Alpha and Omega Semiconductor Reports Financial Results for the Fiscal Second Quarter of 2024 Ended December 31, 2023
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Alpha and Omega Semiconductor Reports Financial Results for the Fiscal Second Quarter of 2024 Ended December 31, 2023

SUNNYVALE, Calif. — (BUSINESS WIRE) — February 5, 2024 — Alpha and Omega Semiconductor Limited (“AOS”) (NASDAQ: AOSL) today reported financial results for the fiscal second quarter of 2024 ended December 31, 2023.

The results for the fiscal second quarter of 2024 ended December 31, 2023 were as follows:

GAAP Financial Comparison

Quarterly

(in millions, except percentage and per share data)

(unaudited)

 

 

Three Months Ended

 

 

December 31,
2023

 

September 30,
2023

 

December 31,
2022

Revenue

 

$

165.3

 

 

$

180.6

 

 

$

188.8

 

Gross Margin

 

 

26.6

%

 

 

28.2

%

 

 

28.1

%

Operating Income (Loss)

 

$

(1.1

)

 

$

9.4

 

 

$

8.8

 

Net Income (Loss)

 

$

(2.9

)

 

$

5.8

 

 

$

6.3

 

Net Income (Loss) Per Share - Diluted

 

$

(0.10

)

 

$

0.19

 

 

$

0.21

 

Non-GAAP Financial Comparison

Quarterly

(in millions, except percentage and per share data)

(unaudited)

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

December 31,
2023

 

September 30,
2023

 

December 31,
2022

Revenue

 

$

165.3

 

 

$

180.6

 

 

$

188.8

 

Non-GAAP Gross Margin

 

 

28.0

%

 

 

28.8

%

 

 

29.5

%

Non-GAAP Operating Income

 

$

8.4

 

 

$

11.2

 

 

$

22.8

 

Non-GAAP Net Income

 

$

7.2

 

 

$

9.9

 

 

$

20.0

 

Non-GAAP Net Income Per Share - Diluted

 

$

0.24

 

 

$

0.33

 

 

$

0.67

 

The non-GAAP financial measures in the schedule above and under the section “Financial Results for Fiscal Q2 Ended December 31, 2023” below exclude the effect of share-based compensation expenses, amortization of purchased intangible, legal costs related to government investigation, equity method investment (income) loss from equity investee, and income tax effect of non-GAAP adjustments in each of the periods presented. A detailed reconciliation of GAAP and non-GAAP financial measures is included at the end of this press release.

Financial Results for Fiscal Q2 Ended December 31, 2023

AOS Chief Executive Officer Stephen Chang commented, “Our fiscal Q2 results were in-line with our guidance driven by continued recovery across notebooks, desktop, smartphones, and power tools, offset by ongoing inventory correction in gaming and weak demand for quick chargers and solar.”

Mr. Chang continued, “Beyond normal seasonality, there are promising signs suggesting the cycle has bottomed. AOS's diverse product portfolio is mitigating short-term unpredictability while preparing us to take advantage of a broader market resurgence in the second half of calendar 2024 – especially as customers unveil new products featuring integrated power solutions with higher BOM content. More specifically, we are seeing encouraging near-term strength in graphics cards, AI accelerators for data centers, smartphones from Chinese OEMs, and e-mobility. We are confident that our leading technology, extensive and diverse product range, and Tier 1 customer base strategically positions AOS to navigate through the current cycle and thrive in the forthcoming one.”

Business Outlook for Fiscal Q3 Ending March 31, 2024

The following statements are based on management's current expectations. These statements are forward-looking, and actual results may differ materially. AOS undertakes no obligation to update these statements.

