SemiLEDs Corporation reported first‑quarter fiscal 2026 revenue of $2.6 million, a 79% sequential decline from the $13.2 million earned in the fourth quarter of fiscal 2025. The figure also represents a 106% year‑over‑year increase, as revenue rose from $1.26 million in the same quarter of fiscal 2025. The jump is largely driven by a 71% share of revenue coming from equipment buy‑sell orders, while LED component sales accounted for 27% of total revenue. UV and specialty lighting segments contributed less than $2.5 million annually, underscoring the company’s continued reliance on lower‑margin equipment sales.
The company posted a GAAP net loss of $742,000, or $0.09 per diluted share, compared with a $1.2 million loss ($0.15 per diluted share) in the prior quarter. The sequential narrowing of the loss reflects tighter cost control and a shift toward higher‑margin equipment transactions, but the year‑over‑year loss widened to $0.547 million ($0.08 per share) from $0.547 million in the same quarter of fiscal 2025, indicating that the company’s core LED business remains unprofitable. Management highlighted the ongoing decline in its legacy chip business and the limited contribution from UV and specialty lighting, signaling a strategic pivot toward higher‑margin product lines.
Gross margin contracted to 1% from 2% in the previous quarter, while operating margin widened to a negative 39% from a negative 7% in Q4 2025. The margin compression is attributable to the lower profitability of buy‑sell equipment orders and the continued erosion of the legacy chip segment. Operating expenses did not scale down in line with the revenue decline, amplifying the negative operating margin. The company’s focus on cost reductions and the sale of new higher‑margin products is intended to mitigate this trend over the next quarters.
Cash and cash equivalents rose to $2.9 million at the end of the quarter, up from $2.6 million at the end of Q4 2025. The stronger liquidity position provides a buffer for ongoing operational expenses and potential capital investments in new product development. Management emphasized that the cash reserve will support the company’s transition to a fabless business model and the development of niche LED modules for UV industrial printers, aquarium lighting, medical applications, and horticultural lighting.
Management reiterated that the company is concentrating on cost discipline and the expansion of higher‑margin product lines to improve future gross margins and cash flows. The shift toward equipment buy‑sell revenue, while currently lower‑margin, is part of a broader strategy to stabilize cash flow and reduce reliance on the legacy chip business. The company’s guidance for the next quarter remains unchanged, but the management outlook signals confidence in the company’s ability to navigate the current market headwinds while pursuing new growth opportunities.
The market reacted positively to the earnings release, with investors focusing on the year‑over‑year revenue growth and the narrowing sequential net loss. While margin compression and the concentration of revenue in a few segments raise concerns, the company’s improved cash position and strategic shift toward higher‑margin products were viewed as mitigating factors.
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