Good afternoon, and welcome to the Applied Optoelectronics second quarter 2022 financial results conference call. All participants will be in a listen-only mode. Should you need any assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there'll be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star then two. Please note that this event is being recorded today. I would now like to turn the conference over to Lindsay Savarese. Please go ahead. Thank you. I'm Lindsay Savarese, Investor Relations for Applied Optoelectronics, and I'm pleased to welcome you to AOI second quarter 2022 financial results conference call. After the market closed today, AOI issued a press release announcing its second quarter 2022 financial results and provided its outlook for the third quarter of 2022. The release is also available on the company's website at ao-inc.com. This call is being recorded and webcast live. A link to the recording can be found on the investor relations section of the AOI website and will be archived for one year. Joining us on today's call is Dr. Thompson Lin, AOI's founder, chairman, and CEO, and Dr. Stefan Murry, AOI's Chief Financial Officer and Chief Strategy Officer. Thompson will give an overview of AOI's Q2 results, and Stefan will provide financial details and the outlook for the third quarter of 2022. A question-and-answer session will follow our prepared remarks. Before we begin, I would like to remind you to review AOI's safe harbor statement. On today's call, management will make forward-looking statements. 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. In some cases, you can identify forward-looking statements by terminology such as believes, anticipates, estimates, intends, predicts, expects, plans, may, should, could, would, will, or thinks, and by other similar expressions that convey uncertainty of future events or outcomes. Forward-looking statements also include statements regarding management's beliefs and expectations related to the expansion of the reach of our products into new markets and customer responses to our innovations, as well as statements regarding the company's outlook for the third quarter of 2022. Except as required by law, we assume no obligation to update forward-looking statements for any reason after the date of this earnings call to conform these statements to actual results or to changes in the company's expectations. More information about other risks that may impact the company's business are set forth in the Risk Factors section of the company's reports on file with the SEC, including the company's annual report on Form 10-K for the year ended December 31, 2021. Also, all financials discussed today are on a non-GAAP basis, unless specifically noted otherwise. Non-GAAP financial measures are not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. A reconciliation between our GAAP and non-GAAP measures, as well as a discussion of why we present non-GAAP financial measures, are included in our earnings press release that is available on our website. I'd like to note the date of our third quarter 2022 earnings call is currently scheduled for November 3, 2022. Now I'd like to turn the call over to Dr. Thompson Lin, Applied Optoelectronics Founder, Chairman, and CEO. Thompson? Thank you, Lindsay, and thank you for joining our call today. I will begin with some highlights from the quarter before I turn the call over to Stefan Murry, who will discuss a more detailed review of our second quarter financial results and outlook for the third quarter. Our second quarter revenue was adversely affected by a delay in the completion of several orders from a large CATV customer that we expect to ship in Q2. During the quarter, the customer requested certain changes to several orders, but due to the well-known supply chain issues, we were unable to adjust production and procure raw material to address these changes prior to quarter end, and the revenue therefore slipped into Q3. We have since shipped substantially all of this order. We recognize the resulting revenue. These shipping delays negatively impacted our Q2 revenue by approximately $6.7 million. As a result, our total revenue for the second quarter decreased 3.5% year-over-year to $52.3 million, which was below our expectations. As to the rest of our results, our gross margin was in line with our expectations, and non-GAAP EPS was above our expectations. Total revenue in our CATV segment of $23.7 million was down 14.1% year-over-year and was down 5.1% sequentially due to the reason I mentioned above, related to the delayed shipping. The overall demand environment remained robust as MSOs, particularly in North America, continued purchasing additional network products in order to upgrade their network. Total revenue for our data center product of $21.5 million decreased 4% year-over-year, and was essentially flat sequentially. As we had discussed previously, the slight year-over-year decline in data center revenue is due to a decline in 40G, which is nearly the end of its life cycle. This decline was partially offset by an increase in 100G. As 400G continues to ramp later this year, we expect year-over-year growth for our total data center revenue to resume. We continue to see good customer traction on 400G. To date, we have received nearly $5 million in orders for our 400G products, most of which we expect it to be shipped in Q3 and Q4 of this year. During the second quarter, we secured eight design wins. Of these design wins, two were for our 400G products, both with existing hyperscale data center