Our expectations for the fiscal third quarter of year 2024 are as follows:

Conference Call and Webcast

AOS plans to hold an investor teleconference and live webcast to discuss the financial results for the fiscal second quarter ended December 31, 2023 today, February 6, 2024 at 2:00 p.m. PT / 5:00 p.m. ET. To listen to the live conference call, please dial +1 (833) 470-1428 or +1 (404) 975-4839 if dialing from outside the United States and Canada. The access code is 798862. A live webcast of the call will also be available in the "Events & Presentations" section of the company's investor relations website, http://investor.aosmd.com. The webcast replay will be available for seven days after the live call on the same website. In addition, a copy of the script of management's prepared remarks and a live webcast of the call will also be available in the "Events & Presentations" section of the company's investor relations website, http://investor.aosmd.com.

Forward-Looking Statements

This press release contains forward-looking statements that are based on current expectations, estimates, forecasts and projections of future performance based on management's judgment, beliefs, current trends, and anticipated product performance. These forward-looking statements include, without limitation, market trends in the semiconductor industry, our ability to mitigate economic downturns and current cycles, seasonality of our business, our ability to penetrate new markets and achieve long-term growth, our ability to improve our financial performance in 2024, our projected amount of revenue, gross margin, operating income (loss), income tax expenses, net income (loss), and share-based compensation expenses, non-GAAP gross margin, non-GAAP operating expenses, income tax expenses, our ability to continue to win and acquire market share and other information under the section entitled “Business Outlook for Fiscal Q3 Ending March 31, 2024”. Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. These factors include, but are not limited to, the state of semiconductor industry and seasonality of our markets; government policies on our business operations in China; our lack of control over the joint venture in China; difficulties and challenges in executing our diversification strategy into different market segments; tariffs on goods from China; ordering pattern from distributors and seasonality; changes in regulatory environment and government investigation; our ability to introduce or develop new and enhanced products that achieve market acceptance; decline of PC markets; the actual product performance in volume production; the quality and reliability of our product, our ability to achieve design wins; the general business and economic conditions; our ability to maintain factory utilization at a desirable level; and other risks as described in our SEC filings, including our Annual Report on Form 10-K for the fiscal year ended June 30, 2023 filed by AOS with the SEC and other periodic reports we filed with the SEC. Other unknown or unpredictable factors or underlying assumptions subsequently proving to be incorrect could cause actual results to differ materially from those in the forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance, or achievements. You should not place undue reliance on these forward-looking statements. All information provided in this press release is as of today's date, unless otherwise stated, and AOS undertakes no duty to update such information, except as required under applicable law.

Use of Non-GAAP Financial Measures

To supplement our unaudited consolidated financial statements presented on a basis consistent with U.S. GAAP, we disclose certain non-GAAP financial measures for our historical performance, including non-GAAP gross profit, gross margin, operating expenses, operating income (loss), net income (loss), diluted earnings per share ("EPS") and EBITDAS. These supplemental measures exclude, among other items, share-based compensation expenses, legal and profession fees related to government investigation, amortization of purchased intangible, income tax effect of non-GAAP adjustments and equity method investment loss (income) from equity investee. We also disclose certain non-GAAP financial measures in our guidance for the next quarter, including non-GAAP gross margin and operating expenses. We believe that these historical and forecast non-GAAP financial measures provide useful information to both management and investors by excluding certain items and expenses that are not indicative of our core operating results or do not reflect our normal business operations. In addition, our management uses non-GAAP measures to compare our performance relative to forecasts and to benchmark our performance externally against competitors. Our use of non-GAAP financial measures has certain limitations in that such non-GAAP financial measures may not be directly comparable to those reported by other companies. For example, the terms used in this press release, such as non-GAAP net income (loss) or non-GAAP operating expenses, do not have a standardized meaning. Other companies may use the same or similarly named measures, but exclude different items, which may not provide investors with a comparable view of our performance in relation to other companies. In addition, we included the amount of income tax effect of non-GAAP adjustments in the non-GAAP net income (loss) of reconciliation table for all periods presented as the management believes that such non-GAAP presentation provides useful information to investors, even though the amounts are not significant. We seek to compensate for the limitation of our non-GAAP presentation by providing a detailed reconciliation of the non-GAAP financial measures to the most directly comparable U.S. GAAP measures both in the text in this press release and in the tables attached hereto. Investors are encouraged to review the related U.S. GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable U.S. GAAP financial measures.

