Alpha and Omega Semiconductor Reports Financial Results for the Fiscal Second Quarter of 2023 Ended December 31, 2022
Alpha and Omega Semiconductor Limited (AOSL) reported Q2 2023 financial results, revealing a revenue drop to $188.8 million, down 9.5% from Q1 2023 and 2.4% from Q2 2022. GAAP gross margin fell to 28.1%, while operating income decreased to $8.8 million. Net income attributable to AOS was $6.3 million, translating to $0.21 per diluted share. AOSL's cash flow from operations significantly declined to $0.3 million. CEO Dr. Mike Chang noted challenges due to industry-wide inventory corrections and decreased customer demand but expressed confidence in long-term fundamentals and growth prospects, aiming for a recovery in Q2 2023 and a $1 billion annual revenue target.
- Record annual revenue of $794 million in 2022.
- Non-GAAP earnings per share achieved a record of $4.16.
- Strong fundamentals expected to aid recovery in the second half of 2023.
- Q2 2023 revenue down 9.5% from Q1 and 2.4% year-over-year.
- Gross margin decreased to 28.1%, impacting profitability.
- Significant drop in cash flow from operations to $0.3 million.
The results for the fiscal second quarter of 2023 ended
GAAP Financial Comparison |
||||||||||||
Quarterly |
||||||||||||
(in millions, except percentage and per share data) |
||||||||||||
(unaudited) |
||||||||||||
|
|
Three Months Ended |
||||||||||
|
|
|
|
|
|
|
||||||
Revenue |
$ |
188.8 |
|
$ |
208.5 |
|
$ |
193.3 |
|
|||
Gross Margin |
|
28.1 |
% |
|
34.1 |
% |
|
35.4 |
% |
|||
Operating Income |
$ |
8.8 |
|
$ |
25.5 |
|
$ |
27.7 |
|
|||
Net Income Attributable to AOS |
$ |
6.3 |
|
$ |
26.0 |
|
$ |
383.0 |
|
|||
Net Income Per Share Attributable to AOS - Diluted |
$ |
0.21 |
|
$ |
0.88 |
|
$ |
13.54 |
|
Non-GAAP Financial Comparison |
||||||||||||
Quarterly |
||||||||||||
(in millions, except percentage and per share data) |
||||||||||||
(unaudited) |
||||||||||||
|
|
|
|
|
|
|
||||||
|
|
Three Months Ended |
||||||||||
|
|
|
|
|
|
|
||||||
Revenue |
$ |
188.8 |
|
$ |
208.5 |
|
$ |
193.3 |
|
|||
Non-GAAP Gross Margin |
|
29.5 |
% |
|
35.4 |
% |
|
36.7 |
% |
|||
Non-GAAP Operating Income |
$ |
22.8 |
|
$ |
37.1 |
|
$ |
37.4 |
|
|||
Non-GAAP Net Income Attributable to AOS |
$ |
20.0 |
|
$ |
35.2 |
|
$ |
34.0 |
|
|||
Non-GAAP Net Income Per Share Attributable to AOS - Diluted |
$ |
0.67 |
|
$ |
1.20 |
|
$ |
1.20 |
|
The non-GAAP financial measures in the schedule above and under the section “Financial Results for Fiscal Q2 Ended
Financial Results for Fiscal Q2 Ended
-
Revenue was
, a decrease of$188.8 million 9.5% from the prior quarter and a decrease of2.4% from the same quarter last year. -
GAAP gross margin was
28.1% , down from34.1% in the prior quarter and down from35.4% in the same quarter last year. -
Non-GAAP gross margin was
29.5% , down from35.4% in the prior quarter and down from36.7% in the same quarter last year. -
GAAP operating expenses were
, down from$44.3 million in the prior quarter and up from$45.6 million in the same quarter last year.$40.6 million -
Non-GAAP operating expenses were
, down from$32.8 million from last quarter and down from$36.6 million in the same quarter last year.$33.5 million -
GAAP operating income was
, down from$8.8 million in the prior quarter and down from$25.5 million in the same quarter last year.$27.7 million -
Non-GAAP operating income was
as compared to$22.8 million for the prior quarter and$37.1 million for the same quarter last year.$37.4 million -
GAAP net income per diluted share attributable to AOS was
, compared to$0.21 net income per share for the prior quarter, and$0.88 net income per share for the same quarter a year ago.$13.54 -
Non-GAAP net income per share attributable to AOS was
compared to$0.67 for the prior quarter and$1.20 for the same quarter a year ago.$1.20 -
Consolidated cash flow provided by operating activities was
, as compared to$0.3 million in the prior quarter.$36.7 million -
The Company closed the quarter with
of cash and cash equivalents.$287.8 million
AOS Chairman and Chief Executive Officer Dr.
