Applied Optoelectronics, Inc. Q3 FY2025 Earnings Call

Good afternoon. I will be your conference operator today. At this time, I would like to welcome everyone to Applied Optoelectronics Third Quarter 2025 Earnings Conference Call. Please note, this call is being recorded. I will now turn the call over to Lindsay Savarese, Investor Relations for Applied Optoelectronics. Ms. Savarese, you may begin.

Thank you. I'm Lindsay Savarese, Investor Relations for Applied Optoelectronics. I'm pleased to welcome you to AOI's Third Quarter 2025 Financial Results Conference Call. After the market closed today, AOI issued a press release announcing its third quarter 2025 financial results and provided its outlook for the fourth quarter of 2025. The release is also available on the company's website at ao-inc.com. 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 one year. 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 Q3 results, and Stefan will provide financial details and the outlook for the fourth quarter of 2025. A question-and-answer session will follow our prepared remarks. 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. In some cases, you can identify forward-looking statements by terminology such as believe, forecast, anticipate, estimates, suggests, intends, predicts, expects, plans, may, should, could, would, will, potential or think 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. 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. Forward-looking statements also include statements regarding management's beliefs and expectations related to the expansion of the reach of its products into new markets and customer responses to its innovations as well as statements regarding the company's outlook for the fourth quarter of 2025. Except as required by law, AOI assumes no obligation to update these 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 AOI's reports on file with the SEC, including the company's annual report on Form 10-K and quarterly reports on Form 10-Q. 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 the company's earnings press release that is available on AOI's website. Before moving to the financial results, I'd like to note that the date of AOI's fourth quarter and full year 2025 earnings call is currently scheduled for February 26, 2026. Now I would like to turn the call over to Dr. Thompson Lin, AOI's Founder, Chairman and CEO.

Thank you, Lindsay, and thank you for joining our call today. We successfully delivered revenue, gross margin and non-GAAP loss per share in line with our expectations. In fact, we recorded the highest quarterly revenue in our history, driven by strong demand in the CATV market, which also achieved record revenue in the third quarter. The strength we saw in our CATV business more than offset the datacenter revenue trending slightly below our expectations, largely due to the timing of certain shipments at quarter end. In Q3, we were approximately $6.6 million in shipping our 400G transceiver to a large hyperscale customer, who was not able to convert that into revenue during the quarter due to various shipping and receiving delays, and which we have booked in Q4. Despite this delay, our financial results clearly highlight the advantage of having diversified revenue streams, as a result of combined revenue increased 15% sequentially and 82% year-over-year. We continue to make profits on customer colocation on our 800G products. As we mentioned last quarter, we believe we are near the final stage of qualifications with several customers and expect qualifications in the near-term based on conversations with our customers. We continue to believe that we will produce meaningful shipments of AOI products in the fourth quarter. Total third quarter revenue was $118.6 million, which was in line with our guidance of $115 million to $127 million. We recorded non-GAAP gross margin of 31%, which was in line with our guidance range of 29.5% to 31%. Our net loss per share of $0.09 was in line with our guided range of a loss of $0.10 to a loss of $0.13. Total revenue for our datacenter was $43.9 million, which increased 7% year-over-year, but was down sequentially. Revenue from our other products increased 32% year-over-year, while revenue for our 400G product was down 65% year-over-year or $7.1 million due to the timing of certain shipments this quarter end that I just mentioned. Total revenue in Q3 in our CATV segment was a record $70.6 million, which was more than triple year-over-year and was up 26% sequentially from a strong Q2. This increase is due to the continued ramp in orders for our 1.8GHz amplifier product for both existing as well as new customers. With that, I will turn the call over to Stefan to review the details of our Q3 performance and outlook for Q4.

