合和我們的目標成本削減。我們的非 GAAP 每股虧損為 0.21 美元，高於我們 0.23 至 0.31 美元虧損的指導範圍。

Total revenue in our CATV segment was $9.3 million, down 61% year-over-year and down 66% sequentially. As a reminder, our Q2 results were negatively impacted by some inventory build up with certain CATV customers, which led to softer-than-expected CATV revenue in Q2.

CATV 部門的總收入為 930 萬美元，同比下降 61%，環比下降 66%。提醒一下，我們第二季度的業績受到某些有線電視客戶積累的一些庫存的負面影響，這導致第二季度有線電視收入低於預期。

We do believe that this inventory dilation in 2022 and based on what we are seeing today, we expect our CATV revenue to increase slightly sequentially also maybe down year-over-year off by the quite strong Q3 of last year.

我們確實相信 2022 年的庫存擴張，並且根據我們今天所看到的情況，我們預計我們的 CATV 收入將環比略有增長，也可能比去年相當強勁的第三季度同比下降。

Total revenue for our data center product of $27.6 million increased 28% year-over-year and increased 35% sequentially largely due to increased demand for our 100G and 400G products as we continue to see the run-up of our 400G products.

我們的數據中心產品總收入為 2760 萬美元，同比增長 28%，環比增長 35%，這主要是由於我們的 400G 產品持續增長，對 100G 和 400G 產品的需求增加。

On our last 2 calls, we discussed an agreement we have signed with Microsoft, who has been a long-term key customer of ours. For development program to make next-generation lasers for its data center, specifically 400G and beyond.

在最近兩次通話中，我們討論了與微軟簽署的一項協議，微軟一直是我們的長期重要客戶。用於為其數據中心製造下一代激光器（特別是 400G 及以上）的開發計劃。

During the second quarter, we signed additional development agreement with Microsoft to provide design and assembly services for active optical cables. We view this contract award as validation of the strength and quality of our core laser fabrication ability. In total, we believe that this award AOI of over $300 million over 7 years.

第二季度，我們與微軟簽署了額外的開發協議，提供有源光纜的設計和組裝服務。我們認為這份合同的授予是對我們核心激光製造能力的實力和質量的驗證。總的來說，我們認為該獎項 AOI 在 7 年內將超過 3 億美元。

With that, I will turn the call over to Stefan to review the details of our Q2 performance and outlook for Q3. Stefan?

接下來，我將把電話轉給 Stefan，以審查我們第二季度業績的詳細信息和第三季度的前景。斯特凡？

Thank you, Thompson. As Thompson mentioned, our second quarter revenue was in line with our expectations, while our non-GAAP gross margin and non-GAAP loss per share were above our expectations. We're pleased by the continued progress we have made to improve our gross margin and expect this trend to continue. Further, we are encouraged by the increased demand we saw for our 100G and 400G products in our data center business during Q2.

謝謝你，湯普森。正如湯普森提到的，我們第二季度的收入符合我們的預期，而我們的非 GAAP 毛利率和非 GAAP 每股虧損高於我們的預期。我們對在提高毛利率方面取得的持續進展感到高興，並預計這一趨勢將持續下去。此外，第二季度數據中心業務對 100G 和 400G 產品的需求增加令我們感到鼓舞。

Lastly, we are excited about our newly formed Broadband Access group, the strength of talent we have recently added to this team and believe that we are well positioned to execute on our new strategy to sell our CATV products directly to MSO customers.

最後，我們對新成立的寬帶接入團隊感到興奮，我們最近為該團隊增添了強大的人才力量，並相信我們有能力執行我們的新戰略，直接向 MSO 客戶銷售我們的 CATV 產品。

Before turning to discuss our results and outlook, I want to provide an update on the transaction that we announced last September with Yuhan Optoelectronic Technology. As we have previously discussed, we entered into an agreement with Yuhan for the sale of our manufacturing facilities located in the People's Republic of China, and certain assets related to our transceiver business and multichannel optical subassembly products for the data center, telecom, and FTTH markets for a purchase price of $150 million. As a reminder, this transaction is subject to customary closing conditions and regulatory approvals, including CFIUS and ODI.

在討論我們的業績和前景之前，我想先介紹一下我們去年 9 月宣布的與鈺瀚光電科技的交易的最新情況。正如我們之前討論的，我們與 Yuhan 達成協議，出售我們位於中華人民共和國的製造設施，以及與我們的收發器業務和數據中心、電信和 FTTH 多通道光學組件產品相關的某些資產。市場收購價為1.5 億美元。請注意，本次交易須滿足慣例成交條件和監管部門的批准，包括 CFIUS 和 ODI。

We continue to make progress in preparing the information that will be needed in order to file for the various regulatory approvals that are required in order to finalize the divestiture. Although these filings are not yet complete, we do expect to submit our application to CFIUS within the next 45 days. While the timing of the regulatory approval process is uncertain, based on our current schedule, we expect the closing time frame will be early 2024.