About Alpha and Omega Semiconductor

Alpha and Omega Semiconductor Limited, or AOS, is a designer, developer and global supplier of a broad range of power semiconductors, including a wide portfolio of Power MOSFET, IGBT, IPM, TVS, HVIC, GaN/SiC, Power IC and Digital Power products. AOS has developed extensive intellectual property and technical knowledge that encompasses the latest advancements in the power semiconductor industry, which enables us to introduce innovative products to address the increasingly complex power requirements of advanced electronics. AOS differentiates itself by integrating its Discrete and IC semiconductor process technologies, product design, and advanced packaging know-how to develop high performance power management solutions. AOS’ portfolio of products targets high-volume applications, including portable computers, graphic cards, flat panel TVs, home appliances, smart phones, battery packs, quick chargers, home appliances, consumer and industrial motor controls and power supplies for TVs, computers, servers and telecommunications equipment. For more information, please visit www.aosmd.com.

The following unaudited condensed consolidated financial statements are prepared in accordance with U.S. GAAP.

Alpha and Omega Semiconductor Limited

Condensed Consolidated Statements of Operations

(in thousands, except percentages and per share amounts)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

December 31,
2023

 

September 30,
2023

 

December 31,
2022

 

December 31,
2023

 

December 31,
2022

 

 

 

 

 

 

 

 

 

 

Revenue

$

165,285

 

 

$

180,633

 

 

$

188,760

 

 

$

345,918

 

 

$

397,236

 

Cost of goods sold

 

121,284

 

 

 

129,708

 

 

 

135,719

 

 

 

250,992

 

 

 

273,067

 

Gross profit

 

44,001

 

 

 

50,925

 

 

 

53,041

 

 

 

94,926

 

 

 

124,169

 

Gross margin

 

26.6

%

 

 

28.2

%

 

 

28.1

%

 

 

27.4

%

 

 

31.3

%

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Research and development

 

22,919

 

 

 

22,113

 

 

 

21,468

 

 

 

45,032

 

 

 

42,857

 

Selling, general and administrative

 

22,216

 

 

 

19,431

 

 

 

22,788

 

 

 

41,647

 

 

 

46,993

 

Total operating expenses

 

45,135

 

 

 

41,544

 

 

 

44,256

 

 

 

86,679

 

 

 

89,850

 

Operating income (loss)

 

(1,134

)

 

 

9,381

 

 

 

8,785

 

 

 

8,247

 

 

 

34,319

 

 

 

 

 

 

 

 

 

 

 

Other income (loss), net

 

(472

)

 

 

26

 

 

 

(903

)

 

 

(446

)

 

 

(919

)

Interest income (expense), net

 

274

 

 

 

229

 

 

 

(397

)

 

 

503

 

 

 

(1,005

)

Net income (loss) before income taxes

 

(1,332

)

 

 

9,636

 

 

 

7,485

 

 

 

8,304

 

 

 

32,395

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

894

 

 

 

1,138

 

 

 

1,659

 

 

 

2,032

 

 

 

3,033

 

Net income (loss) before income (loss) from equity method investment

 

(2,226

)

 

 

8,498

 

 

 

5,826

 

 

 

6,272

 

 

 

29,362

 

Equity method investment income (loss) from equity investee

 

(697

)

 

 

(2,712

)

 

 

511

 

 

 

(3,409

)

 

 

3,013

 

Net income (loss)

$

(2,923

)

 

$

5,786

 

 

$

6,337

 

 

$

2,863

 

 

$

32,375

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per common share

 

 

 

 

 

 

 

 

 

