 SUGAR LAND, Texas, Aug. 06, 2020 GLOBE NEWSWIRE -- Applied Optoelectronics, Inc. NASDAQ: AAOI, a leading provider of fiber-optic access network products for the internet datacenter, cable broadband, telecom and fiber-to-the-home FTTH markets, today announced financial results for its second quarter 2020 ended June 30, 2020.Overall, we are pleased with the progress of our second quarter financial performance, with revenue ahead of our guidance driven by strong demand from our datacenter customers and record revenue in our telecom segment led by deployments of 5G mobile technology, said Dr. Thompson Lin, Applied Optoelectronics Inc. Founder, President and Chief Executive Officer. We are also encouraged by the increased contributions from our newer customers, which has led to a meaningful improvement in customer and end market diversification. Looking ahead, we expect this momentum to continue into the third quarter driven by similar trends in increased demand from both our data center and telecom end markets.Second Quarter 2020 Financial Summary Total revenue was 65.2 million, compared with 43.4 million in the second quarter of 2019 and 40.5 million in the first quarter of 2020. GAAP gross margin was 21.1, compared with 24.3 in the second quarter of 2019 and 15.7 in the first quarter of 2020. Non-GAAP gross margin was 23.1, compared with 27.2 in the second quarter of 2019 and 19.5 in the first quarter of 2020. GAAP net loss was 18.6 million, or 0.89 per basic share, compared with net loss of 11.4 million, or 0.57 per basic share in the second quarter of 2019, and a net loss of 16.8 million, or 0.83 per basic share in the first quarter of 2020. Non-GAAP net loss was 5.0 million, or 0.24 per basic share, compared with non-GAAP net loss of 5.2 million, or 0.26 per basic share in the second quarter of 2019, and a non-GAAP net loss of 8.8 million, or 0.44 per basic share in the first quarter of 2020. A reconciliation between all GAAP and non-GAAP information referenced above for the second quarters of 2020 and 2019 is contained in the tables below. Please also refer to Non-GAAP Financial Measures below for a description of these non-GAAP financial measures.Third Quarter 2020 Business Outlook For the third quarter of 2020, the company currently expects: Revenue in the range of 76 million to 83 million. Non-GAAP gross margin in the range of 25 to 26.5. Non-GAAP net loss in the range of 4.6 million to 0.6 million, and non-GAAP loss per share in the range of 0.20 to 0.03 using approximately 23.4 million shares. 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 InformationThe company will host a conference call and webcast for analysts and investors on August 6, 2020 to discuss its second quarter 2020 results and outlook for its third quarter 2020 at 4:30 p.m. Eastern time 3:30 p.m. Central time. Open to the public, investors may access the call by dialing 844-890-1794 domestic or 412-717-9586 international. A live audio webcast of the conference call along with supplemental financial information will also be accessible on the companys 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 877-344-7529 domestic or 412-317-0088 international and entering passcode 10146520.Forward-Looking InformationThis 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, strategy, potential, is likely, will, expect, plan project, permit or by other similar expressions that convey uncertainty of future events or outcomes. These statements include managements beliefs and expectations related to our outlook for the third quarter of 2020. 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 companys actual results to differ materially from those anticipated in such forward-looking statements. These risks and uncertainties include but are not limited to: the impact of the COVID-19 pandemic on our business and financial results; reduction in the size or quantity of customer orders; change in demand for the companys 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 companys 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 companys 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, 2019 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020. More information about these and other risks that may impact the companys business are set forth in the Risk Factors section of the companys 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 companys expectations.Non-GAAP Financial MeasuresWe provide non-GAAP gross margin, non-GAAP net income loss, and non-GAAP earnings per share 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 expense, expenses associated with discontinued products, and non-recurring 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, non-recurring expenses, unrealized foreign exchange gain loss, losses from the disposal of idle assets, if any, non-GAAP tax expenses benefits, and expenses associated with discontinued products, if any, from our GAAP net income loss. Included in our non-recurring expenses in Q2 2020 and Q2 2019 are certain one-time legal if any and consulting fees if any and employee severance expenses if any. In computing our non-GAAP income tax expense benefit, 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 earnings per share is calculated by dividing our non-GAAP net income 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 assets, stock-based compensation expense, non-recurring revenue and expenses, losses from the disposal of idle assets, unrealized foreign exchange gain or loss, unamortized debt issuance costs associated with the extinguishment of debt, and depreciation on certain equipment undergoing reconfiguration is appropriate because treatment of these items may vary for reasons unrelated to our overall operating performance; We believe that elimination of expenses associated with discontinued 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 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 our past financial performance, period-to-period results and with our peer companies, many of which also use similar non-GAAP financial measures; and We anticipate that investors and securities analysts will utilize non-GAAP measures as a supplement to GAAP measures to evaluate our overall operating performance. 