<general_context>
	- Current date: 2026-11-05 21:16 UTC.
</general_context>
<company_context>
	- Ticker: AAOI.
	- Company: Applied Optoelectronics.
</company_context>


                <data>
                    <label>Press release on Q3 financial results</label>
                    <content>**Exhibit 99.1**
[IMAGE:  | Source: image_001.jpg]
**Applied Optoelectronics
Reports Third Quarter 2026 Results**
**Sugar Land, Texas, November 5, 2026 – Applied Optoelectronics,
Inc. \(NASDAQ: AAOI\) \(“AOI”\),** a leading provider of advanced optical and HFC networking products that power AI, today announced
financial results for its third quarter ended September 30, 2026.
“We are pleased to have generated record revenue for our sixth
consecutive quarter and to have returned to GAAP profitability in Q3,” said Dr. Thompson Lin, AOI’s Founder, President and
Chief Executive Officer. “We have made meaningful progress in scaling our manufacturing capabilities, particularly for our 800G
and 1.6T products, to address demand for AI-related optical technologies that we believe is accelerating. We have recently secured a multi-year
strategic agreement with a Tier 1 hyperscale datacenter customer, which we think provides us with improved long-term visibility and reinforces
our confidence in the opportunity ahead as demand for high-bandwidth, energy-efficient optical connectivity products continues to grow.”
“We delivered another solid quarter, including accelerating revenue
growth and improving profitability, driven by robust demand and manufacturing expansion in both our datacenter and CATV businesses,”
said Dr. Stefan Murry, AOI’s Chief Financial Officer and Chief Strategy Officer. “We currently have a total manufacturing
equipment capacity approaching 330,000 units per month. We expect our 2027 capacity expansion plan in the US to take longer to complete
due to longer than expected time to obtain necessary electrical power among other construction related issues. As we work through these
construction issues, we now expect by the end of 2026 that we will have sufficient manufacturing equipment installed to produce over 500,000
pieces of 800G and 1.6 Tb products per month and we expect to grow our manufacturing capacity to over 1 million pieces of 800G and 1.6
Tb transceivers per month by the end of 2027. We remain focused on executing on our capacity expansion plans and believe we are well positioned
to support the next phase of AI datacenter deployment.”
**Third Quarter 2026 Financial Summary**
|  | · | GAAP revenue was $269.9 million, compared with $118.6 million in the third<br>quarter of 2025 and $191.9 million in the second quarter of 2026. |
|  | · | GAAP gross margin was 28.2%, compared with 28.0% in the third quarter of<br>2025 and 27.7% in the second quarter of 2026. Non-GAAP gross margin was 28.7%, compared with 31.0% in the third quarter of 2025 and 29.8%<br>in the second quarter of 2026. |
|  | · | GAAP net income was $6.3 million, or $0.07 per basic share, compared with<br>net loss of $17.9 million, or $0.28 per basic share in the third quarter of 2025, and a net loss of $22.8 million, or $0.28 per basic<br>share in the second quarter of 2026. |
|  | · | Non-GAAP net income was $14.8 million, or $0.17 per diluted share, compared<br>with non-GAAP net loss of $5.4 million, or $0.09 per basic share in the third quarter of 2025, and a non-GAAP net income of $5.5 million,<br>or $0.06 per diluted share in the second quarter of 2026.  |
A reconciliation between all GAAP and non-GAAP information referenced
above is contained in the tables below. Please also refer to “Non-GAAP Financial Measures” below for a description of these
non-GAAP financial measures.
|   | 1 |   |
**Fourth Quarter 2026 Business Outlook <sup>\(\+\)</sup>**
For fourth quarter of 2026, the company currently expects:
|  | · | Revenue in the range of $385 million to $420 million. |
|  | · | Non-GAAP gross margin in the range of 29.5% to 31%. |
|  | · | Non-GAAP net income in the range of $45.9 million to $60.4 million, and non-GAAP<br>income per share in the range of $0.48 to $0.63 using approximately 96 million shares.  |
**<sup>\(\+\) </sup>** Please refer to the note below on forward-looking
statements and the risks involved with such statements as well as the note on non-GAAP financial measures.
**Conference Call Information**
The company will host a conference call and webcast for analysts and
investors today, November 5, 2026 to discuss its third quarter 2026 financial results and outlook for its fourth quarter 2026 at 4:30
p.m. Eastern time / 3:30 p.m. Central time. This call will be open to the public, and investors may access the call by dialing 888-880-3330
\(domestic\) or 646-357-8766 \(international\). A live audio webcast of the conference call along with supplemental financial information
will also be accessible on the company's website at investors.ao-inc.com.
Following the webcast, an archived version will be available on the website for one year. A telephonic replay of the call will be available
one hour after the call and will run for five business days and may be accessed by dialing \(800\) 770-2030 \(domestic\) or \(609\) 800-9909
\(international\) and entering passcode 4754976 #.
**Forward-Looking Information**
This press release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terminology such
as "believe," "may," "estimate," "continue," "anticipate," "intend," "should,"
"could," "would," "target," "seek," "aim," "predicts," "think,"
"objectives," "optimistic," "new," "goal," “priorities,” "strategy," "potential,"
"is likely," "will," "expect," “momentum,” "plan" "project," "permit,"
“positions” or by other similar expressions that convey uncertainty of future events or outcomes. These statements include
management’s beliefs and expectations related to our outlook for the fourth quarter of 2026 and the remainder of the year. Such
forward-looking statements reflect the views of management at the time such statements are made. These forward-looking statements involve
risks and uncertainties, as well as assumptions and current expectations, which could cause the company's actual results to differ materially
from those anticipated in such forward-looking statements. These risks and uncertainties include but are not limited to: reduction in
the size or quantity of customer orders; change in demand for the company's products due to industry conditions; changes in manufacturing
operations; volatility in manufacturing costs; delays in shipments of products; disruptions in the supply chain; change in the rate of
design wins or the rate of customer acceptance of new products; the company's reliance on a small number of customers for a substantial
portion of its revenues; potential pricing pressure; a decline in demand for our customers' products or their rate of deployment of their
products; general conditions in the internet datacenter, cable television \(CATV\) broadband, telecom, or fiber-to-the-home \(FTTH\) markets;
changes in the world economy \(particularly in the United States and China\); changes in the regulation and taxation of international trade,
including the imposition of tariffs; changes in currency exchange rates; the negative effects of seasonality; and other risks and uncertainties
described more fully in the company's documents filed with or furnished to the Securities and Exchange Commission, including our Annual
Report on Form 10-K for the year ended December 31, 2025 and our Quarterly report on Form 10-Q for the quarter ended September 30, 2026.
More information about these and other risks that may impact the company's business are set forth in the "Risk Factors" section
of the company's quarterly and annual reports on file with the Securities and Exchange Commission. You should not rely on forward-looking
statements as predictions of future events. All forward-looking statements in this press release are based upon information available
to us as of the date hereof, and qualified in their entirety by this cautionary statement. Except as required by law, we assume no obligation
to update forward-looking statements for any reason after the date of this press release to conform these statements to actual results
or to changes in the company's expectations.
|   | 2 |   |
**Non-GAAP Financial Measures**
We provide non-GAAP gross margin, non-GAAP net income \(loss\), and non-GAAP
earnings \(loss\) per share, and non-GAAP Adjusted EBITDA to eliminate the impact of items that we do not consider indicative of our overall
operating performance. To arrive at our non-GAAP gross margin, we exclude stock-based compensation expenses, expenses associated with
discontinued products, and non-recurring \(income\) expenses, if any, from our GAAP gross margin. To arrive at our non-GAAP net income \(loss\),
we exclude all amortization of intangible assets, stock-based compensation expense, expenses associated with discontinued products, non-cash
expenses associated with discontinued products and non-recurring \(income\) expenses, unrealized foreign exchange loss \(gain\), and non-GAAP
tax benefit \(expenses\) from our GAAP net income \(loss\). Included in our non-recurring expenses in Q3 2026 and Q3 2025 are employee severance
expenses \(if any\) and legal expenses associated with litigation and certain legal and advisory expenses associated with purchase termination
or patent protection. In computing our non-GAAP income tax benefit \(expense\), we have applied an estimate of our annual effective income
tax rate and applied it to our net income before income taxes. Our non-GAAP Adjusted EBITDA is calculated by excluding depreciation expense,
non-GAAP tax benefit \(expense\), and interest \(income\) expense, as well as the items excluded from non-GAAP net income \(loss\), from our
GAAP net income \(loss\). Our non-GAAP diluted net earnings \(loss\) per share is calculated by dividing our non-GAAP net gain \(loss\) by the
fully diluted share count \(for periods in which non-GAAP net income is positive\) or basic share count \(for periods in which our non-GAAP
net income is negative\).
We believe that our non-GAAP measures are useful to investors in evaluating
our operating performance for the following reasons:
|   | · | We believe that elimination of items such as amortization of intangible<br>assets, stock-based compensation expense, non-recurring revenue and expenses, losses from the disposal of idle assets, unrealized foreign<br>exchange gain or loss, and depreciation on certain equipment undergoing reconfiguration is appropriate because treatment of these items<br>may vary for reasons unrelated to our overall operating performance; |
|   | · | We believe that elimination of expenses associated with discontinued<br>products, including depreciation and inventory obsolescence is appropriate because these expenses are not indicative of our ongoing operations; |
|   | · | We believe that estimating non-GAAP income taxes allows comparison<br>with prior periods and provides additional information regarding the generation of potential future deferred tax assets; |
|   | · | We believe that non-GAAP measures provide better comparability with<br>our past financial performance, period-to-period results and with our peer companies, many of which also use similar non-GAAP financial<br>measures; and |
|   | · | We anticipate that investors and securities analysts will utilize<br>non-GAAP measures as a supplement to GAAP measures to evaluate our overall operating performance. |
A reconciliation of our GAAP net income \(loss\), GAAP total gross profit,
GAAP earnings \(loss\), and GAAP earnings \(loss\) per share for Q3 2026 to our non-GAAP net income \(loss\), non-GAAP total gross profit, Adjusted
EBITDA, and earnings \(loss\) per share, respectively, is provided below, together with corresponding reconciliations for Q3 2025.
Non-GAAP measures should not be considered as an alternative to gross
profit, net income \(loss\), earnings \(loss\) per share, or any other measure of financial performance calculated and presented in accordance
with GAAP. Our non-GAAP measures may not be comparable to similarly titled measures of other organizations because other organizations
may not calculate such other non-GAAP measures in the same manner. We have not reconciled the non-GAAP measures included in our guidance
to the appropriate GAAP financial measures because the GAAP measures are not readily determinable on a forward-looking basis. GAAP measures
that impact our non-GAAP financial measures may include stock-based compensation expense, non-recurring expenses, amortization of intangible
assets, unrealized exchange loss \(gain\), asset impairment charges, loss \(gain\) from disposal of idle assets, and changes in the fair value
of our convertible notes. These GAAP measures cannot be reasonably predicted and may directly impact our non-GAAP gross margin, our non-GAAP
net income and our non-GAAP fully-diluted earnings per share, although changes with respect to certain of these measures may offset other
changes. In addition, certain of these measures are out of our control. Accordingly, a reconciliation of the non-GAAP financial measure
guidance to the corresponding GAAP measures is not available without unreasonable effort.
|   | 3 |   |
**About Applied Optoelectronics**
Applied Optoelectronics,
Inc. \(AOI\) is a leading developer and manufacturer of advanced optical and HFC networking products that serve as the critical building
blocks for AI datacenters, CATV and broadband fiber access networks worldwide. AOI supplies these critical infrastructure products to
tier-one customers across cloud computing, CATV broadband, telecommunications, and FTTH markets. The company has R&D facilities in
Atlanta, GA, and engineering and manufacturing facilities at its corporate headquarters in Sugar Land, TX, as well as in Taipei, Taiwan
and Ningbo, China. For additional information, visit www.ao-inc.com .  #
# #
**Investor Relations Contacts:**
The Blueshirt Group, Investor Relations
Lindsay Savarese
\+1-212-331-8417
ir@ao-inc.com
|   | 4 |   |
Applied Optoelectronics, Inc.
Preliminary Condensed Consolidated Balance Sheets
\(In thousands\)
\(Unaudited\)
|   |   | September 30, <br><br>2026 | September 30, <br><br>2026 |   |   | December 31, <br><br>2025 | December 31, <br><br>2025 |   |
| ASSETS |   |   |   |   |   |   |   |   |
| CURRENT ASSETS |   |   |   |   |   |   |   |   |
| Cash, Cash Equivalents and Restricted Cash |   | $ | 621,457 |   |   | $ | 216,035 |   |
| Accounts Receivable, Net |   |   | 413,760 |   |   |   | 244,404 |   |
| Inventories |   |   | 377,991 |   |   |   | 183,105 |   |
| Prepaid Expenses and Other Current Assets |   |   | 131,557 |   |   |   | 32,183 |   |
| Total Current Assets |   |   | 1,544,765 |   |   |   | 675,727 |   |
| Property, Plant And Equipment, Net |   |   | 1,043,993 |   |   |   | 376,050 |   |
| Land Use Rights, Net |   |   | 4,940 |   |   |   | 4,825 |   |
| Operating Right of Use Asset |   |   | 70,509 |   |   |   | 49,697 |   |
| Intangible Assets, Net |   |   | 3,692 |   |   |   | 3,623 |   |
| Other Assets |   |   | 467,727 |   |   |   | 58,501 |   |
| TOTAL ASSETS |   | $ | 3,135,626 |   |   | $ | 1,168,423 |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY |   |   |   |   |   |   |   |   |
| CURRENT LIABILITIES |   |   |   |   |   |   |   |   |
| Accounts Payable |   | $ | 494,279 |   |   | $ | 143,932 |   |
| Bank Acceptance Payable |   |   | 51,509 |   |   |   | 33,363 |   |
| Accrued Expenses |   |   | 49,794 |   |   |   | 42,491 |   |
| Current Lease Liability-Operating |   |   | 5,182 |   |   |   | 3,522 |   |
| Current Portion of Notes Payable and Long Term Debt |   |   | 59,990 |   |   |   | 33,975 |   |
| Total Current Liabilities |   |   | 660,754 |   |   |   | 257,283 |   |
| Convertible Senior Notes |   |   | 128,836 |   |   |   | 129,829 |   |
| Other Long-Term Liabilities |   |   | 104,688 |   |   |   | 47,393 |   |
| TOTAL LIABILITIES |   |   | 894,278 |   |   |   | 434,505 |   |
| STOCKHOLDERS' EQUITY |   |   |   |   |   |   |   |   |
| Common Stock |   |   | 90 |   |   |   | 75 |   |
| Additional Paid-in Capital |   |   | 2,757,548 |   |   |   | 1,224,538 |   |
| Cumulative Translation Adjustment |   |   | 4,551 |   |   |   | \\\(617 | \\\) |
| Retained Earnings |   |   | \\\(520,841 | \\\) |   |   | \\\(490,078 | \\\) |
| TOTAL STOCKHOLDERS' EQUITY |   |   | 2,241,348 |   |   |   | 733,918 |   |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |   | $ | 3,135,626 |   |   | $ | 1,168,423 |   |
|   | 5 |   |
Applied Optoelectronics, Inc.
Preliminary Condensed Consolidated Statements of Operations
\(In thousands\)
\(Unaudited\)
|   |   | Three Months Ended September 30, | Three Months Ended September 30, | Three Months Ended September 30, | Three Months Ended September 30, | Three Months Ended September 30, | Three Months Ended September 30, |   |   | Nine Months Ended September 30, | Nine Months Ended September 30, | Nine Months Ended September 30, | Nine Months Ended September 30, | Nine Months Ended September 30, | Nine Months Ended September 30, |   |
|   |   | 2026 | 2026 |   |   | 2025 | 2025 |   |   | 2026 | 2026 |   |   | 2025 | 2025 |   |
| Revenue |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| CATV |   | $ | 110,879 |   |   | $ | 70,602 |   |   | $ | 258,298 |   |   | $ | 191,122 |   |
| Datacenter |   |   | 155,609 |   |   |   | 43,935 |   |   |   | 344,675 |   |   |   | 120,775 |   |
| Telecom |   |   | 2,727 |   |   |   | 3,742 |   |   |   | 8,698 |   |   |   | 8,618 |   |
| Other |   |   | 660 |   |   |   | 351 |   |   |   | 1,271 |   |   |   | 926 |   |
| Total Revenue |   |   | 269,875 |   |   |   | 118,630 |   |   |   | 612,942 |   |   |   | 321,441 |   |
| Total Cost of Goods Sold |   |   | 193,720 |   |   |   | 85,367 |   |   |   | 439,664 |   |   |   | 226,472 |   |
| Total Gross Profit |   |   | 76,155 |   |   |   | 33,263 |   |   |   | 173,278 |   |   |   | 94,969 |   |
| Operating Expenses: |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Research and Development |   |   | 38,109 |   |   |   | 21,265 |   |   |   | 98,636 |   |   |   | 59,687 |   |
| Sales and Marketing |   |   | 7,875 |   |   |   | 9,871 |   |   |   | 25,712 |   |   |   | 23,363 |   |
| General and Administrative |   |   | 31,613 |   |   |   | 20,314 |   |   |   | 88,090 |   |   |   | 55,020 |   |
| Total Operating Expenses |   |   | 77,597 |   |   |   | 51,450 |   |   |   | 212,438 |   |   |   | 138,070 |   |
| Operating Loss |   |   | \\\(1,442 | \\\) |   |   | \\\(18,187 | \\\) |   |   | \\\(39,160 | \\\) |   |   | \\\(43,101 | \\\) |
| Other Income \\\(Expense\\\): |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest Income |   |   | 3,094 |   |   |   | 451 |   |   |   | 8,079 |   |   |   | 961 |   |
| Interest Expense |   |   | \\\(1,221 | \\\) |   |   | \\\(902 | \\\) |   |   | \\\(3,011 | \\\) |   |   | \\\(2,653 | \\\) |
| Other Income \\\(Expense\\\), net |   |   | 8,228 |   |   |   | 702 |   |   |   | 8,027 |   |   |   | 8,587 |   |
| Total Other Income \\\(Expense\\\): |   |   | 10,101 |   |   |   | 251 |   |   |   | 13,095 |   |   |   | 6,895 |   |
| Net income \\\(loss\\\) before Income Taxes |   |   | 8,659 |   |   |   | \\\(17,936 | \\\) |   |   | \\\(26,065 | \\\) |   |   | \\\(36,206 | \\\) |
| Income Tax Expense |   |   | \\\(2,359 | \\\) |   |   | – |   |   |   | \\\(4,697 | \\\) |   |   | – |   |
| Net income \\\(loss\\\) |   | $ | 6,300 |   |   | $ | \\\(17,936 | \\\) |   | $ | \\\(30,762 | \\\) |   | $ | \\\(36,206 | \\\) |
| Net income \\\(loss\\\) per share attributable to common stockholders |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| basic |   | $ | 0.07 |   |   | $ | \\\(0.28 | \\\) |   | $ | \\\(0.38 | \\\) |   | $ | \\\(0.64 | \\\) |
| diluted |   | $ | 0.07 |   |   | $ | \\\(0.28 | \\\) |   | $ | \\\(0.38 | \\\) |   | $ | \\\(0.64 | \\\) |
| Weighted-average shares used to compute net income \\\(loss\\\) per share attributable to common stockholders |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| basic |   |   | 85,397 |   |   |   | 63,329 |   |   |   | 81,016 |   |   |   | 56,762 |   |
| diluted |   |   | 87,835 |   |   |   | 63,329 |   |   |   | 81,016 |   |   |   | 56,762 |   |
|   | 6 |   |
Applied Optoelectronics, Inc.
Reconciliation of Statements of Operations under GAAP and Non-GAAP
\(In thousands\)
\(Unaudited\)
|   |   | Three Months Ended September 30, | Three Months Ended September 30, | Three Months Ended September 30, | Three Months Ended September 30, | Three Months Ended September 30, | Three Months Ended September 30, |   |   | Nine Months Ended September 30, | Nine Months Ended September 30, | Nine Months Ended September 30, | Nine Months Ended September 30, | Nine Months Ended September 30, | Nine Months Ended September 30, |   |
|   |   | 2026 | 2026 |   |   | 2025 | 2025 |   |   | 2026 | 2026 |   |   | 2025 | 2025 |   |
| GAAP total gross profit \[^a\] |   | $ | 76,155 |   |   | $ | 33,263 |   |   | $ | 173,278 |   |   | $ | 94,969 |   |
| Share-based compensation expense |   |   | 161 |   |   |   | 87 |   |   |   | 487 |   |   |   | 264 |   |
| Non-recurring expense |   |   | 29 |   |   |   | 7 |   |   |   | 327 |   |   |   | 48 |   |
| Expenses associated with discontinued products |   |   | 1,098 |   |   |   | 3,372 |   |   |   | 4,691 |   |   |   | 3,372 |   |
| Non-GAAP total gross profit \[^a\] |   | $ | 77,443 |   |   | $ | 36,729 |   |   | $ | 178,783 |   |   | $ | 98,653 |   |
| GAAP net gain \\\(loss\\\) |   | $ | 6,300 |   |   | $ | \\\(17,936 | \\\) |   | $ | \\\(30,762 | \\\) |   | $ | \\\(36,206 | \\\) |
| Share-based compensation expense |   |   | 5,684 |   |   |   | 3,116 |   |   |   | 14,939 |   |   |   | 8,842 |   |
| Expenses associated with discontinued products |   |   | 1,098 |   |   |   | 3,372 |   |   |   | 4,691 |   |   |   | 3,372 |   |
| Non-cash expenses associated with discontinued products |   |   | 902 |   |   |   | 1,106 |   |   |   | 2,920 |   |   |   | 3,225 |   |
| Amortization of intangible assets |   |   | 127 |   |   |   | 113 |   |   |   | 371 |   |   |   | 330 |   |
| Non-recurring \\\(income\\\) expense |   |   | 816 |   |   |   | 86 |   |   |   | 5,837 |   |   |   | 1,340 |   |
| Unrealized exchange loss \\\(gain\\\) |   |   | \\\(568 | \\\) |   |   | 5,550 |   |   |   | 176 |   |   |   | 490 |   |
| Tax \\\(benefit\\\) expense related to the above |   |   | 433 |   |   |   | \\\(806 | \\\) |   |   | 17,155 |   |   |   | 3,519 |   |
| Non-GAAP net income \\\(loss\\\) |   | $ | 14,792 |   |   | $ | \\\(5,399 | \\\) |   | $ | 15,327 |   |   | $ | \\\(15,088 | \\\) |
| GAAP net income \\\(loss\\\) |   | $ | 6,300 |   |   | $ | \\\(17,936 | \\\) |   | $ | \\\(30,762 | \\\) |   | $ | \\\(36,206 | \\\) |
| Share-based compensation expense |   |   | 5,684 |   |   |   | 3,116 |   |   |   | 14,939 |   |   |   | 8,842 |   |
| Expenses associated with discontinued products |   |   | 1,098 |   |   |   | 3,372 |   |   |   | 4,691 |   |   |   | 3,372 |   |
| Non-cash expenses associated with discontinued products |   |   | 902 |   |   |   | 1,106 |   |   |   | 2,920 |   |   |   | 3,225 |   |
| Amortization of intangible assets |   |   | 127 |   |   |   | 113 |   |   |   | 371 |   |   |   | 330 |   |
| Non-recurring expense \\\(income\\\) |   |   | 816 |   |   |   | 85 |   |   |   | 5,837 |   |   |   | 1,341 |   |
| Unrealized exchange loss \\\(gain\\\) |   |   | \\\(568 | \\\) |   |   | 5,550 |   |   |   | 176 |   |   |   | 490 |   |
| Depreciation expense |   |   | 13,692 |   |   |   | 6,148 |   |   |   | 31,159 |   |   |   | 15,936 |   |
| Interest \\\(income\\\) expense, net |   |   | \\\(1,873 | \\\) |   |   | 451 |   |   |   | \\\(5,068 | \\\) |   |   | 1,692 |   |
| Income tax expenses \\\(credit\\\) |   |   | 2,359 |   |   |   | – |   |   |   | 4,697 |   |   |   | – |   |
| Adjusted EBITDA |   | $ | 28,537 |   |   | $ | 2,005 |   |   | $ | 28,960 |   |   | $ | \\\(978 | \\\) |
| GAAP diluted net income \\\(loss\\\) per share |   | $ | 0.07 |   |   | $ | \\\(0.28 | \\\) |   | $ | \\\(0.38 | \\\) |   | $ | \\\(0.64 | \\\) |
| Share-based compensation expense |   |   | 0.06 |   |   |   | 0.05 |   |   |   | 0.18 |   |   |   | 0.16 |   |
| Expenses associated with discontinued products |   |   | 0.01 |   |   |   | 0.05 |   |   |   | 0.06 |   |   |   | 0.06 |   |
| Non-cash expenses associated with discontinued products |   |   | 0.01 |   |   |   | 0.02 |   |   |   | 0.03 |   |   |   | 0.06 |   |
| Non-recurring \\\(income\\\) expense |   |   | 0.01 |   |   |   | – |   |   |   | 0.07 |   |   |   | 0.02 |   |
| Unrealized exchange loss \\\(gain\\\) |   |   | \\\(0.01 | \\\) |   |   | 0.08 |   |   |   | – |   |   |   | 0.01 |   |
| Non-GAAP tax benefit |   |   | 0.01 |   |   |   | \\\(0.01 | \\\) |   |   | 0.20 |   |   |   | 0.06 |   |
| Effect of diluted share count |   |   | 0.01 |   |   |   | – |   |   |   | 0.02 |   |   |   | – |   |
| Non-GAAP diluted net earnings \\\(loss\\\) per share |   | $ | 0.17 |   |   | $ | \\\(0.09 | \\\) |   | $ | 0.18 |   |   | $ | \\\(0.27 | \\\) |
| Shares used to compute diluted loss per share |   |   | 85,397 |   |   |   | 63,329 |   |   |   | 81,016 |   |   |   | 56,762 |   |
| Shares used to compute diluted earnings per share |   |   | 87,835 |   |   |   | 63,329 |   |   |   | 84,106 |   |   |   | 56,762 |   |
1. \(a\) Provided for the purpose of calculating gross profit as a percentage of revenue \(gross margin\).
|   | 7 |   |



