SemiLEDs Corporation reported its fourth‑quarter and full fiscal‑year 2025 results on November 28, 2025. Revenue for the quarter fell to $13.2 million from $17.7 million in the prior quarter, while the company posted a GAAP net loss of $1.2 million, or $(0.15) per diluted share, compared with a net income of $223 thousand, or $0.03 per diluted share, in the third quarter.
The quarter‑over‑quarter decline was driven by a sharp contraction in the company’s high‑volume, low‑margin equipment buy‑sell segment. Gross margin slipped to 2 % in Q4 from 5 % in Q3, and operating margin fell to –7 % from –0.4 %. The loss of $1.2 million in Q4 reversed the modest profit recorded in Q3, underscoring the impact of margin compression on profitability.
For the full fiscal year ended August 31, 2025, SemiLEDs generated $43 million in revenue, a 750 % increase from $5.2 million in 2024. The company’s GAAP net loss widened to $1.1 million, or $(0.15) per diluted share, compared with a $2.0 million loss, or $(0.32) per diluted share, in 2024. Gross margin for the year fell to 6 % from 20 % the previous year, and operating margin declined to negative 4 % from negative 57 %. Cash and cash equivalents rose to $2.6 million, up from $1.7 million a year earlier, reflecting improved liquidity despite the loss.
Margin compression is largely attributable to the company’s reliance on the high‑volume, low‑margin buy‑sell business. While this segment has driven the impressive revenue rebound, it also erodes profitability as the company sells equipment at thin margins. The Q4 gross margin of 2 % and operating margin of –7 % illustrate the cost‑to‑revenue ratio tightening, with no significant pricing power to offset the volume‑driven cost structure. The company has not disclosed specific reasons for the Q4 revenue decline, but the lack of a clear driver suggests a cyclical or inventory‑related factor rather than a structural weakness.
Investors reacted with concern over the sequential revenue decline and the steep margin contraction, which raised questions about the sustainability of the company’s growth trajectory. The shift from a modest profit in Q3 to a loss in Q4, coupled with the narrowing gross margin, signals that the high‑volume model may not translate into long‑term profitability without significant cost discipline or a shift to higher‑margin offerings.
Management did not provide forward guidance in the release, but the company emphasized a continued focus on cost discipline and strategic investments in higher‑margin segments. The improved cash position and reduced long‑term debt suggest a short‑term liquidity cushion, but the persistent net losses and margin compression highlight the need for a clearer path to profitability.
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