“AOS has been in business for over two decades and inventory corrections and market cycles are a natural and healthy part of our industry. Demand for more and better power management is being driven by what we call the ‘electrification of everything’. We believe this tailwind is here to stay despite this temporary headwind, and we are in an excellent position to continue to win and thrive in this market. We enter 2023 with many strengths: growing product offerings, promising technology roadmaps, diverse and expanding manufacturing capabilities, strong relationships with strategic customers and a robust balance sheet, which will enable us to navigate the current economic environment while keeping our eyes on achieving our
Business Outlook for Fiscal Q3 Ending
The following statements are based on management's current expectations. These statements are forward-looking, and actual results may differ materially. AOS undertakes no obligation to update these statements.
Our expectations for the third quarter of fiscal year 2023 are as follows:
-
Revenue to be approximately
, plus or minus$130 million .$5 million -
GAAP gross margin to be
22.5% , plus or minus1% . We anticipate non-GAAP gross margin to be24.5% , plus or minus1% . -
GAAP operating expenses to be in the range of
, plus or minus$45.5 million . Non-GAAP operating expenses are expected to be in the range of$1 million , plus or minus$35.5 million .$1 million -
Interest expense is expected to be approximately
, and$1.2 million -
Tax expense is expected to be in the range of
to$1.3 million .$1.5 million
Conference Call and Webcast
AOS plans to hold an investor teleconference and live webcast to discuss the financial results for the fiscal second quarter ended
Forward-Looking Statements
This press release contains forward-looking statements that are based on current expectations, estimates, forecasts and projections of future performance based on management's judgment, beliefs, current trends, and anticipated product performance. These forward-looking statements include, without limitation, market trends in the semiconductor industry; our ability to navigate economic downturns and expected recovery timeline; anticipated earnings power and non-GAAP EPS on an annual basis, our growth opportunities and new markets, our annual revenue target, projected amount of revenue, gross margin, operating income, income tax expenses, net income, and share-based compensation expenses, non-GAAP gross margin, non-GAAP operating expenses, tax expenses, our objectives to achieve revenue target, our ability to continue to win and acquire market share and other information under the section entitled “Business Outlook for Fiscal Q3 Ending
Use of Non-GAAP Financial Measures