我們在準備所需信息方面繼續取得進展，以便提交完成剝離所需的各種監管批准。儘管這些文件尚未完成，但我們預計將在未來 45 天內向 CFIUS 提交申請。雖然監管審批流程的時間尚不確定，但根據我們目前的時間表，我們預計截止時間將在 2024 年初。

Turning to the quarter. Our total revenue for the second quarter decreased to 20% year-over-year to $41.6 million, which was in line with our guidance range of $40.5 million to $47.5 million. The decline in revenue was largely due to the inventory buildup with certain of our CATV customers that we discussed on our Q1 call.

轉向季度。我們第二季度的總收入同比下降 20% 至 4160 萬美元，符合我們 4050 萬美元至 4750 萬美元的指導範圍。收入下降主要是由於我們在第一季度電話會議上討論的某些 CATV 客戶的庫存積累所致。

During the second quarter, 66% of our revenue was from our data center products, 22% was from our CATV products, with the remaining 11% from FTTH, telecom and other. In line with our expectations, CATV revenue in the second quarter was $9.3 million, which was down 66% sequentially and 61% year-over-year.

第二季度，我們66%的收入來自數據中心產品，22%來自CATV產品，其餘11%來自FTTH、電信和其他產品。與我們的預期一致，第二季度 CATV 收入為 930 萬美元，環比下降 66%，同比下降 61%。

As a reminder, our CATV revenue was negatively impacted as a few of our CATV customers worked through excess inventory that had built up among their various distribution channels. We expect that any inventory buildup will be transitory and based on what we are seeing today, we expect that our CATV business will increase slightly sequentially, although it will be down year-over-year off a historically strong Q3 of last year.

提醒一下，我們的有線電視收入受到了負面影響，因為我們的一些有線電視客戶通過其各個分銷渠道中積累的過剩庫存進行工作。我們預計任何庫存增加都將是暫時的，根據我們今天所看到的情況，我們預計我們的有線電視業務將環比小幅增長，​​儘管與去年第三季度的歷史強勁水平相比將同比下降。

As a reminder, our CATV revenue in 2021 and 2022 was historically high compared to prior years. We do expect our CATV revenue will rebound to more normal levels although near term, it will be down compared to those historic highs as the MSOs transition to next-generation architecture.

提醒一下，我們 2021 年和 2022 年的 CATV 收入與前幾年相比處於歷史最高水平。我們確實預計我們的 CATV 收入將反彈至更正常的水平，儘管短期內，隨著 MSO 過渡到下一代架構，該收入將低於歷史高點。

Looking further ahead, we are carefully monitoring MSO plans to move to DOCSIS 4.0 networks. While we are cautiously optimistic as the nature of these upgrade cycles can be lengthy, we continue to believe AOI remains well positioned to capture a portion of this new infrastructure spend and think our products are well suited for when the push to install amplifiers and other network elements for DOCSIS 4.0 begins. We believe this transition could happen in early to mid-2024.

展望未來，我們正在仔細監控 MSO 轉向 DOCSIS 4.0 網絡的計劃。雖然我們對這些升級週期可能很長而持謹慎樂觀的態度，但我們仍然相信 AOI 仍處於有利位置，能夠捕獲部分新基礎設施支出，並認為我們的產品非常適合推動安裝放大器和其他網絡的情況DOCSIS 4.0 的要素開始。我們相信這一轉變可能會在 2024 年初至中期發生。

During the quarter, we announced the change in our strategy to offer our CATV products directly to MSO customers through our recently formed Broadband Access group. We believe this strategic move will allow us to better serve the MSO needs for reliable, feature-rich amplifiers for their network upgrades. We also expect that this strategy will help us scale our business more efficiently and improve our gross margin further. We believe we could eventually see 10 to 15 points of margin increase as a result of this transition.

本季度，我們宣布改變戰略，通過最近成立的寬帶接入團隊直接向 MSO 客戶提供 CATV 產品。我們相信，這一戰略舉措將使我們能夠更好地滿足 MSO 對可靠、功能豐富的放大器的網絡升級需求。我們還預計這一戰略將幫助我們更有效地擴展業務並進一步提高毛利率。我們相信，由於這一轉變，我們最終可能會看到利潤率增加 10 到 15 個百分點。

In line with our new strategy of directly selling to the MSOs, during the quarter, we announced order availability of our Quantum Bandwidth line extender and system amplifier products. As 1 of the few companies with large-scale in-house manufacturing capacity for amplifiers, we believe our new products will expand AOI's product portfolio while maintaining the industry-leading quality and reliability of our renowned HFC products.

