Applied Optoelectronics (AAOI) reported its second-quarter results on Aug. 6, marking the company’s fifth straight quarter of record revenue. The headline growth looked strong, helped by a 140% year-over-year increase in data center revenue and a 44% rise in CATV revenue. But the rest of the financial statements told a more mixed story. AAOI said GAAP gross margin fell to 27.7% in the quarter, while non-GAAP gross margin came in at 29.8%. The company also remained loss-making on a GAAP basis even as non-GAAP net profit turned positive. In the reconciliation, the biggest item was a $14.26 million tax adjustment tied to the excluded items, accounting for about 50.5% of the total bridge difference. Cash flow showed the strain of expansion more clearly. In the first half, net cash outflow from operating and investing activities totaled $707 million, driven by receivables, inventory, and spending on plants, equipment, and prepayments. Financing activity brought in $980 million, including $1.028 billion in net proceeds from common stock issuance. AAOI ended the period with $509 million in cash, cash equivalents, and restricted cash, with the increase mainly coming from equity financing rather than a broad turnaround in operating cash flow.