---

[^a]: leading provider of advanced optical and HFC networking products that power AI, today announced
financial results for its third quarter ended September 30, 2026.</content>
                </data>
            

                <data>
                    <label>AAOI 10-Q, date: 2026-11-05 21:16 UTC</label>
                    <content>UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2026 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to__________ Commission File Number: 001-36083 Applied Optoelectronics, Inc. (Exact name of registrant as specified in its charter)

13139 Jess Pirtle Blvd. Sugar Land, TX 77478 (Address of principal executive offices) ( 281) 295-1800 (Registrant’s telephone number) Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐No ☒ As of November 2, 2026, there w ere 90,770,732shares of the registrant’s Common Stock outstanding. 1

Applied Optoelectronics, Inc. Table of Contents

2

<div align='center'>Part I. Financial Information</div>

Item 1. Condensed Consolidated Financial Statements

<div align='center'>Applied Optoelectronics, Inc. and Subsidiaries

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands)

​

​

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

Applied Optoelectronics, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in thousands, except per share data)

​

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

Applied Optoelectronics, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited, in thousands)

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

Applied Optoelectronics, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Three and Nine Months ended September 30, 2026 and 2025

(Unaudited, in thousands, except for share amount)

6

The accompanying notes are an integral part of these condensed consolidated financial statements.