Thank you, Thompson. As Thompson mentioned, we successfully delivered revenue, gross margin and a non-GAAP loss per share in line with our expectations. In fact, we recorded the highest quarterly revenue in our history, driven by strong demand in the CATV market, which also achieved record revenue in the third quarter. The strength that we saw in our CATV business more than offset our datacenter revenue, which came in slightly below our expectations, largely due to the timing of certain shipments at quarter end. In particular, we had approximately $6.6 million in shipments of 400G transceivers to a large hyperscale customer, which was not able to convert that into revenue during the quarter due to various shipping and receiving delays, and which we have booked in Q4. Despite this delay, our financial results clearly highlight the advantage of having diversified revenue streams. As a result, our total revenue on a combined basis increased 15% sequentially and 82% year-over-year. In Q3, we delivered revenue of $118.6 million, which was in line with our guidance range of $115 million to $127 million. We recorded a non-GAAP gross margin of 31%, which was also in line with our guidance range of 29.5% to 31%. Our non-GAAP loss per share of $0.09 was also in line with our guidance range of a loss of $0.10 to a loss of $0.03. We continue to make progress on customer qualifications for our 800G products. As we mentioned last quarter, we believe we are near the final stages of qualification with several customers and expect to produce meaningful shipments of 800G products in the fourth quarter. For several quarters in a row, we have recorded immaterial revenue for our 800G products related to deliveries for customer qualification activity. As mentioned before, our production ramp-up schedule is largely constrained by our ability to build and qualify production capacity. We are pleased to report that we made good progress on getting our production ready during the third quarter and remain nearly on track to achieve the targets we laid out at OFC. As a reminder, we expect this will culminate later this year with what we believe will be the largest domestic production capacity for 800G or 1.6 terabit transceivers, approximately 35,000 transceivers per month or roughly 35% of our overall capacity for these advanced optical transceivers. Notably, we will be able to accommodate this expansion in our current Texas facility footprint. By mid-2026, we continue to expect to produce over 200,000 pieces per month with the majority produced in Texas. We announced last week that we signed an agreement to lease an additional building in Sugar Land, Texas. We will begin construction on this new facility later this year and are confident in our ability to scale our production towards the middle to end of next year to achieve our 2026 targets. AOI has had an in-house laser manufacturing capability for many years and we have been expanding and improving this capability. While we have heard talks about laser shortages, having a laser production capability in-house gives us an advantage. To date, we have not experienced a shortage of lasers that has affected our ability to deliver products according to our customers' requests. We developed our automated manufacturing capabilities over the years, giving us an advantage in manufacturing virtually anywhere in the world, making building out another facility in a cost-effective way in Texas possible. Many of our customers have a strong preference for production in North America, and that is our current focus. The lead time for us to add new equipment is typically less than it takes to hire and train skilled operators needed for manual processes used by most competitors. To reiterate, we currently have three manufacturing sites; one in Sugar Land, Texas, which will soon involve two facilities, one in Ningbo, China, and two in Taipei, Taiwan with an additional one under construction. As we indicated at OFC, we expect to increase the total production of 800G and 1.6 terabit products by 8.5 times by the end of the year, and we are on track to achieve this goal. During the third quarter, direct tariffs had a $1.1 million impact on our income statement. While we do utilize some imported components in our transceivers, many key components like our laser chips are already manufactured in the U.S. Importantly, in our 800G and 1.6 terabit transceiver designs, less than 10% of the value of the components used is currently sourced from China. We are in discussions with several key suppliers about onshoring their production to the U.S. to support a robust domestic supply chain. Turning to our third quarter results, our total revenue was $118.6 million, which increased 82% year-over-year and 15% sequentially off a strong Q2, and was in line with our guidance range of $115 million to $127 million. During Q3, 60% of revenue was from CATV products, 37% was from data center products, with the remaining 3% from FTTH, telecom and other. In our datacenter business, Q3 revenue came in at $43.9 million, which was up 7% year-over-year and down 2% sequentially. Sales of our 100G products increased 32% year-over-year, while sales of our 400G products decreased 65% year-over-year or $7.1 million, primarily driven by the timing of certain shipments at quarter end that I previously discussed. In Q3, 83% of datacenter revenue was from 100G products, 9% from 200G and 400G transceiver products, and 7% from 10G and 40G transceiver products. Looking ahead to Q4, we expect substantial sequential increases in our data center revenue, driven by growth in 400G revenue as well as layering in some increased 800G revenue. In our CATV business, we saw exceptionally strong demand in Q3. CATV revenue in Q3 was a record $70.6 million, more than tripling year-over-year and up 26% sequentially from a strong Q2. This increase is due to the continued ramp in orders for our 1.8 gigahertz amplifier products. Similar to last quarter, we shipped a significant quantity of 1.8 gigahertz amplifiers to Charter in the quarter, and demand continues to be robust. On our last earnings call, we discussed that in addition to Charter, we had six other MSOs that had begun to order and deploy our 1.8 gigahertz products or are in various stages of qualification of these products. We are pleased to see continued momentum with these new customers and are excited about