根據我們直接向 MSO 銷售的新戰略，我們在本季度宣布了量子帶寬線路擴展器和系統放大器產品的訂單供貨情況。作為少數擁有大規模放大器內部製造能力的公司之一，我們相信我們的新產品將擴大 AOI 的產品組合，同時保持我們著名的 HFC 產品行業領先的質量和可靠性。

During the quarter and subsequent to quarter end, we also added critical talent to our newly formed Broadband Access group. Notably, and as you may have seen, we appointed Todd McCrum as Senior Vice President and General Manager of the Broadband Access team. In this newly created position, Todd will lead sales, product development and marketing of AOI's Quantum Bandwidth line of Broadband Access products. Todd's impressive career in broadband has spanned the development of modern hybrid fiber-coax networks and we are thrilled to add him to the team. He previously spent 27 years with Scientific-Atlanta and Cisco Systems, including serving as the lead of Cisco's Cable Access business unit and Vice President of Marketing.

在本季度和季度末後，我們還為新成立的寬帶接入團隊增加了關鍵人才。值得注意的是，正如您可能已經看到的，我們任命 Todd McCrum 為寬帶接入團隊的高級副總裁兼總經理。在這個新設立的職位上，托德將領導 AOI 寬帶接入產品的量子帶寬系列的銷售、產品開發和營銷。托德在寬帶領域令人印象深刻的職業生涯跨越了現代混合光纖同軸網絡的發展，我們很高興將他加入團隊。此前，他曾在 Scientific-Atlanta 和 Cisco Systems 工作了 27 年，其中包括擔任 Cisco 有線接入業務部門的領導和營銷副總裁。

In addition to Todd, within our Broadband Access group, we also appointed Steve Pederson as EVP of Business Development; Michael Ballard, as Senior Director of Marketing; Al Johnson, as Senior Director of Business Development; and most recently, Corey Chapman, as Senior Director of Sales Engineering for our Quantum Bandwidth line of products.

除了 Todd 之外，我們還任命 Steve Pederson 為寬帶接入團隊的業務開發執行副總裁；邁克爾·巴拉德 (Michael Ballard)，擔任高級營銷總監； Al Johnson，業務發展高級總監；最近，Corey Chapman 擔任我們量子帶寬產品線的銷售工程高級總監。

All 4 of these business professionals have had impressive careers with extensive experience that we believe will greatly contribute to the success of our Broadband Access group. We were excited by the strength of talent that we have added at the leadership level, and we have also made significant strides in building out the rest of the Broadband Access team. We are focused on executing on our new strategy, and believe we are well positioned with the right products and a deep bench of talent.

所有這 4 位商業專業人士都擁有令人印象深刻的職業生涯和豐富的經驗，我們相信他們將為我們寬帶接入團隊的成功做出巨大貢獻。我們對領導層增加的人才實力感到興奮，而且我們在組建寬帶接入團隊的其他成員方面也取得了重大進展。我們專注於執行我們的新戰略，並相信我們擁有合適的產品和深厚的人才儲備。

Turning to our data center business. In Q2, data center revenue came in at $27.6 million, up 28% year-over-year and up 35% sequentially, largely due to increased demand for our 100G and 400G products. In the second quarter, 75% of our data center revenue was from our 100G products, 12% was from our 200G and 400G transceiver products and 5% was from our 40G transceiver products.

轉向我們的數據中心業務。第二季度，數據中心收入為 2760 萬美元，同比增長 28%，環比增長 35%，這主要是由於對我們 100G 和 400G 產品的需求增加。第二季度，我們數據中心收入的75%來自我們的100G產品，12%來自我們的200G和400G收發器產品，5%來自我們的40G收發器產品。

Notably, revenue for our 100G products increased 30% sequentially, while revenue for our 400G products doubled sequentially and accounted for 11% of our total data center revenue in Q2. Looking ahead, we're encouraged by the increased demand we have been seeing and expect continued sequential growth of our data center business in Q3.

值得注意的是，我們的 100G 產品收入環比增長 30%，而 400G 產品收入環比翻倍，佔第二季度數據中心總收入的 11%。展望未來，我們對不斷增長的需求感到鼓舞，並預計第三季度我們的數據中心業務將持續環比增長。

As Thompson mentioned, on our last 2 earnings calls, we discussed how we signed an agreement with Microsoft for a development program to make next-generation lasers for its data center both for 400G and beyond. During the second quarter, we signed an additional development agreement with Microsoft to provide design and assembly services for active optical cables. Our recent 8-K filings give additional data.