Basic

$

(0.10

)

 

$

0.21

 

 

$

0.23

 

 

$

0.10

 

 

$

1.18

 

Diluted

$

(0.10

)

 

$

0.19

 

 

$

0.21

 

 

$

0.10

 

 

$

1.10

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares used to compute net income (loss) per share

 

 

 

 

 

 

 

 

 

Basic

 

27,939

 

 

 

27,693

 

 

 

27,511

 

 

 

27,816

 

 

 

27,451

 

Diluted

 

27,939

 

 

 

29,786

 

 

 

29,576

 

 

 

29,830

 

 

 

29,499

 

 

 

 

 

 

 

 

 

 

 

Alpha and Omega Semiconductor Limited

Condensed Consolidated Balance Sheets

(in thousands, except par value per share)

(unaudited)

 

December 31, 2023

 

June 30, 2023

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

162,266

 

 

$

195,188

 

Restricted cash

 

212

 

 

 

415

 

Accounts receivable, net

 

31,923

 

 

 

22,420

 

Inventories

 

191,709

 

 

 

183,247

 

Other current assets

 

20,509

 

 

 

22,666

 

Total current assets

 

406,619

 

 

 

423,936

 

Property, plant and equipment, net

 

349,046

 

 

 

357,831

 

Operating lease right-of-use assets

 

25,416

 

 

 

24,349

 

Intangible assets, net

 

5,141

 

 

 

6,765

 

Equity method investment

 

356,144

 

 

 

366,617

 

Deferred income tax assets

 

518

 

 

 

536

 

Other long-term assets

 

33,462

 

 

 

19,703

 

Total assets

$

1,176,346

 

 

$

1,199,737

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

45,156

 

 

$

50,775

 

Accrued liabilities

 

77,683

 

 

 

79,533

 

Payable related to equity investee, net

 

12,966

 

 

 

11,950

 

Income taxes payable

 

4,680

 

 

 

5,546

 

Short-term debt

 

11,533

 

 

 

11,434

 

Deferred revenue

 

3,715

 

 

 

8,073

 

Finance lease liabilities

 

900

 

 

 

867

 

Operating lease liabilities

 

4,963

 

 

 

4,383

 

Total current liabilities

 

161,596

 

 

 

172,561

 

Long-term debt

 

32,568

 

 

 

38,360

 

Income taxes payable - long-term

 

2,924

 

 

 

2,817

 

Deferred income tax liabilities

 

26,385

 

 

 

27,283

 

Finance lease liabilities - long-term

 

2,758

 

 

 

3,216

 

Operating lease liabilities - long-term

 

21,214

 

 

 

20,544

 

Other long-term liabilities

 

34,343

 

 

 

51,037

 

Total liabilities

 

281,788

 

 

 

315,818

 

Shareholders' Equity:

 

 

 

Preferred shares, par value $0.002 per share:

 

 

 

Authorized: 10,000 shares; issued and outstanding: none at December 31, 2023 and June 30, 2023

 

 

 

 

 

Common shares, par value $0.002 per share:

 

 

 

Authorized: 100,000 shares; issued and outstanding: 35,205 shares and 28,051 shares, respectively at December 31, 2023 and 34,811 shares and 27,654 shares, respectively at June 30, 2023

 

70

 

 

 

70

 

Treasury shares at cost: 7,154 shares at December 31, 2023 and 7,157 shares at June 30, 2023

 

(79,343

)

 

 

(79,365

)

Additional paid-in capital

 

342,636

 

 

 

329,034

 

Accumulated other comprehensive loss

 

(13,937

)

 

 

(8,111

)

Retained earnings

 

645,132

 

 

 

642,291

 

Total shareholders' equity

 

894,558

 

 

 

883,919

 

Total liabilities and shareholders' equity

$

1,176,346

 

 

$

1,199,737

 

 

Alpha and Omega Semiconductor Limited

Selected Cash Flow Information

(in thousands, unaudited)