To supplement our unaudited consolidated financial statements presented on a basis consistent with
About
The following unaudited condensed consolidated financial statements are prepared in accordance with
|
||||||||||||||||||||
Condensed Consolidated Statements of Operations |
||||||||||||||||||||
(in thousands, except percentages and per share amounts) |
||||||||||||||||||||
(unaudited) |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|||||||||||||||
Revenue |
$ |
188,760 |
|
$ |
208,476 |
|
$ |
193,319 |
|
$ |
397,236 |
|
$ |
380,354 |
|
|||||
Cost of goods sold |
|
135,719 |
|
|
137,348 |
|
|
124,954 |
|
|
273,067 |
|
|
247,422 |
|
|||||
Gross profit |
|
53,041 |
|
|
71,128 |
|
|
68,365 |
|
|
124,169 |
|
|
132,932 |
|
|||||
Gross margin |
|
28.1 |
% |
|
34.1 |
% |
|
35.4 |
% |
|
31.3 |
% |
|
34.9 |
% |
|||||
|
|
|
|
|
|
|||||||||||||||
Operating expenses: |
|
|
|
|
|
|||||||||||||||
Research and development |
|
21,468 |
|
|
21,389 |
|
|
16,516 |
|
|
42,857 |
|
|
34,328 |
|
|||||
Selling, general and administrative |
|
22,788 |
|
|
24,205 |
|
|
24,132 |
|
|
46,993 |
|
|
45,938 |
|
|||||
Total operating expenses |
|
44,256 |
|
|
45,594 |
|
|
40,648 |
|
|
89,850 |
|
|
80,266 |
|
|||||
Operating income |
|
8,785 |
|
|
25,534 |
|
|
27,717 |
|
|
34,319 |
|
|
52,666 |
|
|||||
|
|
|
|
|
|
|||||||||||||||
Other income (loss), net |
|
(903 |
) |
|
(16 |
) |
|
473 |
|
|
(919 |
) |
|
457 |
|
|||||
Interest expense, net |
|
(397 |
) |
|
(608 |
) |
|
(541 |
) |
|
(1,005 |
) |
|
(2,717 |
) |
|||||
Gain on deconsolidation of the |
|
— |
|
|
— |
|
|
399,093 |
|
|
— |
|
|
399,093 |
|
|||||
Loss on changes of equity interest in the |
|
— |
|
|
— |
|
|
(7,641 |
) |
|
— |
|
|
(7,641 |
) |
|||||
Net income before income taxes |
|
7,485 |
|
|
24,910 |
|
|
419,101 |
|
|
32,395 |
|
|
441,858 |
|
|||||
|
|
|
|
|
|
|||||||||||||||
Income tax expense |
|
1,659 |
|
|
1,374 |
|
|
34,096 |
|
|
3,033 |
|
|
35,416 |
|
|||||
Net income before income from equity method investment |
|
5,826 |
|
|
23,536 |
|
|
385,005 |
|
|
29,362 |
|
|
406,442 |
|
|||||
Equity method investment income from equity investee |
|
511 |
|
|
2,502 |
|
|
— |
|
|
3,013 |
|
|
— |
|
|||||
Net income |
|
6,337 |
|
|
26,038 |
|
|
385,005 |
|
|
32,375 |
|
|
406,442 |
|
|||||
Net loss attributable to noncontrolling interest |
|
— |
|
|
— |
|
|
2,007 |
|
|
— |
|
|
20 |
|
|||||
Net income attributable to |
$ |
6,337 |
|
$ |
26,038 |
|
$ |
382,998 |
|
$ |
32,375 |
|
$ |
406,422 |
|
|||||
|
|
|
|
|
|
|||||||||||||||
Net income per common share attributable to |
|
|
|
|
|
|||||||||||||||
Basic |
$ |
0.23 |
|
$ |
0.95 |
|
$ |
14.40 |
|
$ |
1.18 |
|
$ |
15.35 |
|
|||||
Diluted |
$ |
0.21 |
|
$ |
0.88 |
|
$ |
13.54 |
|
$ |
1.10 |
|
$ |
14.53 |
|
|||||
|