正如 Thompson 提到的，在我們最近兩次財報電話會議上，我們討論瞭如何與 Microsoft 簽署開發計劃協議，為其數據中心生產 400G 及更高速率的下一代激光器。第二季度，我們與微軟簽署了額外的開發協議，為有源光纜提供設計和組裝服務。我們最近提交的 8-K 文件提供了更多數據。

We expect to begin shipping initial quantities of these products to Microsoft by the end of this year for their testing with production ramping early next year. We view these contract awards as validation of the strength and quality of our core laser fabrication ability and our design and manufacturing expertise for these advanced high-speed interconnect products.

我們預計將在今年年底前開始向微軟交付首批產品，以進行測試，並於明年初開始量產。我們認為這些合同的授予是對我們核心激光製造能力的實力和質量以及我們對這些先進高速互連產品的設計和製造專業知識的驗證。

As many of you know, Microsoft has been a long-term key customer of ours. While not guaranteed, we believe that the revenue opportunity for our 400G and 800G products could be greater and have a longer duration than the revenue contribution we saw from this customer during the peak of the 40G product cycle, which would imply revenue from these products exceeding $300 million over the several years of these build-outs.

眾所周知，微軟一直是我們的長期重要客戶。雖然不能保證，但我們相信我們的 400G 和 800G 產品的收入機會可能比我們在 40G 產品週期高峰期間從該客戶那裡看到的收入貢獻更大且持續時間更長，這意味著這些產品的收入超過這些擴建項目在幾年內花費了3 億美元。

We also believe that the value proposition that we offer to Microsoft is just as strong with other data center operators, and we are working with several of them to evaluate our technology and qualify our products.

我們還相信，我們向 Microsoft 提供的價值主張與其他數據中心運營商一樣強大，我們正在與其中的幾家運營商合作來評估我們的技術並鑑定我們的產品。

We are also seeing positive inbound interest from other potential customers for our lasers, and we believe we are well positioned to grow this business. I'd like to particularly highlight 1 new source of laser revenue in this quarter.

我們還看到其他潛在客戶對我們的激光器產生了積極的興趣，我們相信我們有能力發展這項業務。我想特別強調本季度激光收入的一個新來源。

During the quarter, we received our first volume order for LiDAR lasers to be used in a transportation application. The order was approximately $1 million worth of lasers to be delivered over the next few quarters, so it's not immediately material financially. But we feel that the LiDAR business has the potential to grow substantially in the 3- to 5-year time frame, and we view this initial volume order as indicative of the success of the development program for our frequency modulated continuous wave or FMCW, LiDAR lasers. We believe that we will secure additional orders to these lasers over time as other customers begin to roll out FMCW, LiDAR technology.

本季度，我們收到了第一筆用於交通運輸應用的激光雷達激光器批量訂單。該訂單價值約 100 萬美元的激光器，將在接下來的幾個季度內交付，因此在財務上不會立即產生重大影響。但我們認為，LiDAR 業務有潛力在 3 至 5 年的時間內大幅增長，我們認為這一初始批量訂單表明我們的調頻連續波或 FMCW、LiDAR 開發計劃取得了成功激光。我們相信，隨著其他客戶開始推出 FMCW、LiDAR 技術，我們將隨著時間的推移獲得這些激光器的更多訂單。

Now turning to our telecom segment. Revenue from our telecom products of $4.2 million was down 33% year-over-year and up 14% sequentially. Looking ahead, we expect telecom sales to remain roughly flat to up slightly in Q3.

現在轉向我們的電信部門。我們的電信產品收入為 420 萬美元，同比下降 33%，環比增長 14%。展望未來，我們預計第三季度電信銷售額將大致持平或小幅增長。

For the second quarter, our top 10 customers represented 88% of revenue, up from 87% in Q2 of last year. We had 2 greater than 10% customers, 1 in the data center market and 1 in the CATV market which contributed 29% and 13% of our total revenue, respectively.

第二季度，我們的十大客戶佔收入的 88%，高於去年第二季度的 87%。我們有2個超過10%的客戶，1個在數據中心市場，1個在有線電視市場，分別貢獻了我們總收入的29%和13%。

In Q2, we generated non-GAAP gross margin of 24.8%, which was above our guidance range of 20.5% to 23.5% and was up from 23.2% in Q1 of 2023 and up from 16.7% in Q2 of 2022. The increase in gross margin was driven mainly by our favorable product mix, our cost reduction efforts and the benefit of some of the intentional actions we have taken to improve our bottom line that we have discussed on our prior couple of earnings calls.

第二季度，我們的非 GAAP 毛利率為 24.8%，高於我們 20.5% 至 23.5% 的指導範圍，高於 2023 年第一季度的 23.2%，高於 2022 年第二季度的 16.7%。利潤率主要是由我們有利的產品組合、我們降低成本的努力以及我們為提高利潤而採取的一些有意行動的好處所帶來的，我們在之前的幾次財報電話會議上已經討論過這些行動。

These actions included the exit of several low-profit legacy products, shifting R&D resources away from some low-margin projects to focus our resources on areas where we can maximize margin and some success in executing price increases with some customers.