the broad appeal of our amplifiers and QuantumLink software. During the quarter, we announced the addition of four new software modules to our QuantumLink HFC remote management solution. These modules provide actionable intelligence to optimize network performance, reduce operational costs and improve the broadband experience. Most software features will be available this quarter. The feedback we have received from our customers is very positive. In September, we attended the Society of Cable Telecommunications Engineering Expo, where we had great interactions with customers and potential customers. As I just mentioned, the feedback from our customers has been overwhelmingly positive, with many noting that our amplifiers are groundbreaking in terms of performance, ease of setup, and control and monitoring capabilities. As cable operators prepare for substantial upgrades to their infrastructure to meet increased spectrum and bandwidth demands, it is clear that the deployment of next-generation amplifiers and related equipment has become essential. Looking ahead to Q4, we expect strength in our CATV business to continue, although we anticipate revenue in this business to moderate to between $50 million and $55 million next quarter, following this quarter's exceptionally strong results. Now turning to our Telecom segment, revenue from our Telecom products of $3.7 million was up 34% year-over-year and 93% sequentially. We have mentioned before that we expect telecom sales to fluctuate from quarter-to-quarter. For Q3, our top 10 customers represented 97% of revenue, up from 96% in Q3 of last year. We had two greater than 10% customers, one in the CATV market contributing 66% of total revenue, and one in the data center market contributing 24% of total revenue. In Q3, we generated a non-GAAP gross margin of 31%, which was in line with our guidance range of 29.5% to 31%, up from 25% in Q3 2024, and compared to 30.4% in Q2 2025. The year-over-year increase in our gross margin was primarily driven by our favorable product mix. Looking ahead, we expect continued gradual improvement in gross margin, although we anticipate that the revenue mix in data centers in the next few quarters will be a slight headwind. We remain committed to our long-term goal of returning our non-GAAP gross margin to around 40%. This progress demonstrates that we're on the right track, and we continue to believe that this goal is achievable. Total non-GAAP operating expenses in Q3 were $47.1 million or 40% of revenue, compared to $27.9 million or 43% of revenue in Q3 of the prior year. While operating expenses increased this quarter and were slightly higher than our forecast, this rise was largely driven by increased shipping costs related to higher business activity in our CATV segment this quarter. Looking ahead, we expect non-GAAP operating expenses to be in the range of $48 million to $50 million per quarter. Non-GAAP operating loss in Q3 was $10.3 million compared to an operating loss of $11.7 million in Q3 of the prior year. GAAP net loss for Q3 was $17.9 million or a loss of $0.28 per basic share compared with a GAAP net loss of $17.8 million or a loss of $0.42 per basic share in Q3 of 2024. On a non-GAAP basis, the net loss for Q3 was $5.4 million or $0.09 per share, which was in line with our guidance range of a loss of $5.9 million to a loss of $2 million or non-GAAP income per share in the range of a loss of $0.10 to a loss of $0.03. This compares to a non-GAAP net loss of $8.8 million or $0.21 per share in Q3 of the prior year. The basic shares outstanding used for computing the earnings per share in Q3 were $63.3 million. Turning now to the balance sheet, we ended the third quarter with $150.7 million in total cash, cash equivalents, short-term investments and restricted cash. This compares with $87.2 million at the end of the second quarter of 2025. We ended the third quarter with total debt, excluding convertible debt, of $62 million compared to $54.3 million at the end of last quarter. Earlier this year, we announced a revolving loan facility with BOK Financial of $35 million, which we intend to use to meet some of our working capital needs going forward. As of September 30, we had $170.2 million in inventory, compared to $138.9 million at the end of Q2. This increase in inventory is nearly entirely due to purchases of raw materials for production over the next several months. During the quarter, we initiated a new ATM program, raising $147 million net of commissions and fees, which we intend to use mainly for new equipment and machinery for production, research and development, including the production expansion in Texas. We made a total of $49.9 million in capital investments in Q3 for manufacturing capacity expansion for our 400G and 800G transceiver products. In our last few earnings calls, we discussed our plans for sizable CapEx investments over the next several quarters as we prepare for increased 400G, 800G, and 1.6 terabit data center production in 2025. To date, this year, we have made a total of $124.9 million in capital investments and are tracking at or above our CapEx projections of $120 million to $150 million for the year. We have noted on our prior calls that these costs could be impacted by tariffs, but given the evolving nature, it is difficult to predict the exact impact. In Q3, the direct tariff impact on capital equipment was $1.9 million or roughly 4%, but tariff rates and equipment import mix may cause future results to vary materially. We source equipment from various locations, and we will continue to do our best to minimize any impacts. U.S.-based production is a priority for our customers, and we remain committed to expanding our capacity to meet that demand. Moving now to our Q4 outlook, we expect Q4 revenue to be between $125 million and $140 million, accounting for a sequential decrease in CATV revenue as well as a more substantial sequential increase in our data center revenue. We expect non-GAAP gross margin to be in the range of 29% to 31%. Non-GAAP net income is expected to be in the range of a loss of $9 million to a loss of $2.8 million, and non-GAAP earnings per share is forecasted to be a loss of between $0.13 per share and a loss of $0.04 per share using a weighted average basic share count of approximately 70.3 million shares. With that, I will turn it back over to the operator for the Q&A session.