|
|
|
|
|
|||||||||||||||
Weighted average number of common shares attributable to |
|
|
|
|
|
|||||||||||||||
Basic |
|
27,511 |
|
|
27,391 |
|
|
26,593 |
|
|
27,451 |
|
|
26,479 |
|
|||||
Diluted |
|
29,576 |
|
|
29,423 |
|
|
28,287 |
|
|
29,499 |
|
|
27,963 |
|
|||||
|
|
|
|
|
|
Condensed Consolidated Balance Sheets |
||||||||
(in thousands, except par value per share) |
||||||||
(unaudited) |
||||||||
|
|
|
|
|
||||
ASSETS |
|
|
||||||
Current assets: |
|
|
||||||
Cash and cash equivalents |
$ |
287,805 |
|
$ |
314,352 |
|
||
Restricted cash |
|
288 |
|
|
299 |
|
||
Accounts receivable, net |
|
53,223 |
|
|
65,681 |
|
||
Inventories |
|
163,823 |
|
|
158,040 |
|
||
Other current assets |
|
12,004 |
|
|
11,220 |
|
||
Total current assets |
|
517,143 |
|
|
549,592 |
|
||
Property, plant and equipment, net |
|
350,950 |
|
|
318,666 |
|
||
Operating lease right-of-use assets |
|
23,474 |
|
|
23,674 |
|
||
Intangible assets, net |
|
8,389 |
|
|
10,050 |
|
||
Equity method investment |
|
365,115 |
|
|
378,378 |
|
||
Deferred income tax assets |
|
566 |
|
|
592 |
|
||
Other long-term assets |
|
20,008 |
|
|
17,677 |
|
||
Total assets |
$ |
1,285,645 |
|
$ |
1,298,629 |
|
||
LIABILITIES AND EQUITY |
|
|
||||||
Current liabilities: |
|
|
||||||
Accounts payable |
$ |
65,799 |
|
$ |
87,377 |
|
||
Accrued liabilities |
|
98,107 |
|
|
116,893 |
|
||
Payable related to equity investee, net |
|
21,570 |
|
|
28,989 |
|
||
Income taxes payable |
|
5,620 |
|
|
4,248 |
|
||
Short-term debt |
|
25,045 |
|
|
25,563 |
|
||
Finance lease liabilities |
|
835 |
|
|
802 |
|
||
Operating lease liabilities |
|
4,553 |
|
|
3,850 |
|
||
Total current liabilities |
|
221,529 |
|
|
267,722 |
|
||
Long-term debt |
|
44,101 |
|
|
42,486 |
|
||
Income taxes payable - long-term |
|
2,227 |
|
|
2,158 |
|
||
Deferred income tax liabilities |
|
27,136 |
|
|
28,757 |
|
||
Finance lease liabilities - long-term |
|
3,658 |
|
|
3,932 |
|
||
Operating lease liabilities - long-term |
|
19,713 |
|
|
20,878 |
|
||
Other long-term liabilities |
|
67,607 |
|
|
78,603 |
|
||
Total liabilities |
|
385,971 |
|
|
444,536 |
|
||
Equity: |
|
|
||||||
Preferred shares, par value |
|
|
||||||
Authorized: 10,000 shares; issued and outstanding: none at |
|
— |
|
|
— |
|
||
Common shares, par value |
|
|
||||||
Authorized: 100,000 shares; issued and outstanding: 34,181 shares and 27,565 shares, respectively at |
|
68 |
|
|
68 |
|
||
|
|
(65,990 |
) |
|
(66,000 |
) |
||
Additional paid-in capital |
|
316,141 |
|
|
288,951 |
|
||
Accumulated other comprehensive income (loss) |
|
(12,904 |
) |
|
1,080 |
|
||
Retained earnings |
|
662,359 |
|
|
629,994 |
|
||
Total equity |
|
899,674 |
|
|
854,093 |
|
||
Total liabilities and equity |
$ |
1,285,645 |
|