這些行動包括退出一些低利潤的遺留產品，將研發資源從一些低利潤項目轉移到可以將我們的資源集中在可以最大化利潤的領域，以及在與一些客戶執行價格上漲方面取得了一些成功。

We are pleased with the execution we made on increasing our gross margin and expect this trend to continue. We remain committed to the long-term goal of returning gross margin to around 40% and believe that this goal is achievable.

我們對提高毛利率的執行情況感到滿意，並預計這一趨勢將持續下去。我們仍然致力於將毛利率恢復到40%左右的長期目標，並相信這個目標是可以實現的。

In line with our expectations, total non-GAAP operating expenses in the second quarter were $19 million or 45.8% of revenue which compared to $18.2 million or 34.9% of revenue in Q2 of the prior year. With the new additions in our Broadband Access group and additional activity we plan to promote our CATV products, we expect a modest uptick in non-GAAP operating expenses to $21 million per quarter starting in Q3 of 2023.

與我們的預期一致，第二季度非 GAAP 運營支出總額為 1,900 萬美元，佔收入的 45.8%，而上年第二季度為 1,820 萬美元，佔收入的 34.9%。隨著寬帶接入團隊的新增成員以及我們計劃推廣 CATV 產品的額外活動，我們預計從 2023 年第三季度開始，非 GAAP 運營支出將小幅上升至每季度 2100 萬美元。

Non-GAAP operating loss in the second quarter was $8.7 million compared to an operating loss of $9.5 million in Q2 of the prior year. GAAP net loss for Q2 was $16.9 million or a loss of $0.57 per basic share compared with a GAAP net loss of $14.5 million or a loss of $0.52 per basic share in Q2 of 2022.

第二季度非 GAAP 運營虧損為 870 萬美元，而上年第二季度運營虧損為 950 萬美元。第二季度 GAAP 淨虧損為 1,690 萬美元，即每股基本股虧損 0.57 美元，而 2022 年第二季度 GAAP 淨虧損為 1,450 萬美元，即每股基本股虧損 0.52 美元。

On a non-GAAP basis, net loss for Q2 was $6.1 million or a loss of $0.21 per basic share, which was better than our guidance range of a loss of $6.8 million to $9 million or loss per share in the range of $0.23 to $0.31 per basic share, and compares to a net loss of $7.6 million or a loss of $0.28 per basic share in Q2 of the prior year. The basic shares outstanding used for computing the net loss in Q2 were 29.5 million.

按非公認會計準則計算，第二季度淨虧損為610 萬美元，或每股基本股虧損0.21 美元，好於我們的指導範圍（虧損680 萬美元至900 萬美元）或每股虧損0.23 美元至0.31美元每股基本股虧損 760 萬美元，去年第二季度每股基本股虧損 0.28 美元。用於計算第二季度淨虧損的已發行基本股為2950萬股。

Turning now to the balance sheet. We ended the second quarter with $28.6 million in total cash, cash equivalents, short-term investments and restricted cash. This compares with $26.9 million at the end of the first quarter of this year. We ended the quarter with total debt, excluding convertible debt of $46.9 million, down from $70.1 million at the end of last quarter. As of June 30, we had $66.3 million in inventory compared to $70.2 million at the end of Q1.

現在轉向資產負債表。截至第二季度末，我們的現金、現金等價物、短期投資和限制性現金總額為 2860 萬美元。相比之下，今年第一季度末的銷售額為 2690 萬美元。本季度末，我們的總債務（不包括可轉換債務）為 4,690 萬美元，低於上季度末的 7,010 萬美元。截至 6 月 30 日，我們的庫存為 6,630 萬美元，而第一季度末為 7,020 萬美元。

Inventory decreased due to consumption of inventory for customer orders. We made a total of $1 million in capital investments in the second quarter, which is mainly used for production and R&D equipment. As we disclosed in March, we initiated a new at-the-market offering. To date, we have raised $9.9 million net of commissions and fees under this new program, all of which was raised in Q2.

庫存減少是由於客戶訂單消耗庫存所致。第二季度我們總共進行了100萬美元的資本投資，主要用於生產和研發設備。正如我們在三月份所披露的那樣，我們啟動了一項新的市場發行。迄今為止，我們已根據這項新計劃籌集了 990 萬美元（扣除佣金和費用），所有這些資金都是在第二季度籌集的。

Moving now to our Q3 outlook. We expect Q3 revenue to be between $60 million and $66 million and non-GAAP gross margin to be in the range of 29.5% to 31%. Non-GAAP net income is expected to be in the range of a loss of $1.9 million to income of $0.2 million and non-GAAP income between a loss of $0.06 per basic share and income of $0.01 per basic share using a weighted average basic share count of approximately 33.1 million shares.