7

Applied Optoelectronics, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)

​</div>

​

<div align='center'>The accompanying notes are an integral part of these condensed consolidated financial statements.

8

Applied Optoelectronics, Inc. and Subsidiaries

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)</div>

Note 1.Description of Business

​

Business Overview

Applied Optoelectronics, Inc. ("AOI" or the "Company") is a Delaware corporation. The Company is a leading, vertically integrated provider of fiber-optic networking products, primarily for four networking end-markets: internet and AI data centers, cable television ("CATV"), telecommunications ("telecom") and fiber-to-the-home ("FTTH"). The Company designs and manufactures a wide range of optical communications products at varying levels of integration, from components, subassemblies and modules to complete turn-key equipment.

​

The Company has manufacturing and research and development facilities located in the U.S., Taiwan and China. In the U.S., at its corporate headquarters and manufacturing facilities in Sugar Land, Texas, the Company primarily manufactures lasers and laser components as well as certain of its data center transceivers and performs research and development activities for laser component and optical module products and certain data center transceiver products. In addition, the Company has a research and development facility in Duluth, Georgia. The Company operates in Taipei, Taiwan and Ningbo, China through its wholly-owned subsidiary Prime World International Holdings, Ltd. ("Prime World", incorporated in the British Virgin Islands). Prime World operates a branch in Taipei, Taiwan, which primarily manufactures certain of its data center transceivers and certain CATV systems and equipment and performs research and development activities for the transceiver products. Prime World is the parent of Global Technology, Inc. ("Global", incorporated in the People’s Republic of China). Through Global, the Company primarily manufactures certain of its data center transceiver products, including subassemblies, as well as CATV systems and equipment, and performs research and development activities for CATV and certain data center transceiver products.

​

Interim Financial Statements

The accompanying unaudited condensed consolidated financial statements of the Company as of September 30, 2026 and December 31, 2025 and for the three and nine months ended September 30, 2026 and September 30, 2025, have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim information and with the instructions on Form 10-Q and Rule 10-01 of Regulation S-X pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). In accordance with those rules and regulations, the Company has omitted certain information and notes required by GAAP for annual consolidated financial statements. In the opinion of management, the condensed consolidated financial statements contain all adjustments, necessary for the fair statement of the Company’s financial position and results of operations for the periods presented. The year-end condensed balance sheet data was derived from audited financial statements. These condensed consolidated financial statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in the Company’s Annual Report on Form 10-K ("Annual Report") for the fiscal year ended December 31, 2025. The results of operations for the three and nine months ended September 30, 2026 are not necessarily indicative of the results expected for the entire fiscal year. All significant inter-company accounts and transactions have been eliminated.

​

Use of Estimates

​

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ materially from those estimates in the consolidated financial statements and accompanying notes. Significant estimates and assumptions that impact these financial statements and the accompanying notes relate to, among other things, revenue recognition, allowance for credit losses, inventory reserve, valuation of long-lived assets, service and product warranty costs, share-based compensation expense, estimated useful lives of tangible and intangible assets, and taxes.

<div align='center'>9</div>

Note 2.Significant Accounting Policies

​

There have been no changes in the Company’s significant accounting policies for the three and nine months ended September 30, 2026, as compared to the significant accounting policies described in its 2025 Annual Report.

​

Recent Accounting Pronouncements Adopted

In November 2024,the Financial Accounting Standard Board ("FASB") issued Accounting Standard update ("ASU") 2024-04, Debt-Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments. The amendments clarify the accounting for certain induced conversions of convertible debt instruments. The Company adopted this ASU effective January 1, 2026.The adoption did not have a material impact on the Company’s consolidated financial statements and related disclosures because the Company did not enter into any transactions within the scope of the standard during the period.

In July 2025,the FASB issued ASU 2025-05—Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which added a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset when estimating expected credit losses for current accounts receivable and current contract assets. The guidance is effective for annual periods beginning after December 15, 2025.The Company has adopted this ASU and this ASU did not have a material impact on the Company's financial statements.

Recent Accounting Pronouncements NotYet Adopted

In November 2024,the FASB issued ASU 2024- 03"Income Statement: Reporting Comprehensive Income/Expense Disaggregation Disclosures (Subtopic 220- 40)" to improve the disclosures about an entity's expenses. Upon adoption, the Company will be required to disclose in the notes a disaggregation of certain expense categories included within the expense captions of the income statement. The standard is effective for the Company's 2027annual period, and its interim periods beginning in 2028.The Company is currently evaluating the impact the new standard will have on its annual financial statements and related disclosures.

In May 2025, the FASB issued ASU 2025- 04"Share-Based Consideration Payable to a Customer". The standard is effective for the Company's 2026annual period, and its interim periods beginning in 2027.The Company is currently evaluating the impact of this ASU on its annual financial statements and related disclosures.

In September 2025, the FASB issued ASU 2025 - 06—Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350 - 40 ): Targeted Improvements to the Accounting for Internal-Use Software, which removed the language around project stages that was used to assess when costs could be capitalized for an internal-use software. The update also requires internal-use software to be disclosed under the ASC 360 Property, Plant, and Equipment guidance. The guidance is effective for annual periods beginning after December 15, 2027. The Company is currently assessing the impact of this ASU on the Company’s accounting policies and the financial statements.

In December 2025,the FASB issued ASU 2025-10, Government Grants (Topic 832), to establish the accounting for a government grant received by a business entity including guidance for (1) a grant related to an asset and (2) a grant related to income. For public business entities, the provisions of ASU 2025-10 are effective for fiscal years beginning after December 15, 2028.Early adoption is permitted. The Company is currently evaluating the requirements under this new standard, which mayhave a material impact on the timing of recognition and presentation of grants received on the Company's results of operations or financial condition.

In December 2025,the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. The ASU clarifies interim disclosure requirements and the applicability of Topic 270. The objective of the amendments is to provide further clarity about the current interim disclosure requirements. The ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027.Adoption of this ASU can be applied as either a prospective or a retrospective approach. Early adoption is permitted. The Company﻿ is currently evaluating the provisions of this ASU and does not expect this ASU to have a material impact on its consolidated financial statements.

In December 2025,the FASB issued ASU 2025-12, Codification Improvements. The ASU addresses thirty-three items, representing the changes to the Codification that (1) clarify, (2) correct errors, or (3) make minor improvements. Generally, the amendments in this update are not intended to result in significant changes for most entities. The ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2026.The adoption method of this ASU mayvary, on an issue-by-issue basis. Early adoption is permitted. The Company ﻿is currently evaluating the provisions of this ASU and does not expect this ASU to have a material impact on its consolidated financial statements.

There have been no other recent accounting pronouncements or changes in accounting pronouncements during the third quarter of 2026 that are of significance or potential significance to the Company.

<div align='center'>10</div>

Note 3.Revenue Recognition

​

Disaggregation of Revenue

​

Revenue is classified based on the location where the product is manufactured. For additional information on the disaggregated revenues by geographical region, see Note 17, "Segment and Geographic Information."

All of the Company's contracts have original expected durations of one year or less, and therefore the Company does not disclose remaining performance obligations.

Revenue is also classified by major product categories and is presented below (in thousands):

​

Customer Warrant

On March 13, 2025,the Company issued a warrant (the "Customer Warrant") to a wholly-owned subsidiary of Amazon.com, Inc. to purchase up to an aggregate of shares of the Company's common stock ("Warrant Shares") at an exercise price of $ per share. The Customer Warrant has a contractual term of years. At the time of the issuance, the Customer Warrant is exercisable to purchase Warrant Shares. The remaining Warrant Shares mayvest over the next 10 years, dependent on aggregate purchases by or on behalf of Amazon and its affiliates of $ billion of the Company's products over this time period. The Company accounts for the Customer Warrant as an equity classified share-based consideration to a customer and will recognize the grant-date fair value of the Customer Warrant as a reduction of revenue from Amazon as the related goods or services are transferred. The grant date fair value of the Customer Warrant was determined to be $ per share, using the Black-Scholes-Merton option pricing model.

The per share grant date fair value of the Customer Warrant was estimated using the following assumptions:

For the nine months ended September 30, 2026, the Company recognized approximately $ million related reduction to $ million revenue associated with customer arrangements that included the issuance of warrants. As of December 31, 2025, the Company recorded other current asset of $ million and other noncurrent asset of $ million. As of September 30, 2026, the Company recorded other current assets of $ million and other noncurrent assets of $ million, representing the aggregate grant-date fair value of warrant shares vested at issuance.

<div align='center'>11</div>

Note 4.Leases

The Company leases space under non-cancellable operating leases for manufacturing facilities, office space (including research and development offices), warehouses, certain storage facilities and apartments. These leases do not contain contingent rent provisions. The Company also leases certain machinery, office equipment and a vehicle under operating leases. The Company determines if an arrangement is or contains a lease at contract inception. Many of its leases include both lease (e.g. fixed payments including rent, taxes, and insurance costs) and non-lease components (e.g. common-area or other maintenance costs) which are accounted for as a single lease component as the Company has elected the practical expedient to group lease and non-lease components for all leases. Several of the leases include one or more options to renew which have been assessed and either included or excluded from the calculation of the lease liability of the right of use ("ROU") asset based on management’s intentions and individual fact patterns. Several warehouses and apartments have non-cancellable lease terms of less than one-year and therefore, the Company has elected the practical expedient to exclude these short-term leases from its ROU asset and lease liabilities.

On October 7, 2024,Prime World entered into a Land and Building Lease Agreement with San Ho Enterprise Co., Ltd. ("San Ho Enterprise"), under which Prime World leases approximately square feet, of two adjoining parcels of land, in New Taipei City. The lease also includes a building on these parcels, totaling approximately square feet. The lease term is for fifteen years, commencing on December 1, 2024,and ending on November 30, 2039.A two-month renovation period from October 1to November 30, 2024,preceded the lease term, during which no rent was charged by San Ho Enterprise. During the lease term, the monthly rent will increase by three percent (%) every three years.

On September 1, 2025,Prime World entered into a Lease Agreement with International Games System Co., Ltd., under which Prime World leases a parcel of land with a total area of approximately square feet, in New Taipei City. The lease includes a building on the parcel, totaling approximately square feet, excluding approximately square feet of the leased property which, at the same time, had previously been leased to an existing tenant. The lease term is for fifteen years, commencing November 1, 2025,and ending October 31, 2040.A two-month renovation period from September 1to October 1, 2025,preceded the lease term, during which no rent was charged. During the lease term, the monthly rent will increase by three percent (%) every five years. On October 28, 2025,Prime World entered into a lease to include square feet of the property which was previously excluded in the lease entered into on September 1, 2025.

On September 19, 2025,the Company entered into a Lease Agreement with Coleman Logistics Assets LLC (“Coleman”), pursuant to which the Company leases approximately square feet of space located at 1111 Gillingham Lane, Sugar Land, Texas 77478. The leased premises is used by the Company primarily for manufacturing and related operations. The lease has a term of months, commencing on March 31, 2026,and expiring approximately 126 months thereafter, unless earlier terminated in accordance with the lease. Coleman agreed to provide a construction allowance toward the cost of leasehold improvements in an amount equal to the lesser of (i) the actual aggregate cost of such improvements or (ii) $. Base rent under the lease is abated for the first seven months of the term and thereafter increases on a scheduled basis through the end of the term, reflecting an average annual escalation of approximately %. Beginning in the eighth month of the term, base rent will be $ per rentable square foot on an annual basis (approximately $ per month), escalating periodically to $ per rentable square foot on an annual basis (approximately $ per month) during the final six months of the term. The total undiscounted lease payments over the initial lease term are approximately $ 18.5million. As of September 30, 2026,we recorded an $ 11.1million ROU asset and $ 12.4million in lease liability related to this agreement.

On February 23, 2026,the Company entered into a Lease Agreement (the "Prior Lease") with Blue Ridge Commerce Center West LLC ("Blue Ridge"), pursuant to which the Company leased approximately square feet of space in Building #3, located at 16851 Blue Ridge Commerce Drive, Houston, Texas 77489. The leased premises were used for office, warehouse and light manufacturing and assembly purposes. The Prior Lease had a term of months, commencing on February 10, 2026.Blue Ridge agreed to provide an improvement allowance in the amount of $. Base rent was abated for the first five months of the term. For months 6 through 10, monthly base rent was $ per rentable square foot on an annualized basis (approximately $ per month). Beginning in month 11, base rent would have increased to $ per rentable square foot on an annualized basis (approximately $ per month) and escalated periodically throughout the remainder of the term, reflecting an average annual increase of approximately %. These scheduled increases would have culminated in base rent of $ per rentable square foot on an annualized basis (approximately $ per month) during the final 10 months of the term (months 121 through 130). The Company was required to pay (i) prepaid rent of $ to be applied against the eleventh month’s rent and (ii) an initial security deposit of $ million, which accrued interest and was subject to partial reductions during the lease term if specified payment-performance conditions are satisfied. The Prior Lease provided for scheduled reductions of the security deposit of $ million after 40 months, $ million after 70 months, and $ million after 100 months, subject to the Company not being in default and other conditions set forth in the Lease. The total undiscounted lease payments over the initial lease term are approximately $ million. On September 4, 2026,the Company exercised its purchase option under the Prior Lease and acquired the leased property, consisting of approximately acres of land and the approximately rentable-square-foot building, for an aggregate purchase price of approximately $ million, paid in cash at closing. Prior to the purchase, the Company had recorded a $ million ROU asset and $ million in lease liability related to this agreement. Upon the acquisition, the lease was terminated and the related ROU asset and lease liability were derecognized.