Our first question comes from Simon Leopold of Raymond James.

I'm going to ask two and start with the cable TV side. Clearly, a strong blowout number here this quarter. So the moderation makes sense. I guess where I'd like to go is to understand how you're thinking about the broader outlook for CATV in that I recall last quarter, we talked about the potential to do over $300 million in 2026. If we sort of run rate out what you're doing, you're certainly on that trajectory. But I want to assess this given the lumpy nature of cable TV.

Yes, thanks for bringing that up. We think that $300 million plus in cable TV revenue is still achievable next year. As you pointed out, we're approaching a run rate there in this quarter. What I think is significant to point out, though, and we noted on the last earnings call as well, most of that growth is going to come from new products that we've announced. We discussed in our prepared remarks about the great success that we had at the Society of Cable Telecommunications Engineering Show, showcasing some of our new products, including the software products that we highlighted. So yes, I think the $300 million plus mark is achievable next year. However, it's not likely to come from just the amplifier products—again, we expect strong results in amplifiers—but the additional revenue we expect from those other products should get us to that $300 million mark.

As we said in the script, we expect the cable TV revenue in Q4 to reduce to maybe $50 million to $55 million. So that means the data center growth should be significant. Since the revenue increased by about $10 million compared to Q3.

Thanks. And then, yes. No. So that's why I wanted to follow up on the data center, particularly around your comment about 400 and 800 gig being up, given 800 gig is small right now. I'd like to unpack that a little bit because I don't think you've announced certifications or qualifications on 800 gig yet. It sounds like that's somewhat imminent but I don't want to overinterpret. So maybe just drill down specifically to how you think about 800 gig in that Q4? And then, of course, how should we think about the timing for 1.6T? I understand that's not in Q4, but should we be thinking about that for next year?

Yes. We expect meaningful shipments in the fourth quarter, as we stated in our prepared remarks. The growth in Q4 will primarily come from 400 gig, but we do anticipate meaningful revenue from 800 gig in this quarter. As you pointed out, that requires product qualification to be imminent, which we believe is the case. Regarding 1.6 terabits, we expect to see revenue from 1.6 terabit later next year, but that won't be a factor in Q4, as you indicated, and probably not in the first half of next year.

The AOI CATV single mode, especially for the AOI CATV single mode transceiver, in Q4 will be around $4 million to $8 million. Most of the growth is from 400G single mode transceiver. The 1.6T single mode transceiver we have right now is around 4 customers. We are working very hard and expect to deliver the samples either by the end of this year or early next year. The volume manufacture will be more likely by June or July next year for 1.6T. We have several products for 1.6T single mode transceiver, and we will announce them pretty soon.