現在轉向我們的第三季度展望。我們預計第三季度收入將在 6000 萬美元至 6600 萬美元之間，非 GAAP 毛利率將在 29.5% 至 31% 之間。根據加權平均基本股數計算，非 GAAP 淨利潤預計將在虧損 190 萬美元至收入 20 萬美元之間，非 GAAP 收入預計將在每股基本股虧損 0.06 美元至每股基本股收入 0.01 美元之間約3310萬股。

With that, I will turn it back over to the operator for the Q&A session. Operator?

這樣，我會將其轉回給操作員進行問答環節。操作員？

(Operator Instructions) The first question comes from Simon Leopold with Raymond James.

（操作員說明）第一個問題來自 Simon Leopold 和 Raymond James。

You've given us a lot of good modeling information here, and I'd like to just clarify something I think is implied. In that you suggested that the CATV business would be up a little bit sequentially, telecom would be flat to slightly up and so kind of backing out that into your total revenue forecast suggests your data center business is up sequentially by something on the order of 70%. And you didn't mention that explicitly, but you've kind of guided us this way. Can you just clarify what your expectation is there?

您在這里為我們提供了很多很好的建模信息，我想澄清一些我認為隱含的內容。您建議有線電視業務將連續增長一點，而電信業務將持平或略有增長，因此將其納入您的總收入預測表明您的數據中心業務將連續增長約 70 %。您沒有明確提及這一點，但您已經以這種方式引導了我們。您能澄清一下您的期望嗎？

Sure, Simon. You're pretty good at math. The uptick there is mainly from the data center business, as you surmised.

當然，西蒙。你數學很好。正如您所猜測的那樣，增長主要來自數據中心業務。

Great. And you talked about the Microsoft project timing being the end of this year. So it's not coming from the new Microsoft awards. Could you give us some color on what's driving this big jump?

偉大的。您談到微軟項目的時間是今年年底。所以它不是來自新的微軟獎項。您能給我們一些關於推動這一巨大飛躍的原因嗎？

Well, I mean, we've continued to see very strong results in our existing 100G and 400G products. And that's where this uptick is coming from. We've talked about over the last, gosh, probably at least 1 year that we felt like our 400G was starting to ramp and was in that ramping phase, and that's indeed what we're seeing right now.

嗯，我的意思是，我們繼續在現有的 100G 和 400G 產品中看到非常強勁的成果。這就是這種上升的來源。我們在過去談論過，天哪，可能至少有一年我們感覺我們的 400G 開始提升並處於提升階段，而這確實是我們現在所看到的。

400G is continuing to ramp. While at the same time, we're seeing very strong results from 100G as well. So -- both of those things are kind of firing on all cylinders. As you noted, the revenue increase that we're seeing is primarily not coming from the new Microsoft contracts. It's mostly coming from existing products.

400G 正在繼續發展。與此同時，我們也看到 100G 取得了非常強勁的成果。所以——這兩件事都在全力以赴。正如您所指出的，我們看到的收入增長主要不是來自新的微軟合同。它主要來自現有產品。

And don't forget, I think that because of AI (inaudible) and AOI at the same time is getting pretty strong market share.

不要忘記，我認為由於人工智能（聽不清）和 AOI 同時獲得了相當強大的市場份額。

Great. And then just pivoting now to the cable business. Just others who are in that market have talked about some of the transitional effects -- and you've been pretty clear in talking about excess inventory as a factor.

偉大的。然後現在轉向有線電視業務。該市場的其他人已經談到了一些過渡性影響，而您在談論庫存過剩這一因素時已經非常明確了。

And I wanted to maybe see if you could talk a little bit about the transitions of technology and how that might be playing into it specifically the deployment of DOCSIS 4.0 and the -- basically, the debate between full duplex and extended spectrum. Is that a factor that sort of amplifies or creates a greater pause in this market? Is that we're burning off old technology ahead of new technology. Could you help me understand that?

我想看看您是否可以談談技術的轉變以及技術的轉變如何發揮作用，特別是 DOCSIS 4.0 的部署以及——基本上是全雙工和擴展頻譜之間的爭論。這個因素是否會放大或造成這個市場更大的停頓？是我們在新技術之前淘汰舊技術。你能幫我理解一下嗎？

I don't think that's a big factor right now. I think that the bigger factor just has to do with the distribution channel, and I think I mentioned on the previous earnings call, with the interest rate environment, many of the distributors are taking a hard look at how much inventory that they carry. So I think it has more to do with financial effects and just the raw amount of inventory that's out there as opposed to looking ahead and saying, well, we might not need these products because DOCSIS 4.0 is coming on board.