On May 8, 2026,the Company entered into three separate Lease Agreements with Hightower Phase I Owner, LLC ("Hightower"), pursuant to which the Company will lease three industrial buildings, located at 6000 McHard Road, Houston, Texas 77053 ("Building 1"), 6100 McHard Road, Houston, Texas 77053 ("Building 2") and 17255 Chimney Rock Road, Houston, Texas 77053 ("Building 3"). The leased premises maybe used for manufacturing, warehouse and office use. Each lease has a term of 123 full calendar months, plus any partial month from the commencement date to the end of the calendar month in which the commencement date occurs. The commencement date will be the earliest of: (i) the date on which the Company occupies any portion of the applicable premises and begins conducting business therein, (ii) the date on which Hightower’s work is substantially completed, or (iii) the date on which such work would have been substantially completed but for any tenant delay days. Under each lease agreement, the Company is entitled to an initial rent abatement period during the first three months. Commencing in the fourth month, base rent escalates periodically throughout the term. Building 1 consists of approximately rentable square feet, together with approximately -acre adjacent unimproved tract. Monthly basic rent starts at $ in month four, escalating periodically to $ during months 112 through 123. Monthly basic rent for the adjacent unimproved tract starts at $ in month four, escalating periodically to $ during months 112 through 123. Building 2 consists of approximately rentable square feet. Monthly basic rent starts at $ in month four, escalating periodically to $ during months 112 through 123. Building 3 consists of approximately rentable square feet. Monthly basic rent starts at $ in month four, escalating periodically to $ during months 112 through 123. Each lease agreement includes a fair value purchase and sales agreement granting the Company an option to purchase Building 1, Building 2 and Building 3, together with the land on which such buildings are located. The purchase and sale agreements provide for an aggregate purchase price of $ and require earnest money of $. As of September 30, 2026,the Company had not recorded any ROU asset nor lease liability related to this agreement as the Company has not met the commencement criteria.

On August 31, 2026,the Company entered into two separate lease agreements with Hightower Phase II Owner, LLC ("Hightower II"), an affiliate of Hightower, for two industrial buildings to be constructed at 17331 Chimney Rock Road ("Building 4") and 17433 Chimney Rock Road ("Building 5"), Houston, Texas 77053, consisting of approximately and rentable square feet, respectively. The leased premises maybe used for light manufacturing, warehouse and related uses. Substantial completion is anticipated approximately 16 months following the date of the leases. Each lease has an initial term of months, plus any partial month, commencing on the earliest of (i) the date the Company occupies and begins conducting business in any portion of the applicable premises, (ii) substantial completion of the landlord's work, or (iii) the date substantial completion would have occurred but for tenant delay. Monthly basic rent starts at approximately $ for Building 4 and $ for Building 5 and increases annually to approximately $ and $, respectively, during the final lease year. The Company is also responsible for 100% of the operating costs, taxes and insurance allocated to each building. The leases require aggregate security deposits of $ million, subject to scheduled reductions, and grant the Company an option to purchase Buildings 4 and 5 and the related land for an aggregate purchase price of approximately $ million, subject to adjustment. Hightower II mayterminate the leases if the Company does not timely exercise, or fails to close, its option to purchase Buildings 1, 2 and 3. As of September 30, 2026,the Company had not recorded any ROU asset nor lease liability related to these leases because the commencement criteria had not been met.

On September 10, 2026,Global entered into a Factory Premises Lease Agreement with Ningbo Yiduofu Industrial Co., Ltd., under which Global will lease a building of approximately square meters (approximately square feet) located in Haishu District, Ningbo, China. The lease term is ten years, commencing on September 16, 2026,and ending on September 15, 2036,and includes a three-month rent-free renovation period beginning upon delivery of the premises. Annual rent is RMB (approximately $ million), increasing by three percent (%) every three years beginning in the third lease year. Global also has a right of first refusal to purchase the premises if the lessor elects to sell, and a right of first refusal to renew the lease. As of September 30, 2026,the Company recorded an $ million ROU asset and $ million in lease liability related to this agreement.

<div align='center'>12</div>

As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Based on the applicable lease terms and current economic environment, the Company applies a location approach for determining the incremental borrowing rate.

Lease expense was included in general and administrative expenses and totaled $ million and $ million for the three months ended September 30, 2026and 2025, respectively. Total lease expense was $ million and $ million for the nine months ended September 30, 2026and 2025, respectively. The components of lease expense were as follows for the periods indicated (in thousands):

Maturities of lease liabilities are as follows for the future one-year fiscal year periods (in thousands):

​

​

The weighted average remaining lease term and discount rate for the leases were as follows for the periods indicated:

​

Supplemental cash flow information related to the leases was as follows for the periods indicated (in thousands):

​

<div align='center'>13</div>

Note 5.Cash, Cash Equivalents and Restricted Cash

​

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the statement of financial position that sum to the total of the same such amounts in the statement of cash flows (in thousands):

​

Restricted cash includes guarantee deposits for customs duties, a China government subsidy fund, and deposits as collateral in order to secure bank acceptance notes issued to vendors. As of September 30, 2026 and December 31, 2025, there was $ million and $ million of restricted cash required for bank acceptance notes issued to vendors, respectively. There were $ million and $ million guarantee deposits for customs duties as of September 30, 2026 and December 31, 2025, respectively.

Note 6.Earnings (Loss) Per Share

​

Basic net income (loss) per share has been computed using the weighted-average number of shares of common stock outstanding during the period. Diluted net income (loss) per share has been computed using the weighted-average number of shares of common stock and dilutive potential common shares from restricted stock units, including performance-based stock units, and senior convertible notes outstanding during the period. In periods with net losses, dilutive securities are excluded from diluted earnings per share because their inclusion would be antidilutive. On March 13, 2025,the Company issued stock warrants to a subsidiary of Amazon, of which warrants vested upon signing the warrant agreement. For the three and nine months ended September 30, 2026, such warrants are both in the money and are considered dilutive instruments. For the three months ended September 30, 2026,the vested Amazon warrants were determined to be dilutive and were included in diluted earnings per share. The Company's 2030 Convertible Senior Notes were evaluated under the if-converted method and were included in diluted earnings per share. Accordingly, diluted earnings per share reflects both the shares issuable upon conversion of the notes and the related adjustment to net income for interest expense and debt issuance cost amortization, net of applicable tax effects.

​

The following table sets forth the computation of the basic and diluted net income (loss) per share for the periods indicated (in thousands):

The following potentially dilutive securities were excluded from the diluted net loss per share as their effect would have been antidilutive (in thousands):

Note 7.Inventories

Inventories, net consist of the following for the periods indicated (in thousands):​

For the three months ended September 30, 2026and 2025, the inventory reserve adjustment expensed for inventory was $() million and $ million, respectively. For the nine months ended September 30, 2026and 2025, the inventory reserve adjustment expensed for inventory was $() million and $ million, respectively.

For the three months ended September 30, 2026and 2025, the direct inventory write-offs related to scrap, discontinued products and damaged inventories were $ million and $ million, respectively. For the nine months ended September 30, 2026and 2025, the direct inventory write-offs related to scrap, discontinued products and damaged inventories were $ million and $ million, respectively.

<div align='center'>14</div>

Note 8.Property, Plant & Equipment

Property, plant and equipment consisted of the following for the periods indicated (in thousands):

​

​

Capital Equipment Prepayments

Other assets, net primarily consist of long-term prepayments made in connection with the Company's capital expansion projects. As of September 30, 2026, other assets, net was $ million, compared to $ million as of December 31, 2025. The increase was primarily attributable to advance payments for equipment and facility related capital expenditures associated with the Company's manufacturing expansion initiatives. These amounts are expected to be reclassified to property, plant and equipment as the related assets are received and placed into service.

For the three months ended September 30, 2026and 2025, the depreciation expense of property, plant and equipment was $ million and $ million, respectively. For the nine months ended September 30, 2026and 2025, the depreciation expense of property, plant and equipment was $ million and $ million, respectively.

Note 9.Intangible Assets, net

Intangible assets consisted of the following for the periods indicated (in thousands):

​

​

For the three months ended September 30, 2026and 2025, amortization expense for intangible assets, included in general and administrative expenses on the statement of operations, was $ million and $ million, respectively. For the nine months ended September 30, 2026and 2025, amortization expense for intangible assets, included in general and administrative expenses on the statement of operations, was $ million and $ million, respectively. The remaining weighted average amortization period for intangible assets is approximately years.

On September 30, 2026, future amortization expenses for intangible assets for future periods are estimated to be (in thousands):

Note 10.Fair Value of Financial Instruments

The carrying value amounts of cash and cash equivalents, restricted cash, accounts receivable, prepaid expenses, notes receivable and other current assets, accounts payable, accrued expenses, bank acceptance payable and other current liabilities approximate fair value because of the short-term maturity of these instruments. The Company believes that the interest rates in effect at each period end represent the current market rates for similar borrowings.

The Company's accounts receivable was $ million as of September 30, 2026. Of this amount, $ million was due from Digicomm International Inc. For each of the three and nine months ended September 30, 2026and 2025, our top ten customers represented % and % of our revenue, respectively. For the three months ended September 30, 2026, our top three customers represented %, % and % of our revenue, respectively. For the three months ended September 30, 2025, our top three customers represented %, % and % of our revenue, respectively. For the nine months ended September 30, 2026, our top three customers represented %, % and % of our revenue, respectively. For the nine months ended September 30, 2025, our top three customers represented %, % and % of our revenue, respectively.

The fair value of convertible senior notes is measured for disclosure purposes only. The fair value and carrying amount of our convertible senior notes as of September 30, 2026 was $ million and $ million, respectively. As of December 31, 2025, the fair value and carrying amount of our convertible senior notes was $ million and $ million, respectively. The fair value is based on observable market prices for this debt, which is traded in less active markets and is therefore classified as a Level 2 fair value measurement. The significant increase in the fair value of the convertible senior notes relative to their carrying amount as of September 30, 2026 is primarily attributable to a substantial increase in the market price of the Company's common stock during the quarter, which increased the value of the conversion feature embedded in the notes.

<div align='center'>15</div>

Note 11.Notes Payable and Long-Term Debt

Notes payable and long-term debt consisted of the following for the periods indicated (in thousands):

​

SPD Credit Line

On July 29, 2025,Global entered into a five-year revolving credit line agreement with Shanghai Pudong Development Bank Co., Ltd. in Ningbo City, China ("SPD"), totaling 250,000,000 RMB (the "¥250M SPD Credit Line"), or approximately $ million at that time, and a mortgage contract. The ¥250M SPD Credit Line is included in the prior RMB credit facility entered into by Global on July 18, 2025.

On June 11, 2026,Global entered into a one-year revolving credit line agreement with SPD increasing the ¥250M SPD Credit Line to RMB (the "¥500M SPD Credit Line"), or approximately $ million at that time. Borrowing under the ¥500M SPD Credit Line will be used for general corporate and capital investment purposes. Global's obligation under the ¥500M SPD Credit Line will be secured by certain real property owned by Global. As of September 30, 2026, $ million was outstanding under the ¥500M SPD Credit Line, and the outstanding balance of bank acceptance notes under this bank issued to vendors was $ million. The unused credit as of September 30, 2026 was $ million.

CCB Loan

On June 12, 2025,Global entered into a one-year credit facility with China Construction Bank Co., Ltd., in Ningbo, City, China ("CCB"), totaling RMB (the "CCB Credit Facility"), or approximately $ million at that time.

On June 26, 2025,Global entered into a five-year revolving credit line agreement with CCB, totaling RMB (the "CCB Credit Line"), or approximately $ million at that time. The amount available under the CCB Credit Line is inclusive of the CCB Credit Facility previously granted by CCB on June 12, 2025.On December 19, 2025,the CCB Credit Line was increased to RMB. Global's obligation under the CCB Credit Line is secured by certain real property owned by Global. As of September 30, 2026, there was $ million outstanding under the CCB Credit Line. The outstanding balance of bank acceptances notes under this bank issued to vendors was $ million as of September 30, 2026. The unused credit as of September 30, 2026 was $ million.

NBCB Loan

On June 23, 2025,Global entered into a five-year credit facility with Bank of Ningbo, in Ningbo City, China, totaling RMB (the "NBCB Credit Facility"), or approximately $ million at that time. On December 19, 2025,the parties entered into an amendment to the NBCB Credit Facility, increasing the credit limit to RMB, or approximately $ million at that time (the "NBCB Credit Line"). As of September 30, 2026, there was $ million outstanding under the NBCB Credit Line. The outstanding balance of bank acceptance notes issued to vendors under this bank was $ million as of September 30, 2026. The unused credit as of September 30, 2026 was $ million.