 

 

 

 

 

Six Months Ended December 31,

 

 

2023

 

 

 

2022

 

Net cash provided by (used in) operating activities

$

(9,628

)

 

$

37,015

 

Net cash used in investing activities

 

(21,431

)

 

 

(67,935

)

Net cash provided by (used in) financing activities

 

(2,146

)

 

 

4,526

 

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

80

 

 

 

(164

)

Net decrease in cash, cash equivalents and restricted cash

 

(33,125

)

 

 

(26,558

)

Cash, cash equivalents and restricted cash at beginning of period

 

195,603

 

 

 

314,651

 

Cash, cash equivalents and restricted cash at end of period

$

162,478

 

 

$

288,093

 

 

 

 

 

Alpha and Omega Semiconductor Limited

Reconciliation of Condensed Consolidated GAAP Financial Measures to Non-GAAP Financial Measures

(in thousands, except percentages and per share data)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

December 31,
2023

 

September 30,
2023

 

December 31,
2022

 

December 31,
2023

 

December 31,
2022

 

 

 

 

 

 

 

 

 

 

 

GAAP gross profit

 

$

44,001

 

 

$

50,925

 

 

$

53,041

 

 

 

94,926

 

 

$

124,169

 

Share-based compensation

 

 

1,504

 

 

 

212

 

 

 

1,748

 

 

 

1,716

 

 

 

3,536

 

Amortization of purchased intangible

 

 

812

 

 

 

812

 

 

 

811

 

 

 

1,624

 

 

 

1,623

 

Non-GAAP gross profit

 

$

46,317

 

 

$

51,949

 

 

$

55,600

 

 

$

98,266

 

 

$

129,328

 

Non-GAAP gross margin as a % of revenue

 

 

28.0

%

 

 

28.8

%

 

 

29.5

%

 

 

28.4

%

 

 

32.6

%

 

 

 

 

 

 

 

 

 

 

 

GAAP operating expense

 

$

45,135

 

 

$

41,544

 

 

$

44,256

 

 

$

86,679

 

 

$

89,850

 

Share-based compensation

 

 

7,187

 

 

 

706

 

 

 

11,343

 

 

 

7,893

 

 

 

20,151

 

Legal costs related to government investigation

 

 

16

 

 

 

52

 

 

 

110

 

 

 

68

 

 

 

252

 

Non-GAAP operating expense

 

$

37,932

 

 

$

40,786

 

 

$

32,803

 

 

$

78,718

 

 

$

69,447

 

 

 

 

 

 

 

 

 

 

 

 

GAAP operating income (loss)

 

$

(1,134

)

 

$

9,381

 

 

$

8,785

 

 

$

8,247

 

 

$

34,319

 

Share-based compensation

 

 

8,691

 

 

 

918

 

 

 

13,091

 

 

 

9,609

 

 

 

23,687

 

Amortization of purchased intangible

 

 

812

 

 

 

812

 

 

 

811

 

 

 

1,624

 

 

 

1,623

 

Legal costs related to government investigation

 

 

16

 

 

 

52

 

 

 

110

 

 

 

68

 

 

 

252

 

Non-GAAP operating income

 

$

8,385

 

 

$

11,163

 

 

$

22,797

 

 

$

19,548

 

 

$

59,881

 

Non-GAAP operating margin as a % of revenue

 

 

5.1

%

 

 

6.2

%

 

 

12.1

%

 

 

5.7

%

 

 

15.1

%

 

 

 

 

 

 

 

 

 

 

 

GAAP net income (loss)

 

$

(2,923

)

 

$

5,786

 

 

$

6,337

 

 

$

2,863

 

 

$

32,375

 

Share-based compensation

 

 

8,691

 

 

 

918

 

 

 

13,091

 

 

 

9,609

 

 

 

23,687

 

Amortization of purchased intangible

 

 