operator customers. We also had two design wins for our 100G products with hyperscale customers. We had two 100G wins with network equipment manufacturers supplying the data center industry. The remaining two design wins were in our fiber to the home, telecom, and other category. With that, I will turn the call over to Stefan to review the details of our Q2 performance and outlook for Q3. Stefan? Thank you, Thompson. As Thompson mentioned, our second quarter revenue was adversely affected by a delay in the completion of several orders from a large CATV customer that we had expected to ship in Q2. During the quarter, the customer requested certain changes to several orders, but due to the well-known supply chain issues, we were unable to adjust production and procure raw materials to address these changes prior to quarter end, and the revenue therefore slipped into Q3. We have since shipped substantially all of these orders, and although delayed, we have recognized the resulting revenue in Q3. These shipment delays negatively impacted our Q2 revenue by approximately $6.7 million. As a result, our total revenue for the second quarter decreased 3.5% year-over-year to $52.3 million, which was below our expectations and essentially flat compared to Q1. While our revenue came in below our expectations, we delivered gross margin in line with our expectations and non-GAAP EPS above our expectations. We're encouraged by the strong CATV environment, the recovery in the telecom market, and the traction we are seeing with our 400G products. During the quarter, we secured eight new design wins. Of these design wins, two were for our 400G products, both with existing hyperscale data center operator customers. We also had two wins for our 100G products with hyperscale customers. We had two 100G wins with network equipment manufacturers supplying the data center industry. The remaining two design wins were in our FTTH telecom and other category. We continue to see good customer traction on 400G, and we expect orders will ramp up in the second half of this year. On our Q1 call, we had discussed how a major hyperscale data center customer selected AOI as a vendor for several of our 400G products. We are pleased to have completed the interoperability testing with the company's other prospective vendors, and we have begun to receive sizable orders for shipments beginning in Q3. This was in addition to the two new design wins for 400G in the quarter that I just mentioned. One was with a major hyperscale operator, and the other was with a smaller operator. These new wins further bolster our expectation for continued ramp in 400G later this year and into 2023. Turning to our second quarter results, 45% of our Q2 revenue was from our CATV products, 41% was from our data center products, and the remaining 14% from FTTH, telecom, and other. In our CATV product segment, the overall demand environment remains robust as MSOs, particularly in North America, continue purchasing additional networking products in order to upgrade their networks. However, for the reasons I mentioned earlier related to the orders that slipped from Q2 into Q3, we generated CATV revenue of $23.7 million, down 14.1% year-over-year and down 5.1% sequentially. Looking ahead, we currently expect strong sequential improvement in CATV revenue in Q3. Further out, we continue to have good visibility with CATV orders as we see our backlog stretching throughout 2022 and into 2023. We have significantly increased production capacity for CATV products, and we believe that we are well-positioned to deliver on the demand that we are seeing. Our Q2 data center revenue came in at $21.5 million, down 4% year-over-year and up 0.4% sequentially. In the second quarter, 71% of our data center revenue was from our 100G products, 21% was from our 40G transceiver products, and 1.1% was from our 200G and 400G transceiver products. As Thompson noted earlier, we have booked nearly $5 million in orders already for 400G products. With our production capacity ramping, we expect to ship most of these in Q3 and Q4 this year. Now turning to our telecom segment. Revenue from our telecom products of $6.3 million was up 88.3% year-over-year and up 19.2% sequentially. Our strong second quarter performance was driven by a recovery in the China telecom market. Looking ahead, we continue to expect to see fluctuations in revenue in telecom as the outlook for China telecom remains somewhat murky. For the second quarter, our top 10 customers represented 87.1% of revenue, up from 86.8% in Q2 of the prior year. We had two 10% or greater customers in the second quarter, one in the CATV market and one in the data center market. These customers contributed 40% and 22.2% of total revenue, respectively. In Q2, we generated non-GAAP gross margin of 16.7%, which was within our guidance range of 16.5%-18% and was down from 17.5% in Q1 of 2022 and 25% in Q2 of 2021. The decline in our gross margin was mostly due to continued challenges with the supply chain. Total non-GAAP operating expenses in the second quarter were $18.2 million or 34.9% of revenue, down from $20 million or 36.9% of revenue in Q2 of the prior year. R&D expenses decreased year-over-year, reflecting the timing of certain R&D projects, which we believe will come back next quarter, and our sales and marketing expenses benefited from some reduced shipping costs as well as lower personnel costs. Looking forward, we expect non-GAAP operating expenses to hover around $20 million per quarter for the rest of the year. Non-GAAP operating loss