我認為現在這不是一個大因素。我認為更大的因素與分銷渠道有關，我想我在之前的財報電話會議上提到過，在利率環境下，許多分銷商正在認真審視他們擁有多少庫存。因此，我認為這更多地與財務影響以及現有的原始庫存量有關，而不是展望未來並說，好吧，我們可能不需要這些產品，因為 DOCSIS 4.0 即將推出。

There's going to be a long tail, I would anticipate with the existing 1.2 gigahertz DOCSIS 3.1 type of products. So I'm not hearing from distributors that they're concerned about the inventory level that they have due to concerns they won't be able to sell it efficiently. It's more about, well, I just don't know what the right level of inventory is at this point, given the financial situation and interest rates and what have you.

我預計現有的 1.2 GHz DOCSIS 3.1 類型產品將會有一個長尾。因此，我沒有聽到經銷商表示他們擔心庫存水平，因為擔心他們無法有效地銷售產品。更重要的是，考慮到財務狀況和利率以及您擁有的東西，我只是不知道目前正確的庫存水平是多少。

(Operator Instructions) The next question comes from Tim Savageaux with Northland Capital Markets.

（操作員說明）下一個問題來自 Northland Capital Markets 的 Tim Savageaux。

Congratulations on the outlook, in particular. I wanted to follow up with some questions there. I see there's a good bit of deferred revenue that has been added to your balance sheet here, both short term and a little long term. And I was wondering if part of that revenue increase might be some of the NRE or project development payments coming out of Microsoft in addition to product revenue.

特別是對前景表示祝賀。我想跟進一些問題。我看到您的資產負債表中已經添加了大量的遞延收入，包括短期的和一點長期的。我想知道除了產品收入之外，收入增長的一部分是否可能來自微軟的一些 NRE 或項目開發付款。

And if that's the case, I wonder if you could try and quantify that. And I imagine that would have a real positive impact on gross margins as well? Or is this just all module revenue driving this increase?

如果是這樣的話，我想知道你是否可以嘗試量化這一點。我想這也會對毛利率產生真正的積極影響？或者這只是所有模塊收入推動這一增長？

You're talking about in the guidance, how much NRE revenue or development revenue that we're counting on?

您在指南中談到，我們指望多少 NRE 收入或開發收入？

That's right.

這是正確的。

Okay. So there is some of that in there. For nondisclosure reasons, I can't give you the exact toll in there, but there is some of that in there. But really, the bulk of the increase in margin is coming from increased margins on the products that we're selling, as we mentioned in our prepared remarks. It's not primarily being driven by NRE revenue. That's a relatively small amount that's included in guidance.

好的。所以里面有一些。出於保密原因，我無法向您提供確切的通行費，但其中有一些。但實際上，正如我們在準備好的評論中提到的那樣，利潤增長的大部分來自我們所銷售產品的利潤增長。它主要不是由 NRE 收入驅動的。這是指南中包含的相對較小的金額。

Okay. Great. And so would you say the same thing about product revenue being the bulk of the increase -- the sequential increase in data center. And within that, do you expect to see these dynamics continue around 400 gig and 100 gig in terms of outsized -- where do you expect, I guess, over the next few quarters, your 400-gig revenue to go or, say, I guess, you classify 200 gig plus as a percent of total data center revenue?

好的。偉大的。因此，您是否會說，產品收入是增長的主要部分——數據中心的連續增長。在這之中，你是否期望看到這些動態在 400 演出和 100 演出方面持續下去 - 我猜，在接下來的幾個季度中，你預計你的 400 演出收入會去哪裡，或者說，我你猜，您將200 兆以上歸類為數據中心總收入的百分比嗎？

Yes, I expect the 400 gig -- and you're correct in saying it's 200 gig plus, but for us, that's almost entirely 400 gig. We don't have a lot of 200-gig business. We expect that to continue to grow, both in absolute dollars and as a percent of data center revenue.

是的，我預計 400 演出——你說得對，是 200 演出以上，但對我們來說，這幾乎完全是 400 演出。我們沒有很多 200 場的業務。我們預計這一數字將繼續增長，無論是絕對金額還是佔數據中心收入的百分比。

That being said, I mean, I think 100 gig is continuing to track very well as well. So I think both of those things are looking good as I mentioned when Simon asked earlier.

話雖這麼說，我的意思是，我認為 100 場演出也繼續保持良好勢頭。所以我認為這兩件事看起來都不錯，正如我在西蒙早些時候問到的時候提到的那樣。

You had another question there, Tim, I'm sorry, I forgot. I think basically, you were just asking -- I think the first part of the question, if I remember, was just basically asking is this really truly product revenue that is driving the increase in revenue as well as gross margin?