812

 

 

 

812

 

 

 

811

 

 

 

1,624

 

 

 

1,623

 

Equity method investment (income) loss from equity investee

 

 

697

 

 

 

2,712

 

 

 

(511

)

 

 

3,409

 

 

 

(3,013

)

Legal costs related to government investigation

 

 

16

 

 

 

52

 

 

 

110

 

 

 

68

 

 

 

252

 

Income tax effect of non-GAAP adjustments

 

 

(96

)

 

 

(406

)

 

 

122

 

 

 

(502

)

 

 

241

 

Non-GAAP net income

 

$

7,197

 

 

$

9,874

 

 

$

19,960

 

 

$

17,071

 

 

$

55,165

 

Non-GAAP net margin as a % of revenue

 

 

4.4

%

 

 

5.5

%

 

 

10.6

%

 

 

4.9

%

 

 

13.9

%

 

 

 

 

 

 

 

 

 

 

 

GAAP net income (loss)

 

$

(2,923

)

 

$

5,786

 

 

$

6,337

 

 

$

2,863

 

 

$

32,375

 

Share-based compensation

 

 

8,691

 

 

 

918

 

 

 

13,091

 

 

 

9,609

 

 

 

23,687

 

Amortization and depreciation

 

 

13,573

 

 

 

12,951

 

 

 

10,804

 

 

 

26,524

 

 

 

20,156

 

Equity method investment (income) loss from equity investee

 

 

697

 

 

 

2,712

 

 

 

(511

)

 

 

3,409

 

 

 

(3,013

)

Interest expense (income), net

 

 

(274

)

 

 

(229

)

 

 

397

 

 

 

(503

)

 

 

1,005

 

Income tax expense

 

 

894

 

 

 

1,138

 

 

 

1,659

 

 

 

2,032

 

 

 

3,033

 

EBITDAS

 

$

20,658

 

 

$

23,276

 

 

$

31,777

 

 

$

43,934

 

 

$

77,243

 

 

GAAP diluted net income (loss) per share

 

$

(0.10

)

 

$

0.19

 

 

$

0.21

 

 

$

0.10

 

 

$

1.10

 

Share-based compensation

 

 

0.29

 

 

 

0.03

 

 

 

0.44

 

 

 

0.32

 

 

 

0.80

 

Amortization of purchased intangible

 

 

0.03

 

 

 

0.03

 

 

 

0.03

 

 

 

0.05

 

 

 

0.05

 

Equity method investment (income) loss from equity investee

 

 

0.02

 

 

 

0.09

 

 

 

(0.02

)

 

 

0.11

 

 

 

(0.10

)

Legal costs related to government investigation

 

 

0.00

 

 

 

0.00

 

 

 

0.00

 

 

 

0.00

 

 

 

0.01

 

Income tax effect of non-GAAP adjustments

 

 

(0.00

)

 

 

(0.01

)

 

 

0.01

 

 

 

(0.01

)

 

 

0.01

 

Non-GAAP diluted net income per share

 

$

0.24

 

 

$

0.33

 

 

$

0.67

 

 

$

0.57

 

 

$

1.87

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares used to compute GAAP diluted net income (loss) per share

 

 

27,939

 

 

 

29,786

 

 

 

29,576

 

 

 

29,830

 

 

 

29,499

 

Weighted average number of common shares used to compute Non-GAAP diluted net income (loss) per share

 

 

29,874

 

 

 

29,786

 

 

 

29,576

 

 

 

29,830

 

 

 

29,499

 

 

 

 

 

 

 

 

 

 

 

 

 



Contact:

Investor and media inquiries:

The Blueshirt Group
Gary Dvorchak, CFA
In US +1 323 240 5796
In China +86 (138) 1079-1480
gary@blueshirtgroup.com

Yujia Zhai
The Blueshirt Group
Yujia@blueshirtgroup.com
+1 (860) 214-0809