in the second quarter was $9.5 million, compared to an operating loss of $6.5 million in Q2 of the prior year. GAAP net loss for Q2 was $14.5 million or a loss of $0.52 per basic share, compared with the GAAP net loss of $8.2 million or a loss of $0.31 per basic share in Q2 of 2021. On a non-GAAP basis, net loss for Q2 was $7.6 million or a loss of $0.28 per basic share, which was better than our guidance range of a loss of $8.4 million-$9.5 million or a loss per share in the range of $0.30-$0.34 per basic share, and compares to a net loss of $4.1 million or a loss of $0.15 per basic share in Q2 of the prior year. The basic shares outstanding used for computing the net loss in Q2 were 27.6 million. Turning now to the balance sheet. We ended the second quarter with $40.7 million in total cash equivalents, short-term investments, and restricted cash. This compares with $40.1 million at the end of the first quarter. We ended the quarter with total debt of $63.8 million, down from $67.2 million last quarter. As of June 30, we had $98.2 million in inventory, compared to $92 million at the end of Q1. Inventory increased primarily due to the delay in shipment of the CATV orders that we discussed earlier. We made a total of $1 million in capital investments in the second quarter, including $0.7 million in production equipment and machinery and $0.2 million in construction and building improvements. For the first half of the year, our total CapEx spend has been about $2 million. Looking ahead to the second half, we would expect flat to slightly higher CapEx spending. For the year, we currently expect between $4 million and $6 million in total CapEx. Before turning to guidance, I would first like to provide an update on the supply chain environment. We continue to see challenges in some areas of our supply chain, particularly semiconductors. As in prior quarters, we have adapted to these challenges by purchasing materials from alternative, often higher cost sources. In some cases, we are able to reduce the impact by redesigning products to utilize components with better availability and cost. This is not always possible for every shortage. We currently see approximately $1 million-$3 million in potential revenue reduction in Q3 due to component shortages. However, this amount represents revenue that will be shifted to Q4 rather than lost revenue. Moving now to our Q3 outlook. We expect Q3 revenue to be between $57 million and $60 million, and non-GAAP gross margin to be in the range of 16.5%-18.5%. Non-GAAP net loss is expected to be in the range of $7.6 million-$9.1 million, and non-GAAP loss per basic share between $0.27 and $0.32, using a weighted average basic share count of approximately 27.9 million shares. With that, I will turn it back over to the operator for the Q&A session. Operator? We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw a question, please press star then two. At this time, we will pause momentarily to assemble our roster. Again, if you have a question, please press star then one. All righty. Our first question will come from Tim Savageaux with Northland Capital Markets. Please go ahead. Hi, good afternoon. Question on your, well, your outlook and a comment you might have made about Datacom. As you look at the sequential increase, you're guiding for Q3, should we assume that's, you know, principally all cable TV catch-up or is there anything else going on there, on the one hand? On the other, I think Thompson submitted a comment about returning to year-over-year growth in data center. Was that comment about Q3, the second half or any particular color on that? Sure. The first question was about the nature of the sequential increase that we're forecasting in revenue. Yeah, a lot of that is related to the cable TV increase. Data center, we think will be kind of flattish sequentially. As far as the returning to sequential growth, that wasn't a specific statement on Q3 or Q4, but we've said that at some point during the second half, so probably Q3 or Q4, we should return to sequential to year-over-year growth. Okay. Just to follow up on that, you know, given the, you know, orders in hand and, you know, additional, design wins for 400 Gb, it sounds like you expect that to ramp more material into Q4 or are you seeing any offsets in lower speed to kinda drive that flattish outlook for data center in Q3? Yeah. I mean, a lot of the four hundred G orders are gonna start shipping later in Q3, so there's not as much effect in Q3 as you might otherwise, you know, as we would otherwise expect if it was gonna be for the entire quarter. And then there's always some fluctuation in some of the lower stuff as well. So we do expect to see some ramp in 400G, but it'll be towards the end of the quarter, more material in Q4. Okay. Maybe just one more. When you talk about the $5 million in 400G orders, should we assume, you know, that's primarily from your kind of just, well, not, I guess, recently historically top customer, maybe you've just added your other historical top customer. Should we assume that's concentrated with one major cloud operator? You know, how does that initial kind of batch of orders in hand compare to the kind of total opportunity that you see with either that cloud customer or the two major cloud customers? Yeah. The orders that we've gotten so far for 400G by and large are not for the largest, the most recent largest major customer. It is for a couple of other hyperscale operators. As far as how we look at this opportunity, I mean, this is very much the beginning. That $5 million