Additionally, just to reiterate something we've mentioned repeatedly, the factory we're building both here and the increased capacity that we've been adding in Taiwan can manufacture both 800G and 1.6 terabit on the same production line. The only difference is in the final testing equipment needed.

The next question comes from George Notter of Wolfe Research.

I was curious if you could tell us more about the shipping and receiving delay at the end of the quarter. I'm just wondering what that was. Can you confirm if it was a single customer? Multiple customers? Any insights would be great. I've got a follow-up, too.

Sure. It was a single customer, a single hyperscale customer, which is a relatively new addition for us. Due to this, some of the shipments at the end of the quarter—we cannot go into too many details for confidentiality reasons—but let's just say not all the systems that were intended to receive those goods were properly configured in time for us to book that revenue in Q3. We resolved that within the first few days of Q4 and have booked that revenue since then. This was somewhat unique to this customer and we do not expect it to recur.

Got it. So the products were delivered to the customer, but it sounds like ownership couldn't transition because it hadn't been through their inventory management system. Is that the right understanding?

Yes, that's essentially correct. There was a system integrator involved; without going into too many details, it was a timing issue with the necessary systems needing to be synchronized.

Can you give us an update on capital spend? You mentioned tracking ahead of the $120 million to $150 million for the year. What does that look like now for Q4? And how about 2026? Do you have an initial view on CapEx for next year?

A lot of Q4 guidance relies on timing for equipment deliveries. We're likely to exceed the $150 million upper target but cannot determine exactly how much will arrive. As for 2026, we are still finalizing our plans, but I anticipate it will be above what we're seeing this year, although I can't provide a precise number yet.

Our next question comes from Michael Genovese of Rosenblatt Securities.

I guess for 400G, with that customer becoming a run rate business. If I'm not mistaken, I recall thinking about 100,000 units per month. Could you update on that? Is that the right way to think about it? And is it reaching that in Q4? Should we expect that customer to be at the same 400G level all year in 2026? Am I interpreting this correctly?

It is moving toward becoming a run-rate business. When I say run-rate, I assume you mean consistent capacity. We will not reach full capacity in Q4, especially as we’re adding infrastructure in Taiwan, but it will be a meaningful revenue contributor. Our guidance suggests that CATV facing a decline of about $15 million, and overall revenue should increase by the same amount primarily from data centers.

For the 400G single mode transceiver in Q4, we expect to reach about 60,000 per month. Then into Q2, we aim for 110,000 to 120,000 per month, depending on capacity. That's why we have invested in CapEx for both locations. It's critical we ensure our laser capacity, which is essential given current shortages.

It sounds like you have a high level of confidence for 800G qualification coming soon if you're planning on including it in your Q4 guidance. I want to get further into that confidence. Reflecting back three months, did you expect it to go this way? I understand a few weeks on either side isn't a big deal, but are we still on track?

We should receive orders pretty soon and will send several batches for qualification for DIL and 2xFR4. We believe we should see volume orders in about three or four weeks. We have delivered thousands of samples to several customers, and they're now moving into volume production, albeit not at large scales yet. Our estimates suggest we will be at a capacity of 100,000 per month by the end of December and around 20,000 by June next year. Our spending aligns with customer commitments, not mere expectations.

To clarify, we expected qualifications to happen in late Q3 or early Q4, and we still view that timeline as accurate.

What should we expect from 100G in '26 versus '25? In looking at the ASP of 100G to 800G, is it an 8x multiple, or is it higher?

It's not an 8x multiple, but rather lower. I anticipate that 100G will remain stable next year, with some potential increases, owing to the ongoing deployments.

Regarding CapEx plans with expansion, you've gone to the market several times this year. Do you feel you’re in a good place financially next year, or might you need to raise additional funds?

We will likely continue raising capital to fund our CapEx. Our plans reflect strong customer demand, particularly for U.S.-based production. Recently, we announced a new facility lease that still requires build-out, positioning it for growth in 2026. We’ll add capacity as customer demand warrants.