CZB Loan

On December 26, 2025,Global entered into an asset pooling cooperation agreement with China Zheshang Bank in Ningbo City, China totaling RMB (the "CZB Credit Line"), or approximately $ million at that time. As of September 30, 2026, there was $ million outstanding under the CZB Credit Line. The unused credit as of September 30, 2026 was $ million.

BOC Loan

On April 29, 2026,Global entered into a one-year credit facility with Bank of China in Ningbo City, China, totaling RMB (the "BOC Credit Line"), or approximately $ million at that time. As of September 30, 2026, there was $ million outstanding under the BOC Credit Line.

BOKF Loan

On July 31, 2025,the Company entered into a Loan and Security Agreement with BOKF, NA dba BOK Financial, as agent for secured parties (the "BOKF Credit Facility"). The BOKF Credit Facility provides the Company with a three-year, $ million revolving line of credit, with the ability to request additional lender commitments in an aggregate amount not to exceed $ million (for a total aggregate amount of $ million) pursuant to certain conditions. As of September 30, 2026, $ was outstanding under the BOKF Credit Facility.

Taishin Loan

On November 27, 2025,Prime World entered into a credit facility with Taishin International Bank in Taiwan, consisting of a NT$100,000,000 line of credit (the "NT$100M Credit Line"), or approximately $ million at that time, and a US$2,000,000 line of credit (the "US$2M Credit Line", collectively, with the NT$100M Credit Line, the "Taishin Credit Facility"). Prime World mayutilize the Taishin Credit Facility from November 27, 2025through October 31, 2026.Borrowings under the NT$100M Credit Line maybe drawn as short-term loans, while the US$2M Credit Line is a derivatives-based facility and maybe used by Prime World to enter into foreign exchange hedging transactions. As of September 30, 2026, $ million was outstanding under the NT$100M Credit Line and the US$2M Credit Line was unutilized.

FCB Loan

On January 2, 2026,Prime World entered into a credit facility with First Commercial Bank in Taiwan, consisting of a NT$100,000,000 line of credit (the "FCB Credit Facility"), or approximately $ million at that time. As of September 30, 2026, there was $ million outstanding under the FCB Credit Facility.

CTBC Loan

On June 11, 2026,Prime World entered into a credit facility with CTBC Bank Co., Ltd. in Taiwan, consisting of a NT$100,000,000 line of credit and a NT$180,000,000 equipment term loan (collectively, the "CTBC Credit Facility"), or approximately a total of $ million at that time. As of September 30, 2026 $ million was outstanding under the CTBC Credit Facility. The unused credit as of September 30, 2026 was $ million.

Chailease Loan

On July 14, 2026, Prime World entered into a sale and purchase agreement and a finance lease agreement credit facility with Chailease Finance Co., Ltd. in Taiwan, providing financing of NT$200,000,000 (collectively, the "Chailease Financing Arrangement"), or approximately $ million at that time. As of September 30, 2026, $ million was outstanding under the Chailease Financing Arrangement.

Covenants

As ofSeptember 30, 2026, we were in compliance with the covenants in the lending arrangements.

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Unused Borrowing Capacity

As of September 30, 2026 , the Company had $ 63.4 million of unused borrowing capacity under the SPD Credit Line, CCB Loan, NBCB Loan, CZB Loan, BOKF Loan, and CTBC Loan. This also includes $ 7.5million of available borrowing capacity from BOCOM. As of December 31, 2025 , the Company had $ 60.7million of unused borrowing capacity under the SPD Credit Line, CCB Loan, NBCB Loan, CZB Loan, BOKF Loan and Taishin Loan.

As of September 30, 2026and December 31, 2025, there was $ 11.4 million and $ 8.7million of restricted cash, investments or security deposits associated with the loan facilities, respectively.

Note 12.Convertible Senior Notes

On December 18, 2024,the Company entered into exchange agreements with certain holders of its % senior convertible notes due 2026 (the “2026 Notes”) to exchange approximately $ million principal amount of the 2026 Notes for aggregate consideration consisting of (i) $ million aggregate principal amount of % Convertible Senior Notes due 2030 (the "2030 Notes"), (ii) shares of the Company’s common stock, par value $ per share (the "Common Stock") and (iii) approximately $ million of cash in aggregate, representing accrued and unpaid interest on the 2026 Notes and the value of fractional shares of Common Stock (such transactions, collectively, the "Exchanges"). The Exchanges closed on December 23, 2024,and we recorded a debt extinguishment loss of $ million due to these Exchanges. There was $ million principal amount for the 2026 Notes remaining. On July 30, 2025,the Company retired the final $ million principal and accrued and unpaid interest on the 2026 Notes by exchanging such outstanding principal for shares of the Company's common stock and by paying the accrued and outstanding interest in cash.

The 2030 Notes were issued pursuant to an Indenture, dated as of December 23, 2024 (the "Indenture"), between the Company, as issuer, and Computershare Trust Company, N.A., as trustee. The 2030 Notes bear interest at a rate of % per year and will pay interest semiannually in arrears on January 15and July 15of each year, beginning on July 15, 2025.The 2030 Notes will mature on January 15, 2030,unless earlier converted, redeemed or repurchased in accordance with their terms.

During the three months ended June30, 2026, a holder of the 2030 Notes exercised its conversion right with respect to $ in aggregate principal amount of 2030 Notes. The Company settled the conversion by delivering shares of Common Stock and $ in cash to the converting holder based on the applicable conversion rate of shares per $1,000 principal amount. Following this conversion, the aggregate principal amount of 2030 Notes outstanding was approximately $ million as of September30, 2026.

The following table presents the carrying value of the 2030 Notes for the periods indicated (in thousands):

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The conversion rate for the 2030 Notes is shares of Common Stock per $1,000 principal amount of the 2030 Notes (which is equivalent to a conversion price of approximately $ per share of Common Stock, representing a premium of approximately % over the last reported sale price of the Common Stock on December 18, 2024of $ per share), subject to adjustment. Before October 15, 2029,holders of the 2030 Notes will have the right to convert their 2030 Notes only upon the satisfaction of a common stock sale price condition or a note trading price condition (each, as described in the Indenture) or upon the occurrence of certain events (including the occurrence of a Fundamental Change, Make-Whole Fundamental Change or Common Stock Change Event (each as defined in the Indenture). From and after October 15, 2029,holders of the 2030 Notes mayconvert their 2030 Notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date. The Company will settle conversions by paying or delivering, as applicable, cash, shares of its Common Stock or a combination of cash and shares of its Common Stock, at the Company’s election, based on the applicable conversion rate(s).

The common stock sale price condition was satisfied during the three months ended September 30, 2026,as the last reported sale price of the Company's common stock exceeded % of the conversion price for at least trading days, whether or not consecutive, during a consecutive trading-day period, in accordance with the terms of the Indenture. As a result, holders of the 2030 Notes mayconvert all or a portion of their 2030 Notes at their option during the fiscal quarter ending December 31, 2026.

The 2030 Notes will be redeemable, in whole or in part (subject to certain limitations described in the Indenture), at the Company’s option at any time, and from time to time, on or after January 15, 2027and on or before the 40th scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount of the 2030 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, but only if the last reported sale price per share of the Common Stock exceeds % of the conversion price on (1) each of at least trading days, whether or not consecutive, during the consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice; and (2) the trading day immediately before the date it sends such notice.

In addition, the 2030 Notes will be redeemable, in whole or in part, at the Company’s option at any time, and from time to time, on or before the 40th scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount of the 2030 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date (subject to the right of a holder of 2030 Notes as of the close of business on a record date to receive the related interest payment on the corresponding interest payment date), if the “Specified Divestiture” (as defined in the Indenture) is completed.

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Calling any 2030 Note for redemption will constitute a "Make-Whole Fundamental Change" (as defined in the Indenture) with respect to that 2030 Note, in which case the conversion rate applicable to the conversion of that 2030 Note will be increased in certain circumstances if it is converted after it is called for redemption.

In addition, if the Specified Divestiture is completed, then unless the Company has previously elected to redeem all of the 2030 Notes, each holder of 2030 Notes will have the right to require the Company to repurchase its 2030 Notes for cash on a date of the Company’s choosing, which must be a business day that is no more than 35, nor less than 20, business days after the date the Company’s sends the related notice of Specified Divestiture. The repurchase price for a note tendered for such repurchase will be equal to the principal amount of the 2030 Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the repurchase date (subject to the right of a holder of 2030 Notes as of the close of business on a record date to receive the related interest payment on the corresponding interest payment date).

Moreover, if the Company undergoes a fundamental change, as described in the Indenture, holders of the 2030 Notes mayrequire the Company to repurchase for cash all or part of their 2030 Notes at a repurchase price equal to % of the principal amount of the 2030 Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the required repurchase date.

Additionally, the 2030 Notes are subject to customary events of default. The 2030 Notes do not restrict the Company’s ability to incur debt or liens. No sinking fund is provided for the 2030 Notes. There are no guarantors of the 2030 Notes.

Pursuant to the guidance in ASC 815-40, Contracts in Entity’s Own Equity, the Company evaluated whether the conversion feature of the note needed to be bifurcated from the host instrument as a freestanding financial instrument. Under ASC 815-40, to qualify for equity classification (or non-bifurcation, if embedded) the instrument (or embedded feature) must be both (1) indexed to the issuer’s own stock and (2) meet the requirements of the equity classification guidance. Based upon the Company’s analysis, it was determined the conversion option is indexed to its own stock and also met all the criteria for equity classification. Accordingly, the conversion option is not required to be bifurcated from the host instrument as a derivative.

Pursuant to ASC 815-15, the Company further determined that the contingent redemption features in the 2030 Notes are not required to be bifurcated from the host contract and accounted for separately. Additionally, the Company then evaluated whether the conversion feature needed to be separately accounted for as an equity component under ASC 470-20, Debt with Conversion and Other Options, and determined that the additional premium was not substantial. Accordingly, that amount was recognized as a premium on the 2030 Notes.

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The following table sets forth interest expense information related to the 2026Notes and 2030Notes (in thousands):

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Note 13.Accrued Liabilities

Accrued liabilities consisted of the following for the periods indicated (in thousands):

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Note 14.Other Income and Expense

Other income and expense consisted of the following for the periods indicated (in thousands):

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Government subsidy income primarily relates to grants received under government assistance programs, including grants received by the Company's China entity under local government incentive programs that support manufacturing operations, technology development, and capital investment, as well as the Texas Semiconductor Innovation Fund ("TSIF"). In April 2026,the Company and the State of Texas, Office of the Governor, Texas CHIPS Office entered into a grant agreement under the Texas Semiconductor Innovation Fund for the TSIF to reimburse the Company for qualifying expenditures not to exceed $ million through December 31, 2027.The TSIF grant is intended to support qualifying semiconductor manufacturing and capital investment activities in Texas and is subject to compliance with the terms and conditions of the grant agreement. Amounts associated with the TSIF grant are recognized in prepaid expenses and other current assets and Government subsidy income within other income (expense), net when the applicable grant requirements are satisfied and receipt became reasonably assured. During the three and nine months ended September 30, 2026,the Company recognized government subsidy income of $ million and $ million, respectively, which included approximately $ million related to the TSIF grant, recognized during the three months ended September 30, 2026.

Note 15.Share-Based Compensation

Equity Plans

The Company’s board of directors and stockholders approved the following equity plans:

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The Company has issued stock options, restricted stock awards ("RSAs") and restricted stock units ("RSUs") to employees, consultants and non-employee directors. Stock option awards generally vest over a four-year period and have a maximum term of ten years. Stock options under these plans have been granted with an exercise price equal to the fair market value on the date of the grant. Nonqualified and Incentive Stock Options, RSAs and RSUs maybe granted from these plans.

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Performance Based Incentive Plan

Starting in 2021, certain senior executives were granted performance stock units ("PSUs") under our equity plan, which generally vest over a three-year period subject to achievement of certain pre-established performance metrics. The number of shares of common stock that would ultimately be issued to settle PSUs granted ranged from % to % of the target number of shares granted. We estimate the fair value of the PSUs on the date of grant using a Monte Carlo simulation model, with stock-based compensation expense recognized ratably over the applicable three-year performance period. The Company recognized stock-based compensation expense for the PSUs for the three months ended September 30, 2026and 2025 of $ million and $ million, respectively. The Company recognized stock-based compensation expense for the PSUs for the nine months ended September 30, 2026and 2025 of $ million and $ million, respectively.

The following is a summary of PSU activity for the nine months ended September 30, 2026:

As of September 30, 2026, there was $ million of unrecognized stock-based compensation expense related to outstanding PSUs, which expense is expected to be recognized over years.

Restricted Stock Units

Restricted stock units are issued to employees through a vesting plan and distribution schedule after employee remains with the Company for a particular length of time. The following is a summary of RSU activity:

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As of September 30, 2026, there was$ 22.4million of unrecognized compensation expense related to these RSUs. This expense is expected to be recognized over years.

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Share-Based Compensation

Employee share-based compensation expenses recognized for the periods indicated (in thousands):

Note 16.Income Taxes

For the three months ended September 30, 2026, the Company recorded an income tax expense of $ million, compared with income tax expense or benefit for the three months ended September 30, 2025. For the nine months ended September 30, 2026, the Company recorded an income tax expense of $ million, compared with income tax expense or benefit for the nine months ended September 30, 2025. The income tax expense for the current period was primarily attributable to income in China, as well as the impact of valuation allowances and discrete items.