represents, you know, an accumulation of orders that we've received, you know, during the quarter. It's not, you know, it's not like that just all happened, you know, say this month or this week or something where we'd expect that to be some sort of run rate. But the purpose of that is really just to point out that we are, you know, we are starting to see a sizable backlog for orders. We're ramping our production capacity to be able to accommodate those orders, and that, you know, we'll be delivering on those orders and presumably additional orders that we'll receive between now and the end of the year. Okay, thanks. Our next question will come from Paul Silverstein with Cowen. Please go ahead. Yeah. Stefan, what's the visibility, if any, to margin improvement? What needs to happen? Well, I recognize everyone's being impacted by supply chain, yourself included, but what needs to happen for gross margin to get up to a more meaningful level from here? Yeah. You know, I think as we highlighted in our prepared remarks earlier, you know, the biggest factor that's been affecting us recently has been just, you know, there's not one particular supply chain issue that I can point to. There's been a lot of, you know, various different issues that we've had. I think this is not untypical for other companies, of course, not that that's an excuse. It's a little bit difficult to predict exactly what, you know, the trajectory of those pricing is gonna be. As we noted in our prepared remarks, we've done quite a lot of work on qualifying second sources, finding alternatives, you know, in many cases, redesigning products or portions of products to be able to accommodate, you know, components that are either more available or available at a lower cost or hopefully both. There's been a lot of activity that we've had. The difficulty in translating all that activity into improved gross margin is that, you know, if it's a redesign or something like that, we have to burn through the existing inventory. In some cases, the inventory that we're getting or the products that we're able to get are actually higher cost, so that kind of offsets what would otherwise be cost savings from other areas. I mean, I think we're gonna see improvement in gross margin towards the end of the year, based on, you know, some of the new products that we have kicking in more meaningfully, contributing to revenue at that time. And also some of the, you know, anticipated cost reduction, the combination of some of the cost reduction efforts that we have had. Our current expectation is from sort of an uptick in gross margin in Q4. I will hedge that a little bit by saying that that assumes that the supply chain situation doesn't, you know, get materially worse, which it seems like is unlikely at this point, but one never knows. Yeah, but is what you're talking about getting back to the mid- to high-20s% before the incremental impact from supply chain, or you're not even talking about getting back to that level. I guess where I was trying to get to was to get to 30+% beyond supply chain, what needs to happen? What can just repairing supply chain get you back to? To get to 30+%, what needs to happen beyond supply chain normalization? Yeah. I think the supply chain probably gets us back into the low to mid-20s%. To get to 30%, you know, we would need to see contribution, significant contribution from some of our higher margin, newer higher margin products. A mix shift in addition to the supply chain normalization. Specifically to 400G. Okay. Oh, go. I'm sorry. No, go ahead, Paul. I'm sorry. Specifically to 400G or you're speaking more generically in terms of newer products? More generically, but I mean, 400G can be a contributor there. That's certainly part of it, but, you know, other new products as well. Like I said, the timeframe on the supply chain normalization, we think is sort of Q4-ish, again, barring any other things that happen. The new products, again, will start to kick in probably in Q4, but it'll probably contribute more meaningfully in quarters after that, so into 2023. All right. I'll pause as I know you've addressed this in the past, but to get to break even, what does that assume in terms of volume and gross margin, your assumptions? Right. Well, we gave some guidance on operating expense. You know, it's gonna hover probably between $19.5-$20 million, something like that, through the rest of the year. You know, you can kind of. I don't expect that to change meaningfully next year really either. We've been fairly consistent in operating expense. You know, you can kind of do the math then on the gross margin and revenue numbers that it would take to get to break even. You know, we said before, I think we can get back to the upper 20s% or even 30%, maybe touch 30% at some point. It's not likely to happen in the next couple of quarters, given the trajectory that we just talked about. If you kind of assume that and, you know, plug in a, say, $20 million-ish operating expense, you know, you can get a pretty rough idea on what the revenue level would need to be. I appreciate it. Thank you. There are no remaining questions at this time. With that, we will conclude our question and answer session. I'd like to turn the conference back over to Dr. Thompson Lin for any closing remarks. Again, thank you for joining us today. As always, we want to extend our thanks to our investors, customers, and employees for your continuous support. We look forward to updating you on our progress next quarter. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.