你還有另一個問題，蒂姆，對不起，我忘了。我想基本上，你只是在問——我想問題的第一部分，如果我記得的話，基本上只是問這個產品收入真的能推動收入和毛利率的增長嗎？

And the answer is, yes, it's product revenue that's driving it. I mean, we're selling a lot more 100 gig and 400 gig in data center space. Cable TV, as we mentioned, is down a little bit, but we do anticipate that to tick up a little bit sequentially in the guidance. And that's what's really driving the growth.

答案是，是的，是產品收入推動的。我的意思是，我們在數據中心空間銷售了更多的 100 GB 和 400 GB 容量。正如我們所提到的，有線電視略有下降，但我們確實預計該數字會在指南中依次上升。這才是真正推動增長的因素。

Great. And -- maybe I could ask a question about kind of what's happening at your Microsoft, your biggest data center customer. So on the 1 hand, you look to be developing the fact of optical cable product for what I assume to be a very high-speed application, 800 gig, I suppose, maybe 400 as well associated with an AI build-out.

偉大的。而且——也許我可以問一個關於你們最大的數據中心客戶微軟正在發生什麼事情的問題。因此，一方面，您希望為我認為非常高速的應用程序開發光纜產品，我想是 800 GB，也許是 400 GB，以及與人工智能構建相關的產品。

And yet you're also prior to that seeing some pretty strong increases in volumes and maybe pricing as well. Given the gross margin movement on the current module product I wonder if you can kind of relate those 2 things.

然而，在此之前您也看到了銷量和價格的強勁增長。鑑於當前模塊產品的毛利率變動，我想知道您是否可以將這兩件事聯繫起來。

I mean, we've seen Microsoft with a pretty dramatic uptick in spending here this quarter that's expected to continue really for the next several quarters. So from your perspective, I'd be interested on kind of what's happening sort of short term versus medium term there with regard to data center connectivity demand.

我的意思是，我們看到微軟本季度在這方面的支出大幅增加，預計在接下來的幾個季度中這種情況將持續下去。因此，從您的角度來看，我對數據中心連接需求方面的短期與中期情況感興趣。

Well, without going into too many details that would be difficult to disclose publicly due to our relationship there. I think your observation that Microsoft has been investing heavily. It's a very apt explanation. The fact that AI is really driving their network needs right now is extremely important to them and keeping up with the demand there is very, very critical to their operations. And so they're definitely adding a lot of optical modules, a lot of interconnect modules now.

好吧，無需透露太多細節，由於我們在那裡的關係，這些細節很難公開披露。我認為你觀察到微軟一直在大力投資。這是一個非常恰當的解釋。事實上，人工智能現在確實正在推動他們的網絡需求，這對他們來說極其重要，而滿足那裡的需求對於他們的運營來說非常非常關鍵。因此，他們現在肯定會添加大量光學模塊、大量互連模塊。

And their expectation based on the contracts that we've supplied in terms of active optical cables certainly would indicate to us that they expect to continue to see strong demand mainly driven by AI applications, although certainly, the sort of general purpose compute is also a part of that.

他們基於我們提供的有源光纜合同的預期肯定會向我們表明，他們預計將繼續看到主要由人工智能應用驅動的強勁需求，儘管當然，通用計算也是一種其中一部分。

And it would seem to imply that that's expected to be in pretty strong demand for Microsoft for several years, at least, as we noted in our prepared remarks, I mean if you kind of look at some of the forecasts that we've received from them and the contractual -- the minimum contractual levels of manufacturing that they've asked us to prepare. That would imply revenue of $300 million plus over the next few years just in those products not counting existing other types of business that they might have. So it's a pretty sizable opportunity for us.

這似乎意味著，預計微軟未來幾年的需求將相當強勁，至少，正如我們在準備好的評論中指出的那樣，我的意思是，如果你看看我們從他們和合同——他們要求我們準備的最低製造合同水平。這意味著未來幾年內這些產品的收入將達到 3 億美元以上，不包括他們可能擁有的現有其他類型的業務。所以這對我們來說是一個相當大的機會。

At this time, I will turn the call over to Dr. Thompson Lin for closing remarks.

此時，我將把電話轉給 Thompson Lin 博士做總結髮言。

Okay. Again, thank you for joining us today. As always, we want to extend a thank you to our investors, customers, employees for your continued support. We look forward to seeing many of you at our upcoming investment conference and update you our next earnings call.

好的。再次感謝您今天加入我們。一如既往，我們要感謝我們的投資者、客戶、員工的持續支持。我們期待在即將舉行的投資會議上見到你們，並向您介紹我們下一次財報電話會議的最新情況。

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

會議現已結束。感謝您參加今天的演講。您現在可以斷開連接。