Q3 2026 results
| Metric | Result | Change |
|---|---|---|
| Total Revenue | $269.9 million | up 127.5% year-over-year |
| Non-GAAP EPS | $0.17 | within guidance range |
| Data Center Revenue | $155.6 million | up 254% year-over-year |
| CATV Revenue | $110.9 million | up 57% year-over-year |
| Non-GAAP Gross Margin | 28.7% | below guidance range |
Guidance and outlook
- Q4 revenue is expected to be between $385 million and $420 million.
- Q4 non-GAAP gross margin is expected to be in the range of 29.5% to 31%.
- Q4 non-GAAP net income is expected to be in the range of $45.9 million to $60.4 million.
- Q4 non-GAAP earnings per share is expected to be between $0.48 and $0.63.
How management sounded
Positive (+6 on our -10 to +10 scale). Management delivered record revenue and returned to GAAP profitability, though they acknowledged construction delays and supply chain constraints impacting short-term capacity. Management sounded more upbeat than on 8% of the 190 calls we cover; most companies sound positive on their own calls, so the comparison says more than the label.
Q&A summary
Capacity and 1.6T ramp
Asked: Simon Leopold from Raymond James asked about the 4Q 800G and 1.6T expectations given customer transitions and capacity delays.
Answer: Management explained that while 800G growth continues, 1.6T demand is exceeding supply due to material limitations, though they expect to linearize capacity growth throughout the year.
Customer demand
Asked: Simon Leopold from Raymond James asked if customers are having second thoughts about investments due to the election or data center fears.
Answer: Management stated they have not heard of any second-guessing from hyperscale customers and believe the demand remains strong regardless of political shifts.
Financing
Asked: George Notter from Wolfe Research asked about financing strategy given the share price and potential for debt versus equity.
Answer: Management noted they are leaning more on debt than equity and are looking at the most efficient mix, including a recent $1,200 million bank loan.
1.6T DSP supply
Asked: Ryan Koontz from Needham & Co asked about supply constraints, specifically for 1.6T DSPs.
Answer: Management confirmed DSPs are a significant limitation for 1.6T but expect the situation to improve in the first quarter of next year as they qualify more suppliers.
What to watch before the next call
- Progress on the Phase II capacity expansion and resolution of electrical power supply issues.
- Supply chain constraints for 1.6T DSPs and raw materials.
- Execution of the multiyear long-term agreement with the Tier 1 hyperscale customer.
