Between the first quarter of 2025 and the second quarter of 2026, Applied Optoelectronics (Nasdaq: AAOI) sold stock through at-the-market (ATM) programs for net proceeds of $1.547bn. External funding over those six quarters came to $1.590bn, so equity supplied 97.3% of it; the rest was $28.4m of net revolver borrowing, $12.8m of net bank acceptance notes and $1.7m of notes. Leave the notes out of the denominator and the share is 97.4%; the report shows both bases. Customers contributed nothing: contract liabilities have been zero since the end of 2024.
How much was raised is on record in the 424B5s and in the monthly ATM tables of the 10-Qs. The more useful question is where the money went: how much of it has become assets, and how much is still in the bank. What follows is a way to rebuild that ledger from the cash-flow statement, and the places where pulling the numbers by tag goes wrong.
Four destinations
Put six quarters of cash-flow statements side by side and the net ATM proceeds went four ways. 54.5% became capital spending: $514.3m of PP&E purchases, $320.8m of equipment deposits and prepayments and $8.58m of land, $843.7m in total. 16.0% covered the operating cash shortfall, with cumulative operating cash flow of −$248.2m. 5.3% paid the taxes withheld when employees' restricted stock vested. 27.8% stayed on the balance sheet, as cash and restricted cash rose from $79.13m to $508.8m. The four add up to 103.6%; the excess is covered by net inflows from the revolver, acceptance notes and notes.
| Quarter | Net ATM proceeds | Capital spending | Operating cash flow | Capital spending ÷ net ATM proceeds |
|---|---|---|---|---|
| Q1 2025 | 71.7 | 36.2 | −50.9 | 50.5% |
| Q2 2025 | 124.1 | 38.8 | −65.5 | 31.3% |
| Q3 2025 | 146.8 | 50.4 | −28.5 | 34.3% |
| Q4 2025 | 176.4 | 84.8 | −29.6 | 48.1% |
| Q1 2026 | 382.4 | 68.0 | −85.4 | 17.8% |
| Q2 2026 | 645.8 | 565.5 | +11.6 | 87.6% |
| Total | 1,547.1 | 843.7 | −248.2 | 54.5% |
$ millions. Source: AAOI FY2025 10-K and 10-Q cash-flow statements; quarterly values are differences of year-to-date figures; capital spending includes PP&E purchases, equipment deposits and prepayments, and land; ratios are calculated.
The pace shifted in Q2 2026: $565.5m of capital spending in a single quarter, 87.6% of that quarter's net ATM proceeds, of which $280.0m was prepayment for equipment on order. Operating cash flow in the same quarter was +$11.6m, the first positive quarter after nine negative ones, but accounts payable rose $137.9m in the quarter, and excluding the change in payables it was −$126.4m. Suppliers financed the positive quarter; it is not evidence of an operating turn.
Rebuilding it: one statement, three manual fixes
Everything comes from the cash-flow statement. The 10-Qs report year-to-date figures, so each quarter is the current period less the prior one. XBRL companyfacts lets you pull the lines in bulk, but at AAOI at least three of them come out wrong if you go by tag.
The first is capex, which changed tags. The Q2 2026 10-Q moved "Purchase of property, plant and equipment" from PaymentsToAcquirePropertyPlantAndEquipment to PaymentsToAcquireOtherPropertyPlantAndEquipment. A program that follows the standard tag stops at Q1's $58.2m; combining the statement lines gives $565.5m for the quarter, so the tag-only reading misses about nine-tenths of it.
The second is land. PaymentsToAcquireLand carries only a half-year value of $8.58m and no Q1 value, so no quarterly figure can be differenced out; the report assigns it to Q2 because the Kirby property closed in April. A bulk pull by tag drops the line and puts the quarter's all-in capex at $556.9m.
The third is the withholding tax behind the 5.3%. For the first half and the first nine months of 2025 the XBRL tag reads 0, while the 10-Q text gives $7.821m and $9.181m. In 2026 the company moved to an extension tag that companyfacts does not collect, so the first-half figure of $71.16m can only be taken from the text.
The filing text can be wrong as well. The MD&A in the FY2025 10-K describes the first 2025 ATM round as about 2.1m shares at an average of $12.69 for net proceeds of about $26m. That is April alone: the monthly sales table in the notes and the Q2 2025 10-Q give the full round as 5,645,707 shares at $17.71 for $98m. Go with the monthly table in the notes, then check one route against the other. The ATM tables in the 10-K and the 10-Q add up to $1,548.2m, the six quarters of XBRL differences to $1,547.1m, a gap of $1.1m, or about 0.07%.
What the money turned into
Of what the money bought, $480.2m has not started depreciating. At 30 June, construction in progress stood at $168.8m and prepayments within other non-current assets at about $311.4m. Before reading the prepayment line, take one item out: other non-current assets also hold the $12.6m non-current part of the contract asset created by Amazon's warrant. It comes from the fair value of the first vested tranche and is amortized as Amazon buys; it is not an equipment prepayment. Net of it, prepayments rose from about $35.9m at the end of 2025 to about $311.4m, 8.7 times in half a year. On the report's capacity ledger, this $480.2m and the leases signed but not yet commenced turn into depreciation and rent between Q4 2026 and 2027.
Where the peers found their expansion money
The same kind of expansion, funded differently. In the latest fiscal year, Lumentum's operating cash flow of $751.4m exceeded its capex of $451.3m, and NVIDIA bought $2.000bn of its preferred stock; Coherent took $1.999bn of common equity from NVIDIA and $437.0m of divestiture proceeds; Fabrinet's operating cash flow of $256.7m roughly matched its capex of $252.5m. From Q3 2025 to Q2 2026, AAOI's operating cash flow was −$131.8m against all-in capex of $768.6m and net ATM proceeds of $1.351bn.
The difference is who bought the new shares. At LITE and COHR the new shares went to an industrial buyer and to convertible conversions, and NVIDIA's $2bn in each came with multi-year purchase commitments or capacity-use rights attached. AAOI sold its new shares at market into the secondary market, and no customer has committed to purchases beyond one year. Contract liabilities as a share of quarterly revenue stand at 1.7% for Lumentum, 3.1% for Coherent, 0.3% for Fabrinet and zero for AAOI.
How many shares each $100m costs depends on the share price. In the second 2025 round, $100m of net proceeds took 5.84m shares; in the part of the second 2026 round sold by 30 June, 550k. A third $600m program has been live since 2026-08-21, and how much of it was used will first appear in the Q3 10-Q, the next point at which this ledger can be checked.
Where this sits in the report
This sources-and-uses ledger is the spine of Chapters 2, 5, 7 and 8 of our Applied Optoelectronics (AAOI) deep dive (first edition): the seven lags between issuing equity and collecting cash, the capacity ledger item by item with the new fixed costs, all-in capex and the XBRL tag traps, and the seven equity distribution agreements round by round with a monthly funding ledger. Methodology is at Research methods. For another case where pulling by tag misleads, see IREN's two sets of books; for how far a headline contract figure can sit from what the accounts lock in, see TeraWulf's contract value vs. commenced-lease receivable.
Research content; not investment advice.