$ |
1,298,629 |
|
Reconciliation of Condensed Consolidated GAAP Financial Measures to Non-GAAP Financial Measures |
||||||||||||||||||||
(in thousands, except percentages and per share data) |
||||||||||||||||||||
(unaudited) |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|||||||||||||||
GAAP gross profit |
$ |
53,041 |
|
$ |
71,128 |
|
$ |
68,365 |
|
$ |
124,169 |
|
$ |
132,932 |
|
|||||
Share-based compensation |
|
1,748 |
|
|
1,788 |
|
|
1,709 |
|
|
3,536 |
|
|
2,278 |
|
|||||
Amortization of purchased intangible |
|
811 |
|
|
812 |
|
|
811 |
|
|
1,623 |
|
|
1,623 |
|
|||||
Non-GAAP gross profit |
$ |
55,600 |
|
$ |
73,728 |
|
$ |
70,885 |
|
$ |
129,328 |
|
$ |
136,833 |
|
|||||
Non-GAAP gross margin as a % of revenue |
|
29.5 |
% |
|
35.4 |
% |
|
36.7 |
% |
|
32.6 |
% |
|
36.0 |
% |
|||||
|
|
|
|
|
|
|||||||||||||||
GAAP operating expense |
$ |
44,256 |
|
$ |
45,594 |
|
$ |
40,648 |
|
$ |
89,850 |
|
$ |
80,266 |
|
|||||
Share-based compensation |
|
11,343 |
|
|
8,808 |
|
|
6,838 |
|
|
20,151 |
|
|
10,904 |
|
|||||
Legal costs related to government investigation |
|
110 |
|
|
142 |
|
|
293 |
|
|
252 |
|
|
724 |
|
|||||
Non-GAAP operating expense |
$ |
32,803 |
|
$ |
36,644 |
|
$ |
33,517 |
|
$ |
69,447 |
|
$ |
68,638 |
|
|||||
|
|
|
|
|
|
|||||||||||||||
GAAP operating income |
$ |
8,785 |
|
$ |
25,534 |
|
$ |
27,717 |
|
$ |
34,319 |
|
$ |
52,666 |
|
|||||
Share-based compensation |
|
13,091 |
|
|
10,596 |
|
|
8,547 |
|
|
23,687 |
|
|
13,182 |
|
|||||
Amortization of purchased intangible |
|
811 |
|
|
812 |
|
|
811 |
|
|
1,623 |
|
|
1,623 |
|
|||||
Legal costs related to government investigation |
|
110 |
|
|
142 |
|
|
293 |
|
|
252 |
|
|
724 |
|
|||||
Non-GAAP operating income |
$ |
22,797 |
|
$ |
37,084 |
|
$ |
37,368 |
|
$ |
59,881 |
|
$ |
68,195 |
|
|||||
Non-GAAP operating margin as a % of revenue |
|
12.1 |
% |
|
17.8 |
% |
|
19.3 |
% |
|
15.1 |
% |
|
17.9 |
% |
|||||
|
|
|
|
|
|
|||||||||||||||
GAAP net income attributable to AOS |
$ |
6,337 |
|
$ |
26,038 |
|
$ |
382,998 |
|
$ |
32,375 |
|
$ |
406,422 |
|
|||||
Share-based compensation |
|
13,091 |
|
|
10,596 |
|
|
8,547 |
|
|
23,687 |
|
|
13,182 |
|
|||||
Amortization of purchased intangible |
|
811 |
|
|
812 |
|
|
811 |
|
|
1,623 |
|
|
1,623 |
|
|||||
Gain on deconsolidation and changes of the equity interest in the |
|
— |
|
|
— |
|
|
(391,452 |
) |
|
— |
|
|
(391,452 |
) |
|||||
Equity method investment income from equity investee |
|
(511 |
) |
|
(2,502 |
) |
|
— |
|
|
(3,013 |
) |
|
— |
|
|||||
Legal costs related to government investigation |
|
110 |
|
|
142 |
|
|
293 |
|
|
252 |
|
|
724 |
|
|||||
Income tax effect of non-GAAP adjustments |
|
122 |
|
|
119 |
|
|
32,800 |
|
|
241 |
|
|
32,801 |
|
|||||