For the three months ended September 30, 2026and 2025, the effective tax rates were % and %, respectively. For the nine months ended September 30, 2026and 2025, the effective tax rates were ()% and %, respectively. The effective tax rate differed from the U.S. federal statutory rate of % primarily due to the impact of valuation allowances recorded against deferred tax assets ("DTA") in the United States and Taiwan, and the China R&D Super Deduction.

The Company assesses the realizability of its DTAs, including an analysis of factors such as future taxable income, reversal of existing taxable temporary differences, and tax planning strategies. In assessing the need for a valuation allowance, the Company considered both positive and negative evidence related to the likelihood of realization of deferred tax assets using a “more likely than not” standard. In making such assessment, more weight was given to evidence that could be objectively verified, including recent cumulative losses. Based on the Company’s review of this evidence, management determined that a full valuation allowance against all of the Company’s US and Taiwan net deferred tax assets remains appropriate as of September 30, 2026. However, the Company believes that there is a reasonable possibility that within the next 12 months, sufficient positive evidence maybecome available to allow it to reach a conclusion that a portion of the valuation allowance will no longer be needed. Release of the valuation allowance would result in the recognition of certain DTAs and a decrease to income tax expense for the period the release is recorded. However, the exact timing and amount of the valuation allowance release are subject to change on the basis of the level of profitability that it is able to actually achieve.

The Company expects any earnings of foreign subsidiaries to be indefinitely invested outside the United States. As of December 31, 2025,however, the Company does not have any accumulated undistributed earnings generated by foreign subsidiaries and has estimated that its tax basis in foreign subsidiaries exceeds its book basis. The Company has concluded that no deferred tax asset (DTA) should be recorded because at the present time it does not expect that the temporary book-tax basis difference that would create this DTA will reverse in the foreseeable future.

Recent Tax Legislation

The Company evaluated the provisions of the One Big Beautiful Bill Act ("OBBBA"), which was enacted on July 4, 2025.Consistent with its prior assessment, the provisions related to domestic research and development expenditures, bonus depreciation, business interest expense limitations, or clean energy tax credits did not have a material impact on the Company's income tax provision or effective tax rate.

Note 17.Segment and Geographic Information

The Company operates in one reportable segment. The Company’s Chief Executive Officer, who is considered to be the chief operating decision maker ("CODM"), manages the Company’s operations as a whole and reviews financial information presented on a consolidated basis, accompanied by information about product revenue, for purposes of evaluating financial performance and allocating resources. Our CEO is the functional head of all operations and manufacturing. Our Board, in conjunction with our CODM, considers our consolidated performance and does not have individual financial or operating goals for each location, nor for any other subset of the Company's operations. As such, the Company has determined it operates as one reportable segment.

Our CODM uses net income or loss to allocate resources and assess performance. The CODM regularly reviews the consolidated net income or loss to make strategic decisions, such as capital expenditure plan, production plan and manpower allocation. The following table is in thousands.

We exclude share-based compensation and related expense, certain legal expenses associated with litigation and other one-time expenses from adjusted research and development, adjusted sales and marketing and adjusted general and administrative expenses.

Other segment items include share-based compensation expense, interest expense, interest income, certain legal expenses associated with litigation and other one-time items.

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The following tables set forth the Company’s revenue and asset information by geographic region. Revenue is classified based on the location of where the product is manufactured. Long-lived assets in the tables below comprise property, plant, equipment, land use rights, right of use assets and intangible assets (in thousands):

Note 18.Commitments and Contingencies

Litigation

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From time to time, the Company maybe subject to legal proceedings and litigation arising in the ordinary course of business, including, but not limited to, inquiries, investigations, audits and other regulatory proceedings. The Company records a loss provision when it believes it is both probable that a liability has been incurred and the amount can be reasonably estimated.

The Company believes that there are no claims or actions pending or threatened against it, the ultimate disposition of which would have a material adverse effect on it.

Other Contingencies

On August 9, 2021,the Company received a Taxes Notification of Audit Result ("Notice") from the Texas Comptroller’s Office (the "Comptroller"), for fiscal years between 2016 and 2019, informing the Company that the Comptroller believes the Company did not qualify for certain sales and use tax exemptions on various Research and Development purchases and accordingly the Company is liable for Sale and Use Tax in the amount of approximately $ million including interest charges. The Company paid $ million for the tax notice in May 2021,but challenged the remaining tax assessments and vigorously defended its position. The Comptroller’s office exhausted its redetermination period and therefore moved the Company’s case to the hearing process. No hearing date has yet been scheduled, and as a result the Company is not able to determine the outcome of this sales tax dispute or the likelihood or amount of the Company’s loss, if any, arising from this matter.

On February 20, 2026,the United States Supreme Court issued a ruling invalidating certain tariffs previously imposed under the International Emergency Economic Powers Act ("IEEPA"). Following this ruling, the U.S. Court of International Trade issued an order directing U.S. Customs and Border Protection ("CBP") to establish a process for the submission and review of refund claims related to affected IEEPA tariffs. On April 20, 2026,CBP launched an online portal through which companies maysubmit IEEPA tariff refund requests. On April 29, 2026,the Company submitted refund claims totaling $ million. The Company received payments of approximately $ million and $ million on May 20and May 27, 2026,respectively, and received the remaining balance of approximately $ million on July 6, 2026,for total receipts of approximately $ million, consisting of the full $ million of duties claimed plus applicable interest. The Company recognized the tariff refunds by reducing cost of goods sold, operating expenses, and certain asset balances, as applicable, to align the refund benefit with the financial statement line items in which the associated tariff costs were initially recognized. As of September 30, 2026,the Company’s duty recovery under CAPE 1 is fully complete, and no refund claims or amounts remain outstanding under Phase 1.

Purchase Obligations and Commitments

Kirby Property Acquisition. On April 7, 2026,the Company entered into a Purchase and Sale Agreement with SRPF D/Kirby Industrial, L.P. to acquire real property and improvements located at 14621 Kirby Drive and 11555 North Spectrum Boulevard, Pearland, Texas, consisting of approximately square feet in the aggregate, for an aggregate purchase price of approximately $ million. The acquisition closed on April 16, 2026.The Company intends to use the property for office, warehouse, manufacturing and assembly purposes.

Design-Build Agreement. On June 25, 2026,the Company entered into a design-build agreement with LCC3 Solution Inc. for the design and construction of approximately square feet of ISO Class 6 cleanroom space, together with office, testing and inventory space, at its 11555 North Spectrum Boulevard facility. The total contract amount is approximately $ million. Payments are based on progress, with % retainage withheld until final completion. The design-builder mayearn up to approximately $ million in schedule- and performance-based incentives, and the agreement provides for liquidated damages for delays, capped at $ million. Substantial completion is targeted for January 10, 2027.As of September 30, 2026,the Company had paid approximately $ million under the agreement, and the remaining commitment was approximately $ million.

Hightower Purchase Options. The Company's leases with Hightower Phase I Owner, LLC for Buildings 1, 2 and 3 include an option to purchase the buildings and related land for an aggregate purchase price of $ million. The Company's leases with Hightower Phase II Owner, LLC for Buildings 4 and 5 include an option to purchase those buildings and related land for an aggregate purchase price of approximately $ million, subject to adjustment. The Phase II landlord mayterminate the Phase II leases if the Company does not timely exercise, or fails to close, its option to purchase Buildings 1, 2 and 3. As of September 30, 2026,neither option had been exercised. See Note 4, "Leases."

Other Capital Commitments. As of September 30, 2026,the Company had other outstanding purchase commitments for equipment and facility construction of approximately $ million, primarily related to its manufacturing capacity expansion.

Note 19.Subsequent Events

Loan Agreement

On October 30, 2026,subsequent to the end of the reporting period, the Company entered into a $ million credit agreement with a syndicate of lenders, with East West Bank acting as administrative agent (the "EWB Loan"), and terminated the BOKF Credit Facility. The EWB Loan provides for $ million in revolving commitments and $ million in initial term loan commitments, matures on October 30, 2030,subject to certain earlier maturity provisions, and permits the Company to request up to $ million in incremental term loan commitments, subject to specified conditions.

ATM Completion

On October 1, 2026,the Company completed its third ATM Offering, selling approximately million shares at a weighted average price of $ per share, providing proceeds of approximately $ million, net of expenses and underwriting discounts and commissions.

Supply Agreement

On November 2, 2026,the Company entered into a five-year supply framework agreement and an annual purchase contract with a supplier for the purchase of a key raw material used in certain of its products. The annual contract provides for purchases of up to approximately $ million and requires the Company to make aggregate prepayments of up to $ million, including $ million payable during 2026. No prepayments had been made as of the filing date.

The supplier’s ability to export and deliver the material is subject to obtaining and maintaining required regulatory approvals in China, and actual purchase quantities are subject to the quantities approved for export. If the required approvals are not obtained or maintained, the Company maycancel the annual contract and affected purchase orders and require the refund of applicable prepayments and other amounts paid. Because the agreements were entered into after September 30, 2026,no amounts relating to the agreements have been reflected in the Company’s condensed consolidated financial statements as of that date.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements and the accompanying notes appearing elsewhere in this Quarterly Report on Form 10-Q for the period ended September 30, 2026 and the audited consolidated financial statements and notes thereto and management’s discussion and analysis of financial condition and results of operations for the fiscal year ended December 31, 2025 included in our Annual Report. References to "Applied Optoelectronics," “we," "our" and "us" are to Applied Optoelectronics, Inc. and its subsidiaries unless otherwise specified or the context otherwise requires.

This Quarterly Report on Form 10-Q contains "forward-looking statements" that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. The statements contained in this Quarterly Report that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Terminology such as "believe," "may," "estimate," "continue," "anticipate," "intend," "should," "could," "would," "target," "seek," "aim," "believe," "predicts," "think," "objectives," "optimistic," "new," "goal," "strategy," "potential," "is likely," "will," "expect," "plan," "project," "permit," or by other similar expressions that convey uncertainty of future events or outcomes are intended to identify forward-looking statements.

We have based these forward-looking statements largely on our current expectations and projections about future events and industry and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of events to differ materially from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified in "Part II —Item 1A. Risk Factors", those discussed in other documents we file with the SEC, including our Report on Form 10-K for the year ended December 31, 2025 and subsequent Quarterly Reports on Form 10-Q, and geopolitical tensions and conflicts, including with respect to international trade policies in areas such as tariffs and export controls. Furthermore, such forward-looking statements speak only as of the date of this Quarterly Report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of this Quarterly Report.

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Overview

We are a leading, vertically integrated provider of fiber-optic networking products. We target four networking end-markets: internet and artificial intelligence (“AI”) data centers, CATV, telecom, and FTTH. We design and manufacture a range of optical communications products at varying levels of integration, from components, subassemblies and modules to complete turn-key equipment. In designing products for our customers, we typically begin with the fundamental building blocks of lasers and laser components. From these foundational products, we design and manufacture a wide range of products to meet our customers’ needs and specifications, and such products differ from each other by their end market, intended use and level of integration. We are primarily focused on the higher-performance segments within the internet data center, CATV, telecom and FTTH markets which increasingly demand faster connectivity and innovation.

Our vertically integrated manufacturing model provides us several advantages, including rapid product development, fast response times to customer requests and control over product quality and manufacturing costs.

The four end markets we target are all driven by significant bandwidth demand fueled by the growth of AI, cloud computing, network-connected devices, video traffic, and online social networking. Within the data center market, AI workloads are fueling the retooling of existing data centers and the construction of purpose-built data centers for AI, in both cases significantly increasing demand for higher speed optical networking technology. Existing internet data centers are also being upgraded with higher speed optical networking equipment to support ever-increasing data traffic. Within the CATV market, we benefit from a number of ongoing trends including the move to higher bandwidth networks among CATV service providers, especially the desire by CATV multiple system operators ("MSOs") to increase the return-path bandwidth available to offer to their customers. In the FTTH market, we benefit from continuing Passive Optical Networks ("PON") deployments and system updates among telecom service providers. In the telecom market, we benefit from deployment of new high-speed fiber-optic networks by telecom network operators, including 5G networks.

Our vertically integrated manufacturing model provides us several advantages, including rapid product development, fast response times to customer requests and greater control over product quality and manufacturing costs. We design, manufacture and integrate our own analog and digital lasers using a proprietary Molecular Beam Epitaxy ("MBE"), and Metal Organic Chemical Vapor Deposition ("MOCVD") alternative processes for the fabrication of lasers. We believe the use of both processes, and our knowledge of how to combine these processes with others to fabricate lasers is unique in our industry. We manufacture the majority of the laser chips and optical components that are used in our products. The lasers we manufacture are tested extensively to enable reliable operation over time and our devices are often highly tolerant of changes in temperature and humidity, making them well-suited to the CATV, FTTH and 5G telecom markets where networking equipment is often installed outdoors. All of our laser chips are manufactured in our facility in Sugar Land, Texas. We believe that our domestic production capacity for these devices gives us a competitive advantage over many of our competitors, as we believe that many of our customers prefer to source key components from suppliers who have domestic manufacturing capacity.

