Shares fell 27% as investors reacted negatively to a cautious outlook and indications of deceleration in the optical segment, overshadowing strong sequential revenue growth and margin expansion.
- Revenue reached a record $479 million, up 10% sequentially and more than doubling year over year.
- Non-GAAP gross margin improved to 68%, supporting non-GAAP net income of $236 million, a 140% increase year over year.
- Optical business showed progress with early silicon photonics PIC revenue and record DSP revenue but faces a transition to next-generation 1.6T solutions, introducing execution risk.
- Management highlighted ongoing engagement with hyperscalers and neo cloud customers but noted the complexity and heterogeneity of future AI infrastructure could slow near-term adoption.
- Despite strong product innovation, the market appears cautious on guidance and the pace of optical ramps, contributing to the sharp stock decline post-earnings.
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