Non-GAAP net income attributable to AOS |
$ |
19,960 |
|
$ |
35,205 |
|
$ |
33,997 |
|
$ |
55,165 |
|
$ |
63,300 |
|
|||||
Non-GAAP net margin attributable to AOS as a % of revenue |
|
10.6 |
% |
|
16.9 |
% |
|
17.6 |
% |
|
13.9 |
% |
|
16.6 |
% |
|||||
|
|
|
|
|
|
|||||||||||||||
GAAP net income attributable to AOS |
$ |
6,337 |
|
$ |
26,038 |
|
$ |
382,998 |
|
$ |
32,375 |
|
$ |
406,422 |
|
|||||
Share-based compensation |
|
13,091 |
|
|
10,596 |
|
|
8,547 |
|
|
23,687 |
|
|
13,182 |
|
|||||
Amortization and depreciation |
|
10,804 |
|
|
9,352 |
|
|
11,938 |
|
|
20,156 |
|
|
25,660 |
|
|||||
Gain on deconsolidation and changes of the equity interest in the |
|
— |
|
|
— |
|
|
(391,452 |
) |
|
— |
|
|
(391,452 |
) |
|||||
Equity method investment income from equity investee |
|
(511 |
) |
|
(2,502 |
) |
|
— |
|
|
(3,013 |
) |
|
— |
|
|||||
Interest expense, net |
|
397 |
|
|
608 |
|
|
541 |
|
|
1,005 |
|
|
2,717 |
|
|||||
Income tax expense |
|
1,659 |
|
|
1,374 |
|
|
34,096 |
|
|
3,033 |
|
|
35,416 |
|
|||||
EBITDAS |
$ |
31,777 |
|
$ |
45,466 |
|
$ |
46,668 |
|
$ |
77,243 |
|
$ |
91,945 |
|
|||||
|
|
|
|
|
|
|||||||||||||||
GAAP diluted net income per share attributable to AOS |
$ |
0.21 |
|
$ |
0.88 |
|
$ |
13.54 |
|
$ |
1.10 |
|
$ |
14.53 |
|
|||||
Share-based compensation |
|
0.44 |
|
|
0.36 |
|
|
0.30 |
|
|
0.80 |
|
|
0.47 |
|
|||||
Amortization of purchased intangible |
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
0.05 |
|
|
0.06 |
|
|||||
Gain on deconsolidation and changes of the equity interest in the |
|
— |
|
|
— |
|
|
(13.84 |
) |
|
— |
|
|
(14.00 |
) |
|||||
Equity method investment income from equity investee |
|
(0.02 |
) |
|
(0.09 |
) |
|
— |
|
|
(0.10 |
) |
|
— |
|
|||||
Legal costs related to government investigation |
|
0.00 |
|
|
0.01 |
|
|
0.01 |
|
|
0.01 |
|
|
0.03 |
|
|||||
Income tax effect of non-GAAP adjustments |
|
0.01 |
|
|
0.01 |
|
|
1.16 |
|
|
0.01 |
|
|
1.17 |
|
|||||
Non-GAAP diluted net income per share attributable to AOS |
$ |
0.67 |
|
$ |
1.20 |
|
$ |
1.20 |
|
$ |
1.87 |
|
$ |
2.26 |
|
|||||
|
|
|
|
|
|
|||||||||||||||
Shares used to compute GAAP diluted net income per share |
|
29,576 |
|
|
29,423 |
|
|
28,287 |
|
|
29,499 |
|
|
27,963 |
|
|||||
Shares used to compute Non-GAAP diluted net income per share |
|
29,576 |
|
|
29,423 |
|
|
28,287 |
|
|
29,499 |
|
|
27,963 |
|
|||||
|
|
|
|
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20230205005026/en/
Investor and media inquiries:
In US +1 323 240 5796
In
gary@blueshirtgroup.com
Yujia@blueshirtgroup.com
+1 (860) 214-0809
Source:
FAQ
What were AOSL's Q2 2023 earnings results?
How did AOSL perform compared to previous quarters?
What is AOSL's outlook for Q3 2023?
What were AOSL's key financial metrics for Q2 2023?