We have three manufacturing sites: Sugar Land, Texas, Ningbo, China and Taipei, Taiwan. Our research and development functions are generally partnered with our manufacturing locations, and we have an additional research and development facility in Duluth, Georgia. In our Sugar Land facility, we manufacture laser chips (utilizing our MBE and MOCVD processes), transceivers for the internet data center market, subassemblies and components. The subassemblies are used in the manufacture of components by our other manufacturing facilities or sold to third parties as modules. We manufacture our laser chips only within our Sugar Land facility, where our laser design team is located. In our Taiwan location, we manufacture optical components, such as our butterfly lasers, which incorporate laser chips, subassemblies and components manufactured within our Sugar Land facility. Additionally, in our Taiwan location, we manufacture transceivers for the internet data center, telecom, FTTH and other markets. We also manufacture CATV outdoor equipment including amplifiers. In our China facility, we do certain assembly operations on various products, including some optical subassemblies and transceivers for the CATV transmitters (at the headend), some CATV outdoor equipment and transceivers for our internet data center market. The extent of the assembly operations in our China facility do not always establish the country of origin for these products as China for U.S. tariff purposes. Each manufacturing facility conducts testing on the components, modules or subsystems it manufactures, and each facility is certified to ISO 9001:2015. Our facilities in Ningbo, China, Taipei, Taiwan, and Sugar Land, Texas are all certified to ISO 14001:2015. We are expanding our manufacturing space in and around these existing facilities and are currently in the process of building out suitable facilities for this expansion. We expect the first of these new facilities to begin operation later in 2026.

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Our business depends on winning competitive bid selection processes to develop components, systems and equipment for use in our customers’ products. These selection processes are typically lengthy, and as a result our sales cycles will vary based on the level of customization required, market served, whether the design win is with an existing or new customer and whether our solution being designed in our customers’ product is our first generation or subsequent generation product. However, once one of our solutions is incorporated into a customer’s design, we believe that our solution is likely to continue to be purchased for that design throughout that product’s life cycle because of the time and expense associated with redesigning the product or substituting an alternative solution.

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Our principal executive offices are located at 13139 Jess Pirtle Blvd., Sugar Land, TX 77478, and our telephone number is (281) 295-1800.

Trends and Other Matters Affecting Our Business

Demand for our data center products remained strong during the nine months ended September 30, 2026, driven by continued investments by hyperscale customers in artificial intelligence, cloud computing and high-speed networking infrastructure. We experienced significant growth in sales of data center products during the period, reflecting increased customer deployments and demand for higher speed optical connectivity solutions.

Subsequent to September 30, 2026, we signed a 3-year long term agreement (LTA) with a major hyperscale data center customer. Under this long term agreement, this customer is obligated, with certain conditions, to purchase 10% of certain 1.6 Tb data center transceiver products from us during the three-year period beginning June, 2026 and ending May, 2029. We are obligated to supply these products, including building any additional manufacturing capacity needed to fulfill this demand. We have also agreed to certain maximum pricing levels over the term of this agreement. Actual purchase volumes and revenue under the LTA will depend on the customer’s demand for the covered products, the satisfaction of the applicable conditions and our ability to meet our supply obligations.

LTAs of this type are not typical for our industry and AOI has not been a party to an agreement of this type before. We believe that this customer's desire to engage in an LTA of this type is a consequence of their belief that the demand for these components will remain strong for the next several years.

Although market demand remains favorable, the global economic environment continues to be subject to uncertainty resulting from evolving trade policies, tariffs, export controls, geopolitical developments and other macroeconomic factors. These conditions may impact the availability and cost of materials and components, customer purchasing decisions, deployment schedules and capital spending plans. In addition, changes in global trade policies and regulations could also affect our manufacturing operations, supply chain and customer demand.

We continue to monitor these developments and have implemented strategies intended to reduce potential disruptions, including supply chain diversification, inventory management initiatives and operational efficiencies. However, future demand may be affected by changes in customer deployment schedules, inventory levels, capital spending plans and general market conditions.

Results of Operations

The following table sets forth our consolidated results of operations for the periods presented and as a percentage of our revenue for those periods (in thousands, except percentages):

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Comparison of Financial Results

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Revenue

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We generate revenue through the sale of our products to equipment providers and network operators for the internet data center, CATV, telecom, FTTH and other markets. We derive a significant portion of our revenue from our top ten customers, and we anticipate that we will continue to do so for the foreseeable future. The following charts provide the revenue contribution from each of the markets we served for the three months and nine months ended September 30, 2026 and 2025 (in thousands, except percentages):

Revenues for the three months ended September 30, 2026 increased by $151.2 million, or 127.5%, compared to the three months ended September 30, 2025. The increase was primarily driven by:

Revenues for the nine months ended September 30, 2026 increased by $291.5 million, or 90.7%, compared to the nine months ended September 30, 2025. The increase was primarily driven by:

Future revenue trends are expected to depend on customer demand, customer deployment schedules, capital spending levels, competitive pricing, supply chain conditions and broader macroeconomic conditions.

For each of the three and nine months ended September 30, 2026 and 2025, our top ten customers represented 99% and 97% of our revenue, respectively. We believe that diversifying our customer base is critical for our future success, since reliance on a small number of key customers makes our ability to forecast future results dependent upon the accuracy of the forecasts we receive from those key customers. We continue to prioritize new customer acquisition and growth of diverse revenue streams.

Cost of goods sold and gross margin

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Cost of goods sold increased by $108.4 million, or 126.9%, for the three months endedSeptember 30, 2026, compared to the three months endedSeptember 30, 2025.The increase was primarily attributable to:

Cost of goods sold increased by $213.2 million, or 94.1%, for the nine months endedSeptember 30, 2026, compared to the nine months endedSeptember 30, 2025.The increase was primarily attributable to:

Gross margin increased to 28.2% for the threemonths endedSeptember 30, 2026, compared to 28.0% for the three months ended September 30, 2025. The increase in gross margin was primarily attributable to:

Gross profit increased by $42.9 million, or 128.9% for the three months endedSeptember 30, 2026, compared to the three months endedSeptember 30, 2025. The increase in gross profit was primarily attributable to:

Gross margin decreased to 28.3% for the nine months endedSeptember 30, 2026, compared to 29.5% for the nine months ended September 30, 2025. Despite the decrease in gross margin percentage, gross profit increased by $78.3 million, or 82.5%, driven by higher revenues. The decrease in gross margin was primarily attributable to:

Gross profit increased by $78.3 million, or 82.5% for the nine months endedSeptember 30, 2026, compared to the nine months ended September 30, 2025. The increase in gross profit was primarily attributable to:

Management expects gross margin to increase in future periods as a result of product mix, cost optimization initiatives, and production efficiencies.

Operating Expenses

Research and Development Expense

Research and development expense increased by $16.8 million, or 79.2%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The increase was primarily attributable to:

Research and development expense increased by $38.9 million, or 65.3%, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The increase was primarily attributable to:

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Sales and Marketing Expense

Sales and marketing expense decreased by $2.0 million, or 20.2%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The decrease was primarily attributable to:

Sales and marketing expense increased by $2.3 million, or 10.1%, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The increase was primarily attributable to:

Management continues to monitor tariff developments and their potential impact on its cost structure and pricing strategy. Based on current conditions, management expects shipping costs and tariff-related impacts to continue through the remainder of 2026, although at a reduced level compared to 2025. Following the termination of tariffs imposed under IEEPA, the Administration implemented replacement measures under other provisions of federal law, including new tariffs under Section 301 of the Trade Act of 1974 that became effective July 24, 2026, subject to applicable exemptions. The trade environment remains uncertain, and additional tariff measures or changes to existing tariffs could affect our costs and pricing strategy. Accordingly, management cannot currently predict whether the reduction in tariff-related impacts will continue or the extent to which future tariff developments may affect our results of operations.

General and Administrative Expense

General and administrative expense increased by $11.3 million, or 55.6%, for the three months endedSeptember 30, 2026compared to the three months endedSeptember 30, 2025.General and administrative expense increased by $33.1 million, or 60.1%, for the nine months endedSeptember 30, 2026compared to the nine months endedSeptember 30, 2025. The increase was primarily due to increased personnel-related costs, including increased share-based compensation expense, as well asexpanded corporate infrastructure to support the Company's growth.

Other Income (Expense), Net

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Interest income increased by $2.6 million, or 586.0%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. Interest income increased by $7.1 million, or 740.7%, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The increases were primarily attributable to higher average cash and investment balances, as well as higher interest income earned on those balances during the period.

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Interest expense increased by $0.3 million, or 35.4%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. Interest expense increased by $0.4 million, or 13.5%, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The increases were primarily attributable to higher average outstanding debt balances and related financing costs during the period.

Other income (expenses) increased by $7.5 million, or 1,072.1 %,for the three months endedSeptember 30, 2026compared to the three months endedSeptember 30, 2025. The increase was primarily attributable to the government subsidy income recognized during the period, as well as the positive foreign exchange impact. Government subsidy income primarily relates to grants received by the Company's China entity under local government incentive programs. Included in government subsidy income for the three months ended September 30, 2026 was approximately $3.5 million of income recognized under the Texas Semiconductor Innovation Fund. The grants were recognized in earnings upon satisfaction of the applicable grant conditions and when receipt became reasonably assured. Other income (expenses) decreased by $0.6 million, or 6.5 %,for the nine months endedSeptember 30, 2026compared to the nine months endedSeptember 30, 2025. The decrease was mainly due to the negative foreign exchange impact.

Benefit (Provision) for Income Taxes

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The Company’s effective tax rates for the three months ended September 30, 2026 and 2025were 27.3% and 0%, respectively.For the nine months ended September 30, 2026 and 2025, the effective tax rates were (18.0)% and 0.0%, respectively.The effective tax rate varied from the federal statutory rate of 21% primarily due to the change of the valuation allowance on federal, state, and Taiwan deferred tax assets ("DTA"), and the R&D super deduction in China.

On August 9, 2022, the Creating Helpful Incentives to Produce Semiconductors Act ("CHIPS Act") was enacted. Among its provisions, the bill provides various federal grants, tax credits, and incentives for investment in the United States. To the extent that we make investments in expanding manufacturing in our semiconductor fabrication facility in Texas, we believe that the CHIPS Act would provide a refundable tax credit for certain equipment and facilities upgrades. We made significant investments in the three months ended September 30, 2026 which we believe should qualify for these credits, but we intend to continue to evaluate these and future investments for applicability to the tax credit provisions of the CHIPS Act.

Comprehensive Income (loss)

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Comprehensive income increased by $26.4 million, or 147.1%, for the three months endedSeptember 30, 2026, compared to the three months endedSeptember 30, 2025.

Comprehensive loss decreased by $7.0 million, or 21.4%, for the nine months endedSeptember 30, 2026as compared to the nine months endedSeptember 30, 2025.

The functional currency for the Company’s operations is generally the applicable local currency. Accordingly, the assets and liabilities of companies whose functional currency is other than the U.S. dollar are included in the consolidated financial statements by translating the assets and liabilities into the U.S. dollar at the exchange rates applicable at the end of the reporting period. Translation gains or losses are accumulated in other comprehensive income (loss) in the consolidated statements of shareholders’ equity and are also included in comprehensive income (loss).

Liquidity and Capital Resources

As of September 30, 2026, we had $63.4 millionof unused borrowing capacity from all of our loan agreements. As of September 30, 2026, our cash, cash equivalents and restricted cash totaled $621.5 million.Cash and cash equivalents are held for working capital purposes and are invested primarily in money market or time deposit funds. We do not enter into investments for trading or speculative purposes.

Subsequent to September 30, 2026, the Company further strengthened its liquidity position by entering into a new $200 million credit agreement consisting of $30 million in revolving credit commitments and $170 million in initial term loan commitments, with the ability to request up to an additional $50 million of incremental term loan commitments, subject to specified conditions.

ATM Offerings

On December 18, 2024, ﻿the Company filed an automatic shelf registration statement on Form S-3ASR (Registration File No. 333-283905) (the "Automatic Shelf Registration Statement") with the U.S. Securities and Exchange Commission, which became effective immediately upon filing.

On February 26, 2026, the Company entered into an Equity Distribution Agreement (the "First EDA") with Raymond James & Associates and Needham & Company, LLC (collectively, the "Sales Agents" and each, a "Sales Agent") pursuant to which the Company could issue and sell shares of the Company’s common stock, par value $0.001 per share having an aggregate offering price of up to $250 million (the "First ATM Offering"), from time to time through the Sales Agents. On March 12, 2026, the Company entered into Amendment No. 1 to the First EDA with the Sales Agents, to increase the aggregate offering price from $250 million to $500 million. On April 2, 2026, the Company completed the First ATM Offering, selling approximately 4.8 million shares at a weighted average price of $103.51 per share, providing proceeds of approximately $490 million, net of expenses and underwriting discounts and commissions.

On May 14, 2026, the Company entered into an Equity Distribution Agreement (the "Second ﻿EDA") with the Sales Agents pursuant to which the Company could issue and sell shares of the Company's common stock, par value $0.001 per share having an aggregate offering price of up to $600 million (the "Second ﻿ATM Offering"), from time to time through the Sales Agents. On August 17, 2026, the Company completed the Second ATM Offering, selling approximately 3.3 million shares at a weighted average price of $183.06 per share, providing proceeds of approximately $588 million, net of expenses and underwriting discounts and commissions.

On August 21, 2026, the Company entered into an Equity Distribution Agreement (the "Third ﻿EDA") with the Sales Agents pursuant to which the Company could issue and sell shares of the Company's common stock, par value $0.001 per share (the "Shares") having an aggregate offering price of up to $600 million (the "Third ﻿ATM Offering"), from time to time through the Sales Agents.