We are discussing potential investments from one or two major customers for U.S. capacity, possibly around $200 million. We are also working closely with Texas State including the U.S. government for financial support. We anticipate strong profitability next year, projecting net profits of more than $150 million which will help fund our expansion.

Our next question comes from Ryan Koontz of Needham & Co.

On the follow-up regarding your transceiver products and silicon photonics, could you compare your views on SiPho versus EML versus VCSELs, and what feedback have you received from customers about their interests as data rates rise to 800 to 1.6?

Most customers view us favorably regarding silicon photonics. While they won't transition all their products to SiPho, we see this technology as having more scalability for higher data rates in the future. We're in the early stages of volume manufacturing for silicon photonics, which needs time to ramp, but its capacity for higher data rates outpaces EML.

You also need fewer lasers for SiPho. Currently, there is a significant shortage of lasers, especially for EML. For example, an 800G DIL using EML requires about eight EMLs, whereas silicon photonics only needs two high-power CW lasers. This makes SiPho a favorable option because of the current laser shortages.

How do you perceive market share among your larger customers? Is the recent demand increase indicative of gaining share or higher deployment rates?

Primarily, we are gaining market share. Customer plans continue evolving. We've had notable success with major customers, including larger MSOs like Charter and smaller operators. The Society of Cable Telecommunications Engineers show we attended reinforced our positive standing in the market.

In addition to Charter, we have six other customers. We placed orders with two of them, leading us to a total of seven customers currently for cable TV's 1.8 gigahertz systems, excluding 1.2 gigahertz. We expect to add another ten by year-end, aiming for a total of 17 customers across North America, Latin America, Australia, and parts of Asia.

When you mentioned upcoming new products in cable, are you referring to both nodes and the software products for the amplifiers?

Yes, both. Don't forget the software is crucial. Our QuantumLink and Quantum Bridge solutions address a lot of customer challenges, ultimately reducing operational costs, which has impressed customers. This integration of hardware and software strengthens AOI's position as the top supplier in cable TV.

Our next question will come from Tim Savageaux of Northland Capital Markets.

I wanted to start with a report that there is a significant and broad-based increase in AI optical demand across several areas, especially in datacenters for modules. Are you witnessing this trend in the context of customer discussions about transceiver demand in recent weeks?

Yes, we're experiencing a strong increase in demand. If you refer to our guidance, it implies a significant ramp in data center revenue for Q4. While we haven't provided annual guidance, we anticipate this demand figures will mark the beginning of a sustained positive trend. Our focus is currently on 800G, with the expectation for 1.6 to contribute significantly later next year.

I want to revisit your capacity goals as we exit the year at 100,000 units a month. With the commitments from customers, will you be positioned to ship that full capacity, particularly in Q1? Do you have orders or commitments to support those volumes?

I would say more like Q2. The upcoming Chinese New Year affects the major cycle time, which is about 1.5 months. We're presently conducting a pilot for equipment readiness in Taiwan and the U.S. Even if a customer places an order, the cycle will likely translate to 90,000 to 100,000 pieces per month starting in Q2. Customers currently provide projections ranging over 300,000 for both 800G and 1.6T single mode transceivers, just from AOI's share. This is genuine demand, not a bubble.

I want to clarify; the capacity of 100,000 per month is primarily for our 800G and 1.6 terabit. Aside from that, there’s separate capacity for 400G, which we expect to maximize upwards of 120,000 pieces or more early next year, and we have commitments for that.

The demand from all hyperscale customers is authentic. This isn’t speculative; it's a real uptick in orders for the product hour, which we've been tracking closely.

Thank you everyone for your participation today and your continued support. We remain optimistic about AOI's positive trajectory in the coming quarters and will keep you updated on our progress. Thank you, and have a great day.

Again, thank you for joining us today. As always, we want to extend a thank you to our investors, customers, and employees for your continued support. We believe the fundamental driver of long-term demand for our business remains robust, and we are uniquely positioned to drive value from these opportunities. We look forward to welcoming some of you to our Texas factory tour next week and seeing many of you at the upcoming investor conference. Thank you.

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