Upon delivery of a placement notice and subject to the terms and conditions of the Third ﻿EDA, sales of the Shares were made through the Sales Agents in transactions that are deemed to be “at the market” offerings as defined in Rule 415 of the Securities Act of 1933, as amended (the "Securities Act"), including sales made through the facilities of the Nasdaq Global Market, the principal trading market for the Company’s common stock, on any other existing trading market for the Company’s common stock, to or through a market maker or as otherwise agreed by the Company and the Sales Agents. In the placement notice, the Company would designate the maximum number of Shares to be sold through the Sales Agents, the time period during which sales were requested to be made, the minimum price for the Shares to be sold, and any limitation on the number of Shares that could be sold in any one day. Subject to the terms and conditions of the Third ﻿EDA, the Sales Agents would use their commercially reasonable efforts to sell Shares on the Company’s behalf up to the designated amount specified in the placement notice.

The Third ﻿EDA provided that each of the Sales Agents would be entitled to compensation of up to 2% of the gross sales price of the Shares sold through such Sales Agent from time to time. The Company also agreed to reimburse the Sales Agents for certain specified expenses in connection with the registration of Shares under state blue sky laws and any filing with, and clearance of the offering by, the Financial Industry Regulatory Authority Inc., not to exceed $10,000 in the aggregate, and any associated application fees incurred. The Company agreed to indemnify the Sales Agents against certain liabilities, including liabilities under the Securities Act, or to contribute to payments that the Sales Agents could be required to make because of any of those liabilities.

On October 1, 2026, the Company completed the Third ATM Offering, selling approximately 5.7 million shares at a weighted average price of $105.36 per share, providing proceeds of approximately $588 million, net of expenses and underwriting discounts and commissions.

The details of the shares of common stock sold through the First ATM Offering, the Second ATM Offering and the Third ATM Offering as of the end of September 30, 2026 are as follows (in thousands, except shares and weighted average per share price):

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Note Offerings

On December 23, 2024, the Company issued approximately $125.0 million aggregate principal amount of 2.75% convertible senior notes due 2030 (the "2030 Notes"), and on the same day consummated various separate, privately negotiated exchange agreements with certain holders of its 2026 Notes to exchange approximately $76.7 million principal amount of the 2026 Notes for aggregate consideration consisting of (i) $125.0 million aggregate principal amount of the 2030 Notes, (ii) 1,487,874 shares of the Company's common stock, par value $0.001 per share and (iii) approximately $0.9 million of cash in aggregate. Also, refer to Note 12 "Convertible Senior Notes" to the consolidated financial statements for further discussion of the 2030 Notes.

Operating Activities

The table below sets forth selected cash flow data for the periods presented (in thousands):

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Net cash used in operating activities was $76.7 million during the nine months ended September 30, 2026 as compared to $144.9 million during the nine months ended September 30, 2025, a decrease of 47.1%. Net cash used in operating activities consisted of our net loss of $30.8 million, adjusted for non-cash items of $56.2 million, and a net use of cash from changes in working capital of $102.1 million.

The changes in working capital were primarily attributable to:

Management believes these changes are consistent with ongoing production ramp activities and customer demand dynamics, which may result in variability in operating cash flows from period to period.

Customer Concentration

As of September 30, 2026, Digicomm represented approximately 56.7% of total accounts receivable. This concentration is primarily attributable to customer purchasing patterns, shipment timing, and billing concentration. Management has extended longer than typical payment terms to Digicomm in order to ensure Digicomm has adequate inventory on hand to quickly provide products to customers when needed for their network builds. The Company has a multi-year history with Digicomm and over this period the Company’s collection experience has been good. Digicomm’s payment history has generally been relatively consistent over time. In addition, to the extent customers in the Company’s data center business continue to grow relative to Digicomm, Management expects Accounts Receivable concentration with Digicomm to decline.

The Company continues to monitor credit exposure and collection trends related to significant customers and does not believe this concentration will create a material credit‑risk.

For the nine months ended September 30, 2026, revenues from Digicomm were approximately $257.0 million, representing approximately 41.9% of consolidated revenues. These revenues were primarily attributable to the CATV product category.

Investing Activities

Net cash used in investing activities was $1.11 billion during the nine months ended September 30, 2026, compared with $125.7 million during the nine months ended September 30, 2025, an increase of 782.9%, primarily driven by capital expenditures of $702.1 million, which included $315.4 million capital expenditures in the US, $177.4 million in Taiwan, and $209.3 million in China. The increase in capital expenditures was primarily attributable to facility expansion and equipment purchases to support increased production capacity for the Company’s internet data center and broadband product lines, including investments related to Quantum Bandwidth products and the continued expansion of manufacturing operations for 400G, 800G, and 1.6T transceiver products. Management expects that 2026 capital expenditure will continue to be elevated above past year levels, driven by the need to expand production capacity to meet customer demand.

The increase in prepayments for equipment and others, primarily reflects advance payments for equipment and facility related capital expenditures associated with the Company's manufacturing expansion projects in the United States, Taiwan and China. These advance payments are expected to be reclassified to property, plant and equipment as the related assets are received and placed into service.

During the third quarter of 2026, we entered into several agreements to support our manufacturing capacity expansion:

If we exercise the Hightower purchase options, our capital requirements would increase significantly. See Note 4, "Leases," and Note 18, "Commitments and Contingencies," for additional information.

Management expects to continue to make investments in capacity expansion through at least the end of 2027 and believes that this expansion will provide adequate production capacity to meet expected demand for data center transceiver, semiconductor lasers, and Quantum Bandwidth broadband products, subject to demand variability, customer ramp timing, supply chain, and other factors. The Company expects to expand manufacturing operations in the U.S. and Taiwan during 2026 and 2027 primarily to support laser diode production and production of 800G and 1.6T transceivers.

Financing Activities

Net cash provided by financing activities was $1.59 billion during the nine months ended September 30, 2026, compared with $348.2 million in the nine months ended September 30, 2025, an increase of 357.0%, primarily attributable to the net proceeds of $1.59 billion from the ATM Offerings, the net proceeds from line of credit borrowings of $20.5 million, the net proceeds of $40.0 million from issuance of notes payable and long-term debt, and net proceeds from bank acceptance payable of $16.5 million, partially offset by tax payments related to share-based compensation of $76.0 million.

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Loans and Commitments

As of September 30, 2026, we have lending arrangements with one U.S. bank, four financial institutions in Taiwan, andfivefinancial institutions in China. As ofSeptember 30, 2026, we were in compliance with the covenants in the lending arrangements.As ofSeptember 30, 2026,we had $63.4 million of unused borrowing capacity.

On December 23, 2024, the Company issued $125.0 million of 2.75% convertible senior notes due 2030. The 2030 Notes will mature on January 15, 2030, unless earlier repurchased, redeemed or converted in accordance with their terms.

See Note 11 "Notes Payable and Long-term Debt" and Note 12 "Convertible Senior Notes" of our Condensed Consolidated Financial Statements for a description of our notes payable and long-term debt and convertible senior notes.

Warrants

On March 13, 2025, we issued a warrant (the "Customer Warrant") to an Amazon affiliate to purchase up to an aggregate of 7,945,399 shares of the Company's common stock ("Warrant Shares") at an exercise price of $23.6956 per share. The Customer Warrant has a contractual term of 10 years. At the time of issuance, the Customer Warrant is exercisable to purchase 1,324,233 Warrant Shares. The remaining 6,621,166 Warrant Shares may vest over the next 10 years, dependent on aggregate purchases by Amazon of $4 billion of our products over this time period. See Note 3 "Revenue Recognition" of our Condensed Consolidated Financial Statements for additional description of the Warrant Shares.

Future Liquidity Needs

We had cash, cash equivalents and restricted cash of $621.5 million as of September 30, 2026, an increase of approximately $405.4 million compared to December 31, 2025. Our future capital requirements will depend on many factors including our growth rate, the timing and extent of spending to support our research and development efforts, the expansion of our sales and marketing activities, the introduction of new and enhanced products, the building improvement of new factories in Taiwan, China and the U.S., changes in our manufacturing capacity and the continuing market acceptance of our products.

As of September 30, 2026, we had a total loan balance (excluding convertible notes) of $96.6 million from various lenders and had $63.4 million available borrowing capacity on existing credit lines. Should additional liquidity be needed, our Board may authorize issuance of additional common stock under an at-the-market offering in the future (see the discussion of "ATM Offerings" above).

Subsequent to September 30, 2026, the Company further strengthened its liquidity position by entering into a new $200 million credit agreement consisting of $30 million in revolving credit commitments and $170 million in initial term loan commitments, with the ability to request up to an additional $50 million of incremental term loan commitments, subject to specified conditions.

In the event we need additional liquidity, we will explore additional sources of liquidity. These additional sources of liquidity could include one, or a combination, of the following: (i) issuing equity or debt securities, (ii) incurring indebtedness secured by our assets and (iii) selling product lines, other assets and/or portions of our business. There can be no guarantee that we will be able to raise additional funds on terms acceptable to us, or at all.

Contractual Obligations and Commitments

Please refer to Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2025 for a complete discussion of its contractual obligations and commitments.

Except as described below, there have been no material changes during the nine months ended September 30, 2026 to the contractual obligations and commitments disclosed in Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

During the nine months ended September 30, 2026, we entered into the following agreements in connection with our manufacturing capacity expansion, each of which is described in our Current Reports on Form 8-K filed with the SEC:

On November 2, 2026, we entered into supply agreements to secure a source of a key raw material used in certain of our products. The agreements include material purchase and prepayment commitments and are subject to risks relating to required regulatory approvals in China. If performed as contemplated, the agreements may materially affect our future liquidity, inventory levels and working-capital requirements. See Note 19, “Subsequent Events,” to our condensed consolidated financial statements for additional information.

See Note 4, "Leases," and Note 18, "Commitments and Contingencies," for additional information.

Inflation

Inflation in the United States has moderated in recent periods. However, certain cost components, including labor, materials, logistics and tariffs, remain elevated relative to historical levels. These cost pressures were partially offset by improved supply chain conditions, operational efficiencies and continued cost optimization initiatives.

During the nine months ended September 30, 2026, we continued to experience inflationary pressures in certain areas of our operations. However, these pressures did not have a material impact on our business, financial condition, or results of operations. While we have implemented pricing actions, supply chain diversification initiatives and operational efficiencies to mitigate the effects of inflation, there can be no assurance that these measures will fully offset future cost increases. Continued inflationary pressures, particularly related to labor, tariffs and raw materials, could adversely affect our cost structure, gross margins and operating results in future periods.

In our Annual Report for the year ended December 31, 2025 and in the Notes to the Financial Statements herein, we identify our most critical accounting policies. In preparing the financial statements, we make assumptions, estimates and judgments that affect the amounts reported. We periodically evaluate our estimates and judgments that are most critical in nature which are related to revenue recognition, allowance for credit losses, inventory reserves, impairment of long-lived assets, service and product warranties, share based compensation expense, estimated useful lives of property and equipment, and income taxes. Our estimates are based on historical experience and on our future expectations that we believe are reasonable. The combination of these factors forms the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results are likely to differ from our current estimates and those differences may be material.

Critical Accounting Estimates

Our condensed consolidated financial statements are prepared in accordance with GAAP, which requires management to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenue and expenses and the related disclosures. We periodically evaluate our estimates and judgments that are most critical in nature which are related to revenue recognition, allowance for credit losses, inventory reserves, valuation of long-lived assets, service and product warranty costs, share-based compensation expense, estimated useful lives of tangible and intangible assets, and income taxes. We base our estimates on historical experience and other assumptions that we believe are reasonable under the circumstances. The combination of these factors forms the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates and those differences may be material.

There have been no material changes to our critical accounting estimates as compared to those disclosed under "Management's Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

For quantitative and qualitative disclosures about market risk affecting the Company, see Item 7A – Quantitative and Qualitative Disclosures about Market Risk in our Annual Report for the fiscal year ended December 31, 2025. We do not believe the Company’s exposure to market risk has changed materially since December 31, 2025.

We are affected by changes in currency exchange and interest rates. Our risk management programs are designed to reduce, but may not entirely eliminate, the impacts of these risks. We performed an evaluation of these risks to our financial positions as of December 31, 2025, and updated that analysis as of September 30, 2026, to determine whether material changes in market risks pertaining to currency and interest rates have occurred as a result of the changes in international trade policies, including tariffs and export controls. No material revisions were noted from the disclosures in Part II, Item 7A, "Quantitative and Qualitative Disclosures About Market Risk" of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

Item 4. Controls and Procedures

The term "disclosure controls and procedures," as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their control objectives.

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Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2026. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective.

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Changes in Internal Control over Financial Reporting

There were no changes in the Company’s internal control over financial reporting during the three months ended September 30, 2026 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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Part II. Other Information</div>

Item 1. Legal Proceedings

Information with respect to legal proceedings can be found in Note 18 to the Condensed Consolidated Financial Statements contained in Part 1, Item 1 of this report.

Item 1A. Risk Factors

Investing in our common stock involves a high degree of risk. See Part I, Item 1A, "Risk Factors", of our Annual Report on Form 10-K for the year endedDecember 31, 2025 for a detailed discussion of the risk factors affecting our Company. As of September 30, 2026, there have been no material changes to those risk factors.

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Item 5.Other Information

(a) None

(b) None

(c)During the three months ended September 30, 2026,none of our directors or executive officers adopted or terminated any Rule 10b5-1 trading arrangement or any non-Rule 10b5-1 trading arrangement (such terms are defined in Item 408 of Regulation S-K).

Item 6. Exhibits

See Exhibit Index.

<div align='center'>EXHIBIT INDEX

34</div>

* Incorporated herein by reference to the indicated filing.

** Filed herewith.

† Management contract, compensatory plan or arrangement.

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SIGNATURES</div>

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

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